CHINA MERCHANTS PORT GROUP CO., LTD.
FINANCIAL STATEMENTS AND AUDITOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
CHINA MERCHANTS PORT GROUP CO., LTD.
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
CONTENTS Pages
AUDITOR'S REPORT 1-6
THE CONSOLIDATED AND COMPANY BALANCE SHEETS 7 - 10
THE CONSOLIDATED AND COMPANY INCOME STATEMENTS 11 - 12
THE CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS 13 - 14
THE CONSOLIDATED AND COMPANY STATEMENTS OF CHANGES IN
SHAREHOLDERS' EQUITY 15 - 18
NOTES TO THE FINANCIAL STATEMENTS 19 - 177
AUDITOR'S REPORT
De Shi Bao (Shen) Zi(20) No. P02283
(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.
(hereinafter referred to as "the Company"), which comprise the consolidated and company balance
sheets as at 31 December 2019, 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 2019, 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) 11 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 2019, the Company's income from investment in associates/joint ventures under equity
method amounts to RMB 3,727,850,763.22. As at 31 December 2019, the carrying amount of long-
term equity investment of the Company in associates/joint ventures amounts to RMB
57,916,539,383.26. 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.
Principal audit procedures we performed for key audit matters are as follows:
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AUDITOR'S REPORT- continued
De Shi Bao (Shen) Zi(20) No. P02283
(Page 2, 6 pages)
III. Key Audit Matters - continued
1. Subsequent measurement of long-term equity investment in associates and joint ventures -
continued
(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.
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AUDITOR'S REPORT- continued
De Shi Bao (Shen) Zi (20) No. P02283
(Page 3, 6 pages)
III. Key Audit Matters - continued
2. Goodwill impairment
As disclosed in Notes (V) 21 to the consolidated financial statements, as at 31 December 2019, the
goodwill in the consolidated financial statements of the Company was RMB 8,023,659,694.81. The
management of the Company used the net amount of fair value less costs of disposal or the present
value of the estimated future cash flows to determine the recoverable amount of the relevant asset
group when testing the goodwill for impairment, of which the fair value assessment is based on the
market approach, and the forecast of future cash flows and the calculation of the present value
included key assumptions, such as income growth rate, gross profit margin, discount rate, etc. We
identified the goodwill impairment as a key audit matter of the consolidated financial statements due to
the significant amount of goodwill and that the management needs to make significant judgments and
estimates when conducting goodwill impairment testing.
Principal audit procedures we performed for key audit matters are as follows:
(1) Assess reasonability of division of asset group and combination of asset group management made
by management;
(2) Referred to industry practice to assess whether the management's approach in cash flows forecast
is appropriate and whether the assumptions used are reasonable;
(3) Compared the data used in cash flow forecast with historical data and budget data approved by the
management, and assessed the reasonableness of the data used;
(4) Compared the growth rate of the business volume in the forecast period with the growth rate of
the historical business volume and evaluated its appropriateness.
(5) 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.
(9) Reviewed whether the method to assess the fair value less costs of disposal was appropriate.
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AUDITOR'S REPORT- continued
De Shi Bao (Shen) Zi (20) No. P02283
(Page 4, 6 pages)
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.
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.
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AUDITOR'S REPORT- continued
De Shi Bao (Shen) Zi(20) No. P02283
(Page 5, 6 pages)
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.
(4) Concluded on the appropriateness of the directors' application of the going concern basis of
accounting. Based on audit evidence obtained, concluded on whether the material uncertainty of
events or conditions that may cause cast significant doubt on the Company's ability to continue
as a going concern existed. If we concluded that a material uncertainty existed, we were required
to draw attention in our auditor's report to the related disclosures in the financial statements or to
modify our opinion, if such disclosures were inadequate. Our conclusions were based on the
audit evidence obtained up to the date of our auditor's report. However, future events or
conditions may cause the Company to cease to continue as a going concern.
(5) Evaluated the overall presentation (including the disclosures), structure and content of the
financial statements, and whether the financial statements represented the underlying
transactions and events in a manner that achieved fair presentation.
(6) Obtained sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Company to express an opinion on the financial statements. We
were responsible for the direction, supervision and performance of the group audit. We remained
solely responsible for our audit opinion.
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AUDITOR'S REPORT- continued
De Shi Bao (Shen) Zi(20) No. P02283
(Page 6, 6 pages)
VI. Auditor's Responsibilities for the Audit of the Financial Statements - continued
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
Li Wei Hua
Chinese Certified Public Accountant
Zhang Min
April 15, 2020
The auditor’s report and the accompanying financial statements are English translations of the Chinese auditor’s report and statutory
financial statements prepared under accounting principles and practices generally accepted in the People’s Republic of China. These
financial statements are not intended to present the financial position and results of operations and cash flows in accordance with
accounting principles and practices generally accepted in other countries and jurisdictions. In case the English version does not
conform to the Chinese version, the Chinese version prevails.
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CHINA MERCHANTS PORT GROUP CO., LTD.
FINANCIAL STATEMENTS
AT 31 DECEMBER 2019
Consolidated Balance Sheet
Unit: RMB
Opening balance
Item Notes Closing balance
(restated)
Current assets:
Cash and bank balances (V)1 7,734,948,210.26 7,077,396,895.72
Notes receivable (V)2 38,192,250.02 11,608,669.43
Accounts receivable (V)3 1,356,460,129.90 1,109,230,503.08
Accounts receivable financing (V)4 260,760,537.45 -
Prepayments (V)5 55,034,019.81 124,404,862.87
Other receivables (V)6 2,129,378,252.50 766,518,078.72
Inventories (V)7 163,980,192.08 108,567,270.02
Assets held for sale (V)8 188,404,228.34 115,356,162.94
Non-current assets due within one year (V)9 808,893,013.06 25,952,956.76
Other current assets (V)10 2,298,792,661.70 1,195,421,189.12
Total current assets 15,034,843,495.12 10,534,456,588.66
Non-current Assets:
Long-term receivables (V)11 1,098,831,799.90 793,046,240.11
Long-term equity investments (V)12 57,916,539,383.26 50,176,577,263.40
Other investments in equity instruments (V)13 163,561,272.00 247,848,314.30
Other non-current financial assets (V)14 2,385,363,537.39 2,087,872,081.94
Investment properties (V)15 5,760,262,674.40 5,890,146,989.51
Fixed assets (V)16 27,519,962,529.29 22,994,190,880.43
Construction in progress (V)17 6,334,141,441.88 5,499,426,090.06
Right-of-use assets (V)18 9,633,325,390.46
Intangible assets (V)19 19,693,715,554.10 20,761,018,044.54
Research expenditure (V)20 37,399,092.28 -
Goodwill (V)21 8,023,659,694.81 8,335,895,842.35
Long-term prepaid expenses (V)22 711,911,011.67 235,706,437.21
Deferred tax assets (V)23 300,435,502.27 66,708,157.19
Other non-current assets (V)24 2,082,965,467.04 395,191,485.98
Total non-current assets 141,662,074,350.75 117,483,627,827.02
TOTAL ASSETS 156,696,917,845.87 128,018,084,415.68
-7-
CHINA MERCHANTS PORT GROUP CO., LTD.
AT 31 DECEMBER 2019
Consolidated Balance Sheet - continued
Unit: RMB
Opening balance
Item Notes Closing balance
(restated)
Current liabilities:
Short-term borrowings (V)25 9,439,099,793.47 3,427,365,512.21
Notes payable (V)26 76,455,949.01 -
Accounts payable (V)27 591,112,466.39 429,120,690.97
Receipts in advance (V)28 28,826,687.37 29,170,709.86
Contract liabilities (V)29 85,831,002.52 49,993,895.50
Employee benefits payable (V)30 634,718,784.64 433,489,555.40
Taxes payable (V)31 1,898,076,342.74 345,183,422.42
Other payables (V)32 2,223,754,677.96 1,690,124,901.29
Non-current liabilities due within one year (V)33 6,104,339,856.79 2,896,971,014.97
Other current liabilities (V)34 885,956,581.63 609,009,584.80
Total current liabilities 21,968,172,142.52 9,910,429,287.42
Non-current Liabilities:
Long-term borrowings (V)35 6,313,735,540.33 6,971,479,842.18
Bonds payable (V)36 20,930,681,967.19 22,097,467,096.40
Including: Preferred shares - -
Perpetual bonds - -
Lease liabilities (V)37 1,647,129,968.61
Long-term payables (V)38 1,935,245,003.21 1,294,190,118.18
Projected benefits obligation (V)39 471,482,138.63 375,325,127.65
Provisions (V)40 76,242,559.95 34,951,392.27
Deferred income (V)22 1,147,752,857.17 228,658,214.64
Deferred tax liabilities (V)41 3,961,752,749.17 2,911,074,941.27
Other non-current liabilities (V)42 3,254,515,306.85 3,777,582,522.86
Total non-current liabilities 39,738,538,091.11 37,690,729,255.45
TOTAL LIABILITIES 61,706,710,233.63 47,601,158,542.87
SHAREHOLDERS' EQUITY:
Share capital (V)43 1,922,365,124.00 1,793,412,378.00
Capital reserve (V)44 22,296,485,467.35 19,426,912,957.05
Other comprehensive income (V)45 (355,944,565.91) 88,925,978.57
Special reserve (V)46 12,386,734.70 8,231,080.43
Surplus reserve (V)47 630,345,307.43 527,175,908.67
Unappropriated profit (V)48 11,467,166,351.85 8,915,817,110.21
Total shareholders' equity attributable to equity
35,972,804,419.42 30,760,475,412.93
holders of the parent
Minority interests 59,017,403,192.82 49,656,450,459.88
TOTAL SHAREHOLDERS' EQUITY 94,990,207,612.24 80,416,925,872.81
TOTAL LIABILITIES AND 156,696,917,845.87 128,018,084,415.68
SHAREHOLDERS' EQUITY
The accompanying notes form part of the financial statements.
The financial statements on pages 7 to 177 were signed by the following:
Bai Jingtao Wen Ling Sun Ligan
Legal Representative Chief Financial Officer Head of Accounting Department
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CHINA MERCHANTS PORT GROUP CO., LTD.
AT 31 DECEMBER 2019
Balance Sheet of the Company
Unit: RMB
Opening balance
Item Notes Closing balance
(restated)
Current Assets:
Cash and bank balances 690,685,211.42 389,876,753.95
Accounts receivable - 23,444,175.65
Other receivables (XIV)1 805,534,763.27 651,015,334.06
Inventories - 165,553.46
Other current assets 1,107,292,458.33 1,563,111.61
Total current assets 2,603,512,433.02 1,066,064,928.73
Non-current Assets:
Long-term receivables 61,004,284.75 11,004,284.75
Long-term equity investments (XIV)2 30,266,376,582.23 28,544,261,576.96
Other investments in equity instruments 155,688,635.00 151,746,700.00
Investment properties - 12,685,959.06
Fixed assets 672,842.27 190,804,655.63
Construction in progress 5,803,169.37 2,500,843.87
Intangible assets 54,692,581.18 57,755,603.44
Long-term prepaid expenses - 3,785,801.32
Deferred tax assets 928,465.21 -
Total non-current assets 30,545,166,560.01 28,974,545,425.03
TOTAL ASSETS 33,148,678,993.03 30,040,610,353.76
-9-
CHINA MERCHANTS PORT GROUP CO., LTD.
AT 31 DECEMBER 2019
Balance Sheet of the Company - continued
Unit: RMB
Opening balance
Item Notes Closing balance
(restated)
Current Liabilities:
Short-term borrowings 300,378,812.50 378,615,990.56
Accounts payable - 13,125,624.29
Contract liabilities - 92,003.00
Employee benefits payable 6,000,000.00 26,605,190.52
Taxes payable 209,282,889.78 18,826,587.50
Other payables 628,013,119.77 708,309,782.90
Non-current liabilities due within one year 35,832,000.00 301,508,794.53
Other current liabilities 715,766,708.20 206,349,863.00
Total current liabilities 1,895,273,530.25 1,653,433,836.30
Non-current Liabilities:
Long-term payables - 151,710,000.00
Deferred tax liabilities 35,164,858.75 34,179,375.00
Total non-current liabilities 35,164,858.75 185,889,375.00
TOTAL LIABILITIES 1,930,438,389.00 1,839,323,211.30
SHAREHOLDERS' EQUITY
Share capital 1,922,365,124.00 1,793,412,378.00
Capital reserve 27,576,242,527.73 25,517,647,180.04
Other comprehensive income 105,594,576.25 102,638,125.00
Special reserve - 470,465.59
Surplus reserve 630,345,307.43 527,175,908.67
Unappropriated profit 983,693,068.62 259,943,085.16
TOTAL SHAREHOLDERS'
31,218,240,604.03 28,201,287,142.46
EQUITY
TOTAL LIABILITIES AND SHAREHOLDERS'
33,148,678,993.03 30,040,610,353.76
EQUITY
The accompanying notes form part of the financial statements.
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CHINA MERCHANTS PORT GROUP CO., LTD.
FOR THE YEAR ENDED 31 DECEMBER 2019
Consolidated Income Statement
Unit: RMB
Amount incurred in Amount incurred in
Item Notes
the current period the previous period
I. Operating income (V)49 12,123,829,423.74 9,703,394,622.58
Less: Operating costs (V)49 7,648,920,919.71 5,739,241,395.87
Business taxes and levies (V)50 172,556,579.92 235,953,803.51
Administrative expenses (V)51 1,509,520,581.66 1,251,865,675.45
Research and development expenses 123,853,344.29 121,989,097.82
Financial expenses (V)52 1,936,269,737.53 1,643,418,102.95
Including: Interest expense 2,089,837,594.54 1,634,101,331.80
Interest income 252,060,018.58 272,453,293.86
Add: Other income (V)53 162,101,113.10 56,180,127.64
Investment income (V)54 4,619,173,755.42 3,967,828,149.48
Including: Income from investments in
(V)54 3,727,850,763.22 3,913,864,538.60
associates and joint ventures
Gains (losses) from changes in fair value (V)55 66,483,266.48 (1,074,406,837.68)
Gains (losses) from impairment of credit (V)56 (50,249,409.77) (7,528,580.60)
Gains from impairment of assets (V)57 25,051.16 -
Gains on disposal of assets (V)58 4,794,562,782.79 19,258,495.33
II. Operating profit 10,324,804,819.81 3,672,257,901.15
Add: Non-operating income (V)59 553,103,360.41 67,128,689.98
Less: Non-operating expenses (V)60 70,452,012.40 125,031,298.57
III. Gross profit 10,807,456,167.82 3,614,355,292.56
Less: Income tax expenses 2,640,538,894.62 728,440,538.60
IV. Net profit 8,166,917,273.20 2,885,914,753.96
(I) Categorization by continuity of operation
1. Net profit of continued operation 8,166,917,273.20 2,885,914,753.96
2. Net profit of discontinued operation - -
(II) Categorization by attribution of ownership
1. Net profit attributable to shareholders of the parent 2,898,192,168.84 1,090,418,910.77
2. Profit or loss attributable to minority shareholder 5,268,725,104.36 1,795,495,843.19
V. Amount of other comprehensive net income after tax (V)63 (1,096,285,894.51) 204,602,785.68
Amount of other comprehensive net income after tax attributable to
(443,076,984.15) 41,778,087.02
equity holders of the parent
(I) Other comprehensive income that will not be reclassified to profit
9,090,184.52 (48,671,312.79)
or loss
1. Change as a result of remeasurement of the net defined benefit plan 1,069,722.83 (7,943,999.30)
2. Other comprehensive income under the equity method that will not
4,830,921.62 (46,138,662.23)
be reclassified to profit or loss
3. Fair value changes of other investments in equity instruments 3,189,540.07 5,411,348.74
(II) Other comprehensive income that will be reclassified
(452,167,168.67) 90,449,399.81
subsequently to profit or loss
1. Other comprehensive income under the equity method that will be
(59,050,164.54) (7,952,099.73)
reclassified to profit or loss
2. Translation differences of financial statements denominated in
(393,117,004.13) 98,401,499.54
foreign currencies
Amount of other comprehensive net income after tax attributable to
(653,208,910.36) 162,824,698.66
minority shareholders
VI. Total comprehensive income attributable to: 7,070,631,378.69 3,090,517,539.64
Shareholders of the parent 2,455,115,184.69 1,132,196,997.79
Minority shareholders 4,615,516,194.00 1,958,320,541.85
VII. Earnings per share
(I) Basic earnings per share 1.59 0.61
(II) Diluted earnings per share 1.59 0.61
The accompanying notes form part of the financial statements.
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CHINA MERCHANTS PORT GROUP CO., LTD.
FOR THE YEAR ENDED 31 DECEMBER 2019
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)3 92,042,598.05 243,899,253.07
Less: Operating costs (XIV)3 76,084,023.73 160,065,451.42
Taxes and levies 1,839,217.71 47,542,310.81
Administrative expenses 60,487,851.03 122,905,018.75
Research and development expenses - 742,954.48
Financial expenses 41,936,976.49 34,174,062.13
Including: Interest expense 42,810,942.02 36,872,089.57
Interest income 15,909,363.66 20,843,903.27
Add: Other income 955,987.32 271,927.46
Investment income (XIV)4 1,306,222,961.66 193,138,161.44
Including: Income from investments in associates and
(XIV)4 70,092,131.84 63,015,142.10
joint ventures
Gains (losses) on disposal of assets - (937,948.47)
II. Operating profit 1,218,873,478.07 70,941,595.91
Add: Non-operating income 57,049.23 1,336,230.70
Less: Non-operating expenses 81,092.18 867,312.18
III. Gross profit 1,218,849,435.12 71,410,514.43
Less: Income tax expenses 187,155,447.57 395,773.33
IV. Net profit 1,031,693,987.55 71,014,741.10
V. Amount of other comprehensive net income after tax 2,956,451.25 3,377,145.00
(I) Other comprehensive income that will not be reclassified 2,956,451.25 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 instruments 2,956,451.25 3,377,145.00
(II) Other comprehensive income that will be reclassified to
- -
profit or loss
1. Other comprehensive income under the equity method that
- -
will be reclassified to profit or loss
2. Translation differences of financial statements denominated in
- -
foreign currencies
VI. Total comprehensive income 1,034,650,438.80 74,391,886.10
The accompanying notes form part of the financial statements.
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CHINA MERCHANTS PORT GROUP CO., LTD.
FOR THE YEAR ENDED 31 DECEMBER 2019
Consolidated Cash Flow Statement
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 12,294,529,982.73 9,581,481,387.06
Receipts of tax refunds 23,569,265.92 6,203,721.12
Other cash receipts relating to operating activities (V)64(1) 1,165,710,845.18 963,935,271.59
Sub-total of cash inflows 13,483,810,093.83 10,551,620,379.77
Cash payments for goods purchased and services received 3,593,786,248.69 2,647,715,026.47
Cash payments to and on behalf of employees 2,621,068,087.09 1,808,824,527.76
Payments of all types of taxes 957,382,790.97 762,131,488.97
Other cash payments relating to operating activities (V)64(2) 809,699,551.14 1,044,373,911.73
Sub-total of cash outflows 7,981,936,677.89 6,263,044,954.93
Net Cash Flows from Operating Activities (V)65(1) 5,501,873,415.94 4,288,575,424.84
II. Cash Flows from Investing Activities:
Cash receipts from disposals and recovery of investments - 200,000.00
Cash receipts from investments income 1,804,725,809.65 1,813,166,370.38
Net cash receipts from disposal of fixed assets, intangible
6,274,482,747.66 19,846,988.10
assets and other long-term assets
Net cash receipts from disposal of subsidiary and other
(V)64(5) 1,000,000.00 -
operating units
Other cash receipts relating to investing activities (V)64(3),(4) 3,535,967,030.93 156,615,992.14
Sub-total of cash inflows 11,616,175,588.24 1,989,829,350.62
Cash payments to acquire or construct fixed assets, intangible
3,515,540,735.97 2,437,080,643.74
assets and other long-term assets
Cash payments to acquire investments 7,898,674,384.09 4,084,107,008.20
Net cash payment to acquire subsidiary and other operating
- 8,931,096,795.81
units
Other cash payments relating to investing activities (V)64(6) 2,138,951,129.78 1,686,107,391.23
Sub-total of cash outflows 13,553,166,249.84 17,138,391,838.98
Net Cash Flows from Investing Activities (1,936,990,661.60) (15,148,562,488.36)
III. Cash Flows from Financing Activities:
Cash receipts from capital contributions 2,213,530,171.90 296,363,615.57
Including: cash receipts from capital contributions from
27,255,000.00 40,100,000.00
minority owners of subsidiary
Cash receipts from borrowings 14,306,287,000.87 21,763,411,408.42
Cash receipts from issue of bonds - 10,621,000,000.00
Other cash receipts relating to financing activities (V)64(7) 1,713,327,483.01 3,876,395,683.27
Sub-total of cash inflows 18,233,144,655.78 36,557,170,707.26
Cash repayments of borrowings 15,402,220,794.12 23,593,666,839.99
Cash payments for distribution of dividends or profit or
4,022,043,402.10 3,942,108,074.86
interest
Including: Payments for distribution of dividends or profit to
1,745,724,195.29 1,929,962,094.72
minorities
Other cash payments relating to financing activities (V)64(8) 42,583,797.55 146,196,535.06
Sub-total of cash outflows 19,466,847,993.77 27,681,971,449.91
Net Cash Flows from Financing Activities (1,233,703,337.99) 8,875,199,257.35
IV. Effect of Foreign Exchange Rate Changes on Cash and
9,697,074.77 (371,390,771.83)
Cash Equivalents
V. Net Increase (Decrease) in Cash and Cash Equivalents 2,340,876,491.12 (2,356,178,578.00)
Add: Opening balance of Cash and Cash Equivalents (V)65(2) 5,373,281,504.75 7,729,460,082.75
VI. Closing Balance of Cash and Cash Equivalents (V)65(2) 7,714,157,995.87 5,373,281,504.75
The accompanying notes form part of the financial statements.
- 13 -
CHINA MERCHANTS PORT GROUP CO., LTD.
FOR THE YEAR ENDED 31 DECEMBER 2019
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
104,722,961.87 229,302,378.14
services
Other cash receipts relating to operating activities 246,055,628.30 29,331,866.91
Sub-total of cash inflows 350,778,590.17 258,634,245.05
Cash payments for goods purchased and services received 36,211,750.68 74,086,330.85
Cash payments to and on behalf of employees 85,120,511.18 121,661,642.64
Payments of all types of taxes 20,158,391.66 9,401,709.94
Other cash payments relating to operating activities 53,795,218.14 279,797,604.56
Sub-total of cash outflows 195,285,871.66 484,947,287.99
Net Cash Flows from Operating Activities 155,492,718.51 (226,313,042.94)
II. Cash Flows from Investing Activities:
Cash receipts from investments income 57,727,526.33 445,875,054.92
Net cash receipts from disposal of fixed assets, intangible
- 766,830.38
assets and other long-term assets
Other cash receipts relating to investing activities 612,722,414.48 635,013,754.63
Sub-total of cash inflows 670,449,940.81 1,081,655,639.93
Cash payments to acquire or construct fixed assets,
8,035,563.48 12,539,040.21
intangible assets and other long-term assets
Cash payments to acquire investments 8,000,000.00 -
Net cash payments for acquisitions of subsidiaries and
386,159,390.00 149,709,800.00
other business units
Other cash payments relating to investing activities 2,060,171,330.96 374,513,229.40
Sub-total of cash outflows 2,462,366,284.44 536,762,069.61
Net Cash Flows from Investing Activities (1,791,916,343.63) 544,893,570.32
III. Cash Flows from Financing Activities:
Cash receipts from capital contributions 2,186,275,171.90 256,263,615.57
Cash receipts from borrowings 2,160,000,000.00 566,016,000.00
Cash receipts from issue of bonds - 200,000,000.00
Other cash receipts relating to financing activities - -
Sub-total of cash inflows 4,346,275,171.90 1,022,279,615.57
Cash repayments of borrowings 2,167,116,843.58 300,000,000.00
Cash payments for distribution of dividends or profit or
239,800,502.62 873,011,086.61
interest
Other cash payments relating to financing activities 1,593,549.44 1,497,344.37
Sub-total of cash outflows 2,408,510,895.64 1,174,508,430.98
Net Cash Flows from Financing Activities 1,937,764,276.26 (152,228,815.41)
IV. Effect of Foreign Exchange Rate Changes on Cash and
(497,294.65) (6,549,202.77)
Cash Equivalents
V. Net Increase (Decrease) in Cash and Cash Equivalents 300,843,356.49 159,802,509.20
Add: Opening balance of Cash and Cash Equivalents 389,841,854.93 230,039,345.73
VI. Closing Balance of Cash and Cash Equivalents 690,685,211.42 389,841,854.93
The accompanying notes form part of the financial statements.
- 14 -
CHINA MERCHANTS PORT GROUP CO., LTD.
FOR THE YEAR ENDED 31 DECEMBER 2019
Consolidated Statement of Changes in Shareholders' Equity
Unit: RMB
2019
Attributable to shareholders of the parent
Item Other Total shareholders'
Minority interests
Share capital Capital reserve comprehensive Unappropriated equity
income Special reserve Surplus reserve profit
I. Closing balance of the preceding year 1,793,412,378.00 19,426,912,957.05 88,925,978.57 8,231,080.43 527,175,908.67 8,915,817,110.21 49,656,450,459.88 80,416,925,872.81
Add: Changes in accounting policies - - - - - (41,018,077.68) (80,367,183.77) (121,385,261.45)
Corrections of prior period errors - - - - - - - -
Business combination involving
- - - - - - - -
enterprises under common control
Others - - - - - - - -
II. Opening balance of the year 1,793,412,378.00 19,426,912,957.05 88,925,978.57 8,231,080.43 527,175,908.67 8,874,799,032.53 49,576,083,276.11 80,295,540,611.36
III. Changes for the year 128,952,746.00 2,869,572,510.30 (444,870,544.48) 4,155,654.27 103,169,398.76 2,592,367,319.32 9,441,319,916.71 14,694,667,000.88
(I) Total comprehensive income - - (443,076,984.15) - - 2,898,192,168.84 4,615,516,194.00 7,070,631,378.69
(II) Owners' contributions and reduction
128,952,746.00 2,869,572,510.30 - - - - 6,867,048,857.78 9,865,574,114.08
in capital
1．Capital contribution from
128,952,746.00 2,058,595,347.69 - - - - 27,255,000.00 2,214,803,093.69
shareholders
2．Capital contribution from other equity
- - - - - - - -
investment holder
3．Share-based payment recognized in
- - - - - - - -
shareholders' equity
4．Business combination involving
- - - - - - - -
enterprises under common control
5．Others - 810,977,162.61 - - - - 6,839,793,857.78 7,650,771,020.39
(III) Profit distribution - - - - 103,169,398.76 (307,618,409.85) (2,040,721,489.06) (2,245,170,500.15)
1．Transfer to surplus reserve - - - - 103,169,398.76 (103,169,398.76) - -
2．Transfer to general reserve - - - - - - - -
3．Distributions to shareholders - - - - - (204,449,011.09) (2,040,721,489.06) (2,245,170,500.15)
4．Others - - - - - - - -
(IV) Transfers within shareholders'
- - (1,793,560.33) - - 1,793,560.33 - -
equity
1．Capitalization of capital reserve - - - - - - - -
2．Capitalization of surplus reserve - - - - - - - -
3．Loss made up by surplus reserve - - - - - - - -
4．Others - - (1,793,560.33) - - 1,793,560.33 - -
(V) Special reserve - - - 4,155,654.27 - - (523,646.01) 3,632,008.26
1．Withdrawn in the period - - - 108,062,435.41 - - 115,436,394.98 223,498,830.39
2．Utilized in the period - - - (103,906,781.14) - - (115,960,040.99) (219,866,822.13)
(VI) Others - - - - - - - -
IV. Closing balance of the year 1,922,365,124.00 22,296,485,467.35 (355,944,565.91) 12,386,734.70 630,345,307.43 11,467,166,351.85 59,017,403,192.82 94,990,207,612.24
- 15 -
CHINA MERCHANTS PORT GROUP CO., LTD.
FOR THE YEAR ENDED 31 DECEMBER 2019
Consolidated Statement of Changes in Shareholders' Equity - continued
Unit: RMB
2018
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
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 enterprises
under common control
- 18,678,418,974.96 (26,864,990.92) - - 4,900,224,775.30 43,870,482,449.58 67,422,261,208.92
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
The accompanying notes form part of the financial statements.
- 16 -
CHINA MERCHANTS PORT GROUP CO., LTD.
FOR THE YEAR ENDED 31 DECEMBER 2019
Statement of Changes in Shareholders' Equity of the Company
Unit: RMB
2019
Item Other comprehensive Total shareholders'
Share capital Capital reserve income Special reserve Surplus reserve Unappropriated profit equity
I. Closing balance of the preceding year 1,793,412,378.00 25,517,647,180.04 102,638,125.00 470,465.59 527,175,908.67 259,943,085.16 28,201,287,142.46
Add: Changes in accounting policies - - - - - (325,594.24) (325,594.24)
Corrections of prior period
- - - - - - -
errors
Others - - - - - - -
II. Opening balance of the year 1,793,412,378.00 25,517,647,180.04 102,638,125.00 470,465.59 527,175,908.67 259,617,490.92 28,200,961,548.22
III. Changes for the year 128,952,746.00 2,058,595,347.69 2,956,451.25 (470,465.59) 103,169,398.76 724,075,577.70 3,017,279,055.81
(I) Total comprehensive income - - 2,956,451.25 - - 1,031,693,987.55 1,034,650,438.80
(II) Owners' contributions and
128,952,746.00 2,058,595,347.69 - - - - 2,187,548,093.69
reduction in capital
1．Capital contribution from
128,952,746.00 2,058,595,347.69 - - - - 2,187,548,093.69
shareholders
2．Share-based payment recognized
- - - - - - -
in shareholders' equity
3．Others - - - - - - -
(III) Profit distribution - - - - 103,169,398.76 (307,618,409.85) (204,449,011.09)
1．Transfer to surplus reserve - - - - 103,169,398.76 (103,169,398.76) -
2．Transfer to general reserve - - - - - - -
3．Distributions to shareholders - - - - - (204,449,011.09) (204,449,011.09)
4．Others - - - - - - -
(IV) Transfers within shareholders'
- - - - - - -
equity
1．Capitalization of capital reserve - - - - - - -
2．Capitalization of surplus reserve - - - - - - -
3．Loss made up by surplus reserve - - - - - - -
4．Others - - - - - - -
(V) Special reserve - - - (470,465.59) - - (470,465.59)
1．Withdrawn in the period - - - 919,167.67 - - 919,167.67
2．Utilized in the period - - - (1,389,633.26) - - (1,389,633.26)
(VI) Others - - - - - - -
IV. Closing balance of the year 1,922,365,124.00 27,576,242,527.73 105,594,576.25 - 630,345,307.43 983,693,068.62 31,218,240,604.03
- 17 -
CHINA MERCHANTS PORT GROUP CO., LTD.
FOR THE YEAR ENDED 31 DECEMBER 2019
Statement of Changes in Shareholders' Equity of the Company - continued
Unit: RMB
2018
Item Other comprehensive Total shareholders'
Share capital Capital reserve income Special reserve Surplus reserve Unappropriated profit 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
The accompanying notes form part of the financial statements.
- 18 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(I) GENERAL INFORMATION OF THE COMPANY
China Merchants Port Group Company Limited was a stock limited company incorporated in
Shenzhen, Guangdong Province, on 16 January 1993.
The headquarters of the Company is located in Shenzhen, Guangdong Province. The Company
and its subsidiaries (collectively the "Group") are principally engaged in the rendering of port
service, bonded logistics service and other business such as property development and investment.
The Company's and consolidated financial statements have been approved by the Board of
Directors on 14 April 2020.
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).
Going concern
As at 31 December 2019, the Group had total current liabilities in excess of total current assets of
RMB 6,933,328,647.40. On 31 December 2019, the Group had available and unused line of
credit amounting to RMB 46,602,858,550.04, which is greater than the balance of the net current
liabilities. The Group can obtain financial support from the available line of credit when needed.
Therefore, the financial statements have been prepared on a going concern basis.
Basis of accounting and principle of measurement
The Group has adopted the accrual basis of accounting. Except for certain financial instruments
which are measured at fair value, the Group adopts the historical cost as the principle of
measurement of the financial statements. Upon being restructured into a stock company, the fixed
assets and intangible assets initially contributed by the state-owned shareholders are recognized
based on the valuation amounts confirmed by the state-owned assets administration department.
Where assets are impaired, provisions for asset impairment are made in accordance with the
relevant requirements.
- 19 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(II) BASIS OF PREPARATION OF FINANCIAL STATEMENTS - continued
Basis of accounting and principle of measurement - continued
Where the historical cost is adopted as the measurement basis, assets are recorded at the amount
of cash or cash equivalents paid or the fair value of the consideration given to acquire them at the
time of their acquisition. Liabilities are recorded at the amount of proceeds or assets received or
the contractual amounts for assuming the present obligation, or, at the amounts of cash or cash
equivalents expected to be paid to settle the liabilities in the normal course of business.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date, regardless of whether
that price is directly observable or estimated using valuation technique. Fair value measurement
and/or disclosure in the financial statements are determined according to the above basis.
Fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the
inputs to the fair value measurements are observable and the significance of the inputs to the fair
value measurement in its entirety, which are described as follows:
Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the
entity can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable
for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.
(III) 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 2019, and the Company’s and consolidated results of operations, the Company’s and
consolidated shareholders' equity and cash flows for the year then ended.
2. Accounting period
The Group has adopted the calendar year as its accounting year, e.g. from 1 January to 31
December.
- 20 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
3. Operating cycle
An operating cycle refers to the period since when an enterprise purchases assets for processing
purpose till the realization of those assets in cash or cash equivalents. The Group are principally
engaged in the rendering of port service, bonded logistics service and other 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
and its domestic subsidiaries operate. Therefore, the Company and its domestic subsidiaries
choose RMB as their functional currency. The Company's subsidiaries choose their functional
currency on the basis of the primary economic environment in which they operate. The Company
adopts RMB to prepare its financial statements.
5. The accounting treatment of business combinations involving or not involving
enterprises under common control
Business combinations are classified into business combinations involving enterprises under
common control and business combinations not involving enterprises under common control.
5.1 Business combinations involving enterprises under common control
A business combination involving enterprises under common control is a business combination in
which all of the combining enterprises are ultimately controlled by the same party or parties both
before and after the combination, and that control is not transitory.
Assets and liabilities obtained shall be measured at their respective carrying amounts as recorded
by the combining entities at the date of the combination. The difference between the carrying
amount of the net assets obtained and the carrying amount of the consideration paid for the
combination is adjusted to the share premium in capital reserve. If the share premium is not
sufficient to absorb the difference, any excess shall be adjusted against retained earnings.
Costs that are directly attributable to the combination are charged to profit or loss in the period in
which they are incurred.
5.2 Business combinations not involving enterprises under common control and goodwill
A business combination not involving enterprises under common control is a business
combination in which all of the combining enterprises are not ultimately controlled by the same
party or parties before and after the combination.
- 21 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(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 - continued
The cost of combination is the aggregate of the fair values, at the acquisition date, of the assets
given, liabilities incurred or assumed, and equity securities issued by the acquirer, in exchange for
control of the acquire. Where a business combination not involving enterprises under common
control is achieved in stages that involve multiple transactions, the cost of combination is the sum
of the consideration paid at the acquisition date and the fair value at the acquisition date of the
acquirer's previously held interest in the acquiree. The intermediary expenses (fees in respect of
auditing, legal services, valuation and consultancy services, etc.) and other administrative
expenses attributable to the business combination are recognized in profit or loss in the periods
when they are incurred.
The acquiree's identifiable assets, liabilities and contingent liabilities acquired by the acquirer in a
business combination that meet the recognition criteria shall be measured at fair value at the
acquisition date.
When a business combination contract provides for the acquirer's recovery of consideration
previously paid contingent on one or multiple future event(s), the Group recognises the contingent
consideration provided in the contract as an asset, as part of the consideration transferred in the
business combination, and includes it in the cost of business combination at the fair value at the
acquisition date. Within 12 months after the acquisition, where the contingent consideration needs
to be adjusted as new or further evidences are obtained in respect of the circumstances existed at
the acquisition date, the adjustment shall be recognised and the amount originally recognised in
goodwill or non-operating income shall be adjusted. A change in or adjustment to the contingent
consideration under other circumstances shall be accounted for in accordance with Accounting
Standard for Business Enterprise No. 22 – Financial Instruments: Recognition and Measurement
and Accounting Standard for Business Enterprises No. 13 – Contingencies. Any change or
adjustment is included in profit or loss for the current period.
Where the cost of combination exceeds the acquirer's interest in the fair value of the acquiree's
identifiable net assets, the difference is treated as an asset and recognized as goodwill, which is
measured at cost on initial recognition. Where the cost of combination is less than the acquirer's
interest in the fair value of the acquiree's identifiable net assets, the acquirer reassesses the
measurement of the fair values of the acquiree's identifiable assets, liabilities and contingent
liabilities and measurement of the cost of combination. If after that reassessment, the cost of
combination is still less than the acquirer's interest in the fair value of the acquiree's identifiable
net assets, the acquirer recognizes the remaining difference immediately in profit or loss for the
current period.
- 22 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(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 - continued
If either the fair values of identifiable assets, liabilities and contingent liabilities acquired in a
combination or the cost of business combination can be determined only provisionally by the end
of the period in which the business combination was effected, the acquirer recognises and
measures the combination using those provisional values. Any adjustments to those provisional
values within twelve months after the acquisition date are treated as if they had been recognised
and measured on the acquisition date.
Goodwill arising on a business combination is measured at cost less accumulated impairment
losses, and is presented separately in the consolidated financial statements.
6. Preparation of consolidated financial statements
6.1 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.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiaries and
ceases when the Group loses control of the subsidiary.
For a subsidiary already disposed of by the Group, the operating results and cash flows before the
date of disposal (the date when control is lost) are included in the consolidated income statement
and consolidated statement of cash flows, as appropriate.
For subsidiaries acquired through a business combination involving enterprises not under
common control, the operating results and cash flows from the acquisition date (the date when
control is obtained) are included in the consolidated income statement and consolidated statement
of cash flows, as appropriate.
No matter when the business combination occurs in the reporting period, subsidiaries acquired
through a business combination involving enterprises under common control or the party being
absorbed under merger by absorption are included in the Group's scope of consolidation as if they
had been included in the scope of consolidation from the date when they first came under the
common control of the ultimate controlling party. Their operating results and cash flows from the
date when they first came under the common control of the ultimate controlling party are included
in the consolidated income statement and consolidated statement of cash flows, as appropriate.
- 23 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
6. Preparation of consolidated financial statements - continued
6.1 Preparation of consolidated financial statements - continued
The significant accounting policies and accounting periods adopted by the subsidiaries are
determined based on the uniform accounting policies and accounting periods set out by the
Company.
Where the accounting policies / accounting periods adopted by subsidiaries are inconsistent with
those of the Company, appropriate adjustments are made to the subsidiaries' financial statements
in accordance with the accounting policies of the Company.
All significant intra-group balances and transactions are eliminated on consolidation.
The portion of subsidiaries' equity that is not attributable to the parent is treated as minority
interests and presented as "minority interests" in the consolidated balance sheet under
shareholders' equity. The portion of net profits or losses of subsidiaries for the period attributable
to minority interests is presented as "minority interests" in the consolidated income statement
under the "net profit" line item.
When the amount of loss for the period attributable to the minority shareholders of a subsidiary
exceeds the minority shareholders' portion of the opening balance of shareholders' equity of the
subsidiary, the excess amount is still allocated against minority interests.
Acquisition of minority interests or disposals of interests in a subsidiary that do not result in the
loss of control over the subsidiary are accounted for as equity transactions. The carrying amounts
of the parent's interests and minority interests are adjusted to reflect the changes in their relative
interests in the subsidiary. The difference between the amount by which the minority interests are
adjusted and the fair value of the consideration paid or received is adjusted to capital reserve. If
the capital reserve is not sufficient to absorb the difference, the excess are adjusted against
retained earnings.
For the stepwise acquisition of equity interest till acquiring control after a few transactions and
leading to business combination not involving enterprises under common control, this should be
dealt with based on whether this belongs to 'package deal': if it belongs to 'package deal',
transactions will be dealt as transactions to acquire control. If it does not belong to 'package deal',
transactions to acquire control on acquisition date will be under accounting treatment, the fair
value of acquirees' shares held before acquisition date will be revalued, and the difference
between fair value and book value will be recognized in profit or loss of the current period; if
acquirees' shares held before acquisition date involve in changes of other comprehensive income
and other equity of owners under equity method, this will be transferred to income of acquisition
date.
- 24 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
6. Preparation of consolidated financial statements - continued
6.1 Preparation of consolidated financial statements - continued
When the Group loses control over a subsidiary due to disposal of equity investment or other
reasons, any retained interest is re-measured at its fair value at the date when control is lost. The
difference between (i) the aggregate of the consideration received on disposal and the fair value of
any retained interest and (ii) the share of the former subsidiary's net assets cumulatively calculated
from the acquisition date according to the original proportion of ownership interests is recognized
as investment income in the period in which control is lost, and the goodwill is offset accordingly.
Other comprehensive income associated with investment in the former subsidiary is reclassified to
investment income in the period in which control is lost.
When the Group loses control of a subsidiary in two or more arrangements (transactions), terms
and conditions of the arrangements (transactions) and their economic effects are considered. One
or more of the following indicate that the Group shall account for the multiple arrangements as a
'package deal': (i) they are entered into at the same time or in contemplation of each other; (ii)
they form a complete transaction designed to achieve an overall commercial effect; (iii) the
occurrence of one transaction is dependent on the occurrence of at least one other transaction; (iv)
one transaction alone is not economically justified, but it is economically justified when
considered together with other transactions. Where the transactions of disposal of equity
investments in a subsidiary until the loss of control are assessed as a package deal, these
transactions are accounted for as one transaction of disposal of a subsidiary with loss of control.
Before losing control, the difference of consideration received on disposal and the share of net
assets of the subsidiary continuously calculated from acquisition date is recognized as other
comprehensive income. When losing control, the cumulated other comprehensive income is
transferred to profit or loss of the period of losing control. If the transactions of disposal of equity
investments in a subsidiary are not assessed as a package deal, these transactions are accounted
for as unrelated transactions.
7. 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) 16.3.2, a long-term equity investment is subject to for using the equity
method.
- 25 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
7. Types of joint arrangements and the accounting treatment of joint operation -
continued
The Group as a joint operator recognizes the following items in relation to its interest in a joint
operation: (1) its solely-held assets, including its share of any assets held jointly; (2) its solely-
assumed liabilities, including its share of any liabilities incurred jointly; (3) its revenue from the
sale of its share of the output arising from the joint operation; (4) its share of the revenue from the
sale of the output by the joint operation; and (5) its solely-incurred expenses, including its share of
any expenses incurred jointly. The Group accounts for the recognized assets, liabilities, revenues
and expenses relating to its interest in a joint operation in accordance with the requirements
applicable to the particular assets, liabilities, revenues and expenses.
8. Recognition criteria of cash and cash equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash
equivalents are the Group's short-term(generally due within 3 months since the acquisition date),
highly liquid investments that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value.
9. 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; (3) exchange differences arising from changes in the carrying amounts (other
than the amortised cost) of monetary items at fair value through other comprehensive income are
recognised as other comprehensive income.
When the consolidated financial statements include foreign operation(s), if there is foreign
currency monetary item constituting a net investment in a foreign operation, exchange difference
arising from changes in exchange rates are recognized as "exchange differences arising on
translation of financial statements denominated in foreign currencies " in other comprehensive
income, and in profit and loss for the period upon disposal of the foreign operation.
- 26 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
9. Foreign currency transactions - continued
9.1 Transactions denominated in foreign currencies - continued
Foreign currency non-monetary items measured at historical cost are translated to the amounts in
functional currency at the spot exchange rates on the dates of the transactions; the amounts in
functional currency remain unchanged. Foreign currency non-monetary items measured at fair
value are re-translated at the spot exchange rate on the date the fair value is determined.
Difference between the re-translated functional currency amount and the original functional
currency amount is treated as changes in fair value (including changes of exchange rate) and is
recognized in profit and loss or as other comprehensive income.
9.2 Translation of financial statements denominated in foreign currencies
For the purpose of preparing the consolidated financial statements, financial statements of a
foreign operation are translated from the foreign currency into RMB using the following method:
assets and liabilities on the balance sheet are translated at the spot exchange rate prevailing at the
balance sheet date; shareholders' equity items except for unappropriated profit are translated at the
spot exchange rates at the dates on which such items arose; all items in the income statement as
well as items reflecting the distribution of profits are translated at the average exchange rates of
the accounting period of the consolidated financial statements; the opening balance of
unappropriated profit is the translated closing balance of the previous year's unappropriated profit;
the closing balance of unappropriated profit is calculated and presented on the basis of each
translated income statement and profit distribution item. The difference between the translated
assets and the aggregate of liabilities and shareholders' equity items is recognized as other
comprehensive income and included in shareholders' equity.
Cash flows arising from a transaction in foreign currency and the cash flows of a foreign
subsidiary are translated at average exchange rate during the accounting period of consolidated
financial statements. The effect of exchange rate changes on cash and cash equivalents is regarded
as a reconciling item and presented separately in the cash flow statement as "effect of exchange
rate changes on cash and cash equivalents".
The closing balances and the comparative figures of previous year are presented at the translated
amounts in the previous year's financial statements.
On disposal of the Group's entire interest in a foreign operation, or upon a loss of control over a
foreign operation due to disposal of certain interest in it or other reasons, the Group transfers the
accumulated exchange differences arising on translation of financial statements of this foreign
operation attributable to the owners' equity of the Company and presented under owners' equity,
to profit or loss in the period in which the disposal occurs.
- 27 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(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 "revenue standards"), transaction prices defined in the standards shall be adopted on
initial recognition.
The effective interest method is a method that is used in the calculation of the amortized cost of a
financial asset or a financial liability and in the allocation of the interest income or interest
expense in profit or loss over the relevant period.
The effective interest rate is the rate that exactly discounts estimated future cash flows through the
expected life of the financial asset or financial liability to the gross carrying amount of a financial
asset or to the amortized cost of a financial liability. When calculating the effective interest rate,
the Group estimates future cash flows by considering all the contractual terms of the financial
asset or financial liability (for example, prepayment, extension, call option or similar options) but
shall not consider the expected credit losses.
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.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(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, accounts receivable, other receivables,
debt investments, and long-term receivables and etc..
Financial assets that meet the following conditions are subsequently measured at fair value
through other comprehensive income ("FVTOCI"): the financial asset is held within a business
model whose objective is achieved by both collecting contractual cash flows and selling; and the
contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding. Financial assets at
FVTOCI are presented as other debt investments. Other debt investments due within one year
(inclusive) since the balance sheet date are presented as non-current assets due within one year.
Other debt investments due within one year (inclusive) upon acquisition are presented as other
current assets.
On initial recognition, the Group may irrevocably designate non-trading equity instruments, other
than contingent consideration recognized through business combination not involving enterprises
under common control, as financial assets at FVTOCI on an individual basis. Such financial
assets at FVTOCI are presented as other equity instrument.
A financial asset is classified as held for trading if one of the following conditions is satisfied:
It has been acquired principally for the purpose of selling in the near term; or
On initial recognition it is part of a portfolio of identified financial instruments that the
Group manages together and there is objective evidence that the Group has a recent actual
pattern of short-term profit-taking; or
It is a derivative that is not a financial guarantee contract or designated and effective as a
hedging instrument.
- 29 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(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
Financial assets measured at fair value through profit or loss ("FVTPL") include those classified
as financial assets at FVTPL and those designated as financial assets at FVTPL.
Any financial assets that does not qualify for amortized cost measurement or measurement at
FVTOCI or designated at FVTOCI are classified into financial assets at FVTPL.
Upon initial recognition, in order to eliminate or significantly reduce accounting mismatch
and qualified hybrid financial instrument combines financial asset with embedded derivatives,
the Group will irrevocably designated it as financial liabilities at FVTPL.
Financial assets at FVTPL assets other than derivative financial assets are presented as "held-for-
trading financial assets". Such financial assets at FVTPL which may fall due more than one year
(or without fixed term) since the balance sheet date and will be held more than one year are
presented as other non-current financial assets.
10.1.1 Financial assets measured at amortized cost
Financial assets measured at amortized cost are subsequently measured at amortized cost using
the effective interest method. Gain or loss arising from impairment or derecognition is recognized
in profit or loss.
For financial assets measured at amortized cost, the Group recognizes interest income using
effective interest method. The Group calculates and recognizes interest income through book
value of financial assets multiplying effective interest, except for the following circumstances:
For purchased or originated credit-impaired financial assets with credit impairment, the
Group calculates and recognizes its interest income based on amortized cost of the
financial asset and the effective interest through credit adjustment since initial recognition.
10.1.2 Financial assets at FVTOCI
Impairment losses or gains related to financial assets at FVTOCI, interest income measured using
effective interest method and exchange gains or losses are recognized into profit or loss for the
current period, except for the above circumstances, changes in fair value of the financial assets are
included in other comprehensive income. Amounts charged to profit or loss for every period equal
to the amount charged to profit or loss as it is measured at amortized costs. When the financial
asset is derecognized, the cumulative gains or losses previously recognized in other
comprehensive income shall be removed from other comprehensive income and recognized in
profit or loss.
- 30 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(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
10.1.2 Financial assets at FVTOC I - continued
Changes in fair value of non-trading equity instrument investments designated as financial assets
at FVTOCI are recognized in other comprehensive income, and the cumulative gains or losses
previously recognized in other comprehensive income allocated to the part derecognized are
transferred and included in retained earnings. During the period in which the Group holds the
non-trading equity instrument, revenue from dividends is recognized in profit or loss for the
current period when (1) the Group has established the right of collecting dividends; (2) it is
probable that the associated economic benefits will flow to the Group; and (3) the amount of
dividends can be measured reliably.
10.1.3 Financial assets at FVTPL
Financial assets at FVTPL are subsequently measured at fair value. Gain or loss arising from
changes in fair values and dividends and interests related to the financial assets are recognized in
profit or loss.
10.2 Impairment of financial instruments
The Group makes accounting treatment on impairment and recognizes loss allowance for
expected credit losses ("ECL") on financial assets measured at amortized cost, financial assets
classified as at FVTOCI, lease receivables, contract assets, loan commitments that are not
financial liabilities at FVTPL, financial liabilities not measured at FVTPL, financial guarantee
contracts arising from transfer of financial assets which does not satisfy derecognition criteria or
continuing involvement of transferred financial assets.
The Group makes a loss allowance against amount of lifetime ECL of the contract assets, notes
receivable and accounts receivable arising from transactions adopting the Revenue Standard as
well as lease receivables arising from transactions adopting ASBE No. 21- Leases.
For other financial instrument, other than purchased or originated credit-impaired financial assets,
the Group assesses changes in credit risks of the relevant financial asset since initial recognition at
each balance sheet date. If the credit loss of the financial instrument has been significantly
increased since initial recognition, the Group will make a loss allowance at an amount of expected
credit loss during the whole life; if not, the Group will make a loss allowance for the financial
instrument at an amount in the future 12-month expected credit losses. Except for the financial
assets classified as at FVTOCI, increase in or reversal of credit loss allowance is included in profit
or loss as loss/gain on impairment. For the financial assets classified as at FVTOCI, the Group
recognizes credit loss allowance in other comprehensive income and recognizes the loss/gain on
impairment in profit or loss, while the Group does not decrease the carrying amount of such
financial assets in the balance sheet.
- 31 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
10.2 Impairment of financial instruments - continued
The Group has makes a loss allowance against amount of expected credit losses during the whole
life in the prior accounting period. However, at the balance sheet date, the credit risk on a
financial instrument has not increased significantly since initial recognition; the Group will
measure the loss allowance for that financial instrument at an amount in the future 12-month
expected credit losses. Reversed amount of loss allowance arising from such circumstances shall
be included in profit or loss as impairment gains.
10.2.1 Significant increase of credit risk
In assessing whether the credit risk has increased significantly since initial recognition, the Group
compares the risk of a default occurring on the financial instrument as at the reporting date with
the risk of a default occurring on the financial instrument as at the date of initial recognition. For
loan commitments, the date that the Group becomes a party to the irrevocable commitment is
considered to be the date of initial recognition in the application of criteria related to the financial
instrument for impairment.
In particular, the following information is taken into account when assessing whether credit risk
has increased significantly:
(1) Significant changes in internal price indicators of credit risk as a result of a change in
credit risk;
(2) Other changes in the rates or terms of an existing financial instrument that would be
significantly different if the instrument was newly originated or issued at the balance sheet
date (such as more stringent covenants, increased amounts of collateral or guarantees, or
higher income coverage).
(3) Significant changes in external market indicators of credit risk for a particular financial
instrument or similar financial instruments with the same expected life. These indicators
include the credit spread, the credit swap prices for the borrower, the length of time or the
extent to which the fair value of a financial asset has been less than its amortized cost and
other market information related to the borrower, such as changes in the price of a
borrower’s debt and equity instruments.
(4) Significant changes in actual or expected external credit rating for the financial
instruments;
(5) An actual or expected internal credit rating downgrade for the borrower
(6) Adverse changes in business, financial or economic conditions that are expected to cause a
significant change in the debtor’s ability to meet its debt obligations;
(7) An actual or expected significant change in the operating results of the debtor;
(8) Significant increases in credit risk on other financial instruments of the same borrower;
(9) Significant adverse change in the regulatory, economic, or technological environment of
the debtor;
- 32 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(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 - continued
(10) Significant changes in the value of the collateral supporting the obligation or in the quality
of third-party guarantees or credit enhancements, which are expected to reduce the
debtor’s economic incentive to make scheduled contractual payments or to otherwise have
an effect on the probability of a default occurring.
(11) Significant changes in circumstances expected to reduce the debtor’s economic incentive
to make scheduled contractual payments;
(12) Expected changes in the loan documentation including an expected breach of contract that
may lead to covenant waivers or amendments, interest payment holidays, interest rate
step-ups, requiring additional collateral or guarantees, or other changes to the contractual
framework of the financial instrument;
(13) Significant changes in the expected performance and behavior of the debtor;
(14) Changes in the entity’s credit management approach in relation to the financial instrument;
(15) Past due of contract payment.
The Group assumes that the credit risk on a financial instrument has not increased significantly
since initial recognition if the financial instrument is determined to have lower credit risk at the
balance sheet date. A financial instrument is determined to have lower credit risk if: i) it has a
lower risk of default, ii) the borrower has a strong capacity to meet its contractual cash flow
obligations in the near term and iii) adverse changes in economic and business conditions in the
longer term may, but will not necessarily, reduce the ability of the borrower to fulfil its
contractual cash flow obligations.
10.2.2 Credit-impaired financial assets
When the Group expected occurrence of one or more events which may cause adverse impact on
future cash flows of a financial asset, the financial asset will become a credit-impaired financial
assets. Objective evidence that a financial asset is impaired includes but not limited to the
following observable events:
(1) Significant financial difficulty of the issuer or debtor;
(2) A breach of contract by the debtor, such as a default or delinquency in interest or principal
payments;
(3) The creditor, for economic or legal reasons relating to the debtor’s financial difficulty,
granting a concession to the debtor;
(4) It becoming probable that the debtor will enter bankruptcy or other financial
reorganizations;
(5) The disappearance of an active market for that financial asset because of financial
difficulties of the issuer or the debtor;
(6) Purchase or originate a financial asset with a large scale of discount, which reflects facts
of credit loss incurred.
- 33 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
10.2 Impairment of financial instruments - continued
10.2.3 Determination of expected credit loss
Lease receivables are assessed for ECL individually by the Group. In addition, the Group uses
provision matrix to calculate ECL for notes receivable, accounts receivable, other receivables,
contract assets, debt investments and other debt investments based on a portfolio basis. The Group
classifies financial instruments into different groups based on common risk characteristics.
Common credit risk characteristics include credit risk rating, the date of initial recognition,
remaining contractual maturity, industry of borrower and geographical location of the borrower
etc.
The Group determines expected credit losses of relevant financial instruments using the following
methods:
For a financial asset, a credit loss is the present value of the difference between the
contractual cash flows that are due to the Group under the contract and the cash flows that
the Group expects to receive;
For a lease receivable, a credit loss is the present value of the difference between the
contractual cash flows that are due to the Group under the contract and the cash flows that
the Group expects to receive;
For undrawn loan commitments (refer to Note III, 10.4.1.3 for the detail of accounting
policies), the ECL is the present value of the difference between the contractual cash flows
that are due to the Group if the holder of the loan commitments draws down the loan, and
the cash flows that the Group expects to receive if the loan is drawn down. The Group's
estimation of the ECL for loan commitments is consistent with its expection of the loan
commitments drawn down.
For a financial guarantee contract (refer to Note III, 10.4.1.3 for the detail of accounting
policies ), the expected losses is the present value of the expected payments to reimburse the
holder for a credit loss that it incurs less any amounts that the Group expects to receive from
the holder, the debtor or any other party..
For a financial asset with credit-impaired at the balance sheet date, but not purchased or
originated credit-impaired, a credit losses is the difference between the asset’s gross
carrying amount and the present value of estimated future cash flows discounted at the
financial asset’s original effective interest rate.
The factors reflected in methods of measurement of expected credit losses include an unbiased
and probability-weighted amount that is determined by evaluating a range of possible outcomes;
time value of money; reasonable and supportable information about past events, current
conditions and forecasts on future economic status at balance sheet date without unnecessary
additional costs or efforts.
- 34 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
10.2 Impairment of financial instruments - continued
10.2.4 Write-down of financial assets
When the Group will no longer reasonably expect that the contractual cash flows of financial
assets can be collected in aggregate or in part, the Group will directly write down the carrying
amount of the financial asset, which constitutes derecognition of relevant financial assets.
10.3 Transfer of financial assets
The Group will derecognize a financial asset if one of the following conditions is satisfied: (i) the
contractual rights to the cash flows from the financial asset expire; (ii) the financial asset has been
transferred and substantially all the risks and rewards of ownership of the financial asset is
transferred to the transferee; or (iii) although the financial asset has been transferred, the Group
neither transfers nor retains substantially all the risks and rewards of ownership of the financial
asset but has not retained control of the financial asset.
If the Group neither transfers nor retains substantially all the risks and rewards of ownership of a
financial asset, and it retains control of the financial asset, the Group will recognize the financial
asset to the extent of its continuing involvement in the transferred financial asset and recognize an
associated liability. The Group will measure relevant liabilities as follows:
For transferred financial assets carried at amortized cost, the carrying amount of relevant
liabilities is the carrying amount of financial assets transferred with continuing involvement
less amortized cost of the Group's retained rights (if the Group retains relevant rights upon
transfer of financial assets) with addition of amortized cost of obligations assumed by the
Group (if the Group assumes relevant obligations upon transfer of financial assets). Relevant
liabilities are not designated as financial liabilities at fair value through profit or loss.
For transferred financial assets carried at fair value, the carrying amount of relevant
financial liabilities is the carrying amount of financial assets transferred with continuing
involvement less fair value of the Group's retained rights (if the Group retains relevant rights
upon transfer of financial assets) with addition of fair value of obligations assumed by the
Group (if the Group assumes relevant obligations upon transfer of financial assets).
Accordingly, the fair value of relevant rights and obligations shall be measured on an
individual basis.
- 35 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(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 satisfies the derecognition criteria, the
difference between (1) the carrying amount of the financial asset transferred and (2) the sum of
the consideration received from the transfer and accumulated changes in fair value initially
recorded in other comprehensive income is recognized in profit or loss. For the non-tradable
equity instrument designated as financial assets at FVTOCI, cumulative gain or loss that has been
recognized in other comprehensive income should be removed from other comprehensive income
but be recognized in retained earnings.
For a part of transfer of a financial asset that satisfies the derecognition criteria, the carrying
amount of the transferred financial asset is allocated between the part that is derecognized and the
part that is continuously involved, based on the respective fair values of those parts on transfer
date. The difference between (1) the sum of the consideration received for the part derecognized
and any cumulative gain or loss allocated to the part derecognized which has been previously
recognized in other comprehensive income; and (2) the carrying amount allocated to the part
derecognized on derecognition date; is recognized in profit or loss. For the non-tradable equity
instrument designated as financial assets at FVTOCI, cumulative gain or loss that has been
recognized in other comprehensive income should be removed from other comprehensive income
but be recognized in retained earnings.
For a transfer of a financial asset in its entirety that does not satisfy the derecognition criteria, the
Group will continuously recognize the transferred financial asset in its entirety. Considerations
received due to transfer of assets should be recognized as a liability upon receipts.
10.4 Classification of financial liabilities equity instruments
Financial instruments issued by the Group are classified into financial liabilities or equity
instruments on the basis of the substance of the contractual arrangements and the economic nature
not only its legal form, together with the definition of financial liability and equity instruments on
initial recognition.
10.4.1 Classification, recognition and measurement of financial liabilities
On initial recognition, financial liabilities are classified into financial liabilities at FVTPL and
other financial liabilities.
10.4.1.1 Financial liabilities at FVTPL
Financial liabilities at FVTPL consist of financial liabilities held for trading (including derivatives
classified as financial liabilities) and those designated as at FVTPL. Except for derivative
financial liabilities presented separately, the financial liabilities at FVTPL are presented as held-
for-trading financial liabilities.
- 36 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(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
A financial liability is classified as held for trading if one of the following conditions is satisfied:
It has been acquired principally for the purpose of repurchasing in the near term; or
On initial recognition it is part of a portfolio of identified financial instruments that the
Group manages together and there is objective evidence that the Group has a recent actual
pattern of short-term profit-taking; or
It is a derivative that is not a financial guarantee contract or designated and effective as a
hedging instrument.
A financial liability may be designated as at FVTPL on initial recognition when one of the
following conditions is satisfied: (i) Such designation eliminates or significantly reduces
accounting mismatch; or (ii) The Group makes management and performance evaluation on a fair
value basis, in accordance with the Group's formally documented risk management or investment
strategy, and reports to key management personnel on that basis. (iii) The qualified hybrid
financial instrument combines financial asset with embedded derivatives.
Transaction financial liabilities are subsequently measured at fair value. Any gains or losses
arising from changes in the fair value and any dividend or interest expenses paid on the financial
liabilities are recognized in profit or loss.
The amount of change in the fair value of the financial liability that is attributable to changes in
the credit risk of that liability shall be presented in other comprehensive income, other changes in
fair values are included in profit or loss for the current period. Upon the derecognition of such
liability, the accumulated amount of change in fair value that is attributable to changes in the
credit risk of that liability, which is recognized in other comprehensive income, is transferred to
retained earnings. Any dividend or interest income earned on the financial liabilities are
recognized in profit or loss. If the impact of the change in credit risk of such financial liability
dealt with in the above way would create or enlarge an accounting mismatch in profit or loss, the
Group shall present all gains or losses on that liability (including the effects of changes in the
credit risk of that liability) in profit or loss.
Financial liabilities are measured at FVTPL when the financial liabilities is arising from
contingent consideration recognized by the Group as an acquirer in a business combination not
involving enterprises under common control.
- 37 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(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
10.4.1.2 Other financial liabilities
Except for financial liabilities, financial guarantee contracts and loan commitments arising from
transfer of financial assets that do not meet the derecognition criteria or those arising from
continuing involvement in the transferred financial assets, other financial liabilities are
subsequently measured at amortized cost, with gain or loss arising from derecognition or
amortization recognized in profit or loss.
That the Group and its counterparty modify or renegotiate the contract does not result in
derecognition of a financial liability subsequently measured at amortized cost but result in
changes in contractual cash flows, the Group will recalculate the carrying amount of the financial
liability, with relevant gain or loss recognized in profit or loss. The Group will determine carrying
amount of the financial liability based on the present value of renegotiated or modified contractual
cash flows discounted at the financial liability's original effective interest rate. For all costs or
expenses arising from modification or renegotiation of the contract, the Group will adjust the
modified carrying amount of the financial liability and make amortization during the remaining
term of the modified financial liability.
10.4.1.3 Financial guarantee contracts and loan commitments
A financial guarantee contract is a contract that requires the issuer to make specified payments to
reimburse the holder of the contract for a loss it incurs because a specified debtor fails to make
payment when due in accordance with the original or modified terms of a debt instrument.
Subsequent to initial recognition, financial guarantee contracts that are not designated as financial
liabilities at fair value through profit or loss or financial liabilities arising from transfer of
financial assets that do not meet the derecognition criteria or those arising from continuing
involvement in the transferred financial assets, and loan commitments to provide a loan at a
below-market interest rate, which are not designated at fair value through profit or loss, are
measured at the higher of: (1) amount of loss provision; and (2) the amount initially recognized
less cumulative amortization amount determined based on the revenue standard.
10.4.2 Derecognition of financial liabilities
The Group derecognizes a financial liability (or part of it) when the underlying present obligation
(or part of it) is discharged. An agreement between the Group (the debtor) and the creditor to
replace the original financial liability with a new financial liability with substantially different
terms is accounted for as an extinguishment of the original financial liability and the recognition
of a new financial liability.
- 38 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
10.4 Classification of financial liabilities equity instruments - continued
10.4.2 Derecognition of financial liabilities - continued
When the Group derecognizes a financial liability or a part of it, it recognizes the difference
between the carrying amount of the financial liability (or part of the financial liability)
derecognized and the consideration paid (including any non-cash assets transferred or new
financial liabilities assumed) in profit or loss.
10.4.3 Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group
after deducting all of its liabilities. Equity instruments issued (including refinanced), repurchased,
sold and cancelled by the Group are recognized as changes of equity. Changes of fair value of
equity instruments is not recognized by the Group. Transaction costs related to equity transactions
are deducted from equity.
The Group recognizes the distribution to holders of the equity instruments as distribution of
profits, dividends paid do not affect total amount of shareholders' equity.
10.5 Derivatives and embedded derivatives
Derivatives include forward exchange contracts, currency swaps, interest rate swaps and foreign
exchange options, etc. Derivatives are initially measured at fair value at the date when the
derivative contracts are entered into and are subsequently re-measured at fair value.
Derivatives embedded in hybrid contracts with a financial asset host are not separated by the
Group. The hybrid contract shall apply to the relevant accounting standards regarding the
classification of financial assets as a whole.
Derivatives embedded in hybrid contracts with hosts that are not financial assets are separated and
treated as separate derivatives by the Group when they meet the following conditions:
(1) the economic characteristics and risks of the embedded derivative are not closely related to
those of the host contract;
(2) a separate instrument with the same terms as the embedded derivative would meet the
definition of a derivative.
(3) the hybrid contracts are not measured at fair value through profit or loss.
- 39 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
10.5 Derivatives and embedded derivatives - continued
For the embedded derivative separated from the host contracts, the Group accounts for the host
contracts in the hybrid contracts with applicable accounting standards. When the embedded
derivatives whose fair value cannot be measured reliably by the Group according to the terms and
conditions of the embedded derivatives, the fair value of such derivatives are measured at the
difference between the fair value of the hybrid contracts and the fair value of the host contracts.
By adopting the above method, if the embedded derivative cannot be measured on a stand-alone
basis at the time when acquired or at subsequent balance sheet dates, the hybrid instrument is
designated as financial instruments at fair value through profit or loss as a whole.
10.6 Offsetting financial assets and financial liabilities
Where the Group has a legal right that is currently enforceable to set off the recognized financial
assets and financial liabilities, and intends either to settle on a net basis, or to realize the financial
asset and settle the financial liability simultaneously, a financial asset and a financial liability shall
be offset and the net amount is presented in the balance sheet. Except for the above circumstances,
financial assets and financial liabilities shall be presented separately in the balance sheet and shall
not be offset.
10.7 Reclassification of financial instruments
When the Group changes the business model to manage the financial assets, the financial assets
affected will be reclassified and no financial liabilities will be reclassified.
The financial assets are reclassified by the Group and are accounted for prospectively since the
date of reclassification (i.e. the first date of the initial reporting period after the business model of
which the financial assets are reclassified by the enterprise is changed).
Where a financial asset at amortised cost is reclassified as a financial assets at fair value through
profit or loss ("FVTPL") by the Group, such financial asset is measured at fair value at the date of
reclassification and the difference between the original carrying amount and the fair value is
recognized in profit or loss for the period.
Where a financial asset at amortised cost is reclassified as a financial asset at fair value through
other comprehensive income("FVTOCI") by the Group, such financial asset is measured at the
fair value at the date of reclassification, and the difference between the original amount and the
fair value is recognized in other comprehensive income.
Where a financial asset at FVTOCI is reclassified as a financial asset at amortised cost by the
Group, the accumulated gains or losses previously recognized in other comprehensive income are
transferred out and the fair value is adjusted as the fair value at the date of reclassification. The
adjusted fair value is recognized as the new carrying amount, as if the financial asset had been
measured at amortised cost.
- 40 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
10.7 Reclassification of financial instruments- continued
Where a financial asset at FVTOCI is reclassified as a financial asset at FVTPL by the Group,
such financial asset continues to be accounted for at fair value. At the same time, the accumulated
gains or losses previously recognized in other comprehensive income are transferred to profit or
loss for the period.
Where a financial asset at FVTPL is reclassified as a financial asset at amortised cost by the
Group, the fair value at the date of reclassification is recognized as the new account balance.
Where a financial asset at FVTPL is reclassified as a financial asset at FVTOCI by the Group,
such financial asset continues to be measured at fair value.
Where a financial asset at FVTPL is reclassified, the effective interest rate is determined on the
basis of the fair value of the financial asset at the date of reclassification.
11. Accounts receivable
The Group makes internal credit ratings on customers and determines expected losses rate of
notes receivable, accounts receivable and other receivables. Basis for determining ratings and the
expected losses rates are as follows:
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 or the customer has
D 50.00-100.00
significant financial difficulty. The amounts
cannot be recovered in the foreseeable future.
- 41 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
12. Accounts receivable financing
Notes receivable classified to hedging instruments for the purpose of hedging, should be listed as
accounts receivable financing within one year (including one year). If the term above one year, it
should be listed as other investment on bonds. Related accounting policies refer to Note 10.
13. Inventories
13.1 Categories of inventories
Inventories include raw materials, merchandise and others. Inventories are initially measured at
cost. Cost of inventories comprises all costs of purchase, costs of conversion and other
expenditures incurred in bringing the inventories to their present location and condition.
13.2 Valuation method of inventories upon delivery
The actual cost of inventories upon delivery is calculated using the weighted average method.
13.3 Basis for determining net realizable value of inventories and provision methods for decline
in value of inventories
At the balance sheet date, inventories are measured at the lower of cost and net realizable value. If
the cost of inventories is higher than the net realizable value, a provision for decline in value of
inventories is made. Net realizable value is the estimated selling price in the ordinary course of
business less the estimated costs of completion, the estimated costs necessary to make the sale and
relevant taxes. Net realizable value is determined on the basis of clear evidence obtained, after
taking into consideration the purposes of inventories being held and effect of post balance sheet
events.
Provision for decline in value of other inventories is made based on the excess of cost of
inventory over its net realizable value on an item-by-item basis.
After the provision for decline in value of inventories is made, if the circumstances that
previously caused inventories to be written down below cost no longer exist so that the net
realizable value of inventories is higher than their cost, the original provision for decline in value
is reversed and the reversal is included in profit or loss for the period.
13.4 Inventory count system
The perpetual inventory system is maintained for stock system.
13.5 Amortization methods for low cost and short-lived consumable items and packaging
materials
Packaging materials and low cost and short-lived consumable items are amortized using the
immediate write-off method.
- 42 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
14. Contract assets
14.1 Recognition and criteria of contract assets
A contract asset represents the Group's right to consideration in exchange for goods or services
that the Group has transferred to a customer, and such right depends on factors other than the
passage of time. The Group's unconditional right (only the passage of time is required) to
consideration from the customer is separately presented as " accounts receivable".
14.2 Determination and accounting treatments of expected credit losses ("ECL") for contract
assets
Refer to Note 3, 10.2 " Impairment of financial instruments" for determination and accounting
treatments of expected credit losses for contract assets.
15. Assets held for sale
When the Group withdraw the book value of certain assets or disposal group mainly through
disposal instead of continual application, the assets should be classified as held-for-sale assets.
Assets or disposal group classified as held-for-sale assets should meat following conditions: (1)
The current status is available for immediate distribution according to similar transactions of this
category of assets or disposal group; (2) The transaction is likely to occur, i.e. the Group has made
its resolution over the distribution arrangements and acquired purchase commitment. Also the
distribution is going to be fulfilled within a year.
If the holding company loses control of its subsidiary for reasons like subsidiary disposal, in
regardless of whether the holding company still keeps part of equity investment, once the
proposed investment disposal meets the requirements of being classified as available for sale
assets in the holding company's individual statement, all assets and liabilities of the subsidiary
should be classified as held-for-sale in consolidated financial statement.
The group's non-current assets and disposal group are measured at the lower of book value and
the net value of fair value less costs to sell. Once the book value is higher than the net value of
fair value less costs to sell, the book value should be adjusted to the net value and the excess
should be recognized as impairment losses and provision for held-for-sale assets impairment
should be made. A gain and a reverse in the previous provision for held-for-sale assets impairment
can be recognized for any increase in fair value less costs to sell at subsequent balance sheet dates,
to the extent that it is not in excess of the cumulative impairment loss that has been recognized.
Asset impairment losses recognized before such assets are classified as held for sale will not be
reversed.
- 43 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
15. Assets held for sale - continued
Non-current held-for-sale assets is not subject to depreciation and amortization. The creditor
interest and other expenses of disposal group classified as held-for-sale asset should still be
recognized.
Once the associate or joint venture equity investment is completely or partly classified as held-
for-sale assets, the classified part of the investment is not subject to equity method measurement.
If an asset or a disposal group has been classified as held for sale but the recognition criteria for
non-current assets held for sale are no longer met, the Group shall cease to classify the asset or
disposal group as held for sale. It shall be measured at the lower of (1) the carrying amount before
the asset or disposal group was classified as held for sale, adjusted for any depreciation,
amortisation or impairment that would have been recognised had the asset or disposal group not
been classified as held for sale; and (2) the recoverable amount at the date of the decision not to
sell.
For equity investments in associates or joint ventures that are classified as held for sale but the
recognition for non-current assets held for sale are no longer met, such investments are accounted
for retrospectively using the equity method from the date when they classified as held for sale.
The financial statements for the held-for-sale period are adjusted accordingly.
16. Long-term equity investments
16.1 Basis for determining joint control and significant influence over investee
Control is archived when the Group has the power over the investee and has rights to variable
returns from its involvement with the investee; and has the ability to use its power to affect its
returns. Joint control is the contractually agreed sharing of control over an economic activity, and
exists only when the strategic financial and operating policy decisions relating to the activity
require the unanimous consent of the parties sharing control. Significant influence is the power to
participate in the financial and operating policy decisions of the investee but is not control or joint
control over those policies. When determining whether an investing enterprise is able to exercise
control or significant influence over an investee, the effect of potential voting rights of the
investee (for example, warrants and convertible debts) held by the investing enterprises or other
parties that are currently exercisable or convertible shall be considered.
- 44 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
16. Long-term equity investments - continued
16.2 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. Where equity interests in an acquiree are
acquired in stages through multiple transactions ultimately constituting a business combination
involving entities under common control, the acquirer shall determine if these transactions are
considered to be a "package deal". If yes, these transactions are accounted for as a single
transaction where control is obtained. If no, the initial investment cost of the long-term equity
investment is the share of book value of owners' equity of the acquired entity in the ultimate
controlling party's consolidated financial statements at the date of combination. The difference
between the initial investment cost and the sum of carrying amount of equity investments
previously held in the acquiree and the new investment cost is adjusted to capital reserve. If the
balance of capital reserve is not sufficient to absorb the difference, any excess is adjusted to
retained earnings. Other comprehensive income recognized for the previously held equity
investments by accounting treatment of equity method or available-for-sale financial assets is not
subject to accounting treatment temporarily.
For a long-term equity investment acquired through business combination not involving
enterprises under common control, the investment cost of the long-term equity investment
acquired is the cost of acquisition.
The absorbing party's or purchaser's intermediary expenses (fees in respect of auditing, legal
services, valuation and consultancy services, etc.) and other administrative expenses attributable
to the business combination are recognized in profit or loss in the periods when they are incurred.
The long-term equity investment acquired otherwise than through a business combination is
initially measured at its cost. When the entity is able to exercise significant influence or joint
control (but not control) over an investee due to additional investment, the cost of long-term
equity investments is the sum of the fair value of previously-held equity investments determined
in accordance with Accounting Standard for Business Enterprises No.22 - Financial Instruments:
Recognition and Measurement (ASBE No. 22) and the additional investment cost.
- 45 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES – continued
16. Long-term equity investments - continued
16.3 Subsequent measurement and recognition of profit or loss
16.3.1 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.
16.3.2 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.
- 46 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES – continued
16. Long-term equity investments - continued
16.3 Subsequent measurement and recognition of profit or loss - continued
16.3.2 A long-term equity investment accounted for using the equity method - continued
The Group discontinues recognizing its share of net losses of the investee after the carrying
amount of the long-term equity investment together with any long-term interests that in substance
form part of its net investment in the investee are reduced to zero. Except that if the Group has
incurred obligations to assume additional losses, a provision is recognized according to the
obligation expected, and recorded in the investment loss for the period. Where net profits are
subsequently made by the investee, the Group resumes recognizing its share of those profits only
after its share of the profits exceeds the share of losses previously not recognized.
16.4 Disposal of long-term equity investments
On disposal of a long-term equity investment, the difference between the proceeds actually
received and receivable and the carrying amount is recognized in profit or loss for the period.
For long-term equity investments accounted for using the equity method, if the remaining interest
after disposal is still accounted for using the equity method, other comprehensive income
previously recognized for using the equity method is accounted for on the same basis as would
have been required if the investee had directly disposed of related assets or liabilities, and
transferred to profit or loss for the period on a pro rata basis; owners' equity recognized due to
changes in other owners' equity of the investee (other than net profit or loss, other comprehensive
income and profit distribution) is transferred to profit or loss for the period on a pro rata basis.
For long-term equity investments accounted for using the cost method, if the remaining interest
after disposal is still accounted for using the cost method, other comprehensive income previously
recognized for using the equity method or in accordance with the standards for the recognition
and measurement of financial instruments before obtaining the control over the investee, is
accounted for on the same basis as would have been required if the investee had directly disposed
of related assets or liabilities, and transferred to profit or loss for the period on a pro rata basis;
changes in other owners' equity in the investee's net assets recognized under the equity method
(other than net profit or loss, other comprehensive income and profit distribution) is transferred to
profit or loss for the period on a pro rata basis.
17. Investment properties
Investment property is property held to earn rentals or for capital appreciation or both. It includes
a land use right that is leased out; a land use right held for transfer upon capital appreciation; and
a building that is leased out.
An investment property is measured initially at cost. Subsequent expenditures incurred for such
investment property are included in the cost of the investment property if it is probable that
economic benefits associated with an investment property will flow to the Group and the
subsequent expenditures can be measured reliably, other subsequent expenditures are recognized
in profit or loss in the period in which they are incurred.
- 47 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
17. Investment properties - continued
The Group uses the cost model for subsequent measurement of investment property, and adopts a
depreciation or amortization policy for the investment property which is consistent with that for
buildings or land use rights.
An investment property is derecognized upon disposal or when the investment property is
permanently withdraw from use and no future economic benefits are expected from the disposal.
When an investment property is sold, transferred, retired or damaged, the Group recognizes the
amount of any proceeds on disposal net of the carrying amount and related taxes in profit or loss
for the period.
18. Fixed assets
18.1 Recognition criteria for fixed assets
Fixed assets are tangible assets that are held for use in the production or supply of goods or
services, for rental to others, or for administrative purposes, and have useful lives of more than
one accounting year. A fixed asset is recognized only when it is probable that economic benefits
associated with the asset will flow to the Group and the cost of the asset can be measured reliably.
Fixed assets are initially measured at cost. Upon being restructured into a stock company, the
fixed assets initially contributed by the state-owned shareholders are recognized based on the
valuation amounts confirmed by the state-owned assets administration department.
Subsequent expenditures incurred for the fixed asset are included in the cost of the fixed asset and
if it is probable that economic benefits associated with the asset will flow to the Group and the
subsequent expenditures can be measured reliably. Meanwhile the carrying amount of the
replaced part is derecognized. Other subsequent expenditures are recognized in profit or loss in
the period in which they are incurred.
18.2 Depreciation 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 5-50 years 5.00 1.90-19.00
Buildings 10-50 years 5.00 1.90-9.50
Machinery and equipment, furniture and
3-20 years 5.00 4.75-31.67
fixture and other equipment
Motor vehicles and cargo ships 5-25 years 5.00 3.80-19.00
Estimated net residual value of a fixed asset is the estimated amount that the Group would
currently obtain from disposal of the asset, after deducting the estimated costs of disposal, if the
asset were already of the age and in the condition expected at the end of its useful life.
- 48 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
18. Fixed assets - continued
18.3 Other explanations
If a fixed asset is upon disposal or no future economic benefits are expected to be generated from
its use or disposal, the fixed asset is derecognized. When a fixed asset is sold, transferred, retired
or damaged, the amount of any proceeds on disposal of the asset net of the carrying amount and
related taxes is recognized in profit or loss for the period.
The Group reviews the useful life and estimated net residual value of a fixed asset and the
depreciation method applied at least once at each financial year-end, and account for any change
as a change in an accounting estimate.
19. Construction in progress
Construction in progress is measured at its actual costs. The actual costs include various
construction expenditures during the construction period, borrowing costs capitalized before it is
ready for intended use and other relevant costs. Construction in progress is not depreciated.
Construction in progress is transferred to a fixed asset when it is ready for intended use.
20. Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying
asset are capitalized when expenditures for such asset and borrowing costs are incurred and
activities relating to the acquisition, construction or production of the asset that are necessary to
prepare the asset for its intended use or sale have commenced. Capitalization of borrowing costs
ceases when the qualifying asset being acquired, constructed or produced becomes ready for its
intended use or sale. Capitalization of borrowing costs is suspended during periods in which the
acquisition, construction or production of a qualifying asset is interrupted abnormally and when
the interruption is for a continuous period of more than 3 months. Capitalization is suspended
until the acquisition, construction or production of the asset is resumed. Other borrowing costs are
recognized as an expense in the period in which they are incurred.
Where funds are borrowed under a specific-purpose borrowing, the amount of interest to be
capitalized is the actual interest expense incurred on that borrowing for the period less any bank
interest earned from depositing the borrowed funds before being used on the asset or any
investment income on the temporary investment of those funds. Where funds are borrowed under
general-purpose borrowings, the Group determines the amount of interest to be capitalized on
such borrowings by applying a capitalization rate to the weighted average of the excess of
cumulative expenditures on the asset over the amounts of specific-purpose borrowings. The
capitalization rate is the weighted average of the interest rates applicable to the general-purpose
borrowings. During the capitalization period, exchange differences related to a specific-purpose
borrowing denominated in foreign currency are all capitalized. Exchange differences in
connection with general-purpose borrowings are recognized in profit or loss in the period in
which they are incurred.
- 49 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
21. Intangible assets
21.1 Valuation method and useful life of intangible assets
An intangible asset is measured initially at cost. Upon being restructured into a stock company,
the intangible assets initially contributed by the state-owned shareholders are recognized based on
the valuation amounts confirmed by the state-owned assets administration department. When an
intangible asset with a finite useful life is available for use, its original cost is amortized over its
estimated useful life. Intangible assets with uncertain service life will not be amortize. The
terminal operating rights are amortized using the output method, that is, amortized through
periods according to the ratio of the estimated minimum guaranteed throughput to the estimated
minimum guaranteed total throughput during the operation period. When the estimated minimum
guaranteed throughput cannot be measured reliably,the straight-line method will be used for
amortization. An intangible asset with uncertain useful life will not be amortized. The
amortization method, useful life and estimated net residual value of various intangible assets are
as follows:
Useful Life
Category Amortization Method Residual value (%)
(year)
Land use rights Straight-line method 40-50 -
Port operating right Units-of-production/Straight-line method 30-35 -
Others Straight-line method 5-50 -
For an intangible asset with a finite useful life, the Group reviews the useful life and amortization
method at the end of the year, and makes adjustments when necessary.
21.2 Research and development expenditure
Expenditure during the research phase is recognised as an expense in the period in which it is
incurred.
Expenditure during the development phase that meets all of the following conditions at the same
time is recognised as intangible asset. Expenditure during development phase that does not meet
the following conditions is recognised in profit or loss for the period.
(1) it is technically feasible to complete the intangible asset so that it will be available for use or
sale;
(2) the Group has the intention to complete the intangible asset and use or sell it;
(3) the Group can demonstrate the ways in which the intangible asset will generate economic
benefits, including the evidence of the existence of a market for the output of the intangible
asset or the intangible asset itself or, if it is to be used internally, the usefulness of the
intangible asset;
(4) the availability of adequate technical, financial and other resources to complete the
development and the ability to use or sell the intangible asset; and
(5) the expenditure attributable to the intangible asset during its development phase can be
reliably measured.
- 50 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
21. Intangible assets - continued
21.2 Research and development expenditure - continued
If the expenditures cannot be distinguished between the research phase and development phase,
the Group recognises all of them in profit or loss for the period.
The costs of intangible assets generated by the internal research only include the total expenditure
incurred for the period from the time point of capitalization to the intangible assets are ready for
intended use. For the identical intangible asset, the expenditures recorded as expenses before they
qualify for capitalization during the development process are not adjusted.
22. Impairment of long-term assets
The Group assesses at the balance sheet date whether there is any indication that the long-term
equity investments, investment properties measured at cost method, construction in progress,
fixed assets, right-of-use assets and intangible assets with a finite useful life may be impaired. If
there is any indication that such assets may be impaired, recoverable amounts are estimated for
such assets. Intangible assets with indefinite useful life and intangible assets not yet available for
use are tested for impairment annually, irrespective of whether there is any indication that the
assets may be impaired.
Recoverable amount is estimated on individual basis. If it is not practical to estimate the
recoverable amount of an individual asset, the recoverable amount of the asset group to which the
asset belongs will be estimated. The recoverable amount of an asset is the higher of its fair value
less costs of disposal and the present value of the future cash flows expected to be derived from
the asset.
If the recoverable amount of an asset or an asset group is less than its carrying amount, the deficit
is accounted for as an impairment loss and is recognized in profit or loss.
Goodwill is tested for impairment at least at the end of each year. For the purpose of impairment
testing, goodwill is considered together with the related assets groups, i.e., goodwill is reasonably
allocated to the related assets groups or each of assets groups expected to benefit from the
synergies of the combination. In testing an assets group with goodwill for impairment, an
impairment loss is recognized if the recoverable amount of the assets group or sets of assets
groups (including goodwill) is less than its carrying amount. The impairment loss is firstly
allocated to reduce the carrying amount of any goodwill allocated to such assets group or sets of
assets groups, and then to the other assets of the group pro-rata basis on the basis of the carrying
amount of each asset (other than goodwill) in the group.
Once the impairment loss of above-mentioned asset is recognized, it shall not be reversed in any
subsequent period.
- 51 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
23. Long-term prepaid expenses
Long-term prepaid expenses represent expenses incurred that should be borne and amortized over
the current and subsequent periods (together of more than one year). Long-term prepaid expenses
are amortized using the straight-line method over the expected periods in which benefits are
derived.
24. Contract liabilities
A contract liability represents the Group’s obligation to transfer goods or services to a customer
for which the Group has received consideration (or an amount of consideration is due) from the
customer. A contract asset and a contract liability relating to the same contract are accounted for
and presented on a net basis.
25. Employee benefits
25.1 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.
25.2 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.
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.
- 52 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
25. Employee benefits - continued
25.2 The accounting treatment of post-employment benefits - continued
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.
Service costs and net interest of net liabilities and net assets of defined benefit plans are
recognized in profit or loss of current period or costs of related assets. Remeasurement of the net
defined benefit liability (asset) (including actuarial gains and losses, the return on plan assets,
excluding amounts included in net interest on the net defined benefit liability (asset), and any
change in the effect of the asset ceiling, excluding amounts included in net interest on the net
defined benefit liability (asset)) are recognized in other comprehensive income.
25.3 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.
26. Provisions
Provisions are recognized when the Group has a present obligation related with contingencies, it
is probable that the Group will be required to settle that obligation causing an outflow of
economic benefits, and a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle
the present obligation at balance sheet date, taking into account the risks, uncertainties and time
value of money surrounding the obligation. When a provision is measured using the cash flows
estimated to settle the present obligation, its carrying amount is the present value of those cash
flows where the effect of the time value of money is material.
When some or all of the economic benefits required to settle a provision are expected to be
recovered from a third party, a receivable is recognized as an asset if it is virtually certain that
reimbursement will be received and the amount of the receivable should not exceed the carrying
amount of provisions.
- 53 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
27. Revenue
The Group's revenue is mainly from the following business types:
(1) Port service;
(2) Bonded logistics service
(3) Other business such as property development and investment.
The Group recognizes revenue based on the transaction price allocated to such performance
obligation when a performance obligation is satisfied, i.e. when "control" of the goods or services
underlying the particular performance obligation is transferred to the customer. A performance
obligation represents the commitment that a good and service that is distinct shall be transferred
by the Group to the customer. Transaction price refers to the consideration that the Group is
expected to charge due to the transfer of goods or services to the customer, but it does not include
payments received on behalf of third parties and amounts that the Group expects to return to the
customer.
If one of the following criteria is met and it is a performance obligation performed over time, the
Group recognizes the revenue within a certain period of time according to the progress of the
performance: (1) the customer simultaneously receives and consumes the benefits provided by the
Group's performance as the Group performs; (2) the customer is able to control the goods under
construction in the course of the Group's performance; (3) the goods produced by the Group
during the performance of the contract are irreplaceable and the Group has the right to charge for
the accumulated part of the contract that has been performed so far during the whole contract
period. Otherwise, the Group recognizes revenue at a certain point in time when "control" of the
goods or services is transferred to the customer.
The Group adopts output method, i.e. the value of goods or services transferred to customers to
determine the appropriate progress of performance. Where the progress cannot be determined
reasonably, the revenue is recognized based on the amount of cost that is expected to be
compensated based on the cost already incurred, until the progress of performance is reasonably
determined.
If the contract includes two or more performance obligations, at contract inception, the Group
allocates the transaction price to single performance obligation according to relative proportion of
the stand-alone selling prices of the goods or services promised by single performance obligation.
However, where there is conclusive evidence that the contract discount or variable consideration
is only related to one or more (not all) performance obligations in the contract, the Group shall
allocate the contract discount or variable consideration to relevant one or more performance
obligations. The stand-alone selling price is the price at which the Group would sell a promised
good or service separately to a customer. If a stand-alone selling price is not directly observable,
the Group shall consider all information that is reasonably available to the Group and maximize
the use of observable inputs and apply estimates methods consistently in similar circumstances.
- 54 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
27. Revenue - continued
For contracts that contain variable consideration(e.g. sales discount), the Group estimates the
amount of consideration using either the expected value or the most likely amount.
The transaction price that includes variable consideration is only to the extent that it is highly
probable that such an inclusion will not result in a significant revenue reversal in the future when
the uncertainty is subsequently resolved.
At the end of each reporting period, the Group reevaluates the variable consideration included in
the transaction price.
For non-cash consideration from customer, the Group recognizes the transaction price based on
the fair value of the non-cash consideration. Where the fair value of the non-cash consideration
cannot be reasonably estimated, the Group recognizes the transaction price indirectly by reference
to the stand-alone price of the promised goods or services promised transferred to the customer.
If the contract includes significant financing component, the Group determines the transaction
price based on the amount payable under the assumption that the customer pays that amount
payable in cash when "control" of the goods or services is obtained by the customer. The
difference between the transaction price and the contract consideration shall be amortized within
the contract period using effective interest rate. If the Group expects, at contract inception, that the
period between when the Group transfers a promised good or service to a customer and when the
customer pays for that good or service will be one year or less, the Group needs not to consider
the significant financing component.
The Group determines whether it is a principal or an agent at the time of the transaction based on
whether it owns the "control" of the goods or services before the transfer of such goods or
services to the customer. The Group is a principal if it controls the specified good or service
before that good or service is transferred to a customer, and the revenue shall be recognized based
on the total consideration received or receivable; otherwise, the Group is an agent, and the
revenue shall be recognized based on the amount of commission or handling fee that is expected
to be charged, and such amount is determined based on the net amount of the total consideration
received or receivable after deducting the prices payable to other related parties or according to
the established commission amount or proportion.
Where payment is received in advance, the advance payment received shall be recorded as a
liability and recognized as revenue when the relevant performance obligation is satisfied.
The above amount will be recognized as revenue proportionately in accordance with the model of
contractual rights exercised by the customer if (1) the Group's advance payment does not need to
be returned, (2) the customer may waive all or part of its contractual rights, and (3) the Group
expects to be entitled to the amount related to the contractual rights waived by the customer.
Otherwise, the balance of the liabilities is recognized as revenue by the Group only when the
possibility of the customer requesting the satisfaction of the remaining performance obligations is
extremely remote.
- 55 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
28. Contract costs
28.1 Costs to fulfill a contract
If the costs incurred in fulfilling a contract are not within the scope of other standard other than
the revenue standard, the Group shall recognized an asset from the costs incurred to fulfill a
contract only if those costs meet all of the following criteria: (1) the costs relate directly to a
contract or to an anticipated contract that the Group can specifically identify; (2) the costs
generate or enhance resources of the entity that will be used in satisfying performance obligations
in the future; and (3) the costs are expected to be recovered. The asset mentioned above shall be
amortized on a basis that is consistent with the transfer to the customer of the goods or services to
which the asset relates and recognized in profit or loss for the period.
28.2 Impairment of contract costs
In determination of impairment losses of assets related to contract costs, firstly impairment losses
of other assets related to the contract recognized based on other relevant accounting standards;
secondly, the Group shall recognized an impairment loss to the extent that the carrying amount of
an asset exceeds: (1) the remaining amount of consideration that the Group expects to receive in
exchange for the goods or services to which the asset relates; (2) the estimated costs that relate to
providing those goods or services.
The Group shall, after the impairment has been provided, recognized in profit or loss a reversal of
some or all of an impairment loss previously recognized when the impairment conditions no
longer exist or have improved. The increased carrying amount of the asset shall not exceed the
carrying amount that would have been determined if no impairment loss had been recognized
previously.
29. Types and accounting methods of government grants
Government grants are transfer of monetary assets or non-monetary assets from the government to
the Group at no consideration. A government grant is recognized only when the Group can
comply with the conditions attached to the grant and the Group will receive the grant.
If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount
received or receivable.
29.1 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.
- 56 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
29. Types and accounting methods of government grants - continued
29.2 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.
30. Deferred tax assets/ deferred tax liabilities
The income tax expenses include current income tax and deferred income tax.
30.1 Current income tax
At the balance sheet date, current income tax liabilities (or assets) for the current and prior periods
are measured at the amount expected to be paid (or recovered) according to the requirements of
tax laws.
30.2 Deferred tax assets and deferred tax liabilities
For temporary differences between the carrying amounts of certain assets or liabilities and their
tax base, or between the nil carrying amount of those items that are not recognized as assets or
liabilities and their tax base that can be determined according to tax laws, deferred tax assets and
liabilities are recognized using the balance sheet liability method.
Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred
tax assets for deductible temporary differences are recognized to the extent that it is probable that
taxable profits will be available against which the deductible temporary differences can be utilized.
However, for temporary differences associated with the initial recognition of goodwill and the
initial recognition of an asset or liability arising from a transaction (not a business combination)
that affects neither the accounting profit nor taxable profits (or deductible losses) at the time of
transaction, no deferred tax asset or liability is recognized.
For deductible losses and tax credits that can be carried forward, deferred tax assets are
recognized to the extent that it is probable that future taxable profits will be available against
which the deductible losses and tax credits can be utilized.
- 57 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
30. Deferred tax assets/ deferred tax liabilities - continued
30.2 Deferred tax assets and deferred tax liabilities- continued
Deferred tax liabilities are 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.
30.3 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.
- 58 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
31. Leases
Lease is a contract that conveys the right to use an asset for a period of time in exchange for
consideration.
For contracts that are signed or modified after the date of initial application, at
inception/modification of the contracts, the Group assesses whether the contract is, or contains, a
lease. Unless the terms and conditions of the contract are changed, the Group does not reassess
whether a contract is, or contains, a lease.
31.1 The Group as Lessee
31.1.1 Separating components of a lease
If a contract contains a lease component and one or more non-lease components, the Group
allocates the consideration in the contract to each lease component on the basis of the relative
stand-alone price of the lease components and the aggregate stand-alone price of the non-lease
components.
31.1.2 Right-of-use assets
Except for short-term leases and leases for which the underlying asset is of low value, at the
commencement date of the lease, the Group recognises a right-of-use assets. The commencement
date of the lease is the date on which a lessor makes an underlying asset available for use by the
Group. The Group measures the right-of-use assets at cost. The cost of the right-of-use assets
comprises:
the amount of the initial measurement of the lease liabilities;
any lease payments made at or before the commencement date, less any lease incentives;
any initial direct costs incurred by the Group;
an estimate of costs to be incurred by the lessee in dismantling and removing the underlying
asset, restoring the site on which it is located or restoring the underlying asset to the condition
required by the terms and conditions of the lease.
Right-of-use assets are depreciated by the Group in accordance with the ASBE No.4 Fixed Assets.
If the Group is reasonably certain, that the lease will transfer ownership of the underlying asset to
the Group by the end of the lease term, the right-of-use assets is depreciated from the
commencement date to the end of the useful life of the underlying asset. Otherwise, the right-of-
use assets is depreciated from the commencement date to the earlier of the end of the useful life of
the right-of-use assets or the end of the lease term.
The Group applies ASBE No. 8 Impairment of Assets, to determine whether the right-of-use
assets are impaired and to account for any impairment loss identified.
- 59 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
31. Leases - continued
31.1 The Group as Lessee - continued
31.1.3 Lease liabilities
Except for short-term leases and leases for which the underlying asset is of low value, at the
commencement date of the lease, the Group measures the lease liabilities at the present value of
the lease payments that are not paid at that date. If the interest rate implicit in the lease cannot be
readily determined, the lessee shall use the lessee's incremental borrowing rate.
The lease payments comprise the following payments by the Group for the right to use the
underlying asset during the lease term:
(1) fixed payments (including in-substance fixed payments), less any lease incentives;
(2) variable lease payments that depend on an index or a rate;
(3) the exercise price of a purchase option if the Group is reasonably certain to exercise that
option;
(4) payments for terminating the lease, if the lease term reflects the Group exercising an
option to terminate the lease;
(5) amounts expected to be payable by the Group under residual value guarantees.
Variable lease payments that depend on an index or a rate, are initially measured using the index
or rate as at the commencement date. Variable lease payments not included in the measurement of
the lease liabilities, are recognised in profit or loss, or in the cost of relevant assets, in the period
of those payments.
Interest on the lease liabilities in each period during the lease term is calculated by a constant
periodic rate of interest on the remaining balance of the lease liabilities.
After the commencement date, if one of the following occurs, the lease liability is remeasured by
the Group with the adjustment to the right-of-use asset. If the carrying amount of the right-of-use
asset is reduced to zero and there is further reduction in the measurement of the lease liability, the
remaining remeasurement should be recognized in profit or loss.
there is a change in the lease term, or in the assessment of an option to purchase the
underlying asset, the Group remeasures the lease liabilities, on the basis of the revised lease
term and the revised discount rate;
there is a change in the amounts expected to be payable under a residual value guarantee, or
in future lease payments resulting from a change in an index or a rate used to determine
those payments, the Group remeasures the lease liabilities, on the basis of the revised lease
payments and the unchanged discount rate, unless the change in the lease payments results
from a change in floating interest rates, in which case a revised discount is applied to the
present value.
- 60 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
31. Leases - continued
31.1 The Group as Lessee - continued
31.1.4 Short-term leases and leases for which the underlying asset is of low value
The Group elects not to recognise right-of-use assets or lease liabilities for short-term leases and
leases for which the underlying asset is of low value, i.e. port and terminal facilities, buildings,
machinery and equipment, furniture and fixture and other equipment, motor vehicles and cargo
ships, other short-term leases and leases for which the underlying asset is of low value. A shorts-
term lease is a lease that, at the commencement date, has a lease term of 12 months or less. A
lease for which the underlying asset is of low value is that, the value of the underlying asset is low
when it is new. For short-term leases and leases for which the underlying asset is of low value, the
Group recognises the lease payments associated with those leases as an expense or cost of
relevant asset on a straight-line basis over the lease term.
31.1.5 Lease modifications
A lease modification should be accounted for as a separate lease if both of the following apply:
the modification increases the scope of the lease by adding the right to use one or more
underlying assets; and
the consideration for the lease increases by an amount commensurate with the stand-alone
price for the increase in scope and any appropriate adjustments to that stand-alone price
according to the circumstances of the particular contract
For a lease medication that is not accounted for as a separate lease, at the effective date of the
lease modification, the Group should allocate the consideration in the modified contract,
determine the lease term of the modified lease and remeasure the lease liability by discounting the
revised payments using a revised discount rate.
For lease modifications that decrease the scope of the lease or narrow the term of the lease, the
Group should decrease the carrying amount of the right-of-use asset with any gain or loss relating
to the partial or full termination of the lease should be recognized in profit or loss. For
remeasurement of lease liabilities from all other lease modifications, a corresponding adjustment
is made to the carrying amount of the right-of-use asset.
31.2 The Group as Lessor
31.2.1 Separating components of a lease
For a contract that contains lease and non-lease components, the Group shall allocate the
consideration in the contract in accordance with the allocation of the transaction price under the
revenue standard, on the basis of the relative stand-alone price of the lease components and the
aggregate stand-alone price of the non-lease components.
- 61 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
31. Leases - continued
31.2 The Group as Lessor - continued
31.2.2 Classification of leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the
risks and rewards of ownership. All other leases are classified as operating leases.
31.2.2.1 The Group as lessor under operating leases
The Group recognises lease payments from operating leases as income on a straight-line basis.
The Group capitalises initial direct costs incurred in obtaining an operating lease and recognises
those costs as an expense over the lease term on the same basis as the lease income.
Variable lease receipts relating to an operating lease not included in the lease receipts are
recognized in profit or loss by the Group when incurred.
31.2.2.2 The Group as lessor under finance leases
At the commencement date, the Group recognizes a finance lease receivable at the amount equal
to the net investment in the lease with finance lease assets derecognized. The net investment in the
lease is the sum of any unguaranteed residual value and lease payments receivable from the
commencement date, discounted at the interest rate implicit in the lease.
The amount of the lease payments receivable refers to the amount that the Group should collect
from the lessee for the purpose of transferring the leased assets during the lease term, including:
fixed payments (including in-substance fixed payments) paid by the lessee, less any lease
incentives;
variable lease payments that depend on an index or a rate;
the exercise price of a purchase option, provided that it is reasonably determined that the
lessee will exercise the option;
the lessee exercises the amount to be paid for the termination of the lease option, provided
that the lease term reflects the lessee's exercise of the option to terminate the lease;
the residual value of the guarantee provided by the lessee, the party concerned with the
lessee and the independent third party with the financial ability to perform the guarantee
obligation.
Variable payments receivable not included in the net investment in the lease are recognized in
profit or loss when they arise.
Interest income for each period over the lease term is recognized by the Group at the fixed
periodic rate.
- 62 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
31. Leases - continued
31.2 The Group as Lessor - continued
31.2.3 Subleases
As a lessor of the sublease, the Group accounts for the original lease contract and the sublease
contract as two separate contracts. The Group classifies the subleases based on the right-of-use
assets generating from the original lease rather than the underlying assets of the original lease.
31.2.4 Lease modifications
The Group accounts for a modification to an operating lease as a new lease from the effective date
of the modification, considering any lease advances or receivables relating to the original lease as
the lease receipts for the new lease.
The Group should account for a modification to a finance lease as a separate lease if both:
the modification increases the scope of the lease by adding the right to use one or more
underlying assets; and
The consideration for the lease increases by an amount commensurate with the stand-alone
price for the increase in scope with any appropriate adjustment to that stand-alone price
For a modification to a finance lease that is not accounted for as a separate lease, the Group
should account for the modification as follows:
if the lease would have been classified as an operating lease had the modification been effect
at the inception date, the Group should account for the lease modification as a new lease
from the effective date of the modification, and measure the carrying amount of the
underlying asset as the net investment in the lease before the effective date of the lease
modification.
If the lease would have been classified as an operating lease if the modification had been in
effect at the inception date, the Group should apply the requirements of contract
modification and renegotiation under the ASBE No. 22 Financial Instruments: Recognition
and Measurement.
31.2.5 Sale and leaseback transactions
31.2.5.1 The Group as the seller-lessee
The Group applies the requirements of the revenue standard to determine whether the transfer of
an asset is accounted for as a sale of that asset. If the transfer of an asset does not constitute a sale,
the Group should continue to recognize the transferred assets and should recognize a financial
liability equal to the transfer proceeds applying ASBE No. 22 Financial Instruments: Recognition
and Measurement. If the transfer of an asset is a sale, the Group should measure the right-of-use
asset arising from the leaseback at the proportion of the previous carrying amount of the asset that
relates to the right of use, and recognize only the amount of any gain or loss that relates to the
rights transferred to the lessor.
- 63 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
32. Exchange of Non-Monetary Assets
Where a non-monetary assets transaction satisfies the following conditions at the same time, it
should calculated based on fair value. The transaction is commercial in nature and the fair value
of the assets received or surrendered can be measured reliably. The fair value of the assets
surrendered and relevant payable taxes shall be regarded as the transaction cost of the assets
received. For assets surrendered, the difference between the fair value and the carrying value of
the asset surrendered shall be recorded into the profit or loss of the current period. If any exact
evidence showing that the fair value of the assets received is more reliable, the cost of assets
received and surrendered shall be calculated as different way. For assets received, its cost shall be
calculated based on fair value of assets received and relevant payable taxes. For the assets
surrendered, the difference between the fair value of the assets received and the carrying value of
the asset surrendered shall be recorded into the profit or loss of the current period.
Where a non-monetary assets transaction does not meet the conditions as prescribed, the carrying
value and relevant payable taxes of the assets surrendered shall be the cost of the assets received
and no profit or loss is recognized.
33. Discontinued Operation
Discontinued operation refers to the separately identifiable components that have been disposed
of or classified as held for sale and meet one of the following conditions:
(1) The component represents an independent main business or a major business area;
(2) This component is a part of a related plan that intends to dispose an independent main
business or a separate main operating area;
(3) This component is a subsidiary acquired exclusively for resale.
Profits or losses from discontinued operations are presented separately in the income statement
from continuing operations. Profits and losses from operations or disposals (e.g. impairment
losses and reversals of discontinued operations) are presented under discontinued operations. For
discontinued operations presented in the current period, the information previously under
continuing operations is presented under discontinued operations by the Group in the financial
statements for the comparable accounting period.
34. Safety Production Cost
According to the Administrative Rules on Provision and Use of Enterprise Safety Production Cost
jointly issued by the Ministry of Finance and the State Administration of Work Safety on 14
February 2012 (filed as Cai Qi [2012] No. 16), safety production cost set aside by the Group is
directly included in the cost of relevant products or recognized in profit or loss for the period, as
well as the special reserve. When safety production cost set aside is utilized, if the costs incurred
can be categorized as expenditure, the costs incurred should be charged against the special reserve.
If the costs set aside are used to build up fixed assets, the costs should be charged to construction
in progress, and reclassified to fixed assets when the safety projects are ready for intended use.
Meantime, expenditures in building up fixed assets are directly charged against the special reserve
with the accumulated depreciation recognized at the same amount. Depreciation will not be made
in the future period on such fixed assets.
- 64 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
35. Critical judgments in applying accounting policies and key assumptions and
uncertainties in accounting estimates
In the application of accounting policies as set out in Note (III), the Company is required to make
judgments, estimates and assumptions about the carrying amounts of items in the financial
statements that cannot be measured accurately, due to the internal uncertainty of the operating
activities. These judgments, estimates and assumptions are based on historical experiences of the
Company's management as well as other factors that are considered to be relevant. Actual results
may differ from these estimates.
The Company regularly reviews the judgments, estimates and assumptions on a going concern
basis. Changes in accounting estimates which only affect the current period should be recognized
in current period; changes which not only affect the current but the future periods should be
recognized in current and future periods. At the balance sheet date, key assumptions and
uncertainties that are likely to lead to significant adjustments to the book values of assets and
liabilities in the future are:
Goodwill impairment
For the purpose of impairment testing, the present value of the expected future cash flows of the
assets group or portfolio including goodwill shall be calculated, and such expected future cash
flows shall be estimated. Meantime, a pre-tax rate shall be determined that should reflect the time
value of money on the current market and the specific interest risks.
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.
- 65 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
36. Changes in significant accounting policies and accounting estimates
(1) New lease standard
Since 1 January 2019 (the date of initial application), the Group has adopted the Accounting
Standards for Business Enterprises No 21 – Leases (hereinafter referred to as "New Lease
Standards") revised by MoF in 2018. The New Leases Standard improves the definition of leases;
adds contents including identifying a lease, separating components of a lease and combination of
leases; no longer adopts the original classification of operating leases and finance leases for
lessees, requiring that in cases of all leases (except short-term leases and leases of low-value
assets), a right-of-use asset and a lease liability shall be recognised at the commencement date of
the lease; improves subsequent measurement of leases for lessors, adding accounting treatments
for changes in the lease term or the assessment of an option to purchase the underlying asset; and
sets out relevant principles for disclosure. Moreover, additional disclosure as lessor is presented.
The revised accounting policies of the Group as lessee and lessor for the recognition and
measurement of leases are set out in Note III. 30.
For the lease contracts that already existed before the application of the standard, the Group
chooses not to reassess whether the contract was, or contained, a lease on the date of initial
application.
The Group As lessee
In accordance with the New Leases Standard, during the initial application of the standard, the
accumulative amounts affected shall be adjusted in the opening balance (i.e. balance as at 1
January 2019) of relevant items in the financial statements, with no impacts on comparative
information.
Except for the leases of low-value assets, for all the leases classified as operating leases before the
initial application of the standard, the Group chooses one or more of the following practical
expedients:
Leases for which the lease term ends within 12 months of the date of initial application are
accounted for in the same way as short-term leases;
application of a single discount rate to a portfolio of leases with similar characteristics on
measuring lease liabilities;
The measurement of right-of-use assets excludes any initial direct costs incurred;
If the contract contains options to extend or terminate the lease, the Group determines the
lease term based on the actual usage of the options before the date of initial application and
hindsight.
As an alternative to impairment tests for right-of-use assets, assessed whether a contact
containing a lease was an onerous contract before the date of initial application in
accordance with the Accounting Standard for Business Enterprises No.13- Contingencies,
and adjusted right-of-use assets based on the provision for impairment of loss recorded in
the balance sheet before the date of initial application;
Performance of accounting treatments subject to final arrangements of lease modification, if
any, before the date of initial application.
- 66 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
36. Changes in significant accounting policies and accounting estimates - continued
(1) New lease standard - continued
On the date of initial application, the Group made the following adjustments in accordance with
the New Leases Standard:
For leases that were classified as finance leases previously, the carrying amount of the right-
of-use asset and the lease liability at the date of initial application shall be the carrying
amount of the lease asset and lease liability immediately before that date;
For a lease previously classified as an operating lease, the Group recognised a lease liability
at the date of initial application, by measuring that lease liability at the present value of the
remaining lease payments and discounted using the lessee’s incremental borrowing rate at
the date of initial application, and a right-of-use asset at the date of initial application, by
measuring that right-of-use asset using the following method: -- Measured at carrying
amounts as if the New Leases Standard were adopted since the commencement date of the
lease term (the incremental borrowing rate of the lessor on the date of initial application is
adopted as the discount rate).
As at 1 January 2019, the Group has recognized lease liabilities of RMB 1,231,425,355.87 and
right-of-use assets of RMB 8,280,694,060.88. For the leases classified as operating leases before
the initial application, the Group recognised the lease liabilities at the date of initial application,
by measuring that lease liability at the present value of the remaining lease payments, discounted
by the lessee’s incremental borrowing rate at the date of initial application. The weighted average
of these incremental borrowing rates is 5.12%.
Effects of applying the new lease standard on items in the consolidated balance sheet of the Group
at 1 January 2019 are as follows:
Unit: RMB
Item 31 December 2018 Reclassification 1 January 2019
Assets:
Prepayments 124,404,862.87 (42,559,680.57) 81,845,182.30
Fixed assets 22,994,190,880.43 (5,418,649,214.54) 17,575,541,665.89
Right-of-use assets 8,280,694,060.88 8,280,694,060.88
Intangible assets 20,761,018,044.54 (1,798,568,602.15) 18,962,449,442.39
Liabilities:
Other payables 1,690,124,901.29 (17,158,000.00) 1,672,966,901.29
Non-current liabilities due
2,896,971,014.97 138,227,164.89 3,035,198,179.86
within one year
Lease liabilities 1,062,562,578.13 1,062,562,578.13
Long-term payables 1,294,190,118.18 (41,329,917.95) 1,252,860,200.23
Shareholders' Equity
Unappropriated profit 8,915,817,110.21 (41,018,077.68) 8,874,799,032.53
Minority interests 49,656,450,459.88 (80,367,183.77) 49,576,083,276.11
- 67 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
36. Changes in significant accounting policies and accounting estimates - continued
(1) New lease standard - continued
The Group as the lessee - continued
Differences between the lease liabilities recognized by the Group at 1 January 2019 and the
significant operating lease commitments disclosed in the 2018 financial statements are as follows:
Unit: RMB
Item Amount
Non-cancellable operating leases at 31 December 2018: 1,756,853,448.93
Lease liabilities discounted using the incremental borrowing rate at the date of initial
879,791,487.61
application
Add: Lease liabilities arising from lease modifications to existing leases(Note 1) 18,799,241.72
Renewal option that is reasonably certain to be exercised 270,731,536.32
Less: Recognition exemption – short-term leases 9,862,435.57
Lease liabilities relating to original leases recognised under the new lease standard 1,159,459,830.08
Add: Finance lease payable at 31 December 2018 71,965,525.79
Lease liabilities 1,231,425,355.87
Including: Non-current liabilities due within one year 168,862,777.74
Lease liabilities 1,062,562,578.13
Note1: The Group entered into new lease contracts for port and terminal facilities, machinery and
equipment, furniture and fixture and other equipment, etc. As the commencement date of
the leases is after the initial application date, the above renewal contracts are accounted for
as modifications to the original contracts under the new lease standard.
The carrying amount of the right-of-use asset at 1 January 2019 is detailed as follows:
Unit: RMB
Item 1/1/2019
Right-of-use assets recognised under operating leases before the date of
1,063,476,244.19
initial application
Assets held under finance leases that are recognised as fixed assets under
5,418,649,214.54
the former lease standard (Note 2)
Land use right recognised as intangible assets under the former lease
1,798,568,602.15
standard
Total 8,280,694,060.88
The right-of-use asset disclosed by categories at 1 January 2019:
Unit: RMB
Item 1/1/2019
Port and terminal facilities 5,542,541,139.16
Buildings 164,239,617.13
Machinery and equipment, furniture and fixture and other equipment 133,936,083.43
Motor vehicles and cargo ships 10,249,287.29
Others 2,429,727,933.87
Total 8,280,694,060.88
- 68 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
36. Changes in significant accounting policies and accounting estimates - continued
(1) New lease standard - continued
The Group as the lessee - continued
Note 2: The Group recognizes the fixed assets of RMB 5,418,649,214.54 still in lease as at 1
January 2019 and classified as finance leases under the former lease standard as right-of-
use assets.
(2) Exchange of Non-monetary Assets
On 9 May 2020, the Ministry of Finance ("MoF") published the Cai Kuai (2019) No. 8.
( hereinafter referred to as the " New standards for Exchange of Non-monetary Assets ") which
revised the accounting Standards for business enterprises No.7 , Exchange of Non-monetary
Assets , and should be effective on 10 June 2019. New standards for Exchange of Non-monetary
Assets firstly revised the definition of Non-monetary Assets and clarified the application scope. It
secondly specified when to confirm a non-monetary assets transaction meets the conditions.
Thirdly, It specified the different principles for non-monetary assets input and output transaction.
Fourthly, It refined the accounting treatment and added disclosure requirements.
The Company has adjusted the non-monetary assets transaction during 1 January 2019 and 10
June 2019 and performed retroactive modulation for the transaction before 1 January 2019.
(3) Presentation of financial statements
The Company has prepared the financial statements for the year 2019 in accordance with the
Notice of the Revised Format of 2019 Financial Statements for General Business Enterprises (Cai
Kuai (2019) No. 6, hereinafter referred to as the "Cai Kuai No.6 Document") released by the
Ministry of Finance on 30 April 2019. Cai Kuai No.6 Document revised the presenting accounts
in the balance sheet and income statement and split "Notes and accounts receivable" to be "Notes
receivable" and "Accounts receivable", and "Notes and accounts payable" to be "Notes payable"
and "Accounts payable". It also specified or revised the presentation of line items of "Non-current
assets due within one year", "Deferred income", "Other equity instruments", "Research and
development expenses", "Interest income" under "Financial expenses", "Other income", "Gains on
disposal of assets", "Non-operating income" and "Non-operating expenses", and adjusted the
presenting location of "Impairment losses of assets", and specified the presentation of "Capital
contribution of holders of other equity instruments". For the above changes in presenting accounts,
the Company has adjusted retrospectively the comparable data for the prior year.
- 69 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
IV. TAXES
1. Major taxes and tax rates
Taxes Tax basis Tax rate
Taxable income 16.5%-34%(Note 1)
Enterprise income tax
Dividend income tax 5%、10%、25%(Note 2)
Income from sale of goods (Note 4) 9%-16%
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 majority of subsidiaries set up in China are subject to an enterprise income tax
rate of 25% and certain others are subject to the preferential tax rate for small and micro
enterprises of 20%, and the other overseas subsidiaries are subject to enterprise income
tax rates between 28% and 34%.
Note 2:Foreign investors who receive dividends of profits from Chinese subsidiaries in 2008 and
thereafter generally shall pay withholding income tax at a rate of 10% in accordance with
the relevant provisions of the PRC enterprise income tax. For companies incorporated in
certain regions (including Hong Kong and Singapore), if the companies are actual owners
holding more than 25% interest in the subsidiaries in China, they will enjoy a preferential
tax rate of 5%.
The Company obtains dividends distributed by overseas subsidiaries and should pay
enterprise income tax at a rate of 25% in accordance with relevant Chinese tax laws. The
Company obtains taxable income outside of China, and the amount of income tax that has
been paid abroad can be offset with the current taxable amount. The credit limit is the
taxable amount calculated in accordance with the provisions of the Enterprise Income Tax
Law.
Note3: 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.
- 70 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(IV) TAXES - continued
1. Major taxes and tax rates - continued
Note4: Pursuant to Announcement of Customs on Relevant Policies for Deepening the Value-
Added Tax Reform issued by the Ministry of Finance, the State Taxation Administration
and the General Administration (Announcement No. 39 [2019] of the Ministry of Finance,
the State Taxation Administration and the General Administration of Customs), from 1
April 2019, the tax rate of 16% and 10% applicable to the VAT taxable sale or import of
goods are adjusted to 13% and 9%, respectively.
Note5: The social contribution tax is the tax paid by the overseas subsidiaries of the Group to the
local government.
2. Tax preference
Some subsidiaries of the Group in China are recognized as high-tech enterprises or encouraged
industrial enterprises in the region and are subject to an enterprise income tax rate of 15%. The
Group's subsidiaries outside China may be subject to enterprise income tax preference in
accordance with relevant local tax policies.
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
1. Cash and bank balances
Unit: RMB
Opening balance
Item Closing balance
(restated)
Cash 331,305.65 349,650.07
RMB 122,990.39 77,877.30
USD 55,429.82 29,909.14
HKD 28,354.40 57,342.60
BRL 8,872.81 11,402.34
Others 115,658.23 173,118.69
Bank deposit (Note1) 7,423,112,193.18 6,118,508,644.13
RMB 4,868,888,181.56 3,401,709,911.75
USD 1,597,545,919.28 1,326,034,833.97
EUR 528,103,576.51 359,682,134.06
BRL 310,275,686.79 539,493,644.44
HKD 76,041,665.91 432,603,546.37
Others 42,257,163.13 58,984,573.54
Other cash and bank balances (Note 2) 311,504,711.43 958,538,601.52
RMB 311,504,711.43 958,538,601.52
Total 7,734,948,210.26 7,077,396,895.72
Including: The total amount of funds deposited overseas 3,511,266,717.03 2,809,011,079.47
Note1: The bank deposits of the Group deposited overseas and restricted for remittance to China
at the end of the year totaled RMB nil (at the end of the previous year: RMB
1,002,027,200.00).
- 71 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
1. Cash and bank balances - continued
Note2: The structured deposits that can be readily withdrawn on demand totaled RMB
294,519,101.06, the deposit totaled RMB 15,648,978.15, and the balance of the margin
maintenance account was RMB 1,336,632.22.
2. Notes receivable
(1) Category of notes receivable
Unit: RMB
Category Closing balance Opening balance
Bank acceptance 13,290,478.02 11,608,669.43
Commercial acceptance 24,901,772.00 -
Total 38,192,250.02 11,608,669.43
Less: Provision for credit losses (Note) - -
Carrying amount 38,192,250.02 11,608,669.43
Note: The Group believes that the acceptor of its bank acceptance and commercial acceptance
have high credit ratings with no significant credit risks; therefore, no provision for credit
loss is made.
(2) As at 31 December 2019, there are no notes receivable pledged.
(3) As at 31 December 2019, there are no notes receivable endorsed or discounted which are not
yet due at the balance sheet date.
Unit: RMB
Amount
Amount recognized
Item derecognized at the
at the end of the year
end of the year
Bank acceptance 300,000.00 -
Commercial acceptance 4,541,403.43 -
Total 4,841,403.43 -
(4) As at 31 December 2019, there are no notes reclassified to accounts receivable due to the
drawers' inability to settle the note.
(5) The Group has no notes receivable written off in 2019.
- 72 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
3. Accounts receivable
(1) Accounts receivable disclosed by aging
Unit: RMB
Closing balance
Aging Accounts
Provision for credit loss Proportion (%)
receivable
Within 1 year 1,397,114,366.29 53,712,152.09 3.84
More than 1 year but not exceeding 2 years 12,924,655.94 1,233,944.62 9.55
More than 2 years but not exceeding 3 years 1,304,475.96 499,044.67 38.26
More than 3 years 43,951,987.53 43,390,214.44 98.72
Total 1,455,295,485.72 98,835,355.82
(2) Disclosure of accounts receivable by categories
Unit: RMB
Expected Closing balance Opening balance
Credit
credit loss rate Provision for Carrying Provision for credit
rating Carrying amount Book value Book value
(%) credit loss amount loss
A 0.00-0.10 552,947,162.60 236,251.00 552,710,911.60 323,319,258.26 32,331.93 323,286,926.33
B 0.10-0.30 730,397,420.98 2,106,455.92 728,290,965.06 614,037,476.13 1,144,038.38 612,893,437.75
C 0.30-50.00 70,292,155.38 1,703,501.79 68,588,653.59 155,462,941.77 2,079,476.01 153,383,465.76
D 50.00-100.00 101,658,746.76 94,789,147.11 6,869,599.65 59,928,872.52 40,262,199.28 19,666,673.24
Total 1,455,295,485.72 98,835,355.82 1,356,460,129.90 1,152,748,548.68 43,518,045.60 1,109,230,503.08
(3) Changes in provision for credit loss of accounts receivable
Unit: RMB
Lifetime expected credit loss Lifetime expected credit loss
Item Total
(not credit-impaired) (credit-impaired)
At 1 January 2019 3,255,846.32 40,262,199.28 43,518,045.60
Carrying amount of accounts receivable at 1 January 2019
-- Transferred to credit-impaired
- - -
accounts receivables
-- Reversed to not credit-impaired
- - -
accounts receivable
Provision for the year 1,667,805.36 52,556,214.94 54,224,020.30
Reversal for the year (2,049,083.92) (296,692.00) (2,345,775.92)
Transfer-out from derecognition of
financial assets(including direct - - -
write-down)
Other changes 1,171,640.95 2,267,424.89 3,439,065.84
At 31 December 2019 4,046,208.71 94,789,147.11 98,835,355.82
(4) The Group has no accounts receivable written off in 2019.
- 73 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
3. Accounts receivable - continued
(5) The top five balances of accounts receivable classified by debtor
Unit: RMB
Proportion of the
Closing balance
amount to the total
Name of entity Closing balance Aging of provision for
accounts receivable
credit loss
(%)
Client A 149,146,106.27 Within 1 year 10.24 149,146.11
Within 1 year, more than 1
year but not exceeding 2
Client B 88,998,923.34 years, more than 2 year but 6.12 158,176.01
not exceeding 3 years, more
than 3 years
Within 1 year, more than 1
year but not exceeding 2
Client C 65,719,439.09 4.52 65,719.44
years, more than 2 year but
not exceeding 3 years
Client D 61,650,252.50 Within 1 year 4.24 61,650.25
Client E 48,948,830.76 Within 1 year 3.36 48,948.83
Total 414,463,551.96 28.48 483,640.64
4. Accounts receivable financing
(1) Accounts receivable financing classification
Unit: RMB
Items Closing balance Opening balance
Bank acceptance measured by fair value 260,760,537.45 -
(2) On 31 December 2019，The Group has no pledged accounts receivable financing.
(3) On 31 December 2019，The Group has no pledged accounts receivable financing.
Unit: RMB
Closing balance Opening balance
Items
Derecognized Recognized Derecognized Recognized
Bank acceptance measured by fair value 129,391,886.08 - - -
5. Prepayments
(1) Aging analysis of prepayment
Unit: RMB
Closing balance Opening balance
Aging Proportion Proportion
Amount (%) Amount (%)
Within 1 year 50,341,341.46 91.47 124,276,781.51 99.90
More than 1 year but not exceeding 2 years 4,533,596.99 8.24 4,000.00 -
More than 2 years but not exceeding 3 years - - 81.36 -
More than 3 years 159,081.36 0.29 124,000.00 0.10
Total 55,034,019.81 100.00 124,404,862.87 100.00
- 74 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
5. Prepayments - continued
(2) As at 31 December 2019, the Group has no significant prepayments aged more than one
year.
(3) The top five balances of prepayments classified by entities
Unit: RMB
Relationship with the Proportion of the closing balance
Name of entity 31 December 2019
Company to the total prepayments (%)
Saham Assurance Togo S.A. Non-related party 6,039,892.02 10.98
Chubb Seguros Brasil S.A. Non-related party 5,471,286.32 9.94
Fairfax Brasil Seguros
Non-related party 3,038,626.22 5.52
Corporativos S.A.
N-Able (Pvt) Ltd. Non-related party 1,824,252.09 3.31
Allianz Non-related party 1,502,286.34 2.73
Total 17,876,342.99 32.48
6. Other receivables
6.1 Summary of other receivables
Unit: RMB
Opening balance
Item Closing balance
(restated)
Interest receivable 159,794.48 -
Dividend receivable 459,352,522.24 259,804,145.16
Other receivables 1,669,865,935.78 506,713,933.56
Total 2,129,378,252.50 766,518,078.72
6.2 Interest receivable
(1) Classification of interest receivable
Unit: RMB
Item Closing balance Opening balance
Interest receivable from related parties 159,954.43 -
Others - -
Total 159,954.43 -
Less: Provision for credit loss 159.95 -
Book value 159,794.48 -
(2) As at 31 December 2019, the Group has no significant overdue interest.
- 75 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
6. Other receivables - continued
6.3 Dividend receivable
(1) Presentation of dividend receivable
Unit: RMB
Name of investee Closing balance Opening balance
China Nanshan Development (Group) Incorporation ("Nanshan
313,435,420.00 175,692,500.00
Group")
Tin-Can Island Container Terminal Ltd 82,625,546.31 -
Qingdao Qianwan United Container Terminal Co., Lt. 50,000,000.00 25,000,000.00
Zhanjiang Port (Group) Co., Ltd.(" Zhanjiang Port ") - 9,253,682.23
Shanghai International Port (Group) Co., Ltd. - 50,118,027.14
Others 13,751,368.26 -
Total 459,812,334.57 260,064,209.37
Less: Provision for credit loss 459,812.33 260,064.21
Book value 459,352,522.24 259,804,145.16
(2) Significant dividend receivable aged more than 1 year
Unit: RMB
Closing balance of
Name of investee Closing balance Aging Why unrecovered provision for
credit losses
Undergoing relevant
More than 1 year formalities and
Nanshan Group 105,415,500.00 but not exceeding expected to be 105,415.50
2 years recovered at the end
of 2020
(3) Changes in provision for credit loss of dividends receivable
Unit: RMB
Stage 1 Stage 2 Stage 3
Lifetime expected Lifetime expected
Item Expected credit loss in Total
credit loss (not credit- credit loss (credit-
12 months
impaired) impaired)
At 1 January 2019 260,064.21 - - 260,064.21
Carrying amount of dividends receivable at 1 January 2019
--Transfer to Stage 2 - - - -
--Transfer to Stage 3 - - - -
-- Reverse to Stage 2 - - - -
--Reverse to Stage 1 - - - -
Provision for the year 199,748.12 - - 199,748.12
Reversal for the year - - - -
Transfer-out on
derecognition of financial
- - - -
assets( including direct
write-down)
Other changes - - - -
At 31 December 2019 459,812.33 - - 459,812.33
- 76 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
6. Other receivables - continued
6.4 Other receivables
(1) Other receivables disclosed by aging
Unit: RMB
Closing balance
Aging Provision for credit
Other receivables Proportion (%)
loss
Within 1 year 1,300,755,524.31 1,978.18 0.00
More than 1 year but not exceeding 2 years 14,474,718.17 46,121.93 0.32
More than 2 years but not exceeding 3 years 3,556,322.62 56,383.37 1.59
More than 3 years 387,443,486.16 36,259,632.00 9.36
Total 1,706,230,051.26 36,364,115.48
(2) Disclosure of other receivables by nature
Unit: RMB
Item Closing balance Opening balance
Operation compensation(Note 1) 669,121,539.36 176,625,857.32
Land compensation (Note 2) 521,246,000.00 -
Temporary payments 334,617,193.32 187,153,302.95
Compensation for profit or loss on transition( Note 3) 35,317,035.66 -
Deposits 21,309,320.77 39,657,003.56
Others 124,618,962.15 138,880,391.56
Total 1,706,230,051.26 542,316,555.39
Less: Provision for credit loss 36,364,115.48 35,602,621.83
Book value 1,669,865,935.78 506,713,933.56
Note 1: It is the compensation paid by Global Terminal Limited, the holding company of the non-
controlling shareholder of LoméContainer Terminal S.A.(hereinafter referred to as
"LCT"), the non-wholly owned subsidiary of the Group for the operation of the subsidiary,
refer to Note V, 59 for details.
Note 2: On 5 November 2019, Shantou China Merchants Port Group Co., Ltd.(hereinafter referred
to as " Shantou Port") entered into the Contract for the Acquisition of State-Owned Land
Use Rights in Shantou with Shantou Land Reserve Center. Pursuant to the contract, the
land and attached buildings of approximately 370.96 mu located in Zhuchi deepwater port
on the south of Zhongshan East Road of Shantou will be returned to Shantou Land
Reserve Center by Shantou Port, which is amounting to RMB 1,558,032,000.00.
As at 31 December 2019, there are land and attached buildings of approximately 183.63
mu pending for transfer with the carrying amount of RMB 207,904,868.22 and the
compensation of RMB 771,246,000.00. The compensation is approximately
RMB537,635,141.78. After netting transaction expenses, the land compensation of
RMB521,246,000.00 is not yet recovered.
As at 31 December 2019, there are land and attached buildings of 187.33 mu pending for
transfer, which are presented as held for sale assets by the Group.
- 77 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
6. Other receivables - continued
6.4 Other receivables - continued
(2) Disclosure of other receivables by nature - continued
Note 3:As stated in Note VI.1, the Company acquired Zhanjiang Port this year. According to
relevant contract terms, Zhanjiang Infrastructure, the non-controlling shareholder of
Zhanjiang Port, shall have the compensation for profit or loss on transition of RMB
31,513,558.59 (calculated based on the original shareholding ratio) paid to the Company
in the form of dividends deduction; Sinotrans Guangdong Co., Ltd., the former
shareholder of Zhangjiang Port, shall have the compensation for profit or loss on transition
of RMB 3,803,477.07 (calculated based on the original shareholding ratio) paid to the
Company in the form of dividends deduction.
(3) Provision for credit loss on other receivables
As part of the Group's credit risk management, the Group conducts internal credit ratings for its
customers and determines the expected loss rate for other receivables for each rating. Such
expected average loss rates are based on actual historical impairments and taking into account the
current and future economic conditions.
As at 31 December 2019, the credit risk and expected credit loss of other receivables of each
category of customers are presented as below:
Unit: RMB
Closing balance Opening balance
Lifetime
Lifetime expected Lifetime
Expected Lifetime
Credit Expected credit expected Expected credit expected
credit loss expected credit
rating loss in 12 credit loss Total credit loss in loss (not credit loss Total
rate (%) loss (credit-
months (not credit- 12 months credit- (credit-
impaired)
impaired) impaired impaired)
)
A 0.00-0.10 1,669,968,696.05 - - 1,669,968,696.05 - - -
B 0.10-0.30 - - - - 506,719,623.66 - - 506,719,623.66
C 0.30-50.00 - - - - -
D 50.00-100.00 - - 36,261,355.21 36,261,355.21 - 35,596,931.73 35,596,931.73
Account - -
1,669,968,696.05 36,261,355.21 1,706,230,051.26 506,719,623.66 35,596,931.73 542,316,555.39
balance
Provision
for credit 102,760.27 - 36,261,355.21 36,364,115.48 5,690.10 - 35,596,931.73 35,602,621.83
loss
Book -
1,669,865,935.78 - 1,669,865,935.78 506,713,933.56 - - 506,713,933.56
value
- 78 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
6. Other receivables - continued
6.4 Other receivables - continued
(4) Changes in provision for credit loss of other receivables
Unit: RMB
Stage 1 Stage 2 Stage 3
Lifetime expected Lifetime expected
Item Expected credit Total
credit loss (not credit- credit loss (credit-
loss in 12 months
impaired) impaired)
At 1 January 2019 5,690.10 - 35,596,931.73 35,602,621.83
Carrying amount of other receivables at 1 January 2019
--Transfer to Stage 2 - - - -
--Transfer to Stage 3 - - - -
-- Reverse to Stage 2 - - - -
--Reverse to Stage 1 - - - -
Provision for the year 39,665.00 - 576,181.80 615,846.80
Reversal for the year (2,497,831.58) - - (2,497,831.58)
Transfer-out on derecognition of
financial assets( including direct - - - -
write-down)
Other changes 2,555,236.75 - 88,241.68 2,643,478.43
At 31 December 2019 102,760.27 - 36,261,355.21 36,364,115.48
(5) The Group has no other receivables written off in 2019.
(6) The top five balances of other receivables classified by debtor
Unit: RMB
Proportion of the Provision for
amount to the credit loss at
Name of entity Nature Closing balance Aging
other receivable the end of the
(%) year
Operation Within 1 year,
Global Terminal Limited 669,121,539.36 39.22 17,528.45
compensation More than 3 years
Land
Shantou Land Reserve Center 521,246,000.00 Within 1 year 30.55 -
compensation
Shenzhen Qianhaiwan Bonded Port Temporary
61,317,510.00 More than 3 years 3.59 6,131.75
Authority payments
State-owned Assets Supervision and Temporary
Administration Commission of payments
43,674,019.13 More than 3 years 2.56 4,367.40
Shantou Municipal People's
Government
Shenzhen Qianhaiwan Bonded Port Temporary
43,326,181.06 Within 1 year 2.54 -
Area Authority payments
Total 1,338,685,249.55 78.46 28,067.60
- 79 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Inventories
(1) Categories of inventories
Unit: RMB
Closing balance Opening Balance
Provision for Provision for
Item Carrying Carrying
decline in value Book value decline in value Book value
amount amount
of inventories of inventories
Raw materials 147,548,980.01 1,918,890.33 145,630,089.68 89,572,663.06 2,584,953.53 86,987,709.53
Finished goods 4,944,593.66 - 4,944,593.66 4,629,610.81 - 4,629,610.81
Others 13,405,508.74 - 13,405,508.74 16,949,949.68 - 16,949,949.68
Total 165,899,082.41 1,918,890.33 163,980,192.08 111,152,223.55 2,584,953.53 108,567,270.02
(2) Provision for decline in value of inventories
Unit: RMB
Decrease
Item 1 January 2019 Provision 31 December 2019
Reversal Write-off
Raw materials 2,584,953.53 - 25,051.16 641,012.04 1,918,890.33
(3) As at 31 December 2019, the Group has no capitalized borrowing cost in the balance of
inventories.
8. Assets held for sale
Unit: RMB
Carrying amount Fair value at closing Estimated
Item Schedule
at closing balance balance disposal expenses
Removal before 30
Long-term assets held for sale 188,404,228.34 786,786,000.00 20,815,400.00
June 2020
Less: Provision for
impairment of assets held for -
sale
Carrying amount 188,404,228.34
Note: Refer to Note (V) 6.4(2) for details.
9. Non-current assets due within one year
Unit: RMB
Opening balance
Item Closing balance
(restated)
Long-term receivables due within one year 809,702,715.78 25,986,030.98
Less: Provision for credit loss 809,702.72 33,074.22
Book value 808,893,013.06 25,952,956.76
- 80 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
10. Other current assets
(1) Categories of other current assets
Unit: RMB
Item Closing balance Opening balance
Structural deposits 2,000,298,176.18 -
Including: Principal 1,991,000,000.00 -
Interest receivable 9,298,176.18 -
Prepaid taxes 31,612,381.68 7,872,157.38
Loans to associates of related parties - 1,029,478,047.00
Others(Note) 266,882,103.84 159,100,462.79
Total 2,298,792,661.70 1,196,450,667.17
Less: Provision for credit loss – loans to associates of related
- 1,029,478.05
parties
Book value 2,298,792,661.70 1,195,421,189.12
Note: Refer to the VAT credits of domestic subsidiaries.
(2) Changes in provision for credit loss on other current assets
Unit: RMB
Stage 1 Stage 2 Stage 3
Lifetime expected Lifetime expected
Item Expected credit loss in Total
credit loss (not credit- credit loss (credit-
12 months
impaired) impaired)
At 1 January 2019 1,029,478.05 - - 1,029,478.05
Carrying amount of other current assets at 1 January 2019
--Transfer to Stage 2 - - - -
--Transfer to Stage 3 - - - -
-- Reverse to Stage 2 - - - -
--Reverse to Stage 1 - - - -
Provision for the year - - - -
Reversal for the year (1,029,478.05) - - (1,029,478.05)
Transfer-out on
derecognition of financial
- - - -
assets( including direct
write-down)
Other changes - - - -
At 31 December 2019 - - - -
- 81 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
11. Long-term receivables
(1) Details of long-term receivables
Unit: RMB
Closing balance Opening balance (restated)
Item Provision for Provision for
Account balance Book value Account balance Book value
credit loss credit loss
Principal and
interest of
1,025,631,435.87 1,025,631.44 1,024,605,804.43 - - -
receivables for
cooperation(Note )
Advances to
869,503,011.54 869,503.01 868,633,508.53 819,826,111.17 826,914.30 818,999,196.87
shareholders
Financing lease - - -
14,500,000.00 14,500.00 14,485,500.00
deposits
Total 1,909,634,447.41 1,909,634.45 1,907,724,812.96 819,826,111.17 826,914.30 818,999,196.87
Less: Long-term
receivables due 809,702,715.78 809,702.72 808,893,013.06 25,986,030.98 33,074.22 25,952,956.76
within 1 year
Long-term
receivables due 1,099,931,731.63 1,099,931.73 1,098,831,799.90 793,840,080.19 793,840.08 793,046,240.11
over 1 year
Note: Refer to the land-transferring fees of cruise port project paid by Zhangjiang Port, subsidiary
of the Company on behalf of its associate Zhanjiang China Merchants Harbor City
Investment Co., Ltd. ("China Merchants Harbor City"); and the interest is paid by China
Merchants Harbor City in accordance with the benchmark interest rate of the People's Bank
of China for the same period.
(2) Provision for credit loss on long-term receivables
Unit: RMB
Stage 1 Stage 2 Stage 3
Item Lifetime expected Lifetime expected Total
Expected credit loss in
credit loss (not credit- credit loss (credit-
12 months
impaired) impaired)
At 1 January 2019 826,914.30 - - 826,914.30
Carrying amount of long-term receivables at 1 January 2019
--Transfer to Stage 2 - - - -
--Transfer to Stage 3 - - - -
-- Reverse to Stage 2 - - - -
--Reverse to Stage 1 - - - -
Provision for the year 1,082,720.15 - - 1,082,720.15
Reversal for the year - - - -
Transfer-out on
derecognition of financial
- - - -
assets( including direct
write-down)
Other changes - - - -
At 31 December 2019 1,909,634.45 - - 1,909,634.45
(3) As at 31 December 2019, there are no long-term receivables derecognized due to the
transfer of financial assets at the end of the year.
- 82 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
11. Long-term receivables - continued
(4) There are no assets and liabilities arising from the transfer or continuing involvement of long-term receivables at 31 December 2019.
12. Long-term investments
Unit: RMB
Changes for the year
Effect of
Effect of
Reconciling translation of Closing value
Accounti changes in the Cash dividends Provisio
Investment profit items from financial 31 December of provision
Investees ng 1 January 2019 scope of Other equity or profits n for
Increase or loss under other Others statements 2019 for
method consolidation(N movements announced of impairm
equity method comprehensive denominated in impairment
ote 2) issuance ent
income foreign
currencies
I. Joint ventures
Equity
Euro-Asia Oceangate S.àr.l. 2,668,860,034.32 - - 71,820,758.28 (280,527.66) - (147,837,530.98) - - 43,205,141.32 2,635,767,875.28 -
method
Equity
Port of Newcastle(Note 1) 2,122,353,964.75 - 68,471,438.86 31,855,255.55 (22,634,759.93) - (28,606,943.76) - - 28,557,291.19 2,199,996,246.66 -
method
Qingdao Qianwan United Container Equity
1,512,162,331.41 - - 142,602,575.17 - - (150,000,000.00) - - - 1,504,764,906.58 -
Terminal Co., Ltd. method
Ningbo Daxie Merchants Equity
815,846,742.40 - - 120,498,548.83 - - (82,350,000.00) - - - 853,995,291.23 -
International Terminals Co., Ltd. method
Laizhou Laiyin Port Business Co., Equity
793,557,064.58 - - 42,110,853.02 - - (43,605,689.02) - - - 792,062,228.58 -
Ltd. method
Equity
Zhangjiang Port(Note 2) 2,007,506,536.77 - - 4,273,885.37 - - - (2,011,780,422.14) - - - -
method
Equity
Others 1,310,015,480.03 113,562,995.78 8,000,000.00 55,537,145.35 4,196,807.83 - (23,106,144.67) (67,529,762.21) - 4,963,495.78 1,405,640,017.89 -
method
Subtotal 11,230,302,154.26 113,562,995.78 76,471,438.86 468,699,021.57 (18,718,479.76) - (475,506,308.43) (2,079,310,184.35) - 76,725,928.29 9,392,226,566.22 -
II. Associates
Shanghai International Port (Group)
Equity
Co., Ltd. 22,187,560,070.95 - - 2,425,921,985.71 (44,041,520.45) 305,487,960.90 (955,194,576.56) - - (1,691,053.00) 23,918,042,867.55 -
method
(A Share)
Equity
Nanshan Group 5,061,280,021.90 - - 242,285,185.34 (9,766,075.98) 15,461,264.40 (219,122,880.00) - - - 5,090,137,515.66 -
method
Equity
Terminal Link SAS 3,933,259,485.26 - - 280,560,341.83 12,048,067.43 - - - - (13,463,319.11) 4,212,404,575.41 -
method
Equity
Dalian Port Co., Ltd. 3,203,881,342.67 - - 148,347,321.32 5,010,696.01 2,082,698.58 (51,579,984.00) - - (14,481,518.80) 3,293,260,555.78 661,864,517.40
method
Shenzhen China Merchants Qianhai
Industrial Development Co.,
Ltd.(hereinafter referred to as" China Equity
72,800,000.00 - 7,456,412,803.00 (5,514,066.49) - - - (682,632,512.39) - - 6,841,066,224.12 -
Merchants Qianhai Industrial method
")(Note 3)
Equity
Others 4,487,494,188.36 59,122,780.74 678,573,224.36 167,550,973.94 (78,353,158.16) 34,520,308.86 (257,058,128.22) - - 77,550,888.64 5,169,401,078.52 -
method
Subtotal 38,946,275,109.14 59,122,780.74 8,134,986,027.36 3,259,151,741.65 (115,101,991.15) 357,552,232.74 (1,482,955,568.78) (682,632,512.39) - 47,914,997.73 48,524,312,817.04 661,864,517.40
Total 50,176,577,263.40 172,685,776.52 8,211,457,466.22 3,727,850,763.22 (133,820,470.91) 357,552,232.74 (1,958,461,877.21) (2,761,942,696.74) - 124,640,926.02 57,916,539,383.26 661,864,517.40
- 83 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS – continued
12. Long-term investments - continued
Note 1:The increase for the year is the stamp tax paid of AUD 14 million (equivalent to RMB
68,471,438.86) due to acquisition of 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 (collectively referred to as" Port of Newcastle").
Note 2: Refer to Note VI, 1 for details.
Note 3: Refer to Note X,5(6) for details.
13. Other investments in equity instruments
(1) Details of Other investments in equity instruments
Unit: RMB
Investees Closing balance Opening balance
China Ocean Shipping Agency (Shenzhen) Co., Ltd. 144,069,435.00 141,547,500.00
Lac Assal Investment Holding Company Limited - 88,806,577.97
Others 19,491,837.00 17,494,236.33
Total 163,561,272.00 247,848,314.30
(2) Details of non-trading equity instruments
Unit: RMB
Why
Amounts
transferred to
transferred to
Dividends income retained
Accumulated retained earnings Why designated as
Item recognized for the earnings from
gains/losses from other FVTOIC
year other
comprehensive
comprehensive
income
income
The intention of
China Ocean Shipping holding is neither
10,362,585.00 130,559,435.00 - N/A
Agency (Shenzhen) Co., Ltd. for sale nor profits
in short-term
The intention of
Lac Assal Investment holding is neither Transformed
- 6,127,068.35 6,127,068.35
Holding Company Limited for sale nor profits to an associate
in short-term
East Aden
The intention of Holding
holding is neither Company
Others 580,175.11 6,648,872.81 (1,742,907.19)
Limited
for sale nor profits
in short-term transformed to
an associate
Total 10,942,760.11 143,335,376.16 4,384,161.16
- 84 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS – continued
14. Other non-current financial assets
Unit: RMB
Item Closing balance Opening balance
Financial assets at FVTPL 2,385,363,537.39 2,087,872,081.94
Including: Investments in equity instruments 2,385,363,537.39 2,087,872,081.94
Including：Ningbo Zhoushan Port Co., Ltd.(A shares) 1,548,914,671.20 1,361,414,474.58
Qingdao Port International Co., Ltd. 820,263,917.11 603,681,045.90
Others 16,184,949.08 122,776,561.46
15. Investment properties
(1) Investment properties measured under cost method
Unit: RMB
Item Land use rights Buildings Total
I.Total original carrying amount
1. Balance at 1 January 2019 28,632,130.84 6,292,605,806.72 6,321,237,937.56
2.Increase in the current year 77,095,361.98 5,744,045.30 82,839,407.28
(1) Changes in consolidation
77,095,361.98 - 77,095,361.98
scope
(2) Other increase - 5,744,045.30 5,744,045.30
3.Decrease in the current year - 6,611,400.00 6,611,400.00
4. Balance at 31 December 2019 105,727,492.82 6,291,738,452.02 6,397,465,944.84
II.Accumulated depreciation and
amortisation
1. Balance at 1 January 2019 15,495,791.85 415,595,156.20 431,090,948.05
2.Increase in the current year 15,756,720.44 190,883,555.47 206,640,275.91
(1) Provision for the year 2,134,718.70 188,283,452.16 190,418,170.86
(2)Changes in consolidation
13,622,001.74 - 13,622,001.74
scope
(3) Other increase 2,600,103.31 2,600,103.31
3. Decrease in the current year - 527,953.52 527,953.52
4. Balance at 31 December 2019 31,252,512.29 605,950,758.15 637,203,270.44
III.Impairment provision
1. Balance at 1 January 2019 - - -
2. Increase in the current year - - -
3. Decrease in the current year - - -
4. Balance at 31 December 2019 - - -
IV. Book value
1. At 31 December 2019 74,474,980.53 5,685,787,693.87 5,760,262,674.40
2. At 1 January 2019 13,136,338.99 5,877,010,650.52 5,890,146,989.51
(2) Investment properties without ownership certificates
Unit: RMB
Item Closing balance Opening balance
Buildings and land use rights 40,255,588.09 43,119,291.89
- 85 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS – continued
16. Fixed assets
16.1 Summary of fixed assets
Unit: RMB
Item Closing balance Opening balance
Fixed assets 27,519,109,906.41 22,994,155,151.43
Disposal of fixed assets 852,622.88 35,729.00
Total 27,519,962,529.29 22,994,190,880.43
16.2 Fixed assets
(1) Details of fixed assets
Unit: RMB
Machinery and
Port and terminal equipment, furniture Motor vehicles and
Item Buildings Total
facilities and fixture and other cargo ships
equipment
I. Total original carrying amount
1. Balance at 31 December 2018 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
Add: Changes in accounting policy (5,228,720,859.19) (133,330,274.56) (262,585,213.34) (38,350,000.00) (5,662,986,347.09)
2. Balance at 1 January 2019 16,606,517,007.79 1,015,636,160.90 10,329,571,144.82 1,329,915,652.07 29,281,639,965.58
3. Increase for the year 10,705,981,160.20 610,385,510.98 3,540,091,808.12 744,710,073.31 15,601,168,552.61
(1)Purchase 57,330,774.88 4,509,444.69 133,011,962.46 20,136,360.22 214,988,542.25
(2)Transfer from development
- - 203,539.84 - 203,539.84
expenditure
(3)Transfer from construction in
2,178,289,357.84 31,634,640.06 754,826,891.92 84,474,509.55 3,049,225,399.37
progress
(4)Transfer from other non-current
- - 52,470,573.84 - 52,470,573.84
asserts
(5) Effect of changes in the scope
8,470,361,027.48 574,241,426.23 2,599,578,840.06 640,099,203.54 12,284,280,497.31
of consolidation
4. Decrease for the year 454,021,361.06 8,842,438.62 197,980,656.97 46,814,646.40 707,659,103.05
(1) Disposal or retirement 290,094,629.69 4,866,167.52 194,751,763.03 46,814,646.40 536,527,206.64
(2) Transfer to investment
- 3,976,271.10 - - 3,976,271.10
properties
(3)Transfer to held for sale assets 163,926,731.37 - 3,228,893.94 - 167,155,625.31
5. Effect of changes in foreign
(23,249,228.12) 2,513,708.28 16,395,624.54 11,405,782.06 7,065,886.76
exchange
6. Balance at 31 December 2019 26,835,227,578.81 1,619,692,941.54 13,688,077,920.51 2,039,216,861.04 44,182,215,301.90
II. Accumulated depreciation
1. Balance at 31 December 2018 4,947,169,556.44 247,180,241.42 6,183,431,342.23 515,226,508.99 11,893,007,649.08
Add: Changes in accounting policy (79,532,929.29) (6,255,609.41) (130,447,881.14) (28,100,712.71) (244,337,132.55)
2. Balance at 1 January 2019 4,867,636,627.15 240,924,632.01 6,052,983,461.09 487,125,796.28 11,648,670,516.53
3. Increase for the year 3,000,601,209.37 162,942,162.21 1,905,806,501.71 382,573,252.12 5,451,923,125.41
(1) Provision 779,035,162.75 55,401,978.88 749,519,583.33 97,050,501.54 1,681,007,226.50
(2) Effect of changes in the scope
2,221,566,046.62 107,540,183.33 1,156,286,918.38 285,522,750.58 3,770,915,898.91
of consolidation
4. Decrease for the year 270,361,688.78 6,129,923.93 187,507,185.22 36,724,765.35 500,723,563.28
(1) Disposal or retirement 171,504,010.93 3,529,820.62 184,704,078.66 36,724,765.35 396,462,675.56
(2) Transfer to investment
- 2,600,103.31 - - 2,600,103.31
properties
(3)Transfer to held for sale assets 98,857,677.85 - 2,803,106.56 - 101,660,784.41
5. Effect of changes in foreign
(2,145,974.27) 718,710.53 4,889,844.24 2,107,868.19 5,570,448.69
exchange
6. Balance at 31 December 2019 7,595,730,173.47 398,455,580.82 7,776,172,621.82 835,082,151.24 16,605,440,527.35
III. Impairment provision
1. Balance at 31 December 2018 57,419,468.96 - 44,043.20 - 57,463,512.16
Add: Changes in accounting policy - - - - -
2. Balance at 1 January 2019 57,419,468.96 - 44,043.20 - 57,463,512.16
3. Increase for the year - - 201,355.98 - 201,355.98
(1) Effect of changes in the scope
- - 201,355.98 - 201,355.98
of consolidation
4. Decrease for the year - - - - -
5. Balance at 31 December 2019 57,419,468.96 - 245,399.18 - 57,664,868.14
IV. Book value
1. Book value at 31 December 2019 19,182,077,936.38 1,221,237,360.72 5,911,659,899.51 1,204,134,709.80 27,519,109,906.41
2. Book value at 31 December 2018 16,830,648,841.58 901,786,194.04 4,408,680,972.73 853,039,143.08 22,994,155,151.43
(2) The Group has no fixed assets that are temporarily idle as at 31 December 2019.
- 86 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
16. Fixed assets - continued
16.2 Fixed assets - continued
(3) Fixed assets leased out under operating leases
Unit: RMB
Book value at 31 Book value at 31
Item
December 2019 December 2018
Buildings 312,602,129.37 242,804,849.53
Port and terminal facilities 12,233,139.52 844,843,802.95
Machinery and equipment, furniture and fixture and other
63,964.98 139,712.96
equipment
Motor vehicles and cargo ships 17,754.72 -
Total 324,916,988.59 1,087,788,365.44
(4) Fixed assets without ownership certificates
Unit: RMB
Book value at 31 Book value at 31
Item
December 2019 December 2018
Buildings, port and terminal facilities 1,652,483,135.07 1,590,990,468.38
(5) Other issues
Unit: RMB
Item Amount Remark
Cost of fixed assets fully depreciated but still in use as at 31
2,791,308,996.03
December 2019
Cost of fixed assets temporarily idle as at 31 December 2019 -
Fixed assets disposed and retired for the year:
Cost of fixed assets disposed and retired 536,527,206.64
Net value of fixed assets disposed and retired 140,064,531.08
Profit or loss on disposal or retirement of fixed assets (17,700,058.28)
15.3 Disposal of fixed assets
Unit: RMB
Item Closing balance Opening balance
Machinery and equipment, furniture and fixture and other
848,410.93 23,079.00
equipment
Motor vehicles and cargo ships 4,211.95 12,650.00
Total 852,622.88 35,729.00
- 87 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
17. Construction in progress
17.1 Summary of construction in progress
Unit: RMB
Item Closing balance Opening balance
Construction in progress 6,318,389,715.70 5,499,426,090.06
Materials for construction of fixed assets 15,751,726.18 -
Total 6,334,141,441.88 5,499,426,090.06
17.2 Construction in progress
(1) Details of construction in progress
Unit: RMB
Closing balance Opening balance
Item Provision for Provision for
Carrying amount impairment Book value Carrying amount impairment Book value
Port and terminal facilities 5,713,564,853.28 787,181.96 5,712,777,671.32 4,104,748,962.75 - 4,104,748,962.75
Berths and yards 296,933,093.52 - 296,933,093.52 1,023,331,798.30 - 1,023,331,798.30
Infrastructure 175,423,610.37 - 175,423,610.37 40,000,912.00 - 40,000,912.00
Ship under construction 80,042,167.50 - 80,042,167.50 22,985,373.73 - 22,985,373.73
Others 53,213,172.99 - 53,213,172.99 308,359,043.28 - 308,359,043.28
Total 6,319,176,897.66 787,181.96 6,318,389,715.70 5,499,426,090.06 - 5,499,426,090.06
- 88 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
17. Construction in progress - continued
17.2 Construction in progress - continued
(2) The top ten balances of construction in progress
Unit: RMB
Proportion of Interest
Effect of accumulated Constr Amount of Including: capitalizati
Effect of changes Other
Increase for the Transfer to fixed changes in construction uction accumulated capitalized on rate for Capital
Item Budget amount 1 January 2019 in scope of decreases for 31 December 2019
year assets foreign investment in progre capitalized interest for the the source
consolidation the year
exchange budget ss (%) interest year current
(%) year (%)
Reconstruction project of container,
2,822,177,972.30 1,384,261,784.70 - - - - 22,794,017.60 1,407,055,802.30 49.86 49.86 - - - Self-funding
oil terminal and tank area, HIPG
Guangao project Phase II, Shantou Self-funding
2,200,000,000.00 1,250,245,755.45 499,044,891.68 - 342,477,489.06 2,573,371.44 - 1,404,239,786.63 79.51 79.51 13,447,553.66 - -
Port and loan
Reconstruction project of Berth 1#- Self-funding
2,851,020,136.97 417,326,228.14 641,663,530.85 - - - - 1,058,989,758.99 37.14 37.14 5,806,750.96 5,806,750.96 3.92
4#, Haixing Wharf and loan
Project of Grain Dispatch Warehouse
Self-funding
at Berth2#,3# Phase III , Machong 620,000,000.00 54,800,647.68 266,398,210.78 - - - - 321,198,858.46 51.81 51.81 16,955.56 16,955.56 4.36
and loan
Port
Donghaidao port wharf project, Self-funding
905,348,400.00 - 48,487,590.17 206,058,139.11 - - - 254,545,729.28 28.12 28.12 20,489,781.20 9,105,325.34 4.79
Zhanjiang Port and loan
Xiashan port general wharf project, Self-funding
737,975,100.00 - 169,495,671.06 64,813,237.96 - - - 234,308,909.02 31.75 31.75 2,865,473.23 2,865,473.23 4.79
Zhanjiang Port and loan
CICT Machinery equipment
209,216,238.00 - 204,067,723.49 - - - 2,006,393.85 206,074,117.34 98.50 98.50 - - - Self-funding
procurement project
Petrifaction old tank area
Self-funding
reconstruction, Phase I, Zhanjiang 218,378,500.00 - 1,994,027.62 176,989,605.30 - - - 178,983,632.92 81.96 81.96 5,024,262.73 - -
and loan
Port
Baoman Port container wharf
extension project, Phase I, Zhanjiang Self-funding
2,412,810,000.00 - 49,802,533.11 105,892,965.68 - - - 155,695,498.79 6.45 6.45 964,740.46 964,740.46 4.79
Port and loan
Baoman stuffing and destuffing
Self-funding
service area, Phase I Project, 606,521,505.83 - 9,554,950.43 124,474,810.57 - - - 134,029,761.00 22.10 22.10 16,689,500.56 - -
and loan
Zhanjiang Port
Total 13,583,447,853.10 3,106,634,415.97 1,890,509,129.19 678,228,758.62 342,477,489.06 2,573,371.44 24,800,411.45 5,355,121,854.73 65,305,018.36 18,759,245.55
- 89 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
17. Construction in progress - continued
17.3 Materials for construction of fixed assets
Unit: RMB
Closing balance Opening balance
Item Provision for Provision for
Carrying amount impairment Book value Carrying amount impairment Book value
Materials for construction - - -
15,751,726.18 - 15,751,726.18
of fixed assets
18. Right-of-use assets
(1) Details of right-of-use assets
Unit: RMB
Machinery and
equipment,
Port and terminal Motor vehicles and
Item Buildings furniture and Others Total
facilities cargo ships
fixture and other
equipment
I. Cost
1.Balance at 31 December 2018
Add: Changes in accounting
5,696,887,745.03 181,521,736.13 264,518,199.73 38,350,000.00 2,603,500,288.84 8,784,777,969.73
policy
2.Balance 1 January 2019 5,696,887,745.03 181,521,736.13 264,518,199.73 38,350,000.00 2,603,500,288.84 8,784,777,969.73
3.Increase for the year 906,090,446.15 7,691,430.56 503,167,422.04 7,620,740.24 198,170,427.78 1,622,740,466.77
(1) Purchase 43,133,738.23 7,691,430.56 6,340,687.53 - 191,746,689.11 248,912,545.43
(2) Effect of changes in the
862,956,707.92 - 496,826,734.51 7,620,740.24 6,423,738.67 1,373,827,921.34
scope of consolidation
4.Decrease for the year 1,707,585.07 5,202,400.95 - - - 6,909,986.02
(1) Termination of lease 1,707,585.07 5,202,400.95 - - - 6,909,986.02
5.Effect of changes in foreign
88,131,920.50 2,195,653.48 39,678.18 - 44,408,750.58 134,776,002.74
exchange
6.Balance at 31 December 2019 6,689,402,526.61 186,206,419.22 767,725,299.95 45,970,740.24 2,846,079,467.20 10,535,384,453.22
II. Accumulated depreciation
1.Balance at 31 December 2018
Add: Changes in accounting
154,346,605.87 17,282,119.00 130,582,116.30 28,100,712.71 173,772,354.97 504,083,908.85
policy
2.Balance at 1 January 2019 154,346,605.87 17,282,119.00 130,582,116.30 28,100,712.71 173,772,354.97 504,083,908.85
3.Increase for the year 222,180,410.17 19,985,432.77 100,981,272.43 2,848,243.48 46,784,440.48 392,779,799.33
(1) Provision 211,794,077.31 19,985,432.77 51,419,032.74 709,088.28 44,978,579.62 328,886,210.72
(2) Increase for changes in the
10,386,332.86 - 49,562,239.69 2,139,155.20 1,805,860.86 63,893,588.61
scope of consolidation
4.Decrease for the year 356,556.12 447,016.56 - - - 803,572.68
(1) Termination of lease 356,556.12 447,016.56 - - - 803,572.68
5.Effect of changes in foreign
2,669,904.40 160,165.93 8,353.91 - 3,160,503.02 5,998,927.26
exchange
6.Balance at 31 December 2019 378,840,364.32 36,980,701.14 231,571,742.64 30,948,956.19 223,717,298.47 902,059,062.76
III. Impairment provision
1.Balance at 31 December 2018
Add: Changes in accounting
policy
2.Balance 1 January 2019
3.Increase for the year - - - - - -
4.Decrease for the year - - - - - -
5.Balance at 31 December 2019 - - - - - -
IV. Book value
1.Book value at 31 December
6,310,562,162.29 149,225,718.08 536,153,557.31 15,021,784.05 2,622,362,168.73 9,633,325,390.46
2019
2.Book value at 31 December
2018
- 90 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
18. Right-of-use assets - continued
(2) Amount recognized in profit or loss
Unit: RMB
Amount incurred in the
Category current period
Depreciation expenses of right-of-use assets(Note 1) 328,886,210.72
Interest expenses on lease liabilities (Note 2) 106,836,843.78
Expenses for short-term leases 58,919,264.88
Expenses for leases of low value assets -
Variable lease payments not included in the measurement of lease liabilities(Note 3) -
Revenue from sublease of right-of-use assets 19,572,976.50
Note 1: No depreciation expenses of right-of-use assets is capitalized in 2019.
Note 2: No interest expenses of lease liabilities are capitalized in 2019.
Note 3: No variable lease payments were included in the measurement of lease liabilities in 2019.
(3) The total cash outflows in relation to leases for the current year amounting to RMB
526,621,689.64.
(4) Lease assets of the Group with the lease term as follows:
Category Lease term
Port and terminal facilities 1-99 years
Buildings 1-5 years
Machinery and equipment, furniture and fixture and other equipment 1-6 years
Motor vehicles and cargo ships 5-9 years
Others 2-99 years
(5) The Group has an option to purchase port and terminal facilities, machinery and equipment
and cargo ships at the end of the extension period at a rate that is below market rates.
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CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
19. Intangible assets
(1) Summary of intangible assets
Unit: RMB
Terminal management
Items Land use rights Others Total
rights
I. Total original carrying amount
1. Balance at 31 December 2018 13,097,878,517.45 10,511,520,659.11 1,124,069,969.28 24,733,469,145.84
Add: Changes of accounting policies (1,813,694,115.71) - - (1,813,694,115.71)
2. Balance at 1 January 2019 11,284,184,401.74 10,511,520,659.11 1,124,069,969.28 22,919,775,030.13
3.Increase in the current year 4,019,959,533.26 11,544,709.16 108,916,766.14 4,140,421,008.56
(1) Purchase - 11,544,709.16 70,770,763.15 82,315,472.31
(2) Effect of changes in the scope of
4,016,895,872.22 - 36,305,792.10 4,053,201,664.32
consolidation
(3) Other increase 3,063,661.04 - 1,840,210.89 4,903,871.93
4. Decrease in the current year 1,985,834,473.13 7,943,452.72 3,937,120.86 1,997,715,046.71
(1) Disposal 931,377,542.00 - - 931,377,542.00
(2) Transfer to held-for-sale assets (Note 1) 137,535,397.65 - - 137,535,397.65
(3) Other decrease (Note 2) 916,921,533.48 7,943,452.72 3,937,120.86 928,802,107.06
5. Effect of changes in foreign exchange 6,364,192.81 (291,366,046.68) (80,792,488.12) (365,794,341.99)
6. Balance at 31 December 2019 13,324,673,654.68 10,223,755,868.87 1,148,257,126.44 24,696,686,649.99
II. Accumulated amortization
1. Balance at 31 December 2018 2,433,897,714.42 1,268,696,311.70 269,857,075.18 3,972,451,101.30
Add: Changes of accounting policies (15,125,513.56) - - (15,125,513.56)
2. Balance at 1 January 2019 2,418,772,200.86 1,268,696,311.70 269,857,075.18 3,957,325,587.74
3.Increase in the current year 786,821,200.60 238,624,029.70 93,471,339.77 1,118,916,570.07
(1) Accrual of amortization 326,408,082.24 238,624,029.70 67,594,658.22 632,626,770.16
(2) Effect of changes in the scope of
460,413,118.36 - 25,876,681.55 486,289,799.91
consolidation
4. Decrease in the current year 49,669,959.62 - 891,025.77 50,560,985.39
(1) Disposal 35,043,949.41 - - 35,043,949.41
(2) Transfer to held-for-sale assets 14,626,010.21 - - 14,626,010.21
(3) Other increase - - 891,025.77 891,025.77
5. Effect of changes in foreign exchange 5,228,241.48 (25,835,819.75) (2,102,498.26) (22,710,076.53)
6. Balance at 31 December 2019 3,161,151,683.32 1,481,484,521.65 360,334,890.92 5,002,971,095.89
III. Total provision for impairment losses
1. Balance at 31 December 2018 - - - -
Add: Changes of accounting policies - - - -
2. Balance at 1 January 2019 - - - -
3.Increase in the current year - - - -
4. Decrease in the current year - - - -
5. Balance at 31 December 2019 - - - -
IV. Total book value
1. Book value at 31 December 2019 10,163,521,971.36 8,742,271,347.22 787,922,235.52 19,693,715,554.10
2. Book value at 31 December 2018 10,663,980,803.03 9,242,824,347.41 854,212,894.10 20,761,018,044.54
Note 1: Details are set out in Note (V) 6.4 (2).
Note 2: Primarily the lands located in Shenzhen Qianhaiwan Logistics Park has been returned to
government in 2019 by the Company’s subsidiaries Antongjie Terminal Services
(Shenzhen) Co., Ltd. (“ATJ”) and Ansujie Terminal Services (Shenzhen) Co., Ltd.
(“ASJ”). Details are set out in Note (X) 5 (6).
(2) Land use rights without ownership certificates on 31 December 2019:
Unit: RMB
Item Book value at this year end Book value at last year end
Land use rights 1,163,098,978.96 1,383,494,095.83
- 92 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
20. Development expenses
Unit: RMB
Decrease in the current year
Changes in
Increase in the Transfer to Transfer to
Item 1/1/2019 the scope of Transfer to 31/12/2019
current year intangible profit or loss for
consolidation fixed assets
assets the year
Crude oil unit train loading
- 1,826,780.56 14,004,176.18 - - - 15,830,956.74
equipment key technology research
CMPort terminals information
- - 8,606,646.27 - - 8,606,646.27 -
sharing platform
Intelligent monitoring system at
- - 8,601,073.24 - - 8,601,073.24 -
Shekou Custom
R&D of automation-based and
intelligence-based overall IT - - 6,583,130.94 - - 6,583,130.94 -
solution for container terminal
Electronic bill of lading (loaded
- - 5,076,107.10 - - 5,076,107.10 -
container from other terminals)
Mazut, diesel, petrol, methanol
process automatic control system - - 4,834,850.03 - - - 4,834,850.03
development and application
SCT OOG self-service access gate - - 4,624,600.00 - - 4,624,600.00 -
Knoe hanger supporting wheel
- - 4,224,000.00 - - 4,224,000.00 -
modification
Automatic distribution and
- - 4,416,000.00 - - 4,416,000.00 -
identification of seals
Onshore bridge equipment
repairing auxiliary system based on - - 4,080,000.00 - - 4,080,000.00 -
mobile application technology
Others - 13,141,526.26 82,871,568.99 1,434,483.16 203,539.84 77,641,786.74 16,733,285.51
Total - 14,968,306.82 147,922,152.75 1,434,483.16 203,539.84 123,853,344.29 37,399,092.28
21. Goodwill
(1) Carrying amount of goodwill
Unit: RMB
Effect of changes
1/1/2019
Investee Increase Decrease in foreign 31/12/2019
exchange
TCP Participaes S.A. ("TCP") 4,284,229,939.11 - - (737,763,462.93) 3,546,466,476.18
Mega Shekou Container Terminals Limited 1,815,509,322.42 - - - 1,815,509,322.42
China Merchants Port Holdings Company
993,992,000.00 - - - 993,992,000.00
Limited("CMPort")
Shantou Port 552,317,736.65 - - - 552,317,736.65
Zhanjiang Port (Note) - 418,345,307.68 - - 418,345,307.68
Shenzhen Mawan Project 408,773,001.00 - - - 408,773,001.00
Others (Note) 281,073,843.17 7,182,007.71 - - 288,255,850.88
Total 8,335,895,842.35 425,527,315.39 - (737,763,462.93) 8,023,659,694.81
Note: The increase in the current year mainly represent the goodwill arising from the Group's
acquisitions of Zhanjiang Port and Guangdong Zhanjiang Port Longteng Shipping Co., Ltd.
("Longteng Shipping") respectively in February 2019 and December 2019. Details are set
out in Note (VI) 1.
- 93 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
21. Goodwill - continued
(2) Information of assets group or portfolio of assets group to which the goodwill belongs
The Group takes the ability to independently generate cash inflows, manage the way of
production and operation activities (mainly by geographic areas) and unified decision on the
use and disposal of the assets as the criteria to determine assets group or portfolio of assets
group, and performs impairment test of goodwill for the assets group or portfolio of assets
group as determined. As at 31 December 2019, the assets group or portfolio of assets group
determined by the Group include: TCP; Mega Shekou Container Terminals Limited,
including Shekou Container Terminals Ltd., Shenzhen Lianyunjie Container Terminals Co.,
Ltd., Anxunjie Container Terminals (Shenzhen) Co., Ltd.; CMPort; Shantou Port; Zhanjiang
port; Shenzhen Mawan Project, including Shenzhen Mawan Port Waterway Co., Ltd.,
Shenzhen Mawan Port Services Co., Ltd. and Shenzhen Magang Cangma Co., Ltd.
(3) Impairment test of goodwill and key parameters
When testing the goodwill for impairment, the Group compares the carrying amount of
related assets group and portfolio of assets group (including goodwill) with the recoverable
amount. If the recoverable amount is less than the carrying amount, the difference is
included in profit or loss for the period. The Group determines the recoverable amount of
the assets group and portfolio of assets group that generate goodwill at fair value less cost of
disposal or at present value of expected future cash flows. The fair value is determined
using market approach. The present value of cash flows is estimated based on the forecast of
cash flows for five-to-ten-year detailed forecast period and subsequent forecast period. The
estimated future cash flows for the detailed forecast period are based on the business plan
established by the management; the expected future cash flows for the subsequent forecast
period are determined in conjunction with the level of the final year of the detailed forecast
period, combined with the Group's business plans, industry trends and inflation rates. The
growth rate adopted will not exceed the long-term average growth rate of the country where
the assets group and portfolio of assets group are located. The key assumptions used by the
Group in estimating the present value of future cash flows include growth in business
volume, gross profit margin and discount rate etc. The discount rate and the growth rate for
subsequent forecasted period adopted in 2019 are around 9.40%-12.3% and 3% respectively.
The parameters of key assumptions determined by the Group's management are in line with
the Group's historical experience or external source of information.
(4) Effect of impairment test of goodwill
After the test, the Group's management considers that any reasonable change in above
assumptions will not result in the circumstance that the carrying amount of the assets group
and portfolio of assets group is higher than the recoverable amount, therefore it is not
necessary to make provision for impairment of goodwill.
- 94 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
22. Long-term prepaid expenses
Unit: RMB
Effect of
Amortization in
changes in the Increase in the
Item 1/1/2019 the current Other decrease 31/12/2019
scope of current period
period
consolidation
Tonggu channel widening
164,567,384.97 - 390,445,093.47 21,333,123.01 8,163,265.59 525,516,089.84
project (Note 1)
Relocation project of Nanhai
40,107,549.49 - - 1,057,781.52 - 39,049,767.97
Rescue Bureau
Expenditures for the
improvement of leased fixed 21,163,538.17 - 153,528.33 1,447,327.28 2,090,855.04 17,778,884.18
assets
West port area public channel
- - 81,488,690.28 1,018,601.68 - 80,470,088.60
widening project (Note 2)
Others 9,867,964.58 2,630,870.77 43,327,480.45 6,730,134.72 - 49,096,181.08
Total 235,706,437.21 2,630,870.77 515,414,792.53 31,586,968.21 10,254,120.63 711,911,011.67
Note 1: This represent the Group's actual expenses on the Shenzhen West Port Area Tonggu
Channel 240-270 Meters Widening Project. According to relevant resolutions of
Shenzhen municipal government, the expenses incurred for the project are born by the
enterprise and government on 50% to 50% principle. The Company's subsidiary has
included the expenses on deepening the channel in the item of "long-term prepaid
expenses", and amortized such expenses over the expected useful life of 40 years using
straight-line method since the completion of the channel widening project on 27 February
2019.
Note 2: This represent the Group's actual expenses on the first section of Shenzhen West Port
Area Public Channel 240-270 Meters Widening Project. According to relevant
resolutions of Shenzhen municipal government, the expenses incurred for the project are
born by the enterprise and government on 50% to 50% principle. The Company's
subsidiary has included the expenses on deepening the channel in the item of "long-term
prepaid expenses", and amortized such expenses over the expected useful life of 40 years
using straight-line method since the completion of the channel widening project on 1
June 2019.
23. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets without offsetting
Unit: RMB
Closing balance Opening balance
Deductible Deductible
Item
temporary Deferred tax assets temporary Deferred tax assets
differences differences
Unrealized profit 805,528,482.59 196,545,362.77 - -
Depreciation of fixed assets 108,244,052.41 27,227,981.18 22,036,522.49 4,514,995.56
Deductible losses 79,034,267.56 19,758,566.89 86,136,992.42 23,604,794.05
Provision for credit loss 71,636,378.50 17,881,386.96 32,805,128.88 8,213,219.45
Provisions 60,976,862.88 16,601,394.38 19,470,820.00 6,620,078.85
Deferred income 40,272,757.15 9,737,699.40 50,033,346.52 11,382,687.30
Amortization of computer software 13,630,227.66 3,407,556.91 16,453,443.95 4,113,360.99
Organization costs 10,905,997.08 2,726,499.27 14,386,394.26 3,287,938.27
Provision for impairment losses of
1,918,890.31 479,722.58 2,258,081.96 481,468.22
assets
Others 29,120,031.36 6,069,331.93 17,635,287.26 4,489,614.50
Total 1,221,267,947.50 300,435,502.27 261,216,017.74 66,708,157.19
- 95 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
- 96 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
23. Deferred tax assets and deferred tax liabilities - continued
(2) Deferred tax liabilities without offsetting
Unit: RMB
Closing balance Opening balance
Item Taxable temporary Deferred tax Taxable temporary Deferred tax
differences liabilities differences liabilities
Withholding dividend income tax 24,219,415,080.67 1,735,339,232.65 17,819,027,902.41 1,138,273,886.12
Fair value adjustment of assets acquired
7,989,044,772.81 1,812,240,254.17 6,415,001,869.22 1,431,954,458.35
by business combination
Changes in fair value of other equity
1,434,338,833.65 186,123,245.82 930,040,371.21 105,285,399.58
investments
Changes in fair value of other non-
731,584,120.16 166,830,773.03 754,359,502.42 174,592,634.60
current financial assets
Depreciation of fixed assets 140,659,435.00 35,164,858.75 136,717,500.00 34,179,375.00
Others 110,838,382.96 26,054,384.75 114,027,794.35 26,789,187.62
Total 34,625,880,625.25 3,961,752,749.17 26,169,174,939.61 2,911,074,941.27
(3) Deferred tax assets or liabilities that are presented at the net amount after offsetting
Unit: RMB
Offset amount of Deferred tax assets Offset amount of Deferred tax assets
deferred tax assets or liabilities after deferred tax assets or liabilities after
Item
and liabilities in offsetting in the and liabilities in offsetting in the
the current period current period the prior period prior period
Deferred tax assets - 300,435,502.27 - 66,708,157.19
Deferred tax liabilities - 3,961,752,749.17 - 2,911,074,941.27
(4) Details of unrecognized deferred tax assets
Unit: RMB
Item Closing balance Opening balance
Deductible temporary differences 503,037,805.60 237,418,074.51
Deductible losses 2,289,500,649.57 1,291,865,454.88
Total 2,792,538,455.17 1,529,283,529.39
The Group recognizes deferred income tax assets to the extent of future taxable income that is
likely to be obtained to offset the deductible temporary differences and deductible losses. For the
excess of deductible temporary differences and deductible losses over future taxable income, no
deferred tax assets is recognized.
(5) Deductible losses for unrecognized deferred tax assets will be expired in the following years:
Unit: RMB
Year Closing balance Opening balance
2019 - 132,642,333.11
2020 182,809,604.33 110,359,740.81
2021 244,394,853.17 151,793,398.29
2022 615,440,669.35 320,679,566.41
2023 745,889,729.49 576,351,741.67
2024 500,926,253.51 -
No expiration date 39,539.72 38,674.59
Total 2,289,500,649.57 1,291,865,454.88
- 97 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
24. Other non-current assets
Unit: RMB
Item Closing balance Opening balance
Dachanwan port area Phase II land replacement payment (Note 1) 916,884,222.49 -
Advances of channel project (Note 2) 896,848,920.76 -
Prepayments of land use rights 132,334,704.86 175,908,026.15
Prepayments of fixed assets 90,186,071.12 174,039,051.91
Prepayments of terminal franchise 30,356,842.78 30,383,609.79
Others 16,354,705.03 14,860,798.13
Total 2,082,965,467.04 395,191,485.98
Note 1: Details are set out in Note (X) 5(6).
Note 2: This represent that the Company's subsidiary Zhanjiang Port, upon its reorganization into
a joint stock company in 2007, signed the Channel Arrangement Agreement with State-
owned Assets Supervision and Administration Commission of Zhanjiang ("Zhanjiang
SASAC") and China Merchants International Terminal (Zhanjiang) Co., Ltd. According
to the agreement, the channel belongs to Zhanjiang SASAC, therefore the Company
included the advances of channel project that should be repaid by Zhanjiang SASAC in
other non-current assets.
25. Short-term borrowings
(1) Classification of short-term borrowings
Unit: RMB
Opening balance
Item Closing balance
(restarted)
Credit loan 9,439,099,793.47 3,427,365,512.21
(2) At 31 December 2019, the Group has no short-term borrowings that were overdue.
26. Notes payable
Unit: RMB
Category Closing balance Opening balance
Bank acceptance 2,529,389.61 -
Commercial acceptance 73,926,559.40 -
Total 76,455,949.01 -
27. Accounts payable
(1) Details of accounts payable are as follows:
Unit: RMB
Item Closing balance Opening balance
Construction fee 173,811,112.97 115,371,240.88
Material purchase 146,969,853.48 76,365,058.49
Service fee 133,134,547.67 132,946,488.81
Equipment payments 15,947,499.80 659,317.15
Rental fee 13,897,329.66 10,564,893.93
Others 107,352,122.81 93,213,691.71
Total 591,112,466.39 429,120,690.97
- 98 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
27. Accounts payable - continued
(2) Significant accounts payable aged more than one year
Unit: RMB
Item Amount Reason for outstanding
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.
28. Receipts in advance
(1) Summary of receipts in advance
Unit: RMB
Item Closing balance Opening balance
Rental fee receipt in advance 13,409,679.80 5,536,804.56
Service fee receipt in advance 10,500,836.06 23,038,672.44
Others 4,916,171.51 595,232.86
Total 28,826,687.37 29,170,709.86
(2) There is no significant receipts in advance aged more than one year at the end of the year
29. Contract liabilities
(1) Summary of contract liabilities
Unit: RMB
Item Closing balance Opening balance
Port charges received in advance 63,954,147.44 11,657,235.81
Service fee received in advance 17,396,130.82 24,353,966.50
Warehousing fee received in advance - 8,705,589.57
Others 4,480,724.26 5,277,103.62
Total 85,831,002.52 49,993,895.50
(2) Items with significant change in carrying amount and reason for the change
Unit: RMB
Item Amount of change Reason for the change
Fulfilling the
performance obligations
and inclusion of
Port charges received in advance 52,296,911.63
Zhanjiang Port in the
scope of consolidation
(3) There is no significant contract liabilities aged more than one year at the end of the year.
- 99 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
29. Contract liabilities - continued
(4) Qualitative and quantitative analysis of contract liabilities
The contract liability mainly represents the amount received by the Group to provide port
services to customers. The payment is collected according to the contractual payment time.
The Group recognizes contract revenue based on the progress of the contract. The contract
liabilities will be recognized as income after the Group fulfills its performance obligations.
(5) Revenue recognized in the current period and included in the opening carrying amount of
contract liabilities
An amount of RMB 39,037,511.27 included in the book value of contract liabilities at the
beginning of 2019 has been recognized as revenue in the current year, including contract
liabilities arising from settled but unfinished construction resulting from the contract of
receipt of service fee in advance amounting to RMB 14,405,439.86, contract liabilities
arising from settled but unfinished construction resulting from the contract of receipt of port
charges in advance amounting to RMB 11,385,355.28, and contract liabilities arising from
settled but unfinished construction resulting from the contract of receipt of warehousing fee
in advance amounting to RMB 8,449,390.82 as well as contract liabilities arising from
settled but unfinished construction resulting from other contracts amounting to RMB
4,797,325.31.
30. Employee benefits payable
(1) Details of employee benefits payable are as follows
Unit: RMB
Effect of changes
1/1/2019 Increase in the Decrease in the 31/12/2019
Item in the scope of
current year current year
consolidation
1. Short-term benefits 431,714,138.23 74,046,373.76 2,505,176,428.76 2,380,580,326.31 630,356,614.44
2. Post-employment benefits –
2,286,649.91 - 224,339,253.53 221,610,579.66 5,015,323.78
defined contribution plan
3. Termination benefits - - 14,610,713.62 14,610,713.62 -
4. Others (511,232.74) - 6,662,872.93 6,804,793.77 (653,153.58)
Total 433,489,555.40 74,046,373.76 2,750,789,268.84 2,623,606,413.36 634,718,784.64
(2) Short-term benefits
Unit: RMB
Effect of changes
1/1/2019 Increase in the Decrease in the 31/12/2019
Item in the scope of
current year current year
consolidation
I. Wages and salaries, bonuses,
409,390,929.61 72,201,271.35 2,077,766,550.89 1,954,494,382.02 604,864,369.83
allowances and subsidies
II. Staff welfare - - 120,257,663.25 120,257,663.25 -
III. Social insurance charges 5,145,526.57 - 115,987,499.06 111,496,252.60 9,636,773.03
Including: Medical insurance 4,418,339.26 - 91,570,250.51 87,671,544.82 8,317,044.95
Work injury insurance - - 8,645,779.35 8,645,779.35 -
Maternity insurance - - 5,831,448.10 5,831,448.10 -
Others 727,187.31 - 9,940,021.10 9,347,480.33 1,319,728.08
IV. Housing funds - - 141,006,740.13 141,006,740.13 -
V. Labor union and employee
17,166,673.76 1,845,102.41 38,809,767.71 41,966,072.32 15,855,471.56
education funds
VI. Other short-term benefits 11,008.29 - 11,348,207.72 11,359,215.99 0.02
Total 431,714,138.23 74,046,373.76 2,505,176,428.76 2,380,580,326.31 630,356,614.44
- 100 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
30. Employee benefits payable - continued
(3) Defined contribution plan
Unit: RMB
Effect of changes
1/1/2019 Increase in the Decrease in the 31/12/2019
items in the scope of
current year current year
consolidation
I. Basic pension 1,620,436.89 - 181,593,596.57 178,313,764.59 4,900,268.87
II. Unemployment insurance 551,158.12 - 3,229,973.30 3,781,131.41 0.01
III. Enterprise annuity plan 115,054.90 - 39,515,683.66 39,515,683.66 115,054.90
Total 2,286,649.91 - 224,342,871.98 221,614,198.11 5,015,323.78
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.
31. Taxes payable
Unit: RMB
Item Closing balance Opening balance
Enterprise income tax 1,843,381,355.01 271,954,754.74
VAT 11,377,223.08 8,200,265.65
Others 43,317,764.65 65,028,402.03
Total 1,898,076,342.74 345,183,422.42
32. Other payables
(1) Summary of other payables
Unit: RMB
Opening balance
Item Closing balance
(restated)
Interest payable - -
Dividends payable 150,286,550.81 66,052,207.09
Other payables 2,073,468,127.15 1,624,072,694.20
Total 2,223,754,677.96 1,690,124,901.29
- 101 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
32. Other payables - continued
(2) Dividends payable
Unit: RMB
Item Closing balance Opening balance
Ordinary share dividends 150,286,550.81 66,052,207.09
Including: Modern Terminals Limited 58,156,000.00 -
Yihai Kerry Arawana Cereals, Oils and Foodstuffs Co. Ltd. 37,402,426.09 37,402,426.09
Sri Lanka Ports Authority 31,392,997.47 -
Soifer Participaes Societárias S.A. 14,141,088.03 -
Pattac Empreendimentos e Participaes S.A. 4,597,020.40 -
Tuc Participacoes Portuarias S.A. 4,597,018.82 -
Sinotrans South China Co., Ltd. - 25,949,781.00
Qingdao Port (Group) Co., Ltd. - 2,700,000.00
As at 31 December 2019, the dividend payable with aging over one year amounts to RMB
37,402,426.09 which represents the dividends not yet received by the investor.
(3) Other payables
(a) Disclosure of other payables by nature
Unit: RMB
Item Closing balance Opening balance
Amount payable for construction and quality warranty 1,053,340,753.66 660,870,685.70
Deposits 162,460,889.01 149,705,612.54
Customer discount 117,736,418.62 128,787,894.63
Prepaid expenses 110,741,377.48 140,305,423.54
Port construction and security fee 58,732,330.62 62,255,593.38
Balance of land use rights transfer 14,538,738.00 93,258,350.90
Others 555,917,619.76 388,889,133.51
Total 2,073,468,127.15 1,624,072,694.20
- 102 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
32. Other payables - continued
(3) Other payables - continued
(b) Significant other payables with aging over 1 year
Unit: RMB
Reason for being outstanding or carried
Company name Closing balance
forward
Shanghai Zhenhua Heavy Industries Co., Equipment failed to meet the acceptance
60,656,174.48
Ltd. standards
CCCC Fourth Harbor Engineering Co.,
Ltd. 41,820,223.83 Project not yet approved by a third party
CCCC Third Harbor Engineering Co., Ltd. 37,314,702.00 Project not yet approved by a third party
Shantou Transportation Bureau 31,358,355.47 To be paid after confirmation by mutual
parties
Zhanjiang Transportation Bureau 23,247,472.05 Balance of advances
China Merchants Real Estate (Shenzhen) Quality warranty, the contracted settlement
20,762,053.30
Co., Ltd. condition has not been reached
Qingdao Maritime Bureau 20,713,982.12 Port construction fee not yet settled
CCCC-FHDI Engineering Co., Ltd. 16,985,103.50 Performance of contract not yet completed
Shenzhen Municipal Special Fund for
12,238,226.14 Collection of dividends payments etc.
Development of Bulk Cement
China Merchants Finance Lease (Tianjin)
Co., Ltd. 11,250,000.00 Performance of contract not yet completed
To be paid after confirmation by mutual
Shantou Finance Bureau 10,000,000.00
parties
Guangdong Hengtai Tong Industrial Co., Quality warranty, the contracted settlement
10,000,000.00
Ltd. condition has not been reached
Shenzhen Dongpeng Construction Not yet applied or processed by the
9,906,473.62
Supervision Co., Ltd. counterparty
China First Metallurgical Group Co., Ltd. 8,175,706.55 Performance of contract not yet completed
The contracted settlement condition has not
Harman Technology (Shenzhen) Co., Ltd. 5,884,632.48 been reached
Total 320,313,105.54
33. Non-current liabilities due within one year
Unit: RMB
Opening balance
Item Closing balance
(restated)
Long-term loans due within one year 2,954,701,198.90 1,974,288,010.22
Including: Credit loan 1,294,054,756.85 389,974,981.60
Guaranteed loan 1,119,153,332.94 1,109,331,175.51
Mortgage loan 541,493,109.11 474,981,853.11
Bonds payable due within one year 1,889,505,167.46 785,481,781.86
Long-term payable due within one year 61,107,722.82 30,635,607.84
Long-term employee benefits payable due within one year 31,950,000.00 19,100,000.00
Lease liabilities due within one year 341,240,327.95
Other non-current liabilities due within one year 825,835,439.66 87,465,615.05
Total 6,104,339,856.79 2,896,971,014.97
- 103 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
34. Other current liabilities
Unit: RMB
Opening balance
Item Closing balance
(restated)
Short-term bonds payable 712,345,315.07 206,349,863.00
Accrued professional agency fee 143,346,356.53 116,064,056.75
Joint venture loan - 241,927,341.05
Others 30,264,910.03 44,668,324.00
Total 885,956,581.63 609,009,584.80
Changes of short-term bonds payable:
Unit: RMB
Discou
Ter Effect of Interest nt or
Amount issued Repayment in
Date of m of Amount of 1/1/2019 changes in accrued premi 31/12/2019
Name of bond Face value in the current the current
issue the issue the scope of based on um
year year
bond consolidation par value amorti
zation
4.73%, RMB 200 million,
267
Super & Short-term 200,000,000.00 24/04/2018
days
200,000,000.00 206,349,863.00 - - 570,191.79 - 206,920,054.79 -
Commercial Paper
3.08%, RMB 700 million,
270
Super & Short-term 700,000,000.00 04/06/2019
days
700,000,000.00 - - 700,000,000.00 12,345,315.07 - - 712,345,315.07
Commercial Paper
2.98%, RMB 300 million,
180
Super & Short-term 300,000,000.00 04/06/2019
days
300,000,000.00 - - 300,000,000.00 4,396,721.31 - 304,396,721.31 -
Commercial Paper
5.70%, RMB 300 million,
272
Super & Short-term 300,000,000.00 16/05/2018
days
300,000,000.00 - 312,325,273.97 - 324,041.10 - 312,649,315.07 -
Commercial Paper
5.97%, RMB 300 million,
272
Super & Short-term 300,000,000.00 04/06/2018
days
300,000,000.00 - 311,914,102.74 - 1,334,390.41 - 313,248,493.15 -
Commercial Paper
3.80%, RMB 300 million,
277
Super & Short-term 300,000,000.00 18/01/2019
days
300,000,000.00 - 300,437,260.27 - 7,995,616.45 - 308,432,876.72 -
Commercial Paper
Total 2,100,000,000.00 2,100,000,000.00 206,349,863.00 924,676,636.98 1,000,000,000.00 26,966,276.13 - 1,445,647,461.04 712,345,315.07
35. Long-term borrowings
(1) Classification of long-term borrowings
Unit: RMB
Opening balance
Item Closing balance
(restated)
Credit borrowings 3,368,772,302.71 2,047,087,456.97
Guaranteed borrowings (Note 1) 2,857,916,427.61 3,676,678,040.09
Mortgage borrowings (Note 2) 3,041,748,008.91 3,222,002,355.34
Total 9,268,436,739.23 8,945,767,852.40
Less: Long-term borrowings due within one year 2,954,701,198.90 1,974,288,010.22
Including: Credit borrowings 1,294,054,756.85 389,974,981.60
Guaranteed borrowings 1,119,153,332.94 1,109,331,175.51
Mortgage borrowings 541,493,109.11 474,981,853.11
Long-term borrowings due after one year 6,313,735,540.33 6,971,479,842.18
During the year, the annual interest rate of the borrowing ranges from 1.20% to 5.89%.
Note1: The loan was guaranteed by China Merchants International (China) Investment Co., Ltd.,
JYRT and China Merchants Port Development (Shenzhen) Co., Ltd. ("CMPD").
- 104 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
35. Long-term borrowings - continued
(1) Classification of long-term borrowings - continued
Note 2: As at 31 December 2019, the Group obtained the long-term loan of RMB
3,028,877,614.16 (31 December 2018: RMB 3,194,255,164.03) with its entire equity in
Colombo International Container Terminals Limited and the entire equity in Thesar
Maritime Limited, and the land with ownership, fixed assets and construction in progress
held by Guangdong Yide Port Co., Ltd. (hereinafter referred to as "Yide Port"), the land
use rights of Shenzhen Haixing Harbor Development Co., Ltd. as well as the sea area use
rights of Dongguan Chiwan Port Service Co., Ltd. mortgaged as collaterals.
Details of mortgage borrowings are as follows:
Unit: RMB
Opening
Company name Closing balance balance Collateral
(restated)
The Group's entire equity in Colombo
China Development Bank Corporation 1,358,129,654.07 1,568,189,186.18 International Container Terminals
Limited
International Finance Corporation 449,103,214.20 530,954,660.44
African Development Bank 206,294,203.06 243,879,424.87
Nederlandse Financierings-Maatschappij voor
169,887,745.22 200,892,936.34
Ontwikkelingslanden N.V.
The Opec Fund For International Development 145,656,886.91 172,142,912.47 The Group's entire equity in Thesar
Societe de Promotion et de Participation pour la Maritime Limited
145,613,216.49 172,210,289.61
Cooperation Economique S.A.
Deutsche Investitions-und
Entwicklungsgesellschaft 121,392,394.29 143,457,150.91
MBH
Land use rights, fixed assets and
China Construction Bank Shunde Branch 184,264,872.07 190,275,794.52 construction in progress of Yide Port (see
note (V) 62)
Land use rights of Shenzhen Haixing
Bank of China Qianhai Shekou Branch 241,388,867.03 - Harbor Development Co., Ltd (see note
(V) 62)
Sea area use rights of Dongguan Chiwan
China Merchants Bank Dongguan Branch 20,016,955.57 -
Warf Co., Ltd. (see note (V) 62)
Total 3,041,748,008.91 3,222,002,355.34
36. Bonds payable
(1) Bonds payable
Unit: RMB
Opening balance
Item Closing balance
(restated)
4.375%, USD 900 million corporate bond 6,349,018,876.27 6,235,321,752.65
5.000%, USD 600 million corporate bond 4,218,874,981.43 4,145,346,424.65
4.750%, USD 500 million corporate bond 3,541,255,065.51 3,481,200,658.82
5.000%, USD 500 million corporate bond 3,500,281,169.59 3,437,038,919.01
4.890%, USD 2,500 million corporate bond 2,585,072,602.74 2,585,072,602.74
3.500%, USD 200 million corporate bond 1,414,333,247.34 1,389,033,618.74
IPCA + 7.8164%, BRL 428 million corporate bond 810,150,534.24 783,774,548.64
4.980%, RMB 400 million corporate bond 401,200,657.53 -
5.150%, RMB 500 million corporate bond - 524,651,558.48
2.970%, RMB 300 million corporate bond - 301,508,794.53
Total 22,820,187,134.65 22,882,948,878.26
Less: Bonds payable due within one year 1,889,505,167.46 785,481,781.86
Bonds payable due after one year 20,930,681,967.19 22,097,467,096.40
- 105 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
36. Bonds payable - continued
(2) Changes of bonds payable
Unit: RMB
Effect of Effect of
Term Amount issued Interest Discount or Repayment in
Date of changes in changes in 31/12/2019
Name of bonds Face value of the Amount of issue 1/1/2019 in the current accrued based premium the current
issue scope of foreign
bond year on par value amortization year
consolidation exchange
4.375%, USD 900 million
USD 900,000,000.00 06/08/2018 5 years USD 900,000,000.00 6,235,321,752.65 - - 272,014,148.70 9,090,007.51 272,014,148.70 104,607,116.11 6,349,018,876.27
corporate bond
5.000%, USD 600 million
USD 600,000,000.00 06/08/2018 10 years USD 600,000,000.00 4,145,346,424.65 - - 207,248,875.20 4,177,721.93 207,248,875.20 69,350,834.85 4,218,874,981.43
corporate bond
4.750%, USD 500 million
USD 500,000,000.00 03/08/2015 10 years USD 500,000,000.00 3,481,200,658.82 - - 164,072,026.13 2,156,660.73 164,072,026.20 57,897,746.03 3,541,255,065.51
corporate bond
5.000%, USD 500 million
USD 500,000,000.00 04/05/2012 10 years USD 500,000,000.00 3,437,038,919.01 - - 172,707,396.00 6,040,527.71 172,707,396.00 57,201,722.87 3,500,281,169.59
corporate bond
4.890%, RMB 2,500 million
RMB 2,500,000,000.00 21/04/2017 5 years RMB 2,500,000,000.00 2,585,072,602.74 - - 122,250,000.00 - 122,250,000.00 - 2,585,072,602.74
corporate bond
3.500%, USD 200 million
USD 200,000,000.00 03/08/2015 5 years USD 200,000,000.00 1,389,033,618.74 - - 48,358,070.88 2,184,832.77 48,358,070.88 23,114,795.83 1,414,333,247.34
corporate bond
IPCA+7.8164%, BRL 428
BRL 428,047,000.00 07/11/2016 6 years BRL 428,047,000.00 783,774,548.64 - - 95,782,430.65 11,483,036.38 64,633,265.91 (16,256,215.52) 810,150,534.24
million corporate bond
4.980%, RMB 400 million
RMB 400,000,000.00 10/12/2018 3 years RMB 400,000,000.00 - 402,892,493.15 - 18,228,164.38 - 19,920,000.00 - 401,200,657.53
corporate bond
5.150%, RMB 500 million
RMB 500,000,000.00 06/02/2018 3 years RMB 500,000,000.00 524,651,558.48 - - 1,070,098.17 - 525,721,656.65 - -
corporate bond
2.970%, RMB 300 million
RMB 300,000,000.00 11/10/2016 3 years RMB 300,000,000.00 301,508,794.53 - - 6,932,712.28 468,493.19 308,910,000.00 - -
corporate bond
Total 22,882,948,878.26 402,892,493.15 - 1,108,663,922.39 35,601,280.22 1,905,835,439.54 295,916,000.17 22,820,187,134.65
Less: Bonds payable due
785,481,781.86 1,889,505,167.46
within one year
Bonds payable due after one
22,097,467,096.40 20,930,681,967.19
year
- 106 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
37. Lease liabilities
Unit: RMB
Category Closing balance Opening balance
Lease payment 2,934,104,267.67
Unrecognized financing cost (945,733,971.11)
Total 1,988,370,296.56
Less: Lease liabilities due within one year 341,240,327.95
Lease liabilities due after one year 1,647,129,968.61
38. Long-term payables
(1) Summary of long-term payables
Unit: RMB
Item Closing balance Opening balance
Long-term payables 1,447,802,228.74 1,285,984,226.34
Special payables 548,550,497.29 38,841,499.68
Total 1,996,352,726.03 1,324,825,726.02
Less: Long-term payables due within one year 61,107,722.82 30,635,607.84
Long-term payables due after one year 1,935,245,003.21 1,294,190,118.18
(2) Long-term payables
Unit: RMB
Item Closing balance Opening balance
Terminal management rights (Note 1) 881,239,309.85 823,360,554.03
Payable to minority shareholders of subsidiaries (Note 2) 407,092,971.69 390,658,146.52
Borrowings from related parties (Note 3) 150,000,000.00 -
Financing lease payments - 71,965,525.79
Others 9,469,947.20 -
Total 1,447,802,228.74 1,285,984,226.34
Less: Long-term payables due within one year 61,107,722.82 30,635,607.84
Long-term payables due after one year 1,386,694,505.92 1,255,348,618.50
Note 1: As at 12 August 2011, the Group reached a 35-year building, operation and transfer agreement
through the subsidiary Colombo International Container Terminals Limited and the Sri Lanka
Port Authority on the building, operation, management and development of the Colombo Port
South Container Terminal (hereinafter referred to as for "BOT"). The above-mentioned
terminal operating rights purchase amount is determined by discounting the amount to be paid
in the future using the prevailing market interest rate according to the BOT agreement. As at
31 December 2019, the amount is RMB 881,239,309.85.
Note 2: It is an unsecured loan from minority shareholder of Thesar Maritime Limited, a
subsidiary of the Company, with an annual interest rate of 4.65%.
- 107 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
38. Long-term payables - continued
(2) Long-term payables - continued
Note 3: At 9 December 2019, ZCMG, a subsidiary of the Company, and China Merchants
Finance Lease (Tianjin) Co., Ltd. entered into a 72-month sale-and-leaseback agreement
in respect of the sale-and-leaseback assets, with a consideration of RMB 150,000,000.00.
The leased assets represent the front 80 meters hydraulic project main body assets of
section A and section B under the Xiamen Port Houshi port area No. 3 general berth
project. According to the agreement, after the lessee has settled all the liabilities under the
contract, it is entitled to purchase the leased assets at the nominal price of RMB 100
(inclusive of VAT). ZCMG is the saler and lessee of the leased assets. As China
Merchants Finance Lease (Tianjin) Co., Ltd. has no control over the leased assets, the
transfer of assets in the sale-and-leaseback transaction is not a sale and the cash receipts
are accounted for as financial liabilities, i.e. borrowings from related parties. According
to the agreement, the interest rate for the borrowings is 4.75% and the borrowing period
is 72 months.
At 9 December 2019, ZCMG and China Merchants Finance Lease (Tianjin) Co., Ltd. as
the beneficiary entered into a mortgage agreement with the land use rights of two plots of
land for harbor and wharf with areas of 126,400 square meters and 172,700 square meters
respectively as the collaterals. As of 31 December 2019, the carrying amount of the
mortgaged land use rights is RMB 121,585,300.20.
(3) Special payables
Unit: RMB
Effect of changes in
Increase in the Decrease in the
Item 1/1/2019 the scope of 31/12/2019 Reason
current year current year
consolidation
Refunds of Harbor
36,061,435.67 78,708.90 510,107,118.35 900,794.60 545,346,468.32 Note 1
Construction Fee
Employee housing
2,780,064.01 423,964.96 - - 3,204,028.97 Note 2
fund
Total 38,841,499.68 502,673.86 510,107,118.35 900,794.60 548,550,497.29
Note 1: This represents the refund of the construction fee received by the Group from the
Ministry of Transport, Shenzhen Municipal Transportation Bureau. According to the
"Port Construction Fee Management Measures" promulgated by the Ministry of Finance,
this payment is dedicated to the construction of water transport infrastructure.
Note 2: This represent the repairing fund for public areas and public facilities and equipment
established after the Group's selling the public-owned house on the collectively allocated
land to employees. The fund is contributed by all the employees having ownership of the
house according to the rules, and is specially managed and used for specific purpose.
- 108 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
39. Long-term employee benefits payable
(1) Long-term employee benefits payable
Unit: RMB
Item Closing balance Opening balance
Post-employment benefits - net liabilities of defined benefits plan
454,383,940.25 385,323,310.21
(note)
Termination benefits 49,048,198.38 9,101,817.44
Total 503,432,138.63 394,425,127.65
Less: Long-term employee benefits payable due within one year 31,950,000.00 19,100,000.00
Long-term employee benefits payable due after one year 471,482,138.63 375,325,127.65
(2) Changes of defined benefits plan
Present value of defined benefits plan obligation:
Unit: RMB
Item 2019 2018
I. Opening balance 385,323,310.21 358,010,123.90
II. Defined benefits cost included in profit or loss for the
25,714,051.83 10,313,678.43
period
1. Current service cost 10,244,780.50 2,163,678.43
2. Past service cost (180,000.00) (7,460,000.00)
3. Interest adjustment 15,649,271.33 15,610,000.00
III. Defined benefits cost included in other comprehensive
(1,513,131.31) 34,693,502.67
income
1. Actuarial gains (losses) (1,552,580.61) 34,562,392.88
2. Effect of exchange rate changes 39,449.30 131,109.79
IV. Other changes 44,859,709.52 (17,693,994.79)
1. Benefits paid (31,910,290.48) (17,693,994.79)
2. Changes in the scope of consolidation 76,770,000.00 -
V. Closing balance 454,383,940.25 385,323,310.21
The Company's subsidiaries provide the registered retirees and in-service staff with
supplementary post-employment benefit plans.
The Group hired a third-party actuary to estimate the present value of its above-mentioned
retirement benefit plan obligations in an actuarial manner based on the expected cumulative
welfare unit method. The Group recognizes the Group's liabilities based on the actuarial results.
The relevant actuarial gains or losses are included in other comprehensive income and cannot be
reclassified into profit or loss in the future. Past service costs are recognized in profit or loss for
the period in which the plan is revised. The net interest is determined by multiplying the defined
benefit plan net debt or net assets by the appropriate discount rate.
- 109 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
40. Provisions
Unit: RMB
Item Closing balance Opening balance Reason
Estimated expenses on Shangtou Port land
45,897,100.00 -
acquisition and reservation
Sales discount 15,265,697.07 15,480,571.55
Pending litigation (Note) 15,079,762.88 19,470,820.72 Note
Total 76,242,559.95 34,951,392.27
Note: This represent the estimated compensation amount that the Company's subsidiary TCP
may need to pay due to the pending litigation.
41. Deferred income
Unit: RMB
Effect of changes
Increase in the Decrease in the
Item 1/1/2019 in the scope of 31/12/2019
current year current year
consolidation
Government grants 228,658,214.64 503,152,280.00 452,418,582.19 37,903,296.88 1,146,325,779.95
Unrealized sale-and-
- - 1,902,769.80 475,692.58 1,427,077.22
leaseback income
Total 228,658,214.64 503,152,280.00 454,321,351.99 38,378,989.46 1,147,752,857.17
Items involving government grants are as follows:
Unit: RMB
Recognized in
Effect of changes
1/1/2019 Other 31/12/2019 Related to assets
Liabilities Increase in the scope of
comprehensive /related to income
consolidation
income
Refund from marine reclamation land - - 392,906,557.65 17,736,737.26 375,169,820.39 Related to assets
Tonggu channel widening project (Note) - 282,311,343.28 - 5,881,486.48 276,429,856.80 Related to assets
West port area public channel widening
- 217,588,656.72 - 967,832.04 216,620,824.68 Related to assets
project (Note)
Modern logistics special funds 115,360,000.04 - - 639,999.96 114,720,000.08 Related to assets
Terminal subsidy 47,775,000.00 - - 1,224,999.96 46,550,000.04 Related to assets
Appropriation for harbor dues on cargo - - 22,819,438.96 504,043.87 22,315,395.09 Related to assets
Port construction subsidy - 1,000,000.00 20,946,639.06 847,305.47 21,099,333.59 Related to assets
Qianwan Bonded Logistics Park Project 15,304,301.08 200,000.00 - 1,077,251.84 14,427,049.24 Related to assets
Subsidized grain transfer project subsidy 8,142,857.12 - - 285,714.29 7,857,142.83 Related to assets
Central budgetary support for bulk grain
7,472,916.67 - - 212,500.00 7,260,416.67 Related to assets
transfer terminal projects
Refund of land transfer charges - - 6,680,000.00 - 6,680,000.00 Related to assets
AMP project 6,748,036.42 - - 961,620.72 5,786,415.70 Related to assets
Oil to electricity project 6,017,089.67 - - 784,837.92 5,232,251.75 Related to assets
War readiness tug special fund - - 4,425,000.00 206,250.00 4,218,750.00 Related to assets
Bonded logistics center industry
- - 2,690,000.00 110,000.00 2,580,000.00 Related to assets
informatization development special fund
Automated terminal operation and
5,162,470.31 - - 2,915,508.74 2,246,961.57 Related to assets
dispatching system special support project
War readiness portal crane subsidy 1,855,895.24 - - 262,008.73 1,593,886.51 Related to assets
Bulk cargo production business
- 1,500,000.00 - - 1,500,000.00 Related to assets
management system
Research and development of fully
automated intelligent terminal information
2,737,023.07 - - 1,679,085.80 1,057,937.27 Related to assets
investment based on cloud platform
architecture
Green low carbon port project 1,403,900.02 - - 421,170.00 982,730.02 Related to assets
Others 10,678,725.00 552,280.00 1,818,226.52 1,184,943.80 11,997,007.72
Total 228,658,214.64 503,152,280.00 452,418,582.19 37,903,296.88 1,146,325,779.95
- 110 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
41. Deferred income - continued
Note: According to the reply from Ministry of Transportation, Shenzhen West Port Area Tonggu
Channel 240-270 Meters Widening project, Shenzhen West Port Area West Public
Channel Section I 240-270 Meters Widening Project and Shenzhen West Port Area West
Public Channel Section II and III 240-270 Meters Widening Project have been included in
the National "13th Five-year Plan for Water Transport". As of 31 December 2019, the
Ministry of Transportation has appropriated relevant subsidies of RMB 499,900,000 to the
Company's subsidiaries.
42. Other non-current liabilities
Unit: RMB
c Closing balance Opening balance
TCP operating rights liability (Note 1) 3,326,952,857.86 3,260,547,002.45
Obligation to minority shareholders due to acquisition (Note 2) 732,733,351.01 579,195,304.56
Berth priority call right (Note 3) 20,664,537.64 25,305,830.90
Total 4,080,350,746.51 3,865,048,137.91
Less: Other non-current liabilities due within one year 825,835,439.66 87,465,615.05
Including: TCP operating rights liability 93,102,088.65 87,465,615.05
Obligation to minority shareholders due to acquisition 732,733,351.01 -
Other non-current liabilities due after one year 3,254,515,306.85 3,777,582,522.86
Note 1: As at 23 February 2018, CMPort, a subsidiary of the Company, acquired a 90% stake in
TCP and incorporate it into the consolidated financial statements of the Group. TCP has
operation right the port of paranagua up to 2048. At 31 December 2019, the payment to
acquire the port operation rights is calculated based on local comprehensive price index.
Note 2: In February 2018, CMPort, a subsidiary of the Company, acquired a 90% stake in TCP.
According to the agreement, minority shareholders of TCP can choose to sell their 10%
stake in TCP to Kong Rise Development, a subsidiary of CMPort, at the market price or
the BRL 320 million (whichever is higher) after two years. Therefore, the Group
recognizes the total amount of obligations related to the purchase of minority interests as
liabilities.
Note 3: This represents the berth priority call right as agreed in the contract entered into with the
clients in 2003, with total amount of USD 14 million. The Group must give priority to
the berthing requirements of the contracted customers during the contract period. The
Group amortized the berth priority right within 20 years using straight-line method. In
2019, the amount included in operating income is RMB 4,641,293.26.
- 111 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
43. Share capital
Unit: RMB
Changes for the year
Item Opening balance New issue of Bonus Capitalization of Closing balance
Others Sub-total
share (note) issue surplus reserve
2019
I. Restricted tradable shares
1. State-owned shares - - - - - - -
2. State-owned legal person - -
- 128,952,746.00 128,952,746.00 128,952,746.00
shares
3. Other domestic shares (Note) 212,156.00 - - - (42,554.00) (42,554.00) 169,602.00
4. Foreign shares 1,148,648,648.00 - - - - - 1,148,648,648.00
Total restricted tradable shares 1,148,860,804.00 128,952,746.00 - - (42,554.00) 128,910,192.00 1,277,770,996.00
II. Non-restricted tradable shares
1. Ordinary shares denominated - - -
464,855,324.00 3,000.00 3,000.00 464,858,324.00
in RMB
2. Foreign capital shares listed - - -
179,696,250.00 39,554.00 39,554.00 179,735,804.00
domestically
3. Foreign capital shares listed - - - - - -
-
overseas
4. Others - - - - - - -
Total non-restricted tradable shares 644,551,574.00 - - - 42,554.00 42,554.00 644,594,128.00
III. Total shares 1,793,412,378.00 128,952,746.00 - - - 128,952,746.00 1,922,365,124.00
2018
I. Restricted tradable shares
1. State-owned shares - - - - - - -
2. State-owned legal person - - - - - -
-
shares
3. Other domestic shares 160,106.00 - - - 52,050.00 52,050.00 212,156.00
4. Foreign shares - 1,148,648,648.00 - - - 1,148,648,648.00 1,148,648,648.00
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 - - -
464,859,300.00 (3,976.00) (3,976.00) 464,855,324.00
in 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
Note: In October 2019, the Company issued 128,952,746 shares of ordinary shares tailed for
Shenzhen Infrastructure Investment Fund Partnership (LLP) and Sino-Africa Development
Fund Co., Ltd. at the price of RMB17.16 per share.
- 112 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
44. Capital Reserve
Unit: RMB
Item Opening balance Increase Decrease Closing balance
2019
Capital premium 19,429,694,090.05 2,770,861,727.22 16,957,921.94 22,183,597,895.33
Including: Capital contributed by investors (note 1) 4,954,397,136.25 2,058,595,347.69 - 7,012,992,483.94
Differences arising from business combination - -
13,311,099,845.41 13,311,099,845.41
involving enterprises under common control
Differences arising from acquisition of minority interests 419,130,116.03 -
- 419,130,116.03
(Note 2)
Others (Note 3) 1,164,197,108.39 293,136,263.50 16,957,921.94 1,440,375,449.95
Other capital Reserve (2,781,133.00) 129,059,971.90 13,391,266.88 112,887,572.02
Including: Transfer from capital reserve under the previous - - (2,781,133.00)
(2,781,133.00)
accounting system
Other changes of owners' equity of the investee under equity
method other than changes in net profit or loss, profit - 129,059,971.90 13,391,266.88 115,668,705.02
distribution and other comprehensive income
Others (Note 3) - - - -
Total 19,426,912,957.05 2,899,921,699.12 30,349,188.82 22,296,485,467.35
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 combination - 583,183,507.54 13,311,099,845.41
13,894,283,352.95
involving enterprises under common control
Others - 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 1: The increase in the year mainly represents the premium of the shares issued by the
Company.
Note 2: The increase in the year mainly represents the dividends from the Company's share in
CMPort which is obtained in the form of scrip dividends, i.e. the portion of change in
minority interests. Details are set out in Note (VII)1(2).
Note 3: The increase in the year primarily represents the difference between the disposal price of
equity of Xinda Resources Limited held by the Company's subsidiary CMPort and the
share of net assets of the subsidiary corresponding to the disposal of the long-term equity
investments continuously calculated since the date of acquisition, which is CNY
221,549,814.91. The company Details are set out in Note (VII)2(1).
- 113 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
45. Other comprehensive income
Unit: RMB
2019
Less: Amount
Less: Other
included in Impact of
comprehensiv
other business
Post-tax income Post-tax income e income
comprehensive Less: combination
Item Opening balance Pre-tax amount for attributable to attributable to carried Closing balance
income in the Income tax involving
the year the parent minority forward to
prior periods expense enterprises
company owner shareholders retained
transferred to under common
earnings
profit or loss control
this year
2019:
I. Other comprehensive income that will not be
75,673,134.08 19,605,662.56 - 985,483.75 9,090,184.52 9,529,994.29 - 1,793,560.33 82,969,758.27
reclassified subsequently to profit or loss
Including: Changes arising from remeasurement
- 1,552,580.61 - - 1,069,722.83 482,857.78 - - 1,069,722.83
of defined benefits plan
Other comprehensive income that
can't be transferred to profit or loss - 13,161,546.95 - - 4,830,921.62 8,330,625.33 - - 4,830,921.62
under equity method
Changes in fair value of other equity
75,673,134.08 4,891,535.00 - 985,483.75 3,189,540.07 716,511.18 - 1,793,560.33 77,069,113.82
instruments
II. Other comprehensive income that will be
13,252,844.49 (1,114,906,073.32) - - (452,167,168.67) (662,738,904.65) - - (438,914,324.18)
reclassified subsequently to profit or loss
Including: Other comprehensive income that
may be transferred to profit or loss 100,000.00 (146,982,017.86) - - (59,050,164.54) (87,931,853.32) - - (58,950,164.54)
under equity method
Translation differences of financial
statements denominated in foreign 13,152,844.49 (967,924,055.46) - - (393,117,004.13) (574,807,051.33) - - (379,964,159.64)
currencies
Total other comprehensive income 88,925,978.57 (1,095,300,410.76) - 985,483.75 (443,076,984.15) (653,208,910.36) - 1,793,560.33 (355,944,565.91)
- 114 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
45. Other comprehensive income - continued
Unit: RMB
2019
Less:
Amount
Less: Other
included in Impact of
comprehensiv
other business
Post-tax income Post-tax income e income
comprehensi combination
Item Opening balance Pre-tax amount for Less: Income attributable to attributable to carried Closing balance
ve income in involving
the year tax expense the parent minority forward to
the prior enterprises
company owner shareholders retained
periods under common
earnings
transferred control
to profit or
loss this year
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: Changes arising from remeasurement
- (20,136,880.35) - - (7,943,999.30) (12,192,881.05) 7,943,999.30 - -
of defined benefits plan
Other comprehensive income that
can't be transferred to profit or loss - (116,954,783.85) - - (46,138,662.23) (70,816,121.62) 46,138,662.23 - -
under equity method
Changes in fair value of other equity
(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
instruments
II. Other comprehensive income that will be
13,252,844.49 333,315,323.72 - - 90,449,399.81 242,865,923.91 (90,449,399.81) - 13,252,844.49
reclassified subsequently to profit or loss
Including: Other comprehensive income that
may be transferred to profit or loss 100,000.00 (20,157,413.77) - - (7,952,099.73) (12,205,314.04) 7,952,099.73 - 100,000.00
under equity method
Translation differences of financial
statements denominated in foreign 13,152,844.49 353,472,737.49 - - 98,401,499.54 255,071,237.95 (98,401,499.54) - 13,152,844.49
currencies
Total other comprehensive income (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
- 115 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
46. Special reserve
Unit: RMB
Item Opening balance Increase Decrease Closing balance
2019:
Production safety reserve 8,231,080.43 108,062,435.41 103,906,781.14 12,386,734.70
2018:
Production safety reserve 4,767,373.45 24,165,961.75 20,702,254.77 8,231,080.43
47. Surplus reserve
Unit: RMB
Item Opening balance Increase Decrease Closing balance
2019:
Statutory surplus reserve 527,175,908.67 103,169,398.76 - 630,345,307.43
2018:
Statutory surplus reserve 520,074,434.56 7,101,474.11 - 527,175,908.67
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
may 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
share capital after approval.
The appropriation of discretionary surplus reserve is proposed by the board of directors and
approved at the shareholders meeting. The discretionary surplus reserve can be used to make up
for the loss or increase the share capital after approval.
48. Unappropriated profit
Unit: RMB
Proportion of
Item Amount appropriation or
allocation
2019:
Unappropriated profit at the end of prior year before adjustment 8,915,817,110.21
Adjustment of total unappropriated profit at the beginning of year (41,018,077.68) Note 1
Unappropriated profit at the beginning of year after adjustment 8,874,799,032.53
Add: Net profit attributable to shareholders of the Company for the year 2,898,192,168.84
Less: Appropriation to statutory surplus reserve 1,793,560.33
Appropriation to discretionary surplus reserve 103,169,398.76
Appropriation to general risk reserve -
Ordinary shares' dividends payable 204,449,011.09 Note 2
Ordinary shares' dividends converted into share capital -
Unappropriated profit at the end of the year 11,467,166,351.85
- 116 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
48. Unappropriated profit - continued
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
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
Appropriation to discretionary surplus reserve -
Appropriation to general risk reserve -
Ordinary shares' dividends payable 850,443,359.86
Ordinary shares' dividends converted into share capital -
Others 599,688,222.23
Unappropriated profit at the end of the year 8,915,817,110.21
Note 1: As set out in Note (III)34, the Group reduced the unappropriated profit at the beginning
of the year by RMB41,018,077.68 due to the impact of changes of accounting policies.
Note 2: According to the resolution of shareholders meeting on 20 May 2019, the Company
distributes cash dividends of RMB 1.14 (inclusive of tax) for every 10 shares, totaling to
RMB204,449,011.09 on the basis of the total shares of 1,793,412,378 shares at the end of
2018.
Note 3: Profit distribution after the balance sheet date
According to the profit distribution plan for 2019, approved by the 9th board of directors
at the 7th meeting on 14 April 2020, the Company, based on the total shares of
1,922,365,124 on the 31 December 2019, would distribute cash dividends at a amount of
RMB884,287,957.04. The above profit distribution plan has yet been approved by
shareholders meeting.
- 117 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
49. Operating income and operating costs
(1) Operating income and operating costs
Unit: RMB
Amount incurred Amount incurred
in the current in the prior
Item
period period
Income Cost Income Cost
Principal operating 11,958,482,255.05 7,425,898,430.33 9,570,796,336.11 5,517,782,669.86
Other operating 165,347,168.69 223,022,489.38 132,598,286.47 221,458,726.01
Total 12,123,829,423.74 7,648,920,919.71 9,703,394,622.58 5,739,241,395.87
(2) Revenue from contracts
Unit: RMB
Bonded logistics Other
Categories of contracts Ports operation Total
operation operation
Mainland China, Hong Kong
8,310,009,620.17 396,670,343.38 165,347,168.69 8,872,027,132.24
and Taiwan area
- Pearl River Delta 5,196,613,368.06 267,511,586.97 165,347,168.69 5,629,472,123.72
- Yangtze River Delta - - - -
- Bohai Rim 65,287,182.79 129,158,756.41 - 194,445,939.20
- Other areas 3,048,109,069.32 - - 3,048,109,069.32
Other countries 3,237,062,565.69 14,739,725.81 - 3,251,802,291.50
Total 11,547,072,185.86 411,410,069.19 165,347,168.69 12,123,829,423.74
- 118 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(3) Description of performance obligations
The Group provides wharf service, bonded logistics service and other services. These services are
obligations performed over a period of time. For wharf services, as the handling time for
containers and bulk cargos is short, the management believes that it is not necessary to recognize
revenue according to the progress towards the completion of contract and it is an appropriate
method to recognize the fulfillment of performance obligation and revenue upon the completion
of the service. For bonded logistics service and other services, the customers evenly obtains and
consumes the economic benefits from the Group's performance of contract, meanwhile the
charging rules as agreed in the contract terms usually adopt daily/month/yearly basis. During the
process of rendering services, the Group recognizes revenue using straight-line method. Part of
the Group's handling contracts are established with discount terms, i.e. the customers whose
business volume reaches agreed level, are granted with preferential charge rate or discount. At the
end of the year, as the business quantity finally realized within the contract period is uncertain, the
contract consideration is subject to variable factors. The management included this part of
discount in provisions. Details are set out in Note (V) 40. The Group's revenue contract does not
have significant financing components.
(4) At the end of the year, the variable consideration of RMB15,265,697.07 (31 December 2018:
RMB15,480,571.55) arising from sales discount is not included in the transaction price due to the
restriction requirements relating to variable considerations.
50. Taxes and levies
Unit: RMB
Amount incurred Amount incurred
Item in the current in the prior
period period
Property tax 45,998,786.01 50,993,199.89
Land use tax 32,116,936.18 15,095,001.85
City construction and maintenance tax 6,188,074.98 5,258,434.33
Stamp duty 4,948,743.36 45,775,414.65
Education surcharges and local education surcharges 4,866,915.60 4,059,161.54
Others (Note) 78,437,123.79 114,772,591.25
Total 172,556,579.92 235,953,803.51
Note: Others mainly represent (1) the tax levied by Program of Social Integration and
Contribution for the Financing of Social Security against enterprises, amounting to
BRL14,988,643.16 (equivalent to RMB 26,302,820.45); (2) Tax for services calculated
based on the services rendered, amounting to BRL24,028,392.69 (equivalent to
RMB42,166,224.91).
- 119 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
51. Administrative expense
Unit: RMB
Amount incurred Amount incurred
Item in the current in the prior
period period
Employee's salary 980,074,507.53 702,986,443.49
Depreciation expenses 74,954,306.82 42,634,581.68
Amortization of intangible assets 58,414,351.33 14,013,965.69
Fees paid to agencies 55,258,915.07 233,972,825.17
Others 340,818,500.91 258,257,859.42
Total 1,509,520,581.66 1,251,865,675.45
52. Financial expenses
Unit: RMB
Amount incurred Amount incurred
Item in the current in the prior
period period
Interest expense 2,018,175,947.65 1,672,764,416.74
Less: Capitalized interest expenses 35,175,196.89 38,663,084.94
Less: Interest income 252,060,018.58 272,453,293.86
Exchange differences 37,236,030.34 235,825,068.78
Handling fee 56,876,221.78 37,531,206.16
Others 4,379,909.45 8,413,790.07
Interest expenses of lease liabilities 106,836,843.78
Total 1,936,269,737.53 1,643,418,102.95
- 120 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
53. Other income
Unit: RMB
Amount incurred Amount incurred
Item in the current in the prior
period period
Allocation of deferred income 37,903,296.88 9,551,510.74
Department of Commerce of Guangdong Province - Special funds for
20,970,000.00 -
promoting economic development of Guangdong
Shenzhen Municipal Finance Committee – Foreign trade growth incentive
13,850,262.00 -
fund
Additional deduction of VAT 13,268,318.27 -
Sri Lanka Hambantota Port project subsidies 10,278,619.72 -
Nanshan district modern logistics project support fund 8,094,400.00 3,000,000.00
Transport Bureau of Zhangzhou Development Zone port operation support
7,415,800.50 5,602,326.79
subsidy
Refund of withholding taxes 6,903,526.71 2,334,770.36
Shenzhen Transportation Committee – key logistics enterprises finance
6,019,100.00 -
subsidiary
Nanshan district independent innovation enterprise development special fund 5,561,600.00 -
Shenzhen Municipal Finance Committee 2019 equipment construction fee 5,448,613.20 -
Shenzhen Science and Technology Innovation Committee – R&D subsidy 4,241,000.00 5,411,000.00
Electricity subsidy 3,307,715.28 4,040,714.30
Shenzhen Qianhai Shenzhen-Hong Kong Modern Service Industry
Cooperation Zone Administration – the first batch of headquarter enterprise 2,375,100.00 -
contribution support fund for 2019
Xiamen Port Holding Group Co., Ltd. – 2018 incentive support fund 2,000,000.00 -
Steady post subsidies 1,985,363.23 476,958.57
Fujian Provincial Port and Shipping Development Special Fund 1,864,088.00 1,029,000.00
Special fund for foreign trade and economic development from central
government (cross-border business management system based on big data 1,720,000.00 -
service)
Fujian Development and Reform Commission – 3rd batch provincial
1,000,000.00 -
demonstration logistics park subsidy
Special fund for promoting high-quality development of economy 1,000,000.00 -
Market Supervision Bureau Of Shenzhen – China quality awards nomination
1,000,000.00 -
prize
Shenzhen Qianhai Shenzhen-Hong Kong Modern Service Industry
Cooperation Zone Administration – Qianhai cooperation zone new trade 1,000,000.00 -
development special fund
Shenzhen Municipal Finance Committee policy subsidy - 5,767,400.00
Infrastructure construction investment of Central government – TCP port
- 5,161,467.89
project (early stage work) subsidy
Subsidy for increasing the port's capacity of handling containers for 2017 - 3,500,000.00
Domestic trade containers handling capacity finance subsidy from
- 1,999,631.00
Transportation Committee
Economy, Trade and Information Commission of Shenzhen Municipality –
Subsidy of central government for 2017 foreign economic and trade
- 1,904,900.00
development special fund (cross-border e-commerce type) (Trade clearance
facilitation platform)
Others 4,894,309.31 6,400,447.99
Total 162,101,113.10 56,180,127.64
- 121 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
54. Investment income
(1) Details of investment income:
Unit: RMB
Amount incurred Amount incurred
Item in the current in the prior
period period
Long-term equity investments income under equity method 3,727,850,763.22 3,913,864,538.60
Gains from remeasurement of previously held equity at fair value upon
845,432,476.22 -
obtaining the control (Note)
Investment income on other non-current financial assets 127,790,790.54 45,661,915.63
Investment income on disposal of other non-current financial assets (407,903.18)
Dividend income on other equity instruments 10,942,760.11 8,228,975.00
Interest income on debt investments 20,352,987.67 -
Others (112,788,119.16) 72,720.25
Total 4,619,173,755.42 3,967,828,149.48
There is no significant restriction on the remittance of the Group's investment income.
Note: The income is mainly generated by the acquisition of Zhanjiang Port whose original equity
was remeasured at fair value.
(2) Details of long-term equity investments income under equity method
Unit: RMB
Amount incurred Amount incurred
Investee in the current in the prior Reason for changes
period period
Shanghai International Port (Group) Co., Ltd. 2,425,921,985.71 2,571,370,986.64 Changes in net profit of investee
Terminal Link SAS 280,560,341.83 357,885,181.99 Changes in net profit of investee
Nanshan Group 242,285,185.34 220,478,175.60 Changes in net profit of investee
Dalian Port Co., Ltd. 148,347,321.32 112,882,708.11 Changes in net profit of investee
Qingdao Qianwan United Container Terminal
142,602,575.17 141,704,248.41 Changes in net profit of investee
Co., Ltd.
Ningbo Daxie Merchants International Wharf
120,498,548.83 102,956,377.59 Changes in net profit of investee
Co., Ltd.
Euro-Asia Oceangate, S.a` r.l. 71,820,758.28 108,552,693.45 Changes in net profit of investee
China Overseas Harbour Affaris (Laizhou) Co.,
42,110,853.02 48,450,765.57 Changes in net profit of investee
Ltd.
Port of Newcastle 31,855,255.55 8,870,390.98 Changes in net profit of investee
Others 221,847,938.17 240,713,010.26 Changes in net profit of investee
Total 3,727,850,763.22 3,913,864,538.60
55. Gains (losses) on changes in fair value
Unit: RMB
Amount incurred Amount incurred
Item in the current in the prior
period period
Other non-current financial assets 431,344,898.81 (948,440,538.45)
Including: Financial assets at fair value through profit or loss 431,344,898.81 (948,440,538.45)
Other non-current liabilities (364,861,632.33) (125,966,299.23)
Including: Financial liabilities at fair value through profit or
(364,861,632.33) (125,966,299.23)
loss
Total 66,483,266.48 (1,074,406,837.68)
- 122 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
56. Gains (losses) on impairment of credit
Unit: RMB
Amount incurred Amount incurred
Item in the current in the prior
period period
I. Gains (losses) on impairment of credit of accounts receivable (51,878,244.38) 3,102,192.00
II. Gains (losses) on impairment of credit of other receivables 1,682,076.71 (9,760,870.10)
III. Gains (losses) on impairment of credit of long-term
(1,082,720.15) (784,171.05)
receivables
IV. Others 1,029,478.05 (85,731.45)
Total (50,249,409.77) (7,528,580.60)
57. Gains from impairment of assets
Unit: RMB
Amount incurred Amount incurred
Item in the current in the prior
period period
Gains from decline in value of inventories 25,051.16 -
58. Gains on disposal of assets
Unit: RMB
Amount Amount included
Amount incurred
incurred in non-recurring
Item in the current
in the prior profit or loss for
period
period the current year
Gains on disposal of non-current assets 4,794,562,782.79 19,258,495.33 4,794,562,782.79
Including: Gains on disposal of fixed assets 6,759,787.47 18,151,195.97 6,759,787.47
Gains on disposal of intangible assets 1,108,671,001.98 - 1,108,671,001.98
Gains on disposal of construction in
47,902,373.19 - 47,902,373.19
progress
Others 3,631,229,620.15 1,107,299.36 3,631,229,620.15
Note: The gains on disposal of assets mainly include:
1) On 30 October 2019, the Company's subsidiary Shantou Port signed the "Transfer Letter"
with Shantou Land Reserve Center, returning the land around 133.61 mu and accompany
buildings on the east of Zhuchi deepwater port and on the south of Zhongshan East Road
of Shantou to the municipal government. According to the legal opinion, Shantou Port
confirmed the completion of transfer of the land of 133.61 mu and accompany buildings,
and recognized gains on compensation of assets amounting to RMB69,324,588.03.
2) The Company's subsidiary Shantou Port obtained received a compensation of
RMB537,635,141.78 by returning its land parcels of 183.63 mu and accompany buildings
at Zhuchi deepwater port on the south of Zhongshan East Road of Shantou to government.
Details are set out in Note (V)6.4(2).
3) The Company's subsidiaries Antongjie Terminal Services (Shenzhen) Co., Ltd. ("ATJ")
and Ansujie Terminal Services (Shenzhen) Co., Ltd. ("ASJ") obtained compensation of
RMB4,193,314,004.68 by returning land parcels and its accompany buildings. Details are
set out in Note (X)5(6).
- 123 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
59. Non-operating income
Unit: RMB
Amount Amount included in
Amount incurred
incurred non-recurring profit
Item in the current
in the prior or loss for the
period current year
period
Compensation obtained by minority shareholders
488,492,798.26 - 488,492,798.26
(Note)
Compensation received for contracts violation 14,444,165.81 945,809.03 14,444,165.81
Exempted account currents 2,026,044.81 - 2,026,044.81
Insurance compensation received - 540,000.00 -
Others 48,140,351.53 65,642,880.95 48,140,351.53
Total 553,103,360.41 67,128,689.98 553,103,360.41
Note: In August 2012, the Group acquired 50% equity of LCT held by Mediterranean Shipping
Company S.A ("MSC") through its subsidiary Global Terminal Limited at the consideration
of EUR150 million. According to the "Equity Acquisition Agreement", from 2014 to 2028,
MSC provides LCT port with commitment of minimum quantity of containers through
Global Terminal Limited, of which the performance is assessed every three years, and
agrees on the compensation mechanism whenever the guaranteed quantity of containers is
not satisfied. In 2019, the Group recognized compensation of RMB488,492,798.26 for the
period from 2017 to 2019. As at 31 December 2019, the Group accumulatively recognized
compensation of RMB866,629,494.55 of which RMB669,121,539.36 is not yet received.
60. Non-operating expenses
Unit: RMB
Amount Amount included in
Amount incurred
incurred non-recurring profit
Item in the current
in the prior or loss for the
period current period
period
Donations 31,344,046.81 12,070,408.91 31,344,046.81
Losses on retirement of non-current assets 24,459,845.75 32,095,701.53 24,459,845.75
Compensation, liquidated damages and penalties 5,574,036.67 49,204,874.59 5,574,036.67
Others 9,074,083.17 31,660,313.54 9,074,083.17
Total 70,452,012.40 125,031,298.57 70,452,012.40
61. Income tax expenses
Unit: RMB
Amount incurred Amount incurred
Item in the current in the prior
period period
Current tax expenses 2,308,373,316.21 510,367,919.37
Deferred tax expenses 332,165,578.41 218,072,619.23
Total 2,640,538,894.62 728,440,538.60
- 124 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
61. Income tax expenses - continued
Reconciliation of income tax expenses to the accounting profit is as follows:
Unit: RMB
Amount incurred
Item in the current
period
Accounting profit 10,807,456,167.82
Income tax expenses calculated at 25% 2,701,864,041.96
Effect of non-deductible cost, expenses and losses 261,705,254.04
Accrued income tax expenses 973,358,960.93
Effect of deductible temporary differences and deductible losses for which the deferred tax
136,262,425.91
assets are not recognized in current period
Effect of tax-free income (Note) (565,271,919.77)
Effect of tax incentives and changes of tax rate (289,666,792.29)
Effect of different tax rates of subsidiaries operating in other jurisdictions (475,302,953.37)
Effect of utilizing deductible losses for which the deferred tax assets were not recognized
(76,090,943.14)
in prior period
Effect of adjustments to prior-year income tax (31,763,879.70)
Changes in the opening balance of deferred tax assets/ liabilities due to tax adjustments 5,366,646.17
Others 78,053.88
Income tax expenses 2,640,538,894.62
Note: This mainly represents the tax effect on investment income from joint venture and
associates.
62. Assets with restricted ownership or use right
Unit: RMB
Item Closing balance Opening balance
Cash and bank balances (Note 1) 15,648,978.15 1,697,027,200.00
Equity investment in Colombo International Container
1,591,452,920.23 1,526,241,901.61
Terminals Limited (Note 2)
Equity investment in Thesar Maritime Limited (Note 2) 799,684,707.77 767,331,789.70
Fixed assets (Note 3) 349,612,960.23 5,825,207,339.57
Intangible assets (Note 3) 345,131,760.52 161,408,030.71
Construction in progress (Note 3) 23,840,920.42 43,352,104.93
Total 3,125,372,247.32 10,020,568,366.52
Note 1: Details of restricted cash and bank balances are set out in Note (V) 1.
Note 2: Details of mortgaged equity and interests are set out in Note (V) 35.
Note 3: Yide Port mortgaged its land with property right, fixed assets and construction in
progress to obtain bank borrowings; Shenzhen Haixing Harbor Development Co., Ltd.
mortgaged its land with property right to obtain bank borrowings; Dongguan Chiwan
Warf Co., Ltd. mortgaged its sea area use right with property right to obtain bank
borrowings; ZCMG mortgaged its land with property right to obtain related party
borrowings. Details of mortgage borrowings are set out in Note (V) 35 and Note (V)
38.
- 125 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
63. Other comprehensive income
Details are set out in Note (V) 45.
64. Items in cash flow statement
(1) Other cash receipts relating to operating activities:
Unit: RMB
Amount incurred Amount incurred
Item in the current in the prior
period period
Government grants 614,567,707.23 50,797,838.32
Interest income 212,679,224.25 214,787,250.36
Guarantees and deposits 30,791,091.36 27,953,110.71
Rentals 16,310,934.86 13,313,831.31
Compensation from contracts 13,860,280.30 218,843,719.69
Insurance compensation 4,565,218.67 16,320,537.80
Harbor construction fee 2,803,216.00 96,876,815.04
Others 270,133,172.51 325,042,168.36
Total 1,165,710,845.18 963,935,271.59
(2) Other cash payments relating to operating activities
Unit: RMB
Amount incurred Amount incurred
Item in the current in the prior
period period
Operating expenses such as operating costs and administration
201,645,233.00 255,069,427.76
expense etc.
Advance payment 177,076,380.78 155,172,493.64
Rentals 31,228,253.07 70,806,355.26
Port construction fee 26,478,534.06 83,269,723.00
Guarantees and deposits 20,638,334.19 16,514,731.00
Port charges 8,187,025.59 53,236,125.23
Harbour dues on cargo 3,138,152.55 2,668,097.85
Others 341,307,637.90 407,636,957.99
Total 809,699,551.14 1,044,373,911.73
(3) Other cash receipts relating to investing activities
Unit: RMB
Amount incurred Amount incurred
Item in the current in the prior
period period
Recovery of loans 1,018,695,828.48 120,500,000.00
Recovery of deposits restricted due to acquisition of Hambantota
1,001,472,400.00 -
Port project
Net cash receipts from acquisition of subsidiaries and other
845,457,228.45 -
operating units
Cash receipts for debt transfer 356,137,574.00 -
Recovery of principal of structured deposit that is not readily for
314,000,000.00 -
withdrawal
Interest of structured deposits - 36,115,992.14
Others 204,000.00 -
Total 3,535,967,030.93 156,615,992.14
- 126 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
64. Items in cash flow statement - continued
(4) Net cash payments for acquiring subsidiaries and other operating units
Unit: RMB
Amount incurred
Item in the current
period
Cash and cash equivalents paid for business combination in the current year 375,334,390.00
Including: Zhanjiang port 375,334,390.00
Longteng Shipping -
Less: Cash and cash equivalents held by subsidiaries at the acquisition date 1,220,791,618.45
Including: Zhanjiang port 1,216,363,923.97
Longteng Shipping 4,427,694.48
Net cash payments for acquisition of subsidiaries (845,457,228.45)
Including: Zhanjiang port (841,029,533.97)
Longteng Shipping (4,427,694.48)
(5) Net cash receipts from disposal of subsidiaries and other operating units
Unit: RMB
Amount incurred
Item in the current
period
Cash and cash equivalent received in current period for disposal of subsidiaries in prior
1,000,000.00
period
Including: China Merchants Warehousing (Shenzhen) Service Co., Ltd. 1,000,000.00
(6) Other cash payments relating to investing activities
Unit: RMB
Amount incurred Amount incurred
Item in the current in the prior
period period
Structured deposit that is not readily for withdrawal 1,610,000,000.00 695,000,000.00
Debt transfer payment 356,137,574.00 -
Related party borrowings 104,390,000.00 -
Supplementary payment of tax on significant assets restructuring 68,423,555.78 -
Deposits restricted due to acquisition of Hambantota Port project - 965,644,000.00
Payment of income tax on disposal of other equity instruments - 25,463,391.23
Total 2,138,951,129.78 1,686,107,391.23
(7) Other cash receipts relating to financing activities
Unit: RMB
Amount incurred Amount incurred
Item in the current in the prior
period period
Proceeds from disposal of equity of subsidiaries by CMPort 1,713,327,483.01 -
Proceeds from disposal of equity of the Company by CMPort - 3,876,395,683.27
Total 1,713,327,483.01 3,876,395,683.27
- 127 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
64. Items in cash flow statement - continued
(8) Other cash payments relating to financing activities
Unit: RMB
Amount incurred Amount incurred
Item in the current in the prior
period period
Bonds issuance cost 6,600,000.00 104,284,657.11
Repayment of advances of shareholders 1,592,783.29 1,833,400.80
Lease payments - 39,828,477.15
Others 34,391,014.26 250,000.00
Total 42,583,797.55 146,196,535.06
65. Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
Unit: RMB
Amount incurred Amount incurred
Supplementary information in the current in the prior
period period
1．Reconciliation of net profit to cash flows from operating
activities:
Net profit 8,166,917,273.20 2,885,914,753.96
Add: Provision for impairment losses of assets (25,051.16) -
Provision for impairment losses of credit 50,249,409.77 7,528,580.60
Depreciation of fixed assets 1,681,007,226.50 1,298,671,209.43
Depreciation of investment property 190,418,170.86 183,248,437.37
Depreciation of right-of-use assets 328,886,210.72
Amortization of intangible assets 632,626,770.16 526,994,590.78
Amortization of long-term prepaid expenses 31,586,968.21 19,045,474.75
Losses (gains) on disposal of fixed assets, intangible assets
(4,794,562,782.79) (19,258,495.33)
and other long-term assets
Losses on retirement of fixed assets, intangible assets and
24,459,845.75 32,095,701.53
other long-term assets
Losses (gains) on changes in fair value (66,483,266.48) 1,074,406,837.68
Financial expenses 2,127,073,624.88 1,869,926,400.58
Investment loss (income) (4,619,173,755.42) (3,967,828,149.48)
Decrease (increase) in deferred tax assets (191,905,933.39) (24,282,252.12)
Increase in deferred tax liabilities 524,071,511.80 242,354,871.34
Decrease (increase) in inventories (11,704,381.63) (25,110,483.47)
Decrease (increase) in operating receivables (2,391,266,937.99) (261,424,216.35)
Increase in operating payables 3,819,698,512.95 446,292,163.57
Net cash flows from operating activities 5,501,873,415.94 4,288,575,424.84
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 7,714,157,995.87 5,373,281,504.75
Less: Opening balance of cash 5,373,281,504.75 7,729,460,082.75
Add: Closing balance of cash equivalents - -
Less: Opening balance of cash equivalents - -
Net increase (decrease) in cash and cash equivalents 2,340,876,491.12 (2,356,178,578.00)
- 128 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
65. Supplementary information to the cash flow statement - continued
(2) Cash and cash equivalents
Unit: RMB
Item Closing balance Opening balance
I. Cash 7,714,157,995.87 5,373,281,504.75
Including: Cash on hand 331,305.65 349,650.07
Bank deposits 7,422,490,058.00 5,116,481,444.13
Other monetary funds 291,336,632.22 256,450,410.55
II. Cash equivalents - -
III. Closing balance of cash and cash equivalents 7,714,157,995.87 5,373,281,504.75
- 129 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
66. Foreign currency monetary items
Closing balance of Closing amount in
Item Exchange rate
original currency RMB
Cash and bank balances 2,254,117,370.52
Including: HKD 24,556,034.06 0.8958 21,997,295.31
USD 210,842,987.16 6.9762 1,470,882,847.03
EUR 66,928,010.67 7.8155 523,075,867.39
RMB 238,161,360.79 1.0000 238,161,360.79
Accounts receivable 134,801,300.52
Including: HKD 6,121,974.82 0.8958 5,484,065.04
USD 4,590,551.69 6.9762 32,024,606.70
EUR 12,448,676.19 7.8155 97,292,628.78
Other receivables 561,195,430.79
Including: HKD 35,529,633.52 0.8958 31,827,445.71
USD 3,538,045.40 6.9762 24,682,112.32
EUR 32,766,909.72 7.8155 256,089,782.91
RMB 248,596,089.85 1.0000 248,596,089.85
Long-term receivables 9,800,295.76
Including: EUR 1,253,956.87 7.8155 9,800,295.76
Short-term borrowings 1,304,398,148.00
Including: HKD 540,743,634.74 0.8958 484,398,148.00
RMB 820,000,000.00 1.0000 820,000,000.00
Accounts payable 30,431,392.31
Including: HKD 3,086,706.06 0.8958 2,765,071.29
USD 50,041.20 6.9762 349,097.42
EUR 3,489,504.65 7.8155 27,272,223.60
RMB 45,000.00 1.0000 45,000.00
Other payables 574,112,167.24
Including: HKD 13,979,385.79 0.8958 12,522,733.79
USD 47,361,608.63 6.9762 330,404,054.12
EUR 18,525,508.27 7.8155 144,786,109.92
RMB 86,399,269.41 1.0000 86,399,269.41
Non-current liabilities due within one year 261,401,461.04
Including: EUR 33,446,543.54 7.8155 261,401,461.04
Long-term borrowings 1,254,199,485.00
Including: EUR 124,950,000.00 7.8155 976,546,725.00
USD 39,800,000.00 6.9762 277,652,760.00
Bonds payable 21,212,400,200.93
Including: RMB 2,500,000,000.00 1.0000 2,500,000,000.00
USD 2,682,319,916.42 6.9762 18,712,400,200.93
Long-term payables 1,940,107,556.84
Including: HKD 2,366,680.83 0.8958 2,120,072.69
USD 217,303,185.71 6.9762 1,515,950,484.15
EUR 54,000,000.00 7.8155 422,037,000.00
- 130 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
67. Government grants
Unit: RMB
Amount included in profit
Type Amount Item Account
or loss for the period
Related to assets 282,311,343.28 Tonggu channel widening project Deferred income -
Related to assets 217,588,656.72 West port area public channel widening project Deferred income -
Department of Commerce of Guangdong Province - Special funds for promoting economic 20,970,000.00
Related to income 20,970,000.00 Other income
development of Guangdong
Related to income 13,850,262.00 Shenzhen Municipal Finance Committee – Foreign trade growth incentive fund Other income 13,850,262.00
Related to income 13,268,318.27 Additional deduction of VAT Other income 13,268,318.27
Related to income 10,278,619.72 Sri Lanka Hambantota Port project subsidies Other income 10,278,619.72
Related to income 8,094,400.00 Nanshan district modern logistics project support fund Other income 8,094,400.00
Related to income 7,415,800.50 Transport Bureau of Zhangzhou Development Zone port operation support subsidy Other income 7,415,800.50
Related to income 6,903,526.71 Refund of withholding taxes Other income 6,903,526.71
Related to income 6,019,100.00 Shenzhen Transportation Committee – Finance subsidiary for key logistics enterprises Other income 6,019,100.00
Related to income 5,561,600.00 Nanshan district independent innovation enterprise development special fund Other income 5,561,600.00
Related to income 5,448,613.20 Shenzhen Municipal Finance Committee 2019 equipment construction fee Other income 5,448,613.20
Related to income 4,241,000.00 Shenzhen Science and Technology Innovation Committee – R&D subsidy Other income 4,241,000.00
Related to income 3,307,715.28 Electricity subsidy Other income 3,307,715.28
Shenzhen Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone
Related to income 2,375,100.00 Administration – the first batch of headquarter enterprise contribution support fund for Other income 2,375,100.00
2019
Related to income 2,000,000.00 Xiamen Port Holding Group Co., Ltd. – 2018 incentive support fund Other income 2,000,000.00
Related to income 1,985,363.23 Steady post subsidies Other income 1,985,363.23
Related to income 1,864,088.00 Fujian Provincial Port and Shipping Development Special Fund Other income 1,864,088.00
Special fund for foreign trade and economic development from central government (cross-
Related to income 1,720,000.00 Other income 1,720,000.00
border business management system based on big data service)
Related to assets 1,500,000.00 Zhanjiang port bulk cargo production business management system Deferred income -
- 131 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
67. Government grants - continued
Unit: RMB
Amount included in profit
Type Amount Item Account
or loss for the period
rd
Fujian Development and Reform Commission – 3 batch provincial demonstration
Related to income 1,000,000.00 Other income 1,000,000.00
logistics park subsidy
Related to income 1,000,000.00 Special fund for promoting high-quality development of economy Other income 1,000,000.00
Related to income 1,000,000.00 Market Supervision Bureau Of Shenzhen – China quality awards nomination prize Other income 1,000,000.00
Shenzhen Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone Administration
Related to income 1,000,000.00 Other income 1,000,000.00
– Qianhai cooperation zone new trade development special fund
Related to assets 1,000,000.00 Port construction subsidy Deferred income -
Related to income 4,894,309.31 Others Other income 4,894,309.31
Related to income 485,929.28 Others Deferred income 485,929.28
Related to assets 752,280.00 Others Deferred income -
Total 627,836,025.50 124,683,745.50
- 132 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
68. Lease
Undiscounted lease receipts subsequent to the balance sheet date are as follows:
Unit: RMB
Maturity analysis of undiscounted lease receipts 31/12/2019
c 262,471,675.69
2nd year subsequent to the balance sheet date 170,415,614.49
3rd year subsequent to the balance sheet date 126,553,858.93
4th year subsequent to the balance sheet date 94,901,695.84
5th year subsequent to the balance sheet date 86,772,978.95
Subsequent years 415,842,560.49
Total 1,156,958,384.39
Note 1: The operating leases where the Group as the lessor are related to port and terminal
facilities, machinery equipment, vehicles, land and buildings, with lease terms ranging
from 1 month to 50 years and option to renew the lease of port and terminal facilities,
machinery equipment, land and buildings. The Group considers that as the leased assets
are properly used, the unguaranteed balance of such assets does not constitutes material
risk of the Group.
Note 2: For 2019, the revenue relating to operating lease amounts to RMB260,445,597.84; there
is no revenue relating to variable lease payment that is not included in lease receipts.
(VI) CHANGES IN SCOPE OF CONSOLIDATION
1. Business combination not involving enterprises under common control
(1) Business combination not involving enterprises under common control for the year
Unit: RMB
Acquiree's income Acquiree's net profit
Proportion
Basis for from acquisition from acquisition
Name of Date on which the of equity Acquisition
Acquisition cost Acquisition date determining the date to the end of date to the end of the
acquiree investment is acquired acquired method
acquisition date the year year
(%)
Zhanjiang port Cash
3 February 2019 6,188,148,907.97 58.3549 3 February 2019 Transfer of control 2,306,530,651.61 75,720,720.11
(Note 1) payment
Change of
Longteng
31 December 2019 77,485,870.00 70.00 articles of 31 December 2019 Transfer of control - -
Shipping (Note 2)
association
Note 1: At 31 December 2018, China Merchants International Terminal (Zhanjiang) Co., Ltd., a
subsidiary of the Company, holds 1,620,000,000 shares of ordinary shares of Zhanjiang
Port, accounting for 40.2916% of the issued shares of Zhanjiang Port.
On 2 January 2019, the Company and Guangdong Sinotrans Co., Ltd. entered into the
"Share Transfer Agreement on Zhanjiang Port (Group) Co., Ltd.", according to which the
Company receives 201,034,548 shares of ordinary shares of Zhanjiang Port held by
Guangdong Sinotrans Co., Ltd., accounting for 5% of the total issued shares of Zhanjiang
Port at the date of the agreement. The consideration for the conversion is
RMB375,334,390.00.
- 133 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(VI) CHANGES IN SCOPE OF CONSOLIDATION - continued
1. Business combination not involving enterprises under common control - continued
(1) Business combination not involving enterprises under common control for the year -
continued
On 8 January 2019, Chiwan Wharf (Hong Kong) Co., Ltd. ("CWHK"), a subsidiary of the
Company, and Zhanjiang Infrastructure and Zhanjiang Port signed the "Capital Increase
Agreement of Zhanjiang Port (Group) Co., Ltd". According to the agreement, Zhanjiang
Port proposes to issue additional 1,853,518,190 shares of ordinary share at the price of
RMB 1.867 per share or equivalent foreign currency price (determined based on
exchange rate of the capital contribution) so as to increase its registered capital to RMB
5,874,209,145.00. CWHK proposes to subscribe for 1,606,855,919 shares ordinary shares,
accounting for 27.3544% of the issued shares of Zhanjiang Port at the issuing date. The
total subscription payment is RMB 3,000,000,000.77 or the equivalent amount in foreign
currency (determined based on the exchange rate of capital contribution).
The above transaction has been completed on 3 February 2019. Since then, the Group
holds total 3,427,890,467 shares of ordinary share of Zhanjiang Port, accounting for
58.3549% of the total issued shares of Zhanjiang Port. The Group is able to control
Zhanjiang Port, therefore includes Zhanjiang Port in the scope of consolidation financial
statements.
Note 2: According to the previous articles of association of Longteng Shipping, the top authority
of the company is the General Shareholders Meeting, and the resolution of Shareholders
Meeting requires unanimous consent of all the shareholders. Therefore, the Company's
subsidiary Zhanjiang Port accounts for Longteng Shipping as a joint venture.
At 31 December 2019, Longteng Shipping held the 2019 second extraordinary
shareholders meeting where the resolution of changing the articles of association was
approved. According to the revised articles of association, the Company's top authority is
the Shareholders Meeting, and the resolution of Shareholders Meeting requires consent of
no less one half of the shareholders having voting power. Therefore, the Company's
subsidiary Zhanjiang Port has control over Lengteng Shipping. So that the Group
included it in the scope of consolidated financial statements.
(2) Acquisition cost and goodwill
Unit: RMB
Acquisition cost Zhanjiang Port Longteng Shipping
--Cash 3,375,334,390.77 -
-- Fair value of previously held equity at acquisition date 2,816,617,994.27 77,485,870.00
-- Others (3,803,477.07) -
Total acquisition cost 6,188,148,907.97 77,485,870.00
Less: Share of fair value of net identifiable assets 5,769,803,600.29 70,303,862.29
Goodwill 418,345,307.68 7,182,007.71
- 134 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(VI) CHANGES IN SCOPE OF CONSOLIDATION - continued
1. Business combination not involving enterprises under common control - continued
(3) Identifiable assets, liabilities of the acquiree at acquisition date
Unit: RMB
Zhanjiang Port Longteng Shipping
Item Fair value at acquisition Carrying amount at Fair value at Carrying amount at
date acquisition date acquisition date acquisition date
Assets:
Current assets 5,165,579,759.10 5,165,579,759.10 16,465,094.05 16,465,094.05
Other non-current financial
15,243,577.73 15,243,577.73 - -
assets
Long-term receivables 877,208,613.40 877,208,613.40 - -
Long-term equity investments 172,685,776.52 165,494,758.03 - -
Investment property 63,473,360.24 39,760,964.41 - -
Fixed assets 8,445,573,407.27 7,451,556,053.74 67,589,835.15 62,305,835.15
Right-of-use assets 1,304,452,747.69 1,304,452,747.69 5,481,585.04 5,481,585.04
Construction in progress 1,158,968,327.74 1,158,968,327.74 19,804,885.23 19,804,885.23
Materials for construction of
13,684,316.43 13,684,316.43 - -
fixed assets
Intangible assets 3,566,911,864.41 2,211,115,469.85 - -
Development expenses 14,968,306.82 14,968,306.82 - -
Goodwill - 9,775,569.57 - -
Long-term prepaid expenses 2,630,870.77 2,630,870.77 - -
Deferred tax assets 41,991,411.69 41,991,411.69 7,500.00 7,500.00
Other non-current assets 875,819,471.20 875,819,471.20 - -
Liabilities:
Current liabilities 6,048,006,153.82 6,048,006,153.82 3,456,823.04 3,456,823.04
Long-term borrowings 1,762,537,800.00 1,762,537,800.00 - -
Bonds payable 400,000,000.00 400,000,000.00 - -
Long-term payables 510,107,118.35 510,107,118.35 - -
Deferred income 454,321,351.99 454,321,351.99 - -
Long-term employee benefits
103,174,447.59 103,174,447.59 30,000.00 30,000.00
payable
Deferred tax liabilities 595,179,290.60 - 1,321,000.00 -
Lease liabilities 857,876,749.08 857,876,749.08 4,106,987.44 4,106,987.44
Net assets 10,987,988,899.58 9,212,226,597.34 100,434,088.99 96,471,088.99
Less: Minority interests 5,218,185,299.29 4,401,619,250.71 30,130,226.70 28,941,326.70
Net assets acquired 5,769,803,600.29 4,810,607,346.63 70,303,862.29 67,529,762.29
(4) Operating results and net cash flows of the acquiree from the acquisition date to the end of
the period of business combination
Unit: RMB
Acquisition date to the end of the period of
Item business combination
Zhanjiang port Longteng Shipping
Operating income 2,306,530,651.61 -
Operating cost and expenses 2,266,290,301.90 -
Gross profit 70,722,673.91 -
Net profit 75,720,720.11 -
Net cash flows from operating activities 735,126,563.91 -
Net cash flows from investing activities (616,817,351.55) -
Net cash flows from financing activities (3,934,477,407.34) -
Net increase in cash and cash equivalents (3,816,168,194.98) -
- 135 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(VI) CHANGES IN SCOPE OF CONSOLIDATION - continued
1. Business combination not involving enterprises under common control - continued
(5) Gains or losses from remeasurement of equity held prior to acquisition date at fair value
Unit: RMB
Amount
Method of
transferred from
determining the
Gains or losses other
Carrying amount Fair value of fair value of
from comprehensive
of previously held previously held previously held
Name of the acquiree remeasurement of income to
equity at the equity at the equity at
previously held investment income
acquisition date acquisition date acquisition date
equity at fair value in respect of the
and key
equity held prior to
assumptions
the acquisition date
Asset-based
Zhanjiang Port 1,981,183,625.76 2,816,617,994.27 835,434,368.51 -
valuation
Asset-based
Longteng Shipping 67,487,762.29 77,485,870.00 9,998,107.71 -
valuation
(VII) EQUITY IN OTHER ENTITIES
1. Interests in subsidiaries
(1) Composition of the Group
Proportion of
Principal Place of Registered capital
Nature of ownership
Name of the subsidiary place of incorpo (RMB'0000, unless Acquisition method
business Interest(%)
business ration otherwise specified)
Direct Indirect
Shenzhen Chiwan International Freight Agency Co., Shenzhen, Shenzhen, Logistics support Established through
550.00 100.00 -
Ltd. PRC PRC services investment
Hong Kong, Hong Kong, Investment Established through
CWHK HKD1,000,000 100.00 -
PRC PRC holding investment
Dongguan, Dongguan, Logistics support Established through
Dongguan Chiwan Warf Co., Ltd. 45,000.00 85.00 -
PRC PRC services investment
Dongguan, Dongguan, Logistics support Established through
Dongguan Chiwan Terminal Co., Ltd. 40,000.00 100.00 -
PRC PRC services investment
Business combination
Shenzhen, Shenzhen, Logistics support
Shenzhen Chiwan Harbor Container Co. Ltd. 28,820.00 100.00 - involving enterprises
PRC PRC services
under common control
Business combination
Shenzhen, Shenzhen, Logistics support
Shenzhen Chiwan Port Development Co., Ltd. 1,500.00 100.00 - involving enterprises
PRC PRC services
under common control
Business combination
Shenzhen, Shenzhen, Logistics support
Chiwan Container Terminal Co., Ltd. USD95,300,000 55.00 20.00 involving enterprises
PRC PRC services
under common control
Business combination
Shenzhen, Shenzhen, Logistics support
Shenzhen Chiwan Tugboat Co., Ltd. 2,400.00 100.00 - involving enterprises
PRC PRC services
under common control
Business combination
Hong Kong, Hong Kong, Logistics support
Chiwan Shipping (Hong Kong) Limited HKD800,000 100.00 - involving enterprises
PRC PRC services
under common control
Business combination
Hong Kong, Hong Kong, Investment
CMPort (Note 1) HKD40,614,228,200.00 40.91 - involving enterprises
PRC PRC holding
under common control
Business combination
Shenzhen, Shenzhen, Logistics support
China Merchants Bonded Logistics Co., Ltd. 70,000.00 40.00 60.00 involving enterprises
PRC PRC services
under common control
Business combination
China Merchants International Information Shenzhen, Shenzhen,
IT service 5,000.00 23.16 76.84 involving enterprises
Technology Co., Ltd. PRC PRC
under common control
Business combination
China Merchants International (China) Investment Shenzhen, Shenzhen, Investment
USD30,000,000 - 100.00 involving enterprises
Co., Ltd. PRC PRC holding
under common control
- 136 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(VII) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(1) Composition of the Group - continued
Principal Place of Nature of Proportion of
Registered capital
place of incorpo business ownership
Name of the subsidiary (RMB'0000, unless Acquisition method
business ration Interest(%)
otherwise specified)
Direct Indirect
Business combination
Qingdao, Logistics support
CMT Qingdao, PRC USD206,300,000 - 100.00 involving enterprises
PRC services
under common control
Business combination
Hong Kong, Hong Kong, Logistics support
China Merchants Container Services Limited HKD500,000 - 100.00 involving enterprises
PRC PRC services
under common control
Business combination
Shenzhen, Shenzhen, Logistics support
China Merchants Port (Shenzhen) Co., Ltd. 55,000.00 - 100.00 involving enterprises
PRC PRC services
under common control
Business combination
Shenzhen, Shenzhen, Engineering
Shenzhen Haiqin Project Management Co., Ltd. 300.00 - 100.00 involving enterprises
PRC PRC supervision
under common control
Preparation for Business combination
Shenzhen, Shenzhen,
ATJ warehousing HKD100,000,000 - 100.00 involving enterprises
PRC PRC
project under common control
Preparation for Business combination
Shenzhen, Shenzhen,
ASJ warehousing HKD100,000,000 - 100.00 involving enterprises
PRC PRC
project under common control
Business combination
China Merchants International Terminal (Qingdao) Qingdao, Logistics support
Qingdao, PRC USD44,000,000 - 90.10 involving enterprises
Co., Ltd. PRC services
under common control
Business combination
Logistics support
Colombo International Container Terminals Limited Sri Lanka Sri Lanka USD150,000,100 - 85.00 involving enterprises
services
under common control
Business combination
Shenzhen, Shenzhen, Logistics support
Shenzhen Mawan Port Services Co., Ltd. 20,000.00 - 100.00 involving enterprises
PRC PRC services
under common control
Business combination
Shenzhen, Shenzhen, Logistics support
Shenzhen Magang Cangma Co., Ltd. 33,500.00 - 100.00 involving enterprises
PRC PRC services
under common control
Business combination
Shenzhen, Shenzhen, Logistics support
Shenzhen Mawan Port Service Co., Ltd. 20,000.00 - 100.00 involving enterprises
PRC PRC services
under common control
Business combination
Zhangzhou, Zhangzhou, Logistics support
Zhangzhou China Merchants Tugboat Co., Ltd. 1,500.00 - 100.00 involving enterprises
PRC PRC services
under common control
Business combination
Zhangzhou, Zhangzhou, Logistics support
Zhangzhou China Merchants Port Co., Ltd. 100,000.00 - 60.00 involving enterprises
PRC PRC services
under common control
Business combination
Zhangzhou, Zhangzhou, Logistics support
ZCMG (note 2) 44,450.00 - 31.00 involving enterprises
PRC PRC services
under common control
Business combination
Shenzhen, Shenzhen, Logistics support
Shekou Container Terminals Ltd. HKD618,201,200 - 100.00 involving enterprises
PRC PRC services
under common control
Business combination
Shenzhen, Shenzhen, Logistics support
Shenzhen Lianyunjie Container Terminals Co., Ltd. 60,854.90 - 100.00 involving enterprises
PRC PRC services
under common control
Business combination
Shenzhen, Shenzhen, Logistics support
Anxunjie Container Terminals (Shenzhen) Co., Ltd. 127,600.00 - 100.00 involving enterprises
PRC PRC services
under common control
Preparation for Business combination
Anyunjie Port Warehousing Service (Shenzhen) Co., Shenzhen, Shenzhen,
warehousing 6,060.00 - 100.00 involving enterprises
Ltd. PRC PRC
project under common control
Business combination
Shenzhen, Shenzhen, Logistics support
Shenzhen Haixing Harbor Development Co., Ltd USD15,151,500 - 67.00 involving enterprises
PRC PRC services
under common control
Business combination
Shenzhen, Shenzhen, Logistics support
Shenzhen Lianyongtong Terminal Co., Ltd. USD7,000,000 - 100.00 involving enterprises
PRC PRC services
under common control
Business combination
Foshan, Logistics support
Yide Port Foshan, PRC 21,600.00 - 51.00 involving enterprises
PRC services
under common control
British Business combination
British Virgin Investment
Mega Shekou Container Terminals Limited Virgin USD120.00 - 80.00 involving enterprises
Islands holding
Islands under common control
Business combination
Investment
Thesar Maritime Limited Cyprus Cyprus EUR5,000.00 - 100.00 involving enterprises
holding
under common control
Business combination
Republic of Republic of Logistics support
LCT XOF200,000,000 - 100.00 involving enterprises
Togo Togo services
under common control
- 137 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(VII) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(1) Composition of the Group - continued
Principal Place of Nature of Proportion of
Registered capital
place of incorpo business ownership
Name of the subsidiary (RMB'0000, unless Acquisition method
business ration Interest(%)
otherwise specified)
Direct Indirect
Business combination
Logistics support
Hambantota International Port Group (Private)Limited Sri Lanka Sri Lanka USD794,000,000 - 85.00 involving enterprises
services
under common control
Business combination
Shantou, Logistics support
Shantou port Shantou, PRC 12,500.00 - 60.00 involving enterprises
PRC services
under common control
Business combination
Shenzhen, Shenzhen, Property lease
JYRT 80,000.00 - 100.00 involving enterprises
PRC PRC servce etc.
under common control
Business combination
Shenzhen, Shenzhen, Property lease
QHW 20,000.00 - 100.00 involving enterprises
PRC PRC servce etc.
under common control
Business combination
Shenzhen, Shenzhen, Investment
Juzhongzhi Investment (Shenzhen) Co., Ltd. 4,000.00 - 75.00 involving enterprises
PRC PRC consulting
under common control
Business combination
Shenzhen, Shenzhen, Logistics support
Shenzhen Lianda Tugboat Co., Ltd. 200.00 - 60.29 involving enterprises
PRC PRC services
under common control
Business combination
Zhangzhou, Zhangzhou, Logistics support
Zhangzhou Zhongli Outer Wheel Tally Co., Ltd 200.00 - 84.00 involving enterprises
PRC PRC services
under common control
Business combination
Logistics support
China Merchants Holdings (Djibouti) FZE Djibouti Djibouti USD38,140,000 - 100.00 involving enterprises
services
under common control
British Business combination
British Virgin Investment
Xinda Resources Limited Virgin USD 1.00 - 74.95 involving enterprises
Islands holding
Islands under common control
Business combination
Hong Kong, Hong Kong, Investment
Kong Rise Development Limited HKD 1.00 - 100.00 involving enterprises
PRC PRC holding
under common control
Business combination not
Logistics support BRL
TCP Brazil Brazil - 90.00 involving enterprises
services 68,851,600
under common control
China Merchants Port (Zhoushan) RoRo Logistics Zhoushan, Zhoushan, Logistics support
17,307.86 51.00 - Assets acquisition
Co., Ltd. ("RoRo Logistics" Note 3) PRC PRC services
Shenzhen Haixing Logistics Development Co., Ltd. Shenzhen, Shenzhen, Logistics support
7,066.79 - 100.00 Assets acquisition
(Note 4) PRC PRC services
Business combination not
Zhanjiang, Zhanjiang, Logistics support
Zhanjiang Port (Note 5) 587,420.91 3.42 54.93 involving enterprises
PRC PRC services
under common control
Business combination not
Zhanjiang Port International Container Terminal Co., Zhanjiang, Zhanjiang, Logistics support
60,000.00 - 80.00 involving enterprises
Ltd. (Note 5) PRC PRC services
under common control
Business combination not
Zhanjiang Port Petrochemical Terminal Co., Ltd. (note Zhanjiang, Zhanjiang, Logistics support
18,000.00 - 50.00 involving enterprises
5) PRC PRC services
under common control
Business combination not
China Ocean Shipping Tally Co., Ltd., Zhanjiang Zhanjiang, Zhanjiang, Logistics support
300.00 - 84.00 involving enterprises
(Note 5) PRC PRC services
under common control
Business combination not
Zhanjiang Port Donghaidao Bulk Cargo Terminal Co., Zhanjiang, Zhanjiang, Logistics support
5,000.00 - 100.00 involving enterprises
Ltd. (Note 5) PRC PRC services
under common control
Business combination not
Zhanjiang Port Bonded Service Co., Ltd., Guangdong Zhanjiang, Zhanjiang, Logistics support
300.00 - 100.00 involving enterprises
(Note 5) PRC PRC services
under common control
Business combination not
Guangdong Zhanjiang Port Logistics Co., Ltd. (Note Zhanjiang, Zhanjiang, Logistics support
10,000.00 - 100.00 involving enterprises
5) PRC PRC services
under common control
Business combination not
Zhanjiang, Zhanjiang, Logistics support
Zhanjiang Port Haichuan Trading Co., Ltd. (Note 6) 200.00 - 100.00 involving enterprises
PRC PRC services
under common control
Business combination not
Zhanjiang, Zhanjiang, Logistics support
Longteng Shipping (Note 6) 9,000.00 - 70.00 involving enterprises
PRC PRC services
under common control
- 138 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(VII) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(1) Composition of the Group - continued
Note 1: On 19 June 2018, the Company and China Merchants Group (Hong Kong) Co., Ltd.
("CMHK") entered into "Agreement of Concerted Action on China Merchants Port
Holdings Company Limited". According to the agreement, CMHK unconditionally keeps
consistent with the Company when voting for the matters discussed at the general
shareholders meeting of CMPort in respect of its 22.64% voting power of CMPort as
entrusted, and performs the voting as per the Company's opinion. Therefore, the
Company totally has 62.09% voting power of CMPort, and has control over CMPort.
For July and November 2019, CMPort respectively distributed 2018 dividends and 2019
interim dividends to shareholders. The shareholders may select to receive the interim
dividends in cash as an alternative of entire or partial scrip dividends. The Company
select to receive all its share of dividends from the shareholding in CMPort in the form of
scrip dividends. Upon the completion of above distribution of CMPort, the Company's
share in CMPort increased from 1,313,541,560 shares to 1,411,014,033 shares,
accounting for 40.91% (previously 39.45%) of the total issued shares of CMPort. The
proportion of shares held by CMHK changed from 22.64% to 21.86%. Therefore, the
Company has total 62.77% voting power of CMPort and has control over CMPort.
Note 2: The Group and China Merchants Zhangzhou Development Zone Co., Ltd. entered into
"Equity Custody Agreement", according to which China Merchants Zhangzhou
Development Zone Co., Ltd. entrusted its 29% equity of ZCMG to the Group for
operation and management. Therefore, the Group has 60% voting power of ZCMG and
includes it in the scope of consolidated financial statements.
Note 3: RoRo Logistics, a subsidiary of the Group, held a shareholders meeting on 17 September
2019, and approved the merger agreement entered into with China Merchants Port
(Zhoushan) RoRo Terminal Co., Ltd. ("RoRo Terminal"), another subsidiary of the
Group, on 16 September 2019. According to the agreement, RoRo Logistics merged
RoRo Terminal and continued to survive, while RoRo Terminal was cancelled. The
merger was completed on 5 November 2019.
On 18 September 2019, RoRo Logistics and RoRo Terminal, which are subsidiaries of
the Group, respectively published announcement on "Zhoushan Daily", explaining the
settlement of liabilities or debt guarantees of RoRo Logistics and RoRo Terminal. The
debts of both parties before the merger will be borne by RoRo Logistics that continues to
survive.
On 28 November 2019, the Group's subsidiary RoRo Logistics completed the industrial
and commercial registration of changes while RoRo Terminal completed the industrial
and commercial registration of cancellation.
- 139 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(VII) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(1) Composition of the Group - continued
Note 4: On 13 May 2019, the Company's subsidiary Shenzhen Haixing Xiaoyetian Logistics
Development Co., Ltd. renamed to Shenzhen Haixing Logistics Development Co., Ltd.
Note 5: Details are set out in Note (VI) 1.
(2) Material non-wholly-owned subsidiaries
Unit: RMB
Proportion of Profit or loss Dividends Balance of
ownership attributable to distributed to minority interests
Name of the subsidiary interest held by minority minority at the end of the
the minority shareholders in shareholders in year
shareholders (%) the current year the current year
CMPort 59.09 4,698,967,872.72 1,632,905,377.51 53,597,183,498.95
- 140 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(VII) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(3) Significant financial information of material non-wholly-owned subsidiaries
Unit: RMB
31/12/2019 31/12/2018
Name of the
Non-current Current Non-current
subsidiary Current assets Non-current assets Total assets Current liabilities Total liabilities Current assets Non-current assets Total assets Total liabilities
liabilities liabilities liabilities
CMPort 11,159,452,476.24 119,576,502,129.38 130,735,954,605.62 13,858,924,526.23 35,059,524,441.90 48,918,448,968.13 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
Unit: RMB
2019 2018
Name of the Total Total
Cash flows from Cash flows from
subsidiary Operating income Net profit comprehensive Operating income Net profit comprehensive
operating activities operating activities
income income
CMPort 7,845,242,646.62 7,421,484,985.59 6,327,276,475.35 3,944,044,766.09 7,729,738,537.45 2,685,592,888.44 2,886,818,529.12 3,595,234,888.15
- 141 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(VII) EQUITY IN OTHER ENTITIES - continued
2. Transactions resulting in changes in ownership interests in subsidiaries without losing
control over the subsidiaries
(1) Description of changes in ownership interests in subsidiaries
During the year, the Group's ownership interests in CMPort changed from 39.45% to
40.91%. Details are set out in Note (VII) 1 (1).
In December 2019, the Company sold 25.05% equity of Xinda Resources Limited, a wholly-
owned subsidiary of the Company, and related 25.05% of the shareholders' loans to an
external third party at the consideration of USD 248,010,000.00 (equivalent to
RMB1,713,327,483.01). After the disposal, the Company's ownership interests in Xinda
Resources Limited decreased from 100% to 74.95%.
(2) Effect of the transaction on minority interests and equity attributable to owners of the
Company
Unit: RMB
Xinda Resources
CMPort
Limited
Acquisition cost
- Cash - 1,713,327,483.01
- Fair value of non-cash assets 1,116,813,838.52 -
Total acquisition cost/disposal consideration 1,116,813,838.52 1,713,327,483.01
Less: Share of net assets of subsidiaries calculated based
1,535,943,954.55 1,171,773,303.33
on the proportion of equity acquired/disposed
Difference (419,130,116.03) 541,554,179.68
Including: Adjustment to capital Reserve 419,130,116.03 541,554,179.68
Adjustment to surplus reserve - -
Adjustment to unappropriated profit - -
3. Interests in joint ventures and associates
(1) Material joint ventures or associates
Unit: RMB
Proportion of ownership
Principal Accounting method
Place of Nature of interests held by the Group
Investee place of of investments in
registration business (%)
business associates
Direct Indirect
Associates
Port and
Shanghai International Port (Group) Shanghai, Shanghai, container
- 26.77 Equity method
Co., Ltd. PRC PRC terminal
business
- 142 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(VII) EQUITY IN OTHER ENTITIES - continued
4. Key financial information of material associates
Unit: RMB
Shanghai International Port (Group) Co., Ltd.
Closing balance / Opening balance/
Item Amount incurred Amount incurred
in the current in the prior
period period
Current assets 40,399,631,516.67 47,842,620,837.32
Including: Cash and cash equivalents 17,900,365,675.69 27,935,157,994.83
Non-current assets 101,777,664,401.29 96,524,413,178.58
Total assets 142,177,295,917.96 144,367,034,015.90
Current liabilities 19,339,272,490.14 31,676,398,710.35
Non-current liabilities 32,049,165,771.78 30,340,320,855.30
Total liabilities 51,388,438,261.92 62,016,719,565.65
Minority interests 8,732,108,869.09 6,802,318,747.82
Equity attributable to shareholders of the parent company 82,056,748,786.95 75,547,995,702.43
Share of net assets calculated based on the proportion of 21,966,591,650.27 20,216,643,649.97
ownership interests
Adjustments
-Goodwill 2,076,585,747.12 2,076,585,747.12
-Others (125,134,529.84) (105,669,326.14)
Carrying amounts of equity investments in associates 23,918,042,867.55 22,187,560,070.95
Fair value of publicly quoted equity investments in
35,788,783,813.22 32,129,272,123.48
associates
Operating income 36,101,631,985.21 38,042,544,621.37
Net profit 9,925,845,382.34 11,472,021,103.16
Other comprehensive income (197,209,230.86) (954,348,960.96)
Total comprehensive income 9,728,636,151.48 10,517,672,142.20
Dividends received from associates in the current year 955,194,576.56 1,059,194,508.74
5. Summarized financial information of immaterial associates and joint ventures
Unit: RMB
Closing balance / Opening balance/ Amount
Amount incurred incurred
in the current in the prior
period period
Joint ventures:
Total carrying amount of investments 9,392,226,566.22 11,230,302,154.26
Aggregate of following items calculated based on the
proportion of ownership interest
- Net profit 468,699,021.57 429,904,250.47
- Other comprehensive income (18,718,479.76) (5,608,904.12)
- Total comprehensive income 449,980,541.81 424,295,346.35
Associates:
Total carrying amount of investments 24,606,269,949.49 16,758,715,038.19
Aggregate of following items calculated based on the
proportion of ownership interest
- Net profit 833,229,755.94 912,589,301.49
- Other comprehensive income (71,060,470.70) (31,643,724.68)
- Total comprehensive income 762,169,285.24 880,945,576.81
6. The investees where the Group holds long-term equity investments are not restricted to
transfer funds to the Group.
- 143 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(VIII) RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS
The Group's major financial instruments include cash and bank balances, notes receivable,
account receivables, other receivables, long-term receivables, other equity instrument investments,
other non-current financial assets, short-term borrowings, notes payable, accounts payable, other
payables, long-term borrowings, bonds payable, long-term payables etc. 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.
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 HKD, USD and EUR. Except
for part of the purchases and sales, the Group's other principal activities are denominated and
settled in RMB. As at 31 December 2019, the balance of the Group's assets and liabilities are both
denominated in functional currency, except that the assets and liabilities set out below are
recorded using foreign currency. Currency risk arising from the foreign currency balance of assets
and liabilities may have impact on the Group's performance.
Unit: RMB
Item Closing balance Opening balance
Cash and bank balances 829,827,620.81 2,134,538,905.15
Accounts receivable 134,801,300.52 159,141,161.37
Other receivables 558,948,223.20 574,646,768.14
Long-term receivables 9,800,295.76 -
Short-term borrowings 1,304,398,148.00 1,825,358,000.00
Accounts payable 30,431,392.31 45,071,940.89
Other payables 261,684,252.87 512,625,788.26
Non-current liabilities due within one year 261,401,461.04 220,116,765.00
Long-term borrowings 976,546,725.00 1,926,978,130.00
Bonds payable 2,500,000,000.00 21,384,578,670.28
Long-term payables 431,361,402.17 423,754,200.00
- 144 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(VIII) RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
1. Risk management objectives and policies - continued
1.1 Market risk - continued
1.1.1 Currency risk - continued
The Group closely monitors the effects of changes in the foreign exchange rates on the Group's
currency risk exposures. According to the current risk exposure and judgment of the exchange
rate movements, management considers it is unlikely that the exchange rate changes in the future
one year will result in significant loss to the Group.
Sensitivity analysis on currency risk
The assumption for the sensitivity analysis on currency risk is that all the cash flow hedges and
hedges of a net investment in a foreign operation are highly effective. On the basis of the above
assumption, where all other variables are held constant, the reasonably possible changes in the
foreign exchange rate may have the following pre-tax effect on the profit or loss for the period
and shareholders' equity:
Unit: RMB
Closing balance Opening balance
Effect on Effect on
Item Changes in exchange rate
Effect on profits shareholders' Effect on profits shareholders'
equity equity
All foreign
5% increase against RMB (17,661,467.60) (17,661,467.60) (11,394,591.45) (11,394,591.45)
currencies
All foreign
5% decrease against RMB 17,661,467.60 17,661,467.60 11,394,591.45 11,394,591.45
currencies
All foreign
5% increase against USD (7,574,539.96) (7,574,539.96) 17,324.20 17,324.20
currencies
All foreign
5% decrease against USD 7,574,539.96 7,574,539.96 (17,324.20) (17,324.20)
currencies
All foreign
5% increase against HKD (97,677,880.50) (97,677,880.50) (1,098,658,981.68) (1,098,658,981.68)
currencies
All foreign
5% decrease against HKD 97,677,880.50 97,677,880.50 1,098,658,981.68 1,098,658,981.68
currencies
All foreign
5% increase against FCFA (41,707,232.31) (41,707,232.31) (63,413,556.92) (63,413,556.92)
currencies
All foreign
5% decrease against FCFA 41,707,232.31 41,707,232.31 63,413,556.92 63,413,556.92
currencies
- 145 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(VIII) RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
1. Risk management objectives and policies - continued
1.1 Market risk - continued
1.1.2 Interest rate risk - changes in cash flows
Risk of changes in cash flows of financial instruments arising from interest rate changes is mainly
related to bank loans with floating interest rate. (See Note (V) 24 and Note (V) 34). The Group
continuously and closely monitors the impact of interest rate changes on the Group's interest rate
risk. The Group's policy is to maintain these borrowings at floating rates. Presently, the Group has
no arrangement such as interest rate swaps etc.
Sensitivity analysis of interest rate risk
Sensitivity analysis of interest rate risk is based on the following assumptions:
Fluctuations of market interest rate can affect the interest income or expense of a financial
instrument with floating interest rate;
For a financial instrument at fair value with fixed interest rate, the fluctuations of market interest
rate can only affect its interest income or expense;
For a derivative financial instrument designated as hedging instrument, the fluctuations of market
interest rate affects its fair value, and all interest rate hedging are expected to be highly effective;
The changes in fair value of derivative financial instruments and other financial assets and
liabilities are calculated using cash flow discounting method by applying the market interest rate at
balance sheet date.
On the basis of above assumptions, where the other variables held constant, the pre-tax effect of
possible and reasonable changes in interest rate on the profit or loss for the period and
shareholders' equity are as follows:
Unit: RMB
Closing balance Opening balance
Changes in
Effect on Effect on
Item interest
Effect on profits shareholders' Effect on profits shareholders'
rate
equity equity
Short-term
borrowings and long- 1% increase (126,905,885.92) (126,905,885.92) (119,061,442.29) (119,061,442.29)
term borrowings
Short-term
borrowings and long- 1% decrease 126,905,885.92 126,905,885.92 119,061,442.29 119,061,442.29
term borrowings
1.1.3 Other price risk
The Group's price risk is mainly arising from held-for-trading equity instrument investments and
other equity instrument investments. The Group reduces the price risk of equity instrument
investments by holding portfolio of multiple equity securities.
- 146 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(VIII) RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
1. Risk management objectives and policies - continued
1.2 Credit risk
As at 31 December 2019, 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
financial assets recognized 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
financial assets 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 they are deposited with banks with high credit
ratings.
The Group has adopted a policy to ensure that all sales customers have good credit records.
The Group's risk exposure spreads over a number of counterparties and customers, therefore the
Group has no significant concentration of credit risk. At 31 December 2019, the balance of
accounts receivable from top five entities is RMB 368,100,117.85 (31 December 2018: RMB
278,398,497.79), accounting for 25.29% (31 December 2018: 24.16%) of the Group's accounts
receivable. In addition, the Group has no other significant credit risk exposure concentrated on
single financial asset or portfolio of financial assets with similar characteristics.
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 utilisation of
bank borrowings and ensures compliance with loan covenants.
As of 31 December 2019, the Group had total current liabilities in excess of total current assets of
RMB6,933,328,647.40. As at 31 December 2019, the Group has available unutilized loan facility
of RMB46,602,858,550.04 which is more than current liabilities. Therefore, the Group's
management believes that the Group has no significant liquidity risk.
- 147 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(VIII) RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
1. Risk management objectives and policies - continued
1.3 Liquidity risk - continued
The following is the maturity analysis for financial assets and financial liabilities held by the
Group which is based on undiscounted remaining contractual obligations:
Unit: RMB
Item Carrying amount Gross amount Within 1 year 1 to 5 years Over 5 years
Non-derivative financial liabilities
Short-term borrowings 9,439,099,793.47 10,355,601,387.26 10,355,601,387.26 - -
Notes payable 76,455,949.01 76,455,949.01 76,455,949.01 - -
Accounts payable 591,112,466.39 591,112,466.39 591,112,466.39 - -
Other payables 2,223,754,677.96 2,223,754,677.96 2,223,754,677.96 - -
Non-current liabilities due
5,339,656,505.78 6,891,154,734.34 6,891,154,734.34 - -
within one year
Other current liabilities 885,956,581.63 889,618,828.21 889,618,828.21 - -
Long-term borrowings 6,313,735,540.33 7,053,819,598.75 - 5,772,853,260.76 1,280,966,337.99
Bonds payable 20,930,681,967.19 24,531,511,141.22 - 16,073,205,487.93 8,458,305,653.29
Lease liabilities 1,647,129,968.61 2,503,787,833.87 - 1,119,187,835.33 1,384,599,998.54
Long-term payables 1,386,694,505.92 1,405,262,255.92 - 216,675,454.18 1,188,586,801.74
Derivative financial liabilities
Non-current liabilities due
732,733,351.01 732,733,351.01 732,733,351.01 - -
within one year
(IX) DISCLOSURE OF FAIR VALUE
1. Closing balance of assets and liabilities measured at fair value
Unit: RMB
Fair value at closing balance
Item
Level 1 Level 2 Level 3 Total
Measurements at fair value
continuously
Accounts receivable financing - 260,760,537.45 - 260,760,537.45
Other equity instrument investments 11,220,000.00 - 152,341,272.00 163,561,272.00
Other non-current financial assets 1,753,178,588.31 616,000,000.00 16,184,949.08 2,385,363,537.39
Total assets measured at fair value
1,764,398,588.31 876,760,537.45 168,526,221.08 2,809,685,346.84
continuously
Other non-current liabilities - - 4,059,686,208.87 4,059,686,208.87
Total liabilities measured at fair value
- - 4,059,686,208.87 4,059,686,208.87
continuously
2. Basis for determining the market price of items continuously measured at level 1 fair
value
The market prices of other equity instrument investments and other non-current financial assets
are determined at the closing price of the equity instrument at Shanghai Stock Exchange and
Hong Kong Stock Exchange at 31 December 2019.
- 148 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(IX) DISCLOSURE OF FAIR VALUE - continued
3. Qualitative and quantitative information of valuation techniques and key parameters
adopted for items continuously measured at level 2 fair value
Fair value in the Fair value in the
Item Valuation techniques Inputs
current year prior year
Accounts receivable financing 260,760,537.45 - Cash flow discounting Discount rate
Other non-current financial Listed company
616,000,000.00 - Share price
assets comparison approach
The fair value of non-listed equity instruments included in equity instruments at fair value through
profit or loss is determined using the valuation techniques such as listed company comparison
approach etc. During the valuation, the Group needs to make estimates in respect of market
volatility and relevance etc., select appropriate discount rate and take into consideration of
adjustment of discount and premium.
4. Qualitative and quantitative information of valuation techniques and key parameters
adopted for items continuously measured at level 3 fair value
Unit: RMB
Fair value in the Fair value in the
Item Valuation techniques Inputs
current year prior year
Other equity instrument
152,341,272.00 238,048,314.30 Net worth method Carrying amount
investments
Other non-current financial
2,000,000.00 2,000,000.00 Cash flow discounting Discount rate
assets
Other non-current financial
700,834.13 689,901.07 Net worth method Carrying amount
assets
Other non-current financial Listed company
13,484,114.95 533,366,660.39 Share price
assets comparison approach
Other non-current liabilities 3,326,952,857.86 3,260,547,002.45 Cash flow discounting Discount rate
Exercising price,
Other non-current liabilities 732,733,351.01 579,195,304.56 Option Pricing method
expected volatility etc.
The fair value of non-listed equity instruments included in equity instruments at fair value through
profit or loss or other comprehensive income is determined using the valuation techniques such as
cash flow discounting method, net worth method, listed company comparison approach etc.
During the valuation, the Group needs to make estimates in respect of the future cash flows, credit
risk, market volatility and relevance etc., select appropriate discount rate and take into
consideration of adjustment of discount and premium.
- 149 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(IX) DISCLOSURE OF FAIR VALUE - continued
5. Fair value of financial assets and financial liabilities not measured at fair value
The financial assets and liabilities not measured at fair value mainly include: notes receivable,
accounts receivable, other receivables, short-term borrowings, notes payable, accounts payable,
other payables, long-term borrowings, bonds payable and long-term payables etc.
The Group's management believes that the carrying amounts of financial assets and financial
liabilities at amortized cost in the financial statements approximate their fair values.
The fair value of bonds payable traded in active market is determined at the quoted price in the
active market. The fair values of long-term borrowings, long-term payables and bonds payable
not traded in active market are determined at the present value of contractual future cash flows
discounted using the interest rate for providing nearly the same cash flows to entity with
comparable credit rating under the same conditions.
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS
1． Parent of the Company
Proportion of the
Proportion of the
Related Company's
Place of Legal Nature of Company's voting
Name of the parent party Type of the entity Issued share capital ownership interests
registration representative business power held by the
relationship held by the parent
parent(%)
(%)
Parent Private limited company Investment
Broadford Global Limited Hong Kong Deng Weidong HKD 21,120,986,262 2.88 81.92 (Note)
company (share limited) holding
Note: Broadford Global Limited directly holds 2.88% equity of the Company, and indirectly
holds 19.29% and 59.75% equity of the Company through the subsidiaries China
Merchants Gangtong Development (Shenzhen) Co., Ltd. and China Merchants Investment
Development Co., Ltd. respectively.
The ultimate controlling shareholder of the Company is China Merchants Group.
2. Subsidiaries of the Company
Details of the subsidiaries of the Company are set out in Note (VII) 1.
- 150 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
3. Associates and joint ventures of the Company
Details of the Company's significant joint ventures and associates are set out in Note (VII) 3.
Other joint ventures or joint ventures that occurred related party transactions and formed balances
with the Group this year are as follows:
Name of joint venture or associate Relationship with the Company
Kumport Liman Hizmetleri ve Lojistik Sanayi ve Ticaret Anonim irketi Joint venture
Port of Newcastle and its subsidiaries Joint venture
Guizhou East Land Port Operation Co., Ltd. Joint venture
Longteng Shipping (Note) 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
Qingdao Wutong Century Supply Chain Co., Ltd. Joint venture
COSCO Logistics (Zhanjiang) Co., Ltd. Joint venture
China Merchants Antong Logistics Management Company Joint venture
China Ocean Shipping Agency (Zhanjiang) Co., Ltd Joint venture
China Overseas Harbour Affaris (Laizhou) Co., Ltd. Joint venture
Doraleh Multi-purpose Port Associate
Great Horn Development Company FZCO Associate
International Djibouti Industrial Parks Operation FZCO Associate
Port de Djibouti S.A. Associate
Terminal Link SAS Associate
Tin-Can Island Container Terminal Ltd Associate
Guizhou Qiandongnan Continental Land Port Operation Co., Ltd. Associate
Nanshan Group and its subsidiaries Associate
Shanghai International Port (Group) Co., Ltd. Associate
Shenzhen Baohong E-Commerce Integrated Services Co., Ltd. Associate
Tianjin Haitian Bonded Logistics Co., Ltd. Associate
Modern Terminals Limited Associate
China Merchants Harbor City Associate
Zhanjiang Xiagang United Development Co., Ltd. Associate
Zhangzhou COSCO Shipping Agency Co., Ltd. Associate
Chu Kong River Trade Terminal Co. Ltd. Associate
Note: See Note (VI) 1, it is no longer a related party of the Group since 31 December 2019.
- 151 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
4. Other related parties of the Company
Name of other related parties Relationship with the Company
Qingdao Port (Group) Co., Ltd. Minority shareholders of subsidiaries
Yihai Kerry Arawana Cereals, Oils and Foodstuffs Co. Ltd. Minority shareholders of subsidiaries
Zhanjiang Infrastructure Minority shareholders of subsidiaries
Antong Holdings and its subsidiaries (Note 1) Connected person
China COSCO Shipping Group and its subsidiaries (Note 1) Connected person
CMHK Controlled by the same ultimate controlling shareholder
Sinotrans (NZ) Limited Controlled by the same ultimate controlling shareholder
Guangdong Sinotrans Co., Ltd. Controlled by the same ultimate controlling shareholder
Guangdong Sinotrans Shipping Agency Co., Ltd. Controlled by the same ultimate controlling shareholder
Guangzhou International Ocean Shipping Agency Co., Ltd. Controlled by the same ultimate controlling shareholder
Hoi Tung (Shanghai) Company Limited Controlled by the same ultimate controlling shareholder
South China Sinotrans Supply Chain Management Co., Ltd. Controlled by the same ultimate controlling shareholder
EuroAsia Dockyard Enterprise and development Ltd. Controlled by the same ultimate controlling shareholder
Qingdao Bonded Logistics Park Sino-foreign Transport Warehousing
Controlled by the same ultimate controlling shareholder
Logistics Co., Ltd.
Qingdao Sinotrans Supply Chain Management Co., Ltd. Controlled by the same ultimate controlling shareholder
Shantou COSCO Shipping Agency Co., Ltd. Controlled by the same ultimate controlling shareholder
Shenzhen Nanyou (Holdings) Ltd. Controlled by the same ultimate controlling shareholder
Shenzhen Qianhai Sinotrans Supply Chain Management Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Landmark (Shenzhen) Co ., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants International Shipping Agency (Shenzhen) Co., Ltd. Controlled by the same ultimate controlling shareholder
Shenzhen China Merchants Shekou Assets Management Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Real Estate (Shenzhen) Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants (Shenzhen) Power Supply., Ltd. Controlled by the same ultimate controlling shareholder
Csc Roro Logistics Co., Ltd. Controlled by the same ultimate controlling shareholder
Shenzhen Merchants Construction Co., Ltd. Controlled by the same ultimate controlling shareholder
Shenzhen Merchants Commercial Property Investment Co., Ltd. Controlled by the same ultimate controlling shareholder
Shenzhen China Merchants Property Management Co., Ltd. Controlled by the same ultimate controlling shareholder
China Ocean Shipping Tally Shenzhen CO., Ltd. Controlled by the same ultimate controlling shareholder
China Marine Shipping Agency Shenzhen Co. , Ltd. Controlled by the same ultimate controlling shareholder
Yiu Lian Dockyards (Shekou) Limited Controlled by the same ultimate controlling shareholder
Yiu Lian Dockyards Limited Controlled by the same ultimate controlling shareholder
Zhanjiang port (note 2) Controlled by the same ultimate controlling shareholder
CM Houlder Insurance Brokers Limited Controlled by the same ultimate controlling shareholder
China Merchants Godown, Wharf & Transportation Company Limited Controlled by the same ultimate controlling shareholder
Huanan Refrigeration Ice Making (Shenzhen) Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Hanghua Science & Technology & Trade Center
Controlled by the same ultimate controlling shareholder
Co., Ltd.
China Merchants Group Finance Company Limited Controlled by the same ultimate controlling shareholder
- 152 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
4. Other related parties of the Company - continued
Name of other related party Relationship with the Company
China Merchants Steam Navigation Company Limited Controlled by the same ultimate controlling shareholder
China Merchants Life Insurance Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Finance Lease (Tianjin) Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Shekou Industrial Zone Holdings Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Food (China) Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Tongshang Finance Lease Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Bureau Logistics Group Qingdao Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Logistics Shenzhen Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Property Management Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Zhangzhou Development Zone Power Supply Co.,
Controlled by the same ultimate controlling shareholder
Ltd.
China Merchants Zhangzhou Development Zone Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Bureau Zhongbai Commercial Logistics Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Your Cellar (Shenzhen) Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Securities Co., Ltd. Controlled by the same ultimate controlling shareholder
China Communications Import & Export Co., Ltd. Controlled by the same ultimate controlling shareholder
China Ocean Shipping Agency Shenzhen Controlled by the same ultimate controlling shareholder
Sinotrans South China Co., Ltd. Controlled by the same ultimate controlling shareholder
China Outbound Air Transport Co., Ltd. Controlled by the same ultimate controlling shareholder
Sinotrans Container Lines Co., Ltd. Controlled by the same ultimate controlling shareholder
Sinotrans Container Lines (Hong Kong) Company Limited Controlled by the same ultimate controlling shareholder
Shenzhen Science and Technology University Phase II Real Estate Where the ultimate controlling shareholder has
Management Co., Ltd. significant influence
Where the ultimate controlling shareholder has
Shenzhen Zhaogang Seaway Goods Trading Center significant influence
Where the ultimate controlling shareholder has
Khor Ambado FZCo
significant influence
Where the ultimate controlling shareholder has
China Merchant Bank Co., Ltd.
significant influence
Note 1: From 9 September 2019 to 31 December 2019, the Company's Chairman Fu Gangfeng
work as the key management personnel of both the Company and China COSCO
Shipping Corporation Limited; from 25 September 2019 to 31 December 2019, the
Company's deputy general manager Zheng Shaoping work as the senior management
personnel of both the Company and Antong Holdings Co., Ltd. Therefore, the related
party transactions and balances for the period in which the aforesaid two persons were the
director, senior management personnel of China COSCO Shipping Corporation Limited
and Antong Holdings Co., Ltd. are disclosed.
Note 2: See Note (VI) 1, it is no longer a related party of the Group since 3 February 2019.
- 153 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions
(1) Rendering and receipt of service
Unit: RMB
Pricing method and decision
Related party Content of transaction procedures of related Closing balance Opening balance
transactions
Receipt of service:
Nanshan Group and its subsidiaries Service expenditure Negotiation 59,399,028.43 1,080,269.25
Qingdao Qianwan West Port United Wharf Co.,
Service expenditure Negotiation 18,116,312.14 15,358,571.88
Ltd.
Yiu Lian Dockyards Limited Service expenditure Negotiation 11,822,773.93 10,019,922.18
Shenzhen Merchants Commercial Property
Service expenditure Negotiation 8,063,768.58 10,707,148.03
Investment Co., Ltd.
COSCO Logistics (Zhanjiang) Co., Ltd. Service expenditure Negotiation 5,302,779.67
China Merchants Zhangzhou Development Zone
Service expenditure Negotiation 5,050,730.12 5,681,278.30
Power Supply Co., Ltd.
China Merchants Bureau Logistics Group Qingdao
Service expenditure Negotiation 4,291,294.93 3,751,785.75
Co., Ltd.
China Marine Shipping Agency Shenzhen Co. ,
Service expenditure Negotiation 2,998,142.60 3,539,104.80
Ltd.
China Merchants (Shenzhen) Power Supply., Ltd. Service expenditure Negotiation 2,611,504.71 2,908,847.34
Shenzhen China Merchants Property Management
Service expenditure Negotiation 2,496,785.30 -
Co., Ltd.
CM Houlder Insurance Brokers Limited Service expenditure Negotiation 2,475,979.40 2,102,764.12
China Merchants Your Cellar (Shenzhen) Co., Ltd. Service expenditure Negotiation 1,887,287.74 -
China Merchants Life Insurance Co., Ltd. Service expenditure Negotiation 1,674,762.08 -
Hoi Tung (Shanghai) Company Limited Service expenditure Negotiation 1,472,835.51 3,461,147.79
China Outbound Air Transport Co., Ltd. Service expenditure Negotiation 1,178,932.56 2,199,064.60
China Ocean Shipping Tally Shenzhen CO., Ltd. Service expenditure Negotiation 1,168,331.49 1,240,537.34
China Communications Import & Export Co., Ltd. Service expenditure Negotiation 1,076,783.22 -
China Merchants Property Management Co., Ltd. Service expenditure Negotiation 569,772.90 1,764,315.36
China Merchants Securities Co., Ltd. Service expenditure Negotiation - 22,641,509.43
Other related party Service expenditure Negotiation 5,255,018.65 4,917,018.18
Shenzhen China Merchants Property Management
Property utilities Negotiation 19,706,450.63 13,814,358.72
Co., Ltd.
Nanshan Group and its subsidiaries Property utilities Negotiation 5,923,767.12 2,052,879.52
Other related party Property utilities Negotiation 2,114,730.66 1,920,545.44
China Merchants Finance Lease (Tianjin) Co., Ltd. Lease service fee Negotiation 6,447,169.81 -
China Merchants Group Finance Company Limited Interest expense Negotiation 42,581,045.29 51,574,070.78
Port de Djibouti S.A. Interest expense Negotiation 7,364,273.28 24,719,148.38
China Merchant Bank Co., Ltd. Interest expense Negotiation 3,618,321.05 104,400.00
China Merchants Steam Navigation Company
Interest expense Negotiation - 3,961,479.45
Limited
Total 224,668,581.80 189,520,166.64
- 154 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(1) Rendering and receipt of service - continued
Unit: RMB
Content of Pricing method and decision
Related party Closing balance Opening balance
transaction procedures of related transactions
Rendering of service:
COSCO Logistics (Zhanjiang) Co., Ltd. Service revenue Negotiation 142,786,686.45
China COSCO Shipping Group and its subsidiaries Service revenue Negotiation 128,551,617.88
Qingdao Qianwan United Container Terminal Co., Ltd. Service revenue Negotiation 54,976,948.20 59,871,312.19
China Ocean Shipping Agency (Zhanjiang) Co., Ltd Service revenue Negotiation 48,467,968.01
Guangdong Sinotrans Shipping Agency Co., Ltd. Service revenue Negotiation 33,230,929.57 -
Antong Holdings and its subsidiaries Service revenue Negotiation 30,031,214.77
China Ocean Shipping Agency (Shenzhen) Co., Ltd Service revenue Negotiation 22,026,784.26 26,678,580.24
Khor Ambado FZCo Service revenue Negotiation 13,593,100.08 22,976,552.15
Qingdao Qianwan West Port United Wharf Co., Ltd. Service revenue Negotiation 9,297,044.19 14,667,866.59
China Marine Shipping Agency Shenzhen Co. , Ltd. Service revenue Negotiation 7,924,860.20 11,339,084.02
Shenzhen Baohong E-Commerce Integrated Services Co.,
Service revenue Negotiation 7,624,557.93 13,954,183.68
Ltd.
Huanan Refrigeration Ice Making (Shenzhen) Co., Ltd. Service revenue Negotiation 6,487,127.00 6,422,615.01
Sinotrans (NZ) Limited Service revenue Negotiation 6,191,950.42 -
Yiu Lian Dockyards (Shekou) Limited Service revenue Negotiation 5,818,220.17 3,319,608.63
Guizhou East Land Port Operation Co., Ltd. Service revenue Negotiation 5,538,484.09
China Merchants International Shipping Agency (Shenzhen)
Service revenue Negotiation 5,516,336.45 3,013,980.25
Co., Ltd.
International Djibouti Industrial Parks Operation FZCO Service revenue Negotiation 5,109,432.57 3,054,612.36
Guizhou Qiandongnan Continental Land Port Operation Co.,
Service revenue Negotiation 4,995,026.14
Ltd.
Longteng Shipping Service revenue Negotiation 4,250,943.39
Sinotrans Container Lines Co., Ltd. Service revenue Negotiation 4,173,590.92 10,699,341.99
Ningbo Daxie Merchants International Wharf Co., Ltd. Service revenue Negotiation 3,973,305.23 3,929,015.11
South China Sinotrans Supply Chain Management Co., Ltd. Service revenue Negotiation 3,574,103.34 -
Qingdao Qianwan New United Container Terminal Co., Ltd. Service revenue Negotiation 3,165,271.40 3,411,057.43
Great Horn Development Company FZCO Service revenue Negotiation 2,492,673.00 3,985,900.36
Zhangzhou COSCO Shipping Agency Co., Ltd. Service revenue Negotiation 2,465,482.40 5,804,690.70
Shenzhen China Merchants Shekou Assets Management Co.,
Service revenue Negotiation 2,297,545.50 -
Ltd.
Sinotrans Container Lines (Hong Kong) Company Limited Service revenue Negotiation 2,211,004.97 2,182,888.92
Qingdao Wutong Century Supply Chain Co., Ltd. Service revenue Negotiation 2,061,301.86 -
Shenzhen Zhaogang Seaway Goods Trading Center Service revenue Negotiation 2,026,044.81 -
Qingdao Bonded Logistics Park Sino-foreign Transport
Service revenue Negotiation 1,855,239.95 5,085,762.32
Warehousing Logistics Co., Ltd.
China Overseas Harbour Affaris (Laizhou) Co., Ltd. Service revenue Negotiation 1,775,122.48 1,574,244.92
Qingdao Sinotrans Supply Chain Management Co., Ltd. Service revenue Negotiation 1,643,202.86 1,071,100.78
Shanghai International Port (Group) Co., Ltd. Service revenue Negotiation 1,588,035.85 1,588,035.85
CMHK Service revenue Negotiation 1,412,000.00 1,600,000.00
Terminal Link SAS Service revenue Negotiation 1,362,717.34 1,378,437.57
China Merchants Logistics Shenzhen Co., Ltd. Service revenue Negotiation 1,267,111.56 927,269.16
Kumport Liman Hizmetleri ve Lojistik Sanayi ve Ticaret
Service revenue Negotiation 1,200,615.17 1,119,436.15
Anonim irketi
Sinotrans Shantou Company Limited Service revenue Negotiation 1,142,737.27 607,506.45
Shenzhen Qianhai Sinotrans Supply Chain Management Co.,
Service revenue Negotiation 1,073,773.97 -
Ltd.
Doraleh Multi-purpose Port Service revenue Negotiation 1,062,268.33 337,140.73
Nanshan Group and its subsidiaries Service revenue Negotiation 1,000,829.05 359,379.51
Guangzhou International Ocean Shipping Agency Co., Ltd. Service revenue Negotiation 935,982.67 1,312,017.95
China Merchants Shekou Industrial Zone Holdings Co., Ltd. Service revenue Negotiation 283,404.19 2,496,490.06
China Outbound Air Transport Co., Ltd. Service revenue Negotiation 386.55 1,993,291.26
Zhanjiang port Service revenue Negotiation - 5,568,651.21
Port de Djibouti S.A. Service revenue Negotiation - 4,640,763.43
China Merchants Bureau Zhongbai Commercial Logistics
Service revenue Negotiation - 2,484,304.00
Co., Ltd.
Other related party Service revenue Negotiation 8,688,006.09 6,874,767.79
Port of Newcastle and its subsidiaries Interest income Negotiation 62,584,543.33 34,416,578.56
China Merchants Harbor City Interest income Negotiation 48,716,656.41
China Merchant Bank Co., Ltd. Interest income Negotiation 26,074,287.83 34,629,531.08
Khor Ambado FZCo Interest income Negotiation 18,187,714.88 51,599,386.03
China Merchants Group Finance Company Limited Interest income Negotiation 7,814,725.11 14,042,476.82
Tianjin Haitian Bonded Logistics Co., Ltd. Interest income Negotiation 1,394,695.28 1,383,325.48
Modern Terminals Limited Interest income Negotiation - 1,193,424.67
Other related party Interest income Negotiation 60,804.82 60,669.23
Total 761,984,416.19 373,655,280.64
- 155 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(2) Leases with related parties
The Group as the lessor:
Unit: RMB
Pricing method and
Lease income Lease income
decision procedures
Name of the lessee Type of leased assets recognized in the recognized in the
of related
current year prior year
transactions
China Merchants Food (China) Co., Ltd. Buildings Negotiation 5,675,752.58 3,393,457.47
Qingdao Qianwan West Port United Port and terminal
Negotiation 4,571,984.36 -
Wharf Co., Ltd. facilities
China Communications Import &
Buildings Negotiation 3,943,926.21 2,699,223.60
Export Co., Ltd.
Qingdao Bonded Logistics Park Sino-
foreign Transport Warehousing Buildings Negotiation 3,816,263.45 -
Logistics Co., Ltd.
Nanshan Group and its subsidiaries Buildings Negotiation 2,698,718.83 3,506,398.00
Qingdao Sinotrans Supply Chain
Buildings Negotiation 2,678,324.75 -
Management Co., Ltd.
Yiu Lian Dockyards (Shekou) Limited Buildings Negotiation 2,441,075.14 2,025,218.14
Qingdao Wutong Century Supply Chain
Buildings Negotiation 1,082,330.31 -
Co., Ltd.
China Merchants Securities Co., Ltd. Buildings Negotiation 2,330,741.02 -
Shenzhen Nanyou (Holdings) Ltd. Buildings Negotiation 426,100.95 2,400,571.43
Buildings, land use
Other related party Negotiation 3,015,488.40 1,573,182.07
rights
Total 32,680,706.00 15,598,050.71
- 156 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(2) Leases with related parties - continued
The Group as the lessee:
Unit: RMB
Other significant
Lease term (disclose the period
Name of the lessor Type of leased assets Retail (Year) terms and conditions
covered by contract)
of the lease
China Merchants Finance Lease (Tianjin) Co., 9 March 2018
Port and terminal facilities 108,319,079.87 N/A
Ltd. - 26 March 2024
China Merchants Finance Lease (Tianjin) Co., Machinery equipment, port and 30 November 2018
65,715,388.88 N/A
Ltd. terminal facilities - 30 November 2024
1 January 2016
Nanshan Group and its subsidiaries Buildings, port and terminal facilities 56,968,753.40 N/A
- 31 December 2018
China Merchants Tongshang Finance Lease 30 October 2017
Machinery equipment 46,381,918.54 N/A
Co., Ltd. - 27 October 2023
China Merchants Shekou Industrial Zone 1 July 2017
Port and terminal facilities 20,621,444.76 N/A
Holdings Co., Ltd. - 31 December 2019
China Merchants Tongshang Finance Lease 26 December 2016
Machinery equipment 17,717,147.04 N/A
Co., Ltd. - 15 November 2022
China Merchants Shekou Industrial Zone 1 January 2018
Port and terminal facilities 14,409,799.89 N/A
Holdings Co., Ltd. - 31 December 2019
EuroAsia Dockyard Enterprise and 1 January 2018
Port and terminal facilities 13,642,731.02 N/A
development Ltd. - 31 December 2019
1 January 2016 Attached with
Nanshan Group and its subsidiaries Others 6,397,693.72
- 31 December 2018 renewal option
China Merchants Shekou Industrial Zone 1 January 2019 Attached with
Others 5,823,873.60
Holdings Co., Ltd. - 31 December 2019 renewal option
Shenzhen Merchants Commercial Property 1 January 2018
Buildings 5,363,598.90 N/A
Investment Co., Ltd. - 31 December 2020
1 June 1998 Attached with
Nanshan Group and its subsidiaries Others 4,858,285.68
- 31 May 2018 renewal option
Shenzhen Science and Technology University 1 March 2017
Buildings 3,541,404.00 N/A
Phase II Real Estate Management Co., Ltd. - 28 February 2020
1 January 2019 Attached with
Nanshan Group and its subsidiaries Buildings 3,101,220.22
- 31 December 2019 renewal option
1 July 2019
Nanshan Group and its subsidiaries Buildings 2,936,922.24 N/A
- 31 December 2019
1 January 2019
Shenzhen Nanyou (Holdings) Ltd. Buildings 1,995,553.14 N/A
- 31 December 2019
1 January 2016 Attached with
Nanshan Group and its subsidiaries Buildings 1,817,704.08
- 31 December 2018 renewal option
China Merchants Godown, Wharf & 1 January 2019
Vehicles and vessels 1,457,985.47 N/A
Transportation Co., LTD. - 31 December 2019
1 May 2015
Nanshan Group and its subsidiaries Others 1,428,571.43 N/A
- 30 April 2020
China Merchants Hanghua Science & 1 May 2018
Port and terminal facilities 990,257.55 N/A
Technology & Trade Center Co., Ltd. - 30 April 2021
China Merchants Hanghua Science & 1 January 2019
Buildings 750,288.73 N/A
Technology & Trade Center Co., Ltd. - 31 December 2019
1 January 2017
Nanshan Group and its subsidiaries Others 693,151.72 N/A
- 25 August 2021
Shenzhen Merchants Commercial Property 1 September 2018
Buildings 687,796.80 N/A
Investment Co., Ltd. - 31 December 2020
25 August 2018
Nanshan Group and its subsidiaries Buildings 658,661.84 N/A
- 31 December 2020
1 January 2019
Nanshan Group and its subsidiaries Port and terminal facilities 639,738.84 N/A
- 31 December 2020
1 May 2019
Nanshan Group and its subsidiaries Buildings 500,146.74 N/A
- 31 December 2019
1 January 2017
Nanshan Group and its subsidiaries Others 461,005.72 N/A
- 31 December 2020
1 January 2015
Other related party Buildings 1,107,721.69 N/A
- 31 December 2023
Total 388,987,845.51
- 157 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(3) Related party guarantees
The Group as the guarantor
Unit: RMB
The guarantee has been
Secured party Credit Line Guaranteed amount Commencement date Maturity
completed or not
2019
Terminal Link SAS (note 1) 24,982,114.97 12,241,236.33 June 2013 2019 Yes
Terminal Link SAS (note 1) 80,305,197.15 80,305,197.15 June 2013 2033 No
Khor Ambado FZCo (note 2) 200,914,560.00 118,398,397.00 24 May 2019 2032 No
Port de Djibouti S.A. 343,160,000.00 24,192,780.00 14 June 2016 14 June 2019 Yes
Total 649,361,872.12 235,137,610.48
2018
Terminal Link SAS (note 1) 82,195,789.24 82,195,789.24 June 2013 2033 No
Terminal Link SAS (note 1) 24,982,114.97 12,241,236.33 June 2013 2019 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
Note 1: CMA CGM S.A. is another shareholder of Terminal Link SAS, an associate of the Group.
The Group has made a commitment to CMA CGM S.A. that the Group will provides
guarantee for its bank loan financing to the associate Terminal Link SAS and other
liabilities to the extent of the Group's 49% ownership interest in the company. The actual
guaranteed amount is RMB80,305,197.15 on 31 December 2019. If any guarantee
liability occurs, the Group will compensate CMA CGM S.A.
Note 2: Khor Ambado FZCo is a related company of the Group's common ultimate controlling
shareholder. The Group provides guarantee for its bank loans and other liabilities, with
actual guaranteed amount of RMB118,398,397.00.
- 158 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(4) Borrowings and loans with related parties
Unit: RMB
Related party Amount Commencement date Maturity date Description
2019
Borrowings
China Merchants Group Finance Fixed interest rate of
300,378,812.51 2 December 2019 1 December 2020
Company Limited 4.1325%
China Merchants Group Finance Fixed interest rate of
270,548,281.28 22 April 2019 21 April 2020
Company Limited 4.3500%
China Merchants Finance Lease Fixed interest rate of
150,000,000.00 23 December 2019 23 December 2025
(Tianjin) Co., Ltd. 4.7500%
China Merchants Group Finance Fixed interest rate of
150,000,000.00 27 August 2019 26 August 2020
Company Limited 4.1325%
China Merchants Group Finance Fixed interest rate of
56,483,984.71 1 July 2019 1 July 2034
Company Limited 4.6550%
China Merchants Group Finance Fixed interest rate of
50,061,625.00 4 June 2019 3 June 2020
Company Limited 4.3500%
China Merchants Group Finance Fixed interest rate of
50,000,000.00 29 July 2019 28 July 2022
Company Limited 4.5125%
China Merchants Group Finance Fixed interest rate of
47,000,000.00 14 October 2019 13 October 2024
Company Limited 4.7500%
China Merchants Group Finance Fixed interest rate of
33,052,804.00 22 July 2019 21 July 2020
Company Limited 4.3500%
China Merchants Group Finance Fixed interest rate of
29,000,000.00 18 October 2019 17 October 2023
Company Limited 4.7500%
China Merchants Group Finance Fixed interest rate of
28,000,000.00 15 January 2019 14 January 2024
Company Limited 4.7500%
China Merchants Group Finance Fixed interest rate of
23,000,000.00 10 June 2019 14 January 2024
Company Limited 4.7500%
China Merchants Group Finance Fixed interest rate of
10,000,000.00 28 December 2019 31 October 2023
Company Limited 1.2000%
China Merchants Group Finance Fixed interest rate of
6,000,000.00 22 July 2019 21 July 2020
Company Limited 4.3500%
China Merchants Group Finance Fixed interest rate of
1,000,000.00 24 December 2019 23 December 2020
Company Limited 4.3500%
Total 1,204,525,507.50
Lendings
China Merchants Antong Logistics Fixed interest rate of
50,000,000.00 24 September 2019 24 September 2021
Management Company 8.5000%
2018
Borrowings
China Merchants Group Finance Fixed interest rate of
270,000,000.00 23 April 2018 22 April 2019
Company Limited 4.3500%
China Merchants Group Finance Fixed interest rate of
220,000,000.00 17 May 2018 16 May 2019
Company Limited 4.3500%
China Merchants Group Finance Fixed interest rate of
80,000,000.00 11 December 2018 10 December 2028
Company Limited 4.8020%
China Merchants Group Finance Fixed interest rate of
60,000,000.00 19 June 2018 20 June 2019
Company Limited 4.3500%
China Merchants Group Finance Fixed interest rate of
40,000,000.00 20 May 2018 21 May 2019
Company Limited 4.3500%
China Merchants Group Finance Fixed interest rate of
30,000,000.00 7 December 2018 6 December 2019
Company Limited 4.3500%
China Merchants Group Finance Fixed interest rate of
30,000,000.00 20 December 2018 19 December 2021
Company Limited 4.2750%
China Merchants Group Finance Fixed interest rate of
25,000,000.00 6 December 2018 5 October 2021
Company Limited 4.7500%
China Merchants Group Finance Fixed interest rate of
20,000,000.00 17 December 2018 16 December 2019
Company Limited 4.3500%
Total 775,000,000.00
Lendings
Fixed interest rate of
Port of Newcastle and its subsidiaries 784,057,712.75 14 June 2018 29 May 2020
8.0000%
- 159 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(5) Compensation for key management personnel
Unit: RMB
Item Closing balance Opening balance
Compensation for key management personnel 26,856,013.14 19,243,010.16
(6) Other related party transactions
At 24 December 2018, Shenzhen Urban Planning, Land and Resources Commission, Shenzhen
Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone Administration
("Qianhai Administration"), China Merchants Group, Shenzhen China Merchants Qianhai Chidi
Industrial Co., Ltd.("China Merchants Chidi"), the Company's subsidiaries ATJ and ASJ as well
as China Merchants Shekou Industrial Zone Holdings Co., Ltd. and its 16 subsidiaries ("previous
19 land-holding companies") etc., totally 23 organizations, jointly signed the "China Merchants
Group Qianhai Logistics Park Land Restructuring Agreement" (the "Land Restructuring
Agreement").
According to the agreement, the previous 19 land-holding companies return the land use rights of
the lands within the scope of restructuring to Qianhai Administration. Qianhai Administration
replaces 55% land and corresponding shoreline (land area about 531,300 square meters) included
in the total areas of T102-0166 and T102-0167 held by ATJ and ASJ to Dachanwan port area
Phase II. In addition, other land use rights held by the previous 19 land-holding companies
totaling to RMB43.21 billion (valuation benchmark date is 1 January 2015) is recovered by
Qianhai Administration. After changing the nature of land use rights, Qianhai Administration
return equivalent land use rights as the consideration to recover all the land use rights other than
the Dachanwan port area Phase II that need to be replaced according to the original plan.
As at 31 December 2019, the procedures of changing the Dachanwan port area Phase II land use
rights are not yet completed. The corresponding original carrying amount of land use rights of
RMB916,884,222,49 is transferred to other non-current assets.
ATJ and China Merchants Shekou Industrial Zone Holdings Co., Ltd.with its subsidiary Shenzhen
China Merchants Shekou Assets Management Co., Ltd. jointly setup China Merchants Qianhai
Industry in 2016, which setup China Merchants Chidi in 2017. The previous 19 land-holding
companies jointly holds the equity of China Merchants Qianhai Industry according to the share of
previously held land use rights, and completed the capital increase of China Merchants Qianhai
Industry in 2019. Among the 19 companies, ATJ and ASJ totally contributed
RMB7,456,412,803.00 and hold 14% equity of China Merchants Qianhai Industry.
- 160 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(6) Other related party transactions - continued
According to the joint venture and cooperation arrangement relating to land restructuring, the
previous 19 land-holding companies designate the China Merchants Chidi as the holder of the
lands other than Dachanwan port area Phase II obtained in the above land restructuring. Qianhai
Administration designate its wholly-owned sub-subsidiary Shenzhen Qianhai Hongyu Industrial
Investment Co., Ltd. (the "Qianhai Hongyu") as the land holder in respect of the land use rights
(with reimbursements deducted) obtained in above land restructuring.
In 2016, Shenzhen Qianhai Shekou Free Trade Investment Development Co., Ltd. (hereinafter
referred to as "Qianhai Free Trade") was jointly established by Shenzhen Merchants Qianhai
Industrial Development Co., Ltd. and Shenzhen Qianhai Development Investment Holding Co.,
Ltd. (hereinafter referred to as "Qianhai Investment Holding") which is a wholly-owned
subsidiary of Qianhai Administration Bureau, with each accounting for 50% of the equity and
being controlled by Shenzhen Merchants Qianhai Industrial Development Co., Ltd. through the
Articles of Association and relevant agreements.
In December 2019, Shenzhen Merchants Qianhai Industrial Development Co., Ltd., Qianhai
Investment Holding and Qianhai Free Trade jointly signed a capital increase agreement.
According the agreement, Qianhai Free Trade, as a leading role, purchased 100% shares of China
Merchants Chidi and 100% shares of China Merchants Chidi legally held by Shenzhen Merchants
Qianhai Industrial Development Co., Ltd. and Shenzhen Qianhai Development Investment
Holding Co., Ltd. respectively in the form of capital increase and share expansion. Meanwhile,
Shenzhen Merchants Qianhai Industrial Development Co., Ltd. increased capital into Qianhai
Free Trade with cash of RMB 8.5 billion. The above transaction was completed on December 30,
2019. After the completion of the transaction, Shenzhen Merchants Qianhai Industrial
Development Co., Ltd. and Shenzhen Qianhai Development Investment Holding Co., Ltd. still
hold 50% equity of Qianhai Free Trade respectively, with Shenzhen Merchants Qianhai Industrial
Development Co., Ltd. controlling Qianhai Free Trade through the Articles of Association and
relevant agreements.
Except for the land use rights for replacement of Dachanwan port area Phase II, ATJ and ASJ
returned land and its accompany buildings with a compensation of RMB4,193,314,004.68.
- 161 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from/to related parties
(1) Amounts due from related parties
Unit: RMB
Item Related party Closing balance Opening balance
China Merchant Bank Co., Ltd. 1,451,996,464.50 1,274,536,476.91
Cash and bank
China Merchants Group Finance Company Limited 890,065,186.36 494,131,151.34
balances
Total 2,342,061,650.86 1,768,667,628.25
China COSCO Shipping Group and its subsidiaries 60,545,437.55
Antong Holdings and its subsidiaries 60,112,564.13
COSCO Logistics (Zhanjiang) Co., Ltd. 7,728,194.66
China Ocean Shipping Agency (Zhanjiang) Co., Ltd 5,609,630.60 4,678,761.75
Shenzhen Baohong E-Commerce Integrated Services
4,643,545.31 7,222,351.10
Co., Ltd.
Qingdao Qianwan United Container Terminal Co., Ltd. 4,424,422.68 5,112,134.91
Guizhou East Land Port Operation Co., Ltd. 4,043,600.57
Guangdong Sinotrans Shipping Agency Co., Ltd. 3,583,505.77 -
Khor Ambado FZCo 3,113,788.09 458,050.86
Qingdao Qianwan West Port United Wharf Co., Ltd. 2,986,271.27 74,485.74
Great Horn Development Company FZCo 2,771,510.50 1,486,615.75
Accounts
receivable Guizhou Qiandongnan Continental Land Port Operation
2,010,137.38
Co., Ltd.
China Overseas Harbour Affaris (Laizhou) Co., Ltd. 1,853,183.12 1,490,941.09
South China Sinotrans Supply Chain Management Co.,
1,808,219.75 -
Ltd.
Sinotrans Container Lines Co., Ltd. 1,746,120.89 1,156,769.47
Port de Djibouti S.A. 1,689,447.85 6,387,923.40
China Merchants Harbor City 1,536,503.45
China Marine Shipping Agency Shenzhen Co. , Ltd. 1,058,089.50 1,115,972.50
China Merchants Shekou Industrial Zone Holdings Co.,
914,392.86 1,029,573.58
Ltd.
Other related party 4,216,087.14 4,106,365.60
Total 176,394,653.07 34,319,945.75
- 162 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(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 party Closing balance
(restated)
Nanshan Group and its subsidiaries 313,724,861.31 175,976,941.31
Tin-Can Island Container Terminal Ltd 82,625,546.31 128,428.02
Chu Kong River Trade Terminal Co. Ltd. 61,317,510.00 59,975,890.00
Qingdao Qianwan United Container
50,000,000.00 25,000,000.00
Terminal Co., Ltd.
Tianjin Haitian Bonded Logistics Co., Ltd. 33,282,119.52 34,300,000.00
Zhanjiang Infrastructure 31,513,558.59
Port de Djibouti S.A. 24,832,398.83 24,411,770.72
COSCO Logistics (Zhanjiang) Co., Ltd. 13,751,368.26
Other receivables Guangdong Sinotrans Co., Ltd. 3,803,477.07 -
Csc Roro Logistics Co., Ltd. 2,899,163.95 2,899,163.95
EuroAsia Dockyard Enterprise and
1,514,281.82 1,481,149.51
development Ltd.
Shenzhen Merchants Commercial Property
1,068,658.39 1,051,801.58
Investment Co., Ltd.
Shanghai International Port (Group) Co., Ltd. - 50,118,027.14
Zhanjiang port 9,253,682.23
Other related party 4,199,662.93 3,282,269.08
Total 624,532,606.98 387,879,123.54
Prepayments Other related party 1,414,261.04 -
China Merchant Bank Co., Ltd. 1,528,851,492.46 -
Other current
Khor Ambado FZCo - 1,029,478,047.00
assets
Total 1,528,851,492.46 1,029,478,047.00
Port of Newcastle and its subsidiaries 809,702,715.78 15,858,848.40
Khor Ambado FZCo - 7,332,144.82
Non-current
China Merchants Group Finance Company
assets due within - 2,565,333.33
Limited
one year
Other related party - 229,704.43
Total 809,702,715.78 25,986,030.98
China Merchants Harbor City 1,025,631,435.87
China Merchants Antong Logistics
50,000,000.00
Management Company
Long-term China Merchants Finance Lease (Tianjin)
14,500,000.00 -
receivables Co., Ltd.
Terminal Link SAS 9,800,295.76 9,782,367.44
Port of Newcastle and its subsidiaries - 784,057,712.75
Total 1,099,931,731.63 793,840,080.19
Other non-current China Merchants Shekou Industrial Zone
- 43,472,687.00
assets Holdings Co., Ltd.
- 163 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from/to related parties - continued
(2) Amounts due to related parties
Unit: RMB
Item Related party Closing balance Opening balance
China Merchants Group Finance Company Limited 841,079,404.24 640,000,000.00
Short-term
China Merchant Bank Co., Ltd. 70,093,041.67 -
borrowings
Total 911,172,445.91 640,000,000.00
Nanshan Group and its subsidiaries 10,747,794.44 11,631,575.13
Qingdao Qianwan West Port United Wharf Co., Ltd. 7,641,839.79 5,196,134.76
EuroAsia Dockyard Enterprise and development Ltd. 2,974,168.52 3,698,897.16
Accounts payable Yiu Lian Dockyards Limited 1,676,082.11 2,204,328.63
China Merchants Bureau Logistics Group Qingdao Co., Ltd. 1,006,844.56 928,527.51
Other related party 3,614,167.59 2,323,725.85
Total 27,660,897.01 25,983,189.04
Receipts in
Other related party 600,535.85 66,799.01
advance
Guangdong Sinotrans Shipping Agency Co., Ltd. 3,577,148.00 -
Contract Zhanjiang port 1,287,452.83
liabilities Other related party 2,454,025.09 803,584.16
Total 6,031,173.09 2,091,036.99
Terminal Link SAS 88,978,919.98 46,506,416.54
Modern Terminals Limited 59,038,373.05 1,286,962.56
Yihai Kerry Arawana Cereals, Oils and Foodstuffs Co. Ltd. 37,402,426.09 37,402,426.09
China Merchants Real Estate (Shenzhen) Co., Ltd. 20,762,053.30 951,301.52
China Merchants Shekou Industrial Zone Holdings Co., Ltd. 11,305,700.00 10,000.00
China Merchants Finance Lease (Tianjin) Co., Ltd. 11,250,000.00 -
Shenzhen China Merchants Property Management Co., Ltd. 9,264,823.90 18,294,814.64
Shenzhen Merchants Commercial Property Investment Co.,
8,947,256.82 9,355,392.43
Ltd.
Zhanjiang Xiagang United Development Co., Ltd. 1,433,990.57
Other payables China Merchants Food (China) Co., Ltd. 1,264,171.10 1,254,271.10
COSCO Logistics (Zhanjiang) Co., Ltd. 1,258,811.65
China Merchants Securities Co., Ltd. 424,557.30 22,641,509.43
Shenzhen Merchants Construction Co., Ltd. 156,590.00 28,379,667.10
China Merchants Zhangzhou Development Zone Co., Ltd. - 93,258,350.90
Sinotrans South China Co., Ltd. - 25,949,781.00
Port de Djibouti S.A. - 2,951,170.40
Qingdao Port (Group) Co., Ltd. - 2,700,000.00
China Merchants Group Finance Company Limited - 1,043,521.17
Other related party 6,257,011.91 5,375,438.53
Total 257,744,685.67 297,361,023.41
- 164 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from/to related parties - continued
(2) Amounts due to related parties - continued
Unit: RMB
Opening
Item Related party Closing balance
balance
China Merchants Finance Lease (Tianjin) Co., Ltd. 145,861,850.10
China Merchants Tongshang Finance Lease Co., Ltd. 56,146,040.22
Nanshan Group and its subsidiaries 52,656,827.70
EuroAsia Dockyard Enterprise and development Ltd. 14,269,498.38
Non-current Shenzhen Merchants Commercial Property Investment Co., Ltd. 5,579,040.25
liabilities due China Merchants Shekou Industrial Zone Holdings Co., Ltd. 5,454,253.54
within one year Shenzhen Science and Technology University Phase II Real
3,263,992.11
Estate Management Co., Ltd.
China Merchants Landmark (Shenzhen) Co ., Ltd. 1,242,022.25
Other related party 1,770,041.27
Total 286,243,565.82
Other current
Port de Djibouti S.A. - 241,927,341.05
liabilities
Other non-
current Nanshan Group and its subsidiaries 1,564,380.59 -
liabilities
China Merchants Group Finance Company Limited 376,483,984.71 135,000,000.00
Long-term
China Merchant Bank Co., Ltd. 20,000,000.00 -
borrowings
Total 396,483,984.71 135,000,000.00
Long-term
China Merchants Finance Lease (Tianjin) Co., Ltd. 144,000,000.00 -
payables
China Merchants Finance Lease (Tianjin) Co., Ltd. 491,666,949.79
China Merchants Tongshang Finance Lease Co., Ltd. 161,829,816.02
Lease Nanshan Group and its subsidiaries 167,685,128.23
liabilities China Merchants Shekou Industrial Zone Holdings Co., Ltd. 5,691,513.57
Other related party 1,880,637.25
Total 828,754,044.86
(XI) COMMITMENTS AND CONTINGENCIES
1. Significant commitments
Unit: RMB
Item 31/12/2019 31/12/2018
Commitments that have been entered into but have not been
recognized in the financial statements
- Commitment to acquire long-term assets 3,767,236,258.74 3,971,730,917.34
- Commitment to invest port construction 6,758,563,544.21 5,490,560.00
Others 354,959,845.19 26,115,744.09
Total 10,880,759,648.14 4,003,337,221.43
- 165 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(XI) COMMITMENTS AND CONTINGENCIES - continued
2. Contingencies
Unit: RMB
Item 31/12/2019 31/12/2018
Contingent liabilities arising from litigations (Note 1) 274,299,826.26 323,559,335.68
Guarantees for borrowings of associates (Note 2) 198,703,594.15 118,629,805.57
Total 473,003,420.41 442,189,141.25
Note 1: This represents the significant contingent liabilities arising from the litigations between
TCP and local tax authority, employee or former employee in Brazil at as the year end.
According to the professional advice of external lawyers and the latest estimates of the
Group's management, the possible compensation is RMB274,299,826.26 but it is not
likely to cause outflow of economic benefits from the Group. Therefore, the contingent
liabilities arising from the above pending litigations are not recognized as provisions.
The counter-bonification where the Group as the beneficiary will be executed by the
former TCP shareholder that disposed the shares of TCP. According to the counter-
bonification agreement, the former TCP shareholder need to make counter-bonification
to the Group in respect of the above contingent liabilities, with the compensation amount
not exceeding pre-determined amount and specified period.
Note 2: As at 31 December 2019, the Group made commitments to another shareholder of
Terminal Link SAS (an associate of the Group) to provide guarantee for the borrowings
and other liabilities of Terminal Link SAS to the extent of the Group's 49% equity in the
company. The actual guaranteed amount is RMB80,305,197.15. If any guarantee liability
occurs, the Group will make compensations.
Except for the above guarantee, as at 31 December 2019, the Group also provides
guarantee for the bank loans and other liabilities of the related party Khor Ambado FZCo.
The guaranteed amount is 200,914,560.00. The loan amount used by Khor Ambado
FZCo is RMB118,398,397.00. Details are set out in Note(X) 5 (3).
At 31 December 2019, the Group's directors assessed the risk of default of above loans
and other liabilities and considered that the risk is immaterial and the possibility to make
compensation for the guarantees is rare.
Except for the above contingent events, at 31 December 2019, the Group has no other
significant guarantee or other contingencies that need to be explained.
- 166 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(XII) EVENTS AFTER THE BALANCE SHEET
1. Profit distribution
Items Amount
Profits and dividends to be distributed (Note) 884,287,957.04
Profits and dividends to be declared by shareholder meeting To be approved by shareholder meeting
Note：Refer to Note V, 48 for details.
2. New coronavirus epidemic
Since the outbreak of new coronavirus epidemic in China at the beginning of 2020, the therapy
prophylactic has been carried out throughout the country. The Group actively responded and
executed the regulations and requirements of the new coronavirus epidemic issued by the
government.
New coronavirus epidemic has temporarily affected the Groups’ production and management,
however, the impact of the novel coronavirus outbreak on the economy depends on the progress
and effectiveness as well as duration of our epidemic prevention and control work
The Group has keep following the development of new coronavirus epidemic as well as
evaluating the impact on financial status and operating results, etc. The Group will strengthen the
prevention and control of the epidemic along with resuming production in an orderly way.
3. Share option incentive plan
The Company held the extraordinary general meeting on 3 February 2020, where the Company's
share option incentive plan was reviewed and discussed item-to-item, and approved. The total
share options granted to the incentive objects under the incentive plan involves underlying shares
of 17,728,000 shares, accounting for about 0.922% of the Company's total share capital which is
1,922,365,124 shares upon the announcement of the incentive plan. The first batch (total amount
17,198,000 shares) of incentive objects totals to 238 persons, accounting for 2.5% of total
employee in service at the end of 2018. The registration procedures for the first batch granted
were completed on 13 March 2020.
Except for the above events, the Group has no other significant events after the balance sheet date.
4. Purchase of minority interests of TCP
As Note V(41), the minority shareholder (hereinafter referred to as “ the seller”) acquired 10%
stake from Kong Rise Development Limited , shareholder of the TCP, with a higher price among
the market price and BRL320 million. On 23 February 2020, the seller asked Kong Rise
Development Limited to exercise the option. Until approval date of financial statement, Kong
Rise Development Limited has prepaid USD64 million to the seller on 24 February 2020.The
above transaction has not been completed until the consolidated financial statements have
authorized.
- 167 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(XII) EVENTS AFTER THE BALANCE SHEET - continued
5. Purchase of mandatory convertible securities and loans from company Terminal Link SAS,
an associate company
On November 25th, 2020, the subsidiary of the Group, China merchants port holdings company
has signed the shareholder’s agreements with CMA CGM S.A. , shareholder of the Terminal Link
SAS. According to this agreement, China merchants port holdings company might pay USD 468
million for mandatory convertible securities and has authorized loans with USD500 million limits
to Terminal Link SAS in order to support Terminal Link SAS acquire ten target ports. Terminal
Link SAS has completed acquisition of 8 ports before March 26th, 2020. China merchants port
holdings company has paid for mandatory convertible securities and issued loans , which total
amounts are USD815 million.The remaining mandatory convertible securities have not been paid
and loans have not been issued.
(XIII) OTHER SIGNIFICANT EVENTS
1. Segment reporting
(1) Basis for determining reporting segments and accounting policies
The key management team of the Company is regarded as the CODM, who reviews the Group's
internal reports in order to assess performance, allocate resources and determine the operating
segments.
The CODM manages the Group's operations by divisions from both business and geographic
perspectives.
In respect of business segments, management assesses the performance of the Group's business
operations including ports operation, bonded logistics operation and other operations.
Ports operation
Ports operation includes container terminal operation, bulk and general cargo terminal operation
operated by the Group and its associates and joint ventures. The Group's reportable segments of
the ports operation are as follows:
- 168 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(XIII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(1) Basis for determining reporting segments and accounting policies - continued
(a) Mainland China, Hong Kong and Taiwan
Pearl River Delta
Yangtze River Delta
Bohai Rim
Others
(b) Other locations outside of Mainland China, Hong Kong and Taiwan
Bonded logistics operation
Bonded logistics operation includes logistics park operation, ports transportation and airport cargo
handling operated by the Group and its associates and joint ventures.
Other operations
Other operations mainly includes property development and investment and construction of
modular housing operated by the Group's associates, property investment operated by the Group
and corporate function.
Each of the segments under ports operation include the operations of a number of ports in various
locations within one geographic location, each of which is considered as a separate operating
segment by the CODM. For the purpose of segment reporting, these individual operating
segments have been aggregated into reportable segments on geographic basis in order to present a
more systematic and structured segment information. To give details of each of the operating
segments, in the opinion of the directors of the Company, would result in particulars of excessive
length.
Bonded logistics operation and other operations include a number of different operations, each of
which is considered as a separate but insignificant operating segment by the CODM. For segment
reporting, these individual operating segments have been aggregated according to the natures of
their operations to give rise to more meaningful presentation.
There are no material sales or other transactions between the segments.
As at 31 December 2019, around 70% of The Group's non-current assets other than financial
instruments and deferred tax assets are located in Mainland China.
- 169 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(XIII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Segment financial information
Segment financial information for 2019 is as follows:
Unit: RMB
Ports operation
Mainland China, Hong Kong and Taiwan Bonded logistics Unallocated
Item Others Total
Pearl River Yangtze River Other locations Sub-total operation amount
Bohai Rim Others
Delta Delta
Operating income 5,196,613,368.06 - 65,287,182.79 3,048,109,069.32 3,237,062,565.69 11,547,072,185.86 411,410,069.19 165,347,168.69 - 12,123,829,423.74
Operating cost 3,008,092,503.04 - 54,620,318.87 2,442,406,257.78 1,680,548,644.03 7,185,667,723.72 240,230,706.61 223,022,489.38 - 7,648,920,919.71
Segment operating
2,188,520,865.02 - 10,666,863.92 605,702,811.54 1,556,513,921.66 4,361,404,462.14 171,179,362.58 (57,675,320.69) - 4,474,908,504.03
profit (loss)
Adjustments:
Taxes and levies 28,208,048.74 902,080.83 1,226,820.81 41,913,977.40 74,183,581.47 146,434,509.25 10,405,578.38 15,266,911.26 449,581.03 172,556,579.92
Administrative
367,421,172.07 14,629,856.34 11,286,215.13 427,071,045.26 240,768,795.97 1,061,177,084.77 40,794,239.92 1,086,063.41 406,463,193.56 1,509,520,581.66
expense
R&D expenses 119,506,939.75 - - 4,346,404.54 - 123,853,344.29 - - - 123,853,344.29
Financial expenses 186,473,966.41 3,557,959.06 (1,031,714.93) 140,511,147.67 343,853,815.52 673,365,173.73 27,521,546.75 43,602,750.59 1,191,780,266.46 1,936,269,737.53
Impairment gains of
25,051.16 - - - - 25,051.16 - - - 25,051.16
assets
Impairment gains
(2,704,122.79) 96,054.01 (47,117,070.21) (510,363.77) (50,235,502.76) (13,907.01) - - (50,249,409.77)
(losses) of credit
Other income 74,072,845.73 1,224,999.96 136,812.67 53,835,650.36 - 129,270,308.72 22,545,823.25 6,361.40 10,278,619.73 162,101,113.10
Investment income 160,825,470.54 2,569,882,989.42 415,798,097.77 772,742,553.30 439,240,848.69 4,358,489,959.72 23,454,651.74 237,229,143.96 - 4,619,173,755.42
Gains from changes
10,933.07 154,574,350.85 297,972,325.74 (21,212,710.87) (364,861,632.31) 66,483,266.48 - - - 66,483,266.48
in fair value
Gains from disposal
4,172,962,308.96 - 13,069.99 620,155,605.55 764,083.94 4,793,895,068.44 (3,047.02) - 670,761.37 4,794,562,782.79
of assets
Operating profit 5,892,103,224.72 2,706,592,444.00 713,201,903.09 1,370,264,264.80 972,340,665.25 11,654,502,501.86 138,441,518.49 119,604,459.41 (1,587,743,659.95) 10,324,804,819.81
- 170 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(XIII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Segment financial information - continued
Segment financial information for 2019 is as follows: - continued
Unit: RMB
Ports operation
Mainland China, Hong Kong and Taiwan Bonded logistics Unallocated
Item Others Total
Pearl River Yangtze River Other locations Sub-total operation amount
Bohai Rim Others
Delta Delta
Non-operating income 15,167,367.31 - 920,329.94 19,125,548.43 512,078,201.39 547,291,447.07 458,318.63 1,086,658.83 4,266,935.88 553,103,360.41
Non-operating
13,328,509.27 4,069.14 8,922.44 25,023,662.84 14,345,696.95 52,710,860.64 57,151.76 50,000.00 17,634,000.00 70,452,012.40
expenses
Gross profit 5,893,942,082.76 2,706,588,374.86 714,113,310.59 1,364,366,150.39 1,470,073,169.69 12,149,083,088.29 138,842,685.36 120,641,118.24 (1,601,110,724.07) 10,807,456,167.82
Income tax expenses 1,922,260,744.88 134,247,591.99 91,985,992.66 224,620,829.53 92,650,917.92 2,465,766,076.98 31,835,647.68 13,078,333.18 129,858,836.78 2,640,538,894.62
Net profit 3,971,681,337.88 2,572,340,782.87 622,127,317.93 1,139,745,320.86 1,377,422,251.77 9,683,317,011.31 107,007,037.68 107,562,785.06 (1,730,969,560.85) 8,166,917,273.20
Segment assets 29,586,087,542.86 26,729,937,567.14 7,140,466,913.27 26,167,362,772.28 43,499,664,358.95 133,123,519,154.50 3,343,718,019.81 17,831,744,436.63 2,397,936,234.93 156,696,917,845.87
Total assets in the financial statements 156,696,917,845.87
Segment liabilities 10,648,908,871.15 700,175,249.44 140,580,616.21 9,017,491,838.33 11,995,283,584.80 32,502,440,159.93 757,665,748.51 1,010,340,736.41 27,436,263,588.78 61,706,710,233.63
Total liabilities in the financial statements 61,706,710,233.63
Supplementary
information:
Depreciation and
900,796,294.39 - 2,052,884.92 878,442,775.96 796,377,578.73 2,577,669,534.00 92,199,834.15 174,521,673.45 20,134,304.85 2,864,525,346.45
Amortization
Interest income 42,470,222.92 257,234.76 1,203,144.96 70,701,815.50 83,372,904.82 198,005,322.96 1,266,345.18 1,469,124.45 51,319,225.99 252,060,018.58
Interest expense 183,085,034.75 2,926,671.54 - 203,657,696.95 392,724,564.47 782,393,967.71 28,245,233.91 38,016,163.44 1,241,182,229.48 2,089,837,594.54
Investment income
from long-term equity
129,628,862.78 2,530,919,159.03 347,650,565.12 19,727,531.90 439,240,848.69 3,467,166,967.52 23,454,651.74 237,229,143.96 - 3,727,850,763.22
investment under
equity method
Long-term equity
investment under 2,592,565,388.68 24,772,038,158.14 6,078,963,750.12 640,212,907.12 11,061,215,279.18 45,144,995,483.24 768,727,807.74 12,002,816,092.28 - 57,916,539,383.26
equity method
Non-current assets
other than long-term 21,153,911,773.00 294,462,264.01 27,181,862.66 21,955,658,532.67 28,203,528,560.52 71,634,742,992.86 2,302,277,585.20 5,405,248,897.19 455,073,380.68 79,797,342,855.93
equity investment
- 171 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(XIII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Segment financial information - continued
Segment financial information for 2018 is as follows:
Unit: RMB
Ports operation
Mainland China, Hong Kong and Taiwan Bonded logistics Unallocated
Item Others Total
Pearl River Yangtze River Other locations Sub-total operation amount
Bohai Rim Others
Delta Delta
Operating income 5,303,465,225.60 - 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
Operating 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)
Adjustments:：
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
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
expense
R&D expenses 118,865,768.66 - - - - 118,865,768.66 - - 3,123,329.16 121,989,097.82
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 gains of
- - - - - - - - - -
assets
Impairment gains
(10,760,473.33) - - (10,616.21) 3,410,788.03 (7,360,301.51) (168,279.09) - - (7,528,580.60)
(losses) of credit
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 from changes
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)
in fair value
Gains from disposal
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
of 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
- 172 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(XIII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Segment financial information - continued
Segment financial information for 2018 is as follows: - continued
Unit: RMB
Ports operation
Mainland China, Hong Kong and Taiwan Bonded logistics Unallocated
Item Others Total
Pearl River Yangtze River Other locations Sub-total operation amount
Bohai Rim Others
Delta Delta
Non-operating income 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
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
expenses
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 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
equity 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
- 173 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(XIII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Segment financial information - continued
The Group's revenue by geographical areas of operations and information about its non-current
assets other than financial instruments and deferred tax assets presented based on the geographical
areas in which the assets are located as follows:
Unit: RMB
Amount incurred in Amount incurred in
Revenue from external transactions the the
current period prior period
Mainland China, Hong Kong and Taiwan 8,872,027,132.24 6,635,924,788.34
Pearl River Delta 5,629,472,123.72 5,705,075,363.71
Yangtze River Delta - -
Bohai Rim 194,445,939.20 183,277,638.76
Others 3,048,109,069.32 747,571,785.87
Other locations 3,251,802,291.50 3,067,469,834.24
Total 12,123,829,423.74 9,703,394,622.58
Unit: RMB
Amount incurred in Amount incurred in
Total non-current assets the the
current period prior period
Mainland China, Hong Kong and Taiwan 96,489,027,270.44 73,602,488,004.01
Pearl River Delta 43,196,515,110.55 33,618,069,629.60
Yangtze River Delta 25,066,500,422.16 23,299,884,544.83
Bohai Rim 6,686,470,964.43 6,316,574,360.92
Others 21,539,540,773.30 10,367,959,468.66
Other locations 41,224,854,968.75 40,685,665,029.47
Total 137,713,882,239.19 114,288,153,033.48
(3) Degree of reliance on major customers
The total operating income derived from the top five clients of the Group is RMB
3,234,035,638.42, accounting for 26.68% of the Group's total operating income.
(XIV) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS
1. Other receivables
(1) Summary of other receivables
Unit: RMB
Opening balance
Item Closing balance
(restated)
Interest receivable - -
Dividends receivable 207,259,421.40 329,153,465.74
Other receivables 598,275,341.87 321,861,868.32
Total 805,534,763.27 651,015,334.06
- 174 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(XIV) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
1. Other receivables - continued
(2) Dividends receivable
(a) Disclosure of dividends receivable
Unit: RMB
Company name Closing balance Opening balance
Dongguan Chiwan Warf Co., Ltd. 103,355,370.74 103,355,370.74
Shenzhen Chiwan Harbor Container Co. Ltd. - 96,378,106.61
Dongguan Chiwan Terminal Co., Ltd. 88,196,930.66 88,196,930.66
Shenzhen Chiwan Tugboat Co., Ltd. - 21,929,842.24
China Merchants Bonded Logistics Co., Ltd. 15,707,120.00 15,707,120.00
Shenzhen Chiwan Port Development Co., Ltd. - 3,299,252.31
Shenzhen Chiwan International Freight Agency Co., Ltd. - 286,843.18
CMPort - -
Total 207,259,421.40 329,153,465.74
Less: Provision for credit loss - -
Carrying amount 207,259,421.40 329,153,465.74
(b) Significant dividends receivable with aging over 1 year
Unit: RMB
Item Closing balance Reason for outstanding Impaired or not
Dongguan Chiwan Warf Co., In processing and expected to be
103,355,370.74 No
Ltd. received in 2020
Dongguan Chiwan Terminal In processing and expected to be
88,196,930.66 No
Co., Ltd. received in 2020
Total 191,552,301.40
(3) Other receivables
(a) Disclosure of other receivables by aging
Unit: RMB
Closing balance
Aging Provision for credit Proportion of
Other receivables
loss provision (%)
Within 1 year 598,275,341.87 - -
1 to 2 years - - -
2 to 3 years - - -
Over 3 years 383,456.60 383,456.60 100.00
Total 598,658,798.47 383,456.60
(b) Provision for credit loss of other receivables
As part of the Company's credit risk management, the Company performs internal credit rating on
customers, and determines the expected loss ratio of other receivables under each credit rating.
Such expected average loss ratio is based on historical actual impairment and taking into
consideration of current and expected future economic conditions.
- 175 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(XIV) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
1. Other receivables - continued
(3) Other receivables - continued
(b) Provision for credit loss of other receivables - continued
At 31 December 2019, the credit risk and expected credit loss of other receivables by categories of
customers are as follows:
Unit: RMB
Closing balance Opening balance
Expected Lifetime Lifetime
Credit Lifetime ECL Lifetime ECL
credit loss ECL ECL
rating 12-month ECL (credit- Total 12-month ECL (not credit- Total
ratio (%) (not credit- (credit-
impaired) impaired)
impaired) impaired)
A 0.00-0.10 598,275,341.87 - - 598,275,341.87 321,861,868.32 - - 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 - - 383,456.60 383,456.60
Carrying
598,275,341.87 - 383,456.60 598,658,798.47 321,861,868.32 - 383,456.60 322,245,324.92
amount
Provision
for credit - - 383,456.60 383,456.60 - - 383,456.60 383,456.60
loss
Book value 598,275,341.87 - - 598,275,341.87 321,861,868.32 - - 321,861,868.32
(c) Changes in provision for credit loss of other receivables
Unit: RMB
Stage I Stage II Stage III
Item Lifetime ECL Lifetime ECL Total
12-month ECL
(not credit-impaired) (credit-impaired)
Balance at 1 January 2019 - - 383,456.60 383,456.60
Carrying amount of other receivables at 1 January 2019
-- transfer to stage II - - - -
-- transfer to stage III - - - -
-- transfer back to stage II - - - -
-- transfer back to stage I - - - -
Provision for the year - - - -
Reversal - - - -
Transfer out due to
derecognition of financial assets - - - -
(including direct write-down)
Other changes - - - -
Balance at 31 December 2019 - - 383,456.60 383,456.60
(d) Other receivables by nature
Unit: RMB
Item Closing balance Opening balance
Amounts due from related parties 571,663,096.21 316,567,355.24
Advances 26,283,930.19 4,785,167.82
Deposits - 372,042.31
Others 711,772.07 520,759.55
Total 598,658,798.47 322,245,324.92
Less: Provision for credit loss 383,456.60 383,456.60
Book value 598,275,341.87 321,861,868.32
- 176 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(XIV) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
1. Other receivables - continued
(3) Other receivables - continued
(e) There is no other receivables write-off during this year。
(f) The top five balances of other receivables classified by debtor
Unit: RMB
Proportion of the Closing balance of
Company name Nature Closing balance Aging amount to the total provision for credit
other receivable (%) loss
Shenzhen Haixing Harbor Loan to related
328,163,096.21 Within 1 year 54.81 -
Development Co., Ltd parties
Dongguan Chiwan Terminal Co., Loan to related
134,500,000.00 Within 1 year 22.47 -
Ltd. parties
Loan to related
Dongguan Chiwan Warf Co., Ltd. 109,000,000.00 Within 1 year 18.21 -
parties
Advance
Shenzhen Chiwan Port
payments for 21,072,976.83 Within 1 year 3.52 -
Development Co., Ltd.
account current
Compensation for
profit and loss
Guangdong Sinotrans Co., Ltd. 3,803,477.07 Within 1 year 0.64 -
over the transition
period
Total 596,539,550.11 99.65 -
- 177 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(XIV) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS - continued
2. Long-term equity investments
Unit: RMB
Changes for the year Closing
1/1/2019 Investment Reconciling items from Other Announced Impairm 31/12/2019 balance of
Investee
Increase Decrease income under other comprehensive equity distribution of cash ent Others impairment
equity method income movements dividends or profit provision provision
I. Subsidiary
Shenzhen Chiwan International Freight Agency
5,500,000.00 - - - - - - - - 5,500,000.00 -
Co., Ltd.
Shenzhen Chiwan Harbor Container Co. Ltd. 250,920,000.00 - - - - - - - - 250,920,000.00 -
Shenzhen Chiwan Port Development Co., Ltd.
7,000,000.00 199,283,811.09 - - - - - - - 206,283,811.09 -
(Note 1)
CWHK 1,070,000.00 - - - - - - - - 1,070,000.00 -
Shenzhen Chiwan Tugboat Co., Ltd. 24,000,000.00 - - - - - - - - 24,000,000.00 -
Chiwan Container Terminal Co., Ltd. 421,023,199.85 - - - - - - - - 421,023,199.85 -
Dongguan Chiwan Warf Co., Ltd. 186,525,000.00 - - - - - - - - 186,525,000.00 -
Dongguan Chiwan Terminal Co., Ltd. 175,000,000.00 - - - - - - - - 175,000,000.00 -
Chiwan Shipping (Hong Kong) Limited 1,051,789.43 - - - - - - - - 1,051,789.43 -
CMPort (Note 2) 26,170,129,771.99 1,116,813,838.43 - - - - - - - 27,286,943,610.42 -
RoRo Logistics 149,709,800.00 - - - - - - - - 149,709,800.00 -
Zhanjiang port (Note 3) - 371,530,912.93 - - - - - - - 371,530,912.93 -
Sub-total 27,391,929,561.27 1,687,628,562.45 - - - - - - - 29,079,558,123.72 -
II. Associate
China Merchants International Information
18,274,568.38 - - 2,369,042.80 - - - - - 20,643,611.18 -
Technology Co., Ltd.
China Merchants Bonded Logistics Co., Ltd. 340,500,382.73 - - 25,355,342.22 - - - - - 365,855,724.95 -
Sub-total 358,774,951.11 - - 27,724,385.02 - - - - - 386,499,336.13 -
III. Joint venture
China Overseas Harbour Affaris (Laizhou) Co.,
793,557,064.58 - - 42,110,853.02 - - (43,605,689.02) - - 792,062,228.58 -
Ltd.
China Merchants Antong Logistics Management
- 8,000,000.00 - 256,893.80 - - - - - 8,256,893.80 -
Company
Sub-total 793,557,064.58 8,000,000.00 - 42,367,746.82 - - (43,605,689.02) - - 800,319,122.38 -
Total 28,544,261,576.96 1,695,628,562.45 - 70,092,131.84 - - (43,605,689.02) - - 30,266,376,582.23 -
Note 1: The Company receives 25% equity of Shenzhen Chiwan Port Development Co., Ltd. from CWHK at the consideration of
RMB10,825,000.00 on 19 April 2019. Since then, Shenzhen Chiwan Port Development Co., Ltd. became the Company's wholly-owned
subsidiary. In July 2019, the Company transferred the major operating assets, debts and employees of Chiwan port area 1-7# berth to
Shenzhen Chiwan Port Development Co., Ltd. The net book value of the transferred assets and liabilities at the benchmark date of the
transfer amounting to RMB188,458,811.09 is considered as investment cost and included in the Company's long-term equity investments in
Shenzhen Chiwan Port Development Co., Ltd.
Note 2: Details are set out in Note (VII) 1.
Note 3: Details are set out in Note (VI) 1.
- 178 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(XIV) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
3. Operating income and operating costs
Unit: RMB
Amount incurred in Amount incurred in
Item the current period the prior period
Revenue Cost Revenue Cost
Principal operating 75,207,466.30 75,438,994.71 211,782,804.61 158,561,191.30
Other operating 16,835,131.75 645,029.02 32,116,448.46 1,504,260.12
Total 92,042,598.05 76,084,023.73 243,899,253.07 160,065,451.42
4. Investment income
(1) Details of investment income
Unit: RMB
Amount incurred in Amount incurred in
Item
the current period the prior period
Income from long-term equity investments under cost method 1,221,470,436.60 121,894,044.34
Long-term equity investments income under equity method 70,092,131.84 63,015,142.10
Income from other equity instruments investments 10,822,585.00 8,228,975.00
Income from debt investments 3,837,808.22 -
Total 1,306,222,961.66 193,138,161.44
(2) Income from long-term equity investments under cost method
Unit: RMB
Amount incurred in Amount incurred in Reason for changes
Investee the current period the prior period comparing with prior year
- Changes in profit distribution
CMPort 1,116,334,395.76
of investee
Chiwan Container Terminal Co., - Changes in profit distribution
105,136,040.84
Ltd. of investee
Shenzhen Chiwan Harbor Container - Changes in profit distribution
96,378,106.61
Co. Ltd. of investee
- Changes in profit distribution
Shenzhen Chiwan Tugboat Co., Ltd. 21,929,842.24
of investee
Shenzhen Chiwan Port Development - Changes in profit distribution
3,299,252.31
Co., Ltd. of investee
Shenzhen Chiwan International - Changes in profit distribution
286,843.18
Freight Agency Co., Ltd. of investee
Total 1,221,470,436.60 121,894,044.34
- 179 -
CHINA MERCHANTS PORT GROUP CO., LTD.
SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED 31 DECEMBER 2019
1. BREAKDOWN OF NON-RECURRING PROFIT OR LOSS
Unit: RMB
Item Amount Remarks
Losses on disposal of non-current assets 4,794,562,782.79
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 162,587,042.38
accordance with the national standard)
Money lending income earned from non-financial institutions in profit or loss 19,571,040.36
The excess of attributable fair value of identifiable net assets over the
-
consideration paid for subsidiaries, associates and joint ventures
Gains or losses on exchange of non-monetary assets -
Gains or losses on entrusted investments or assets management -
Provision of impairment losses for each asset due to force majeure, e.g. natural
-
disasters
Gains or losses on debt restructuring -
Business restructuring expenses, e.g., expenditure for layoff of employees,
-
integration expenses, etc.
Gains or losses relating to the unfair portion in transactions with unfair transaction
-
price
Net profit or loss of subsidiaries recognized as a result of business combination of
enterprises under common control from the beginning of the period up to the -
business combination date
Gains or losses arising from contingencies other than those related to normal
-
operating business
Gains from changes of fair value of held-for-trading financial assets, derivative
financial assets, other non-current financial assets, held-for-trading financial
liabilities, derivative financial liabilities other than effective hedging operation
66,075,363.30
relating to the Company's normal operations, and the investment income from
disposal of the above held-for-trading financial assets/financial liabilities and
other debt investments
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 482,165,418.73
Other profit or loss that meets the definition of non-recurring profit or loss (note) 732,644,357.06
Tax effects (1,504,203,995.96)
Effects of minority interest (after tax) (2,892,976,715.05)
Total 1,860,425,293.61
Note: This mainly represents the gains from remeasurement of previously held equity at fair value upon
the Company's acquisition of Zhanjiang Port (Group) Co., Ltd.
CHINA MERCHANTS PORT GROUP CO., LTD.
SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED 31 DECEMBER 2019
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 EPS
Item average return
on net assets (%) Basic EPS Diluted EPS
Net profit attributable to ordinary shareholders 8.7125 1.5943 1.5943
Net profit attributable to ordinary shareholders after
3.1197 0.5709 0.5709
deducting non-recurring profit or loss
