CHINA MERCHANTS PORT GROUP CO., LTD.
ANNUAL REPORT 2019
Date of disclosure: 16 April 2020
China Merchants Port Group Co., Ltd. Annual Report 2019
Chairman’s Statement
Dear shareholders,
I hereby present to you the annual report of China Merchants Port Group Co., Ltd. and its subsidiaries
(the “Company”) for the year ended 31 December 2019. On behalf of the Board, I would like to
express my sincere gratitude to all of you for your long-term support to the Company.
The Company is a crucial vehicle for CMG to implement the “Belt and Road” Initiative promoted by
China and the “Guangdong-Hong Kong-Macao Greater Bay Area” strategy. The Company is also the
headquarters of CMG’s port sector and the operating and management platform for the port assets
and tier one capital of CMG which plays a key role in the consolidation and synergistic development
of CMG’s port assets, and has become the world’s leading port investor, developer and operator.
Looking ahead, the Company will take actions and strive to be a world-class comprehensive port
service provider. While expanding the port ecosystem with a focus on core port businesses and
promoting the construction of “Intelligent Port” under the guidance of technology innovation; it will
proactively take part in international port investment, development and operation, so as to optimize
the port network system on a continuous basis and achieve balanced development on a regional level.
By offering professional top-notch solutions, it will become customers’ partner of choice for
cooperation, which will create greater value for the Company, enhance return for shareholders and
contribute to the healthy development of the port industry and the continuous growth of the global
trade.
Review for the year
In 2019, the global economy sustained a slow growth in general with weakened momentum in the
manufacturing industry and global trade, and unilateralism and trade protectionism continued to bring
uncertainties to the global trade, posing challenges to the daily operation of enterprises. Confronted
with the complex and turbulent external environment, the Company firmly adhered to the strategic
principle of “leveraging on its long-term strategy, tapping the current edges, driving through
technology and embracing changes”. The Company also pursued various tasks in a steady manner
with a focus on the governance of the listed company, the construction of homebase port, merger and
acquisitions, comprehensive development, operation management and business innovation,
successfully accomplishing its strategic goals and various operational objectives of the year.
In terms of port operation, changes in global trade situation have affected the port industry, but the
overall operating performance of the Company was satisfactory. In 2019, the container port business
delivered a container throughput totaled 112.93 million TEUs, up 2.9% year-on-year. Looking into
the regional performance, container throughput handled by the Company’s ports in Mainland China
totaled 84.88 million TEUs, up 4.3% year-on-year. Ports in Hong Kong and Taiwan handled a
combined container throughput of 7.21 million TEUs, down 6.1% year-on-year, while overseas
operations handled a total bulk cargo volume of 20.84 million TEUs, up 0.9% year-on-year. Bulk
cargo volume handled by the Company’s ports decreased by 8.9% year-on-year to 490 million tonnes,
among which the Company’s ports in Mainland China handled a total bulk cargo volume of 480
million tonnes, representing a decrease of 9.3% year-on-year, which was mainly affected by factors
such as the international trade friction, the African Swine Fever and the adjustment of the supply
structure of certain enterprises, while that of overseas port projects increased by 26.1% to 6.29 million
tonnes, which was mainly benefited from the business growth in PDSA in Djibouti and HIPG in Sri
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China Merchants Port Group Co., Ltd. Annual Report 2019
Lanka. Among the major ports, container throughput handled in West Shenzhen Port Zone in China
was 11.42 million TEUs, up 0.7% year-on-year. SIPG handled a container throughput of 43.30
million TEUs, representing a year-on-year increase of 3.1%. For overseas projects, CICT in Sri Lanka
delivered a year-on-year growth of 7.4% by handling a container throughput of 2.88 million TEUs.
LCT in Togo handled a container throughput of 1.13 million TEUs, representing a growth of 7.7%
year-on-year. Kumport in Turkey handled a container throughput of 1.28 million TEUs, representing
a growth of 1.9% year-on-year. Terminal Link SAS (TL) handled a container throughput of 13.25
million TEUs in the year, down 2.8% year-on-year. TCP in Brazil handled an annual container
throughput of 0.92 million TEUs, up 32.0% as compared to that of March to December in 2018.
In terms of key priorities, firstly, the development of the governance system of the listed company
has been pushed forward in an orderly manner. In order to continually optimize the governance
system of the listed company and consolidate the anchor role of standardized operation, we
capitalized on the ancillary financing opportunity to introduce two strategic investors, namely, China-
Africa Development Fund and Shenzhen Infrastructure Investment Fund, and thus effectively
improved such system and contributing to increasingly improving corporate governance system.
Secondly, the construction of domestic and overseas homebase ports has been steadily pushed
forward. In order to step up the efforts in promoting the construction of a world-class domestic
homebase port, we promoted the steady improvement in the competitiveness of West Shenzhen Port
Zone through channels dredging, the integration of operations and the optimization of the customs
clearance procedures in West Shenzhen Port Zone. In addition, we worked aggressively on promoting
overseas homebase ports construction and leading regional port construction in South Asia by
accelerating the output of management experience and improving the comprehensive service
capabilities of both CICT and HIPG. Thirdly, the consolidation of domestic ports has achieved
remarkable progress. In line with the national strategy, we not only capitalized on the restructure and
consolidation of domestic and overseas ports to obtain effective control over Zhanjiang Port upon
completion of capital injection, but also facilitated the robust progression of management tasks
entrusted by Liaoning Port Group and thus built a north-south port connection system. Fourthly,
substantial progress has been achieved in terms of overseas expansion. Adhering to the “Belt and
Road” initiative promoted by China, we kept abreast of new changes in international trade landscape,
capitalized on opportunities presented by the restructuring of competitive landscape in global port
and shipping industry and devoted great efforts to facilitate the merger and acquisition of overseas
projects with a view to optimizing our global layout. Furthermore, we entered into formal agreements
with CMA CGM for the acquisition of equity interests in up to 10 quality terminals under CMA CGM
through TL and successfully introduced two strategic investors for TCP in Brazil. Fifthly, the
comprehensive development has been pushed forward steadily. With dedication to explore innovation,
the Company deepened the development of the comprehensive development model of “Port-Park-
City”, and hence realized preliminary progress in Djibouti International Free Trade Zone and HIPG
and other comprehensive development projects. Sixthly, fruitful results have been achieved in
innovative development. The Company actively implemented the “digitalisation strategy” and
constantly promoted the establishment of “CM ePort” platform. Mawan Intelligent Port project and
the automatic loading and unloading project at large bulk and general cargo terminal in Zhanjiang
Port were well underway. Blockchain electronic invoices have been successfully promoted and
applied. The “5G intelligent port innovation laboratory” was established with concerted efforts of
leading enterprises such as China Mobile, Huawei and others. The Company officially established
the “Development and Research Center of CMPort”, which marked the completion of the industry
development platform empowered by technology. The industrial fund, which focuses on investments
in innovative development of ports, will be launched in the near term.
Outlook
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China Merchants Port Group Co., Ltd. Annual Report 2019
Looking forward into 2020, factors such as trade friction and geopolitical disputes, coupled with the
spread of COVID-19 epidemic, will cast uncertainties to global economic and trade prospects. The
momentum of global economic recovery remains weak and global economic growth will face the
pressure of slowdown in general. The developed economies will continue to experience a slowdown
of economic growth. Emerging economies are expected to see a rebound in economic growth in 2020,
despite the increasing uncertainties arising from the global pandemic. China’s economy will face
pressure in the short run due to the COVID-19 epidemic. Nonetheless, as the epidemic is being
effectively controlled and enterprises have been successively resuming operations and production in
an orderly manner, the impact on China’s economy will be limited in the mid-to-long term and
China’s economy is projected to maintain growth momentum at a reasonable pace in 2020. Driving
factors such as the globalization of the financial market, opening-up of the service sector, and the
upgrading of consumption will bring opportunities to both China and the global economy. At the
same time, industry consolidation will create opportunities, and digitization and technological
innovation will also bring opportunities for industrial development. The Company will firmly adhere
to the overall operation philosophy of “making progress amid stability”, consistently implement the
new development concepts and insist on the strategic principle of “leveraging on its long-term
strategy, tapping the current edges, driving through technology and embracing changes” and adhere
to the dual core driving force of “marketization + digitization”, while taking the initiatives to respond
actively and making breakthroughs on key missions, exploring potential in the process of reform and
innovation and launching new territories in a positive and aggressive manner so as to consistently
strengthen the organic momentum for corporate development with an aim to sustain quality growth
and strive to create better return for shareholders. In 2020, the Company will focus on the following
tasks:
Firstly, we will facilitate the building of domestic and overseas homebase ports. Regarding the
domestic West Shenzhen homebase port, we will step up our efforts in marketing and commerce. The
Company will actively expand ocean-going routes and stabilize near-ocean routes so as to maintain
healthy growth of domestic export business and strive to increase import volume. We will enhance
our marketing efforts in shipping companies and cargo owners by providing customized services and
products. The Company will improve the standard of its feeder services, promote paperless
waterborne customs transit and optimize the platform for the “Western Pearl River Delta Strategy”.
Also, the Company will establish an innovative intelligent corridor of Mawan Intelligent Port. CTOS
will be upgraded to enable the introduction of big data mechanism and cloud storage. We will also
optimize the channels in West Shenzhen Port Zone. To support the transformation plan of Haixing
Port, the Company will complete the delivery and acceptance of section 2 and 3 of the Public Channel
outside West Shenzhen Port Zone, realise regular night services of Tonggu Channel and expedite the
construction of phase II of the seaward channel of West Shenzhen Port Zone. With regard to the
overseas homebase ports in Sri Lanka, we will analyze customer values on an on-going basis and
improve the synergies between CICT and HIPG business, push forward work in relation to quality
and efficiency enhancement and explore potential competitiveness of production capacity of various
terminals, thereby improving the competitiveness of regional markets. It will also optimize the
incentive mechanism for innovation to encourage all staff to participate in innovation and expand the
channels for innovation. The Company will provide value-added port services to facilitate work in
relation to the induction of investment for the port’s logistics park. While promoting the localization
of projects, we will facilitate the development of various businesses based on the industrial layout
alongside the ports.
Secondly, we will optimize the port layout and improve the operating management and control
capability of overseas ports. The Company will continue to capitalize on the opportunities arising
from the “Belt and Road” initiative promoted by China and the international industrial transfers, at
the same time adapting to the trend of deploying mega-vessels and forming shipping alliances. The
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China Merchants Port Group Co., Ltd. Annual Report 2019
Company will grasp opportunities in port, logistics and related infrastructures investment for the on-
going enhancement of its global port network. The Company will enhance the development of
overseas system and cultivate teams of overseas talent with a focus on improving the operational
performance and management capability of overseas ports.
Thirdly, the Company will strengthen the technology-driven approach to create a port ecosystem for
technological innovation. Through the Development and Research Center of CMPort and with the
“empowerment of technology”, the Company will integrate the port ecosystem with technological
innovation to optimise, complement and improve its comprehensive port service model, thereby
supporting the development of the Company in the long run. We will extend our business to the
upstream and downstream of the industrial chain and value chain through innovation of business
model with a view to cultivating ports to support new business. We will also enhance the operating
effectiveness and efficiency of inventory assets through technological and management innovation,
improve the internal intelligent production and operation of ports and terminals via the “CM Chip”
platform and provide high-caliber customer services in ports and terminals via the “CM ePort”
platform, thus building a world-class information team through integrating CMPort’s information
resources and leveraging both internal and external efforts, so as to consolidate our information
capability.
Fourthly, we will promote comprehensive port development and implement the “Port-Park-City”
business model at home and abroad. Regarding the HIPG, the Company will explore and carry out
value-added port services, expand its oil and gas business, container business and maritime services,
as well as facilitate the work in relation to the introduction of investment and capital for the port’s
logistic park and the localization of the projects. Regarding the Djibouti comprehensive development
project, we will devote greater efforts in the cultivation of the market development team to enhance
market development. The Company will establish high-quality management system to vigorously
improve operational efficiency, deepen strategic coordination and innovate financing model so as to
establish a first-class free trade zone in Africa. Regarding Zhanjiang Port, we will build a bulk
commodity trading center and adopt new business models such as import of frozen goods and bonded
transfer of crude oil futures.
Fifthly, the Company will strive to develop an operation management system for sustainable value
creation. Through benchmarking against the leading enterprises in the world, the Company will
analyze the major issues and weaknesses in operation management and formulate targeted
benchmarking measures to gradually enhance various operation management indictors, thereby
promoting the establishment a world-class operation management system. The Company will
systematically push forward the “Project of Improving Quality and Efficiency” in full swing with a
focus on enhancing operational efficiency and deepening refined corporate management, so as to
facilitate the release of potential of the companies and thus realise high-quality corporate development.
The Company will also proactively promote the optimization of control measures by reinforcing the
headquarters’ strategic leadership to empower the subsidiaries in full swing and thus improve
operating efficiency, gain better understanding and strengthen collaboration, and, at the same time,
provided appropriate authorization for enterprises at different levels based on the principle of
maintaining risks under control to enhance their flexibility and hence increase their efficiency of
management and control.
Appreciation
Mr. Fu Gangfeng ceased to be the Chairman of the Board and the Executive Director of the Company
since 31 January 2020 and I was appointed by the Board of Directors of the Company as the Chairman
of the Board with effective on 3 February 2020. During his tenure, Mr. Fu Gangfeng has devoted
great efforts and commitment to the Company’s development and made significant contributions. On
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China Merchants Port Group Co., Ltd. Annual Report 2019
behalf of the Board, I would like to express the sincere gratitude to Mr. Fu Gangfeng and wish him
great success in the new position.
In 2019, facing with the complex environment and various risks and challenges, the Company
adhered to its strategic directives and took the initiatives to embrace changes, and thus recorded
positive results for various tasks and its operating results have been growing steadily. All of those
could not be accomplished without the dedication from all of our staff and the support from our
shareholders and investors, business partners and those in the society who have taken to heart the
Company’s interest. For this, I would like to extend my most sincere appreciation and deepest
gratitude.
Deng Renjie
Chairman
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China Merchants Port Group Co., Ltd. Annual Report 2019
Part I Important Notes, Table of Contents and Definitions
The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,
supervisors and senior management of China Merchants Port Group Co., Ltd. (hereinafter
referred to as the “Company”) hereby guarantee the factuality, accuracy and completeness of
the contents of this Report and its summary, and shall be jointly and severally liable for any
misrepresentations, misleading statements or material omissions therein.
Bai Jingtao, the Company’s legal representative, Wen Ling, the Company’s Chief Financial
Officer, and Sun Ligan, the person-in-charge of the accounting organ hereby guarantee that the
financial statements carried in this Report are factual, accurate and complete.
All the Company’s directors have attended the Board meeting for the review of this Report and
its summary.
Any forward-looking statements such as future plans or development strategies mentioned
herein shall not be considered as the Company’s promises to investors. And investors are
reminded to exercise caution when making investment decisions. Possible risks faced by the
Company and countermeasures have been explained in “Part IV Operating Performance
Discussion and Analysis” herein, which investors are kindly reminded to pay attention to.
Securities Times, Ta Kung Pao (HK) and www.cninfo.com.cn have been designated by the
Company for information disclosure. And all information about the Company shall be subject
to what’s disclosed on the aforesaid media. Investors are kindly reminded to pay attention to.
The Board has approved a final dividend plan as follows: based on 1,922,365,124 shares, a cash
dividend of RMB4.60 (tax inclusive) per 10 shares is to be distributed to shareholders, with no
bonus issue from either profit or capital reserves.
This Report and its summary have been prepared in both Chinese and English. Should there
be any discrepancies or misunderstandings between the two versions, the Chinese versions shall
prevail.
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China Merchants Port Group Co., Ltd. Annual Report 2019
Table of Contents
Chairman’s Statement ................................................................................................ 2
Part I Important Notes, Table of Contents and Definitions .................................... 7
Part II Corporate Information and Key Financial Information .......................... 11
Part III Business Summary ...................................................................................... 17
Part IV Operating Performance Discussion and Analysis .................................... 24
Part V Significant Events .......................................................................................... 51
Part VI Share Changes and Shareholder Information .......................................... 89
Part VII Preferred Shares......................................................................................... 99
Part VIII Convertible Corporate Bonds ............................................................... 100
Part IX Directors, Supervisors, Senior Management and Staff ......................... 101
Part X Corporate Governance ............................................................................... 113
Part XI Corporate Bonds........................................................................................ 128
Part XII Financial Statements (See attached) ...................................................... 129
Part XIII Documents Available for Reference ...................................................... 130
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China Merchants Port Group Co., Ltd. Annual Report 2019
Definitions
Term Definition
China Merchants Port Group Co., Ltd., formerly known as “Shenzhen Chiwan
The “Company”, “CMPort” or “we”
Wharf Holdings Limited”
Shenzhen Chiwan Wharf Holdings Limited (stock name: Chiwan Wharf, Chiwan
Chiwan Wharf
Wharf-B; stock code: 000022, 200022)
CMG China Merchants Group Co., Limited
China Merchants Group (H.K.) Limited, a CMG wholly-owned subsidiary in
CMG Hong Kong
Hong Kong
CMID China Merchants Investment Development Company Limited
CMPort Holdings China Merchants Port Holdings Company Limited (00144.HK)
Broadford Global Broadford Global Limited, a wholly-owned subsidiary of CMG Hong Kong
China Merchants Gangtong Development (Shenzhen) Co., Ltd., a Broadford
CMGD
Global majority-owned subsidiary in Shenzhen
CWH (H.K.) Chiwan Wharf Holdings (Hong Kong) Limited
Sinotrans Guangdong Sinotrans Guangdong Co., Ltd.
Zhanjiang Infrastructure Investment Zhanjiang Infrastructure Construction Investment Group Co., Ltd.
CND Group China Nanshan Development (Group) Inc.
CMB China Merchants Bank Co., Ltd.
Lac Assal Lac Assal Investment Holding Company Limited
CMSK China Merchants Shekou Industrial Zone Holdings Co., Ltd.
Malai Storage Shenzhen Malai Storage Co., Ltd.
KFEL Keen Field Enterprises Limited
CM Qianhai Industrial Shenzhen China Merchants Qianhai Industrial Development Co., Ltd.
CMI China Merchants Investment Limited
SZPL Shenzhen Urban Planning and Land Resources Committee
Antongjie Antongjie Terminal Services (Shenzhen) Co., Ltd.
Ansujie Ansujie Terminal Services (Shenzhen) Co., Ltd.
CM Chidi Shenzhen China Merchants Qianhai Chidi Industrial Co., Ltd.
Qianhai Investment Holdings Shenzhen Qianhai Development Investment Holdings Co., Ltd.
Qianhai Hongyu Shenzhen Qianhai Hongyu Industrial Investment Co., Ltd.
Shekou Asset Management Shenzhen China Merchants Shekou Asset Management Co., Ltd.
Qianhai Free Trade Shenzhen Qianhai Free Trade Investment Development Co., Ltd.
Cheer Signal Cheer Signal Investment Limited
SIPG Shanghai International Port (Group) Co., Ltd.
Zhanjiang Port Zhanjiang Port Group Co., Ltd.
Xiamen Port Zhangzhou China Merchants Xiamen Port Affairs Co., Ltd.
Chiwan Container Terminal Co., Ltd., a majority-owned subsidiary of the
CCT
Company
Kumport Kumport Liman Hizmetleri ve Lojistik Sanayi ve Ticaret Anonim irketi
Port of Newcastle Port of Newcastle
TCP TCP Participaes S.A
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China Merchants Port Group Co., Ltd. Annual Report 2019
CICT Colombo International Container Terminals Ltd.
PDSA Port de Djibouti S.A.
HIPG Hambantota International Port Group
Haixing Harbor Shenzhen Haixing Harbor Development Co., Ltd.
Dalian Port Dalian Port (PDA) Company Limited
Chiwan Wharf’s purchase of 1,313,541,560 ordinary CMPort Holdings shares
The “Assets Purchase via Share Offering”
from CMID via share offering
The transaction plan includes three parts: (1) Chiwan Wharf intends to issue A-
shares to CMID for the acquisition of the 1,313,541,560 CMPort Holdings
ordinary shares that CMID holds (approximately 39.51% of CMPort Holdings’
outstanding ordinary shares). (2) CMG Hong Kong and Chiwan Wharf signs an
Acting in Concert Agreement. According to the agreement, upon the completion
of the assets purchase via share offering, CMG Hong Kong shall vote according
The “Transaction” or “Restructuring” to Chiwan Wharf’s opinion unconditionally on matters to be voted on at CMPort
Holdings’ general meetings in regard with the voting right of the 753,793,751
CMPort Holdings ordinary shares (approximately 22.67% of CMPort Holdings’
outstanding ordinary shares) that CMG Hong Kong has been entrusted to
exercise. (3) Chiwan Wharf intends to raise matching funds of no more than
RMB4 billion from no more than 10 certain investors via an offering of no more
than 128,952,746 A-shares through enquiry.
State-Owned Assets Supervision and Administration Commission of the State
SASAC of the State Council
Council
CSRC China Securities Regulation Commission
Shenzhen CSRC Shenzhen Bureau of China Securities Regulatory Commission
SZSE Shenzhen Stock Exchange
The “Company Law” The Company Law of the People’s Republic of China
The “Securities Law” The Securities Law of the People’s Republic of China
The “Articles of Association” The Articles of Association of China Merchants Port Group Co., Ltd.
The “Stock Listing Rules” The Stock Listing Rules of the Shenzhen Stock Exchange
The cninfo website www.cninfo.com.cn
RTG Rubber Tyre Gantry
CM ePort The wharf e-commerce platform, i.e. the unified customer service platform
EDI Electronic Data Interchange
TEU Twenty Foot Equivalent Unit
Expressed in the Chinese currency of Renminbi
RMB
Expressed in tens of thousands of Renminbi
RMB’0,000
Expressed in hundreds of millions of Renminbi
RMB’00,000,000
(unless otherwise specified)
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China Merchants Port Group Co., Ltd. Annual Report 2019
Part II Corporate Information and Key Financial Information
I Corporate Information
CM Port Group/
Stock name Stock code 001872/201872
CM Port Group B
Stock exchange for stock listing Shenzhen Stock Exchange
Company name in Chinese 招商局港口集团股份有限公司
Abbr. 招商港口
Company name in English (if any) China Merchants Port Group Co., Ltd.
Abbr. (if any) CMPort
Legal representative Bai Jingtao
23-25/F, China Merchants Port Plaza, 1 Gongye 3rd Road, Zhaoshang
Registered address
Street, Nanshan, Shenzhen, PRC
Zip code 518067
23-25/F, China Merchants Port Plaza, 1 Gongye 3rd Road, Zhaoshang
Office address
Street, Nanshan, Shenzhen, PRC
Zip code 518067
Company website http://www.cmp1872.com
Email address Cmpir@cmhk.com
II Contact Information
Board Secretary Securities Representative
Name Huang Chuanjing Hu Jingjing
24/F, China Merchants Port Plaza, 1 24/F, China Merchants Port Plaza, 1
Address Gongye 3rd Road, Zhaoshang Street, Gongye 3rd Road, Zhaoshang Street,
Nanshan, Shenzhen, PRC Nanshan, Shenzhen, PRC
Tel. +86 755 26828888 +86 755 26828888
Fax +86 755 26886666 +86 755 26886666
Email address Cmpir@cmhk.com Cmpir@cmhk.com
III Media for Information Disclosure and Place where this Report Is Lodged
Newspapers designated by the Company for information
Securities Times, Ta Kung Pao
disclosure
Website designated by CSRC for publication of this Report http://www.cninfo.com.cn
Place where this Report is lodged Board Office
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China Merchants Port Group Co., Ltd. Annual Report 2019
IV Change to Company Registered Information
Unified social credit code 91440300618832968J
On 14 December 2018, the Company changed its business scope registered with the
industrial and commercial administration. The new business scope includes:
construction, management and operation of ports and wharves; bonded warehousing
of various goods for import and export; development, construction and operation of
supporting parks in ports; loading, unloading, transshipment, warehousing and
transportation of international and domestic goods and processing of goods; devanning
and LCL operations, cleaning, repair, manufacturing and leasing of containers;
international freight forwarding; vehicle and ship leasing; the provision of ship and
port services including the provision of fuels, supplies and daily necessities for ships;
Change to principal
activity of the Company ship towing (no operation using foreign ships); leasing and repair services of port
since going public (if any) facilities, equipment and machinery; import and export of various goods and
technologies on a self-operation or agency basis, excluding the goods and technologies
restricted or forbidden for import and export by the state; port logistics and port
information technology consulting services; technical development and services in
respect of modern logistics information systems; supply chain management and related
services; design of logistics plans; engineering project management; development,
research and consulting services in respect of port engineering technologies. (In
respect of any operations that require approval according to law, the approval must be
obtained before operation).
1. On 8 June 2018, as the ownership of 209,687,067 Chiwan Wharf shares formerly
held by CND Group and 161,190,933 Chiwan Wharf shares formerly held by Malai
Storage was officially transferred to CMGD, CMGD, holding 57.52% of the
Company’s outstanding share capital, became the controlling shareholder of the
Company. Meanwhile, CMG remains the actual controller of the Company.
Every change of
controlling shareholder 2. On 26 December 2018, the Company issued RMB-denominated ordinary shares (A-
since incorporation (if shares) at RMB21.46/share to CMID for the acquisition of the 1,313,541,560 CMPort
any)
Holdings ordinary shares that it held. Upon the Acquisition, the Company’s total share
capital has become 1,793,412,378 shares. Meanwhile, as Broadford Global controls
an 87.81% aggregated voting right in the Company (direct interests and interests
through CMID and CMGD), it is the direct controlling shareholder of the Company.
Meanwhile, CMG remains the actual controller of the Company.
V Other Information
The independent audit firm hired by the Company:
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China Merchants Port Group Co., Ltd. Annual Report 2019
Name Deloitte Touche Tohmatsu Certified Public Accountants LLP
Office address 30/F, 222 Yan An Road East, Huangpu District, Shanghai, P.R.C.
Accountants writing
Li Weihua and Zhang Min
signatures
The independent sponsor hired by the Company to exercise constant supervision over the Company
in the Reporting Period:
□ Applicable √ Not applicable
The independent financial advisor hired by the Company to exercise constant supervision over the
Company in the Reporting Period:
Name Office address Participant representative Period of supervision
19/F, CITIC Securities
Tower, 8 Zhongxin 3rd Chen Jianjian, Yang Jun and From 26 December 2018 to
CITIC Securities Co., Ltd.
Road, Futian District, Huang Zihua 31 December 2019
Shenzhen, China
VI Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
2019-over-
2019 2018 2017
2018 change
Operating revenue (RMB) 12,123,829,423.74 9,703,394,622.58 24.94% 7,544,635,284.96
Net profit attributable to the
listed company’s 2,898,192,168.84 1,090,418,910.77 165.79% 2,365,214,907.45
shareholders (RMB)
Net profit attributable to the
listed company’s
shareholders before 1,037,766,875.23 516,155,803.81 101.06% 498,373,377.67
exceptional gains and losses
(RMB)
Net cash generated
from/used in operating 5,501,873,415.94 4,288,575,424.84 28.29% 3,475,037,036.28
activities (RMB)
Basic earnings per share
1.59 0.61 160.66% 1.32
(RMB/share)
Diluted earnings per share
1.59 0.61 160.66% 1.32
(RMB/share)
Weighted average return on
8.71% 3.88% 4.83% 10.24%
equity (%)
Change of 31
December 2019 over
31 December 2019 31 December 2018 31 December 2017
31 December 2018
(%)
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China Merchants Port Group Co., Ltd. Annual Report 2019
Total assets (RMB) 156,696,917,845.87 128,018,084,415.68 22.40% 109,135,164,260.01
Equity attributable to the
listed company’s 35,972,804,419.42 30,760,475,412.93 16.94% 28,474,748,165.25
shareholders (RMB)
The total share capital at the end of the last trading session before the disclosure of this Report:
Total share capital at the end of the last trading session
1,922,365,124
before the disclosure of this Report (share)
Fully diluted earnings per share based on the latest total share capital above:
Fully diluted earnings per share based on the latest total
1.5076
share capital above (RMB/share)
VII Accounting Data Differences under China’s Accounting Standards for Business
Enterprises (CAS) and International Financial Reporting Standards (IFRS) and Foreign
Accounting Standards
1. Net Profit and Equity under CAS and IFRS
No difference for the Reporting Period.
2. Net Profit and Equity under CAS and Foreign Accounting Standards
No difference for the Reporting Period.
3. Reasons for Accounting Data Differences Above: Not applicable
VIII Key Financial Information by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 2,702,894,522.99 3,131,458,898.34 3,178,406,039.64 3,111,069,962.77
Net profit attributable to the
814,944,249.12 1,484,237,081.49 171,091,424.23 427,919,414.00
listed company’s shareholders
Net profit attributable to the
listed company’s shareholders
262,409,245.18 306,996,084.91 155,647,010.17 312,714,534.97
before exceptional gains and
losses
Net cash generated from/used
1,148,963,121.64 1,407,898,793.88 1,399,691,070.83 1,545,320,429.59
in operating activities
Indicate by tick mark whether any of the quarterly financial data in the table above or their
summations differs materially from what have been disclosed in the Company’s quarterly or interim
reports.
□ Yes √ No
14
China Merchants Port Group Co., Ltd. Annual Report 2019
IX Exceptional Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Item 2019 2018 2017 Note
Gain or loss on disposal of non-current
assets (inclusive of impairment 4,794,562,782.79 6,512,480.64 324,387.87 -
allowance write-offs)
Government subsidies charged to
current profit or loss (exclusive of
government subsidies given in the
Company’s ordinary course of 162,587,042.38 14,050,544.16 1,843,431.75 -
business at fixed quotas or amounts as
per the government’s uniform
standards)
Capital occupation charges on non-
financial enterprises that are charged to 19,571,040.36 - - -
current profit or loss
Current profit or loss on subsidiaries
obtained in business combinations
involving enterprises under common - 2,685,592,888.44 4,928,289,403.49 -
control from the period-beginning to
combination dates, net
Gain or loss on fair-value changes in
held-for-trading and derivative
financial assets and liabilities &
income from disposal of held-for-
trading and derivative financial assets
66,075,363.30 - - -
and liabilities and other investments in
debt obligations (exclusive of the
effective portion of hedges that arise in
the Company’s ordinary course of
business)
Reversed portions of impairment
allowances for accounts receivable and
- - 4,238,993.78 -
contract assets which are tested
individually for impairment
Non-operating income and expense
482,165,418.73 -3,767,817.73 1,002,589.66
other than the above
As the Company
gained control
of Zhanjiang
Port in the year
under review,
the long-term
Other gains and losses that meet the equity
732,644,357.06 -121,311,211.59 -
definition of exceptional gain/loss investment in
Zhanjiang Port
formerly
measured under
the equity
method was
recognized in
15
China Merchants Port Group Co., Ltd. Annual Report 2019
return on
investment at
the fair value
Less: Income tax effects 1,504,203,995.96 3,010,149.89 802,116.53 -
Non-controlling interests effects
2,892,976,715.05 2,003,803,627.07 3,068,055,160.24 -
(net of tax)
Total 1,860,425,293.61 574,263,106.96 1,866,841,529.78 --
For the Reporting Period, the Company does not reclassify as recurrent any exceptional gain/loss item
defined or listed in the Explanatory Announcement No. 1 on Information Disclosure for Companies
Offering Their Securities to the Public—Exceptional Gain/Loss Items.
16
China Merchants Port Group Co., Ltd. Annual Report 2019
Part III Business Summary
I Principal Activity of the Company in the Reporting Period
1. Main business scope and business models
The Company is principally engaged in the handling, warehousing and transportation of containers
and bulk cargoes, as well as the provision of other ancillary services. It principally operates 24
container berths and 15 bulk cargo berths in the ports in West Shenzhen, 9 container berths, 2 bulk
cargo berths, 10 general cargo berths and 1 berth dedicated to handling coal in Shantou Port, 2
container berths and 33 bulk cargo berths in Zhanjiang Port, 4 multi-purpose berths in Shunde Port,
2 container berths and 6 bulk cargo berths in Zhangzhou Port, 4 container berths in CICT, Sri Lanka,
4 multi-purpose berths, 2 oil berths and 4 container berths in HIPG, 3 container berths in LCT, Togo,
and 4 container berths in TCP, Brazil. Moreover, the Company invests in container hubs in Shanghai
and Ningbo and expands its layout to ports in South Asia, Africa, Europe, South America and Oceania.
The major business segments of China Merchants Port Group Co., Ltd. are as follows:
Business Segments Applications
Container handling and warehousing: the Company provides ship berthing, loading
and unloading services to ship companies, offers container storage service to ship
companies and cargo owners and provides overhead box services to tractor
Cargo handling and companies. The Company also engages in the businesses of division or merger of
warehousing cargoes in containers, container leasing and container maintenance;
Bulk cargo handling and warehousing: the Company is engaged in bulk cargo
handling and transportation in port zones, as well as storage services in yards. The
major types of cargoes handled include food, steel, woods and sandstones.
The ancillary port-related services of the Company mainly include tugboat berthing
Ancillary port-
assistance and barge services at the arrival of ships to the ports, tallying in the course
related services
of cargo handling, and supply of shore power and freshwater for vessels.
The Company provides various services for clients (including logistics companies,
trading companies or cargo owners), for example, warehouse/yard leasing, loading
Bonded logistics
and unloading in warehouses/yards, customs clearance and division or merger of
operations
cargoes at terminals. It also provides documentation services for tractors arriving or
leaving the bonded logistics parks.
2. Development stage and cyclical characteristic of the industry in which the Company operates
and its industry position during the reporting period
The port industry is a crucial cornerstone industry for national economic and social progress, and is
closely linked to global economic and trade development. In 2019, the global economy was on a
growing trend in general, but the growth momentum was unstable. The Company faced challenges
due to many factors including the trade frictions in various countries aggravated by the protectionism
and unilateralism, which impact the international trade order; the slowdown in growth of global
container shipping and the downshift of domestic port business continuously intensify market
competition; the increasing severe competition for investment in emerging markets overseas,
17
China Merchants Port Group Co., Ltd. Annual Report 2019
technology advancement in the port and shipping industry and emerging of new business models. .
Affected by the sluggish economic and trading conditions, the demand in the global container
shipping market was volatile in 2019. As forecasted in the Clarkson Report, despite the overall
weakening demand in the container shipping market in 2019, the competition further intensified. In
order to secure better competitive advantages, various shipping companies continued to carry forward
fleet expansion, hence market capacity continued to grow steadily. At the same time, due to the impact
of ship reforms brought by the International Maritime Organization's 2020 Sulphur Limitation Order,
the scale of idle capacity in 2019 increased significantly year-on-year.
The growth rate of global port container throughput declined in 2019. According to data from
Alphaliner, the global container port throughput amounted to 837 million TEUs in 2019, up by 2.5%
year-on-year. In terms of market share by container throughput, the top 3 regions in order are China
(including Hong Kong), Southeast Asia and North Europe, and the top 3 fastest growing regions in
order are South Europe, South Asia and Southeast Asia. Driven by the global economy and trade, the
global port business declined in general in 2019. The growth rate of global port container throughput
reached 2.5% in 2019, lower than that of 5.2% in 2018. According to the information published by
the Ministry of Transport of the People’s Republic of China, the accumulated port container
throughput in China amounted to 261 million TEUs in 2019, representing a year-on-year increase of
4.4%.
The Company is the largest global leading port developer, investor and operator in the PRC, with a
comprehensive port network at major hub locations along coastal China. It has also successfully
established presence in South Asia, Africa, Europe, Mediterranean, Oceania and South America. By
its proactive, sound and efficient operating style, the Company capitalises on its global port portfolio,
professional management experience, the self-developed state-of-the-art terminal operation system
and integrated logistics management platform for exports and imports, thereby providing its
customers with timely and efficient port and maritime logistics services along with comprehensive
and modern integrated logistics solutions. In addition, the Company also invests in bonded logistics
operation and launches integrated park development business to facilitate the transformation and
upgrade of port industry, develop port-related industries and increase industry efficiencies, which
allows it to create greater value through the synergies of the existing terminal network.
II Significant Changes in Major Assets
1. Significant Changes in Major Assets
Major assets Main reason for significant changes
Equity assets 1. On 2 January 2019, the Proposal on the Signing of the Agreement on the Transfer of Shares
in Zhanjiang Port (Group) Co., Ltd. between the Company and Sinotrans Guangdong was
approved at the 1st Extraordinary Meeting of the 9th Board of Directors of the Company in
2019. By the signing of the Agreement on the same day, the Company was given 201,034,549
ordinary shares in Zhanjiang Port by Sinotrans Guangdong, which accounted for 5% of the
total issued shares of Zhanjiang Port as at the date of signing the Agreement, for a
consideration of RMB375,334,490. The announcement (No. 2019-002) on the external
investment and the related-party transaction has been disclosed on www.cninfo.com.cn on 3
18
China Merchants Port Group Co., Ltd. Annual Report 2019
January 2019.
2. The Proposal on a Capital Increase by a Wholly-Owned Subsidiary to Zhanjiang Port
(Group) Co., Ltd. was approved at the 2nd Extraordinary Meeting of the 9th Board of
Directors held by the Company on 8 January 2019 and the 1st Extraordinary General Meeting
of 2019 held on 24 January 2019 respectively. The wholly-owned subsidiary of the Company
CWH (H.K.) signed in Zhanjiang on 8 January 2019 the Agreement on a Capital Increase to
Zhanjiang Port (Group) Co., Ltd. with Zhanjiang Infrastructure Investment and Zhanjiang
Port (hereinafter referred to as the “Capital Increase Agreement”). According to the provisions
of the Capital Increase Agreement, Zhanjiang Port issued 1,853,518,190 additional ordinary
shares at the price of RMB1.867 per share or the equivalent in the foreign currency (based on
the exchange rate at the time of payment) to increase its registered capital to
RMB5,874,209,145. CWH (H.K.) subscribed for 1,606,855,919 such ordinary shares,
accounting for 27.3544% of the issued shares of Zhanjiang Port as at the date of issuance of
such shares, at a total price of RMB3,000,000,000.77 or the equivalent in the foreign currency
(based on the exchange rate at the time of payment) (hereinafter referred to as "the
Transaction"); and Zhanjiang Infrastructure Investment subscribed for 246,662,271 shares,
accounting for 4.1991% of the issued shares of Zhanjiang Port as at the date of issuance of
such shares, at a total price of RMB460,518,459.96. As of 3 February 2019, the registration
and filing procedures of the Transaction for business change was finished, and the capital
increase to Zhanjiang Port by the Company's wholly-owned subsidiary CWH (H.K.) was
completed. Upon the completion of the Transaction, the Company’s interest in Zhanjiang Port
has increased to 58.3549%. Therefore, Zhanjiang Port has since been included in the scope of
the Company’s consolidated financial statements. For details of the Transaction, please refer
to the Announcement No. 2019-005 on an External Investment and the Related-Party
Transaction by a Wholly-Owned Subsidiary disclosed by the Company on
www.cninfo.com.cn dated 9 January 2019 and the Announcement No. 2019-018 on the
External Investment and The Related-Party Transaction disclosed on www.cninfo.com.cn on
12 February 2019.
3. On 24 December 2018, the Company signed the Agreement on Land Readjustment with
Shenzhen Urban Planning and Land Resources Committee (“SZPL”), The Authority of
Qianhai Shenzhen-Hongkong Modern Service Industry Cooperation Zone of Shenzhen
(“SZQH”) and CMG, and CMG, Shenzhen Qianhai Development Investment Holdings Co.,
Ltd. (“Qianhai Investment Holdings”), and CM Qianhai Industrial and other relevant parties
signed the Joint Venture Cooperation Agreement, to clarify the implementation plans for land
readjustment and the joint venture cooperation in Qianhai. To realize the implementation
plans of land readjustment and the joint venture cooperation in Qianhai, SZQH recovered all
the land use rights under the original plan of 19 land-holding companies within the scope and
in accordance with the Agreement on Land Readjustment, and evaluated the land
compensation amount of about RMB43.21 billion by calculation (the base date of evaluation
is 1 January 2015); and then SZQH replaced the land-use rights under the new plan whose
value equals the compensation value of the land mentioned above with CM Chidi (with 14%
of shares held by Ansujie and Antongjie) (the base date of evaluation is 1 January 2015,
hereinafter referred to as the “land for replacement with China Merchants”); SZQH invested
part of the land invested by Qianhai into Qianhai Investment Holdings to become one of its
shareholders, and then the land use right were invested into Qianhai Hongyu by Qianhai
Investment Holdings, who became a shareholder of Qianhai Hongyu; according to the Capital
Increase Agreement signed among CM Qianhai Industrial, Qianhai Investment Holdings and
Qianhai Free Trade, Qianhai Free Trade would acquire, by way of capital increase, the 100%
equity interests of CM Chidi and the 100% equity interests of Qianhai Hongyu respectively
held by CM Qianhai Industrial and Qianhai Investment Holdings. Meanwhile, CM Qianhai
Industrial would carry out a capital increase (partially in the form of cash) to Qianhai Free
Trade. In order to harmonize the economic interest relationships between CM Chidi and the
19 land-holding companies due to the acquisition of land for investment replacement, CM
Chidi signed on 1 January 2019 the Agreement on Confirmation of Compensation for
Creditor’s Rights with the 19 land-holding companies to determine the amount and proportion
of land compensation for creditor’s rights of the 19 land-holding companies. Ansujie and
19
China Merchants Port Group Co., Ltd. Annual Report 2019
Antongjie will receive about RMB5.693 billion from CM Chidi as compensation for the land
use rights of about 471,800 square meters, accounting for 13.1758% of the total amount of
land compensation for creditor’s rights. In order to keep the proportion of land compensation
for creditor's rights in line with the proportion of 14% equity held indirectly by CMPort
Holdings, Antongjie, Shekou Asset Management and CM Chidi signed on 11 January 2019
the Agreement on Transfer of Creditor’s Rights, to stipulate that Antongjie will purchase
0.8242% of land compensation for creditor’s rights from Shekou Asset Management, with an
amount of creditor's rights up to about RMB356 million. In addition, 55% of the total area of
T102-0166 and T102-0167 plots owned by Ansujie and Antongjie and the corresponding
shorelines (about 531,300 square meters of land area) are replaced to Phase II of Dachanwan
Port Area according to the principle of equal area (including corresponding shorelines).
Ansujie and Antongjie no longer enjoy the compensation of land value under the new and
original planning conditions for the above-mentioned land area. The specific replacement
scheme shall be determined by SZPL, CMG, Antongjie and Ansujie after further consultation
with relevant departments. In order to pay off the above-mentioned land compensation debts,
CM Qianhai Industrial signed on 11 January 2019 the Agreement on Capital Increase to CM
Qianhai Industrial with 19 land-holding companies, to stipulate that the former 19 land-
holding companies will increase their investment to CM Qianhai Industrial by about
RMB43.21 billion in cash, of which about RMB6.049 billion would be raised by Ansujie and
Antongjie. With these increased capital funds, CM Qianhai Industrial will increase its
investment in cash to its wholly-owned subsidiary CM Chidi, who will pay off the land
compensation debts to the 19 land-holding companies with such increased capital funds. In
addition, in order to raise funds for cooperative cash consideration, the 19 land-holding
companies will increase their investment to CM Qianhai Industrial by no more than RMB15
billion with the same proportion of cash, of which, the incremental funds of Ansujie and
Antongjie will not exceed RMB2.1 billion. CM Qianhai Industrial will increase investment
to its wholly-owned subsidiary CM Chidi with such increased capital funds to pay for the cash
consideration for the joint venture (including but not limited to advance payment and sincerity
deposit, etc.), or pay the joint venture cash consideration directly to Qianhai Free Trade
(including but not limited to advance payment and sincerity deposit, etc.). The cash
consideration for the joint venture shall be determined by the evaluation agency entrusted by
CM Qianhai Industrial and Qianhai Investment Holdings, who will evaluate the 100% equity
of CM Chidi and Qianhai Hongyu in accordance with the Joint Venture Cooperation
Agreement. Among the 19 land-holding companies, CMSK and its majority-owned
subsidiary, Shekou Asset Management and the Company are all under the same actual
controller, CMG. As per the Stock Listing Rules, the deal mentioned in the Proposal on a
Wholly-Owned Subsidiary of the Company’s Majority-Owned Subsidiary Participating in
a Land Readjustment in Qianhai constitutes a related-party transaction, but not a major asset
restructuring as defined in the Methods for the Administration of Major Asset Restructurings
by Listed Companies. The Proposal was approved at the 3rd Extraordinary Meeting of the
Company’s 9th Board of Directors of 2019 on 11 January 2019 and then at the 2nd
Extraordinary General Meeting of the Company of 2019 on 25 February 2019. For details,
see Announcements No. 2019-007 and 2019-008 as well as 2019-020 disclosed by the
Company on 12 January and 26 February 2019 respectively.
4. On 22 January 2019, the Company's majority-owned subsidiary CMPort Holdings signed
with CMI, Cheer Signal Investment Limited and Lac Assal the Supplementary Agreement II
on Shareholder Agreement of Lac Assal (hereinafter referred to as the “Capital Increase
Agreement”) to stipulate that the ports of CMPort Holdings, CMI and Cheer Signal
Investment Limited shall increase the capital of Lac Assal by means of cash contribution
according to the proportion of their shareholder’s equity. The total amount of capital to
increase is USD30,000,000, including USD12,000,000 to be increased by CMPort Holdings,
USD12,000,000 to be increased by CMI and USD6,000,000 to be increased by Cheer Signal
Investment Limited (hereinafter referred to as the “capital increase”). After the capital
increase, the registered capital of Lac Assal will increase to USD60,060,000. The proportion
of shares of CMPort Holdings, CMI and Cheer Signal Investment Limited will remained
unchanged as 40%, 40% and 20% respectively. The Company, CMI and Cheer Signal are all
under the same actual controller, CMG. Therefore, as per the Stock Listing Rules and other
20
China Merchants Port Group Co., Ltd. Annual Report 2019
regulations, this deal constitutes a related-party transaction. The Proposal on Joint Capital
Increase by Majority-owned Subsidiary and Related Parties to Lac Assal was deliberated and
approved by the 4th Extraordinary Meeting of the 9th Board of Directors held by the Company
on 22 January 2019. For details, see Announcements No. 2019-011 and 2019-012 disclosed
by the Company on 23 January 2019.
5. On 29 April 2019, the Company's majority-owned subsidiary CMPort Holdings signed with
CMI, Cheer Signal Investment Limited and Lac Assal the Supplementary Agreement III on
Shareholder Agreement of Lac Assal (hereinafter referred to as the “Capital Increase
Agreement”) to stipulate that the ports of CMPort Holdings, CMI and Cheer Signal
Investment Limited shall increase the capital of Lac Assal by means of cash contribution
according to the proportion of their shareholder’s equity. The total amount of capital to
increase is USD84,750,000, including USD33,900,000 to be increased by CMPort Holdings,
USD33,900,000 to be increased by CMI and USD16,950,000 to be increased by Cheer Signal
Investment Limited (hereinafter referred to as the “capital increase”). After the capital
increase, the registered capital of Lac Assal will increase to USD144,810,000. The proportion
of shares of CMPort Holdings, CMI and Cheer Signal Investment Limited will remained
unchanged as 40%, 40% and 20% respectively. The Proposal on Joint Capital Increase by
Majority-owned Subsidiary and Related Parties to Lac Assal was deliberated and approved
by the 6th Extraordinary Meeting of the 9th Board of Directors held by the Company on 26
April 2019. For details, see Announcements No. 2019-041 and 2019-043 disclosed by the
Company on 30 April 2019.
The net value of construction in progress of the Company was RMB6.318 billion as at 31
December 2019, up by RMB0.819 billion from the year-beginning amount of RMB5.499
billion. The increment was primarily because the new inclusion of Zhanjiang Port in the
Construction in
consolidation scope of the Current Period contributed an increase of RMB1.536 billion; Haixing
progress
Harbor an increase of RMB0.642 billion, Shantou Port an increase of RMB0.15 billion, TCP a
decrease of RMB0.978 billion; Xiamen Port a decrease of RMB0.727 billion; and other
consolidated subsidiaries saw minor ups and downs.
2. Major Assets Overseas
Control Return As % of the Material
Asset value
measures to generated Company’s impairment
Asset Source (RMB’0,00 Location Operations
protect (RMB’0,00 net asset risk
0)
asset safety 0) value (yes/no)
Appointing
Port director,
Acquired
Equity 13,073,595. investment supervisor
via share Hong Kong 742,148.50 86.13% No
assets 46 and and senior
offering
operations manageme
nt
Other
N/A
information
III. Core competitiveness analysis
1. Active implementation of the key “Belt and Road” initiative to facilitate the development of
Guangdong-Hong Kong-Macau Greater Bay Area leveraging its global port network
As an important carrier for domestic and overseas port investment and operation of CMG, the
Company seized the significant policy opportunities of the key “Belt and Road” initiative and
21
China Merchants Port Group Co., Ltd. Annual Report 2019
building the Guangdong-Hong Kong-Macau Greater Bay Area to actively build a global port network,
make investment in the allocation of global resources and strivingly build a mutually-beneficial port
ecosystem. In recent years, through mergers, acquisitions and restructuring, along with the renovation
of old ports and building of new ports, the Company has been consistently improving its modern port
chain with global coverage, enhancing value of the port industry and pushing forward balanced
regional development. The Company actively responded to the “Belt and Road” initiative and
provided a comprehensive logistic platform for the development of Guangdong-Hong Kong-Macau
Greater Bay Area.
After years of overseas development, CMPort has developed the port industries across Southeast Asia,
South Asia, Africa, Europe, Oceania, etc. Among which, its port network spreads over 26 countries.
Adhering to the principle of “extensive consultation, joint development and shared benefits”, CMPort
will form a community of shared future with stakeholders from countries and regions along the “Belt
and Road” initiative to explore development opportunities with concerted efforts.
The Company aims at increasing its global presence with shipping routes across five continents. As
both the shipping and port sectors gradually shifted to forming alliances, the Company actively
integrated its domestic and overseas port assets and capitalised on its relatively complete global port
network to provide customers with comprehensive port logistics service solutions, which created its
unique competitive strength. At the same time, the diversified investment and operation of port assets
have also effectively enhanced its capabilities to resist risks of industry fluctuations and trade fictions.
2. Sound shareholder background
CMG is a key state-owned enterprise under the direct administration of the PRC central government.
Headquartered in Hong Kong, it is an integrated enterprise with diversified businesses and one of the
four major Chinese enterprises in Hong Kong. Currently, CMG is mainly engaged in three core
industries namely transportation, finance and real estate, while focusing on four key sectors including
infrastructure and equipment manufacturing, logistics and shipping, integrated finance and
comprehensive development of cities and parks. CMG has been rated as a Grade A enterprise in the
Operating Results Assessment of the State-owned Assets Supervision and Administration
Commission of the State Council for 15 consecutive years and is a central state-owned enterprise that
owns two Fortune 500 companies.
Being a crucial player and facilitator of the national “Belt and Road” initiative, CMG has accelerated
its international development and preliminarily formed a relatively complete network of overseas port,
logistics, finance and park business. The sound shareholder background and ample domestic and
overseas resources of CMG have provided strong support to CMPort for creating a global port
cooperation platform with international vision and global expansion capabilities and ultimately
becoming a world-class comprehensive port service provider.
3. Innovative business development model
Taking port business as the core and leveraging the synergy of different port zones as well as city-
industry integration, the Company is actively exploring and facilitating the comprehensive port
development model of “Port-Park-City”. Based on the traditional loading and unloading and ancillary
22
China Merchants Port Group Co., Ltd. Annual Report 2019
services for ports, the Company further expanded various value-added port services to the ports and
port cities in which it operates. By gathering talents, information, funds and commodities, the
Company provided economic support for urban development, continued to innovate industry
development model and expand regional coverage and influence, thereby driving urban upgrade and
development.
Currently, the Company has participated in promoting the regional comprehensive development and
construction with the port-oriented approach in various overseas regions, and has achieved phased
results. At the same time, the innovative business development model introduces CMPort elements
to urban development and helps foster new profit growth points for the Company.
4. Extensive experience in professional port management with sound and efficient operating
style
By adhering to the proactive, sound and efficient operating style and capitalising on its global port
asset and resource portfolio, the Company is committed to provide customers with timely and
efficient port and maritime logistics services as well as professional and first-class solutions, and has
become preferred partners for customers and an important gateway for the country’s foreign trade,
thereby making due contributions to the country’s foreign trade development. At the same time, the
Company also made an extensive investment in bonded logistics business to expand its port value
chain and enhance industrial value. Taking advantages of the synergies of its existing terminal
network, the Company created values for both its customers and shareholders.
The Company has earned itself good reputation across the industry by leveraging the professional
management experience accumulated for years, its self-developed global leading terminal operating
system and integrated logistics management platform for import and export, its extensive maritime
logistics support system with all-rounded modern integrated logistics solutions and its high-quality
engineering management and reliable service offerings.
23
China Merchants Port Group Co., Ltd. Annual Report 2019
Part IV Operating Performance Discussion and Analysis
I Overview
1. External Environment Analysis
According to the “World Economic Outlook” update report published by the International Monetary
Fund (IMF) in January 2020, the global economic growth rate of 2019 was expected to be 2.9%,
down by 0.7 percentage point year-on-year, among which, developed economies grew by 1.7% while
emerging markets and developing economies grew by 3.7%, down by 0.5 percentage point and 0.8
percentage point as compared to those of 2018, respectively. Total global trade volume (including
goods and services) grew by 1.0%, representing a decrease of 2.7 percentage points as compared to
that of 2018.
Despite the complex and challenging internal and external environment, the Chinese economy
maintained steady growth in 2019. The annual GDP growth was 6.1%, representing a decrease of 0.5
percentage point over the previous year. The long-term positive trend of China’s economy remained
unchanged. Facing the new normal of the economy, China continued to deepen the supply-side
structural reform and strengthen the countercyclical adjustments with a view to achieve high-quality
economic development. In 2019, the economic development witnessed a number of positive changes
with continuous enhancement and upgrade of economic structure, substantial outcomes achieved in
terms of optimization of industrial structure and significant benefits brought by tax cut and fee
reduction policies as well as steady implementation of control targets of “three stabilizations” in the
real estate market. Meanwhile, the economic growth continued to be exposed to downward pressure
as affected by unfavorable factors such as ongoing US-China trade frictions, stable but slowing
industry development, insufficient investment demand and unstable consumption demand. According
to the statistics published by the General Administration of Customs, China’s total import and export
value amounted to RMB31.54 trillion in 2019, representing an increase of 3.4% as compared to that
of 2018, among which the export value was RMB17.23 trillion, representing an increase of 5%; while
import value was RMB14.31 trillion, representing an increase of 1.6% year-on-year. Trade surplus
amounted to RMB2.92 trillion, representing an increase of 25.4%.
2. Port Business Review
In 2019, the Company’s ports handled a total container throughput of 112.93 million TEUs, up by
2.9% year-on-year, among which the ports in Mainland China contributed container throughput of
84.88 million TEUs, indicating an increase of 4.3% year-on-year, which was mainly driven by steady
development of the Mainland China’s economy and consistent growth momentum of import and
export trade. The Company’s operations in Hong Kong and Taiwan contributed an aggregate
container throughput of 7.21 million TEUs, representing a decrease of 6.1% as compared with the
same period of the previous year. Benefited from the growth of the terminal operation of CICT in Sri
Lanka, LCT in Togo and PDSA in Djibouti, a total container throughput handled by the Company’s
24
China Merchants Port Group Co., Ltd. Annual Report 2019
overseas ports grew by 0.9% year-on-year to 20.84 million TEUs. Bulk cargo volume handled by the
Company’s ports decreased by 8.9% year-on-year to 409 million tonnes, of which the Company’s
ports in Mainland China handled a total bulk cargo volume of 480 million tonnes, representing a
decrease of 9.3% year-on-year, which was affected by, among others, international trade friction,
African Swine Fever and adjustment of cargo source structure of certain enterprises; the Company’s
overseas ports handled a total bulk cargo volume of 6.29 million tonnes, representing an increase of
26.1% year-on-year, which was mainly attributable to the business growth in PDSA in Djibouti and
HIPG in Sri Lanka.
Pearl River Delta region
The Company’s terminals in the West Shenzhen Port Zone handled a container throughput of 11.42
million TEUs, up by 0.7% year-on-year; bulk cargo volume amounted to 13 million tonnes, down by
27.9% year-on-year, mainly affected by the change in international trade conditions, African Swine
Fever and changes in cargo source structure. Chu Kong River Trade Terminal Co., Ltd. handled a
total container throughput of 1.09 million TEUs, down by 6.6% year-on-year while bulk cargo
volume amounted to 3.53 million tonnes, up by 43.1% year-on-year. Dongguan Machong Terminal
handled bulk cargo volume of 12.27 million tonnes, down by 7.2% year-on-year. Guangdong Yide
Port Co., Ltd. handled a total container throughput of 0.3 million tonnes, up by 33.5% year-on-year
while bulk cargo volume amounted to 2.26 million tonnes, up by 55.7% year-on-year, mainly
benefited from the expansion of new customers and new routes and further release of terminal
production capacity.
Yangtze River Delta region
SIPG handled a container throughput of 43.30 million TEUs, up by 3.1% year-on-year. Bulk cargo
volume handled declined by 23.4% year-on-year to 120 million tonnes, which was mainly attributed
to the decrease in coal unloaded amount after adjustments made against the structure of bulk cargo
source by SIPG. Ningbo Daxie China Merchants International Terminals Co., Ltd. handled a
container throughput of 3.29 million TEUs, representing an increase of 4.1% year-on-year.
Bohai Rim region
Qingdao Qianwan United Container Terminal Co., Ltd. handled a total container throughput of 7.92
million TEUs, representing an increase of 14.3% year-on-year, driven by the growth of containers of
new international and domestic routes; Qingdao Qianwan West Port United Terminal Co., Ltd.
handled bulk cargo volume of 15.59 million tonnes, representing an increase of 0.3% year-on-year;
Qingdao Port Dongjiakou Ore Terminal Co., Ltd. handled bulk cargo volume of 59.90 million tonnes,
indicating an increase of 4.4% year-on-year. Dalian Port (PDA) Company Limited handled a
container throughput of 10.22 million TEUs, down by 8.0% year-on-year. Bulk cargo volume handled
declined by 2.5% year-on-year to 130 million tonnes. Laizhou Harbour Affairs (莱州港务) handled
bulk cargo volume of 22.72 million tonnes, representing a decrease of 0.1% year-on-year. With the
successful completion of consolidation of Tianjin Port’s container segment, Tianjin Five Continents
International Container Terminals Co., Ltd. and Tianjin Container Terminal Co., Ltd. contributed a
total container throughput of 4.47 million TEUs during the year. The Company’s business volume in
relation to Tianjin Project recorded an increase of 64.5% year-on-year.
South-East region of Mainland China
25
China Merchants Port Group Co., Ltd. Annual Report 2019
Zhangzhou China Merchants Port Co., Ltd. (“Zhangzhou Port”), located in Xiamen Bay Economic
Zone, handled a container throughput of 0.42 million TEUs, decreased by 7.7% year-on-year, while
its bulk cargo volume handled decreased by 43.2% year-on-year to 8.14 million tonnes, which was
mainly affected by African Swine Fever and the environmental policies. Xiamen Bay China
Merchants Terminals Co., Ltd., which officially commenced operation in May 2019, handled a bulk
cargo volume of 0.27 million TEUs. Shantou China Merchants Port Group Co., Ltd. handled a
container throughput of 1.34 million TEUs, up by 3.5% year-on-year, and a bulk cargo volume of
7.09 million tonnes, down by 23.2% year-on-year, which was mainly due to the impact of “bulk
cargoes to containers” and the decrease in domestic demand on coal business as well as the fact that
expansion of sandstone business was restricted by environmental policies.
South-West region of Mainland China
Zhanjiang Port (Group) Co., Ltd. handled a container throughput of 1.11 million TEUs, up by 12.6%
year-on-year, mainly attributable to the development of premium domestic routes in the southern and
northern regions as well as regional water-to-water transshipment and the expansion of cold chain
services business. It also handled a bulk cargo volume of 91.17 million tonnes, down by 0.8% year-
on-year.
Hong Kong and Taiwan
Modern Terminals Limited and China Merchants Container Services Limited delivered an aggregate
container throughput of 5.57 million TEUs, down by 6.1% year-on-year. Kao Ming Container
Terminal Corp. in Kaohsiung, Taiwan, handled a total container throughput of 1.64 million TEUs,
representing a decrease of 6.3% year-on-year.
Overseas operation
In 2019, a total container throughput handled by the Company’s overseas operations increased by
0.9% year-on-year to 20.84 million TEUs, among which container throughput handled by CICT in
Sri Lanka rose by 7.4% year-on-year to 2.88 million TEUs. The wheeled and bulk cargo business in
HIPG progressed well with a bulk cargo volume amounting to 0.50 million tonnes, indicating an
increase of 183.8% year-on-year. Container throughput handled by LCT in Togo increased by 7.7%
year-on-year to 1.13 million TEUs. Container throughput handled by Tin-Can Island Container
Terminal Limited (referred to as TICT) in Nigeria was 0.47 million TEUs, representing a decrease of
2.5% year-on-year, mainly affected by vessels stranded at the terminals. Container throughput
handled by PDSA in Djibouti amounted to 0.92 million TEUs, up by 6.8% year-on-year while bulk
cargo volume amounted to 5.68 million tonnes, up by 20.2% year-on-year, mainly attributed to the
continuous substantial GDP growth as well as increase in volume of food, steel and vehicles in
Ethiopia, its main hinterland. TL handled container throughput of 13.25 million TEUs, representing
a decrease of 2.8% year-on year. Container throughput handled by Kumport in Turkey increased by
1.9% year-on-year to 1.28 million TEUs; while bulk cargo volume handled was 0.10 million tonnes
up by 19.8% year-on-year. TCP in Brazil contributed an annual container throughput of 0.92 million
TEUs, up by 32.0% as compared to that from March to December of the previous year and up by
12.5% as compared to that of the full year of the previous year, mainly attributable to the growth in
trading of domestic produce and vehicles parts and components.
26
China Merchants Port Group Co., Ltd. Annual Report 2019
3. Implementation of business plan during the reporting period
During the reporting period, the Company adhered to its strategic directives and the general operation
philosophy of “enhancing core capability, insisting on both quality and efficiency, capitalizing on
opportunities of this era and striving to become a world’s leading enterprise” with an unwavering
aspiration to reinforce its foundation and made innovation with a pragmatic attitude. Striving to
achieve breakthroughs in five key aspects, namely the building of homebase port, port consolidation,
overseas expansion, comprehensive development and innovative development, the Company actively
pushed forward the implementation of various key tasks and optimized and upgraded its core ports
operation over the past year, successfully accomplishing various operational objectives.
Regarding the development of its homebase ports, the Company continued to promote the building
of West Shenzhen homebase port into a world-class leading port in China and CICT and HIPG
overseas into regional leading ports in South Asia. In terms of West Shenzhen homebase port in China,
the Company proactively advanced key projects such as berth upgrade, shore and bridge heightening
and channel dredging in a view to solving the bottleneck encountered in the development of West
Shenzhen Port Zone and hence upgrading the hardware environment of the port. The Company
facilitated continuous improvement in the customs environment and further reduction of operational
costs to optimize the software environment of ports. The Company also promoted vertical
development of integrated operation to enhance the overall influence and competitiveness of West
Shenzhen homebase port, at the same time adhering to the technology-driven development approach
to steadily advance the development of Mawan Intelligent Port. In terms of the building of overseas
homebase port, leveraging the advantage of synergy between CICT and HIPG, the Company strived
to develop its South Asia port network with Sri Lanka as the center.
In terms of port consolidation, the Company has established a strategic layout “with a focus on
Guangdong-Hong Kong-Macao Greater Bay Area, connecting regions along Belt and Road Initiatives
with a broad global network coverage” through strategic reconstruction. It has also completed the
capital injection in Zhanjiang Port Group and steadily pushed forward work in relation to the entrusted
management of Liaoning Port Group and achieved preliminary results.
As for overseas expansion, by seizing the opportunities arising from the major national initiative of
the “Belt and Road” and international industries migration, the Company has proactively grasped the
investment opportunities in ports, logistics and related infrastructure. In respect of the transaction
regarding the acquisition of interests of no more than 10 quality terminals under CMA CGM through
TL, a formal agreement has been executed with the cooperating parties, which will further improve
the global port network and hence enhance the Company’s core competitiveness and influence. The
Company has also successfully introduced two strategic investors for TCP Terminal in Brazil, which
is the Company’s new attempt to optimize the allocation of its overseas inventories.
In respect of comprehensive development, the Company actively explored and promoted the “Port-
Park-City” comprehensive development model and achieved preliminary progress. As the business
volume of the comprehensive development project in Djibouti increased steadily, the Company will
devote greater efforts in the cultivation of its market development team to enhance market
development. The Company has completed the revision on the overall planning for the future
development of HIPG in Sri Lanka, confirming the business development direction of the port zone.
The one-stop service center for introduction of business and investment officially commenced
27
China Merchants Port Group Co., Ltd. Annual Report 2019
operation.
With regard to innovative development, the Company pushed forward the “digitalisation strategy”
and continued to promote the establishment of “CM ePort”. Mawan Intelligent Port project and the
automatic loading and unloading project at large bulk and general cargo terminal in Zhanjiang Port
were well underway. West Shenzhen Port Zone issued the first blockchain electronic invoice in
China’s port sector, and launched the pilot program of its self-developed blockchain electronic
DO/EIR and documentation function for domestic container business. The Company collaborated
with 11 enterprises such as China Mobile and Huawei in promoting and establishing the “5G
intelligent port innovation laboratory”, and realised the first RTG Remote Control operation under
5G network at Mawan Port, which optimized and enhanced the informationization level of ports
comprehensively. The establishment of “Development and Research Center of CMPort” marked
the completion of the industry development platform empowered by technology. The industrial fund,
which focuses on investments in innovative development of ports, will be launched and implemented
in the near term. Looking forward, the Company will leverage the financial platforms to facilitate the
synergy of resources among various port groups and industries with a view to building up a port
ecosystem to support the projects of startup companies and grasp the opportunities arising from the
rapid growth of emerging industries, so as to promote the transformation and upgrade of the port
industry to expand the rooms for development and improve the development quality, which will bring
new vitality into the traditional core port operation.
II Core Business Analysis
1. Overview
Changes in key financial indicators in the Reporting Period are as follows:
Unit: RMB
Item 2019 2018 Change (%) Reason for the change
The adding of entities to the
Operating revenue 12,123,829,423.74 9,703,394,622.58 24.94% consolidated financial
statements for the current year
The adding of entities to the
Cost of sales 7,648,920,919.71 5,739,241,395.87 33.27% consolidated financial
statements for the current year
The adding of entities to the
Administrative
1,509,520,581.66 1,251,865,675.45 20.58% consolidated financial
expense
statements for the current year
A higher interest expense as a
result of more interest-bearing
debt, as well as the adding of
Finance costs 1,936,269,737.53 1,643,418,102.95 17.82%
entities to the consolidated
financial statements for the
current year
Asset disposal Transfer of land to the
income 4,794,562,782.79 19,258,495.33 24795.83% government in the current
year
Net cash generated 5,501,873,415.94 4,288,575,424.84 28.29%
from/used in
28
China Merchants Port Group Co., Ltd. Annual Report 2019
operating activities
2. Revenue and Cost Analysis
(1) Breakdown of Operating Revenue
Unit: RMB
2019 2018
As % of total As % of total Change (%)
Operating Operating
operating revenue operating revenue
revenue revenue
(%) (%)
12,123,829,423.7
Total 100% 9,703,394,622.58 100% 24.94%
4
By operating division
11,547,072,185.8
Port operations 95.24% 9,184,527,309.09 94.65% 25.72%
6
Bonded logistics
411,410,069.19 3.39% 386,269,027.02 3.98% 6.51%
service
Property
development and 165,347,168.69 1.36% 132,598,286.47 1.37% 24.70%
investment
By operating segment
Mainland China,
Hong Kong and 8,872,027,132.24 73.18% 6,635,924,788.34 68.39% 33.70%
Taiwan
Other countries
3,251,802,291.50 26.82% 3,067,469,834.24 31.61% 6.01%
and regions
(2) Operating Division, Product Category or Operating Segment Contributing over 10% of
Operating Revenue or Operating Profit
Unit: RMB
YoY change in YoY change in YoY change in
Operating Gross profit
Cost of sales operating cost of sales gross profit
revenue margin
revenue (%) (%) margin (%)
By operating division
11,547,072,18 7,185,667,723.
Port operations 37.77% 25.72% 35.49% -4.49%
5.86 72
By operating segment
Mainland
China, Hong 8,872,027,132. 5,968,372,275.
32.73% 33.70% 41.53% -3.72%
Kong and 24 68
Taiwan
Other countries 3,251,802,291. 1,680,548,644.
48.32% 6.01% 10.40% -2.05%
and regions 50 03
Core business data of the prior year restated according to the changed statistical caliber for the
29
China Merchants Port Group Co., Ltd. Annual Report 2019
Reporting Period:
□ Applicable √ Not applicable
(3) Whether Revenue from Physical Sales Is Higher than Service Revenue
□ Yes √ No
(4) Execution Progress of Major Signed Sales Contracts in the Reporting Period
□ Applicable √ Not applicable
(5) Breakdown of Cost of Sales
Unit: RMB
2019 2018
Operating As % of As % of
Item Change (%)
division Cost of sales total cost of Cost of sales total cost of
sales (%) sales (%)
Loading and
Port operations unloading 7,185,667,723.72 93.94% 5,303,286,893.31 92.40% 35.49%
services
Bonded
Logistics
logistics 240,230,706.61 3.14% 214,495,776.55 3.74% 12.00%
service
service
Property
development Properties 223,022,489.38 2.92% 221,458,726.01 3.86% 0.71%
and investment
Total 7,648,920,919.71 100.00% 5,739,241,395.87 100.00% 33.27%
(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period
√ Yes □ No
Zhanjiang Port (Group) Co., Ltd. was added to the consolidated financial statements of the Company
for the Reporting Period due to the business combination of the Company and Zhanjiang Port which
are not under common control; and Guangdong Zhanjiang Port Longteng Shipping Co., Ltd. was
added due to the business combination of Zhanjiang Port and Zhanjiang Port Longteng which are not
under common control.
(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period
□ Applicable √ Not applicable
(8) Major Customers and Suppliers
Major customers:
30
China Merchants Port Group Co., Ltd. Annual Report 2019
Total sales to top five customers (RMB) 3,323,123,237.53
Total sales to top five customers as % of total sales
27.41%
of the Reporting Period (%)
Total sales to related parties among top five
customers as % of total sales of the Reporting 0.00%
Period (%)
Top five customers:
Sales revenue contributed
No. Customer for the Reporting Period As % of total sales revenue (%)
(RMB)
1 Customer A 1,451,102,824.60 11.97%
2 Customer B 667,871,118.65 5.51%
3 Customer C 524,934,804.25 4.33%
4 Customer D 351,823,025.24 2.90%
5 Customer E 327,391,464.79 2.70%
Total -- 3,323,123,237.53 27.41%
Other information about major customers:
□ Applicable √ Not applicable
Major suppliers:
Total purchases from top five suppliers (RMB) 641,738,196.19
Total purchases from top five suppliers as % of
20.91%
total purchases of the Reporting Period (%)
Total purchases from related parties among top
five suppliers as % of total purchases of the 7.19%
Reporting Period (%)
Top five suppliers:
Purchase in the Reporting
No. Supplier As % of total purchases (%)
Period (RMB)
1 Supplier A 205,219,353.89 6.69%
2 Supplier B 127,560,658.82 4.16%
3 Supplier C 123,731,164.49 4.03%
4 Supplier D 93,221,039.90 3.04%
5 Supplier E 92,005,979.09 3.00%
Total -- 641,738,196.19 20.91%
Other information about major suppliers:
□ Applicable √ Not applicable
3. Expense
Unit: RMB
2019 2018 Change (%) Reason for any significant change
31
China Merchants Port Group Co., Ltd. Annual Report 2019
The adding of entities to the
Administrative
1,509,520,581.66 1,251,865,675.45 20.58% consolidated financial statements
expense
in the Reporting Period
A higher interest expense as a
result of more average interest-
bearing debt and the adding of
Finance costs 1,936,269,737.53 1,643,418,102.95 17.82%
entities to the consolidated
financial statements in the
Reporting Period
Higher expenses on various R&D
R&D expense 123,853,344.29 121,989,097.82 1.53%
projects in the Reporting Period
4. R&D Expense
In 2019, adhering to the strategic principle of “Have a Long-Term Vision and Grasp Current
Opportunities, Lead with technology and Embrace the changes”, the Company evolves to changes by
overcoming the contingency and the leading of the technology to grasp the innovative development
opportunity, and sticks to build the intelligent ports with China Merchants’ characteristics.
During the Reporting Period, major R&D projects completed by the Company include: establishing
CMPort Scientific and Technological Innovation Development Research Institute in a bid to develop
new driving forces for innovation-driven transformation and upgrading of the Company; setting up
the first 5G smart port innovation lab in the port industry, making the Company a pioneer that had
entered the actual implementation stage for the application of 5G technology in smart ports; taking
the lead to issue the first blockchain e-invoice in the port industry, which veritably realized the whole-
process regulation of ports, credit account customers and tax regulatory authorities in invoicing, and
issuing a total of more than 18,000 e-invoices with a total amount of nearly RMB500 million; building
the first “1+2” finance sharing center under CMG and connecting all the 55 domestic enterprises to
the center. In addition, the Company has launched and proactively promoted a number of other
innovation and R&D projects, including “CM ePort”, Zhanjiang Port Intelligent Bulk Cargo Terminal,
“Hongzhang” Supercomputing Cluster and Port AI Modeling System.
Details about R&D expense:
2019 2018 Change (%)
Number of R&D personnel 611 428 42.76%
R&D personnel as % of
4.29% 4.47% -0.18%
total employees
R&D expense (RMB) 155,131,267.35 121,989,097.82 27.17%
R&D expense as % of
1.28% 1.26% 0.02%
operating revenue
Capitalized R&D expense
31,277,923.06 0.00 0.00%
(RMB)
Capitalized R&D expense
20.16% 0.00% 20.16%
as % of total R&D expense
Reasons for any significant YoY change in the percentage of R&D expense in operating revenue:
□ Applicable √ Not applicable
Reason for any sharp variation in the percentage of capitalized R&D expense and rationale:
□ Applicable √ Not applicable
32
China Merchants Port Group Co., Ltd. Annual Report 2019
5. Cash Flows
Unit: RMB
Item 2019 2018 Change (%)
Subtotal of cash generated
13,483,810,093.83 10,551,620,379.77 27.79%
from operating activities
Subtotal of cash used in
7,981,936,677.89 6,263,044,954.93 27.44%
operating activities
Net cash generated
from/used in operating 5,501,873,415.94 4,288,575,424.84 28.29%
activities
Subtotal of cash generated
11,616,175,588.24 1,989,829,350.62 483.78%
from investing activities
Subtotal of cash used in
13,553,166,249.84 17,138,391,838.98 -20.92%
investing activities
Net cash generated
from/used in investing -1,936,990,661.60 -15,148,562,488.36 87.21%
activities
Subtotal of cash generated
18,233,144,655.78 36,557,170,707.26 -50.12%
from financing activities
Subtotal of cash used in
19,466,847,993.77 27,681,971,449.91 -29.68%
financing activities
Net cash generated
from/used in financing -1,233,703,337.99 8,875,199,257.35 -113.90%
activities
Effect of exchange rate
2,340,876,491.12 -2,356,178,578.00 199.35%
fluctuations on cash
Explanation of why any of the data above varies significantly on a year-on-year basis:
Subtotal of cash generated from investing activities rose 483.78% year-on-year, primarily driven by
the higher proceeds from disposal of fixed assets, intangible assets or other investing activities.
Net cash generated from investing activities rose 87.21% year-on-year, primarily driven by the
increase year-on-year in subtotal of cash generated from investing activities and the decrease year-
on-year in subtotal of cash used in investing activities.
Subtotal of cash generated from financing activities declined 50.12% year-on-year, primarily driven
by a smaller amount of borrowings obtained.
Net cash generated from financing activities declined 113.90% year-on-year, primarily driven by a
smaller amount of net inflow calculated by borrowings obtained minus repayments of borrowings.
The net increase of cash and cash equivalents rose 199.35% year-on-year, primarily driven by the
comprehensive influence of each activity of cash flows.
Explanation of why net cash generated from/used in operating activities varies significantly from net
profit of the Reporting Period:
For the Reporting Period, net cash generated from operating activities was RMB5,501,873,415.94,
while net profit was RMB8,166,917,273.20. The gap was primarily caused by the influence of the
recognized income of Qianhai land readjustment in 2019.
33
China Merchants Port Group Co., Ltd. Annual Report 2019
III. Analysis of Non-main Businesses
Unit: RMB
As % of total
Amount Main source/reason Exceptional or recurrent
profit
Share of the profit of
Investment joint ventures and
4,619,173,755.42 42.74% Recurrent
income associates, mainly
Shanghai Port
Gain/loss on Compensation income of
4,794,562,782.79 44.36% Exceptional
disposal of assets land readjustment
IV. Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
The Company executed and adjusted the Financial Statements at the beginning year of any New
Standard Governing Financial Instruments, Revenue or Leases in 2019
Unit: RMB
31 December 2019 1 January 2019 Change in
As % of total As % of total percentag Reason for any significant change
Amount Amount e (%)
assets assets
2,129,378 766,518,0 The increase of compensation
Other receivables 1.36% 0.59% 0.77%
,252.50 78.72 receivable of containers and land
Current portion of 808,893,0 25,952,95 The reclassification of advance from
0.52% 0.02% 0.50%
non-current assets 13.06 6.76 shareholders due within one year
The newly adding of structural
deposits, the adding of new
Other current 2,298,792 1,195,421,
1.47% 0.93% 0.54% subsidiaries to the consolidated
assets ,661.70 189.12
financial statements and recovery of
related-party borrowings provided
The adding of new subsidiaries to the
Long-term 1,098,831 793,046,2 consolidated financial statements and
0.70% 0.61% 0.09%
receivables ,799.90 40.11 the reclassification of advance from
shareholders due within one year
The adding of new subsidiaries to the
27,519,96 17,575,54 consolidated financial statements and
Fixed assets 17.56% 13.62% 3.94%
2,529.29 1,665.89 the transfer of construction to fixed
assets
The increase of prepaid expense in
Long-term 711,911,0 235,706,4
0.45% 0.18% 0.27% public channel of Western Port and
prepaid expense 11.67 37.21
Tonggu Channel
Deferred income 300,435,5 66,708,15 The deferred income tax assets
0.19% 0.05% 0.14%
tax assets 02.27 7.19 generated from land readjustment
The compensation of Dachan Bay and
Other non-current 2,082,965 395,191,4
1.33% 0.31% 1.02% the adding of new subsidiaries to the
assets ,467.04 85.98
consolidated financial statements
The adding of new subsidiaries to the
Short-term 9,439,099,793. 3,427,365,512.
6.02% 2.66% 3.36% consolidated financial statements and
borrowings 47 21
increase of short-term bank loans
1,898,076,342.
Tax payable 1.21% 345,183,422.42 0.27% 0.94% The income from land readjustment
74
34
China Merchants Port Group Co., Ltd. Annual Report 2019
Long-term 1,935,245,003. 1,252,860,200. The adding of new subsidiaries to the
1.24% 0.97% 0.27%
payables 21 23 consolidated financial statements
The adding of new subsidiaries to the
1,147,752,857. consolidated financial statements and
Deferred income 0.73% 228,658,214.64 0.18% 0.55%
17 increase in expense of public channel
of Western Port and Tonggu Channel
2. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
Unit: RMB
Gain/loss on Cumulative
Impairment
fair-value fair-value Purchased in Sold in the
Beginning allowance for Other Ending
Item changes in the changes the Reporting Reporting
amount the Reporting changes balance
Reporting charged to Period Period
Period
Period equity
Financial
assets
1. Financial
assets
assigned
measured by
-
fair value and 2,087,872,081 452,557,609. 58,087,016.0 2,385,363,5
- - 213,153,170
the changes .94 68 1 37.39
.24
be included in
the current
gains and
losses
Other equity -
247,848,314.3 163,561,272
instrument - 4,891,535.00 - - 89,178,577.
0 .00
investment 30
Subtotal of -
2,335,720,396 452,557,609. 58,087,016.0 2,548,924,8
financial 4,891,535.00 - 302,331,747
.24 68 1 09.39
assets .54
-
Total of the 2,335,720,396 452,557,609. 58,087,016.0 2,548,924,8
4,891,535.00 - 302,331,747
above .24 68 1 09.39
.54
Financial
0.00 - - - - 0.00
liabilities
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
3. Restricted Asset Rights as at the Period-End
The cash deposit of restricted monetary assets is RMB15,648,978.15. The carrying value of fixed
assets as bank loan mortgages was RMB349,612,960.23. The carrying value of construction in
progress as bank loan mortgages was 23,840,920.42; and the carrying value of intangible assets as
bank loan mortgages was RMB345,131,760.52. The carrying value of equities and interests as bank
loan mortgages was RMB2,391,137,628.00.
35
China Merchants Port Group Co., Ltd. Annual Report 2019
V. Investments Made
1. Total Investment Amount
Amount in 2019 (RMB) Amount in 2018 (RMB) Change (%)
Equity investment 7,898,674,384.09 13,015,203,804.01 -39.31%
Non-equity investment 3,515,540,735.97 2,437,080,643.74 44.25%
2. Major Equity Investments Made in the Reporting Period
Unit: RMB’0,000
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The legal
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Principal Investment Compa Joint Term of matte
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equity in www.cni
project of nfo.com.
Djibouti Free cn
Self- CMI, 23
Lac Trade Zone (Announ
8,067.36 owned Cheer Long term Equity Completed 0.00 No January
Assal and 30% cement
funds Signal 2019
equity in No .
KHOR 2019-
AMBADO 012)
FZCO Capital 726.90
increas 40.00%
Holding the e
equity in www.cni
project of nfo.com.
Djibouti Free 30 cn
Self- CMI,
Lac Trade Zone (Announ
22,790.29 owned Cheer Long term Equity Completed 0.00 No April
Assal and 30% cement
funds Signal 2019
equity in No .
KHOR 2019-
AMBADO 043)
FZCO
36
China Merchants Port Group Co., Ltd. Annual Report 2019
Total -- -- 973,332.37 -- -- -- -- -- -- 0.00 7,747.56 -- -- --
3. Major Non-Equity Investments Ongoing in the Reporting Period
Unit: RMB
Accumula
Reason for
tive
Fixed Accumulative Estimated not reaching
Way of Input amount in realized
assets Industry actual input Capital return on the schedule
Item investmen the Reporting Progress revenues
investmen involved amount as of the resources investmen and
t Period as of the
t or not period-end t anticipated
period-
income
end
Support
Shantou
Port activities of
Self-owned
Guangao water
Self-build Yes 499,044,891.68 1,404,239,786.63 funds and 79.51% 0.00 0.00 N/A
Port
transportatio loans
Phase II
project n
Zhanjiang
Support
Port
activities of Self-owned
Xiashan
Self-build Yes water 234,308,909.02 234,308,909.02 funds and 31.75% 0.00 0.00 N/A
Port
transportatio loans
General
n
Wharf
Transform
ation
Support
project of
activities of Self-owned
Mawan
Self-build Yes water 641,663,530.85 1,058,989,758.99 funds and 37.14% 0.00 0.00 N/A
Smart
transportatio loans
Port of
n
Haixing
Harbor
Support
TCP activities of
Self-owned
expansion Self-build Yes water 186,832,285.10 1,156,332,572.94 100.00% 0.00 0.00 N/A
funds
project transportatio
n
Project of
Support
berth in
activities of Self-owned
Xiamen
Self-build Yes water 25,740,216.89 6,296,208.38 funds and 98.00% 0.00 0.00 N/A
Port
transportatio loans
Houshi
n
Port
General
Cargo Support
project of activities of Self-owned
Zhanjiang Self-build Yes water 254,545,729.28 254,545,729.28 funds and 28.12% 0.00 0.00 N/A
Port transportatio loans
Donghai n
Island
Total -- -- -- 1,842,135,562.82 4,114,712,965.24 -- -- 0.00 0.00 --
4. Financial Investments
(1) Securities Investments
Unit: RMB
37
China Merchants Port Group Co., Ltd. Annual Report 2019
Cumulativ Purchas
Gain/loss on Sold in
Variety e fair ed in Gain/loss Capit
Code of Initial Accounting Beginning fair value the Ending Accoun
of Name of value the in the al
securiti investment measureme carrying changes in Reporti carrying ting
securiti securities changes Reporti Reporting resou
es cost nt model value the Reporting ng value item
es recorded ng Period rces
Period Period
into equity Period
Trading Self-
Ningbo 592,183,095. Fair value 1,361,414,47 154,574,350. 38,963,83 1,548,914,67
Stock 601018 - 0.00 0.00 financia owne
Port 14 method 4.58 85 0.39 1.20
l assets d
Trading Self-
Qingdao 124,405,138. Fair value 190,401,045. 15,816,32 204,263,917.
Stock 06198 9,452,564.63 - 0.00 0.00 financia owne
Port 80 method 90 1.98 11
l assets d
Trading Self-
Qingdao 331,404,250. Fair value 413,280,000. 202,720,000. 42,526,40 616,000,000.
Stock 601298 - 0.00 0.00 financia owne
Port 30 method 00 00 0.00 00
l assets d
Other
equity
Jiangsu Self-
Fair value 1,065,000. 460,000.0 11,220,000.0 instrum
Stock 600377 Expresswa 1,120,000.00 9,800,000.00 - 0.00 0.00 owne
method 00 0 0 ent
y d
investm
ent
Other
equity
Self-
Petrochem Fair value instrum
Stock 400032 3,500,000.00 382,200.00 - 0.00 0.00 - 382,200.00 owne
ical A1 method ent
d
investm
ent
Other
equity
Self-
Guang Fair value instrum
Stock 400009 27,500.00 17,000.00 - 0.00 0.00 - 17,000.00 owne
Jian 1 method ent
d
investm
ent
1,052,639,98 1,975,294,72 366,746,915. 1,065,000. 97,776,55 2,380,797,78
Total -- 0.00 0.00 -- --
4.24 0.48 48 00 2.38 8.31
(2) Investments in Derivative Financial Instruments
Unit: RMB'0,000
Ending
Endi investmen
Related- ng t amount
Purchased Impairm Actual
Relationsh party Initial Beginning Sold in the inves as % of
Counterpa Type of Start End in the ent gain/loss in
ip with the transacti investment investment Reporting tmen the
rty derivative date date Reporting allowanc the Reporting
Company on or amount amount Period t Company’
Period e (if any) Period
not amo s ending
unt net asset
value
Forward 28
Not a 9
Financial foreign Februa
related Not 4,961.18 March 4,961.18 0 4,961.18 - 0 0.00% -332.39
institution currency ry
party 2018
purchase 2019
Financial Not a 29 26
Not Currency swap 20,177.33 20,177.33 0 20,177.33 - 0 0.00% -1,496.24
institution related March March
38
China Merchants Port Group Co., Ltd. Annual Report 2019
party 2018 2019
Forward
Not a 26
Financial foreign 4 April
related Not 173.63 March 173.63 0 173.63 - 0 0.00% -
institution currency 2018
party 2019
purchase
Forward
Not a 15 21
Financial foreign
related Not 42.88 June March 42.88 0 42.88 - 0 0.00% -
institution currency
party 2018 2019
purchase
Forward
Not a 15
Financial foreign 8 May
related Not 4,885.98 June 4,885.98 0 4,885.98 - 0 0.00% -292.64
institution currency 2019
party 2018
purchase
Total 30,241.00 -- -- 30,241.00 0 30,241.00 - 0 0.00% -2,121.27
Funding source Self-funded
Legal matters involved (if applicable) N/A
Disclosure date of the announcement on the
board’s approval of the derivative investment (if -
any)
Disclosure date of the announcement on the
general meeting’s approval of the derivative -
investment (if any)
Analysis of risks and control measures
In order to reduce the risks resulted from changes in the exchange rate of foreign currency loans, the
associated with the derivative investments held
Company’s subsidiary Zhanjiang Port locked the exchange rate of the principal and interest on US$46.65
in the Reporting Period (including but not
million of foreign currency loans. Within the time limit and scope of foreign currency loans, risks of exchange
limited to market, liquidity, credit, operational
rate changes can be reduced by locking the forward exchange rate.
and legal risks, etc.)
Changes in market prices or fair value of
derivative investments in the Reporting Period
(fair value analysis should include measurement Gains and losses on forward financial contracts were RMB-21.2127 million in the Reporting Period.
methods and related assumptions and
parameters)
Significant changes in accounting policies and
No such significant changes
specific accounting principles adopted for
39
China Merchants Port Group Co., Ltd. Annual Report 2019
derivative investments in the Reporting Period
compared to the last reporting period
Opinion of independent directors on derivative
N/A
investments and risk control
5. Use of Funds Raised
(1) Overall Usage of Funds Raised
Unit: RMB’0,000
Proportion
The usage Among of
Total funds Accumulati of
Accumulati Total funds and funds
Way of Total funds used in the ve funds accumulati Total unused
Year ve fund with usage destination raised idle
raising raised Current with usage ve funds funds
used changed of unused for over
Period changed with usage
funds two years
changed
Deposited
Private in funds
2019 221,282.91 213,408.73 213,408.73 18,599.73 18,599.73 8.41% 127,984.00 0
placement raising
account
Total -- 221,282.91 213,408.73 213,408.73 18,599.73 18,599.73 8.41% 127,984.00 -- 0
Explanation of overall usage of funds raised
As approved in the document “ZJXK [2018] No. 1750” of CSRC, CMPort issued 128,952,746 RMB ordinary shares (A Share) at
RMB 17.16 per share through private placement on Shenzhen Stock Exchange. The total fund raised was RMB2,212,829,121.36,
and after deducting fees associated with the issuance of shares, the net fund raised was RMB2,186,275,171.90. As of 22 October
2019, the aforementioned fund was fully paid, which was verified by BDO China Shu Lun Pan Certified Public Accounts LLP with
a capital verification report (XKSBZ [2019] No. ZI10673). As of 31December 2019, a total of RMB2,134,087,334.98 in the
Company’s fund account had been used, including: (1) RMB582,722,414.48 for replacing the self-funding spent on fundraising
investment projects in advance; (2) RMB324,533,139.29 as raised fund invested after the fund was paid; (3) RMB26,831,781.21 for
paying issue fees; (4) RMB1,200,000,000.00 for purchasing structured deposits. The net amount of interest income generated from
the fund account is RMB784,159.99 after deducting surcharges; the amount of structured deposits redeemed is RMB100,000,000.00;
the amount of income from structured deposits is RMB302,465.75; as of 31 December 2019, the balance amount deposited in the
fund-raising account is RMB1,279,840,027.27.
(2) Commitment Projects of Fund Raised
√ Applicable □ Not applicable
Unit: RMB’0,000
Accumulat
Investment Whether
Changed Investment Investment ive Date of Realized
schedule Whether occurred
Committed investment or not Committed amount amount in investment reaching income in
as the reached significant
project and super raise (including investment after the amount as period-end intended the
anticipated changes in
fund arrangement partial amount adjustment Reporting of the use of the Reporting
(3)＝ income project
changes) (1) Period period-end project Period
(2)/(1) feasibility
(2)
Committed investment project
Supporting transformation N/A
Yes 18,599.73 - - - - - No No
project of Han Port (Note 1)
31 N/A
Transformation project of
No 200,000 218,599.73 90,725.55 90,725.55 41.50% December No No
Haixing Harbor (Phase II) (Note 2)
2020
Subtotal of committed
-- 218,599.73 218,599.73 90,725.55 90,725.55 -- -- -- --
investment project
Super raise fund arrangement
40
China Merchants Port Group Co., Ltd. Annual Report 2019
N/A
Subtotal of super raise
-- - - - - -- -- 0 -- --
fund arrangement
Total -- 218,599.73 218,599.73 90,725.55 90,725.55 -- -- 0 -- --
Notes: 1. Based on the estimated construction progress of supporting transformation project of Han Port, US$ 79 million
and USD281 million were planned to be used to build an oil wharf and a tank area respectively in 2019 and 2020;
USD12.48 million and 179.6 million were planned to be used to acquire quay cranes, yard cranes and other operating
Condition and reason for
equipment respectively in 2019 and 2020. The funds were estimated to be fully spent by 2020. So far the project has been
not reaching the schedule
delayed. According to its overall development planning, to further optimize its internal resource allocation, increase the
and anticipated income
utilization efficiency of funds and safeguard shareholders’ rights and interests, the Company used RMB185,997,300 of
(by specific items)
the fund raised in transformation project of Haixing Harbor (Phase II). As of 31 December 2019, a total of RMB0 had
been invested in supporting transformation project of Han Port. 2. Transformation project of Haixing Harbor (Phase II) is
currently under construction and thus has not generated income.
Notes of condition of
significant changes
N/A
occurred in project
feasibility
Amount, usage and
schedule of super raise N/A
fund
Changes in
implementation address of N/A
investment project
Adjustment of
implementation mode of N/A
investment project
On 22 November 2019, the 11th Extraordinary Meeting of the 9th Board of Directors in 2019 reviewed and approved the
Upfront investment and
Proposal on the Replacement of Fund Raised to Self-owned Fund Invested in Advance, which all directors agreed to
transfer of investment
replace fund raised to self-owned fund invested in advance for RMB582,722,414.48. On 13 December 2019, the Company
project
has completed the replacement.
Idle fund supplementing
the current capital N/A
temporarily
Amount of surplus in
project implementation N/A
and the reasons
Usage and destination of
Unused fund was deposited in the fund-raising account.
unused funds
On 22 November 2019, the 11th Extraordinary Meeting of the 9th Board of Directors in 2019 reviewed and approved the
Proposal on the Implementation of Cash Management by the Usage of Idle Fund, which agreed the Company to manage
Problems incurred in fund
cash flow by using idle fund with not more than RMB1.2 billion. As of 31 December 2019, the Company has purchased
using and disclosure or
structural deposits with RMB1.2 billion at CMBC Shenzhen New Times Sub-branch, among which RMB100 million has
other condition
been redeemed with financing income of RMB302,465.75, and the residual RMB1.1 billion was still deposited in the
structural deposits account.
41
China Merchants Port Group Co., Ltd. Annual Report 2019
(3) Changes in Items of Funds Raised
Unit: RMB’0,000
Whether
Accumul Investme occurre
Actual
Amount of ative nt d
Correspond investme Date of Realized
planned investme schedule Whether significa
ing nt reaching income in
Items after funds nt as the reached nt
original amount intended the
changes invested amount period- anticipate changes
committed in the use of the Reporting
after as the end d income in
items Reporting project Period
changes (1) period- (3)=(2)/(1 project
Period
end (2) ) feasibili
ty
Transforma
Supporting
tion project 31
transformat
of Haixing 218,599.73 90,725.55 90,725.55 41.50% December 0 No No
ion project
Harbor 2020
of Han Port
(Phase II)
Total -- 218,599.73 90,725.55 90,725.55 -- -- 0 -- --
The usage of unused fund of RMB185.9973 million in supporting
transformation project of Han Port was changed to the construction of
transformation project of Haixing Harbor (Phase II). The matters of partial
Notes of reasons for changes, changes in fund raised investment has been approved by the Proposal on
decision-making procedures and Partial Changes in Usage of Fund Raised, which was reviewed and
information disclosure (by specific approved on the 11th Extraordinary Meeting of the 9th Board of Directors in
items) 2019 on 22 November 2019. The Announcement of Partial Changes in
Usage of Fund Raised (Announcement No. 2019-85) has been disclosed on
website www.cninfo.com.cn on 26 November 2019. As of 31 December
2019, the amount with usage changed was RMB185.9973 million.
Condition and reason for not
The transformation project of Haixing Harbor (Phase II) was under
reaching the schedule and anticipated
construction with not income generated.
income (by specific items)
Notes of condition of significant
changes occurred in project N/A
feasibility after changes
VI. Sale of Major Assets and Equity Interests
1. Sale of Major Assets
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Interests
□ Applicable √ Not applicable
VII. Major Subsidiaries
Major fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over 10%
42
China Merchants Port Group Co., Ltd. Annual Report 2019
effect on the Company’s net profit
Unit: RMB
Relations
hip with Principal
Name activity Registered capital Total assets Net assets Operating revenue Operating profit Net profit
the
Company
Port
China
business,
Merchant
bonded
s Port HKD
Subsidiary logistics 130,735,954,605.62 81,817,505,637.49 7,845,242,646.62 9,077,943,319.13 7,421,484,985.59
Holdings 40,614,228,170.92
and
Company
property
Limited
investment
Business
Shanghai
related to
Internatio
Joint stock port,
nal Port 23,173,674,650.00 142,177,295,917.96 90,788,857,656.04 36,101,631,985.21 11,869,077,426.37 9,925,845,382.34
company container
(Group)
and
Co., Ltd.
terminal
Subsidiaries obtained or disposed in the Reporting Period
How subsidiary was obtained or disposed in Effects on overall operations and
Subsidiary
the Reporting Period operating performance
Control realization to Zhanjiang Port
and investment income recognized
Zhanjiang Port (Group) Co., Business combination not under the same
of long-term equity investment at
Ltd. control
fair value under the original equity
method
Guangdong Zhanjiang Port Business combination not under the same
Port tug business newly added
Longteng Shipping Co., Ltd. control
Notes of major holding companies and joint stock companies
There is no information on major holding companies and joint stock companies for the Company to
disclose during the Reporting Period.
VIII. Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
IX. Outlook of the Future Development of the Company
1. Layout and trends of the industry
Looking into 2020, the growth of the global economy is expected to slow down due to the heightening
trade barriers, rising geopolitical uncertainties, slow productivity growth, structural problems caused
by aging population, as well as the impact of the spread of COVID-19 epidemic worldwide. Dragged
by the prolonged sluggishness of the manufacturing industry, the economic growth of developed
economies will narrow in 2020. Emerging markets and developing economies will face the
uncertainties caused by the COVID-19 epidemic. The social and political turmoil in certain emerging
economies, notably in regions such as the Middle East and North Africa, will drag economic growth.
According to the forecast of IMF in January, the growth of global economy will be 3.3% in 2020,
slightly up 0.4 percentage point as compared to that of 2019. In particular, the developed economies
will grow at 1.6%, down 0.1 percentage point as compared to that of 2019; and the emerging markets
43
China Merchants Port Group Co., Ltd. Annual Report 2019
and developing economies will grow at 4.4%, up 0.7 percentage point as compared to that of 2019.
Global trade volume (including goods and services) will grow by 2.9%, up 1.9 percentage points as
compared to that of 2019. However, considering the impact from the global pandemic, IMF expected
to cut the above forecast.
The year of 2020 marks the conclusion of the general development of a moderately prosperous society
and the “13th Five-Year” Plan. The Chinese economy will maintain reasonable growth rate and steer
towards the direction of high-quality development. The Chinese government will continue to
implement active fiscal policy in 2020, and the effect of maintaining basically stable leverage ratios
of the macro-economy will be gradually revealed with domestic consumption, high-tech industries
and service industries continue to grow at a relatively fast pace.
Despite the lingering uncertainties over Sino-US economic and trade frictions, the agreement reached
between the US and China on a first-phase trade deal will help to boost confidence in the global
market and hence stabilize market expectation. It should be noted that, although the outbreak of novel
coronavirus will bring impact to the Chinese economy in the short run, the epidemic will have limited
impact on the Chinese economy in the mid-to-long term.
In 2020, the global container shipping market will benefit from the restrained capacity growth while
at the same time, face the uncertainties brought by the spread of novel coronavirus. With the epidemic
being gradually brought under effective control in China and enterprises resuming production in an
orderly manner, China’s container shipping market has recovered rapidly. Benefitted from favorable
factors such as the de-escalation of US-China trade friction, the demand for seaborne freight volume
of the major East-West routes is expected to rise. It is expected that a rebound will be seen in the
growth rate of seaborne freight volume of the non-major East-West routes and the South-North routes.
Currently, with a determination to support economic globalization, China further opens up the
nation’s gates for foreign trading, continues to roll out policies with equal emphasis on import and
export, loosens the restriction on market entry and further lowers import tariff. Through organizing
Import Expo and other measures, China strengthens its alliance with trading partners, and hence
increases import volume of consumer goods. The new landscape of the fully open-up China that is
all-rounded and multi-dimensional with diversified sectors will be conducive to both import and
export, and will in turn benefit the port industry. Furthermore, port business will welcome new
development opportunities presented by the continuous advancement of policies in relation to the
building of world-class leading port, free trade port and marine center city. Under the new
development trend of domestic and overseas economy and trade as well as the port and shipping
industry, the Company as a leading global comprehensive port service provider will be playing an
increasingly important role in the global supply chain.
2. Development strategies of the Company
The Company is striving to become a world-class comprehensive port service provider. The Company
will firmly adhere to the strategic principle of “leveraging on its long-term strategy, tapping the
current edges, driving through technology and embracing changes” and the goal of quality
development to accelerate the technology-powered innovation, thereby realizing a scientific global
layout with balanced development, providing first-class professional solutions and seeking more
returns for shareholders, which will in turn support the development of local economy and industries
44
China Merchants Port Group Co., Ltd. Annual Report 2019
and promote positive development of the port industry.
Firstly, in respect of domestic strategies, the Company will, by seizing the opportunity arising from
the supply-side reform and based on “regional consolidation and enhancement of synergy”, seek for
opportunities for consolidation and cooperation on an ongoing basis across the five main coastal
regions, with a view to further expanding and improving its port network layout within China. The
Company will lead a new direction for the consolidation of regional ports with a key focus on
constantly improving the quality of port development with its best efforts.
Secondly, in respect of overseas strategies, the Company will continue to capitalize on the
opportunities arising from the “Belt and Road” initiative promoted by China and the international
industrial transfers, at the same time adapting to the trend of deploying mega-vessels and forming
shipping alliances. Emphasis will be placed on the development of global major hub ports and
gateway ports as well as areas with high market potential, fast-growing economy and promising
development prospect. The Company will grasp opportunities in port, logistics and related
infrastructures investment for the on-going enhancement of its global port network.
Thirdly, in respect of innovation strategies, adhering to the principle of “driving through technology
and embracing changes”, the Company will continuously increase its investment in innovation and
establish a foothold in the technology high ground to support the future port development. By means
of technological innovation and innovative management, it will significantly enhance the efficiency
and effectiveness of port operation and become a leading enterprise in the automation transformation
of traditional ports. It will also enrich the comprehensive port services through business model
innovation.
3. Business plans for 2020
In 2020, firmly adhering to the strategic principle of “leveraging on its long-term strategy, tapping
the current edges, driving through technology and embracing changes”, the Company will
consistently develop new approaches to promote sustainable and high-quality development with a
focus on stabilizing growth, improving quality and efficiency, enhancing capability, promoting
reform, strengthening innovation, controlling risks and recruiting talents, striving to be “a world-class
comprehensive port service provider”.
Regarding the development of homebase port, the Company will strive to establish world-class
leading ports. The Company will strengthen its business-related work in the West Shenzhen Port Zone
and, in tandem with the optimization of channels and other resources, actively facilitate the
development of ocean-going routes, promote paperless waterborne customs transit, improve the
standard of its feeder services and establish a platform for the Western Pearl River Delta strategy.
Also, the Company will establish an innovative intelligent corridor of Mawan Intelligent Port. CTOS
will be upgraded with standardized operation systems, servers and databases to support automation
and intelligence as well as enable the introduction of big data mechanism and cloud storage. To
support the transformation plan of Haixing Port, the Company will complete the delivery and
acceptance of section 2 and 3 of the Public Channel outside West Shenzhen Port Zone, realise regular
night services of Tonggu Channel and expedite the construction of phase II of the seaward channel
of West Shenzhen Port Zone. In terms of overseas homebase port, CICT will deepen its reform on
management of repair and maintenance service providers to enhance the efficiency and quality of
45
China Merchants Port Group Co., Ltd. Annual Report 2019
repair and maintenance and thus guarantee smooth operation and production. Customer values will
also be analyzed on an on-going basis to adopt appropriate business strategies. In addition, it will
follow the development strategy of HIPG to promote their synergistic business development with
CICT. It will also optimize the incentive mechanism for technological innovation to encourage all
staff to participate in innovation and expand the channels for innovation. HIPG will expand its oil
and gas business, container business and maritime services, and facilitate the work in relation to the
introduction of investment and capital for the port’s logistic park simultaneously.
As for overseas operation, the Company will improve the management system for global operation.
Based on the overseas layout of “East-West routes, South-North routes, regions along the Belt and
Road Initiative”, the Company will work diligently on the overall development plan of overseas
projects. It will also strengthen the work in relation to research on various segments of the global
market to proactively capture investment opportunities in emerging market overseas. Moreover, it
will devote greater efforts in the cultivation of its market development team to enhance market
development, at the same time optimizing its management mechanism to further promote the
establishment of a quantitative management system with a view to improving its operation
management efficiency. The Company will also establish overseas talent team and improve the
performance evaluation and incentive mechanism.
In respect of comprehensive development, the Company will deepen the promotion of the “Port-Park-
City” model. Capitalising on the opportunities arising from industries upgrade and migration, the
Company will achieve the value extension of its core port operation and deeply explore its potential.
Regarding the Djibouti comprehensive development project, the Company will continue to make
efforts for the construction and development of the Djibouti International Free Trade Zone and
promote the implementation of projects such as the transformation of old ports. Regarding the HIPG
project, the Company will thoroughly carry out the work in relation to the introduction of investment
and capital, at the same time deepening the promotion of relevant businesses such as containers, oil,
energy and gas, and maritime affairs in accordance with the overall planning for future development.
With regard to innovative development, the Company will adhere to the “technology-driven”
principle to enhance its competitiveness. The Company has established the Development and
Research Center of CMPort, through which it will be committed to the building of a technology
innovation ecosystem of CMPort and exporting of port technology innovation programmes, with an
aim to become the link between industry, education and research. The “CM Chip” platform will
mainly develop leading products for the three major industries, including CTOS (Container Terminal
Operation System), BTOS (Bulk Cargo Terminal Operation System) and LPOS (Logistic Park
Operation System), striving to realise intelligent production and operation within the terminals. The
“CM ePort” platform will innovate the service models through improvement of the information
service system of port zones and the “Port+Internet” approach, with an aim to develop competitive
customer services for ports and terminals.
Regarding operation management, the Company will strive to establish an operation management and
control system for sustainable value creation. The Company will carry on and enhance the “Project
of Improving Quality and Efficiency”, improve the quality of its measures and promote the integration
of its measures for improving quality and efficiency with its strategic goals, daily work and actual
business, which will help to realise high-quality development. The Company will streamline the
governance structure and operation management and control system for the global operation
46
China Merchants Port Group Co., Ltd. Annual Report 2019
headquarters. An intelligent operation management platform will be developed to digitalise the
production process of and gather data from various business units so as to restructure the refined
management system for ports and develop a supporting system for intelligent decision-making of the
management members of headquarters and at different levels of the Company.
With regard to marketing and commerce, the Company will strengthen its client-oriented
management mechanism for marketing and commerce. A sound interaction mechanism will be
established for marketing and commerce-related matters between the headquarters and the terminals
managed by the Company. The Company will devote more efforts in guiding and coordinating with
its subsidiaries in order to deliver efficient headquarters function in terms of marketing and commerce.
It will also deepen the cooperation with shipping companies and carry out commercial planning for
ports by regions, and strengthen its cooperation with major cargo owners to expand its hinterland.
Moreover, the Company will strengthen its relationship with customers with extending its influence
in the industry as its key priority.
In respective of capital expenditure plans, in 2020, the Company will formulate capital expenditure
plans according to business development needs. Key investment projects include Haixing Harbor
upgrading and reconstruction project, Machong Port Bulk Grain Phase III Project, Zhanjiang Port
Xiashan Port General Terminal Project, Shantou Port Guangao Port Phase II project and the
construction of HIPG container terminal in Sri Lanka, etc.
4. Possible risks and counter measures
(1) External risks
External risks are mainly attributable to the uncertainties brought by the spread of the novel
coronavirus worldwide, volatile global economic environment and political turmoil to the market
environment. On the international front, the global pandemic will cast a great impact on the global
economy, and the degree of impact is subject to the duration and scope of the epidemic. Global
economic and trade frictions have resulted in escalated trade barriers, while trade protectionism may
further dampen global business sentiment, leading to sluggish economic recovery in various
economies. The geopolitical tension maybe affect the already tentative confidence in commercial
trading and investment. All these uncertainties and risks will subdue the demand for global trading,
container shipping and bulk cargo businesses, and hence pose challenges to the overseas operation of
the Company. Domestically, Chinese economy has suffered from short-term repercussions brought
by the outbreak of novel coronavirus. The extended suspension of factories may affect China’s import
of raw materials, as well as export of finished products. In addition, the economic environment in
China is still under the influence of Sino-US trade friction, weak investment sentiment in the
manufacturing industry, rising inflationary pressure and other uncertain factors, which will bring
uncertainties to the relevant business operations and revenue of the Company.
In response to the potential external risks, in particular, the uncertainties and risks looming over
foreign trading and import and export caused by the Sino-US trade friction and the outbreak of novel
coronavirus, the Company will take the initiative to adopt responsive measures. Firstly, the Company
will devote utmost effort into winning the battle against the epidemic, and simultaneously strive to
47
China Merchants Port Group Co., Ltd. Annual Report 2019
minimize the negative impact brought by it. Secondly, strategies pertaining to the national “Belt and
Road” initiative and the development of Guangdong-Hong Kong-Macao Greater Bay Area will be
carried out proactively. Thirdly, the Company will capitalize on the opportunities presented by a new
round of high-level opening-up policy to pursue “improvement in quality and efficiency” of relevant
port operations. Fourthly, the Company will continue to enhance its capability in risk identification,
warning and resolution, follow and study the industrial development and trading movements in
upstream and downstream industries, as well as timely adjust its business operation strategies to
ensure effective prevention, control and mitigation of external risks.
(2) Internal risks
The internal risks of the Company are mainly attributable to credit default of customers, labour
shortage and compliance risk of overseas investment projects. During the Reporting Period, negative
news in respect of bankruptcy, heavy indebtedness and illegal operation of various shipping
companies were being circulated in the market, subjecting the Company to a considerable risk of
customer default. Some of the subsidiaries are still facing a significant labour shortage. Factors such
as staff turnover, aging staff and low skill level have impaired the productivity of and created
operational hurdles for such subsidiaries, thereby bringing uncertain risks to the Company's
sustainable development. As the Company’s overseas projects were gradually put into operation, the
legal and policy compliance requirements of countries and regions where our investments are located
will pose uncertain risks and challenges to the Company's global operations.
In light of the potential internal risks, the Company will attach great importance to the development
of the internal control system of its subsidiaries in a bid to prevent and control internal risks. With
regard to the risk of customer default, on the one hand, risk identification and warning will be
strengthened through application of the warning system on receivables; on the other hand, prevention
and control measures will be formulated and implemented to ensure the effective control of risks and
safeguard the interests of the Company. As for the issue of labour shortage of the subsidiaries, the
Company will expedite technological upgrade for advancement of the automated operation level at
the terminals, so as to facilitate the optimization of personnel structure. Regarding the compliance
risks of overseas investment projects, the Company will step up its efforts in the establishment and
enforcement of compliance management system with reference to the regulatory requirements of the
places where its projects are located, as well as reinforce the management and control throughout the
process of overseas project investment and operations, with a view to strictly preventing legal
compliance risks.
X. Communications with the Investment Community such as Researches, Inquiries and
Interviews
1. During the Reporting Period
Type of
Way of
Date communication Index to basic information of researches
communication
party
48
China Merchants Port Group Co., Ltd. Annual Report 2019
Main discussion: basic business condition, investments and
financial condition of the Company; Materials provided:
One-on-one brochure of the Company;
14 May 2019 Institution
meeting
Index: SZSE EasyIR
(http://irm.cninfo.com.cn/ircs/index)
Main discussion: basic business condition, investments and
financial condition of the Company; Materials provided:
One-on-one brochure of the Company;
22 May 2019 Institution
meeting
Index: SZSE EasyIR
(http://irm.cninfo.com.cn/ircs/index)
Main discussion: basic business condition, investments and
financial condition of the Company; Materials provided:
One-on-one brochure of the Company;
29 May 2019 Institution
meeting
Index: SZSE EasyIR
(http://irm.cninfo.com.cn/ircs/index)
Main discussion: basic business condition, investments and
financial condition of the Company; Materials provided:
One-on-one brochure of the Company;
5 June 2019 Institution
meeting
Index: SZSE EasyIR
(http://irm.cninfo.com.cn/ircs/index)
Main discussion: basic business condition, investments and
financial condition of the Company; Materials provided:
One-on-one brochure of the Company;
11 June 2019 Institution
meeting
Index: SZSE EasyIR
(http://irm.cninfo.com.cn/ircs/index)
Main discussion: basic business condition, investments and
financial condition of the Company; Materials provided:
One-on-one brochure of the Company;
18 June 2019 Institution
meeting
Index: SZSE EasyIR
(http://irm.cninfo.com.cn/ircs/index)
Main discussion: basic business condition, investments and
financial condition of the Company; Materials provided:
One-on-one brochure of the Company;
10 July 2019 Institution
meeting
Index: SZSE EasyIR
(http://irm.cninfo.com.cn/ircs/index)
Main discussion: basic business condition, investments and
financial condition of the Company; Materials provided:
4 September One-on-one brochure of the Company;
Institution
2019 meeting
Index: SZSE EasyIR
(http://irm.cninfo.com.cn/ircs/index)
Main discussion: basic business condition, investments and
financial condition of the Company; Materials provided:
5 September One-on-one brochure of the Company;
Institution
2019 meeting
Index: SZSE EasyIR
(http://irm.cninfo.com.cn/ircs/index)
Main discussion: basic business condition, investments and
financial condition of the Company; Materials provided:
25 September One-on-one brochure of the Company;
Institution
2019 meeting
Index: SZSE EasyIR
(http://irm.cninfo.com.cn/ircs/index)
49
China Merchants Port Group Co., Ltd. Annual Report 2019
Main discussion: basic business condition, investments and
financial condition of the Company; Materials provided:
28 November One-on-one brochure of the Company;
Institution
2019 meeting
Index: SZSE EasyIR
(http://irm.cninfo.com.cn/ircs/index)
Main discussion: basic business condition, investments and
financial condition of the Company; Materials provided:
5 December One-on-one brochure of the Company;
Institution
2019 meeting
Index: SZSE EasyIR
(http://irm.cninfo.com.cn/ircs/index)
Main discussion: basic business condition, investments and
1 January 2019 By phone, EasyIR financial condition of the Company; Materials provided:
to 31 December platform of SZSE Individual brochure of the Company;
2019 and e-mail Index: SZSE EasyIR
(http://irm.cninfo.com.cn/ircs/index)
Times of communications 160
Number of institutions
20
communicated with
Number of individuals
140
communicated with
Number of other communication
0
parties
Tip-offs or leakages of substantial
supposedly-confidential
No
information during
communications
2. Period-end to Disclosure Date
Type of
Way of
Date communication Index to main information communicated
communication
party
Main discussion: basic business condition, investments
By phone or written and financial condition of the Company; Materials
1 January 2020 to provided: brochure of the Company;
inquiry (EasyIR Individual
15 April 2020
platform of SZSE) Index: SZSE EasyIR
(http://irm.cninfo.com.cn/ircs/index)
Times of communications 39
Number of institutions communicated with 0
Number of individuals communicated with 39
Number of other communication parties 0
Tip-offs or leakages of substantial supposedly-confidential
No
information during communications
50
China Merchants Port Group Co., Ltd. Annual Report 2019
Part V Significant Events
I. Profit Distributions to Ordinary Shareholders (in the Form of Cash and/or Stock)
Formulation, execution or adjustments of profit distribution policy for ordinary shareholders,
especially cash dividend policy, in Reporting Period
Pursuant to the CSRC Guideline for Listed Companies No.3-Cash Dividends of Listed Companies
and the Notice of CSRC on Further Implement ting Matters Related to Cash Dividends of Listed
Companies, the Articles of Association clarifies the specific profit distribution policy, decision-
making procedures and mechanism, adjustment of profit distribution policy, implementation of profit
distribution plan and profit distribution for foreign shares. During the Reporting Period, the Company
executed the profit distribution policy in strict compliance with the Articles of Association.
Special statement about the cash dividend policy
In compliance with the Company’s Articles of Association and
Yes
resolution of general meeting
Specific and clear dividend standard and ratio Yes
Complete decision-making procedure and mechanism Yes
Independent directors faithfully performed their duties and played
Yes
their due role
Non-controlling interests are able to fully express their opinion
Yes
and desire and their legal rights and interests are fully protected
In case of adjusting or changing the cash dividend policy, the
conditions and procedures involved are in compliance with Yes
applicable regulations and transparent
The profit distributions to ordinary shareholders, either in the form of cash or stock, in the past three
years (including the Reporting Period)
1. Dividend Payout Plan for 2017
As audited by Deloitte Touche Tohmatsu Certified Public Accountants LLP, the net profit of the
Company as the parent for 2017 stood at RMB731,510,588.25 and the cumulative distributable profit
at RMB1,046,473,178.03.
(1) According to the Company Law and the Articles of Association of the Company, the Company
may stop making statutory surplus reserve when its accumulative amount reaches 50% of the
registered capital. The accumulative statutory surplus reserve of the Company as the parent stood at
RMB520,074,434.56 for 2017, equal to 80.66% of the registered capital. Therefore, the Company
intends not to draw surplus reserve from retained earnings for 2017.
(2) Based on the total 644,763,730 shares as at the end of 2017, a cash dividend of RMB13.19 (tax
included) was to be distributed for every 10 shares, with a total of RMB850,443,359.87 being
51
China Merchants Port Group Co., Ltd. Annual Report 2019
distributed.
The Board of Directors of the Company published the implementation announcement on dividend
payout for 2017 on Securities Times and Ta Kung Pao (HK) dated 16 May 2018, and completed the
dividend payout for the A-share and B-share holders on 23 May 2018 and 25 May 2018 respectively.
2. Dividend Payout Plan for 2018
As audited by Deloitte Touche Tohmatsu Certified Public Accountants LLP, the consolidated net
profit attributable to the Company as the parent for 2018 stood at RMB1,090,418,910.77 and the net
profit of the Company as the parent at RMB71,014,741.10.
(1) According to the Company Law and the Articles of Association of the Company, the Company
withdrew RMB7,101,474.11 of profit as statutory reserve. The accumulative distributable profit of
the Company as the parent at the end of 2018 was RMB259,943,085.16.
(2) Base on the total 1,793,412,378 shares as at the end of 2018, a cash dividend of RMB1.14 (tax
included) is to be distributed for every 10 shares, totaling RMB204,449,011.09.
After the above-mentioned distribution, the retained earnings of the Company as the parent will be
RMB55,494,074.07.
The Board of Directors of the Company published the implementation announcement on dividend
payout for 2018 on Securities Times and Ta Kung Pao (HK) dated 3 July 2019, and completed the
dividend payout for the A-share and B-share holders on 10 July 2019 and 12 July 2019 respectively.
3. Dividend Payout Plan for 2019
As audited by Deloitte Touche Tohmatsu Certified Public Accountants LLP, the consolidated net
profit attributable to the Company as the parent for 2018 stood at RMB2,898,192,168.84 and the net
profit of the Company as the parent at RMB1,031,693,987.55.
(1) According to the Company Law and the Articles of Association of the Company, the Company
shall withdraw 10% of profit as statutory reserve when the Company distributed the profit. The
Company intended to withdraw RMB103,169,398.76 of profit as statutory reserve. The accumulative
distributable profit of the Company as the parent at the end of 2019 was RMB983,693,068.62.
(2) Base on the total 1,922,365,124 shares as at the end of 2019, a cash dividend of RMB4.60 (tax
52
China Merchants Port Group Co., Ltd. Annual Report 2019
included) was to be distributed for every 10 shares, totaling RMB884,287,957.04.
After the above-mentioned distribution, the retained earnings of the Company as the parent will be
RMB99,405,111.58.
The above profit distribution plan still needs to be submitted to the 2019 Annual General Meeting for
approval.
Cash dividend for ordinary shareholders in the past three years (including the Reporting Period)
Unit: RMB
Net profit
attributable to
ordinary Cash dividends Total cash
Cash
shareholders of the A as % of B in other forms C as % of B dividends D as %
Year dividends (tax
listed company in (%) (such as share (%) (including other of B (%)
inclusive) (A)
consolidated repurchase) (C) forms) (D)
statements for the
year (B)
2019 884,287,957.04 2,898,192,168.84 30.51% 0.00 0.00% 884,287,957.04 30.51%
2018 204,449,011.09 1,090,418,910.77 18.75% 0.00 0.00% 204,449,011.09 18.75%
2017 850,443,359.87 2,365,214,907.43 35.96% 0.00 0.00% 850,443,359.87 35.96%
The net profit attributable to the ordinary shareholders of the listed company in the 2018 and 2019
consolidated statement is the data of the Company after the retrospective adjustment for business
combination under the same control. The net profit attributable to the ordinary shareholders of the
listed company in the 2017 consolidated statements is the data of the Company before the
retrospective adjustment for business combination under the same control.
The Company was profitable in the Reporting period and the positive profits of the Company as the
parent attributable to ordinary shareholders while the distribution plan of cash dividend for ordinary
shareholders was not proposed.
□ Applicable √Not applicable
II. Final Dividend Plan for the Reporting Period
Bonus shares/10shares (share) 0
Cash dividend/10 shares (RMB) (tax inclusive) 4.6
Bonus issue from capital reserves (share/10 shares) 0
Share base (share) 1,922,365,124
Total cash dividends (RMB) (tax inclusive) 884,287,957.04
Cash dividends in other forms (such as share
0.00
repurchase) (RMB)
Total cash dividends (including other forms)
884,287,957.04
(RMB)
Distributable profits (RMB) 1,081,244,306.00
Cash dividends (including other forms) as % of total 100%
profits to be distributed (%)
Details of the cash dividends
53
China Merchants Port Group Co., Ltd. Annual Report 2019
As the Company is in the mature stage of development with significant capital expenditures arrangement, when distributing profits,
the proportion of cash dividends in this profit distribution shall be 40% at least.
Details of final dividend plan for the reporting period
As audited by Deloitte Touche Tohmatsu Certified Public Accountants LLP, the consolidated net profit attributable to the Company
as the parent for 2018 stood at RMB2,898,192,168.84 and the net profit of the Company as the parent at RMB1,031,693,987.55.
1. According to the Company Law and the Articles of Association of the Company distributed the profit, 10% of the profit shall be
withdrawn as statutory reserve. RMB103,169,398.76 of the profit is planned to be withdrawn as statutory reserve of the Company.
The accumulative distributable profit of the Company as the parent at the end of 2019 was RMB983,693,068.62;
2. Base on the total 1,922,365,124 shares as at the end of 2019, a cash dividend of RMB4.60 (tax included) is to be distributed for
every 10 shares, totaling RMB884,287,957.04.
After the dividends distribution, the retained earnings of the Company as the parent will be RMB99,405,111.58.
The above profit distribution plan still needs to be submitted to the 2019 Annual General Meeting for approval.
III. Fulfillment of Commitments
1. Commitments of the Company’s Actual Controller, Shareholders, Related Parties and
Acquirers, as well as the Company Itself and other Entities Fulfilled in the Reporting Period or
Ongoing at the Period-end
√ Applicable □ Not applicable
Type of Date of Term of
Commitm Promiso Fulfill
commit Details of commitment commitment commitme
ent r ment
ment making nt
The
commitme
nt on
safeguardi
ng
independe
nce of
CMPort is
effective
for a long
Commit
time; the
ments on
commitme
horizont
nt on
Commitm al
regulating
ents made CMGD competit Commitment on safeguarding independence of CMPort made by
related-
in ion, CMGD and its person acting in concert Broadford Global: to
and 15 March party Ongoi
acquisitio Broadfor related- safeguard the independence of finance, institutions, business and
2018 transaction ng
n party personnel of CMPort as well as independence and integrity of assets
d Global s is
document transacti of CMPort.
effective
s or on and
during the
shareholdi capital
period
ng occupati
when
alteration on
CMGD
document and its
s persons
acting in
concert
possess
control
power
over the
Company
CMGD Commit Commitment on regulating related-party transaction made by The
and ments on CMGD and corresponding persons acting in concert- Broadford 15 March commitme Ongoi
Broadfor horizont Global: 1. CMGD/Broadford Global will make a great effort to 2018 nt on ng
d Global al reduce related-party transaction between CMGD/Broadford Global safeguardi
competit and its related parties as well as CMPort. Inevitable business dealings ng
54
China Merchants Port Group Co., Ltd. Annual Report 2019
ion, or transactions shall be conducted as per marketization principle and independe
related- fair price and the obligation of information disclosure shall be nce of
party fulfilled pursuant to provisions; 2. CMGD/Broadford Global and its CMPort is
transacti related parties ensure they will strictly observe related stipulations of effective
on and laws, regulations, normative documents and Articles of Association for a long
capital of CMPort and equally execute shareholders' rights and fulfill time; the
occupati shareholders' obligations together with other shareholders in line commitme
on with legal program as well as won't seek improper interest with nt on
actual controller's status or damage legitimate interest of CMPort and regulating
other shareholders; 3. The above commitment is continuously related-
effective during the period when CMGD/Broadford Global has the party
right to control CMPort. In case of losses incurred by transaction
CMGD/Broadford Global failing to fulfill the above commitment to s is
CMPort, CMGD will bear corresponding compensation effective
responsibility. during the
period
when
CMGD
and its
persons
acting in
concert
possess
control
power
over the
Company
Commitment on regulating related-party transaction: 1. China
Merchants Group will try its best to reduce related-party transaction
between it and its related parties and CMPort. Inevitable business
Commit
dealings or transactions shall be conducted as per marketization
ments on
principle and fair price and the obligation of information disclosure
horizont
shall be fulfilled pursuant to provisions; 2. China Merchants Group Effective
al
ensure they will strictly observe related stipulations of laws, until no-
competit
regulations, normative documents and Articles of Association of longer to
ion,
CMPort and equally execute shareholders' rights and fulfill 15 March be the Ongoi
CMG related-
shareholders' obligations together with other shareholders in line 2018 actual ng
party
with legal program as well as won't seek improper interest with controller
transacti
actual controller's status or damage legitimate interest of CMPort and of the
on and
other shareholders; 3. The above commitment is continuously Company
capital
effective during the period when China Merchants Group has the
occupati
right to control CMPort. In case of losses incurred by China
on
Merchants Group failing to fulfill the above commitment to CMPort,
China Merchants Group will bear corresponding compensation
responsibility.
1. CMPort shares obtained by purchasing assets with shares issued
this time are forbidden to be transferred or transacted in the market
before the latter one between the date arising 36 months after the date
when CMPort shares gained by CMID based on this transaction are
registered under the name of CMID and the date when fulfillment of
compensation obligations set forth in the Impairment Compensation
Agreement for Issuing Shares To Purchase Assets signed by and
Commitm Commit between CMID and CMPort, separately and its supplementary
ents made ment on agreement (if any) is over (except for repurchasing or presenting
in time of restrictio shares pursuant to Impairment Compensation Agreement for Issuing 26 25 June Ongoi
CMID Shares To Purchase Assets and its supplementary agreement (if December
asset n on 2022 ng
restructuri share any)); 2. In case of closing price of CMPort stocks being lower than 2018
ng trading issue price for consecutive 20 transaction days within 6 months after
completion of the transaction or such closing price being lower than
issue price at the end of the 6th month after completion of the
transaction, the lockup period of CMPort stocks held by CMID will
be automatically lengthened for at least 6 months; 3. CMPort shares
which derive from consideration shares obtained by CMID based on
the transaction during the lockup period due to CMPort distributing
stock dividend and capital reserve converted into increased capital
shall be subject to the commitment regarding the above restricted
55
China Merchants Port Group Co., Ltd. Annual Report 2019
stock trade period; 4. In case that the transaction is placed on file for
investigation and prosecution by judiciary authorities as well as
registered and investigated by CSRC because false record,
misleading statement or important omission happens to provided or
disclosed information, CMID won't transfer its shares with rights and
interests at CMPort before case investigation conclusion is drawn; 5.
In case that lockup period set forth in the commitment is inconsistent
with regulatory opinions from securities market supervision
department or lockup period required by related provisions, CMID
shall adjust the above lockup period pursuant to regulatory opinions
from relevant securities market supervision department and related
provisions. 6. After the above lockup period expires, CMID Port
shall observe provisions of laws and regulations, related rules of
Shenzhen Stock Exchange as well as Articles of Association of
CMPort in case of reducing shares held by it.
1. Before completion of the transaction, CMPort shares held by
CMGD and Broadford Global (include increased shares because
allotment of shares, giving bonus and capital reserve converted into
increased capital occurs to CMPort) shall not be transferred within
12 months as of the date when the transaction is over (the registration
date of new shares by purchasing assets with shares issued this time);
2. In case that lockup period set forth in the commitment is
inconsistent with regulatory opinions from securities market
Commit supervision department or lockup period required by related
CMGD ment on provisions, CMGD shall adjust the above lockup period pursuant to 26 25
and restrictio regulatory opinions from relevant securities market supervision December Comp
December
Broadfor n on department and related provisions. 3. In case that the transaction is 2018 leted
2019
d Global share placed on file for investigation and prosecution by judiciary
trading authorities as well as registered and investigated by CSRC because
false record, misleading statement or important omission happens to
provided or disclosed information, CMGD and Broadford Global
won't transfer its shares with rights and interests at CMPort before
case investigation conclusion is drawn.
In case of losses incurred by CMGD and Broadford Global violate
fulfill the above promise to CMPort, CMGD will bear corresponding
compensation responsibility.
Commitment on avoiding horizontal competition: 1. CMID and other
enterprise controlled by CMID fail to engage in or participate in
business or activity which is similar with and constitutes or likely
constitutes competitive relation with main business conducted by
CMPort and the enterprise controlled by it now; 2. CMID will try its
best to promote CMID and other enterprise controlled by CMID not
to directly or indirectly engage in or participate in or assist to engage
in or participate in any business or activity which constitutes or likely
Commit constitutes competitive relation with main business conducted by
ments on CMPort and the enterprise controlled by it now and in the future
horizont independently or together with others; 3. In case of discovering any
new business opportunity which constitutes or likely constitutes Effective
al
direct or indirect competitive relation with main business of CMPort until no-
competit
or the enterprise controlled by it, CMID or CMID and other longer to
ion,
enterprise controlled by it will immediately notify CMPort in written 26 July 2018 be the Ongoi
CMID related-
as well as make a great effort to promote such business opportunity largest ng
party
to be provided to CMPort or the enterprise controlled by it firstly shareholde
transacti
according to reasonable and fair terms and conditions; 4. In case of r of the
on and
CMPort or the enterprise controlled by it waiving such competitive Company
capital
occupati new business opportunity and CMID or/and other enterprise
on controlled by it engaging in such competitive business, CMPort or
the enterprise controlled by it will have the right to purchase any
stock rights, assets or other rights and interests in the above
competitive business from CMID or/and other enterprise controlled
by it once or several times at any moment, or CMPort will select
entrusted operation, leasing or contract operation of assets or
businesses of CMID or/and other enterprise controlled by it in the
above competitive business as per the mode permitted by national
laws and regulations; 5. When CMID and other enterprise controlled
by it plans to transfer, sell, rent out, conduct licensed use of or
56
China Merchants Port Group Co., Ltd. Annual Report 2019
transfer or allow to use assets and businesses which constitutes or
likely constitutes direct or indirect competitive relationship with
main business of CMPort or the enterprise controlled by it in other
way, CMID and other enterprise controlled by it will provide the
right of priority assignment to CMPort or the enterprise controlled
by it and promise to make a great effort to promote other enterprise
controlled by CMID provide CMPort or the enterprise controlled by
it with the right of priority assignment under the above situation; 6.
As of the date when the commitment letter is provided, CMID
promises to compensate all actual losses, damages and expenses
arising from violation of any clause in the commitment letter by
CMID or the enterprise controlled by it to CMPort or the enterprise
controlled by it.
Commitment on regulating related-party transaction: 1. CMID and
other enterprise controlled by it will make a great effort to avoid and
reduce related-party transaction between CMPort and economic
entity controlled by it; 2. CMID and other enterprise controlled by it
will exercise stockholder's rights in accordance with related
provisions of relevant laws and regulations as well as Articles of
Commit Association of CMPort and fulfill the obligation of vote avoidance
ments on at the moment of voting for related-party transactions involved by
horizont CMID and other enterprise controlled by it at the stockholders'
Effective
al meeting; 3. As for related-party transaction which is inevitable or
until no-
competit occurs due to reasonable reason, CMID will carry out transaction
longer to
ion, pursuant to the principle of openness, fairness and justice for market
be the Ongoi
CMID related- transaction and based on fair and reasonable market price, perform 26 July 2018
largest ng
party related-party transaction decision-making process and legally fulfill
shareholde
transacti information disclosure obligation to safeguard benefits of CMPort
r of the
on and and other shareholders of CMPort in line with provisions of laws,
Company
capital regulations, normative documents and Articles of Association of
occupati CMPort; 4. It's ensured that no legitimate interest of CMPort and
on other shareholders of CMPort is damaged by related-party
transaction based on status and influence of CMPort; 5. CMID will
promote other enterprise controlled by it to observe the commitment
of Subparagraph 1-4; 6. In case of CMID and other enterprise
controlled by it violating the above commitment, causing rights and
interests of CMPort and its shareholders are damaged, CMID will
take corresponding compensation responsibility according to law.
Commitment about keeping independence of CMPort: 1. After the
transaction is completed, CMID will strictly observe related
provisions regarding independence of listed Companies from CSRC
and won't violate standard operating procedures of CMPort based on
Commit the first majority shareholder, conduct excessive intervention of
ments on operation and management activities of CMPort and its subsidiary,
horizont embezzle benefits of CMPort and its subsidiary or damage legitimate
Effective
al interest of CMPort and other shareholders; 2. CMID will ensure
until no-
competit CMPort is independent from CMID and related parties in the aspects
longer to
ion, of business, asset, finance, personnel and institution; 3. CMID
be the Ongoi
CMID related- ensures independence of CMPort, CMID and other enterprise 26 July 2018
largest ng
party controlled by it fail to occupy capitals and resources of CMPort
shareholde
transacti based on violation in any way and will strictly observe provisions of
r of the
on and rules and regulations for avoiding occupation of related party funds
Company
capital from CMPort as well as related laws, regulations and normative
occupati documents; 4. The commitment letter takes effect as of the signature
on date of CMID as well as is legally binding upon CMID. CMID
ensures it will strictly fulfill various commitments in the
commitment letter and will take corresponding legal responsibility
for losses incurred to CMPort due to violation of related
commitment.
Commit Commitment on avoiding horizontal competition: 1. China Effective
ments on Merchants Group and the enterprise controlled by it (excluding until no-
horizont CMPort Holdings and the enterprise controlled it) fail to engage in longer to Ongoi
CMG al or participate in any business or activity which is similar with and 26 July 2018 be the ng
competit constitutes or likely constitute direct or indirect competitive actual
ion, relationship with main business conducted by CMPort and the controller
related- enterprise controlled by it now; 2. China Merchants Group will try of the
57
China Merchants Port Group Co., Ltd. Annual Report 2019
party its best to promote enterprises controlled by it(except for CMPort Company
transacti and the enterprise controlled by it) not to directly or indirectly engage
on and in or participate in or assist to engage in or participate in any business
capital or activity which constitutes or likely constitutes competitive relation
occupati with main business conducted by CMPort and the enterprise
on controlled by it now and in the future independently or together with
others; 3. In case of discovering any new business opportunity which
constitutes and likely constitutes direct or indirect competitive
relation with main business of CMPort or the enterprise controlled
by it, China Merchants Group or enterprise controlled by it(except
for CMPort and the enterprise controlled by it) will immediately
notify CMPort in written as well as make a great effort to promote
such business opportunity to be provided to CMPort or the enterprise
controlled by it firstly according to reasonable and fair terms and
conditions; 4. In case of CMPort or the enterprise controlled by it
waives such competitive new business opportunity and China
Merchants Group or the enterprise controlled by it (except for
CMPort and the enterprise controlled by it) engaging in such
competitive business, CMPort or the enterprise controlled by it will
be entitled to purchase any equities, assets and other rights and
interests in the above competitive business from China Merchants
Group or the enterprise controlled by it (except for CMPort and the
enterprise controlled by it) once or several times at any moment or
CMPort will select entrusted operation, leasing or contract operation
of assets or businesses of China Merchants Group or the enterprise
controlled by it (except for CMPort and the enterprise controlled by
it) in the above competitive business according to the mode
permitted by national laws and regulations; 5. When China
Merchants Group and the enterprise controlled by it (except for
CMPort and the enterprise controlled by it) plans to transfer, sell,
lease, allow to use or transfer or allow to use asset and business
which constitutes or likely constitutes direct or indirect competitive
relationship with main business of CMPort or the enterprise
controlled by it in other way, China Merchants Group and the
enterprise controlled by it (except for CMPort and the enterprise
controlled by it) will provide the right of priority assignment for
CMPort or the enterprise controlled by it and promise to make a great
effort to promote the enterprise controlled by China Merchants
Group to provide the of priority assignment for CMPort or the
enterprise controlled by it under the above situation; 6. As of the date
when the commitment letter is provided, China Merchants Group
promises to compensate all actual losses, damages and expenses
arising from violation of any clause in the commitment letter by
China Merchants Group or the enterprise controlled by it to CMPort
or the enterprise controlled by it.
Commitment on regulating related-party transaction: 1. China
Merchants Group and other enterprise controlled by it will make a
great effort to avoid and reduce related-party transaction between
CMPort and economic entity controlled by it; 2. China Merchants
Commit Group and other enterprise controlled by it will exercise
ments on stockholder's rights in accordance with related provisions of relevant
horizont laws and regulations as well as Articles of Association of CMPort Effective
al and fulfill the obligation of vote avoidance at the moment of voting until no-
competit for related-party transactions involved by CMID and other enterprise longer to
ion, controlled by it at the stockholders' meeting; 3. As for related be the Ongoi
CMG related- transaction which is inevitable or occurs due to reasonable reason, 26 July 2018 actual ng
party China Merchants Group will carry out transaction pursuant to the controller
transacti principle of openness, fairness and justice for market transaction and of the
on and based on fair and reasonable market price, perform related-party Company
capital transaction decision-making process and legally fulfill information
occupati disclosure obligation to safeguard benefits of CMPort and other
on shareholders of CMPort in line with provisions of laws, regulations,
normative documents and Articles of Association of CMPort; 4. It's
ensured that no legitimate interest of CMPort and other shareholders
of CMPort is damaged by related-party transaction based on status
and influence of CMPort; 5. China Merchants Group promotes other
58
China Merchants Port Group Co., Ltd. Annual Report 2019
enterprise controlled by it to observe the commitment set forth in
Subparagraph 1-4 above; 6. In case of China Merchants Group and
other enterprise controlled by it violating the above commitment,
causing rights and interests of CMPort and its shareholders are
damaged, China Merchants Group will take corresponding
compensation responsibility according to law.
Commitment about keeping independence of CMPort: 1. After the
transaction is completed, China Merchants Group will strictly
observe related provisions regarding independence of listed
companies from CSRC and won't violate standard operating
procedures of CMPort based on actual controller's status, conduct
Commit excessive intervention of operation and management activities of
ments on CMPort and its subsidiary, embezzle benefits of CMPort and its
horizont subsidiary or damage legitimate interest of CMPort and other
Effective
al shareholders; 2. China Merchants Group will ensure CMPort is
until no-
competit independent from China Merchants Group and related parties in the
longer to
ion, aspects of business, asset, finance, personnel and institution; 3. China
be the Ongoi
CMG related- Merchants Group ensures independence of CMPort, China 26 July 2018
actual ng
party Merchants Group and other enterprise controlled by it fail to occupy
controller
transacti capitals and resources of CMPort based on violation in any way and
of the
on and will strictly observe provisions of rules and regulations for avoiding
Company
capital occupation of related party funds from CMPort as well as related
occupati laws, regulations and normative documents; 4. The commitment
on letter takes effect as of the signature date of China Merchants Group
as well is legally binding upon China Merchants Group. China
Merchants Group ensures it will strictly fulfill various commitments
in the commitment letter and will take corresponding legal
responsibility for losses incurred to listed Company due to violation
of related commitment.
1. Before completion of the transaction, CMPort shares held by or
indirectly controlled by China Merchants Group (include increased
shares because allotment of shares, giving bonus and capital reserve
converted into increased capital occurs to CMPort) shall not be
transferred within 12 months as of the date when the transaction is
over (the registration date of new shares by purchasing assets with
shares issued this time); 2. In case that lockup period set forth in the
commitment is inconsistent with regulatory opinions from securities
market supervision department or lockup period required by related
Commit
provisions, China Merchants Group shall adjust the above lockup
ments on
period pursuant to regulatory opinions from relevant securities
lock-up
market supervision department and related provisions. 3. In case that
of shares 25
the transaction is placed on file for investigation and prosecution by Comp
CMG and 26 July 2018 December
judiciary authorities as well as registered and investigated by CSRC leted
sharehol 2019
because false record, misleading statement or important omission
ding
happens to provided or disclosed information, China Merchants
reductio
Group won't transfer its shares with rights and interests at listed
n plan
Company before case investigation conclusion is drawn; 4. During
the period from the date of resumption of trading of the transaction
to the date when the transaction is over, China Merchants Group has
no share reduction plan. The above shares include original CMPort
shares directly held or indirectly controlled by China Merchants
Group as well as derivative shares of original shares directly held or
indirectly controlled during the above period due to participation in
profit and presenting shares by CMPort as well as capital reserve
converted into increased capital.
Commitment letter about perfecting the property ownership
certificate for land and house property of CMPort Holdings and the Effective
enterprise subordinate to it: 1. China Merchants Group will spare no until no-
effort to assist, promote and drive CMPort Holdings and the longer to
Other enterprise subordinate to it to standardize, perfect and solve be the Ongoi
CMG commit ownership defects of properties such as land and house property; 2. 26 July 2018
actual ng
ment The following situations happen to CMPort Holdings and the controller
enterprise subordinate to it before completion of the transaction: (1) of the
Land use right of ownership certificate which is being handled, the Company
house property failing to be timely handled (except for results
incurred by force majeure, law, policy, government administration
59
China Merchants Port Group Co., Ltd. Annual Report 2019
behavior and change in planned use of the land instead of CMPort
Holdings and the enterprise subordinate to it); Or (2) Land use right
of ownership certificate, the property ownership certificate failing to
be handled (except for results incurred by force majeure, law, policy,
government administration behavior and change in planned use of
the land of CMPort Holdings and the enterprise subordinate to it); Or
(3) In case of nonstandard other land use right and house property
(except for results incurred by force majeure, law, policy,
government administration behavior and change in planned use of
the land instead of CMPort Holdings and the enterprise subordinate
to it) and encountering actual losses (including but not limited to
compensation, fine, expenditure and benefit lost), China Merchants
Group will timely and fully compensate CMPort.
Commitment letter about real estate leased by CMPort Holdings and
the enterprise subordinate to it: In case of nonstandard situation of
the leased property significantly influencing use of CMPort Holdings
and the Company subordinate to it to engage in operation of normal
business, China Merchants Group will actively take effective
measures (including but not limited to arranging to provide the
property with identical or similar conditions to be used for operation Effective
of related Company) to promote business operation of related until no-
Company to be conducted normally and alleviate or eliminate longer to
Other
adverse effect; In case of nonstandard of the leased property causing be the Ongoi
CMG commit 26 July 2018
CMPort Holdings and the enterprise subordinate to it produce actual actual ng
ment
additional expenditures or losses (such as third-party compensation), controller
China Merchants Group will actively coordinate and negotiate with of the
other related party to support normal operation of CMPort Holdings Company
and the enterprise subordinate to it to the great extent and avoid or
control continuous enlargement of the damage; At the same time,
China Merchants Group agrees compensate CMPort Holdings and
the enterprise subordinate to it in cash for actual losses incurred to
CMPort Holdings and the enterprise subordinate to it for this reason
to relieve or eliminate adverse effect.
Commitment letter about allotted land of the enterprise subordinate
to China Merchants Port Holdings Company Limited from China
Merchants Group: In case that the above allotted land is withdrawn
or needs to be translated into assignment land due to policy
adjustment in the future after the transaction is completed, China
Effective
Merchants Group will actively coordinate with CMPort and related
until no-
companies such as China Merchants Group International Port
longer to
Other (Qingdao) Co., Ltd. and Shantou CMPort Group Co., Ltd. to handle
be the Ongoi
CMG commit the transfer procedure or take other feasible countermeasures. In case 26 July 2018
actual ng
ment of any actual loss (excluding land-transferring fees or rent, fees paid
controller
for taking rural land, ownership registration fees, taxes and dues and
of the
other related expenses to be paid by Chiwan Wharf or above-
Company
mentioned related companies according to provisions of laws and
regulations) incurred to CMPort or above-mentioned related
companies for this reason, China Merchants Group will timely and
fully compensate actual loss incurred to CMPort or above-mentioned
related companies.
Commitment letter about undertaking the accreditation fees of
property ownership certificate for the perfection of the land and
house property of CMPort Holdings and the enterprise subordinate
Effective
to it: In case of defective land use right and house property involved
until no-
by the Company subordinate to CMPort Holdings on account of
longer to
Other operation (namely land use right and house property of the Company 14
be the Ongoi
CMG commit subordinate to CMPort Holdings without complete ownership September
actual ng
ment certificate existing before the transaction is completed), incurring 2018
controller
registration fees such as taxes and dues, compensation and fine in the
of the
process of perfecting legal procedures of defective land use right and
Company
house property by the subordinate to CMPort Holdings, China
Merchants Group will timely and fully compensate to the Company
subordinate to CMPort Holdings for undertaking.
CMG Other Commitment letter about related matters of CMPort after the 30 Three to Ongoi
commit transaction is completed: After the transaction is completed, Chiwan September five years ng
60
China Merchants Port Group Co., Ltd. Annual Report 2019
ment Wharf will become port business asset management headquarters 2018 and CMG
and domestic capital operation platform of China Merchants Group, is the
deeply participate in integration of domestic regional port assets and actual
enlarge the scale of domestic listed assets to make net profit of controller
CMPort Holdings (00144.HK) enjoyed as per the rights and interests of the
in the consolidated statement of listed Company in recent one fiscal Company
year fail to exceed 50% net profit of consolidated statement of the
listed Company and net asset of CMPort Holdings (00144.HK)
enjoyed in light of rights and interests in the consolidated statement
of listed Company in recent one fiscal year fail to exceed 30% net
asset in the consolidated statement of the listed Company within 3-5
years after the transaction is completed.
China Merchants Group and all its directors, supervisors and
administrative officers ensure the transaction report, its abstract,
other information provided for the transaction and application
document are true, accurate and complete without false record,
misleading statement or important omission as well as take
individual and joint legal liability for false record, misleading
statement or important omission. If the information provided or
disclosed by this transaction is suspected of false records, misleading
statements or major omissions, and is investigated by the judicial
authorities or investigated by the China Securities Regulatory
Commission (CSRC), the directors, supervisors or senior managers
of China Merchants Group do not transfer the shares that have
interests in listed Company, and submit the written application and
stock account of the suspension of the transfer to the Board of
Directors of the CMPort within two trading days after receiving the
Other filing inspection notice, and the Board of Directors shall apply for Effective
Ongoi
CMG commit lock-up on behalf of the CMG Hong Kong to the Stock Exchange 26 July 2018 continuous
ng
ment and Registration and Settlement Company. In case of failing to file ly
a locking application within two transaction days and after the Board
of Directors is authorized for verification, identity information and
account information on directors, supervisors or administrative
officers of China Merchants Group will be directly submitted to
Stock Exchange and Registration and Settlement Company with
locking applied; In case of Board of Directors failing to submit
identity information and account information on directors,
supervisors or administrative officers of China Merchants Group to
Stock Exchange and Registration and Settlement Company, Stock
Exchange and Registration and Settlement Company will be
authorized to directly lock related shares. In case that the situation of
violating laws and rules is found upon investigation conclusion,
directors, supervisors or administrative officers of China Merchants
Group promise locked shares are voluntarily used for compensating
related investors.
1. CMG Hong Kong ensures related information provided for the
transaction is true, accurate and complete without false record,
misleading statement or important omission; 2. CMG Hong Kong
ensures the data provided to CMPort and all intermediary organs
participating in the transaction is true, accurate and complete original
written data or data copy. Data copy is consistent with original data
and signature and seal of all the documents are true. The signatory of
such documents is legally authorized and effectively signs such
documents without any false record, misleading statement or
CMG Other important omission; 3. CMG Hong Kong ensures descriptions and Effective
Ongoi
Hong commit confirmations issued for the transaction is true, accurate and 26 July 2018 continuous
ng
Kong ment complete without false record, misleading statement or important ly
omission; 4. CMG Hong Kong ensures that statutory disclosure and
report obligation has been performed, and no contracts, agreements,
arrangements or miscellaneous that should have been disclosed
exists; 5. The CMG Hong Kong made the commitment that if the
information provided or disclosed by this transaction is suspected of
false records, misleading statements or major omissions, and is
investigated by the judicial authorities or investigated by the China
Securities Regulatory Commission (CSRC), it does not transfer the
shares that have interests in listed Company, and submit the written
61
China Merchants Port Group Co., Ltd. Annual Report 2019
application and stock account of the suspension of the transfer to the
Board of Directors of the CMPort within two trading days after
receiving the filing inspection notice, and the Board of Directors
shall apply for lock-up on behalf of the CMG Hong Kong to the
Stock Exchange and Registration and Settlement Company. In case
of failing to file a locking application within two transaction days
and after the Board of Directors is authorized for verification,
identity information and account information on CMG Hong Kong
will be directly submitted to Stock Exchange and Registration and
Settlement Company with locking applied; In case of Board of
Directors failing to submit identity information and account
information on CMG Hong Kong to Stock Exchange and
Registration and Settlement Company, Stock Exchange and
Registration and Settlement Company will be authorized to directly
lock related shares. If the investigation finds that there is a violation
of the law, CMG Hong Kong committed to lock the shares
voluntarily for the relevant investor compensation; 6. If CMG Hong
Kong promises to related document, data and information provided
in the reorganization process aren't true, accurate or complete or are
with false record, misleading statement or important omission, CMG
Hong Kong is willing to legally bear corresponding legal
responsibility; 7. In case of CMG Hong Kong violating the above
promise, incurring losses to CMPort, CMG Hong Kong will take
corresponding compensation responsibility.
1. CMID ensures related information provided for the transaction is
true, accurate and complete without false record, misleading
statement or important omission; 2. CMID ensures the data provided
to CMPort and all intermediary organs participating in the
transaction is true, accurate and complete original written data or
data copy. Data copy is consistent with original data and signature
and seal of all the documents are true. The signatory of such
documents is legally authorized and effectively signs such
documents without any false record, misleading statement or
important omission; 3. CMID ensures description and confirmation
provided for the transaction are true, accurate and complete without
any false record, misleading statement or important omission; 4.
CMID ensures that statutory disclosure and report obligation has
been performed, and no contracts, agreements, arrangements or
miscellaneous that should have been disclosed exists; 5. The CMID
made the commitment that if the information provided or disclosed
by this transaction is suspected of false records, misleading
statements or major omissions, and is investigated by the judicial
authorities or investigated by the China Securities Regulatory
Other Commission (CSRC), it does not transfer the shares that have Effective
Ongoi
CMID commit interests in CMPort, and submit the written application and stock 26 July 2018 continuous
account of the suspension of the transfer to the Board of Directors of ng
ment ly
the CMPort within two trading days after receiving the filing
inspection notice, and the Board of Directors shall apply for lock-up
on behalf of the CMG Hong Kong to the Stock Exchange and
Registration and Settlement Company. If the application for lock-up
is not submitted within two transaction days, the Board of Directors
is authorized to verify and submit the identity information and
account information of CMID directly to the Stock Exchange and
Registration and Settlement Company and apply for lock-up; If the
Board of Directors fails to submit the identity information and
account information of the CMID to the Stock Exchange and
Registration and Settlement Company, then the Stock Exchange and
Registration and Settlement Company shall be authorized to directly
lock the relevant shares. If the investigation finds that there is a
violation of the law, CMID committed to lock the shares voluntarily
for the relevant investor compensation; 6. If CMID promises to
related document, data and information provided in the
reorganization process aren't true, accurate or complete or are with
false record, misleading statement or important omission, CMID is
willing to legally bear corresponding legal responsibility; 7. In case
of CMID violating the above commitment, incurring losses to
62
China Merchants Port Group Co., Ltd. Annual Report 2019
CMPort, CMID will take corresponding compensation
responsibility.
1. CMPort Holdings ensures related information provided for the
transaction is true, accurate and complete without false record,
misleading statement or important omission; 2. CMPort Holdings
ensures the data provided to CMPort and all intermediary organs
participating in the transaction is true, accurate and complete original
written data or data copy. Data copy is consistent with original data
and signature and seal of all the documents are true. The signatory of
such documents is legally authorized and effectively signs such
documents without any false record, misleading statement or
important omission; 3. CMID ensures description and confirmation
CMPort Other provided for the transaction are true, accurate and complete without Effective
Ongoi
Holding commit any false record, misleading statement or important omission; 4. 26 July 2018 continuous
ng
s ment CMPort Holdings ensures that statutory disclosure and report ly
obligation has been performed, and no contracts, agreements,
arrangements or miscellaneous that should have been disclosed
exists; 5. CMPort Holdings made the commitment that if the
information provided or disclosed by this transaction is suspected of
false records, misleading statements or major omissions, and is
investigated by the judicial authorities or investigated by the China
Securities Regulatory Commission (CSRC); CMPort Holdings
committed that if CMPort Holdings violated the above promise,
incurring losses to CMPort, CMPort Holdings will take
corresponding compensation responsibility.
1. China Merchants Group ensures related information provided for
the transaction is true, accurate and complete without false record,
misleading statement or important omission; 2. China Merchants
Group ensures the data provided to CMPort and all intermediary
organs participating in the transaction is true, accurate and complete
original written data or data copy. Data copy is consistent with
original data and signature and seal of all the documents are true. The
signatory of such documents is legally authorized and effectively
signs such documents without any false record, misleading statement
or important omission; 3. China Merchants Group ensures
descriptions and confirmations issued for the transaction is true,
accurate and complete without false record, misleading statement or
important omission; 4. China Merchants Group ensures that statutory
disclosure and report obligation has been performed, and no
contracts, agreements, arrangements or miscellaneous that should
have been disclosed exists; 5. China Merchants Group made the
commitment that if the information provided or disclosed by this
transaction is suspected of false records, misleading statements or
major omissions, and is investigated by the judicial authorities or
Other investigated by the China Securities Regulatory Commission Effective
Ongoi
CMG commit (CSRC), it does not transfer the shares that have interests in CMPort, 26 July 2018 continuous
ng
ment and submit the written application and stock account of the ly
suspension of the transfer to the Board of Directors of the CMPort
within two trading days after receiving the filing inspection notice,
and the Board of Directors shall apply for lock-up on behalf of the
CMG Hong Kong to the Stock Exchange and Registration and
Settlement Company. In case of failing to file a locking application
within two transaction days and after the Board of Directors is
authorized for verification, identity information and account
information of China Merchants Group will be directly submitted to
Stock Exchange and Registration and Settlement Company with
locking applied; In case of Board of Directors failing to submit
identity information and account information of China Merchants
Group to Stock Exchange and Registration and Settlement Company,
Stock Exchange and Registration and Settlement Company will be
authorized to directly lock related shares. If the investigation finds
that there is a violation of the law, China Merchants Group
committed to lock the shares voluntarily for the relevant investor
compensation; 6. If China Merchants Group promises to related
document, data and information provided in the reorganization
process aren't true, accurate or complete or are with false record,
63
China Merchants Port Group Co., Ltd. Annual Report 2019
misleading statement or important omission, China Merchants
Group is willing to legally bear corresponding legal responsibility;
In case of China Merchants Group violating the above promise,
incurring losses to CMPort, China Merchants Group will take
corresponding compensation responsibility.
Chiwan Wharf and all its directors, supervisors and administrative
officers ensure the transaction report, its abstract, other information
provided for the transaction and application document are true,
accurate and complete without false record, misleading statement or
important omission as well as take individual and joint legal liability
for false record, misleading statement or important omission. If the
information provided or disclosed by this transaction is suspected of
false records, misleading statements or major omissions, and is
investigated by the judicial authorities or investigated by the China
Securities Regulatory Commission (CSRC), the directors,
supervisors, or senior managers of Chiwan Wharf do not transfer the
Chiwan shares that have interests in listed Company, and submit the written
Wharf application and stock account of the suspension of the transfer to the
and all Board of Directors of the CMPort within two trading days after
directors receiving the filing inspection notice, and the Board of Directors
Other Effective
, shall apply for lock-up on behalf of the CMG Hong Kong to the Ongoi
commit 26 July 2018 continuous
supervis Stock Exchange and Registration and Settlement Company. In case ng
ment ly
ors and of failing to file a locking application within two transaction days
senior and after the Board of Directors is authorized for verification,
manage identity information and account information on directors,
ment supervisors or administrative officers of Chiwan Wharf will be
directly submitted to Stock Exchange and Registration and
Settlement Company with locking applied; In case of Board of
Directors failing to submit identity information and account
information on directors, supervisors or administrative officers of
Chiwan Wharf to Stock Exchange and Registration and Settlement
Company, Stock Exchange and Registration and Settlement
Company will be authorized to directly lock related shares. In case
that the situation of violating laws and rules is found upon
investigation conclusion, directors, supervisors or administrative
officers of Chiwan Wharf promise locked shares are voluntarily used
for compensating related investors.
China Nanshan Development(group) Incorporation will irrevocably
China and unconditionally agrees it will ensure transferee of such land use
Nanshan right and its successor and assignee will be fully exempted from
Other Effective
Develop responsibility for the above matters in case of CMPort encountering 20 March Ongoi
commit continuous
ment losses, needing to bear expenses and liabilities, undergoing claim for 2001 ng
ment ly
(Group) compensation or needing to file a lawsuit due to any actual or
Inc. potential illegal and unenforceable issues incurred by land use
agreement and relevant documents signed and to be signed by it.
1. The Company has agreed not to transfer the shares subscribed
within twelve months from the end date of the issue (which refers to
Other the listing date of the stock issued) by CMPort. It has requested the
commitm Board of CMPort to apply with the Shenzhen Branch of China
Commit
ents made Securities Depository and Clearing Co., Ltd. (CSDC) for locking the
China- ment of
to shares subscribed by the Company to make sure that the
Africa shares
minority aforementioned shares held by the Company will not be transferred 3
Develop lock-up 4 November Ongoi
sharehold within twelve months from the end date of the issue. 2. Except for November
ment and 2019 ng
ers the sell permitted by regulatory authorities that does not constitute 2020
Fund share
nonperformance or incomplete performance of the aforementioned
Co., Ltd. reductio
commitment, the Company undertakes that it will authorize CSDC
n plan
to transfer the fund from the sell into its account to be owned by all
its shareholders if it violates the aforementioned commitment. 3. The
Company declares that it will faithfully fulfill its commitment and
bear corresponding legal liabilities.
Shenzhe Commit The Company has agreed not to transfer the shares subscribed within
n ment of twelve months from the end date of the issue (which refers to the 4 November 3 Ongoi
Infrastru shares listing date of the stock issued) by CMPort. It has requested the 2019 November
ng
cture lock-up Board of CMPort to apply with the Shenzhen Branch of China 2020
Investm and Securities Depository and Clearing Co., Ltd. (CSDC) for locking the
64
China Merchants Port Group Co., Ltd. Annual Report 2019
ent Fund share shares subscribed by the Company to make sure that the
Partners reductio aforementioned shares held by the Company will not be transferred
hip (LP) n plan within twelve months from the end date of the issue. 2. The Company
committed that as not fulfilling nonperformance or incomplete
performance of the aforementioned commitment, the Company shall
compensate the direct economic loss of other shareholders. The
Company undertakes that if it violates the aforementioned
commitment, it will authorize CSDC to transfer the fund from the
sale into its account to be owned by all shareholders. 3. 3. The
Company declares that it will faithfully fulfill its commitment and
bear corresponding legal liabilities.
Whether
fulfilled Yes
on time
Specific
reasons
for failing
to fulfill
commitm
N/A
ents on
time and
plans for
next step
(if any)
2. Where there Had Been an Earnings Forecast for an Asset or Project and the Reporting
Period Was still within the Forecast Period, Explain why the Forecast Has Been Reached for
the Reporting Period.
□ Applicable √ Not applicable
IV. Occupation of the Company’s Capital by the Controlling Shareholder or Its Related Parties
for Non-Operating Purposes
During the Reporting Period, the controlling shareholder or its related parties did not occupy capital
or repay for non-operating purposes. Deloitte Touche Tohmatsu Certified Public Accountants LLP
issued the Special Report on Occupation of the Company’s Capital by the Controlling Shareholder
and Other Related Parties, and refer to www.cninfo.com.cn for details.
V. Explanations Given by the Board of Directors, the Supervisory Board and the Independent
Directors (if any) Regarding the Independent Auditor's “Modified Opinion” on the Financial
Statements of the Reporting Period
□ Applicable √ Not applicable
VI. YoY Changes to Accounting Policies, Estimates and Methods
The Accounting Standards for Business Enterprises No. 21 – Lease (hereinafter referred to as “New
lease standard”) revised and issued by Ministry of Finance on 7 December 2018 required that
enterprises listed both domestically and overseas and enterprises listed overseas who prepare the
financial statements by International Financial Reporting Standards or Accounting Standards for
Business Enterprises shall implement it form 1 January 2019, and other enterprises implementing the
65
China Merchants Port Group Co., Ltd. Annual Report 2019
Accounting Standards for Business Enterprises shall implement it from 1 January 2021. According
to the requirements of Ministry of Finance, enterprises whose subsidiaries are listed overseas and
prepare the financial statements by International Financial Reporting Standards or Accounting
Standards for Business Enterprises can implement the new lease standard in advance. The Company,
in accordance with the requirements of Ministry of Finance, implemented the new lease standard
from 1 January 2019. Refer to Announcement on Changes of Accounting Policy (Announcement No.
2019-031) on www.cninfo.com.cn. disclosed on 30 March 2019. In accordance with the regulations
of new standards governing financial instrument, the Company shall not adjust the information
between the comparable periods, and the accumulative influence in the first execution of the new
standards shall be adjusted to the retained earnings at the period-begin and the amount of other
relevant item in the financial statements.
On 30 April 2019, the Format of 2019 General Enterprises Financial Statement was revised and
printed by the Ministry of Finance, making partial amendments to the format of financial statements.
The changes of format of financial statements were implemented from the interim financial reports
on 30 June 2019. Refer to Announcement on Changes of Accounting Policy (Announcement No.
2019-063) on www.cninfo.com.cn. disclosed on 31 August 2019.
On 19 September 2019, the Format of 2019 Consolidated Financial Statement was revised and printed
by the Ministry of Finance, making partial amendments to the format of financial statements on the
basis of the Format of 2019 General Enterprises Financial Statement and the Format of 2018 Financial
Enterprises Financial Statement. The changes of format of financial statements were implemented
from the third quarter financial statements on 30 September 2019. Refer to Announcement on
Changes of Accounting Policy (Announcement No. 2019-076) on www.cninfo.com.cn. disclosed on
31 October 2019.
For further information, please refer to (III) Changes in Main Accounting Policies and Estimates in
Part XI Financial Statements for details.
VII. Retrospective Restatements due to Correction of Material Accounting Errors in the
Reporting Period
No such cases in the Reporting Period.
VIII. YoY Changes to the Scope of the Consolidated Financial Statements
On 31 December 2018, the subsidiary of the Company, China Merchants International Terminal
(Zhanjiang) Co., Ltd. held 1,620,000,000 ordinary shares of Zhanjiang Port, accounting for 40.2916%
of the total shares issued by Zhanjiang Port. On 2 January 2019, the Company signed the Agreement
of Share Transfer of Zhanjiang Port (Group) Co., Ltd. with Sinotrans Guangdong Co., Ltd., which
transferred 201,034,548 shares of Zhanjiang Port held by Sinotrans Guangdong Co., Ltd., accounting
for 5% of total shares issued on the signing date with the consideration of transfer of
RMB375,334,390.00.
The wholly-owned subsidiary of the Company CWH (H.K.) signed in Zhanjiang on 8 January 2019
the Agreement on a Capital Increase to Zhanjiang Port (Group) Co., Ltd. with Zhanjiang
Infrastructure Investment and Zhanjiang Port (hereinafter referred to as the “Capital Increase
Agreement”). According to the provisions of the Capital Increase Agreement, Zhanjiang Port issued
66
China Merchants Port Group Co., Ltd. Annual Report 2019
1,853,518,190 additional ordinary shares at the price of RMB1.867 per share or the equivalent in the
foreign currency (based on the exchange rate at the time of payment) to increase its registered capital
to RMB5,874,209,145. CWH (H.K.) subscribed for 1,606,855,919 such ordinary shares, accounting
for 27.3544% of the issued shares of Zhanjiang Port as at the date of issuance of such shares, at a
total price of RMB3,000,000,000.77 or the equivalent in the foreign currency (based on the exchange
rate at the time of payment) (hereinafter referred to as "the Transaction"); and Zhanjiang
Infrastructure Investment subscribed for 246,662,271 shares, accounting for 4.1991% of the issued
shares of Zhanjiang Port as at the date of issuance of such shares, at a total price of
RMB460,518,459.96.
As of 3 February 2019, the registration and filing procedures of the Transaction for business change
was finished, and the capital increase to Zhanjiang Port by the Company’s wholly-owned subsidiary
CWH (H.K.) was completed. Upon the completion of the Transaction, the Company’s interest in
Zhanjiang Port has increased to 58.3549%. Therefore, Zhanjiang Port has since been included in the
scope of the Company’s consolidated financial statements.
IX. Engagement and Disengagement of Independent Auditor
Current independent auditor
Name of the domestic independent auditor Deloitte Touche Tohmatsu Certified Public Accountants LLP
The Company’s payment to the domestic independent auditor
586.2
(RMB’0,000)
How many consecutive years the domestic independent auditor
8
has provided audit service for the Company
Names of the certified public accountants from the domestic
Li Weihua, Zhang Min
independent auditor writing signatures on the auditor’s report
How many consecutive years the certified public accountants
1
have provided audit service for the Company
Name of the overseas independent auditor (if any) Deloitte Touche Tohmatsu
The Company’s payment to the overseas independent auditor
363.8
(RMB’0,000) (if any)
How many consecutive years the overseas independent auditor has
8
provided audit service for the Company (if any)
Names of the certified public accountants from the overseas
independent auditor writing signatures on the auditor’s report (if Zhong Zhiwen
any)
How many consecutive years the certified public accountants
3
have provided audit service for the Company (if any)
Indicate by tick mark whether the independent auditor was changed for the Reporting Period.
□ Yes √ No
Independent auditor, financial advisor or sponsor engaged for the audit of internal controls:
Approved by the 5th Meeting of the 9th Board of Directors in 2019 and 2018 Annual General Meeting
of the Company, the Company was allowed to continuously engage Deloitte Touche Tohmatsu
Certified Public Accountants LLP as the 2019 independent auditor for the audit of annual financial
statements and internal control in the current year. The audit price for 2019 annual financial
statements was RMB9.22 million and the price for internal control was RMB0.28 million. The total
expense on aforesaid two audit work was RMB9.5 million.
67
China Merchants Port Group Co., Ltd. Annual Report 2019
X. Possibility of Listing Suspension or Termination after Disclosure of this Report
□ Applicable √ Not applicable
XI. Insolvency and Reorganization
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XII. Major Legal Matters
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XIII. Punishments and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XIV. Credit Quality of the Company as well as Its Controlling Shareholder and Actual
Controller
□ Applicable √ Not applicable
XV. Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures for
Employees
The Company had completed registration for the grant of stock option (the first grant) under the Stock
Option Incentive Plan (Phase I) as at March 13, 2020. Review and approval procedures carried out in
connection with the Stock Option Incentive Plan are as follows:
At the 2nd non-scheduled meeting of the Nomination, Remuneration and Appraisal Committee of the
ninth session of the Board of 2019 held on October 10, 2019, the following proposals were considered
and approved, including Stock Option Incentive Plan of CMPort (Draft) (hereinafter referred to as
the “Stock Option Incentive Plan (Draft)”) and its summary, Stock Option Incentive Plan of CMPort
(Phase I) (Draft) (hereinafter referred to as the “Stock Option Incentive Plan (Phase I) (Draft)”) and
its summary, Management Measures for the Stock Option Incentive Plan of CMPort (hereinafter
referred to as the “Management Measures for the Stock Option Incentive Plan”), Appraisal Measures
for Implementing the Stock Option Incentive Plan and Implementation Appraisal Measures of Stock
Option Incentive Plan by China Merchants Port Group Co., Ltd. (hereinafter referred to as
“Implementation Appraisal Measures of Stock Option Incentive Plan”)
(2) At the 9th Extraordinary Meeting of the 9th Board in 2019 held on 11 October 2019, the following
proposals were reviewed and approved, including Stock Option Incentive Plan (Draft) and its
summary, Stock Option Incentive Plan (Phase I) (Draft) and its summary, Management Measures for
the Stock Option Incentive Plan, Appraisal Measures for Implementing the Stock Option Incentive
68
China Merchants Port Group Co., Ltd. Annual Report 2019
Plan and Proposal on Requesting the General Meeting to Authorize the Board of Directors to Go
Through Share Incentive Procedures, and independent directors expressed independent opinions. At
the 2nd Extraordinary Meeting of the 9th Supervisory Committee in 2019 held on the same day, the
following proposals were reviewed and approved, including Stock Option Incentive Plan (Draft) and
its summary, Stock Option Incentive Plan (Phase I) (Draft) and its summary, Management Measures
for the Stock Option Incentive Plan and Appraisal Measures for Implementing the Stock Option
Incentive Plan, and List of Incentive Objects under the Stock Option Incentive Plan (Phase I) was
reviewed with opinions expressed.
(3) On 3 January 2020, the Company received Approval on the Implementation of Stock Incentive
Plan of CMPort (GZKF [2019] No. 748) issued by the State-owned Assets Supervision and
Administration Commission of the State Council from China Merchants Group, the actual controller
of the Company. In principle, approval was given to the Company for its implementation of the Stock
Option Incentive Plan and performance appraisal goals under the Plan.
(4) At the 1st Extraordinary Meeting of the 9th Board of Directors in 2020 held on 9 January 2020,
Stock Option Incentive Plan (Phase I) (Revised Draft) and its summary were reviewed and approved
and independent directors expressed independent opinions. At the 1st Extraordinary Meeting of the
9th Supervisory Committee in 2020 held on the same day, Stock Option Incentive Plan (Phase I)
(Revised Draft) and its summary were reviewed and approved and List of Incentive objects under the
Stock Option Incentive Plan (Phase I) (After Adjustment) was reviewed with opinions expressed.
(5) On 20 January 2020, the Company disclosed the List of Incentive Objects of Stock Option
Incentive Plan (Phase I) China Merchants Port Group Co., Ltd. The Company published the names
and positions of the incentive objects for the first grant of the stock option in its internal OA system
from 10 January to 19 January 2020. By the end of the publicity, the Company’s Supervisory
Committee had not received any objection against the incentive objects for the first grant. The
Supervisory Committee reviewed the list of incentive objects for the first grant, and disclosed Notes
of the Supervisory Committee on the Review and Publicity of the List of Incentive Objects under the
Stock Option Plan (Phase I) on 20 January 2020.
(6) At the 1st non-scheduled shareholders’ meeting of 2020 held on 3 February 2020, the following
proposals were considered and approved, including Stock Option Incentive Plan (Draft) and its
summary, Stock Option Incentive Plan (Phase I) (Revised Draft) and its summary, Management
Measures for the Stock Option Incentive Plan, Appraisal Measures for Implementing the Stock
Option Incentive Plan and Proposal on Requesting the General Meeting to Authorize the Board of
Directors to Go Through Share Incentive Procedures. The Company’s Stock Option Incentive Plan
was approved and the Board of Directors was authorized to determine the grant date, grant stock
option to the incentive objects when they meet the conditions and go through all procedures required
for the grant. On the same day, the Company disclosed Self-inspection Report on the Trading of the
Company’s Shares by Insiders and Incentive Objects of the Stock Option Incentive Plan (Phase I)
according to its verification of the trading engaged by the insiders and incentive objects.
(7) At the 2nd Extraordinary Meeting of the 9th Board of Directors in 2020 and the 2nd Extraordinary
Meeting of the 9th Supervisory Committee in 2020 held on 3 February 2020, Announcement on the
Grant of Stock Option (the First Grant) to Incentive Objects of the Stock Option Incentive Plan of the
Company was considered and approved respectively. The Company’s Board of Supervisors reviewed
69
China Merchants Port Group Co., Ltd. Annual Report 2019
the list of incentive objects under the Stock Option Incentive Plan (Phase I) on the grant date and
expressed opinions, and independent directors expressed independent opinions.
The Company had completed registration for the grant of stock option (the first grant) under the Stock
Option Incentive Plan (Phase I) as at 13 March 2020. On the next day, it published Announcement
on Completion of the Grant of Stock Option (the First Grant) under the Stock Option Incentive Plan
(Phase I) of the Company (Announcement No. 2020-020).
XVI. Major Related-Party Transactions
1. Continuing Related-Party Transactions
Ove
As % of Obtainable
r the
total Approved market price Index to
Relations Transacti appr
Type of Specific Pricing value of transaction Method for same- Disclos disclose
Related hip with on price ove
transactio transactio princip Total value all same- line of type ure d
party the (RMB’0,0 d
n n le type (RMB’0,00 settlement transactions date informat
Company 00) line
transacti 0) (RMB’0,000 ion
or
ons )
not
Qingdao www.cni
Qianwa nfo.com.
Exchange
n United cn
Affiliated memo 30
Contain Render Market Settled (Announ
legal fee, 5,497.69 5,497.69 9.21% 6,500.00 No 5,497.69 March
er service price monthly cement
person office, 2019
Termina No.
other
l Co., 2019-
Ltd. 032)
China
www.cni
Mercha
Labor nfo.com.
nts Under the
Render cost, lease cn
Shekou control of 30
service expense Market Settled (Announ
Industri ultimate 4,113.85 4,113.85 6.53% 5,000.00 No 4,113.85 March
and of land price monthly cement
al Zone sharehold 2019
leasing and No.
Holding er
houses 2019-
s Co.,
032)
Ltd.
www.cni
China nfo.com.
Nanshan Office, cn
Affiliated 30
Develop container Market Settled (Announ
legal Leasing 14,948.42 14,948.42 15.71% 11,000.00 Yes 14,948.42 March
ment yard, staff price monthly cement
person 2019
(Group) dormitory No.
Inc. 2019-
032)
Total -- -- 24,559.96 -- 22,500.00 -- -- -- -- --
Large-amount sales return in detail None
The Proposal on Recognition of 2018 Daily Related-party Transaction and the Forecast of 2019 Daily
Related-party Transaction was reviewed and approved on the 5th Meeting of the 9th Board of Directors on
28 March 2019, which allowed the Company and subsidiaries to conduct daily business transaction
Give the actual situation in the Reporting
including office leasing, software procurement and labor coast. The amount of daily related-party
Period (if any) where an estimate had been
transactions in 2019 is estimated to be RMB575 million. The actual amount of the above related-parties
made for the total value of continuing
daily transactions was RMB246 million. Due to the requirements of actual market and business
related-party transactions by type to occur
development, there was difference existed which belonged to the normal management adjustment, without
in the Reporting Period
major influences to the daily operation and performance of the Company. Refer to Announcement on
Recognition of Daily Related-party Transactions in 2019 and the Forecast of Daily Related-party
Transactions in 2020 disclosed on www.cninfo.com.cn dated 16 April 2020.
Reason for any significant difference
between the transaction price and the N/A
market reference price (if applicable)
70
China Merchants Port Group Co., Ltd. Annual Report 2019
2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests
Profit
or
Carrying Estimated
loss
Relations value of value of Transfer Method Index to
Type of Specific on
Related hip with Pricing transferring transferring price of Disclosur disclosed
transactio transactio transa
party the principle assets assets (RMB’0,00 settleme e date informati
n n ction
Company (RMB’0,00 (RMB’0,00 0) nt on
(RMB
0) 0)
’0,00
0)
The
Company
www.cni
purchased
nfo.com.c
the equity
The same n
Sinotrans of
ultimate Assets Settled 5 January (Announc
Guangdo Zhanjiang Fair value 24,255.07 37,533.44 37,533.44 0
actual purchase by times 2019 ement
ng Port held
controller No .
by
2019-
Sinotrans
003)
Guangdo
ng
The
wholly-
owned
subsidiary
, CWH
Senior (H.K.)
www.cni
manager subscribe
Zhanjiang nfo.com.c
of the d
Infrastruc n
Company Assets 27.3544% Settled 9 January
ture Fair value 193,868.92 300,001.97 300,000.00 0 (Announc
holds the purchase of shares by times 2019
Investme ement
position on issued
nt No .2019-
the date
005)
director issued by
Zhanjiang
Port by
RMB3,00
0,000,000
.77.
Reason for any significant difference
between the transfer price and the carrying None
value or estimated value (if applicable)
Influence to the business performance and
None
financial condition
The realization of the performance in the
Reporting Period if relevant transaction N/A
involved in performance commitment
3. Related Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Credits and Liabilities with Related Parties
Whether there are credits and liabilities with non-operating related parties
√Yes □ No
71
China Merchants Port Group Co., Ltd. Annual Report 2019
Credits receivable with related parties
Whether
Increased in Interest in
there is
the Recovered in the Ending
occupatio Beginning
Related Related Forming Reporting the Reporting Interest Reporting balance
n on non- balance
party relationship reason Period Period rate Period (RMB’0,000
operating (RMB’0,000)
(RMB’0,000 (RMB’0,000) (RMB’0,00 )
capital or
) 0)
not
Other
China company
Merchants under the
Bank
Group same No 49,413.12 829,195.99 789,602.59 2.04% 781.47 89,006.52
deposits
Finance control of
Co., Ltd. controlling
shareholder
The
ultimate
Bank
China controlling
deposits and
Merchants shareholder No 127,453.65 2,081,203.62 1,910,572.47 1.90% 2,607.43 298,084.80
structural
Bank has major
deposits
influence
on it
Effects of credits with
related parties on the
The above credits receivable with related parties were mainly deposits in financial institutions which has
Company’s operating
no major influence on the Company’s operating results and financial conditions.
results and financial
conditions
Liabilities payable with related parties
Increased in Recovered in Interest in
Beginning Ending
Related Forming the Reporting the Reporting the Reporting
Related party balance Interest rate balance
relationship reason Period Period Period
(RMB’0,000) (RMB’0,000)
(RMB’0,000) (RMB’0,000) (RMB’0,000)
Other
company
China
under the
Merchants
same control Borrowing 77,500 196,456.34 152,200.00 4.50% 4,041.1 121,756.34
Group Finance
of
Co., Ltd.
controlling
shareholder
The ultimate
controlling
China
shareholder
Merchants Borrowing - 9,009.30 - 4.00% 361.83 9,009.30
has major
Bank
influence on
it
Effects of liabilities with
related parties on the The above liabilities payable with related parties were mainly financial institution loans which had no
Company’s operating results major influence on the Company’s operating results and financial conditions.
and financial conditions
5. Other Major Related-Party Transactions
(1) 17 companies have invested in CM Qianhai Industry, including CMPort Holdings and CMSK,
holding subsidiaries of the Company. On 1 January 2019, CM Chidi, a subsidiary of CM Qianhai
Industry, entered into Confirmation of Compensation for Creditors’ Rights with the 19 land-holding
companies to determine the amount and proportion of land compensation for creditors’ rights of the
19 land-holding companies. Ansujie and Antongjie, wholly-owned subsidiaries of CMPort Holdings,
will receive about RMB5.693 billion from CM Chidi as compensation for the land use rights of about
72
China Merchants Port Group Co., Ltd. Annual Report 2019
471,800 square meters, accounting for 13.1758% of the total amount of land compensation for
creditor’s rights. In order to keep the proportion of land compensation for creditor's rights in line with
the proportion of 14% equity held indirectly by CMPort Holdings, Antongjie, Shekou Asset
Management and CM Chidi signed on 11 January 2019 the Agreement on Transfer of Creditor's
Rights, to stipulate that Antongjie will purchase 0.8242% of land compensation for creditor's rights
from Shekou Asset Management, with an amount of creditor’s rights up to about RMB356 million.
(2) CWH (H.K.), a wholly-owned subsidiary of the Company, signed Agreement on a Capital Increase
to Zhanjiang Port (Group) Co., Ltd. with Zhanjiang Infrastructure Investment and Zhanjiang Port.
According to the Agreement, Zhanjiang Port issued 1,853,518,190 additional ordinary shares at the
price of RMB 1.867 per share or the equivalent in the foreign currency (based on the exchange rate
at the time of payment) to increase its registered capital to RMB5,874,209,145. CWH (H.K.)
subscribed for 1,606,855,919 such ordinary shares, accounting for 27.3544% of the issued shares of
Zhanjiang Port as at the date of issuance of such shares, at a total price of RMB3,000,000,000.77 or
the equivalent in the foreign currency (based on the exchange rate at the time of payment); and
Zhanjiang Infrastructure Investment subscribed for 246,662,271 shares, accounting for 4.1991% of
the issued shares of Zhanjiang Port as at the date of issuance of such shares, at a total price of RM
B460,518,459.96.
(3) The controlling subsidiary of the Company, CMPort signed the Supplemental agreement (II) of
the Shareholder Agreement of Lac Assal Investment Holding Company Limited and Supplemental
agreement (III) of the Shareholder Agreement of Lac Assal Investment Holding Company Limited
with CMI on 22 January 2019 and Cheer Signal on 29 April 2019 respectively. The agreements agreed
that CMPort, CMI and Cheer Signal increased capital jointly to Lac Assal by cash according to the
equity ratio in Lac Assal held by CMPort, CMI and Cheer Signal, totaling USD30,000,000 and
USD84,750,000 respectively, among which CMPort increased capital of USD12,000,000 and
USD33,900,000 respectively. After two-time capital increase, the registered capital of Lac Assal was
increased to USD144,810,000 with no changes in equity ratio held by CMPort, CMI and Cheer Signal
(40%, 40% and 20% respectively)
(4) The Company and subsidiaries opened the accounts at China Merchants Bank. In 2019, the
maximum outstanding of deposits at China Merchants Bank f the company and subsidiaries is planned
not to be more than RMB5 billion and the maximum loan balance not over RMB10 billion.
(5) The wholly-owned subsidiary of the controlling subsidiary CMPort, CMHD signed LAND
LEASE AGREEMENT with joint-stock subsidiary of CMPort, KHOR AMBADO FZCO on 28
March 2019, which appointed CMID to lease the land located in B06/B07 Parcel of Djibouti
international free trade zone with the coverage area of 137,801.63 square meters and the rental of
USD27,756,004.31. The lease term is from the effective date of LAND LEASE AGREEMENT to 14
August 2116.
(6) The Company or its holding subsidiaries would use self-owned funds to provide shareholder loans
of no more than RMB50 million to the participating subsidiary CM Antong with a loan term of no
more than two years (inclusive).
To complete the equity assets transfer between the Company’s holding subsidiary CMPort Holdings
and CMA, CMPort Holdings or its controlled companies would provide TL with a financing of no
more than USD968 million, including guaranteed long-term loans of no more than USD500 million
with a term of eight years and mandatory convertible securities of no more than USD468 million for
the subscription of TL. At the maturity of the long-term loans, CMA would provide the cash required
73
China Merchants Port Group Co., Ltd. Annual Report 2019
for repaying the loans by injecting capital in TL and all the convertible securities held by CMPort
Holdings would be converted into TL’s equity on a mandatory basis.
CM International Investment, a wholly-owned subsidiary of CMPort Holdings, would use self-owned
funds to provide financial aid of RMB34.3 million for Tianjin Haitian, a participating subsidiary of
CMPort Holdings, in the form of entrusted loans. Tianjin Port Holdings Co., Ltd., the controlling
shareholder of Tianjin Haitian, would provide financial aid of the same conditions according to the
contribution proportion with a loan term of three years.
Information on the disclosure website for current announcements on significant related-party
transactions:
Name of provisional reports Disclosure date Website
Announcement on Outward Investment and Related-party www.cninfo.com.cn (Announcement No.
9 January 2019
Transaction by the Wholly-owned Subsidiary 2019-005)
Announcement on Qianhai Land Readjustment and Related-
www.cninfo.com.cn (Announcement No.
party Transaction by the Wholly-owned Subsidiary of the 12 January 2019
2019-008)
Controlling Subsidiary
Announcement on Related-party Transaction by the www.cninfo.com.cn (Announcement No.
13 February 2019
Controlling Subsidiary 2019-012)
Announcement on Related-party Transaction by the www.cninfo.com.cn (Announcement No.
30 April 2019
Controlling Subsidiary 2019-043)
Announcement on Deposit and Loan of Related-party www.cninfo.com.cn (Announcement No.
30 March 2019
Transaction in 2019 at China Merchants Bank 2019-026)
Announcement on Signing the Land Lease Agreement and
www.cninfo.com.cn (Announcement No.
Related-party Transaction by the Wholly-owned Subsidiary 30 March 2019
2019-029)
of the Controlling Subsidiary
Announcement on Financial Assistance and Related-party www.cninfo.com.cn (Announcement No.
7 September 2019
Transaction by Joint-stock Subsidiary 2019-067)
Announcement on Financial Assistance and Outward
www.cninfo.com.cn (Announcement No.
Investment to the Joint-stock Subsidiary by the Controlling 26 November 2019
2019-090)
Subsidiary
Announcement on Adjustment of Deposit and Credit Limit
with China Merchants Group Finance Co., Ltd. and Signing www.cninfo.com.cn (Announcement No.
26 November 2019
the Supplemental Agreement (II) of Financial Service 2019-089)
Agreement and Related-party Transaction
Announcement on Financial Assistance and Related-party www.cninfo.com.cn (Announcement No.
25 December 2019
Transaction by Controlling Subsidiary 2019-098)
XVII. Major Contracts and Execution thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
Details of entrustment
On 13 December 2018, the Company held the 10th Extraordinary Meeting of the 9th Directors of the
Board, on which the Proposal on Signing Custody Agreement of Equity of Liaoning Port Group Co.,
Ltd. between the Company and China Merchants (Liaoning) Port Development Co., Ltd. was
reviewed and approved. The Company was allowed to sign the Custody Agreement of Equity of
Liaoning Port Group Co., Ltd. with China Merchants (Liaoning) Port Development Co, Ltd., the
indirect wholly-owned subsidiary of CMG, and made an appointment that China Merchants (Liaoning)
74
China Merchants Port Group Co., Ltd. Annual Report 2019
Port Development entrusted all 49.9% shares of Liaoning Port Group Co., Ltd. held by it as of 13
December 2018 to the Company for management.
Project which generates profit or loss reaching over 10% of total profits of the Company during the
Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Leases
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Major guarantees
(1) Guarantees
Unit: RMB’0,000
Guarantees provided by the Company and its subsidiaries for external parties (exclusive of those for subsidiaries)
Disclosure
Guarante
date of the
Actual Having e for a
guarantee Line of Actual Type of Term of
Obligor guarantee expired related
line guarantee occurrence date guarantee guarantee
amount or not party or
announcem
not
ent
General About 6
CMA CGM SA N/A - 11 June 2013 0 Yes No
guarantee years
General About 20
CMA CGM SA N/A 8,030.52 11 June 2013 8,030.52 No No
guarantee years
PORT DE DJIBOUTI General About 3
N/A - 14 June 2016 - Yes Yes
S.A., guarantee years
KHOR AMBADO 30 March Joint liability About 13
20,091.46 24 May 2019 11,839.84 No Yes
FZCO 2019 guarantee years
Total approved line for such Total actual amount of such
guarantees in the Reporting Period 20,091.46 guarantees in the Reporting 20,091.46
(A1) Period (A2)
Total approved line for such Total actual balance of such
guarantees at the end of the 28,121.98 guarantees at the end of the 19,870.36
Reporting Period (A3) Reporting Period (A4)
Guarantee between the Company to its subsidiaries
Disclosure
Guarante
date of the
Actual Having e for a
guarantee Line of Actual Type of Term of
Obligor guarantee expired or related
line guarantee occurrence date guarantee guarantee
amount not party or
announcem
not
ent
75
China Merchants Port Group Co., Ltd. Annual Report 2019
Chiwan Wharf
30 March Joint liability
Holdings (Hong 400,000.00 31 July 2019 300,000.00 About 1 year No No
2019 guarantee
Kong) Limited
China Merchants Port
30 March
(Zhoushan) RoRo 12,800.00 - - - - - -
2019
Logistics Co., Ltd
Total approved line for such Total actual amount of such
guarantees in the Reporting Period 412,800.00 guarantees in the Reporting 300,000.00
(B1) Period (B2)
Total approved line for such Total actual balance of such
guarantees at the end of the 412,800.00 guarantees at the end of the 300,000.00
Reporting Period (B3) Reporting Period (B4)
Guarantees provided between subsidiaries
Disclosure
Guarante
date of the
Actual Having e for a
guarantee Line of Actual Type of Term of
Obligor guarantee expired related
line guarantee occurrence date guarantee guarantee
amount or not party or
announcem
not
ent
China Merchants
30 March
International Terminal 70,000.00 - - - - - -
2019
(Qingdao) Co., Ltd.
China Merchants
30 March
International Terminal 10,000.00 - - - - - -
2019
(Qingdao) Co., Ltd.
Shenzhen Jinyu
Rongtai Investment Joint liability About 10
N/A 80,000.00 12 January 2017 76,000.00 No No
Development Co., guarantee years
Ltd.
Shenzhen Jinyu
Rongtai Investment 30 March
100,000.00 - - - - - -
Development Co., 2019
Ltd.
China Merchants
Joint liability About 10
International (China) N/A 2,500.00 30 June 2016 2,500.00 No No
guarantee years
Investment Co., Ltd.
China Merchants
4 May General About 10
Finance Company 348,810.00 4 May 2012 348,810.00 No No
2012 guarantee years
Limited
China Merchants
3 August General About 10
Finance Company 348,810.00 3 August 2015 348,810.00 No No
2015 guarantee years
Limited
China Merchants
3 August General About 5
Finance Company 139,524.00 3 August 2015 139,524.00 No No
2015 guarantee years
Limited
CMHI Finance (BVI) 6 August General About 5
627,858.00 6 August 2018 v No No
Co., Ltd 2018 guarantee years
CMHI Finance (BVI) 6 August General About 10
418,572.00 6 August 2018 418,572.00 No No
Co., Ltd 2018 guarantee years
COLOMBO
INTERNATIONAL
16 September General About 13
CONTAINER N/A 244,097.24 8,677.55 No No
2012 guarantee years
TERMINALS
LIMITED
COLOMBO
INTERNATIONAL
16 September General
CONTAINER N/A 10,464.30 10,464.30 Infinite No No
2012 guarantee
TERMINALS
LIMITED
76
China Merchants Port Group Co., Ltd. Annual Report 2019
COLOMBO
INTERNATIONAL
16 September General
CONTAINER N/A 17,440.50 17,440.50 Infinite No No
2012 guarantee
TERMINALS
LIMITED
Colombo International
30 March
Container Terminals 200,000.00 - - - - - -
2019
Limited
Lome Container General About 9
N/A 7,815.50 June 2015 1,695.96 No No
Terminal Co., Ltd. guarantee years
Lome Container General About 9
N/A 7,815.50 June 2015 1,695.96 No No
Terminal Co., Ltd. guarantee years
Lome Container General About 9
N/A 7,815.50 June 2015 1,695.96 No No
Terminal Co., Ltd. guarantee years
China Merchants Port
Joint liability About 5
Development N/A 320,000.00 31 July 2017 154,000.00 No No
guarantee years
(Shenzhen) Co., Ltd.
China Merchants Port
30 March
Development 100,000.00 - - - - - -
(Shenzhen) Co., Ltd. 2019
TCP - TERMINAL
DE CONTElNERES General About 6
N/A 52,122.00 19 April 2018 46,909.80 No No
DE PARANAGUA guarantee years
S/A.
TCP - TERMINAL
DE CONTElNERES 7 November General About 6
N/A 74,368.89 74,368.89 No No
DE PARANAGUA 2016 guarantee years
S/A.
Shenzhen Haixing
30 March Joint liability About 3
Harbor Development 219,090.00 26 June 2019 16,150.08 No No
2019 guarantee years
Co., Ltd.
Zhanjiang Port 30 March Joint liability About 2
80,000.00 23 August 2017 7,000.00 No No
(Group) Co., Ltd. 2019 guarantee years
30 March
HIPG, etc. 419,500.00 - - - - - -
2019
Total approved line for such Total actual amount of such
guarantees in the Reporting Period 1,198,590.00 guarantees in the Reporting 219,090.00
(C1) Period (C2)
Total approved line for such Total actual balance of such
guarantees at the end of the 3,906,603.43 guarantees at the end of the 2,302,173.00
Reporting Period (C3) Reporting Period (C4)
Total guarantee amount (total of the three kinds of guarantees above)
Total actual guarantee
Total guarantee line approved in the
1,631,481.46 amount in the Reporting 539,181.46
Reporting Period (A1+B1+C1)
Period (A2+B2+C2)
Total actual guarantee
Total approved guarantee line at the
balance at the end of the
end of the Reporting Period 4,347,525.41 2,622,043.36
Reporting Period
(A3+B3+C3)
(A4+B4+C4)
Total actual guarantee amount (A4+B4+C4) as % of the
72.89%
Company’s net assets
Of which:
Balance of guarantees provided for shareholders, actual controller
11,839.84
and their related parties (D)
Balance of debt guarantees provided directly or indirectly for
2,178,280.42
obligors with an over 70% debt/asset ratio (E)
Amount by which the total guarantee amount exceeds 50% of the
975,237.08
Company’s net assets (F)
77
China Merchants Port Group Co., Ltd. Annual Report 2019
Total of the three amounts above (D+E+F) 3,165,357.34
Joint responsibilities possibly borne in the Reporting Period for
None
undue guarantees (if any)
Provision of external guarantees in breach of the prescribed
None
procedures (if any)
Particulars of guarantees adopting complex methods
□ Applicable √ Not applicable
(2) Irregularities in Provision of Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Cash Entrusted to Other Entities for Management
(1) Cash Entrusted for Wealth Management
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Entrusted Loans
Overview of entrusted loans in the Reporting Period
Unit: RMB’0,000
Amount Capital resources Undue balance Overdue amount
3,430 Self-owned funds 3,430 -
Particulars of cash entrusted for wealth management with single significant amount or low security,
bad liquidity, and no capital preservation
□ Applicable √ Not applicable
4. Other Major Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVIII. Corporate Social Responsibilities
1. Fulfillment of Social Responsibilities
As an advocate and practitioner fulfilling the social responsibilities proactively, the Company
leverages its own professional strengths to participate in charitable activities such as environmental
protection, urban renewal, targeted poverty alleviation and reconstruction assistance to disaster-
stricken areas, with an aim to safeguarding the rights and interests of its employees, attaching
78
China Merchants Port Group Co., Ltd. Annual Report 2019
importance to occupational health development, promoting urban and rural economic development
and improving people’s living standards. We also actively participate in various social organizations
and political parties and strengthen our communication with the government and the industries to
make use of our well-earned influence in the practice of enterprise social responsibilities.
The Company is always committed to take on historical missions and has a strong sense of social
responsibilities. During our journey of growth and development, we never steer away from the
original goal. We take the lead to address social problems, continue to seek for the matching point for
mutual development with the society and explore appropriate models for conducting charitable
business that meets the needs of the current generation. By leveraging our core strengths to launch
professional charitable activities, support regional development and preserve fine cultures, we will
incorporate social development needs into our daily operation activities and join hands with even
more partners to create a harmonious society and promote social progress. Refer to Social
Responsibility Report of China Merchants Port Group Co., Ltd. in 2019 for the fulfillment of social
responsibilities in the Reporting Period for details.
2. Measures Taken for Targeted Poverty Alleviation
(1) Plan of Targeted Poverty Alleviation
In 2019, the Company undertook the poverty alleviation thinking and requirements from China
Merchants Group Co., Limited, cooperated and participated actively in the investment of China
Merchants Group Co., Limited such as educational poverty alleviation, industrial poverty alleviation
and infrastructure construction, dedicating to make contributions to build
a moderately prosperous society in 2020 in all respects.
The subsidiary of the Company, Zhanjiang Port Co., Ltd. carried out the targeted poverty alleviation
in Mingli Village, Wuchuan, Guangdong Province. The plan is as follows:
Efforts have been made in the following aspects: First, in accordance with local government’s plans
on poverty alleviation, carry out poverty alleviation, cooperate in the building of new socialist
countryside, work towards industrial prosperity, ecological livability, effective governance and well-
off society, improve rural environments and gradually promote rural revitalization. Second,
strengthen party building in Mingli Village, beef up position building and promotion under party
building, strive to enhance the political theory level of party cadres, and drive the implementation of
poverty alleviation. Third, guarantee the spending in poverty alleviation, expand the size of planting
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China Merchants Port Group Co., Ltd. Annual Report 2019
and farming industries, drive the increase of project returns, raise the income of villagers and rural
collectives, and strengthen poverty alleviation effects. Fourth, help impoverished households to find
jobs and get rid of poverty in multiple respects. Fifth, help impoverished households in house
renovation and repair and achieve the goal of building prosperous life. Sixth, continue charity works
for Mingli Primary School and assist in the building of educational facilities. Seventh, guarantee the
basic living needs of impoverished households. Eighth, promote consumption-based poverty
alleviation and increase the income of impoverished households by buying their products instead of
direct donation. Ninth, carry out condolence and other poverty alleviation work.
(2) Overview of Annual Targeted Poverty Alleviation
The subsidiary of the Company, Zhanjiang Port Co., Ltd. carried out the targeted poverty alleviation
in Mingli Village, Wuchuan, Guangdong Province. The overview is as follows:
As of 31 December 2019, of the 127 persons in 47 impoverished households in Mingli Village, except
for one person in one new household enjoying the five guarantees in the year, 126 in 46 of the
households reached the “Eight Haves” goal and completed the task of casting off poverty,
representing a poverty alleviation rate of 100% (The lowest annual household per capita income is
RMB9,000 and the highest is RMB29,000). In 2019, the annual per capita income of the impoverished
population of Mingli Village reached RMB13,292.23 (compared with RMB3,500 when the Company
entered the Village for poverty alleviation in 2016), which had basically reached the 10 indicators for
being excluded from relative impoverished villages. A number of projects have been completed and
put to use, leading to substantial improvements to the appearance of the Village, delivering the
achievements of building new socialist countryside to the villagers and further enhancing their sense
of well-being.
(3) Results of Targeted Poverty Alleviation
Unit of
Index Amount/implementation
measurement
I. Overall situation - -
Of which: 1. Fund RMB’0,000 124.56
2. Materials converted to cash RMB’0,000 126
II. Subitem investment - -
80
China Merchants Port Group Co., Ltd. Annual Report 2019
1. Industrial development poverty
- -
alleviation
Of which: 1.1 Type of plan of industrial Agriculture and forestry industrial poverty
-
development poverty alleviation alleviation
1.2 Number of plan of
industrial development poverty Unit 1
alleviation
1.3 Number of persons out of
poverty which were helped to set up file Person 126
card
2. Transfer employment poverty
- -
alleviation
2.1 Number of persons of
Person 49
vocational training
3. Relocation poverty alleviation - -
4. Educational poverty alleviation - -
4.1 Number of poor students
Person 2
supported
5. Healthcare poverty alleviation - -
6. Ecological protection poverty
- -
alleviation
7. Basic living standard guarantee - -
Of which: 7.1 Investment amount for
RMB’0,000 2.65
three kinds of left-behind person
7.2 Assistant number of three
Person 9
kinds of left-behind person
8. Social poverty alleviation - -
8.1 Investment amount of
RMB’0,000 100
targeted poverty alleviation
9. Other plans - -
III. Awards received (content, level) - -
3. Issues Related to Environmental Protection
Indicate by tick mark whether the Company or any of its subsidiaries is identified as a major polluter by the environmental protection
authorities.
No.
The Company has made efforts to build green ports, formulate rules and policies on the management
of energy conservation and environmental protection, further specify the content and mechanism for
comprehensive monitoring and management of energy conservation and environmental protection,
identify and deal with climate risk and beef up environmental risk assessment and management. The
Company has continued to develop and apply new energy-efficient and eco-friendly technologies and
products, further expand the application of a number of such technologies and products, such as “ship
shore-based power supply” and “oil-to-electricity technology for reach stackers and stackers”, and
perform monitoring, regulation and legal and conforming disposal of general and hazardous waste,
81
China Merchants Port Group Co., Ltd. Annual Report 2019
air pollution, dust pollution, water pollution and noise pollution. While promoting the concept of
green office and carrying out diverse green public welfare activities, the Company has advanced the
building of green supply chains and continuously enhanced its level of energy conservation, emission
reduction and environmental management. Refer to 2019 Social Responsibilities Report of CMPort
for detail on the Company’s environmental protection during the Reporting Period.
XIX Other Significant Events
1. Major Equity Acquisitions
During the Reporting Period, the Company included Zhanjiang Port into its consolidation scope. The
detailed information is as follows:
On 31 December 2018, China Merchants International Terminals (Zhanjiang) Limited, a subsidiary
of the Company, obtained 1,809,310,930 shares of A common stock shares of the Zhanjiang Port
representing approximately 40.2916% of the total issued shares of the Zhanjiang Port.
On 2 January 2019, the Company signed the Share Transfer Agreement on Zhanjiang Port (Group)
Co., Ltd. with Guangdong Sinotrans Co., Ltd., which stipulated to transfer the ordinary shares of
201,034,548 of Zhanjiang Port held by Sinotrans Guangdong Co., Ltd. to the Group which take
account 5% of the total shares issued by Zhanjiang Port at the agreement signing date at the
consideration of RMB375,334,390.00. For more information, refer to the Announcement on the
Resolution of the 1st Special Meeting of the 9th Board of Directors in 2019 (Announcement No.: 2019-
001) disclosed on the cninfo website on 3 January 2019.
The subsidiary of the Company CWH (H.K.) signed in Zhanjiang on 8 January 2019 the Agreement
on a Capital Increase to Zhanjiang Port (Group) Co., Ltd. with Zhanjiang Infrastructure Investment
and Zhanjiang Port (hereinafter referred to as the “Capital Increase Agreement”). According to the
provisions of the Capital Increase Agreement, Zhanjiang Port issued 1,853,518,190 additional
ordinary shares at the price of RMB1.867 per share or the equivalent in the foreign currency (based
on the exchange rate at the time of payment) to increase its registered capital to RMB5,874,209,145.
CWH (H.K.) subscribed for 1,606,855,919 such ordinary shares, accounting for 27.3544% of the
issued shares of Zhanjiang Port as at the date of issuance of such shares, at a total price of
RMB3,000,000,000.77 or the equivalent in the foreign currency (based on the exchange rate at the
time of payment); and Zhanjiang Infrastructure Investment subscribed for 246,662,271 shares,
accounting for 4.1991% of the issued shares of Zhanjiang Port as at the date of issuance of such shares,
at a total price of RMB460,518,459.96. For details, please refer to the Announcement on Resolutions
of the 2nd Special Meeting of the 9th Board of Directors in 2019 (No.: 2019-004), Announcement of
China Merchants Port Group Co., Ltd. on External Investments by the Wholly-owned Subsidiary and
Related-party Transactions (No.: 2019-005) disclosed on Cninfo on 9 January 2019 and
Announcement on Resolutions of the 1st Extraordinary General Meeting of 2019 (No.: 2019-013)
disclosed on Cninfo on 25 January 2019.
As of 3 February 2019, the above transaction was finished. Since then, the total ordinary shares in
Zhanjiang Port held by the Company were 3,427,890,467 shares accounting for 58.3549% of total
issued shares of Zhanjiang Port. The Company has the control power over Zhanjiang Port and may
enjoy unfixed returns through engaging in its relevant activities. Therefore, the Company included
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China Merchants Port Group Co., Ltd. Annual Report 2019
Zhanjiang Port in the scope of the Company’s consolidated financial statements.
2. Introduction of Strategic Investors and Fundraising Projects
During the Reporting Period, the Company successfully introduced two strategic investors and
fundraising projects. It has effectively improved the governance structure of the Company as a listed
company and vigorously promoted the implementation of its strategies, bearing great significance to
the long-term development of the Company.
The issue price of the private placement of stocks for the fund raised this time was RMB17.16 per
share, which was no less than 90% of the average stock trading price of CMPort for the 20 trading
days prior to the date of pricing benchmark (RMB15.99/share) and no less than the audited net assets
per share of the Company at the end of the last reporting period (RMB17.15 per share). After the
fundraising through the private placement of stocks, the Company had 128,952,746 additional shares
with a total raised fund of RMB2,212,829,121.36. The initial listing date of the aforementioned new
shares was 4 November 2019. (Announcement No.: 2019-078)
The Company had a total share capital of 1,793,412,378 shares before the registration of the new
shares. After the private placement, its total share capital increased to 1,922,365,124 shares. The new
shares of the fundraising through private placement are restricted tradable shares. Related specific
investors who have subscribed the shares are not allowed to transfer within twelve months upon the
date of listing.
The issue target of the financing is Shenzhen Infrastructure Investment Fund Partnership (Limited
Partnership) and China-Africa Development Fund Co., Ltd. The details are as follows:
No. Name of issue target Shares Amount (RMB)
1 Shenzhen Infrastructure Investment Fund Partnership 64,850,182 1,112,829,123.12
(Limited Partnership)
2 China-Africa Development Fund Co., Ltd. 64,102,564 1,099,999,998.24
Total 128,952,746 2,212,829,121.36
The Articles of Association has made according adjustments for above changes of registered capital
which has been reviewed and approved by the 11th Special Meeting of the 9th Board of Directors in
2019 held on 22 November 2019 and the 4th Extraordinary General Meeting of 2019 held on 11
December 2019.
3. Information Disclosure Index
In the Reporting Period, the Company disclosed the following significant events on Securities Times,
Ta Kung Pao (HK) and www.cninfo.com.cn:
Announce
Date Title
ment No.
2019-001 3 January 2019 Announcement on Resolutions of the 1st Special Meeting of the 9th Board of
Directors in 2019
2019-002 3 January 2019 Announcement on the Related-party Transaction regarding Assets
Acquisition
2019-003 5 January 2019 Announcement on the Progress of the Related-party Transaction
83
China Merchants Port Group Co., Ltd. Annual Report 2019
regarding Assets Acquisition
2019-004 9 January 2019 Announcement on Resolutions of the 2nd Special Meeting of the 9th Board
of Directors in 2019
2019-005 9 January 2019 Announcement on the Related-party Transaction regarding Foreign
Investments by the Wholly-owned Subsidiary
2019-006 9 January 2019 Reminder of Convening the 1st Extraordinary General Meeting of 2019
2019-007 12 January 2019 Announcement on Resolutions of the 3rd Special Meeting of the 9th Board
of Directors in 2019
2019-008 12 January 2019 Announcement on a Wholly-Owned Sub-subsidiary of a Majority-Owned
Subsidiary Participating in a Land Readjustment in Qianhai and the Related-
Party Transaction
2019-009 16 January 2019 Announcement on Voluntary Information Disclosure of Business Volume
Data of December 2018
2019-010 19 January 2019 Announcement on the Due Payment of 2018 Phase I Super-short-term
Financing Bonds
2019-011 23 January 2019 Announcement on Resolutions of the 4th Special Meeting of the 9th Board
of Directors in 2019
2019-012 23 January 2019 Announcement on a Related-Party Transaction of a Majority-Owned
Subsidiary
2019-013 25 January 2019 Announcement on Resolutions of the 1st Extraordinary General Meeting of
2019
2019-014 28 January 2019 Announcement on the Extension of the Share Lock-up Period by the
Controlling Shareholder
2019-015 30 January 2019 2018 Annual Performance Forecast
2019-016 2 February 2019 Announcement on Resolutions of the 5th Special Meeting of the 9th Board
of Directors in 2019
2019-017 2 February 2019 Reminder of Convening the 2nd Extraordinary General Meeting of 2019
2019-018 12 February 2019 Announcement on Progress of Related-party Transaction regarding Foreign
Investments by the Wholly-owned Subsidiary
2019-019 16 February 2019 Announcement on Voluntary Information Disclosure of Business Volume
Data of January 2019
2019-020 26 February 2019 Announcement on Resolutions of the 2nd Extraordinary General Meeting of
2019
2019-021 16 March 2019 Announcement on Voluntary Information Disclosure of Business Volume
Data of February 2019
2019-022 19 March 2019 Announcement on the Change of the Company’s Registered Information
with the Industrial and Commercial Administration
2019-023 30 March 2019 Announcement on Resolutions of the 5th Meeting of the 9th Board of
Directors
2019-024 30 March 2019 Announcement on Resolutions of the 5th Meeting of the 9th Supervisors
of Committee
2019-025 30 March 2019 Abstract of Annual Report 2018
2019-026 30 March 2019 Announcement on the Related-Party Transaction Regarding Making
Deposits in and Obtaining Loans from China Merchants Bank in 2019
84
China Merchants Port Group Co., Ltd. Annual Report 2019
2019-027 30 March 2019 Announcement on the External Guarantee Progress of a Majority-Owned
Subsidiary of the Company in 2018 and the Expected New External
Guarantee Line in the Next 12 Months
2019-028 30 March 2019 Announcement on the Provision of Guarantee by a Majority-Owned
Subsidiary for Its Minority-Owned Subsidiary
2019-029 30 March 2019 Announcement on a Wholly-Owned Subsidiary of a Majority-Owned
Subsidiary Entering into a Land Lease Agreement and the Related-Party
Transaction
2019-030 30 March 2019 Announcement on the Adjusted Limits of Deposits in and Loans from and
Entering into a Supplementary Agreement to the Financial Service
Agreement with China Merchants Group Finance Co., Ltd. and the Related-
Party Transaction
2019-031 30 March 2019 Announcement on Changes to the Accounting Policies
2019-032 30 March 2019 Announcement on the Confirmation of the Continuing Related-Party
Transactions in 2018 and the Estimation of Such Transactions in 2019
2019-033 30 March 2019 Reminder of Convening the 3rd Extraordinary General Meeting of 2019
2019-034 30 March 2019 Announcement on the Disclosure of the 2018 Annual Results by a Majority-
Owned Subsidiary
2019-035 30 March 2019 Announcement on the Online Investor Communication on the 2018 Annual
Results to Be Held
2019-036 30 March 2019 Announcement on Changes to the Office Address, Telephone Number and
Other Corporate Information
2019-037 13 April 2019 Announcement on an Estimated Growth in the Q1 2019 Results
2019-038 16 April 2019 Announcement on Resolutions of the 3rd Extraordinary General Meeting of
2019
2019-039 16 April 2019 Announcement on Voluntary Information Disclosure of Business Volume
Data of March 2019
2019-040 26 April 2019 Announcement on the Related-Party Transactions of a Majority-Owned
Subsidiary
2019-041 30 April 2019 Announcement on Resolutions of the 6th Special Meeting of the 9th Board
of Directors in 2019
2019-042 30 April 2019 The Text of the First Quarter Report 2019
2019-043 30 April 2019 Announcement on the Related-Party Transactions of a Majority-Owned
Subsidiary
2019-044 30 April 2019 Announcement on the Provision of Financial Aid by a Majority-Owned
Subsidiary to Its Majority-Owned Subsidiary
2019-045 30 April 2019 Reminder of Convening the 2018 Annual General Meeting
2019-046 30 April 2019 Announcement on the Changed Name and Business Scope of a Wholly-
Owned Subsidiary
2019-047 9 May 2019 Announcement on Additional Proposals for the 2018 Annual General
Meeting and the Updated Notice of the 2018 Annual General Meeting
2019-048 16 May 2019 Announcement on Voluntary Information Disclosure of Business Volume
Data of April 2019
2019-049 21 May 2019 Announcement on Resolutions of the 2018 Annual General Meeting
2019-050 31 May 2019 Reminder of Issuance of 2019 Phase I and Phase II Super-short-term
85
China Merchants Port Group Co., Ltd. Annual Report 2019
Financing Bonds
2019-051 11 June 2019 Announcement on Issue Results of 2019 Phase I and Phase II Super-short-
term Financing Bonds
2019-052 15 June 2019 Announcement on Voluntary Information Disclosure of Business Volume
Data of May 2019
2019-053 28 June 2019 Announcement on Resolutions of the 7th Special Meeting of the 9th Board
of Directors in 2019
2019-054 3 July 2019 Announcement on 2018 Equity Distribution Implementation
2019-055 11 July 2019 Announcement on an Estimated Growth in the H1 2019 Results
2019-056 16 July 2019 Announcement on Voluntary Information Disclosure of Business Volume
Data of June 2019
2019-057 16 August 2019 Announcement on Voluntary Information Disclosure of Business Volume
Data of July 2019
2019-058 16 August 2019 Announcement on Resignation of Securities Affairs Representative
2019-059 30 August 2019 Voluntary Announcement on Signing Strategic Cooperative Framework
Agreement
2019-060 31 August 2019 Announcement on the 6th Meeting of the 9th Board of Directors
2019-061 31 August 2019 Announcement of the 6th Meeting of the 9th Supervisory Committee
2019-062 31 August 2019 Abstract of Interim Report 2019
31 August 2019 Abstract of Interim Report 2019 (English Version)
2019-063 31 August 2019 Announcement on Changes of Accounting Policies
2019-064 31 August 2019 Announcement on the Disclosure of the 2019 Interim Results by a Majority-
Owned Subsidiary
2019-065 31 August 2019 Announcement on the Online Investor Communication on the 2019 Interim
Results to Be Held and Participation of 2019 Online Collective Reception
Activity for Investors of Shenzhen Listed Companies
2019-066 7 September 2019 Announcement on Resolutions of the 8th Special Meeting of the 9th Board
of Directors in 2019
2019-067 7 September 2019 Announcement on Providing Financial Aid for Sharing Companies and
Related-party Transactions
2019-068 16 September 2019 Announcement on Voluntary Information Disclosure of Business Volume
Data of August 2019
2019-069 11 October 2019 Announcement on Resolutions of the 9th Special Meeting of the 9th Board
of Directors in 2019
2019-070 11 October 2019 Announcement on Resolutions of the 2nd Special Meeting of the 9th
Supervisory Committee in 2019
2019-071 11 October 2019 Announcement on an Estimated Growth in the Q3 2019 Results
2019-072 15 October 2019 Announcement on the Due Payment of 2016 Phase I Medium Term Note
2019-073 17 October 2019 Announcement on Voluntary Information Disclosure of Business Volume
Data of September 2019
2019-074 31 October 2019 Announcement on Resolutions of the 10th Special Meeting of the 9th Board
of Directors in 2019
2019-075 31 October 2019 The Text of the Third Quarter Report 2019
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China Merchants Port Group Co., Ltd. Annual Report 2019
31 October 2019 The Text of the Third Quarter Report 2019 (English Version)
2019-076 31 October 2019 Announcement on Changes of Accounting Policies
2019-077 1 November 2019 Asset Acquisition and Supporting Fund Raising by Share Issuance and
the Related-party Transaction Regarding the Report on Result of Private
Placement of Stocks and the Abstract of the Listing Announcement
2019-078 1 November 2019 Asset Acquisition and Supporting Fund Raising by Share Issuance and
the Related-party Transaction Regarding the Report on Result of Private
Placement of Stocks for Raising Supporting Funds
2019-079 1 November 2019 Announcement on Changes in Shareholdings of Directors, Supervisors and
Senior Executives
2019-080 1 November 2019 Report on Commitments of Parties Related to Raised Supporting Funds
2019-081 16 November 2019 Announcement on Voluntary Information Disclosure of Business Volume
Data of October 2019
2019-082 22 November 2019 Announcement on Signing the Three-party Supervision Agreement on
Raised Funds
2019-083 26 November 2019 Announcement on Resolutions of the 11th Special Meeting of the 9th Board
of Directors in 2019
2019-084 26 November 2019 Announcement on Resolutions of the 4th Special Meeting of the 9th
Supervisory Committee in 2019
2019-085 26 November 2019 Announcement on Changes in Use of Some Raised Funds
2019-086 26 November 2019 Announcement on Providing Borrowings for the Majority-owned
Subsidiary with Raised Funds for Implementing the Equity Investment
Project and Related-party Transactions
2019-087 26 November 2019 Announcement on Replacement of Self-raised Funds Previously Input
with Raised Funds
2019-088 26 November 2019 Announcement on Cash Management with Idle Raised Funds
2019-089 26 November 2019 Announcement on Adjusting Quotas of Deposits and Loans and Signing
the Supplementary Agreement II of Financial Service Agreement as
well as Related-party Transactions with China Merchants Group Finance
Co., Ltd.
2019-090 26 November 2019 Announcement on Providing Financial Aid by the Majority-owned
Subsidiary to its Sharing Subsidiary and Related-party Transactions
regarding External Investments
2019-091 26 November 2019 Reminder of Convening the 4th Extraordinary General Meeting of 2019
2019-092 27 November 2019 Announcement on Approval of Public Issuance of Corporate Bonds
2019-093 27 November 2019 Announcement on Approval of Registration of Issuing Super-short-term
Financing Bonds and Medium Term Notes
2019-094 5 December 2019 Announcement on the Due Payment of 2019 Phase I Super-short-term
Financing Bonds
2019-095 12 December 2019 Announcement on Resolutions of the 4th Extraordinary General Meeting of
2019
2019-096 14 December 2019 Announcement on Voluntary Information Disclosure of Business Volume
Data of November 2019
2019-097 25 December 2019 Announcement on Resolutions of the 12th Special Meeting of the 9th Board
87
China Merchants Port Group Co., Ltd. Annual Report 2019
of Directors in 2019
2019-098 25 December 2019 Announcement on Providing Financial Aid by Majority-owned
Subsidiaries and Related-party Transactions
2019-099 25 December 2019 Announcement on Resignation of Vice President
XX Significant Events of Subsidiaries
On 25 November 2019, CMPort Holdings signed a memorandum of agreement with CMA, according to which,
CMA intended to transfer the equity assets of 10 ports it held to Terminal Link (TL). To complete the transfer,
CMPort Holdings would provide TL with a financing of no more than US$968 million, including guaranteed long-
term loans of no more than US$500 million with a term of eight years and mandatory convertible securities of no
more than US$468 million for the subscription of TL. At the maturity of the long-term loans, CMA would provide
the cash required for repaying the loans by injecting capital in TL and all the convertible securities held by CMPort
Holdings would be converted into TL’s equity on a mandatory basis. On 26 March 2020, CMPort Holdings
completed the acquisition of Phase I eight target ports, with the subscription of mandatory convertible securities
and prepayment of the loans amounting to approximately US$815 million.
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China Merchants Port Group Co., Ltd. Annual Report 2019
Part VI Share Changes and Shareholder Information
I. Share Changes
1. Share Changes
Unit: share
Before Increase/decrease in the Reporting Period (+/-) After
Shares
Shares
as
as
dividend
Percenta dividend Percentag
Shares New issues converte Other Subtotal Shares
ge (%) converte e (%)
d from
d from
capital
profit
reserves
I. Restricted shares 1,148,860,804 64.06% 128,952,746 0 0 -42,554 128,910,192 1,277,770,996 66.47%
1. Shares held by state 0 0.00% 0 0 0 0 0 0 0.00%
2. Shares held by state-
0 0.00% 128,952,746 0 0 0 128,952,746 128,952,746 6.71%
owned legal person
3. Shares held by other
212,156 0.01% 0 0 0 -42,554 -42,554 169,602 0.01%
domestic investors
Including: Shares held
by domestic legal 0 0.00% 0 0 0 0 0 0 0.00%
person
Shares held by
212,156 0.01% 0 0 0 -42,554 -42,554 169,602 0.01%
domestic natural person
4. Shares held by
1,148,648,648 64.05% 0 0 0 0 0 1,148,648,648 59.75%
foreign investors
Including: Shares held
1,148,648,648 64.05% 0 0 0 0 0 1,148,648,648 59.75%
by foreign legal person
Shares held by
0 0.00% 0 0 0 0 0 0 0.00%
foreign natural person
II. Unrestricted shares 644,551,574 35.94% 0 0 0 42,554 42,554 644,594,128 33.53%
1. RMB ordinary shares 464,855,324 25.92% 0 0 0 3,000 3,000 464,858,324 24.18%
2. Domestically listed
179,696,250 10.02% 0 0 0 39,554 39,554 179,735,804 9.35%
foreign shares
3. Overseas listed
0 0.00% 0 0 0 0 0 0 0.00%
foreign shares
4. Other 0 0.00% 0 0 0 0 0 0 0.00%
III. Total shares 1,793,412,378 100.00% 128,952,746 0 0 0 128,952,746 1,922,365,124 100.00%
89
China Merchants Port Group Co., Ltd. Annual Report 2019
Reasons for share changes:
1. Raising supporting funds through share issuance; 2. Changes in directors, supervisors, and senior
executives of the Company in December 2018.
Approval of share changes:
On 19 June 2018, the Company’s 5th Special Meeting of the 9th Board of Directors in 2018 reviewed
and approved the Proposal on Raising Supporting Funds by the Company.
On 28 June 2018, SASAC issued the Reply to the Issues in Respect of the Private Placement of A-
Shares by Shenzhen Chiwan Wharf Holdings Limited (GZCQ [2018] No. 360). In principle, this plan
of raising supporting funds was approved.
On 26 July 2018, the Company held the 2nd Extraordinary General Meeting of 2018 and approved the
Proposal on Raising Supporting Funds by the Company.
On 9 October 2018, the Commission for Reviewing M&A of Listed Companies under China
Securities Regulatory Commission approved the Company’s issue of shares by asset acquisition and
raising of supporting funds and related-party transactions.
On 31 October 2018, the Company received the Reply on the Approval of the Issue of Shares by
Shenzhen Chiwan Wharf Holdings Limited to China Merchants Investment Development Company
Limited for Asset Acquisition and Raising of Supporting Funds (ZJXK [2018] No. 1750) from China
Securities Regulatory Commission which approved this transaction.
Transfer of share ownership:
√ Applicable □ Not applicable
The Company received the Confirmation of Acceptance of Share Registration Application issued by
China Securities Depository and Clearing Co., Ltd. on 28 October 2019 which confirmed that the
increased shares issued by the listed company for raising supporting funds was 128,952,746
(restricted public shares). The first trading day of above increased shares was 4 November 2019.
Progress on any share repurchases:
□ Applicable √ Not applicable
Progress on reducing the repurchased shares by means of centralized bidding:
□ Applicable √ Not applicable
Effects of share changes on the basic and diluted earnings per share, equity per share attributable to
the Company’s ordinary shareholders and other financial indicators of the prior year and the prior
accounting period, respectively:
The total shares in this private placement were 128,952,746, and the total share capital after the
issuance was 1,922,365,124. The net asset value per share and earnings per share before and after this
issuance calculated on the basis of financial data of 2018 and January to September in 2019 were as
follows:
90
China Merchants Port Group Co., Ltd. Annual Report 2019
Item Before After
January-September 2018/31 December 2019/31 December 2018/31 December
2019/30 September 2018 2019 2018
2019
Net asset value per 18.4 17.15 18.71 17.14
share(RMB per share)
EPS (RMB per share) 1.38 0.61 1.51 0.57
Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□ Applicable √ Not applicable
2. Changes in Restricted Shares
Unit: share
Number of
Number of Number of Number of
Name of restricted shares Reason for Date of
increased released restricted shares
shareholders at the period- restriction restriction release
restricted shares restricted shares at the period-end
begin
According to
China Merchants
relevant laws and
Investment
1,148,648,648 0 0 1,148,648,648 regulations and June 2022
Development
the shareholder
Company Limited
commitment
According to the
Articles of
Yuan Yuhui 10,530 0 0 10,530 Association and -
the relevant laws
and regulations
According to the
Articles of
Ni Keqin 21,909 0 0 21,909 Association and -
the relevant laws
and regulations
According to the
Articles of
Zheng Shaoping 9,496 0 0 9,496 Association and -
the relevant laws
and regulations
According to the
Articles of
Zhang Jianguo 74,282 18,570 0 55,712 Association and December 2020
the relevant laws
and regulations
According to the
Articles of
Zhao Chaoxiong 64,954 16,238 0 48,716 Association and December 2020
the relevant laws
and regulations
According to the
Articles of
Wang Yongli 4,985 1,246 0 3,739 Association and December 2020
the relevant laws
and regulations
According to the
Articles of
Yao Shenglan 26,000 6,500 0 19,500 Association and December 2020
the relevant laws
and regulations
91
China Merchants Port Group Co., Ltd. Annual Report 2019
Total 1,148,860,804 42,554 0 1,148,818,250 -- --
II. Issuance and Listing of Securities
1. Securities (Exclusive of Preferred Shares) Issued in the Reporting Period
Name of stock and Approved
Issuing price (or Expiry date of the
its derivative Issuing date Numbers Listing date numbers for
interest rate) trading
securities trading
Stock
Private placement RMB17.16 per 4 November
28 October 2019 128,952,746 128,952,746 4 November 2019
of A shares share 2019
Convertible corporate bonds, separate bargaining convertible corporate bonds and corporate bonds
Other derivative securities
Explanation for securities (exclusive of preferred shares) issued in the Reporting Period
On 28 October 2019, the 128,952,746 A shares issued by the Company was registered on Shenzhen
Branch of China Securities Depository and Clearing Corporation Limited. Those shares were traded
on Shenzhen Stock Exchange on 4 November 2019.
2. Changes to Total Shares, Shareholder Structure and Asset and Liability Structures
At the beginning of the Reporting Period, the total share capital of the Company was 1,793,412,378
shares. During the Reporting Period, shares through private placement for raising supporting funds
were 128,952,746 shares. After the registration of the increased shares, the total share capital of the
Company was changed into 1,922,365,124 shares. There is no case in which other shareholders
became the controlling shareholders of the Company through subscribing the shares in this private
placement which will not cause any changes in the control power over the Company. After this
issuance, the listed company still conforms to the listing conditions of stock trading.
3. Existing Staff-Held Shares
□ Applicable √ Not applicable
III Shareholders and Actual Controller
1. Shareholders and Their Shareholdings at the Period-End
Unit: share
92
China Merchants Port Group Co., Ltd. Annual Report 2019
Number of
preferred
Number of shareholders
ordinary Number of preferred with resumed
Number of
shareholders at shareholders with voting rights
ordinary
34,398 the month-end 35,454 resumed voting rights 0 at the month- 0
shareholders at
prior to the at the period-end (if end prior to
the period-end
disclosure of this any) (see note 8) the disclosure
Report of this Report
(if any) (see
note 8)
5% or greater shareholders or top 10 shareholders
Sharehol Increase/decr
Total shares
Name of Nature of ding ease in the Restricted Unrestricted
held at the Shares in pledge or frozen
shareholder shareholder percenta Reporting shares held shares held
period-end
ge Period
CHINA
MERCHANTS
Foreign
INVESTMENT
legal 59.75% 1,148,648,648 0 1,148,648,648 0 0
DEVELOPME
person
NT COMPANY
LIMITED
CHINA
MERCHANTS
State-
GANGTONG
owned
DEVELOPME 19.29% 370,878,000 0 0 370,878,000 0
legal
NT
person
(SHENZHEN)
CO., LTD.
SHENZHEN
INFRASTRUC
TURE
INVESTMENT
FUND-
SHENZHEN Fund and
INFRASTRUC wealth
3.37% 64,850,182 64,850,182 64,850,182 0 0
TURE manageme
INVESTMENT nt products
FUND
PARTNERSHI
P (LIMITED
PARTNERSHI
P)
CHINA- State-
AFRICA owned
3.33% 64,102,564 64,102,564 64,102,564 0 0
DEVELOPME legal
NT FUND person
State-
BROADFORD
owned
GLOBAL 2.88% 55,314,208 0 0 55,314,208 0
legal
LIMITED
person
CMBLSA RE
FTIF Foreign
TEMPLETON legal 1.56% 29,976,596 -13,468,608 0 29,976,596 Unknown
ASIAN GRW person
FD GTI 5496
Foreign
NORGES
legal 0.15% 2,802,863 0 0 2,802,863 Unknown
BANK
person
93
China Merchants Port Group Co., Ltd. Annual Report 2019
CHINA
State-
MERCHANTS
owned
SECURITIES 0.13% 2,513,355 -127,665 0 2,513,355 Unknown
legal
(HK) CO.,
person
LTD.
Domestic
MAI
natural 0.12% 2,376,747 15,700 0 2,376,747 Unknown
SHUQING
person
Domestic
SHEN
natural 0.08% 1,519,849 1,519,849 0 1,519,849 Unknown
HUAILING
person
Strategic investors or
general legal person
becoming top-ten
N/A
shareholders due to placing
of new shares (if any) (see
note 3)
China Merchants Gangtong Development (Shenzhen) Co., Ltd. is a majority-owned subsidiary of
Related or acting-in-concert
Broadford Global Limited, and Broadford Global Limited is the controlling shareholder of China
parties among the
Merchants Investment Development Company Limited. The Company does not know whether the other
shareholders above
unrestricted shareholders are related parties or not.
Top 10 unrestricted shareholders
Shares by type
Name of shareholder Unrestricted shares held at the period-end
Type Shares
CHINA MERCHANTS
RMB
GANGTONG
370,878,000 ordinary 370,878,000
DEVELOPMENT
share
(SHENZHEN) CO., LTD.
BROADFORD GLOBAL Domestically
55,314,208 listed foreign 55,314,208
LIMITED
share
CMBLSA RE FTIF Domestically
TEMPLETON ASIAN 29,976,596 listed foreign 29,976,596
GRW FD GTI 5496 share
Domestically
NORGES BANK 2,802,863 listed foreign 2,802,863
share
CHINA MERCHANTS Domestically
SECURITIES (HK) CO., 2,513,355 listed foreign 2,513,355
LTD. share
RMB
MAI SHUQING 2,376,747 ordinary 2,376,747
share
Domestically
SHEN HUAILING 1,519,849 listed foreign 1,519,849
share
VANGUARD EMERGING Domestically
MARKETS STOCK 1,262,936 listed foreign 1,262,936
INDEX FUND share
INDUSTRIAL AND
COMMERCIAL BANK OF
CHINA-FULLGOAL
RMB
CHINA SECURITIES
1,260,101 ordinary 1,260,101
DIVIDEND INDEX
share
STRENGTHEN
SECURITIES
INVESTMENT FUND
94
China Merchants Port Group Co., Ltd. Annual Report 2019
RMB
CHEN ZEHONG 1,240,000 ordinary 1,240,000
share
Related or acting-in-concert
parties among top 10
unrestricted public China Merchants Gangtong Development (Shenzhen) Co., Ltd. is a majority-owned subsidiary of
shareholders, as well as Broadford Global Limited. The Company does not know whether the other unrestricted shareholders
between top 10 unrestricted are related parties or not.
public shareholders and top
10 shareholders
Top 10 ordinary
shareholders involved in
N/A
securities margin trading (if
any) (see note 4)
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the Company
conducted any promissory repo during the Reporting Period.
□ Yea √ No
No such cases in the Reporting Period.
2. Controlling Shareholder
Nature of the controlling shareholder: Controlled by a central state-owned legal person
Type of the controlling shareholder: legal person
Legal
Name of controlling Unified social credit
representative/person Date of establishment Principal activity
shareholder code
in charge
Port services, bonded
BROADFORD GLOBAL logistic and cold chain
Deng Weidong 27 November 2017 68550019-000-11-17-2 services, property
LIMITED
development and
investment
Shareholdings of the
controlling shareholder in
other listed companies at home N/A
or abroad in this Reporting
Period
Change of the controlling shareholder in the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Actual Controller and Its Acting-in-Concert Parties
Nature of the actual controller: Central institution for state-owned assets management
Type of the actual controller: legal person
Legal
Name of actual Date of Unified social
representative/p Principal activity
controller establishment credit code
erson in charge
Lease and agency of water/land passenger-cargo
transportation, water/land conveyance and facilities;
China Merchants investment and management of port and storage business;
Li Jianhong 14 October 1986 10000522-0
Group salvage, refloatation and tugboat; industrial production;
construction, repairing, checking and marketing of
shipping, offshore petroleum drilling equipment;
95
China Merchants Port Group Co., Ltd. Annual Report 2019
repairing and checking of drilling platform and drilling
container; overall contracting of water/land construction
projects and the related offshore petroleum development
projects, and their construction organization and logistic
services; procurement, supply and sale of water/land
communication and transportation equipment; export and
import business of transportation; investment and
management of finance, insurance, trust, securities,
futures business; investment and management of tourism,
hotels, catering services and relevant service; real estate
development, management and consultancy of property;
investment and management of petroleum and chemical
industry; investment and operation of infrastructure of
communication; overseas assets management.
Development and management of Shenzhen Shekou
Industrial Zone and Fujian Zhangzhou Development
Zone. (The company shall independently choose business
items and carry out business activities according to law.
For items requiring approval according to law, the
company must obtain approval from related authorities
before carrying out the business activities. The company
shall not engage in business activities that are banned and
restricted in the municipal industrial policies.)
China Merchants Group holds:
62.77% shares of China Merchants Port Holdings Company Limited;
54.39% shares of China Merchants Energy Shipping Co., Ltd;
74.35% China Merchants Land Limited;
68.72% shares of China Merchants Expressway Network &Technology Holdings Co., Ltd;
56.34% shares of Sinotrans Limited;
64.08% shares of China Merchants Shekou Industrial Zone Holdings Co., Ltd.;
44.09% shares of China Merchants Securities Co. Ltd.;
29.94% shares of Anhui Expressway Company Limited;
29.97% shares of China Merchants Bank Co., Ltd;
27.59% shares of China Merchants China Direct Investments Limited;
26.77% shares of Shanghai International Port (Group) Co., Ltd;
24.56% shares of China International Marine Containers (Group) Ltd;
24.72% shares of Sichuan Expressway Company Limited;
75.01% shares of Dalian Port (PDA) Company Limited;
17.75% shares of Fujian Expressway Development Co., Ltd;
Shareholdings of the
16.52% shares of Heilongjiang Transport Development Co., Ltd;
actual controller in
16.02% shares of Shandong Hi-speed Co., Ltd;
other listed
15.43% shares of Henan Zhongyuan Expressway Co., Ltd;
companies at home
15.53% shares of Hubei Chutian Expressway Co., Ltd;
or abroad in this
14.04% shares of Jilin Expressway Co., Ltd;
Reporting Period
13.86% shares of Guangxi Wuzhou Communications Co., Ltd;
11.69% shares of Jiangsu Expressway Company Limited;
7.04% shares of Xiandai Touzi Co., Ltd;
4.02% shares of Shenzhen Expressway Co., Ltd;
3.09% shares of Ningbo Zhoushan Port Company Limited;
2.54% shares of Qingdao Port International Co., Ltd;
1.20% shares of Oriental Times Media Co., Ltd;
0.37% shares of Hunan Sunward Intelligent Machine Co., Ltd;
0.16% shares of CMMB Vision Holdings Limited;
6.03% shares of S.F. Holding Co., Ltd.;
27.02% shares of Nanjing Tanker Corporation;
1.28% shares of Sinotrans & CSC Phoenix Co., Ltd.;
0.53% shares of China Shipbuilding Industry Company Limited;
19.08% shares of Jinzhou Port Co., Ltd.;
78.29% shares of Yingkou Port Services Co., Ltd.;
51.16% shares of China Merchants Property Operation & Service Co., Ltd.
Change of the actual controller during the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
96
China Merchants Port Group Co., Ltd. Annual Report 2019
Ownership and control relations between the actual controller and the Company:
Indicate by tick mark whether the actual controller controls the Company via trust or other ways of asset management.
□ Applicable √ Not applicable
4. Other 10% or Greater Corporate Shareholders
Legal
Name of corporate representative Date of
Registered capital Business scope or management activities
shareholders /person in establishment
charge
China Merchants
Investment 15 November
Hu Jianhua HKD28,287,989,241 Investment management of equities and others
Development 2013
Company Limited
Provision of management services for ports (without
involving special administrative measures on the access
of foreign investment); port information inquiries,
economic information consultation, economic
information consultation, corporate management
consultation, business information consultation, brand
management consultation and logistics information
China Merchants consultation (excluding restricted items in each case);
Gangtong Deng 16 January technical development and sales of ship machinery and
RMB9,446 million
Development Weidong 2018 equipment; technical services in respect of port loading
(Shenzhen) Co., Ltd. and unloading equipment; supporting businesses in
respect of the design, sales, import and export of
loading and unloading tools, mechanical and electrical
products and non-ferrous metal products (excluding
precious metals) (Commodities that involve state
trading, quota, license and special administrative
regulations shall be operated through the application
pursuant to related state regulations); technical
97
China Merchants Port Group Co., Ltd. Annual Report 2019
development and technical services in respect of
modern logistics information systems; supply chain
management and related supporting services; design of
logistics plans; planning of corporate image; planning
of cultural exchange activities (without involving
special administrative measures on the access of foreign
investment); marketing planning; and planning of brand
image. (In each case, any item forbidden by laws,
administrative regulations and the State Council shall
be excluded and restricted items shall be operated upon
the attainment of the permission)
5. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder, Actual Controller,
Reorganizer and Other Commitment Makers
For details, see III. Fulfillment of commitments in Part V Significant Events of this report
98
China Merchants Port Group Co., Ltd. Annual Report 2019
Part VII Preferred Shares
□ Applicable √ Not applicable
No preferred shares in the Reporting Period.
99
China Merchants Port Group Co., Ltd. Annual Report 2019
Part VIII Convertible Corporate Bonds
□ Applicable √ Not applicable
No convertible corporate bonds in the Reporting Period.
100
China Merchants Port Group Co., Ltd. Annual Report 2019
Part IX Directors, Supervisors, Senior Management and Staff
I Change in Shareholdings of Directors, Supervisors and Senior Management
Beginnin Increase Decrease
Other Ending
g in the in the
Office Incumbent/ Start of End of increase/d sharehold
Name Gender Age sharehold Reporting Reporting
title Former tenure tenure ecrease ing
ing Period Period
(share) (share)
(share) (share) (share)
Chairman
Deng December
of the Incumbent Male 50 June 2020 0 0 0 0 0
Renjie 2018
Board
Vice
Chairman
Bai Septembe
of the Incumbent Male 54 June 2020 0 0 0 0 0
Jingtao r 2017
Board
and CEO
December
Yan Shuai Director Incumbent Male 47 June 2020 0 0 0 0 0
2018
Director December
Su Jian Incumbent Male 48 June 2020 0 0 0 0 0
2018
Song Director December
Incumbent Male 57 June 2020 0 0 0 0 0
Dexing 2018
Independ
Yuan
ent Incumbent Male 69 June 2017 June 2020 14,040 0 0 0 14,040
Yuhui
director
Independ
Su Qiyun ent Incumbent Male 56 June 2017 June 2020 0 0 0 0 0
director
Li Independ
Changqin ent Incumbent Male 51 June 2017 June 2020 0 0 0 0 0
g director
Chairman
of the
Liu Superviso December
Incumbent Male 48 June 2020 0 0 0 0 0
Yingjie ry 2018
Committe
e
Superviso December
Hu Qin r Incumbent Female 53 June 2020 0 0 0 0 0
2018
Yang Superviso December
r Incumbent Male 53 June 2020 0 0 0 0 0
Yuntao 2018
Superviso
Ni Keqin r Incumbent Female 55 June 2017 June 2020 29,211 0 0 0 29,211
Zheng Superviso
r Incumbent Male 49 June 2017 June 2020 0 0 0 0 0
Linwei
COO and December
Zhang Yi Incumbent Male 49 June 2020 0 0 0 0 0
GM 2018
Zheng December
Vice GM Incumbent Male 57 June 2020 12,661 0 0 0 12,661
Shaoping 2018
101
China Merchants Port Group Co., Ltd. Annual Report 2019
Vice
Huang GMand
December
Chuanjin Secretary Incumbent Male 37 June 2020 0 0 0 0 0
2018
g of the
Board
Lu December
Vice GM Incumbent Male 50 June 2020 0 0 0 0 0
Yongxin 2018
December
Li Yubin Vice GM Incumbent Male 48 June 2020 0 0 0 0 0
2018
December
Wen Ling CFO Incumbent Female 54 June 2020 0 0 0 0 0
2018
Former
Fu Chairman December January
Former Male 53 0 0 0 0 0
Gangfeng of the 2018 2020
Board
Former December December
Yan Gang Former Male 47 0 0 0 0 0
vice GM 2018 2019
Total -- -- -- -- -- -- 55,912 0 0 55,912
II Change of Directors, Supervisors and Senior Management
Name Office title Type of change Date of change Reason for change
Chairman of the
Fu Gangfeng Left 31 January 2020 Job change
Board
Left 23 December
Yan Gang Vice GM Job change
2019
III Biographical Information
Professional backgrounds, major work experience and current duties in the Company of the incumbent directors, supervisors and senior
management:
Deng Renjie, Chairman of the Board, graduated from Beijing Electronic Science&Technology
Institute, majoring in computing, and obtained a bachelor degree, later graduated from Dalian
Maritime University, majoring in international economic law, and obtained master’s degree. Deng
Renjie now holds the post of the Executive Vice President of China Merchants Group Company
Limited, President of Liaoning Port Group Co., Ltd., the Company’s Chairman of the Board, Vice
President of the 8th Council of China Highway and Transportation Society & Vice President of the 7th
Council of China Transportation Association. Deng Renjie has successively held the posts of
Researcher of General Office of Ministry of Communications, Deputy Director of General Office of
Hunan Provincial Party Committee, Deputy Secretary General of Hunan Provincial Party Committee,
Deputy Secretary General of Party Committee of Xinjiang Autonomous Region, Assistant President
of China Merchants Group Company Limited, Director of General Manager’s Office, and Chairman
of the Board of China Merchants Expressway Network & Technology Holdings Co., Ltd. Deng Renjie
has been being the Vice Chairman of the Board of the Company from December 2018 to January
2020, and has been being the Chairman of the Board of the Company since February 2020.
Bai Jingtao, Vice Chairman of the Board and Chief Executive Officer, Professor Level Senior
Engineer, graduated from Department of Water Conservancy of Tianjin University and obtained
bachelor’s degree in port and waterway engineering. Later Bai Jingtao studied at Graduate School of
102
China Merchants Port Group Co., Ltd. Annual Report 2019
Wuhan University of Technology, Graduate School of Shanghai Maritime University and obtained
master’s degree in management science and engineering, doctor’s degree in transportation planning
and management respectively. Bai Jingtao now holds the post of the Company’s Vice Chairman of
the Board, CEO and Party Secretary, Managing Director of China Merchants Port Holdings Company
Limited (CM Port Holdings). Bai Jingtao has successively held the posts of Assistant Engineer of
CCCC Water Transportation Consultants Co., Ltd, Principal Staff of Division of Engineering
Management and Division of Infrastructure Management of Ministry of Communications, Deputy
Director and Director of Division of Infrastructure Management and Division of Water Transport of
Ministry of Communications, Vice President of China Merchants Zhangzhou Development Zone Co.,
Ltd and Director of Zhangzhou Port Authority, Deputy Director of Xiamen Port Authority and
Executive Deputy Commander of Construction Headquarters of Xiamen Haicang Bonded Port Area,
Deputy President of China Merchants International Company Limited, Secretary of the Party
Committee of China Merchants Zhangzhou Economic and Technological Development Zone and
Executive Deputy Director of Management Committee, Secretary of the Party Committee and
President of China Merchants Zhangzhou Economic and Technological Development Zone Company
Limited. Bai Jingtao has been being the Director of the Company since September 2017 and the
Director and Chief Executive Officer of the Company since December 2018, and has been being the
Vice Chairman of the Board and Chief Executive Officer of the Company since April 2020.
Yan Shuai, Director, graduated from Harbin Engineering University, majoring in industrial
automation, and obtained bachelor’s degree in engineering. Later Yan Huai obtained master’s degree
in management at Beijing University of Aeronautics and Astronautics. Yan Shuai now holds the posts
of Director of Human Resources Department. Yan Shuai has successively held the posts of Deputy
Researcher of General Office of the State Council of the People’s Republic of China Second
Secretariat, Vice President of China Merchants Group Finance Co., Ltd., Deputy Director (principal
person) of Human Resources Department of China Merchants Group Company Limited. Yan Shuai
has been being the Director of the Company since December 2018.
Su Jian, Director, Non-Practicing Member of The Chinese Institute of Certified Public Accountants,
Intermediate Accountant, graduated from Department of Economics of Shanghai University of
Finance and Economics, and obtained bachelor’s degree in economics. Li Jian now holds the post of
Director of Finance Department (Property Right Department) of China Merchants Group Company
Limited. Li Jian has successively held the post of Financial Manager of China Merchants International
Travel Co., Ltd., Senior Manager of Finance Department of China Merchants Shekou Industrial Zone,
Senior Manager of Finance Department, Assistant Director of Finance Department, Deputy Director
of Finance Department, Deputy Director of Human Resources Department, Deputy Director of Party
Committee Office, Deputy Director of Organization Department of Party Committee, Deputy
Director of Finance Department (Property Right Department) (principal person) in China Merchants
Group Company Limited, Secretary of Party Committee, Secretary of Committee for Discipline
Inspection, Vice President of China Merchants Industrial Group Company Limited. Su Jian has been
being the Director of the Company since December 2018.
Song Dexing, Director, Senior Engineer, graduated from Department of Mechanics of Wuhan
University of Technology (former name is Wuhan Institute of Water Transportation Engineering), and
obtained bachelor’s degree in engineering. Later Song Dexing obtained master’s degree, majoring in
transportation planning at Wuhan University of Technology and doctor’s degree in management,
103
China Merchants Port Group Co., Ltd. Annual Report 2019
majoring in administrative management at Huazhong University of Science and Technology. Song
Dexing now holds the posts of Business Director of Transportation & Logistics, Minister of
Transportation & Logistics Business Department/Beijing Headquarters of China Merchants Group
Company Limited, President, Secretary of Party Committee of SINOTRANS&CSC. Song Dexing
has successively held the posts of Secretary of Youth League Committee, Engineer of Water Transport
Planning & Design Institute of Ministry of Communications, Principal Staff of Division of Transport
of Ministry of Communications, Deputy Director, Director of Container Office of Division of Water
Transport of Ministry of Communications, Deputy Mayor of Luoyang Municipal People’s
Government (temporary post), Deputy Director of China Waterborne Transport Research Institute,
Deputy Director, Director of Yangtze Three Gorges Navigation Administration, Deputy Director,
Director of Division of Water Transport of Ministry of Communications, Director of Bureau of Water
Transport of Ministry of Transport (Director of Taiwanese Affairs Office of the ministry), Vice
Chairman of the Board, Member of Party Committee, Deputy Secretary of Party Committee,
Secretary of Committee for Discipline Inspection of SINOTRANS&CSC, General Manager of
SINOTRANS&CSC, Director of Department of Comprehensive Logistics Business of China
Merchants Group Company Limited. Song Dexing has been being the Director of the Company since
December 2018.
Yuan Yuhui, Independent Director, MBA, now acts as the Director of Shenzhen Riland Industrial
Co., Ltd. He once acted as the Vice GM, Vice Director of China Nanshan Development (Group)
Incorporation and the Director of the Company. And he has been being the Independent Director of
the Company since August 2015.
Su Qiyun, Independent Director, graduated from Xiamen University of Department of Law with a
master degree of Civil and Commercial Law and a doctor degree of Wuhan University of Law. He
now is the founding partner of Beijing Deheng Law Office. He used to serve as Manager of
Investment Department of Ping An Insurance Company of China, as Cadres of Shenzhen Industry
and Commerce Administration. And he has been an Independent Director of the Company since May
2014.
Li Changqing, Independent Director, graduated from Xiamen University with a doctor degree of
Accounting, and also is a CPA, an excellent talent of new century of Ministry of Department, a
prominent talent of Xiamen as well as a guide tutor of Postdoctoral Center of SSE. He now is the
Director of Senior Business Administration Education Center, professor and doctoral supervisor of
Xiamen University. And he has been being an Independent Director of the Company since May 2014.
Liu Yingjie, Chairman of the Supervisory Committee, graduated from Capital University of
Economics and Business, majoring in accounting, and obtained bachelor’s degree in economics. Liu
Yingjie now holds the post of Director of Risk Control Department/Law and Compliance Department
of China Merchants Group. Liu Yingjie has successively held the posts of Deputy Director, Director
of Division of Comprehensive Audit of Supervision Department of COSCO, Director of Division of
Computer Audit, Assistant Director, Deputy Director of Risk Control Department/Audit Department
of China Merchants Group. Liu Yingjie has been being the Chairman of the Supervisory Committee
of the Company since December 2018.
Hu Qin, Supervisor, graduated from Peking University, majoring in international law, and obtained
master’s degree in law. Later Hu Qin studied at NUS Business School and obtained master’s degree
in management. Hu Qin now holds the post of Deputy Director of Risk Control Department/Law
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China Merchants Port Group Co., Ltd. Annual Report 2019
&Compliance of China Merchants Group. Hu Qin has successively held the posts of Deputy General
Manager of Planning Department of China Merchants Shekou Industrial Zone Company Limited,
General Manager and General Counsel of Department of Legal Affairs, General Counsel of China
Merchants Shekou Industrial Zone Holdings Co., Ltd., Deputy Director of Risk Control Department
of China Merchants Group, Deputy Director of Legal Department. Hu Qin has been being the
Supervisor of the Company Since December 2018.
Yang Yuntao, Supervisor, graduated from Jilin University, majoring in international law, and
obtained bachelor’s degree in law. Later Yang Yuntao studied at School of Law, University of
International Business and Economics, and obtained doctor’s degree in law. Yang Yuntao now holds
the posts of Deputy Director of Transportation & Logistics Business Department/Beijing
Headquarters of China Merchants Group Company Limited, Deputy General Manager and General
Counsel of SINOTRANS&CSC, Member of Party Committee. Yang Yuntao has successively held
the posts of Deputy General Manager of Port Business Department of Sino-Trans China National
Foreign Trade Transportation Corporation, General Manager of Law Department, Director, Deputy
President (principal person) of SINOTRANS (Hong Kong) Group Company Limited, Non-Executive
Director of SINOTRANS Limited, General Manager of Law Department of Sino-Trans China
Foreign Trade Transportation (Group) Corporation, General Manager, Deputy General Counsel,
General Counsel of Law Department of SINOTRANS & CSC. Yang Yuntao has been being the
Supervisor of the Company since December 2018.
Ni Keqin, Supervisor, is the Deputy GM of Chiwan Container Terminal Co., Ltd. now. She took the
positions of Manager Assistant, Deputy Manager as well as Manager of the Operation Department
and GM Assistant of CCT successively. She has been being the Supervisor of the Company since
May 2008.
Zheng Linwei, Supervisor, graduated from NJAU, with a bachelor degree of Agricultural Foreign
Trade and graduated from Shanghai Maritime University with MBA in 2004. He now serves as Vice
GM of the Harbor Division, Dongguan Shenzhen Chiwan Wharf Holdings Limited and Dongguan
Shenzhen Chiwan Terminal Co., Ltd. He has been being worked at the Harbor Division of the
Company from August 1993. He once acted as Director of Operation Room of Department II of
Commercial Freight of the Harbor Division of the Company, Manager Assistant, Vice Manager, and
Manager of Department II of Commercial Freight. And he has been being the Supervisor of the
Company since May 2014.
Zhang Yi, President and Chief Operational Officer, graduated from Wuhan Institute of Water
Transportation Engineering and obtained bachelor’s degree in transportation management
engineering. Later Zhang Yi obtained doctor’s degree in engineering at Wuhan University of
Technology. Zhang Yi now holds the post of the GM & COO of the Company, Deputy General
Manager of China Merchants Port Holdings Company Limited (CM Port Holdings). Zhang Yi has
successively held the posts of Planner of Planning Division of Zhanjiang Port Authority, Deputy
Director of Planning Development Division of Zhanjiang Port Authority, Assistant Director of
Zhanjiang Port Authority, Director, President, Secretary of Party Committee of Zhanjiang Port Group
Company Limited. Zhang Yi has been being the President&COO of the Company since December
2018.
Zheng Shaoping, Vice President, graduated from Dalian Maritime University for postgraduate,
majoring in international maritime law. Later Zheng Shaoping obtained master’s degree in business
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China Merchants Port Group Co., Ltd. Annual Report 2019
administration at The University of Wales. He now acts as the Vice President of the Company, the
Executive Director and Vice General Manager of China Merchants Port Holdings Company Limited.
He once acted as the Vice General Manager of Shenzhen Chiwan Wharf Holdings Limited & General
Manager of Chiwan Wharf Container Company, Vice General Manager and Director of Shenzhen
Chiwan Wharf Holdings Limited, General Manager and Director of Shenzhen Chiwan Wharf
Holdings Limited, General Manager and Vice Chairman of the Board of Shenzhen Chiwan Wharf
Holdings Limited, General Manager and Chairman of the Board of Shenzhen Chiwan Wharf
Holdings Limited, Vice General Manager of China Nanshan Development (Group) Inc., Vice General
Manager and Executive Director of China Merchants Holdings （International） Company Limited,
Vice General Manager (General Manager Level) and Executive Director of China Merchants
Holdings （International） Company Limited. He has been being the Vice President of the Company
since December 2018.
Huang Chuanjing, Vice President and Board Secretary, graduated from the English Department
of Shandong University of Science and Technology with a bachelor’s degree in arts. Later, he obtained
a master’s degree in business administration at The University of Wales. Now he holds the post of the
Vice President & Board Secretary of the Company. He once was the Director of Wharf Operation
Department of China Merchants International Qingdao Wharf Company Limited, Assistant of
General Manager’s Office, Director of Administration Department of China Merchants International
Company Limited, Assistant Director of General Office of China Merchants Group, Senior Manager,
Assistant General Manager of General Office of China Merchants Group Company Limited, Assistant
Director of General Office and secretary of the board of China Merchants Group Company Limited,
Assistant Director of Board of Directors Office, Chief of Board Secretariat of General Office, Deputy
Director of General Office and Deputy Director of Board of Directors Office in China Merchants
Group Company Limited. Huang Chuanjing has been acting as the Vice President of the Company
since December 2018.
Lu Yongxin, Vice President, graduated from Dalian University of Technology, and obtained
bachelor’s degree in English for science and technology. Later Lu Yongxin graduated from Curtin
University and obtained master’s degree in project management. Lu Yongxin now holds the post of
Deputy GM of the Company, Deputy General Manager of China Merchants Port Holdings Company
Limited (CM Port Holdings). Lu Yongxin has successively held the posts of Assistant General
Manager of Zhenhua Construction Co. Ltd., Deputy Director of CHEC (Beijing) Head Office, Deputy
General Manager of Research & Development Department of China Merchants Port Holdings
Company Limited (CM Port Holdings), General Manager of Overseas Business Department,
Assistant General Manager. Lu Yongxin has been dispatched to Terminal Link in France to act as
CFO and Senior Vice President. Lu Yongxin has been as the Vice President of the Company since
December 2018.
Li Yubin, Vice President, graduated from Tianjin University, majoring in Harbor and Cannel
Engineering with the bachelor of engineering degree, Tianjin University, majoring in engineering
management, and obtained master’s degree. Later Li Yubin graduated from The University of Hong
Kong and obtained doctor’s degree in real estate and construction. Li Yubin now holds the post of
Deputy President of the Company and Deputy General Manager of China Merchants Port Holdings
Company Limited (CM Port Holdings). Li Yubin has successively held the posts of Deputy General
Manager of Road and Bridge Project of China Harbor Company in Bangladeshi Office, Project
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China Merchants Port Group Co., Ltd. Annual Report 2019
Director of Overseas Business Department of CHEC, Assistant General Manager of Planning and
Commerce Department of China Merchants Port Holdings Company Limited (CM Port Holdings),
General Manager, Deputy General Economist of Strategy and Operation Management Department,
General Manager, Deputy General Economist of Strategy and Operation Department, General
Manager of China Merchants Bonded Logistics Co., Ltd. and the Chief Representative of
Representative Office of China Merchants Group in Djibouti. Li Yubin has been acting the Vice
President of the Company since December 2018.
Wen Ling, Chief Financial Officer, graduated from Finance Dept. in Southwestern University of
Finance and Economics with a master degree. Wen is now the CFO of the Company, the CFO of
China Merchants Port Holdings Company Limited. Wen was once the Deputy Financial Manager of
China Merchants Port Service (Shenzhen) Co., Ltd., the Financial Manager of Shenzhen Mawan Port
Services Co., Ltd. and the Vice Financial Manager, Senior Vice Financial Manager, and GM of Capital
Operation Dept. in China Merchants Port Holdings Company Limited. And Wen has been acting as
the CFO of the Company since December 2018.
Offices held concurrently in shareholding entities:
□ Applicable √ Not applicable
Offices held concurrently in other entities:
Remuneration
Office held in the or allowance
Name Other entity Start of tenure End of tenure
entity from the
entity
Deng Renjie China Merchants Group Co., Limited Vice President March 2015 Yes
Chairman of the
Deng Renjie Liaoning Port Group November 2018 No
Board
Chairman of the
Deng Renjie Yingkou Port Group Co., Ltd. April 2019 No
Board
Chairman of the
Deng Renjie China Merchants Steamship Co., Ltd. Supervisory June 2017 No
Committee
Deng Renjie China Merchants Group (H.K.) Limited Director December 2015 No
Chairman of the
Deng Renjie Dalian Port Group Corporation Limited May 2019 No
Board
Bai Jingtao Liaoning Port Group Director, GM April 2019 No
Vice Chairman of
Bai Jingtao DaLian Port (PDA) Company Limited June 2017 March 2019 No
the Board
Bai Jingtao Terminal Link Director June 2017 No
Shanghai International Port (Group) Co., Vice Chairman of
Bai Jingtao June 2016 No
Ltd. the Board
China Merchants Group (Beijing) Co.,
Yan Shuai Director July 2016 No
Limited
China Merchants Group (Shanghai) Co.,
Yan Shuai Director July 2016 No
Limited
Yan Shuai Liaoning Port Group Director August 2019 No
China Merchants Chongqing
Su Jian Communications Technology Research & Director December 2018 No
Design Institute Co., Ltd.
CHINA MERCHANTS INTERNATIONAL
Su Jian Director September 2017 No
FINANCE COMPANY LIMITED
107
China Merchants Port Group Co., Ltd. Annual Report 2019
Su Jian China Merchants Zhangzhou Director September 2017 No
CHINA MERCHANTS FINANCE
Su Jian Director September 2017 No
HOLDINGS COMPANY LIMITED
China Merchants Expressway Network &
Su Jian Director July 2017 No
Technology Holdings Co., Ltd.
Su Jian China Merchants Energy Shipping Co., Ltd. Director August 2017 January 2019 No
CHINA MERCHANTS UNION (BVI)
Su Jian Director July 2017 No
LIMITED
Su Jian DIVERSE SUCCESS LIMITED Director August 2019 No
CHINA MERCHANTS INDUSTRY
Su Jian Director September 2017 No
HOLDINGS COMPANY LIMITED
Non-executive
Su Jian China Merchants Securities Co., Ltd July 2017 No
director
Su Jian Liaoning Port Group Director September 2019 No
Su Jian Sinotrans Limited Director March 2019 No
Song Dexing SINOTRANS&CSC GM June 2016 Yes
Chairman of the
Song Dexing Nanjing Port (Group) Co., Ltd. October 2017 No
Board
Vice Chairman of
Song Dexing China Merchants Energy Shipping Co., Ltd. August 2018 No
the Board
Song Dexing Liaoning Port Group Director September 2019 No
Vice Chairman of
Song Dexing Sinotrans Limited the Board, Executive June 2018 No
Director
Chairman of the
Liu Yingjie Sinotrans Limited Supervisory March 2019 No
Committee
Chairman of the
Liu Yingjie China Merchants Group Finance Co., Ltd. Supervisory August 2019 No
Committee
Shareholder
Liu Yingjie China Merchants Energy Shipping Co., Ltd. August 2017 June 2019 No
supervisor
Chairman of the
Liu Yingjie China Yangtze Shipping Group Co., Ltd. Supervisory November 2017 No
Committee
Shenzhen China Merchants Shekou Asset
Hu Qin Supervisor May 2015 No
Management Co., Ltd.
China Merchants Shekou Industrial Zone
Hu Qin Supervisor May 2017 No
Holdings Co., Ltd.
China Merchants Hainan Development &
Hu Qin Supervisor December 2018 No
Investment Co., Ltd.
Yang Yuntao SINOTRANS&CSC Vice GM June 2016 Yes
Yang Yuntao China Yangtze Shipping Group Co., Ltd. Director December 2018 No
China Merchants Hainan Development &
Zhang Yi Director December 2018 No
Investment Co., Ltd.
Zheng
DaLian Port (PDA) Company Limited Director June 2017 March 2019 No
Shaoping
Zheng Ningbo Daxie China Merchants
Director April 2014 No
Shaoping International Container Terminal
Zheng
Ningbo Zhoushan Port Company Limited Director April 2015 No
Shaoping
Zheng Tianjin Five International Container
Director April 2014 August 2019 No
Shaoping Terminal Co., Ltd.
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China Merchants Port Group Co., Ltd. Annual Report 2019
Zheng
Tianjin Port Container Terminal Co., Ltd. Director August 2019 No
Shaoping
Zheng Qingdao Qianwan United Container
Director March 2016 No
Shaoping Terminal Co., Ltd.
Zheng Qingdao Qianwan New United Container
Director March 2016 No
Shaoping Terminal Co., Ltd.
Zheng Qingdao Port Dongjiakou Ore Terminal Co.,
Director March 2017 No
Shaoping Ltd.
Zheng Shanghai International Port (Group) Co.,
Director May 2014 No
Shaoping Ltd.
Zheng Shenzhen China Merchants Qianhai
Director August 2016 No
Shaoping Industrial Development Co., Ltd.
Zheng Chairman of the
Antong Holdings Co., Ltd. August 2016 March 2020 No
Shaoping Board
Zheng China Merchants Antong Logistics Chairman of the
September 2019 No
Shaoping Management Co., Ltd. Board
Zheng Quanzhou Shanghangtong Logistics
Executive director October 2019 No
Shaoping Management Co., Ltd.
Kumport Liman Hizmetleri ve Lojistik Chairman of the
Lu Yongxin December 2019 No
Sanayi ve Ticaret Anonim ?irketi Board
Vice Chairman of
Lu Yongxin Tin-can Island Container Terminal Ltd July 2019 No
the Board
Li Yubin MODERN TERMINALS LIMITED Director March 2015 No
Li Yubin Shenzhen Lianyongtong Terminal Co., Ltd. Director January 2014 No
Cofco China Merchants (Shenzhen) Grain Vice Chairman of
Li Yubin August 2017 May 2019 No
Electronic Trading Center Co., Ltd. the Board
Silk Road Yishang Information Technology Chairman of the
Li Yubin January 2019 No
Co., Ltd. Board
Shanghai International Port (Group) Co.,
Wen Ling Supervisor July 2019 No
Ltd.
Wen Ling China Nanshan Development (Group) Inc. Supervisor July 2019 No
Offices of directors, supervisor, and senior management held concurrently in other entities exclude offices held in
Note
the Company and subsidiaries within the consolidation scope.
Punishments imposed in the recent three years by the securities regulator on the incumbent directors, supervisors and senior
management as well as those who left in the Reporting Period:
□ Applicable √ Not applicable
IV Remuneration of Directors, Supervisors and Senior Management
Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisors and senior
management:
Decision-making procedure for the remuneration of directors, supervisors and senior management:
Remunerations for the Company’s directors, supervisors and senior management shall be nominated
by the Board of Directors and determined upon review of the Remuneration and Appraisal Committee.
Allowance for Independent Directors is RMB150,000/year (tax included), which has been approved
at the 3rd Extraordinary General Meeting of 2018.
Determining basis for the remuneration of directors, supervisors and senior management: The modes
and amounts of the remuneration for directors, supervisors and senior management are determined
according to the market levels with the post value, responsibilities, etc. taken into account.
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China Merchants Port Group Co., Ltd. Annual Report 2019
Actual payment for the remuneration of directors, supervisors and senior management: Salaries and
independent director allowances were paid to directors, supervisors and senior executives on a
monthly basis. And the other bonuses were paid all at one time according to the performance of each
of them.
Remuneration of directors, supervisors and senior management for the Reporting Period
Unit: RMB'0,000
Total before-tax Any
Name Office title Gender Age Incumbent/Former remuneration from the remuneration
Company from related party
Deng Renjie Chairman of the Board Male 50 Incumbent 0 Yes
Vice Chairman of the
Bai Jingtao Male 54 Incumbent 461 No
Board, CEO
Yan Shuai Director Male 47 Incumbent 0 Yes
Su Jian Director Male 48 Incumbent 0 Yes
Song Dexing Director Male 57 Incumbent 0 Yes
Yuan Yuhui Independent director Male 69 Incumbent 15 No
Su Qiyun Independent director Male 56 Incumbent 15 No
Li Changqing Independent director Male 51 Incumbent 15 No
Chairman of the
Liu Yingjie Male 48 Incumbent 0 Yes
Supervisory Committee
Hu Qin Supervisor Female 53 Incumbent 0 Yes
Yang Yuntao Supervisor Male 53 Incumbent 0 Yes
Ni Keqin Supervisor Female 55 Incumbent 134 No
Zheng Linwei Supervisor Male 49 Incumbent 119 No
Zhang Yi COO and GM Male 49 Incumbent 276 No
Zheng Shaoping Vice GM Male 57 Incumbent 378 No
Huang Vice GM and Board
Male 37 Incumbent 191 No
Chuanjing Secretary
Lu Yongxin Vice GM Male 50 Incumbent 276 No
Li Yubin Vice GM Male 48 Incumbent 342 No
Wen Ling CFO Female 54 Incumbent 164 No
Former Chairman of the
Fu Gangfeng Male 53 Former 0 Yes
Board
Yan Gang Former vice GM Male 47 Former 298 No
Total -- -- -- -- 2,684 --
Note: Total before-tax remuneration for senior management includes the deferred bonus of Three-year (from 2016 to 2018) Strategic
Assessment cashed by the Company in the Reporting Period.
Equity incentives for directors, supervisors and senior management in the Reporting Period:
□ Applicable √ Not applicable
V Employees
1. Number, Functions and Educational Backgrounds of Employees
Number of in-service employees of the Company as the parent 299
Number of in-service employees of major subsidiaries 14,761
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China Merchants Port Group Co., Ltd. Annual Report 2019
Total number of in-service employees 15,060
Total number of paid employees in the Reporting Period 15,060
Number of retirees to whom the Company as the parent or its
9,470
major subsidiaries need to pay retirement pensions
Functions
Function Employees
Production 8,005
Sales 570
Technical 3,343
Financial 543
Administrative 2,599
Total 15,060
Educational backgrounds
Educational background Employees
Master’s degree and above 451
Bachelor’s degree 3,449
Junior college 3,509
Technical secondary school and below 7,651
Total 15,060
2. Employee Remuneration Policy
Through its remuneration management system that is oriented by its strategies and based on the three
core elements of internal consistency, staff contribution and external competition, the Company
performs dynamic management of its remuneration strategy, remuneration level and remuneration
components. In 2019, the Company improved its remuneration and incentive system, aligned at
international leading comprehensive port operators and domestic excellent listed port groups, and
teased out the benchmark for incentive optimization to enhance market competitiveness. Based on
the concept of delicacy management of talents, the Company allocated more resources to its core
talents and high-performance personnel and enhanced the effectiveness of resource allocation through
precise incentive.
The Company innovated its incentive mechanism and combined long-term incentive and short-term
incentive to guide focus on its long-term development. It has successfully introduced the stock option
incentive plan to form a mechanism for sharing of profits and risks among itself and its shareholders
and staff. The plan will help to increase shareholder values, safeguard owners’ rights and interests,
assist the management to balance between short-term and long-term goals, support the Company’s
implementation of strategies and long-term sustainable development, fully mobilize the enthusiasm
of its middle and senior management personnel and core technical talents, and attract and retain
excellent management talents and key personnel.
3. Employee Training Plans
The Company is dedicated to creating a platform for the development and promotion of global port
professionals, provides domestic and foreign employees with learning opportunities, opens channels
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China Merchants Port Group Co., Ltd. Annual Report 2019
for global career development and helps employees to keep improving themselves with the
development of the Company. Meanwhile, it provides its peers with opportunities of coming to China
for exchange to share knowledge and values. In 2019, the Company further optimized the training
system, integrated internal and external training resources, and established a series of key training
projects at different levels with different categories, including the project series for senior executive
on International situation, industrial transfer and safety training, the project series on enhancement of
global management and financial capability of middle-level key leaders through internal training
courses, open class and network courses cooperating with professional institutions and the projects
on the enhancement of professional and general abilities for junior employees. The Company made
vigorous efforts to create the network platform Zhi-niao and develop and upload online courses. and
share training resources openly, enlarging the learning timely and effectively. Strengthening the
communications and collaboration between various units, it shall achieve the comprehensive
integration of talents training under the guidance of the Company. The Company actively fulfilled
the social responsibility, carrying out the “Co-creating Blue Dream-21th Century Maritime Silk Road
Talents Plan” of China Merchants Port, which cultivate professionals of port and shipping for
countries along the One Belt and One Road. As of the end of 2019, the project had cultivated 163
young backbone talents from 21 countries on 4 continents. In September 2019, it designed the “C-
Blue Elite Program” sailing class for overseas excellent undergraduates majored in port and shipping.
Through the program, the Company aimed to attract excellent young people to China and develop
more innovation talents with international vision, international awareness, international
communication abilities and cross-cultural communication competence. Meanwhile, the Company
participated in “Zhangqian project” of Hongkong sea silk association and other practical projects for
students, providing Hongkong university students with meaningful overseas internship opportunity,
and actively promoting the cooperation of the university and enterprises.
4. Labor Outsourcing
□ Applicable √ Not applicable
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China Merchants Port Group Co., Ltd. Annual Report 2019
Part X Corporate Governance
I General Information of Corporate Governance
Ever since its establishment, the Company has been in strict compliance with the company law
and securities law, as well as relevant laws and regulations issued by CSRC. And it has timely
formulated and amended its relevant management rules according to the Code of Corporate
Governance for Listed Companies, which are conscientiously and carefully executed. An
effective system of internal control has thus taken shape in the Company. Details about
corporate governance within the reporting period are set out as below:
1. During the Reporting Period, the Company revised the Articles of Association in accordance with
the changes of registered capital and adjustment of setting up of senior management based on demand
for operating and management. The revision has been reviewed and approved on the 1 st Special
Meeting of the 9th Board of Director held on 2 January 2019 and the 1st Extraordinary General
Meeting of 2019 later held on 24 January 2019.
2. The Company’s shareholder structure, assets size, governance structure and strategic planning have
all changed due to its completion of material assets restructuring on 26 December 2018. In
consideration of the Company’s actual situation, according to the Guidelines on Bylaws of Listed
Companies, Rules for General Meetings of Listed Companies, Guidelines of Shenzhen Stock
Exchange for Standard Operations of Listed Companies, Code of Corporate Governance for Listed
Companies, Rules of Shenzhen Stock Exchange for Stock Listing, Company Law of the People’s
Republic of China and other relevant laws and regulations, and in accordance with the requirements
of state-owned assets management authorities for fully promoting the building of law-based central
government-owned enterprises and the running and regulation of companies according to laws and
regulations, the Company during the Reporting Period amended 24 systems including the Articles of
Incorporation, and established six new systems, including Working Instructions for Board Secretary.
The detailed information is as follows:
Name of system Review Disclosure
Revised systems
Articles of Association Has been reviewed on the 6th Meeting of the 9th Has been
Rules of Procedures for the Board of Board of Directors held on 29 August 2019 and the disclosed
Directors 11th Special Meeting of the 9th Board of Directors on Cninfo
held on 22 November 2019 and approved on the in time
4th Extraordinary General Meeting of 2019 held on
11 December 2019.
Rules of Procedures for the Annual Has been reviewed on the 6th Meeting of the 9th
General Meeting Board of Directors held on 29 August 2019 and
th
Work Policy for Independent Directors approved on the 4 Extraordinary General
Meeting of 2019 held on 11 December 2019.
Management Policies for Related-party
Transactions
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China Merchants Port Group Co., Ltd. Annual Report 2019
Management Policies for Raised Funds
Specific System for Engaging
Accountants
Rules of Procedures for the Supervisory Has been reviewed on the 6th Meeting of the 9th
Committee Supervisory Committee held on 29 August 2019
and approved on the 4th Extraordinary General
Meeting of 2019 held on 11 December 2019
Working Articles of Audit Committee of Has been reviewed and approved on the 6th
the Board of Directors Meeting of the 9th Board of Directors held on 29
Working Rules of Annual Report for August 2019
Audit Committee of the Board of
Directors
Working Articles for Nomination,
Remuneration and Evaluation
Committee of the Board of Directors
Working Articles of Strategy Committee
of the Board of Directors
Working Rules of Annual Report for
Independent Directors
Working Articles of Chief Executive
Officer
Management Policies for the Shares of
the Company Held by Directors,
Supervisors and Senior Management
and the Changes
Management Rules on Information
Disclosure
Management System on Inside
Information and Insiders
Rules of Accountability for Significant
Mistakes in Annual Report Information
Disclosure
Information Disclosure Management
Rules for the Inter-bank Debt Financing
Instrument
Management System of Foreign
Investment
Management Method of Financial Tools
Management System on Person in
Charge of Finance and CFO
Rules on the Management of Investors
Relations
114
China Merchants Port Group Co., Ltd. Annual Report 2019
Internal Audit System
Established systems
Management System of External Has been reviewed on the 6th Meeting of the 9th Has been
Guarantees Board of Directors held on 29 August 2019 and disclosed
approved on the 4th Extraordinary General on Cninfo
Meeting of 2019 held on 11 December 2019. in time
Working Articles of Board Secretary Has been reviewed and approved on the 6th
Management System of Securities Meeting of the 9th Board of Directors held on 29
Investments August 2019
Management system of Subsidiaries
Management Method of Donations
Rules of Procedures for Office Meeting
3. Shareholders and shareholders’ general meeting: the Company ensures that all the shareholders,
especially minority shareholders, are equal and could enjoy their full rights. The Company called and
held shareholders’ general meeting strictly in compliance with the Rules for Shareholders’ General
Meeting.
4. Relationship between the controlling shareholder and the Company: controlling shareholder of the
Company acted in line with rules during the reporting period, did not intervened the decisions,
productions or operations of the Company directly or indirectly in exceeding the authority of the
shareholders’ general meeting, and did not appropriate any funds of the Company.
5. Directors and the Board of Directors: the Company elected directors in strict accordance with the
Articles of Association. Number and composition of members of the Board were in compliance with
relevant laws and regulations; all Directors attend Board meetings and shareholders’ general meeting
in a serious and responsible manner and participated enthusiastically relevant training so as to know
better about laws and regulations as well as the rights, obligations and liabilities of Directors. The
Company The Company set up the Audit Committee as approved by The 1st Extraordinary General
Meeting of 2004 and the Nomination, Remuneration and Evaluation Committee and Strategy
Committee as approved by the 2005 Annual General Meeting, with a view to ensuring the efficient
operation and scientific decision-making of the Board of Directors.
6. Supervisors and the Supervisory Committee: number and composition of the members of the
Supervisory Committee were in compliance with the requirements of laws and regulations. The
supervisors diligently and seriously performed their duties and obligations, took responsible attitudes
to all shareholders and supervised the financial affair as well as the performance by the Company’s
Directors, managers and other senior executives of their duties in compliance with the laws and
regulations.
7. Stakeholders: the Company fully respected and safeguarded the legal rights and interests of the
banks and other creditors, staff, clients and other stakeholders so as to develop the Company in a
consistent and healthy way.
8. Information disclosure and transparency: As the department for the management of information
disclosure, the Board of Directors of the Company is responsible for managing the information
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China Merchants Port Group Co., Ltd. Annual Report 2019
disclosure matters of the Company. Chairman of the Board assumes a central role in managing the
information disclosure matters of the Company while the Board Secretary is responsible for
organizing and coordinating such matters. The Board Secretary of the Company is responsible for the
management of investor relationships. Unless expressly authorized and trained, other directors,
supervisors, senior management members and staff members of the Company should avoid speaking
on behalf of the Company in investor relationship activities. The Company disclosed relevant
information in a true, accurate, complete and timely way in strict accordance with the requirements
of laws, regulations and the Articles of Association, formulated the Management Rules on
Information Disclosure, the Management System on Inside Information and Insiders and the Rules
on the Management of Investors Relations, and designated Securities Times, Ta Kung Pao and
http://www.cninfo.com.cn as its newspaper and website for information disclosure, so as to ensure all
shareholders have equal opportunity to obtain the information.
9. Corporate governance mechanisms and rules that the Company already established:
Articles of Association of the Company, Rules of Procedure for General Meetings, Working Articles
of Audit Committee of the Board of Directors, Working Rules of Annual Report for Audit Committee
of the Board of Directors, Working Articles for Nomination, Remuneration and Evaluation
Committee of the Board of Directors; Working Articles of Strategy Committee of the Board of
Directors, Working System for Independent Directors, Working Rules of Annual Report for
Independent Directors, Rules of Procedure for Supervisory Board, Working Articles of Chief
Executive Officer, Management System for Company Shares held by Directors, Supervisors and
Senior Executives and Its Changes, Management System of Foreign Investment, Management
System of Related Transactions, Management System of Fund-raising, Management Rules on
Information Disclosure, Rules of Accountability for Significant Mistakes in Annual Report
Information Disclosure, Management System on Inside Information and Insiders, Internal Audit
System, Management System of Investors’ Relations, Specific System for Engaging Accountants,
Management Method of Financial Tools, Management System on Person in Charge of Finance and
CFO, Information Disclosure Management Rules for the Inter-bank Debt Financing Instrument,
Management System of External Guarantees, Working Articles of Board Secretary, Management
System of Securities Investments, Management System of Subsidiaries, Management Method of
Donations, Rules of Procedures for Office Meeting etc. There isn’t difference between the actual
circumstances of the Company and all established systems.
Since the foundation, the Company was consistently in strict accordance with Company Law and
relevant laws and regulations to make a standard operation, continued business-running in line with
relevant requirements of Corporate Governance Principle for Listed Companies and earnestly made
effort to protect profit and interests of shareholders and stakeholders.
Indicate by tick market whether there is any material incompliance with the regulatory documents
issued by the CSRC governing the governance of listed companies.
□ Yes √ No
No such cases in the Reporting Period.
116
China Merchants Port Group Co., Ltd. Annual Report 2019
II The Company’s Independence from Its Controlling Shareholder in Business, Personnel,
Asset, Organization and Financial Affairs
The Company is absolutely independent in business, personnel, assets, finance and organization from
its controlling shareholder. Details are set out as follows.
Separation in business: The Company has its own assets, personnel, qualifications and ability to carry
out operating activities and is able to operate independently in the market. Separation in personnel:
The Company has basically separated its staff from its controlling shareholder. No senior management
staff of the Company holds positions at controlling shareholder of the Company. Separation in assets:
The Company possesses its own self-governed assets and domicile. Separation in organization: The
Company has established and improved the corporate governance structure according to law and has
an independent and complete organizational structure. Separation in finance: The Company has set
up its own financial department as well as normative accounting system and the financial
management system on its subsidiaries. The Company has its own bank accounts and does not share
the same bank account with its controlling shareholder. The Company has been paying tax in
accordance with the laws and regulations on its own behalf.
III Horizontal Competition
□ Applicable √ Not applicable
IV Annual and Special General Meetings Convened during the Reporting Period
1. General Meeting Convened during the Reporting Period
Investor Index to disclosed
Meeting Type Date of the meeting Disclosure date
participation ratio information
For the resolution
The 1st Extraordinary
Extraordinary announcement (No. 2019-
General Meeting of 90.28% 24 January 2019 25 January 2019
General Meeting 013), see
2019
http://www.cninfo.com.cn
The 2nd For the resolution
Extraordinary Extraordinary announcement (No. 2019-
22.16% 25 February 2019 26 February 2019
General Meeting of General Meeting 020), see
2019 http://www.cninfo.com.cn
The 3rd For the resolution
Extraordinary Extraordinary announcement (No. 2019-
90.05% 15 April 2019 16 April 2019
General Meeting of General Meeting 038), see
2019 http://www.cninfo.com.cn
For the resolution
The 2018 Annual Annual General announcement (No. 2019-
89.91% 20 May 2019 21 May 2019
General Meeting Meeting 049), see
http://www.cninfo.com.cn
The 4th For the resolution
Extraordinary Extraordinary announcement (No. 2019-
90.52% 11 December 2019 12 December 2019
General Meeting of General Meeting 095), see
2019 http://www.cninfo.com.cn
117
China Merchants Port Group Co., Ltd. Annual Report 2019
2. Special General Meetings Convened at the Request of Preferred Shareholders with Resumed Voting Rights
□ Applicable √ Not applicable
V Performance of Duty by Independent Directors in the Reporting Period
1. Attendance of Independent Directors at Board Meetings and General Meetings
Attendance of independent directors at board meetings and general meetings
Total number of Board Board The independent
Board
board meetings Board meetings meetings meetings the director failed to General
Independent meetings
the independent attended by way of attended independent attend two meetings
director attended on
director was telecommunication through a director failed consecutive board attended
site
eligible to attend proxy to attend meetings (yes/no)
Yuan Yuhui 14 2 12 0 0 No
Su Qiyun 14 2 12 0 0 No 5
Li Changqing 14 2 12 0 0 No
Why any independent director failed to attend two consecutive board meetings:
□ Applicable √ Not applicable
2. Objections Raised by Independent Directors on Matters of the Company
Indicate by tick mark whether any independent directors raised any objections on any matter of the Company.
□ Yes √ No
No such cases in the Reporting Period.
3. Other Information about the Performance of Duty by Independent Directors
Indicate by tick mark whether any suggestions from independent directors were adopted by the Company.
√ Yes □ No
Suggestions from independent directors adopted or not adopted by the Company:
During the reporting period, all independent directors of the Company probity and self-discipline,
fulfill their duties in line with their expertise and experience; earnestly and diligently perform their
duties. The independent directors actively known about the Company’s business and operation,
protected the interests of minority shareholders, brought their roles as independent directors into full
play by participating in discussions on reports reviewed at board sessions and other issues of the
Company, and proposed professional suggestions on standard governance and production operation
which had been adopted by the Company. They carefully reviewed and issued independent opinions
in written form on significant events such as material related-party transactions in accordance with
relevant requirements and had play a important role in scientific decision-making of the Board. In
accordance with the requirements of CSRC and Shenzhen Stock Exchange, the “Working Rules for
Independent Directors” and the “Working Rules for Independent Directors Concerning Annual
Reports, they performed their obligations with due diligence and fully oversaw the preparation and
disclosure of the Annual Report of the Company. For details of performance by independent directors
of their duties, please refer to the work report of independent directors for 2019 as disclosed at
118
China Merchants Port Group Co., Ltd. Annual Report 2019
http://www.cninfo.com.cn.
VI Performance of Duty by Specialized Committees under the Board in the Reporting Period
(I) Performance of the Audit Committee of the Board of Directors
The members of Audit Committee include independent director Li Changqing (convener), director
Su Jian, and independent director Su Qiyun. During the Reporting Period, the Audit Committee of
the Board in line with the requirements of CSRC and Shenzhen Stock Exchange, Articles of
Association, Working Rules for the Audit Committee of the Board and the Working Practices for the
Audit Committee of the Board on Annual Report performed their duties, and give full play to their
expertise and experience, earnestly examine the Company's annual audit, reviewing of financial
statement, internal control, and other significant financial information, providing the Board of
Directors’ scientific and efficient decision-making with professional support.
1. Particulars about the Meetings
During the Reporting Period, the Audit Committee of the Board held a total of five meetings, with
details as follows:
(1) The 1st Meeting of the Audit Committee of the 9th Board of Directors for 2019
On 27 March 2019, it was held at Conference Room 25A, China Merchants Port Plaza, Shekou
Industry 3rd Road, Shenzhen, at which the following proposals were reviewed and approved
unanimously:
Proposal on Work Report of Accounting Firm for 2018
Proposal on Financial Report of 2018
Proposal on Renewal of Appointment of Accounting Firm for 2019
Proposal on Internal Auditing Report for 2018
Proposal on Internal Control and Audit Office’s Auditing Report No. 3 for 2018
Proposal on Anti-fraud Risk Assessment Report for 2018
Proposal on Internal Auditing Plan for 2019
Proposal on Working Report of the Audit Committee of the Board in 2018
(2) The 2nd Meeting of the Audit Committee of the 9th Board of Directors for 2019
On 26 April 2019, it was held by communication meeting at which the Proposal on Internal Auditing
Report for the First Quarter of 2019 was reviewed and approved unanimously.
(3) The 3rd Meeting of the Audit Committee of the 9th Board of Directors for 2019
On 29 August 2019, it was held by communication meeting at which the following proposals were
reviewed and approved unanimously：
Proposal on Interim Financial Report for 2019
Proposal on Internal Auditing Report for the Second Quarter of 2019
Proposal on Internal Control and Audit Office’s Auditing Report for 2019 No. 1 on Qingdao Project
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China Merchants Port Group Co., Ltd. Annual Report 2019
Proposal on Internal Control and Audit Office’s Auditing Report for 2019 No. 2 on KUMPORT
Project
(4) The 4th Meeting of the Audit Committee of the 9th Board of Directors for 2019
On 29 October 2019, it was held by communication meeting at which the following proposals were
reviewed and approved unanimously：
Proposal on Internal Auditing Report for the Third Quarter of 2019
Proposal on Internal Control and Audit Office’s Auditing Report for 2019 No. 3
Proposal on Internal Control and Audit Office’s Auditing Report for 2019 No. 4
Proposal on Internal Control and Audit Office’s Auditing Report for 2019 No. 5
Proposal on Internal Control and Audit Office’s Auditing Report for 2019 No. 6
(5) The 5th Meeting of the Audit Committee of the 9th Board of Directors for 2019
On 30 December 2019, it held at Conference Room 25A, China Merchants Port Plaza, Shekou
Industry 3rd Road, Shenzhen, at which the Audit Report on the Company’s Finance and Internal
Control by Deloitte Touche Tohmatsu Certified Public Accountants LLP for 2019 were debriefed by
the Committee members.
2. Performance of Duties to the Audit Work of Financial Statements of the Company
In accordance with relevant requirements of CSRC and Shenzhen Stock Exchange, the specific
working rules and procedure for the Audit Committee, during the reporting period, the Audit
Committee of the Board of the Company oversaw the audit work of Financial Statements of the
Company for 2018 with due diligence, details of which are as follows:
(1) Before the auditors started their work, the Audit Committee discussed with the principal auditor
of the accounting firm and determined, inter alia, the timing schedule for the auditing work of the
financial statements for the year.
(2) The Audit Committee expressed its audit opinions two times on the financial statements of the
Company for 2018.
During the reporting period, the Audit Committee expressed its audit opinions two times on the
financial statements of the Company for 2018 in accordance with relevant requirements from CSRC.
The Audit Committee reviewed the Financial Statements prepared by the Company and issued the
following opinions before the Auditors started their work: the Company was in full compliance with
relevant laws, regulations and the Articles of Association of the Company, the units and items of the
Company's financial statements to be consolidated were complete, and the consolidation basis thereof
was accurate and the information included in the Financial Statements submitted by the Company
was objective, comprehensive and true. The Company's accounting policies were properly adopted
and the accounting estimates made were reasonable. No significant mistake or omission has been
identified so far. Due to the time-lag between this review of Financial Statements and the dates of the
Auditors' Report, we suggest the Finance Department focus on and deal with subsequent events
properly in accordance with the New Enterprises Accounting Standards to ensure the fairness,
truthfulness and completeness of the Financial Statements.
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China Merchants Port Group Co., Ltd. Annual Report 2019
After the Auditors issued their preliminary audit opinions, the Audit Committee reviewed the
Financial Statements again and issued the following opinions: the Company prepared the Financial
Statement in full compliance with the New Enterprise Accounting Standards and relevant provisions
of the financial control system of the Company, the procedures for the preparation of the Financial
Statements were reasonable and proper, which gave a true and fair view of the Company's assets,
liabilities, equity interests and operation results as at 31 December 2018. Information included in the
Financial Statements was objective and complete. Financial Statements for 2018 which was
preliminarily audited by Deloitte Touche Tohmatsu Certified Public Accountants LLP may be
submitted for review at the 5th Meeting of the 9th Board of Directors.
(3) Supervision over the Auditing Work of the Accounting firm
During the Reporting Period, the Audit Committee issued two letters to Deloitte Touche Tohmatsu
Certified Public Accountants LLP to urge them to produce their audit recommendation on the
financial statements and the summary statement of adjusting events in a timely manner to help our
financial staff finish the preparation of financial statements and related notes for 2018 as soon as
possible, so as to ensure the annual audit and information disclosure proceed as scheduled.
(4) Opinions on the Auditing Work Performed by the Accountants for the previous year
During the auditing period, the Audit Committee of the Board focused on the problems discovered in
process of audit, urged auditors to finish the preparation of their report within a prescribed period of
time and ensured the truthfulness, accuracy and completeness of the annual report. The Certified
Public Accountants issued a standard unqualified audit report on 29 March 2019. The Audit
Committee considered that the Certified Public Accountants conducted the audit work of 2018 in
accordance with China’s Independent Auditing Standards, the audit time was sufficient, the
deployment of the auditors was appropriate and their practicing capability was excellent, and that the
audit report issued sufficiently reflected the Company's financial condition as at 31 December 2018
and its operation results and cash flows for the year 2018 and the audit conclusion made was in line
with the actual situation of the Company.
3. Paying attention to the Internal Control and Internal Audit Work of the Company
During the reporting period, the Audit Committee made standards and requirements to the Audit
Office's report submitted, fully understood the sound establish and implementation of internal control
system, focused on problems and suggestions provided by the Audit Office. In addition, the Audit
Committee advised on the improvement for the work of the Audit Department and the Company
relating to internal control for the next year.
(II) Performance of the Nomination, Remuneration and Evaluation Committee
The members of Nomination, Remuneration and Evaluation Committee include independent director
Yuan Yuhui (Convener), director Yan Shuai, and independent director Su Qiyun During the
Reporting Period, the Nomination, Remuneration and Evaluation Committee earnestly performed
their duties, investigated the equity incentive plan and examined the remuneration of directors,
supervisors and senior executives in term of the requirements and stipulations of CSRC, Articles of
Association, Working Rules of the Nomination, Remuneration and Evaluation Committee and
responsibilities and obligations empowered by the Board of Directors.
During the Reporting Period, the Nomination, Remuneration and Evaluation Committee under the
121
China Merchants Port Group Co., Ltd. Annual Report 2019
Board of Directors held a total of two meetings, details of which are as follows:
1. On 27 March 2019, the 1st Meeting of the Nomination, Remuneration and Evaluation Committee
of the 9th Board of Directors for 2019 was held at Conference Room 25A, China Merchants Port Plaza,
Shekou Industry 3rd Road, Shenzhen, at which the following proposals were reviewed and approved
unanimously:
Proposal on Working Report of the Nomination, Remuneration and Evaluation Committee of the
Board for 2018
Proposal on Report on the Remuneration of the Directors, Supervisors and Senior Management Staff
for 2018
2. On 11 October 2019, the 2nd Meeting of the Nomination, Remuneration and Evaluation Committee
of the 9th Board of Directors for 2019 was held by communication meeting at which the following
proposals were reviewed and approved unanimously：
Proposal on Stock Options Incentive Plan of China Merchants Port Group Co., Ltd. (Draft) and its
Abstract
Proposal on Stock Options Incentive Plan of China Merchants Port Group Co., Ltd. (Phase I) (Draft)
and its Abstract
Proposal on Management Method for Stock Options Incentive Plan of China Merchants Port Group
Co., Ltd.
Proposal on Examination Method for Implementation of Stock Options Incentive Plan of China
Merchants Port Group Co., Ltd.
(III) Performance of the Strategy Committee
The members of Strategy Committee include Chairman of the Board Deng Renjie (Convener), Vice
Chairman of the Board and CEO Bai Jingtao, director Song Dexing, independent director Yuan Yuhui,
and independent director Li Changqing. During the Reporting Period, members of the Strategy
Committee in line with the requirements of CSRC, Article of Association, and the stipulation of
Working Rules of the Strategy Committee earnestly performed their duties, conducted research and
advised on the investment plans and assets operation projects related to the medium to long term
development strategy of the Company.
During the Reporting Period, the Strategy Committee under the Board of Directors held a total of
three meetings, details of which are as follows:
1. On 2 January 2019, the 1st Meeting of the Strategy Committee of the 9th Board of Directors for
2019 was held by communication meeting at which the Proposal on Signing the Agreement on
Transfer of Shares in Zhanjiang Port (Group) Co., Ltd. by the Company with Sinotrans Guangdong
Co., Ltd. was reviewed and approved unanimously：
2. On 8 January 2019, the 2nd Meeting of the Strategy Committee of the 9th Board of Directors for
2019 was held by communication meeting at which the Proposal on Capital Increase in Zhanjiang
Port (Group) Co., Ltd. by the Wholly-owned Subsidiary was reviewed and approved unanimously.
3. On 27 March 2019, the 3rd Meeting of the Strategy Committee of the 9th Board of Directors for
2019 was held at Conference Room 25A, China Merchants Port Plaza, Shekou Industry 3rd Road,
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China Merchants Port Group Co., Ltd. Annual Report 2019
Shenzhen, at which the following proposals were reviewed and approved unanimously:
Proposal on Working Report of the Strategy Committee of the Board in 2018
Proposal on Five-Year Strategic Plan of the Company from 2019 to 2023
VII Performance of Duty by the Supervisory Committee
Indicate by tick mark whether the Supervisory Committee found any risk to the Company during its supervision in the Reporting Period.
□ Yes √ No
The Supervisory Committee raised no objections in the Reporting Period.
VIII Appraisal of and Incentive for Senior Management
The Company has a mature assessment mechanism and system covering all senior management
personnel. The annual comprehensive assessment combines qualitative and quantitative methods with
the dimensions including performance, competence, self-discipline, etc. The assessment results of
senior management serve as an important basis for appointment and motivation. The Company
adjusts and determines the post salary of senior managers based on the factors including operation
status, position served and assessment results, and determines the performance bonus of managers
through the factors including annual comprehensive ability assessment, annual key performance
indicators appraisal and three-year strategic appraisal results.
The Company implements a featured performance-oriented system of “outperforming the market
performance and surpassing peers” for the appraisal of and bonus distribution to its senior
management. Through year-on-year comparison vertically and comparison with benchmark peers
transversely, the appraisal coefficient gives a more comprehensive and objective reflection of the
actual performance level and links more closely with performance bonuses. Through the three-year
strategic appraisal mechanism and the introduction of medium- and long-term incentive and short-
term incentive combined, the Company defers a portion of the performance bonuses to senior
management until the end of the three-year strategic appraisal cycle. By doing so, the Company makes
its senior management focus not only on short-term performance yearly but also on medium- and
long-term development of the Company. To motivate senior management personnel more effectively,
the Company has successfully introduced the stock option incentive plan to form a mechanism for
the sharing of profits and risks and fully mobilize the enthusiasm of senior management personnel. It
is beneficial to the Company’s long-term sustainable development and enhancement of shareholder
values.
IX Internal Control
1. Material Internal Control Weaknesses Identified for the Reporting Period
□ Yes √ No
123
China Merchants Port Group Co., Ltd. Annual Report 2019
2. Internal Control Self-Evaluation Report
Disclosure date of the internal control self-evaluation report 16 April 2020
For details, see
Index to the disclosed internal control self-evaluation report
www.cninfo.com.cn
Evaluated entities’ combined assets as % of consolidated total assets 97.6%
Evaluated entities’ combined operating revenue as % of consolidated operating
98.7%
revenue
Identification standards for internal control weaknesses
Weaknesses in internal
Type control over financial Weaknesses in internal control not related to financial reporting
reporting
If a defect or defect Great defect Significant defect Common defect
group give rise to the
Development direction Development direction Development direction
following events which substantially deviates partly deviates from the slightly deviates from
cannot be prevented or from the strategic goals, strategic goals, the strategic goals,
found and made investment direction, investment direction, investment direction,
rectification, the defect and business structure, and business structure, and business structure,
commercial modeled. commercial modeled. commercial modeled.
or defect group are which completely which unable to support which completely can't
recognized as unable to support the the realization of fully support the
significant defects: realization of strategic strategic goals at a larger realization of strategic
goals extent goals
(1) Malpractices of
directors, supervisors Strategy implementation Strategy implementation Strategy implementation
and senior is blocked, almost all is blocked, most of is blocked, part of
management: indicators of strategy indicators of strategy indicators of strategy
implementation cannot implementation cannot implementation cannot
(2) The Company make
completed as planned completed as planned completed as planned
correction to the
Nature financial report issued; Lead to break off of Lead to break off of Some daily business is
standard (3) Certified Public common common influenced, lead to break
Accountant find that business/service or it business/service or it off of common
there is a significant takes half year or above takes three months or business/service or it
error in the financial to recover the break off half year below to takes three months
report, however, the of common recover the break off of below to recover the
internal control did not business/service common break off of common
discover it when business/service business/service
conducting internal
control;
(4) The Audit
Committee under the
Board and Internal
Audit Service's
supervision to the
internal control is
invalid.
124
China Merchants Port Group Co., Ltd. Annual Report 2019
Badly damage the In a large extent, damage damage the working
working enthusiasm of the working enthusiasm enthusiasm of all the
all the employees, will of all the employees, employees, reduce work
give rise to large scale reduce work efficiency, efficiency, have some
group events or heavy have greatly adverse adverse effect to
damage to enterprises effect to enterprises enterprises culture and
culture and enterprises culture and enterprises enterprises cohesion
cohesion cohesion
The employee's ability The employee's ability The employee's ability
and professional skills and professional skills in and professional skills in
universally cannot meet some significant fields some fields cannot meet
the enterprise cannot meet the the enterprise
development needs by a enterprise development development
large margin needs
Negative news spread in Negative news spread in Negative news spread in
the field of the entire the field of the entire the field of the entire
business (including business, or was paid business, have small
extending to industry attention or reported by damage to the reputation
chain),or was paid the local media the of the enterprise, the
attention by the national recovery of reputation recovery of reputation
media or public media, will take three to six will take three months
the recovery of months below
reputation will take more
than six months
The enterprise's internal The enterprise's internal The enterprise's internal
confidential information confidential information confidential information
leakage which badly leakage which affect the leakage which affect the
affect the enterprise's enterprise's competitive enterprise's competitive
competitive capacity in capacity in the market, capacity in the market,
the market, or affect the or affect the competitive or affect the competitive
competitive capacity in capacity in management capacity in management
management in a large extent in a general extent
The judging standard was the net profits attributable to the parent Company's
The judging standard
shareholders in the consolidated financial statements audited in last year.
was the net profits
attributable to the Great defect Significant defect Common defect
parent Company's
shareholders in the Have a significant Have a greater adverse Have an adverse impact
consolidated financial adverse impact on the impact on the asset on the asset turnover
statements audited in asset turnover ability, turnover ability, which ability, which lead to
Quantitative
last year. Misstatement which lead to total asset lead to total asset total asset turnover rate
standard
amount ≥ 5% above of
judging standard was turnover rate lowed 20% turnover rate lowed10% lowed10% below
great defect; 5% above (Including to 20% (Including
judging standard ＞1% 20％） 10%）
misstatement amount
was significant defect; Had significant adverse Had larger adverse Had adverse impact to
misstatement amount impact to the annual impact to the annual the annual operation
125
China Merchants Port Group Co., Ltd. Annual Report 2019
＜1% below of judging operation profits or operation profits or profits or cause decrease
standard was general cause decrease of annual cause decrease of annual of annual operation
standard. operation profits when at operation profits when at profits when at 1%
5% (including 5%) 1% (including 1%) to below of judging
above of judging 5% judging standard standard
standard
Had significant adverse Had larger adverse Had adverse impact to
impact to decrease of impact to decrease of decrease of inflow of
inflow of total cash flow inflow of total cash flow total cash flow or
or increase of outflow or increase of outflow increase of outflow total
total cash flow when at total cash flow when at cash flow when at 5%
10% (including 10%) 5% (including 5%) to below of judging
above of judging 10% above of judging standard
standard standard
Great investment Larger investment Great investment
mistake incurred which mistake incurred which mistake incurred which
cause direct economy cause direct economy cause direct economy
losses when at 5% losses when at 1% losses when at 1% below
(including 5%) above of (including 1%)to 5% of of judging standard or
judging standard or the judging standard or the the return on investment
return on investment return on investment less less than 30% lower than
more than 40% lower than 30%(including 30% expected
than expected to 40%) lower than
expected
10 death or above , or 50 3 deaths above to 10 less than 3 deaths or
people serious injury, or deaths below , or more above , or less than 10
direct economy losses than 10 people but less people serious injury, or
when at 5% (including than 50 people serious direct economy losses
5%) above of judging injury, or direct economy when at 1% below of
standard losses when at 1% judging standard
(including 1%) to 5% of
judging standard
Asset integrity cannot be Asset integrity cannot be Asset integrity cannot be
ensured, when assets ensured, when assets ensured, when assets
losses at 5% (including losses at 1% (including losses at 1% below of
5%) above of judging 1%)to 5% of judging judging standard
standard standard
A large number of great Several commercial Irreconcilable
commercial disputes, disputes, civil lawsuits, commercial disputes,
civil lawsuits and and had obviously civil lawsuits happened
negative influences can't influence in a certain sometimes, cause a
eliminate in a short area and period, may pay certain influences in
period of time, may pay compensation at 1% local, may pay
compensation at 5% (including 1%) to 5% of compensation at 1%
126
China Merchants Port Group Co., Ltd. Annual Report 2019
(including 5%) above of judging standard below of judging
judging standard standard
A serious violation of A serious violation of Violation of laws and
laws and regulations, laws and regulations, regulations, investigated
investigated by investigated by by government
government department government department department and legal
and legal department, and legal department, department, may pay
cause prosecution and may pay compensation compensation at 0.5%
class action, may pay at 0.5% (including below of judging
compensation at 2% 0.5%) to 2% of judging standard
(including 2%) above of standard
judging standard
Number of material weaknesses in internal control over financial reporting 0
Number of material weaknesses in internal control not related to financial reporting 0
Number of serious weaknesses in internal control over financial reporting 0
Number of serious weaknesses in internal control not related to financial reporting 0
X Independent Auditor’s Report on Internal Control
Opinion paragraph in the independent auditor’s report on internal control
We believe that China Merchants Port Group Co., Ltd. has maintained effective internal control over financial reporting in all material
respects as of 31 December 2019 as per the Basic Rules for Enterprise Internal Control and relevant regulations.
Independent auditor’s report on
Disclosed
internal control disclosed or not
Disclosure date 16 April 2020
Index to such report disclosed For details, see www.cninfo.com.cn
Type of the auditor’s opinion Unmodified unqualified opinion
Material weaknesses in internal
control not related to financial None
reporting
Indicate by tick mark whether any modified opinion is expressed in the independent auditor’s report on the Company’s internal control.
□ Yes √ No
Indicate by tick mark whether the independent auditor’s report on the Company’s internal control is consistent with the internal control
self-evaluation report issued by the Company’s Board.
√ Yes □ No
127
China Merchants Port Group Co., Ltd. Annual Report 2019
Part XI Corporate Bonds
Does the Company have any corporate bonds publicly offered on the stock exchange, which were outstanding before the date of this
Report’s approval or were due but could not be redeemed in full?
No
128
China Merchants Port Group Co., Ltd. Annual Report 2019
Part XII Financial Statements (See attached)
I Independent Auditor’s Report
Type of the independent auditor’s opinion Standard and unqualified auditor's report
Date of signing this report 15 April 2020
Name of the independent auditor Deloitte Touche Tohmatsu Certified Public Accountants LLP
Reference number of Audit Report De Shi Bao (Shen) Zi (20) No. P02283
Name of the certified public accountants Li Weihua, Zhang Min
129
China Merchants Port Group Co., Ltd. Annual Report 2019
Part XIII Documents Available for Reference
I. Financial Statements carrying the signatures and stamps of the Company Principal, the Chief
Financial Officer and the person in charge of accounting firm;
II. Original copy of the Auditor's Report stamped by the accounting firm and signed and
stamped by registered accountants;
III. Original copies of all documents and the announcements thereof disclosed in the reporting
period on “Securities Times” and “Ta Kung Pao”;
For and on behalf of the Board
Bai Jingtao
Legal representative of
China Merchants Port Group Co., Ltd.
Dated 16 April 2020
130
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:
-1-
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.
-2-
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.
-3-
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.
-4-
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.
-5-
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.
-6-
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
-8-
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.
- 10 -
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.
- 11 -
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.
- 12 -
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 significant financial difficulty. The amounts 50.00-100.00
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
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
2019
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.
- 91 -
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
(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
- 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
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
- 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
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.
- 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
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
- 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
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
- 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
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
- 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
(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.,
41,820,223.83 Project not yet approved by a third party
Ltd.
CCCC Third Harbor Engineering Co., Ltd. 37,314,702.00 Project not yet approved by a third party
To be paid after confirmation by mutual
Shantou Transportation Bureau 31,358,355.47
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)
11,250,000.00 Performance of contract not yet completed
Co., Ltd.
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
- 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
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").
- 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
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
- 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
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
- 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
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%.
- 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
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.
- 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
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.
- 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
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
- 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
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.
- 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
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.
- 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
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).
- 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
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)
- 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 - 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
- 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
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
- 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
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.
- 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
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
- 117 -
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).
- 118 -
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
- 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
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
- 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
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)
- 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
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 the current year
period
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).
- 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
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
- 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
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.
- 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
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
- 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
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
- 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
(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)
- 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
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
- 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
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
- 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
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 -
- 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 - continued
Unit: RMB
Amount included in profit
Type Amount Item Account
or loss for the period
Fujian Development and Reform Commission – 3 batch provincial demonstration
rd
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
- 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
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.
- 132 -
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
- 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
(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) -
- 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
(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
- 135 -
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
- 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
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
- 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
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.
- 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 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
- 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
(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
- 140 -
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
- 141 -
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.
- 142 -
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
- 143 -
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
- 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
1.1.2 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.
- 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
1.2 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.
- 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
1.3 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.
- 147 -
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.
- 148 -
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.
- 149 -
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.
- 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
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
- 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 - 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.
- 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
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., Ltd. Service expenditure Negotiation 18,116,312.14 15,358,571.88
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. , Ltd. Service expenditure Negotiation 2,998,142.60 3,539,104.80
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
- 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 - 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., Ltd. Service revenue Negotiation 7,624,557.93 13,954,183.68
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 Co.,
Service revenue Negotiation - 2,484,304.00
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
- 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
(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
- 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 - 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
- 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
(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.
- 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
(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%
- 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
(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.
- 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
(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.
- 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
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
Guizhou Qiandongnan Continental Land Port Operation
receivable 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
- 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 - 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.
- 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
(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
- 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 - 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
- 164 -
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.
- 165 -
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.
- 166 -
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:
- 167 -
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.
- 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
(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
- 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 - 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
- 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 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
- 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: - 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
- 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
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
- 173 -
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.
- 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
(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
- 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
(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 -
- 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
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.
- 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
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
- 178 -
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
Basic EPS Diluted EPS
on net assets (%)
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
