CHINA MERCHANTS PORT GROUP CO., LTD.
FINANCIAL STATEMENTS AND AUDITOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
CHINA MERCHANTS PORT GROUP CO., LTD.
FINANCIAL STATEMENTS AND AUDITOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
CONTENTS PAGE(S)
AUDITOR'S REPORT 1-6
CONSOLIDATED BALANCE SHEET 7-8
BALANCE SHEET OF THE COMPANY 9
CONSOLIDATED INCOME STATEMENT 10
INCOME STATEMENT OF THE COMPANY 11
CONSOLIDATED CASH FLOW STATEMENT 12
CASH FLOW STATEMENT OF THE COMPANY 13
CONSOLIDATED STATEMENT OF CHANGES IN
SHAREHOLDERS' EQUITY 14 - 15
THE COMPANY'S STATEMENT OF CHANGES IN
SHAREHOLDERS' EQUITY 16 - 17
NOTES TO THE FINANCIAL STATEMENTS 18 - 179
AUDITOR'S REPORT
De Shi Bao (Shen) Zi (23) No. P03194
(Page 1 of 6)
To all the shareholders of China Merchants Port Group Co., Ltd.,
I. Audit Opinion
We have audited the financial statements of China Merchants Port Group Co., Ltd. (hereinafter
referred to as "the Company"), which comprise the consolidated and Company's balance sheets as at
31 December 2022, and the consolidated and Company's income statements, the consolidated and
Company's cash flow statements and the consolidated and Company's statements of changes in
shareholders' equity for the year then ended, and the notes to the financial statements.
In our opinion, the accompanying financial statements of the Company are prepared and present fairly,
in all material respects, the consolidated and Company's financial position as at 31 December 2022,
and the consolidated and Company's results of operations and cash flows for the year then ended in
accordance with the Accounting Standards for Business Enterprises.
II. Basis for the Opinion
We conducted our audit in accordance with China Standards on Auditing. 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 China Code
of Ethics for Certified Public Accountants, and we have fulfilled our other ethical responsibilities in
accordance with the Code. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current year. These matters were addressed in the context of
our audit of the financial statements as a whole, and in forming our opinion thereon, 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 investments in associates
As disclosed in Note (VIII) 13 to the consolidated financial statements, as at 31 December 2022, the
carrying amount of the Company's long-term equity investments in associates amounts to RMB
82,647,500,863.33, accounting for 64.44% of the total shareholder's equity. In 2022, the investment
income from associates recognized under the equity method amounts to RMB 6,765,840,426.95,
accounting for 82.19% of the consolidated net profit. Since the amount of income from investments in
associates recognized by the Company for the year is significant, and its correctness depends on the
financial status and operating results of the investee, we determine the above-mentioned subsequent
measurement of the long-term equity investments in associates as a key audit matter of the
consolidated financial statements.
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AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (23) No. P03194
(Page 2 of 6)
III. Key Audit Matters - continued
1. Subsequent measurement of long-term equity investments in associates - continued
Principal audit procedures we performed for the above key audit matter are as follows:
(1) Understood the certified public accountants of major associates and evaluated their
independence and professional competence;
(2) Identified and assessed the risk of material misstatement in the financial statements of the major
associates from the perspective of auditing the consolidated financial statements of the
Company by reading the financial statements of the major associates and discussing with the
management about the financial performance of the major associates and the significant
judgments and estimates made in the preparation of the financial statements;
(3) Discussed with the component certified public accountants of the major associates about their
assessment of the component audit risk, the identification of key audit areas and the
implementation of the corresponding audit procedures to evaluate whether the audit of the
component certified public accountants was appropriate;
(4) Verified whether the accounting policies and accounting periods adopted by the major
associates were consistent with those of the Company. If not, checked whether the financial
statements of the major associates have been adjusted according to the accounting policies and
accounting periods of the Company, and recognized the amount of investment income under
equity method on that basis.
2. Goodwill impairment
As disclosed in Note (VIII) 22 to the consolidated financial statements, as at 31 December 2022, the
goodwill presented in the consolidated financial statements of the Company is RMB 6,411,426,891.09.
The management of the Company uses 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 include
key assumptions, such as growth rate and discount rate. We determine 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.
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AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (23) No. P03194
(Page 3 of 6)
III. Key Audit Matters - continued
2. Goodwill impairment - continued
Principal audit procedures we performed for the above key audit matter are as follows:
(1) Assessed the reasonableness of the division of asset group and combination of asset group made
by the management;
(2) Referred to the industry practice to assess whether the management's approach in cash flow
forecast was appropriate and whether the assumptions used were 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 reasonableness;
(5) Understood the basis adopted by the management to determine the growth rate of the business
in the subsequent forecast period and assessed its reasonableness;
(6) Assessed the reasonableness of the discount rate adopted by the management in combination
with market risk-free interest rates, risk factors, etc.;
(7) Used the work of internal evaluation experts to evaluate the appropriateness of the
management's method to assess the recoverable amount of the asset group, and evaluate the
reasonableness of the discount rate used by the management in predicting the present value of
cash flows and the growth rate of the subsequent forecast period;
(8) Reviewed whether the calculation of the present value of future cash flows was correct;
(9) Assessed whether the method used to determine the fair value less costs of disposal was
appropriate;
(10) Assessed the adequacy and appropriateness of the disclosure of goodwill impairment testing.
IV. Other Information
The management of the Company is responsible for the other information. The other information
comprises the information included in the 2022 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.
-3-
AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (23) No. P03194
(Page 4 of 6)
IV. Other Information - continued
In combination with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
If, based on the audit work performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
V. Responsibilities of the Management and Those Charged with Governance for the
Financial Statements
The management of the Company is responsible for the preparation of the financial statements that
give a true and fair view in accordance with Accounting Standards for Business Enterprises, and for
the design, performance and maintenance of such internal control that is necessary to enable that the
preparation of financial statements are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing the Company's
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the management either intends to liquidate the
Company or to cease operations, or has no realistic alternative but to do so.
These charged with governance are responsible for overseeing the Company's financial reporting
process.
VI. Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements are free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes an
audit opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with China Standards on Auditing 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 reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
As part of an audit in accordance with China Standards on Auditing, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:
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AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (23) No. P03194
(Page 5 of 6)
VI. Auditor's Responsibilities for the Audit of the Financial Statements - continued
(1) Identified and assessed the risks of material misstatement of the financial statements, whether
due to fraud or error, designed and performed audit procedures responsive to those risks, and
obtained audit evidence that was sufficient and appropriate to form our opinion. The risk of not
detecting a material misstatement resulting from fraud was higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
(2) Understood audit-related internal control in order to design audit procedures that were
appropriate in the circumstances.
(3) Evaluated the appropriateness of accounting policies applied and the reasonableness of
accounting estimates and related disclosures made by the management.
(4) Concluded on the appropriateness of the management' 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 cast significant doubt on the Company's ability to continue as a
going concern existed. If we concluded that a material uncertainty existed, we were required to
draw attention in our auditor's report to the related disclosures in the financial statements or to
modify our opinion, if such disclosures were inadequate. Our conclusions were based on the
audit evidence obtained up to the date of our auditor's report. However, future events or
conditions may cause the Company to cease to continue as a going concern.
(5) Evaluated the overall presentation (including the disclosures), structure and content of the
financial statements, and whether the financial statements represented the underlying
transactions and events in a manner that achieved fair presentation.
(6) Obtained sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Company to express an opinion on the financial statements. We
were responsible for the direction, supervision and performance of the group audit. We
remained solely responsible for our audit opinion.
We communicated with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identified during our audit.
We also provided those charged with governance with a statement that we had complied with relevant
ethical requirements of independence, and communicated with those charged with governance over all
relationships and other matters that may reasonably be thought to bear on our independence, and
where applicable, related safeguards.
-5-
AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (23) No. P03194
(Page 6 of 6)
VI. Auditor's Responsibilities for the Audit of the Financial Statements - continued
From the matters communicated with those charged with governance, we determined those matters
that were of most significance in the audit of the financial statements of the current year and were
therefore the key audit matters. We described these matters in our auditor's report unless law or
regulation precluded public disclosure about the matter or when, in extremely rare circumstances, we
determined that a matter should not be addressed in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Deloitte Touche Tohmatsu CPA LLP Chinese Certified Public Accountant
(Engagement Partner)
Shanghai, China
Li Weihua
Chinese Certified Public Accountant
Wang Hongmei
31 March 2023
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.
AT 31 DECEMBER 2022
Consolidated Balance Sheet
RMB
Item Notes 31/12/2022 31/12/2021
Current Assets:
Cash and bank balances (VIII)1 13,615,928,739.40 12,772,349,406.77
Held-for-trading financial assets (VIII)2 2,998,781,599.63 6,921,831,502.55
Notes receivable (VIII)3 36,395,000.00 6,081,611.95
Accounts receivable (VIII)4 1,276,149,689.44 1,320,577,577.81
Receivables financing (VIII)5 163,766,913.10 238,429,402.71
Prepayments (VIII)6 63,627,425.42 51,606,794.20
Other receivables (VIII)7 948,842,094.30 696,276,595.87
Inventories (VIII)8 225,122,821.48 194,920,136.12
Assets held-for-sale (VIII)9 - 337,442,757.28
Non-current assets due within one year (VIII)10 902,225,293.93 102,356,461.97
Other current assets (VIII)11 185,903,140.53 339,684,297.41
Total current assets 20,416,742,717.23 22,981,556,544.64
Non-current Assets:
Long-term receivables (VIII)12 5,661,327,499.07 6,162,713,861.02
Long-term equity investments (VIII)13 92,364,293,919.05 70,353,451,824.52
Investments in other equity instruments (VIII)14 171,945,275.02 180,251,798.43
Other non-current financial assets (VIII)15 1,745,740,896.41 809,515,244.87
Investment properties (VIII)16 5,123,690,119.56 5,298,238,414.88
Fixed assets (VIII)17 32,033,326,083.50 31,710,513,230.29
Construction in progress (VIII)18 2,413,844,407.64 2,557,584,953.92
Right-of-use assets (VIII)19 9,342,642,222.33 8,743,077,542.19
Intangible assets (VIII)20 19,277,065,115.61 18,475,412,380.93
Development expenditure (VIII)21 17,412,196.16 82,391,225.85
Goodwill (VIII)22 6,411,426,891.09 6,024,160,942.07
Long-term prepaid expenses (VIII)23 986,356,904.90 975,994,541.52
Deferred tax assets (VIII)24 372,927,261.40 398,145,710.84
Other non-current assets (VIII)25 1,186,789,378.79 1,231,092,952.69
Total non-current assets 177,108,788,170.53 153,002,544,624.02
TOTAL ASSETS 197,525,530,887.76 175,984,101,168.66
-7-
CHINA MERCHANTS PORT GROUP CO., LTD.
AT 31 DECEMBER 2022
Consolidated Balance Sheet - continued
RMB
Item Notes 31/12/2022 31/12/2021
Current liabilities:
Short-term borrowings (VIII)26 7,164,338,366.18 13,651,452,805.36
Notes payable (VIII)27 - 1,895,987.17
Accounts payable (VIII)28 811,149,397.66 843,820,438.51
Receipts in advance (VIII)29 9,886,531.59 9,313,166.01
Contract liabilities (VIII)30 141,899,551.03 196,784,525.26
Employee benefits payable (VIII)31 936,834,718.13 820,416,415.47
Taxes payable (VIII)32 917,933,169.09 2,162,719,251.68
Other payables (VIII)33 1,755,885,258.26 2,140,108,341.08
Non-current liabilities due within one year (VIII)34 11,641,223,688.95 8,268,209,284.17
Other current liabilities (VIII)35 3,161,147,525.96 2,158,497,775.85
Total current liabilities 26,540,298,206.85 30,253,217,990.56
Non-current Liabilities:
Long-term borrowings (VIII)36 12,390,099,177.85 7,144,839,870.89
Bonds payable (VIII)37 19,088,293,099.02 16,670,872,414.14
Including: Preferred shares - -
Perpetual bonds - -
Lease liabilities (VIII)38 948,350,914.04 1,055,194,906.09
Long-term payables (VIII)39 3,551,315,590.31 3,422,179,366.40
Long-term employee benefits payable (VIII)40 639,095,931.43 588,681,492.63
Provisions (VIII)41 35,365,156.43 24,247,302.42
Deferred income (VIII)42 1,031,273,189.74 1,075,957,884.91
Deferred tax liabilities (VIII)24 4,853,271,307.86 4,550,417,470.61
Other non-current liabilities (VIII)43 186,383,117.00 163,065,578.53
Total non-current liabilities 42,723,447,483.68 34,695,456,286.62
TOTAL LIABILITIES 69,263,745,690.53 64,948,674,277.18
Shareholders' equity:
Share capital (VIII)44 2,499,074,661.00 1,922,365,124.00
Capital reserve (VIII)45 34,751,640,835.25 23,592,702,758.70
Other comprehensive income (VIII)46 -691,536,248.44 -890,125,318.18
Special reserve (VIII)47 26,358,259.97 9,184,429.12
Surplus reserve (VIII)48 1,001,917,449.15 961,182,562.00
Unappropriated profit (VIII)49 16,679,688,347.09 14,205,879,106.49
Total equity attributable to shareholders
54,267,143,304.02 39,801,188,662.13
of the Company
Minority interests 73,994,641,893.21 71,234,238,229.35
TOTAL SHAREHOLDERS' EQUITY 128,261,785,197.23 111,035,426,891.48
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 197,525,530,887.76 175,984,101,168.66
The accompanying notes form part of the financial statements.
The financial statements were signed by the following:
Wang Xiufeng Tu Xiaoping Huang Shengchao
Legal Representative Chief Financial Officer Head of Accounting Department
-8-
CHINA MERCHANTS PORT GROUP CO., LTD.
AT 31 DECEMBER 2022
Balance Sheet of the Company
RMB
Item Notes 31/12/2022 31/12/2021
Current Assets:
Cash and bank balances 3,333,936,587.44 2,913,761,567.31
Held-for-trading financial assets 1,502,601,369.86 4,355,978,026.30
Other receivables (XVIII) 1 2,749,637,755.23 1,256,742,971.01
Other current assets 7,774,206.30 3,799,849.79
Total current assets 7,593,949,918.83 8,530,282,414.41
Non-current Assets:
Long-term receivables 9,240,200.34 8,447,395.74
Long-term equity investments (XVIII) 2 53,433,613,471.49 38,632,541,293.73
Investments in other equity instruments 144,700,378.28 154,017,984.69
Other non-current financial assets 950,321,309.06 -
Fixed assets 28,826,135.19 1,684,450.22
Construction in progress 15,435,512.32 8,714,886.98
Intangible assets 50,303,126.12 53,886,017.45
Development expenditure 6,219,670.14 -
Long-term prepaid expenses 873,700.49 1,223,180.69
Deferred tax assets 928,465.21 1,846,793.34
Total non-current assets 54,640,461,968.64 38,862,362,002.84
TOTAL ASSETS 62,234,411,887.47 47,392,644,417.25
Current Liabilities:
Short-term borrowings - 6,606,500,555.58
Employee benefits payable 38,763,907.88 36,196,999.78
Taxes payable 1,251,923.17 166,072,684.93
Other payables 373,569,651.65 1,136,030,015.25
Non-current liabilities due within one year 2,146,233,151.54 82,735,342.45
Other current liabilities 3,017,713,424.64 2,007,042,725.30
Total current liabilities 5,577,532,058.88 10,034,578,323.29
Non-current Liabilities:
Long-term borrowings 4,988,000,000.00 -
Bonds payable 8,000,000,000.00 4,000,000,000.00
Provisions - 1,003,584.24
Deferred tax liabilities 41,622,256.05 44,515,821.76
Total non-current liabilities 13,029,622,256.05 4,045,519,406.00
TOTAL LIABILITIES 18,607,154,314.93 14,080,097,729.29
SHAREHOLDERS' EQUITY
Share capital 2,499,074,661.00 1,922,365,124.00
Capital reserve 37,749,723,642.07 27,594,079,596.13
Other comprehensive income 99,525,686.03 105,412,294.52
Surplus reserve 1,001,917,449.15 961,182,562.00
Unappropriated profit 2,277,016,134.29 2,729,507,111.31
TOTAL SHAREHOLDERS' EQUITY 43,627,257,572.54 33,312,546,687.96
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 62,234,411,887.47 47,392,644,417.25
The accompanying notes form part of the financial statements.
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CHINA MERCHANTS PORT GROUP CO., LTD.
FOR THE YEAR ENDED 31 DECEMBER 2022
Consolidated Income Statement
RMB
Item Notes 2022 2021
I. Operating income (VIII)50 16,230,489,127.55 15,283,808,174.60
Less: Operating costs (VIII)50 9,650,461,712.94 9,046,836,182.49
Taxes and surcharges (VIII)51 282,249,473.46 191,974,244.31
Administrative expenses (VIII)52 1,765,094,736.51 1,729,160,558.50
Research and development expenses 287,706,178.70 217,905,635.67
Financial expenses (VIII)53 2,258,713,672.42 1,545,338,597.29
Including: Interest expenses 2,225,162,805.79 1,909,848,615.00
Interest income 469,834,098.05 377,563,874.49
Add: Other income (VIII)54 241,648,070.42 363,245,161.08
Investment income (VIII)55 7,377,655,506.33 6,636,949,510.91
Including: Income from investments in associates
(VIII)55 7,185,182,148.75 6,290,957,480.59
and joint ventures
Gains (Losses) from changes in fair value (VIII)56 -129,033,650.11 221,242,275.17
Gains (Losses) from impairment of credit (VIII)57 -223,473,576.55 -252,953,617.50
Gains (Losses) from impairment of assets (VIII)58 -22,159,020.20 -420,492,515.75
Gains on disposal of assets (VIII)59 55,130,095.52 35,576,459.42
II. Operating profit 9,286,030,778.93 9,136,160,229.67
Add: Non-operating income (VIII)60 279,274,452.77 43,467,537.50
Less: Non-operating expenses (VIII)61 220,442,254.68 95,528,693.11
III. Gross profit 9,344,862,977.02 9,084,099,074.06
Less: Income tax expenses (VIII)62 1,113,179,679.35 1,429,093,084.31
IV. Net profit 8,231,683,297.67 7,655,005,989.75
(I) Categorized by continuity of operation
1. Net profit from continuing operation 8,231,683,297.67 7,655,005,989.75
2. Net profit from discontinued operation
(II) Categorized by attribution of ownership
1. Net profit attributable to shareholders of the Company 3,337,446,222.82 2,685,829,204.07
2. Profit or loss attributable to minority shareholders 4,894,237,074.85 4,969,176,785.68
V. Other comprehensive income, net of tax (VIII) 64 1,623,526,873.00 -711,791,683.91
Other comprehensive income attributable to shareholders of
206,102,739.65 -61,106,763.50
the Company, net of tax
(I) Other comprehensive income that will not be reclassified to
-22,706,023.29 -316,112.17
profit or loss
1. Changes from remeasurement of the defined benefit plan -12,793,128.73 -8,714,853.33
2. Other comprehensive income that cannot be reclassified to
-11,550,762.02 9,495,957.95
profit or loss under the equity method
3. Changes in fair value of investments in other equity
1,637,867.46 -1,097,216.79
instruments
(II) Other comprehensive income that will be reclassified
228,808,762.94 -60,790,651.33
subsequently to profit or loss
1. Other comprehensive income that can be reclassified to profit
-110,193,707.53 20,160,707.37
or loss under the equity method
2. Translation differences of financial statements denominated
339,002,470.47 -80,951,358.70
in foreign currencies
Other comprehensive income attributable to minority interests,
1,417,424,133.35 -650,684,920.41
net of tax
VI. Total comprehensive income attributable to: 9,855,210,170.67 6,943,214,305.84
Shareholders of the Company 3,543,548,962.47 2,624,722,440.57
Minority shareholders 6,311,661,208.20 4,318,491,865.27
VII. Earnings per share
(I) Basic earnings per share 1.61 1.40
(II) Diluted earnings per share 1.61 1.40
The accompanying notes form part of the financial statements.
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CHINA MERCHANTS PORT GROUP CO., LTD.
FOR THE YEAR ENDED 31 DECEMBER 2022
Income Statement of the Company
RMB
Item Notes 2022 2021
I. Operating income (XVIII) 3 3,669,891.36 2,642,001.75
Less: Operating costs (XVIII) 3 2,276,202.60 2,265,959.45
Taxes and surcharges 1,126,365.82 844,763.45
Administrative expenses 154,023,617.71 149,779,423.73
Research and development expenses 15,151,413.80 -
Financial expenses 361,633,510.16 197,780,513.57
Including: Interest expenses 491,933,634.55 247,594,446.06
Interest income 144,120,475.54 58,523,130.29
Add: Other income 499,438.35 129,405.22
Investment income (XVIII) 4 1,053,614,451.09 1,596,809,225.29
Including: Income from investments in associates
(XVIII) 4 384,257,363.02 226,225,111.65
and joint ventures
Gains (Losses) from changes in fair value -125,383,212.19 5,978,026.30
Gains from disposal of assets 237,727.99 -
II. Operating profit 398,427,186.51 1,254,887,998.36
Add: Non-operating income 545,089.04 430,740.39
Less: Non-operating expenses 18.84
III. Gross profit 398,972,256.71 1,255,318,738.75
Less: Income tax expenses -8,376,614.77 168,246,527.86
IV. Net profit 407,348,871.48 1,087,072,210.89
V. Other comprehensive income, net of tax 1,625,433.48 -123,927.98
(I) Other comprehensive income that cannot be reclassified
1,391,486.75 -2,225,208.98
to profit or loss
1. Changes from remeasurement of the defined benefit plan - -
2. Other comprehensive income that cannot be reclassified to
27,649.59 -1,030,575.00
profit or loss under the equity method
3. Changes in fair value of investments in other equity
1,363,837.16 -1,194,633.98
instruments
(II) Other comprehensive income that will be reclassified to profit
233,946.73 2,101,281.00
or loss
1. Other comprehensive income that can be reclassified
233,946.73 2,101,281.00
to profit or loss under the equity method
2. Translation differences of financial statements denominated
- -
in foreign currencies
VI. Total comprehensive income 408,974,304.96 1,086,948,282.91
The accompanying notes form part of the financial statements.
- 11 -
CHINA MERCHANTS PORT GROUP CO., LTD.
FOR THE YEAR ENDED 31 DECEMBER 2022
Consolidated Cash Flow Statement
RMB
Item Notes 2022 2021
I. Cash Flows from Operating Activities:
Cash receipts from sales of goods and rendering of services 16,547,850,742.82 15,567,101,995.95
Receipts of tax refunds 239,426,543.45 142,122,022.96
Other cash receipts relating to operating activities (VIII) 65(1) 1,141,794,925.33 1,023,728,271.31
Sub-total of cash inflows 17,929,072,211.60 16,732,952,290.22
Cash payments for goods purchased and services received 4,790,513,865.61 4,395,758,133.61
Cash payments to and on behalf of employees 3,612,535,626.78 3,313,989,844.94
Payments of various types of taxes 1,579,320,175.46 1,637,763,934.22
Other cash payments relating to operating activities (VIII) 65(2) 1,026,325,153.40 875,113,806.97
Sub-total of cash outflows 11,008,694,821.25 10,222,625,719.74
Net Cash Flows from Operating Activities (VIII) 66(1) 6,920,377,390.35 6,510,326,570.48
II. Cash Flows from Investing Activities:
Cash receipts from disposal and recovery of investments 40,894,899,081.53 17,047,342,468.86
Cash receipts from investments income 2,429,981,136.20 2,956,256,663.23
Net cash receipts from disposal of fixed assets, intangible assets
13,812,483.21 76,761,096.56
and other long-term assets
Other cash receipts relating to investing activities (VIII) 65(3) 295,064,509.34 437,156,571.09
Sub-total of cash inflows 43,633,757,210.28 20,517,516,799.74
Cash payments to acquire or construct fixed assets, intangible
2,133,837,244.47 2,235,972,958.53
assets and other long-term assets
Cash payments to acquire investments 54,509,066,114.35 22,831,319,242.28
Other cash payments relating to investing activities (VIII) 65(5) 954,802,482.30 22,232,300.95
Sub-total of cash outflows 57,597,705,841.12 25,089,524,501.76
Net Cash Flows from Investing Activities -13,963,948,630.84 -4,572,007,702.02
III. Cash Flows from Financing Activities:
Cash receipts from capital contributions 10,642,126,434.50 1,960,000.00
Including: Cash receipts from capital contributions from
- 1,960,000.00
minority shareholders of subsidiaries
Cash receipts from borrowings 29,859,438,534.05 17,088,797,909.66
Cash receipts from issue of bonds 19,248,308,650.00 9,797,840,000.00
Other cash receipts relating to financing activities (VIII) 65(6) 56,303,169.80 -
Sub-total of cash inflows 59,806,176,788.35 26,888,597,909.66
Cash repayments of borrowings 46,432,911,425.29 23,334,671,577.97
Cash payments for distribution of dividends or profits or
4,732,910,153.42 4,000,078,191.43
settlement of interest expenses
Including: Payments for distribution of dividends or profits to
1,900,086,012.38 1,600,821,550.56
minority shareholders of subsidiaries
Other cash payments relating to financing activities (VIII) 65(7) 1,124,116,740.35 503,530,516.74
Sub-total of cash outflows 52,289,938,319.06 27,838,280,286.14
Net Cash Flows from Financing Activities 7,516,238,469.29 -949,682,376.48
IV. Effect of Foreign Exchange Rate Changes on Cash
367,287,004.46 -159,899,580.91
and Cash Equivalents
V. Net Increase in Cash and Cash Equivalents 839,954,233.26 828,736,911.07
Add: Opening balance of cash and cash equivalents (VIII) 66(2) 12,727,355,238.36 11,898,618,327.29
VI. Closing Balance of Cash and Cash Equivalents (VIII) 66(2) 13,567,309,471.62 12,727,355,238.36
The accompanying notes form part of the financial statements.
- 12 -
CHINA MERCHANTS PORT GROUP CO., LTD.
FOR THE YEAR ENDED 31 DECEMBER 2022
Cash Flow Statement of the Company
RMB
Item Notes 2022 2021
I. Cash Flows from Operating Activities:
Cash receipts from sales of goods and rendering of services - 979,698.05
Other cash receipts relating to operating activities 108,295,282.75 235,966,260.63
Sub-total of cash inflows 108,295,282.75 236,945,958.68
Cash payments for goods purchased and services received 86,280.54 40,000.00
Cash payments to and on behalf of employees 102,305,409.21 97,250,483.46
Payments of various types of taxes 162,077,694.07 210,087,464.31
Other cash payments relating to operating activities 64,738,420.24 258,672,489.54
Sub-total of cash outflows 329,207,804.06 566,050,437.31
Net Cash Flows from Operating Activities -220,912,521.31 -329,104,478.63
II. Cash Flows from Investing Activities:
Cash receipts from disposal and recovery of investments 33,317,450,238.74 10,580,000,000.00
Cash receipts from investment income 770,719,728.64 617,411,256.40
Net cash receipts from disposal of fixed assets, intangible assets
1,002,668.00 -
and other long-term assets
Other cash receipts relating to investing activities 50,285,632.68 340,000,000.00
Sub-total of cash inflows 34,139,458,268.06 11,537,411,256.40
Cash payments to acquire or construct fixed assets, intangible
42,642,426.69 7,311,253.87
assets and other long-term assets
Cash payments to acquire investments 45,942,721,212.13 14,416,331,314.09
Other cash payments relating to investing activities 1,523,809,248.36 588,583,691.07
Sub-total of cash outflows 47,509,172,887.18 15,012,226,259.03
Net Cash Flows from Investing Activities -13,369,714,619.12 -3,474,815,002.63
III. Cash Flows from Financing Activities:
Cash receipts from capital contributions 10,642,126,434.50 -
Cash receipts from borrowings 9,171,668,674.85 7,600,000,000.00
Cash receipts from issue of bonds 16,000,000,000.00 9,797,840,000.00
Other cash receipts relating to financing activities 6,303,169.80 915,000,000.00
Sub-total of cash inflows 35,820,098,279.15 18,312,840,000.00
Cash repayments of borrowings 20,529,408,504.85 11,381,742,457.36
Cash payments for distribution of dividends or profits or
1,257,422,374.13 965,552,501.17
settlement of interest expenses
Other cash payments relating to financing activities 23,179,821.90 1,274,938.84
Sub-total of cash outflows 21,810,010,700.88 12,348,569,897.37
Net Cash Flows from Financing Activities 14,010,087,578.27 5,964,270,102.63
IV. Effect of Foreign Exchange Rate Changes on Cash
714,582.29 -179,610.83
and Cash Equivalents
V. Net Increase in Cash and Cash Equivalents 420,175,020.13 2,160,171,010.54
Add: Opening balance of cash and cash equivalents 2,913,761,567.31 753,590,556.77
VI. Closing Balance of Cash and Cash Equivalents 3,333,936,587.44 2,913,761,567.31
The accompanying notes form part of the financial statement
- 13 -
CHINA MERCHANTS PORT GROUP CO., LTD.
FOR THE YEAR ENDED 31 DECEMBER 2022
Consolidated Statement of Changes in Shareholders' Equity
RMB
2022
Equity attributable to shareholders of the Company
Total
Item Other
Special Unappropriated Minority interests shareholders'
Share capital Capital reserve comprehensive Surplus reserve
reserve profit equity
income
I. Closing balance of the preceding year 1,922,365,124.00 23,592,702,758.70 -890,125,318.18 9,184,429.12 961,182,562.00 14,205,879,106.49 71,234,238,229.35 111,035,426,891.48
Add: Changes in accounting policies - - - - - - - -
Corrections of prior period errors - - - - - - - -
Business combination involving enterprises under
- - - - - - - -
common control
Others - - - - - - - -
II. Opening balance of the year 1,922,365,124.00 23,592,702,758.70 -890,125,318.18 9,184,429.12 961,182,562.00 14,205,879,106.49 71,234,238,229.35 111,035,426,891.48
III. Changes for the year 576,709,537.00 11,158,938,076.55 198,589,069.74 17,173,830.85 40,734,887.15 2,473,809,240.60 2,760,403,663.86 17,226,358,305.75
(I) Total comprehensive income - - 206,102,739.65 - - 3,337,446,222.82 6,311,661,208.20 9,855,210,170.67
(II) Owners' contributions and reduction in capital 576,709,537.00 11,158,938,076.55 - - - - -683,588,937.26 11,052,058,676.29
1. Ordinary shares contributed by shareholders 576,709,537.00 10,055,823,793.40 - - - - 971,135,730.31 11,603,669,060.71
2. Capital contribution from holders
- - - - - - -
of other equity instruments
3. Share-based payment recognized in shareholders' equity - -4,365,536.60 - - - - -3,266,354.51 -7,631,891.11
4. Others - 1,107,479,819.75 - - - - -1,651,458,313.06 -543,978,493.31
(III) Profit distribution - - - - 40,734,887.15 -871,150,652.13 -2,897,141,819.77 -3,727,557,584.75
1. Transfer to surplus reserve - - - - 40,734,887.15 -40,734,887.15 - -
2. Transfer to general risk reserve - - - - - - - -
3. Distribution to shareholders - - - - - -826,617,003.32 -2,698,588,539.77 -3,525,205,543.09
4. Others - - - - - -3,798,761.66 -198,553,280.00 -202,352,041.66
(IV) Transfers within shareholders' equity - - -7,513,669.91 - - 7,513,669.91 - -
1. Capitalization of capital reserve - - - - - - - -
2. Capitalization of surplus reserve - - - - - - - -
3. Loss offset by surplus reserve - - - - - - - -
4. Retained earnings carried forward from other
- - -7,513,669.91 - - 7,513,669.91 - -
comprehensive income
5. Others - - - - - - - -
(V) Special reserve - - - 17,173,830.85 - - 29,473,212.69 46,647,043.54
1. Transfer to special reserve in the year - - - 62,696,039.72 - - 86,478,912.67 149,174,952.39
2. Amount utilized in the year - - - -45,522,208.87 - - -57,005,699.98 -102,527,908.85
(VI) Others - - - - - - - -
IV. Closing balance of the year 2,499,074,661.00 34,751,640,835.25 -691,536,248.44 26,358,259.97 1,001,917,449.15 16,679,688,347.09 73,994,641,893.21 128,261,785,197.23
- 14 -
CHINA MERCHANTS PORT GROUP CO., LTD.
FOR THE YEAR ENDED 31 DECEMBER 2022
Consolidated Statement of Changes in Shareholders' Equity - continued
RMB
2021
Equity attributable to shareholders of the Company
Total
Item Other
Special Surplus Unappropriated Minority interests shareholders'
Share capital Capital reserve comprehensive
reserve reserve profit equity
income
I. Closing balance of the preceding year 1,922,365,124.00 22,805,069,335.49 -826,697,303.06 10,201,178.30 890,690,322.28 12,316,177,395.17 68,559,161,478.89 105,676,967,531.07
Add: Changes in accounting policies - - - - - - - -
Corrections of prior period errors - - - - - - - -
Business combination involving enterprises
- 34,528,989.07 - - - 12,942,703.53 77,217,389.86 124,689,082.46
under common control
Others - - - - - - - -
II. Opening balance of the year 1,922,365,124.00 22,839,598,324.56 -826,697,303.06 10,201,178.30 890,690,322.28 12,329,120,098.70 68,636,378,868.75 105,801,656,613.53
III. Changes for the year - 753,104,434.14 -63,428,015.12 -1,016,749.18 70,492,239.72 1,876,759,007.79 2,597,859,360.60 5,233,770,277.95
(I) Total comprehensive income - - -61,106,763.50 - - 2,685,829,204.07 4,318,491,865.27 6,943,214,305.84
(II) Owners' contributions and reduction in capital - 753,104,434.14 -1,033,518.86 - - -1,588,932.52 143,222,332.57 893,704,315.33
1. Ordinary shares contributed by shareholders - - - - - - - -
2. Capital contribution from holders
- - - - - - - -
of other equity instruments
3. Share-based payment recognized in shareholders' equity - -139,669.02 - - - - -656,323.25 -795,992.27
4. Others - 753,244,103.16 -1,033,518.86 - - -1,588,932.52 143,878,655.82 894,500,307.60
(III) Profit distribution - - - - 70,492,239.72 -808,768,996.52 -1,864,400,984.46 -2,602,677,741.26
1. Transfer to surplus reserve - - - - 70,492,239.72 -70,492,239.72 - -
2. Transfer to general risk reserve - - - - - - - -
3. Distribution to shareholders - - - - - -730,498,747.12 -1,678,821,128.83 -2,409,319,875.95
4. Others - - - - - -7,778,009.68 -185,579,855.63 -193,357,865.31
(IV) Transfers within shareholders' equity - - -1,287,732.76 - - 1,287,732.76 - -
1. Capitalization of capital reserve - - - - - - - -
2. Capitalization of surplus reserve - - - - - - - -
3. Loss offset by surplus reserve - - - - - - - -
4. Others - - -1,287,732.76 - - 1,287,732.76 - -
(V) Special reserve - - - -1,016,749.18 - - 546,147.22 -470,601.96
1. Transfer to special reserve in the year - - - 48,296,277.57 - - 52,595,662.54 100,891,940.11
2. Amount utilized in the year - - - -49,313,026.75 - - -52,049,515.32 -101,362,542.07
(VI) Others - - - - - - - -
IV. Closing balance of the year 1,922,365,124.00 23,592,702,758.70 -890,125,318.18 9,184,429.12 961,182,562.00 14,205,879,106.49 71,234,238,229.35 111,035,426,891.48
The accompanying notes form part of the financial statements.
- 15 -
CHINA MERCHANTS PORT GROUP CO., LTD.
FOR THE YEAR ENDED 31 DECEMBER 2022
The Company's Statement of Changes in Shareholders' Equity
RMB
2022
Other
Item Unappropriated Total shareholders'
Share capital Capital reserve comprehensive Special reserve Surplus reserve
profit equity
income
I. Closing balance of the preceding year 1,922,365,124.00 27,594,079,596.13 105,412,294.52 - 961,182,562.00 2,729,507,111.31 33,312,546,687.96
Add: Changes in accounting policies - - - - - - -
Corrections of prior period errors - - - - - - -
Others - - - - - - -
II. Opening balance of the year 1,922,365,124.00 27,594,079,596.13 105,412,294.52 - 961,182,562.00 2,729,507,111.31 33,312,546,687.96
III. Changes for the year 576,709,537.00 10,155,644,045.94 -5,886,608.49 - 40,734,887.15 -452,490,977.02 10,314,710,884.58
(I) Total comprehensive income - - 1,625,433.48 - - 407,348,871.48 408,974,304.96
(II) Owners' contributions and reduction in capital 576,709,537.00 10,155,644,045.94 - - - - 10,732,353,582.94
1. Ordinary shares contributed by shareholders 576,709,537.00 10,055,823,793.40 - - - - 10,632,533,330.40
2. Share-based payment recognized in shareholders' equity - -6,388,558.75 - - - - -6,388,558.75
3. Others - 106,208,811.29 - - - - 106,208,811.29
(III) Profit distribution - - - - 40,734,887.15 -867,351,890.47 -826,617,003.32
1. Transfer to surplus reserve - - - - 40,734,887.15 -40,734,887.15 -
2. Transfer to general risk reserve - - - - - - -
3. Distribution to shareholders - - - - - -826,617,003.32 -826,617,003.32
4. Others - - - - - - -
(IV) Transfers within shareholders' equity - - -7,512,041.97 - - 7,512,041.97 -
1. Capitalization of capital reserve - - - - - - -
2. Capitalization of surplus reserve - - - - - - -
3. Loss offset by surplus reserve - - - - - - -
4. Retained earnings carried forward from other
- - -7,512,041.97 - - 7,512,041.97 -
comprehensive income
5. Others - - - - - - -
(V) Special reserve - - - - - - -
1. Transfer to special reserve in the year - - - - - - -
2. Amount utilized in the year - - - - - - -
(VI) Others - - - - - - -
IV. Closing balance of the year 2,499,074,661.00 37,749,723,642.07 99,525,686.03 - 1,001,917,449.15 2,277,016,134.29 43,627,257,572.54
- 16 -
CHINA MERCHANTS PORT GROUP CO., LTD.
FOR THE YEAR ENDED 31 DECEMBER 2022
The Company's Statement of Changes in Shareholders' Equity - continued
RMB
2021
Other
Item Unappropriated Total shareholders'
Share capital Capital reserve comprehensive Special reserve Surplus reserve
profit equity
income
I. Closing balance of the preceding year 1,922,365,124.00 27,591,847,402.73 105,536,222.50 - 890,690,322.28 2,442,510,245.26 32,952,949,316.77
Add: Changes in accounting policies - - - - - - -
Corrections of prior period errors - - - - - - -
Others - - - - - - -
II. Opening balance of the year 1,922,365,124.00 27,591,847,402.73 105,536,222.50 - 890,690,322.28 2,442,510,245.26 32,952,949,316.77
III. Changes for the year - 2,232,193.40 -123,927.98 - 70,492,239.72 286,996,866.05 359,597,371.19
(I) Total comprehensive income - - -123,927.98 - - 1,087,072,210.89 1,086,948,282.91
(II) Owners' contributions and reduction in capital - 2,232,193.40 - - - 915,642.00 3,147,835.40
1. Ordinary shares contributed by shareholders - - - - - - -
2. Share-based payment recognized in shareholders' equity - -581,972.50 - - - - -581,972.50
3. Others - 2,814,165.90 - - - 915,642.00 3,729,807.90
(III) Profit distribution - - - - 70,492,239.72 -800,990,986.84 -730,498,747.12
1. Transfer to surplus reserve - - - - 70,492,239.72 -70,492,239.72 -
2. Transfer to general risk reserve - - - - -
3. Distribution to shareholders - - - - - -730,498,747.12 -730,498,747.12
4. Others - - - - - - -
(IV) Transfers within shareholders' equity - - - - - - -
1. Capitalization of capital reserve - - - - - - -
2. Capitalization of surplus reserve - - - - - - -
3. Loss offset by surplus reserve - - - - - - -
4. Others - - - - - - -
(V) Special reserve - - - - - - -
1. Transfer to special reserve in the year - - - - - - -
2. Amount utilized in the year - - - - - - -
(VI) Others - - - - - - -
IV. Closing balance of the year 1,922,365,124.00 27,594,079,596.13 105,412,294.52 - 961,182,562.00 2,729,507,111.31 33,312,546,687.96
The accompanying notes form part of the financial statements.
- 17 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(I) GENERAL INFORMATION OF THE COMPANY
China Merchants Port Group Co., Ltd. (hereinafter referred to as the "Company") is a stock
limited company incorporated in Shenzhen, Guangdong Province, on 16 January 1993.
The headquarters of the Company is located in Shenzhen, Guangdong Province. The Company
and its subsidiaries (collectively the "Group") are principally engaged in the rendering of port
service, bonded logistics service and other businesses such as property development and
investment.
The Company's and consolidated financial statements have been approved by the Board of
Directors on 31 March 2023.
See Note (X) "Equity in Other Entities" for details of the scope of consolidated financial
statements in the current year. See Note (IX) "Changes in Scope of Consolidation" for details of
changes in the scope of consolidated financial statements in the current year.
(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 2022, the Group had total current liabilities in excess of total current assets of
RMB 6,123,555,489.62. As at 31 December 2022, the Group had available and unused line of
credit and bonds amounting to RMB 74,112,485,433.51, which is greater than the balance of the
net current liabilities. The Group can obtain financial support from the available line of credit and
bonds when needed. Therefore, the financial statements have been prepared on a going concern
basis.
(III) STATEMENT OF COMPLIANCE WITH THE ASBE
The financial statements of the Company have been prepared in accordance with ASBE, and
present truly and completely, the Company's and consolidated financial position as at 31
December 2022, and the Company's and consolidated results of operations and cash flows for the
year then ended.
- 18 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
1. Accounting year
The Group has adopted the calendar year as its accounting year, e.g. from 1 January to 31
December.
2. 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 is principally
engaged in the rendering of port service, bonded logistics service and other businesses such as
property development and investment with one year being an operating cycle.
3. 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 overseas subsidiaries choose their
functional currencies on the basis of the primary economic environment in which they operate.
The Company adopts RMB to prepare its financial statements.
4. 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.
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.
In the measurement of non-financial assets at fair value, market participants' ability to best utilize
such assets to generate most economic benefits, or the ability to sell such assets to other market
participants who are able to best utilize the assets to generate economic benefits is taken into
account.
- 19 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
4. Basis of accounting and principle of measurement - continued
For financial assets of which transaction prices are the fair value on initial recognition, and of
which valuation technique involving unobservable input is used in subsequent measurement, the
valuation technique in the course of valuation is adjusted to enable the result of initial recognition
based on the valuation technique equal to the transaction price.
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.
5. Business combinations
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.
- 20 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
5. Business combinations - 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 acquiree. 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 recognizes 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 recognized and the amount originally recognized 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
Standards for Business Enterprise No. 22 - Financial Instruments: Recognition and Measurement
and Accounting Standards 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.
- 21 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
5. Business combinations - 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 recognizes 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 recognized
and measured on the acquisition date.
Goodwill arising from a business combination is measured at cost less accumulated impairment
losses, and is presented separately in the consolidated financial statements.
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 on the
basis of the carrying amount of each asset (other than goodwill) in the group.
Recoverable amount is the higher of the fair value of an asset less cost of disposal and the present
value of estimated future cash flows.
The impairment loss of goodwill is recognized in profit or loss for the period and shall not be
reversed in subsequent periods.
6. 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 in the above elements of the definition of
control.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary 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 cash flow statement, as appropriate.
- 22 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
6. Consolidated financial statements - continued
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 cash flow
statement, 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 cash flow statement, as appropriate.
The significant accounting policies and accounting periods adopted by the subsidiaries are
determined based on the uniform accounting policies and accounting periods set out by the
Company.
Where the accounting policies and 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 Company is treated as minority
interests and presented as "minority interests" in the consolidated balance sheet under the line
item of 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 line item of "net profit". The portion of comprehensive income of subsidiaries
for the period attributable to minority interests is presented as "total comprehensive income
attributable to minority shareholders" in the consolidated income statement under the line item of
"total comprehensive income".
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 owners' equity of the
subsidiary, the excess amount is still allocated against minority interests.
Acquisition of minority interests or disposal of interests in a subsidiary that does not result in the
loss of control over the subsidiary is accounted for as equity transactions. The carrying amounts
of the Company'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 is adjusted
against retained earnings.
- 23 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
6. Consolidated financial statements - continued
For the stepwise acquisition of equity interest till acquiring control after a few transactions and
leading to business combination not involving enterprises under common control, it shall be dealt
with based on whether it belongs to 'package deal': if it belongs to 'package deal', it will be
accounted for as a transactions to acquire control; if it does not belong to 'package deal', it will be
accounted for as a transaction to acquire control on acquisition date, and the fair value of acquiree'
shares held before acquisition date will be revalued, and the difference between fair value and
carrying amount will be recognized in profit or loss of the current period; if acquiree' shares held
before acquisition date involve changes in other comprehensive income and other changes in
owners' equity under equity method, it will be transferred to income of acquisition date.
When the Group loses control over a subsidiary due to disposal of equity investment or other
reasons, any retained interest is re-measured at its fair value at the date when control is lost. The
difference between (i) the aggregate of the consideration received on disposal and the fair value of
any retained interest and (ii) the share of the former subsidiary's net assets cumulatively calculated
from the acquisition date according to the original proportion of ownership interests is recognized
as investment income in the period in which control is lost, and the goodwill is offset accordingly.
Other comprehensive income associated with investment in the former subsidiary is reclassified to
investment income in the period in which control is lost.
When the Group loses control of a subsidiary in two or more arrangements (transactions), terms
and conditions of the arrangements (transactions) and their economic effects are considered. One
or more of the following indicate that the Group shall account for the multiple arrangements as a
'package deal': (i) they are entered into at the same time or in contemplation of each other; (ii)
they form a complete transaction designed to achieve an overall commercial effect; (iii) the
occurrence of one transaction is dependent on the occurrence of at least one other transaction; (iv)
one transaction alone is not economically justified, but it is economically justified when
considered together with other transactions. Where the transactions of disposal of equity
investments in a subsidiary until the loss of control are assessed as a package deal, these
transactions are accounted for as one transaction of disposal of a subsidiary with loss of control.
Before losing control, the difference of consideration received on disposal and the share of net
assets of the subsidiary continuously calculated from acquisition date is recognized as other
comprehensive income. When losing control, the cumulated other comprehensive income is
transferred to profit or loss of the period of losing control. If the transactions of disposal of equity
investments in a subsidiary are not assessed as a package deal, these transactions are accounted
for as unrelated transactions.
- 24 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
7. Joint arrangements
Joint arrangement refers to the arrangement jointly controlled by two or more than two
participants. The Group's joint arrangements have the following characteristics: (1) all the
participants are restricted by the arrangement; (2) the arrangement is jointly controlled by two or
more than two participants. Any participant cannot control the arrangement separately and any
participant to the joint control of the arrangement can stop other participants or the group of
participants from the separate control over the arrangement.
Joint control refers to the joint control over an arrangement in accordance with relevant
agreements and relevant activities of the arrangement shall be decided after the unanimous
consent by participants sharing the controlling rights.
There are two types of joint arrangements - joint operations and joint ventures. 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.
8. Cash and cash equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash
equivalents are the Group's short-term (generally due within 3 months since the acquisition date),
highly liquid investments that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value.
9. Transactions denominated in foreign currencies and translation of financial
statements denominated in foreign currencies
9.1 Transactions denominated in foreign currencies
A foreign currency transaction is recorded, on initial recognition, by applying the spot exchange
rate on the date of the transaction.
At the balance sheet date, foreign currency monetary items are translated into functional currency
using the spot exchange rates at the balance sheet date. Exchange differences arising from the
differences between the spot exchange rates prevailing at the balance sheet date and those on
initial recognition or at the previous balance sheet date are recognized in profit or loss for the
period, except that (1) exchange differences related to a specific-purpose borrowing denominated
in foreign currency that qualify for capitalization are capitalized as part of the cost of the
qualifying asset during the capitalization period; (2) exchange differences related to hedging
instruments for the purpose of hedging against foreign currency risks are accounted for using
hedge accounting; (3) exchange differences arising from changes in the carrying amounts (other
than the amortized cost) of monetary items at fair value through other comprehensive income are
recognized as other comprehensive income.
- 25 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
9. Transactions denominated in foreign currencies and translation of financial
statements denominated in foreign currencies - continued
9.1 Transactions denominated in foreign currencies - continued
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 differences
arising from changes in exchange rates are recognized as "exchange differences arising from
translation of financial statements denominated in foreign currencies" in other comprehensive
income, and in profit or loss for the period upon disposal of the foreign operation.
Foreign currency non-monetary items measured at historical cost are translated to the amounts in
functional currency at the spot exchange rates on the dates of the transactions; the amounts in
functional currency remain unchanged. Foreign currency non-monetary items measured at fair
value are re-translated at the spot exchange rate on the date when 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 in exchange rate) and is
recognized in profit or 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.
- 26 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
9. Transactions denominated in foreign currencies and translation of financial
statements denominated in foreign currencies - continued
9.2 Translation of financial statements denominated in foreign currencies - continued
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 from translation of financial statements of this foreign
operation attributable to the owners' equity of the Company and presented under other
comprehensive income, to profit or loss in the period in which the disposal occurs.
In case of a disposal of part equity investments or other reason leading to lower interest
percentage in foreign operations but does not result in the Group losing control over a foreign
operation, the exchange differences arising from the translation of foreign currency statements
related to this disposed part are re-attributed to minority interests and are not recognized in profit
or 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 from translation
of 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 the financial instrument.
For financial assets purchased or sold in regular ways, assets to be received and liabilities to be
assumed are recognized on the transaction date or assets sold are derecognized on that date.
Financial assets and financial liabilities are initially measured at fair value. For financial assets
and financial liabilities at fair value through profit or loss, transaction costs are immediately
recognized in profit or loss. For other financial assets and financial liabilities, transaction costs are
included in their initial recognized amounts. Upon initial recognition of contract assets, accounts
receivable and notes receivable that do not contain significant financing component or without
considering the financing component included in the contract with a term not exceeding one year
under the Accounting Standards for Business Enterprises No. 14 - Revenue ("Revenue
Standards"), the Group adopts the transaction price as defined in the Revenue Standards for initial
measurement.
The effective interest method is a method of calculating the amortized cost of a financial asset or a
financial liability and of allocating the interest income or interest expenses over the relevant
accounting periods.
- 27 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
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 the
financial asset or to the amortized cost of the financial liability. When calculating the effective
interest rate, the Group estimates future cash flows considering all contractual terms of the
financial asset or financial liability (such as repayment in advance, extension, call option or other
similar options etc.) (without considering 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).
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 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, and the financial
asset is held within a business model whose objective is achieved by collecting contractual cash
flows, the Group classifies such financial asset as financial assets at amortized cost, which include
cash and bank balances, notes receivable, accounts receivable, other receivables, debt
investments, and long-term receivables etc.
If 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, and the financial
asset is held within a business model whose objective is achieved by both collecting contractual
cash flows and selling the financial asset, the Group classifies such financial asset as financial
assets at FVTOCI. The accounts receivable and notes receivable classified as at FVTOCI upon
acquisition are presented under receivables financing, while the remaining items due within one
year (inclusive) upon acquisition are presented under other current assets. Other financial assets of
such type are presented as other debt investments if they are due after one year since the
acquisition, or presented under non-current assets due within one year if they are due within one
year (inclusive) since the balance sheet date.
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 investments in other equity instruments.
- 28 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.1 Classification, recognition and measurement of financial assets - continued
A financial asset is classified as held for trading if one of the following conditions is satisfied:
It has been acquired principally for the purpose of selling in the near term; or
On initial recognition, it is part of a portfolio of identified financial instruments that the
Group manages together and there is objective evidence that the Group has a recent actual
pattern of short-term profit-taking; or
It is a derivative that is not a financial guarantee contract or designated and effective as a
hedging instrument.
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.
Financial assets not satisfying the criteria of classification as financial assets at amortized
cost and financial assets at FVTOCI are classified as financial assets at FVTPL.
Upon initial recognition, the Group may irrevocably designate the financial assets as at
FVTPL if doing so eliminates or significantly reduces accounting mismatch.
Financial assets at FVTPL other than derivative financial assets are presented as financial assets
held-for-trading. Financial assets with a maturity over one year since the balance sheet date (or
without a fixed maturity) and expected to be held for over one year are presented under 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 gross
carrying amount of financial assets multiplying effective interest rate, except for the following
circumstances:
For purchased or originated credit-impaired financial assets, the Group calculates and
recognizes the interest income based on amortized cost of the financial asset and the
effective interest rate through credit adjustment since initial recognition.
- 29 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) 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 FVTOCI
For financial assets classified as at FVTOCI, except for the impairment losses or gains and the
interest income and exchange losses or gains calculated using the effective interest method which
are included in profit or loss for the period, the changes in fair value are included in other
comprehensive income. The amounts included in profit or loss for each period are equivalent to
that as if the financial assets have been always measured at amortized cost. Upon derecognition,
the accumulated gains or losses previously included in other comprehensive income are
transferred to profit or loss for the period.
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 instruments, 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 value and dividends and interest related to the financial assets are recognized in
profit or loss.
10.2 Impairment of financial instruments
For financial assets at amortized cost, financial assets classified as at FVTOCI, lease receivables,
contract assets, loan commitments that are not financial liabilities at FVTPL, financial liabilities
that are not at FVTPL and financial guarantee contracts that are not qualified for derecognition
due to the transfer of financial assets or financial liabilities arising from continuing involvement
of the transferred financial assets, the Group accounts for the impairment and recognizes the
provision for losses on the basis of expected credit loss ("ECL").
For all contract assets, accounts receivable and notes receivable arising from transactions
regulated by Revenue Standards, and lease receivables arising from transactions regulated by the
Accounting Standards for Business Enterprises No. 21 - Leases, the Group recognizes the
provision for losses at an amount equivalent to lifetime ECL.
- 30 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.2 Impairment of financial instruments - continued
For other financial instruments (other than purchased or originated credit-impaired financial
assets), the Group assesses the changes in credit risk since initial recognition of relevant financial
instruments at each balance sheet date. If the credit risk has increased significantly since initial
recognition of the financial instruments, the Group recognizes the provision for losses at an
amount equivalent to lifetime ECL; if the credit risk has not increased significantly since initial
recognition of the financial instruments, the Group recognizes the provision for losses at an
amount equivalent to 12-month ECL. The increase or reversal of credit loss provision for financial
assets other than those classified as at FVTOCI is recognized as impairment loss or gain and
included in profit or loss for the period. For financial assets classified as at FVTOCI, the credit
loss provision is recognized in other comprehensive income and the impairment loss or gain is
included in profit or loss for the period without reducing the carrying amount of the financial
assets in the balance sheet.
Where the Group has measured the provision for losses at an amount equivalent to lifetime ECL
of a financial instrument in prior accounting period, but the financial instrument no longer
satisfies the criteria of significant increase in credit risk since initial recognition at the current
balance sheet date, the Group recognizes the provision for losses of the financial instrument at an
amount equivalent to 12-month ECL at the current balance sheet date, with any resulting reversal
of provision for losses recognized as impairment gains in profit or loss for the period.
10.2.1 Significant increase of credit risk
The Group uses reasonable and supportable forward-looking information to assess whether the
credit risk has increased significantly since initial recognition by comparing the risk of a default
occurring on the financial instrument at the balance sheet date with the risk of a default occurring
on the financial instrument at the date of initial recognition. For loan commitments and financial
guarantee contracts, the date on which 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 resulting from changes in credit risk;
(2) Significant changes in the rates or other terms of an existing financial instrument 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 rate of return,
etc.);
- 31 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) 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
In particular, the following information is taken into account when assessing whether credit risk
has increased significantly: - continued
(3) Significant changes in the external market indicators of credit risk of the same financial
instrument or similar financial instruments with the same expected duration. These
indicators include: credit spreads, credit default swap prices against borrower, length of
time and extent to which the fair value of financial assets is less than their amortized cost,
and other market information related to the borrower (such as the borrower's debt
instruments or changes in the price of equity instruments);
(4) An actual or expected significant change in the financial instrument's external credit
rating;
(5) An actual or expected decrease in the internal credit rating for the debtor;
(6) Adverse changes in business, financial or economic conditions that are expected to cause a
significant decrease 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 increase in credit risk of other financial instruments issued by the same debtor;
(9) Significant adverse changes in the regulatory, economic, or technological environment of
the debtor;
(10) Significant changes in the value of the collaterals or the quality of guarantees or credit
enhancements provided by third parties, which are expected to reduce the debtor's
economic motives to repay within the time limit specified in contract or affect the
probability of default;
(11) Significant change in the debtor's economic motives to repay within the time limit
specified in contract;
(12) Expected changes to loan contract, including the exemption or revision of contractual
obligations, the granting of interest-free periods, the jump in interest rates, the requirement
for additional collateral or guarantees, or other changes in the contractual framework for
financial instruments that may result from the breach of contract;
(13) Significant change in the expected performance and repayment of the debtor;
(14) Significant change in the method used by the Group to manage the credit of financial
instruments.
- 32 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) 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
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 an event or several events that are expected to have adverse impact on the future cash flows
of the financial assets have occurred, the financial assets become credit-impaired. The evidences
of credit impairment of financial assets include the following observable information:
(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 the financial asset because of financial
difficulties of the issuer or the debtor.
(6) Purchase or origination of a financial asset with a large scale of discount, which reflects
the fact of credit loss.
Based on the Group's internal credit risk management, the Group considers an event of default
occurs when information developed internally or obtained from external sources indicates that the
debtor is unlikely to pay its creditors, including the Group, in full (without taking into account any
collaterals held by the Group).
10.2.3 Determination of expected credit loss
The Group determines the credit losses on lease receivables on an individual asset basis, and on
notes receivable, accounts receivable, other receivables, contract assets, debt investments and
other debt investments on a portfolio basis using an impairment matrix for related financial
instruments. The financial instruments are grouped based on common risk characteristics. The
common credit risk characteristics adopted by the Group include credit risk rating, initial
recognition date, remaining contractual term, industry of the debtor, geographical location of the
debtor, etc.
- 33 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) 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 - continued
The Group determines the ECL of relevant financial instruments using the following methods:
For financial assets, the 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 lease receivables, the 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 IV, 10.4.1.3 for the detail of accounting
policies), the credit loss is the present value of the difference between the contractual cash
flows that are due to the Group if the holder of the loan commitments draws down the loan,
and the cash flows that the Group expects to receive if the loan is drawn down. The Group's
estimation of the ECL for loan commitments is consistent with its expectation of the loan
commitments drawn down.
For financial guarantee contracts (refer to Note IV, 10.4.1.3 for the detail of accounting
policies), the credit loss is the present value of the expected payments to reimburse the
holder for the credit loss incurred less any amounts that the Group expects to receive from
the holder, the debtor or any other party.
For financial assets credit-impaired at the balance sheet date, but not purchased or originated
credit-impaired, the credit loss is the difference between the gross carrying amount of the
financial assets and the present value of estimated future cash flows discounted at the
original effective interest rate.
The factors reflected by the Group's measurement of ECL of financial instruments include:
unbiased probability weighted average amount recognized by assessing a series of possible
results; time value of money; reasonable and supportable information related to historical events,
current condition and forecast of future economic position that is available without undue cost or
effort at the balance sheet date.
10.2.4 Write-down of financial assets
When the Group no longer reasonably expects that the contractual cash flows of financial assets
can be collected in aggregate or in part, the Group will directly write down the gross carrying
amount of the financial assets, which constitutes derecognition of relevant financial assets.
- 34 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
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
liabilities is the carrying amount of financial assets transferred with continuing involvement
less fair value of the Group's retained rights (if the Group retains relevant rights upon
transfer of financial assets) with addition of fair value of obligations assumed by the Group
(if the Group assumes relevant obligations upon transfer of financial assets). Accordingly,
the fair value of relevant rights and obligations shall be measured on an individual basis.
For the 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 any cumulative gain or loss that has been
recognized in other comprehensive income, is recognized in profit or loss. Where the transferred
assets are non-trading equity instrument investments designated as at FVTOCI, cumulative gains
or losses previously recognized in other comprehensive income are transferred out and included in
retained earnings.
- 35 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.3 Transfer of financial assets - continued
If a part of the transferred financial asset qualifies for derecognition, the overall carrying amount
of the financial asset prior to transfer is allocated between the part that continues to be recognized
and the part that is derecognized, based on the respective fair value of those parts at the date of
transfer. The difference between (1) the carrying amount allocated to the part derecognized on the
date of derecognition; and (2) 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, is recognized in profit or loss. Where the transferred
assets are non-trading equity instrument investments designated as at FVTOCI, cumulative gains
or losses previously recognized in other comprehensive income are transferred out and included in
retained earnings.
For a transfer of a financial asset in its entirety that does not satisfy the derecognition criteria, the
Group continues to recognize the transferred financial asset in its entirety. The consideration
received from transfer of assets is recognized as a liability upon receipt.
10.4 Classification of financial liabilities and equity instruments
Financial instruments issued by the Group or their components are classified into financial
liabilities or equity instruments on the basis of the substance of the contractual arrangements and
the economic nature not only the legal form, together with the definition of financial liability and
equity instrument on initial recognition.
10.4.1 Classification, recognition and measurement of financial liabilities
On initial recognition, financial liabilities are classified into financial liabilities at FVTPL and
other financial liabilities.
10.4.1.1 Financial liabilities at FVTPL
Financial liabilities at FVTPL consist of financial liabilities held for trading (including derivatives
classified as financial liabilities) and those designated as at FVTPL. Except for derivative
financial liabilities presented separately, the financial liabilities at FVTPL are presented as held-
for-trading financial liabilities.
A financial liability is classified as held for trading if one of the following conditions is satisfied:
It has been acquired principally for the purpose of repurchasing in the near term; or
On initial recognition, it is part of a portfolio of identified financial instruments that the
Group manages together and there is objective evidence that the Group has a recent actual
pattern of short-term profit-taking; or
- 36 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.4 Classification of financial liabilities and equity instruments - continued
10.4.1 Classification, recognition and measurement of financial liabilities - continued
10.4.1.1 Financial liabilities at FVTPL - continued
A financial liability is classified as held for trading if one of the following conditions is satisfied: -
continued
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.
Held-for-trading financial liabilities are subsequently measured at fair value. Any gains or losses
arising from changes in fair value and any dividends or interest expenses paid on the financial
liabilities are recognized in profit or loss.
For a financial liability designated as at FVTPL, the amount of changes in fair value of the
financial liability that are attributable to changes in the credit risk of that liability shall be
presented in other comprehensive income, while other changes in fair value are included in profit
or loss for the current period. Upon the derecognition of such financial liability, the accumulated
amount of changes in fair value that are attributable to changes in the credit risk of that liability,
which was recognized in other comprehensive income, is transferred to retained earnings. Any
dividend or interest expense on the financial liabilities is recognized in profit or loss. If the
accounting treatment for the impact of the change in credit risk of such financial liability in the
above ways 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 for the period.
For financial liabilities arising from contingent consideration recognized by the Group as the
acquirer in the business combination not involving enterprises under common control, the Group
measures such financial liabilities at fair value through profit or loss, and includes the changes in
the financial liabilities in profit or loss for the period.
- 37 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.4 Classification of financial liabilities and equity instruments - continued
10.4.1 Classification, recognition and measurement of financial liabilities - continued
10.4.1.2 Other financial liabilities
Except for financial liabilities, financial guarantee contracts and loan commitments arising from
transfer of financial assets that do not meet the derecognition criteria or those arising from
continuing involvement in the transferred financial assets, other financial liabilities are
subsequently measured at amortized cost, with gain or loss arising from derecognition or
amortization recognized in profit or loss.
If the modification or renegotiation for the contract by the Group and its counterparties does not
result in derecognition of a financial liability subsequently measured at amortized cost but the
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 the
carrying amount of the financial liability based on the present value of renegotiated or modified
contractual cash flows discounted at the original effective interest rate of the financial liability.
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 standards.
10.4.2 Derecognition of financial liabilities
The Group derecognizes a financial liability (or part of it) when the underlying present obligation
(or part of it) is discharged. An agreement between the Group (the debtor) and the creditor to
replace the original financial liability with a new financial liability with substantially different
terms is accounted for as an extinguishment of the original financial liability and the recognition
of a new financial liability.
- 38 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.4 Classification of financial liabilities and equity instruments - continued
10.4.2 Derecognition of financial liabilities - continued
When the Group derecognizes a financial liability or a part of it, it recognizes the difference
between the carrying amount of the financial liability (or part of the financial liability)
derecognized and the consideration paid (including any non-cash assets transferred or new
financial liabilities assumed) in profit or loss.
10.4.3 Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group
after deducting all of its liabilities. Equity instruments issued (including refinanced), repurchased,
sold and cancelled by the Group are recognized as changes in equity. Changes in fair value of
equity instruments are 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, and 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 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 the relevant accounting standards regarding the
classification of financial assets as a whole.
Derivatives embedded in hybrid contracts with hosts that are not financial assets are separated and
treated as separate derivatives by the Group when they meet the following conditions:
(1) the economic characteristics and risks of the embedded derivative are not closely related to
those of the host contract;
(2) a separate instrument with the same terms as the embedded derivative would meet the
definition of a derivative;
(3) the hybrid contracts are not measured at fair value through profit or loss.
- 39 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) 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 it is 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 Compound instruments
For convertible bonds issued by the Group that contain both liabilities and conversion option that
may convert the liabilities to its own equity instrument, upon initial recognition, the bonds are
splitted into liabilities and conversion option which are separately recognized. Therein, the
conversion option that exchanges a fixed amount of cash or other financial assets for a fixed
amount of equity instruments is accounted for as an equity instrument.
Upon initial recognition, the fair value of liability portion is determined based on the prevailing
market price of the bonds containing no conversion option. The overall issue price of the
convertible bonds net of the fair value of the liability portion is considered as the value of the
conversion option that enables the bonds holder to convert the bonds to equity instruments, and is
included in other equity instruments.
The liability portion of the convertible bonds is subsequently measured at amortized cost using
effective interest method; the value of the conversion option classified as equity instrument is
remained in equity instrument. The expiry or conversion of convertible bonds will not result in
loss or gain.
- 40 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.7 Compound instruments - continued
The transaction costs incurred for issuance of the convertible bonds are allocated between the
liability portion and equity instrument portion in proportion to their respective fair values. The
transaction cost relating to the equity instrument portion is directly included in equity instrument;
while the transaction cost relating to the liability portion is included in the carrying amount of the
liability, and amortized over the lifetime of the convertible bonds using effective interest method.
10.8 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 amortized cost is reclassified as a financial asset 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 amortized cost is reclassified as a financial asset at fair value through
other comprehensive income ("FVTOCI") 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 other comprehensive income.
Where a financial asset at FVTOCI is reclassified as a financial asset at amortized cost by the
Group, the accumulated gains or losses previously recognized in other comprehensive income are
transferred out and the fair value at the date of reclassification is adjusted. The adjusted fair value
is determined as the new carrying amount, as if the financial asset has been always measured at
amortized cost. The reclassification of the financial asset shall not affect its effective interest rate
or the measurement of ECL.
Where a financial asset at FVTOCI is reclassified as a financial asset at FVTPL by the Group,
such financial asset continues to be measured 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 amortized cost by the
Group, the fair value at the date of reclassification is determined as the new gross carrying
amount.
- 41 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.8 Reclassification of financial instruments - continued
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 loss rate of notes
receivable, accounts receivable, other receivables and long-term receivables. Basis for
determining ratings and the expected loss rates are as follows:
Internal Expected average
Basis for determining portfolio
credit rating loss rate (%)
Customers can make repayments within credit term and have good
A credit records based on historical experience. The probability of default 0.00-0.10
on payment of due amounts is extremely low in the foreseeable future.
The customers may have overdue payment based on historical
B 0.10-0.30
experience but they can make repayments.
The evidence indicates that the overdue credit risks of the customers are
C 0.30-50.00
significantly increased and there is probability of default on payment.
The evidence indicates that the accounts receivable are impaired or the
D customers have significant financial difficulty. The amounts cannot be 50.00-100.00
recovered in the foreseeable future.
12. Receivables financing
Notes receivable classified as at FVTOCI should be listed as receivables financing within one
year (including one year) from the date of acquisition. Those over one year should be listed as
other debt investments. For related accounting policies, refer to Note (IV) 10.
13. Inventories
13.1 Category of inventories
The Group's inventories mainly 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.
- 42 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
13. Inventories - continued
13.2 Valuation method of inventories upon delivery
The actual cost of inventories upon delivery is calculated using the weighted average method and
first-in-first-out 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 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 method 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.
- 43 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) 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 (i.e., depending on the passage of time only) right to
receive consideration from the customer is separately presented as receivables.
14.2 Determination and accounting treatment for expected credit loss ("ECL") of contract
assets
Refer to Note (IV) 10.2 "Impairment of financial instruments" for determination and accounting
treatment for expected credit loss of contract assets.
15. Assets held-for-sale
Non-current assets and disposal groups are classified as held-for-sale category when the Group
recovers the carrying amount through a sale (including an exchange of nonmonetary assets that
has commercial substance) rather than continuing use.
Non-current assets or disposal groups classified as held-for-sale are required to satisfy the
following conditions: (1) the asset or disposal group is available for immediate sale in its present
condition subject only to terms that are usual and customary for sales of such asset or disposal
group; (2) the sale is highly probable, i.e. the Group has made a resolution about selling plan and
obtained a confirmed purchase commitment and the sale is expected to be completed within one
year.
When there is loss of control over a subsidiary due to disposal of investments in the subsidiary,
and the proposed disposal of investments in the subsidiary satisfies classification criteria of held-
for-sale category, the investments in subsidiaries are classified as held-for-sale category as a
whole in the Company's separate financial statements, and all assets and liabilities of subsidiaries
are classified as held-for-sale category in the consolidated financial statements regardless of
whether that part of the equity investments are remained after the sale.
The Group measures the non-current assets or disposal groups classified as held-for-sale at the
lower of their carrying amount and fair value less costs to sell. Where the carrying amount is
higher than the net amount of fair value less costs to sell, carrying amount should be reduced to
the net amount of fair value less costs to sell, and such reduction is recognized in impairment loss
of assets and included in profit or loss for the period. Meanwhile, provision for impairment of
held-for-sale assets is made. When there is an increase in the net amount of fair value of non-
current assets held-for-sale less costs to sell at the balance sheet date, the original deduction
should be reversed in impairment loss of assets recognized after the classification of held-for-sale
category, and the reversal amount is included in profit or loss for the period. The impairment
losses recognized before such assets are classified as held-for-sale category shall not be reversed.
- 44 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
15. Assets held-for-sale - continued
Non-current assets classified as held-for-sale or non-current assets in disposal groups are not
depreciated or amortized, and interest and other costs of liabilities of disposal groups classified as
held-for-sale continue to be recognized.
All or part of equity investments in associates or joint ventures are classified as held-for-sale
assets. For the part that is classified as held-for-sale, it is no longer accounted for using the equity
method since the date of the classification.
If an asset or a disposal group has been classified as held-for-sale but the recognition criteria for
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, amortization or
impairment that would have been recognized 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
classification criteria for held-for-sale are no longer met, such investments are accounted for
retrospectively using the equity method from the date when they are classified as held-for-sale.
The financial statements for the period in which the held-for-sale assets are held 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.
- 45 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
16. Long-term equity investments - continued
16.2 Determination of initial investment cost
For a long-term equity investment acquired through business combination involving enterprises
under common control, share of carrying amount of owners' equity of the acquiree in the
consolidated financial statements of ultimate controlling party is recognized as initial investment
cost of long-term equity investment at the date of combination. The difference between initial
investment cost of long-term equity investment and cash paid, non-cash assets transferred and
carrying amount of liabilities assumed, is adjusted in capital reserve. If the balance of capital
reserve is not sufficient to absorb the difference, any excess is 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 is the share of carrying amount of owners'
equity of the acquiree in the consolidated financial statements of ultimate controlling party at the
date of combination. The aggregate face value of the shares issued is accounted for as share
capital. The difference between the initial investment cost and the aggregate face value of the
shares issued 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. Where equity interests in an
acquiree are acquired in stages through multiple transactions ultimately constituting a business
combination involving enterprises 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 carrying amount of owners' equity of the acquiree in the
consolidated financial statements of ultimate controlling party 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 non-trading equity instrument
investments designated as at FVTOCI 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 expenses incurred by the acquirer in respect of auditing, legal services, valuation and
consultancy services and other associated administrative expenses attributable to the business
combination are recognized in profit or loss when they are incurred.
- 46 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
16. Long-term equity investments - continued
16.2 Determination of initial investment cost - continued
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 Standards for Business Enterprises No.22 - Financial Instruments:
Recognition and Measurement (ASBE No. 22) and the additional investment cost.
16.3 Subsequent measurement and recognition of profit or loss
16.3.1 Long-term equity investments accounted for using the cost method
Long-term equity investments in subsidiaries are accounted for using the cost method in the
Company's separate financial statements. A subsidiary is an investee that is controlled by the
Group.
Under the cost method, a long-term equity investment is measured at initial investment cost. When
additional investment is made or the investment is recouped, the cost of the long-term equity
investment is adjusted accordingly. Investment income is recognized in the period in accordance
with the attributable share of cash dividends or profit distributions declared by the investee.
16.3.2 Long-term equity investments accounted for using the equity method
Except for investments in associates and joint ventures classified as held-for-sale partly or wholly,
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 Group only has rights to the net assets of the 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.
- 47 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
16. Long-term equity investments - continued
16.3 Subsequent measurement and recognition of profit or loss - continued
16.3.2 Long-term equity investments accounted for using the equity method - continued
Under the equity method, the Group recognizes its share of the net profit or loss and other
comprehensive income of the investee for the period as investment income and other
comprehensive income for the period. Meanwhile, the carrying amount of long-term equity
investment is adjusted; the carrying amount of long-term equity investment is decreased in
accordance with its share of the investee’s declared profit or cash dividends; other changes in
owners’ equity of the investee other than net profit or loss and other comprehensive income are
correspondingly adjusted to the carrying amount of the long-term equity investment, and
recognized 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 individual identifiable assets, etc. at the acquisition date
after making appropriate adjustments. When the investee’s accounting policies and accounting
period are inconsistent with those of the Group, the Group recognizes investment income and
other comprehensive income after making appropriate adjustments to conform to the Group's
accounting policies and accounting period. However, unrealized gains or losses resulting from the
Group’s transactions with its associates and joint ventures, which do not constitute a business, are
eliminated based on the proportion attributable to the Group and then investment gains or losses
are recognized. However, unrealized losses resulting from the Group's transactions with its
associates and joint ventures which represent impairment losses on the transferred assets are not
eliminated.
The Group discontinues recognizing its share of net losses of the investee after the carrying
amount of the long-term equity investment together with any long-term interests that in substance
form part of its net investment in the investee are reduced to zero. In addition, 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.
- 48 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
16. Long-term equity investments - continued
16.4 Disposal of long-term equity investments - continued
For long-term equity investments accounted for using the equity method, if the remaining interest
after disposal is still accounted for using the equity method, other comprehensive income
previously recognized 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 other changes in
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
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; other changes in
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.
Where the Group loses control over the investee due to disposal of part of shares, and in preparing
the separate financial statements, remaining shares after disposal can have joint control or
significant influence over the investee, the equity method shall be adopted to adjust the remaining
shares as they are accounted for under equity method since the acquisition date. If remaining
shares after disposal cannot have joint control or significant influence over the investee, they are
accounted for in accordance with the standards for recognition and measurement of financial
instruments, and the difference between fair value on date of losing control and carrying amount
is recognized in profit or loss for the period. Other comprehensive income recognized using the
equity method or in accordance with the standards for the recognition and measurement of
financial instruments before losing 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 when
the control over the investee is lost; other changes in 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. Where
remaining shares after disposal are accounted for under equity method, other comprehensive
income and other owners' equity are transferred on a pro rata basis. Where remaining shares after
disposal are accounted for in accordance with the standards for recognition and measurement of
financial instruments, other comprehensive income and other owners' equity are all transferred.
- 49 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
16. Long-term equity investments - continued
16.4 Disposal of long-term equity investments - continued
Where the Group loses joint control or significant influence over the investee after part disposal of
shares, remaining shares after disposal are accounted for in accordance with the standards for
recognition and measurement of financial instruments, and the difference between fair value at the
date of losing joint control or significant influence and carrying amount is recognized in profit or
loss for the period. Other comprehensive income previously recognized under 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 when the equity method is not adopted, and other changes
in owners' equity other than net profit or loss, other comprehensive income and profit distribution
are transferred to investment income for the period when the equity method is not adopted.
The Group disposes of its equity investment in subsidiaries through multiple transactions step by
step until it loses control over the subsidiaries. If these transactions belong to "package deal", all
transactions are deemed as one transaction on disposal of equity investment in subsidiaries, and
the difference between the amount of disposal and carrying amount of long-term equity
investment is recognized as other comprehensive income, and transferred to profit or loss for the
period when the control is lost.
17. Investment properties
Investment property is the property held by the Group to earn rentals or for capital appreciation or
both. It includes a land use right that is leased out 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 the investment property will flow to the Group and the
subsequent expenditures can be measured reliably. Other subsequent expenditures are recognized
in profit or loss for the period in which they are incurred.
The Group uses the cost model for subsequent measurement of investment property, and adopts a
depreciation or amortization policy for the investment property which is consistent with that for
buildings or land use rights.
An investment property is derecognized upon disposal or when the investment property is
permanently withdrawn 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.
- 50 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
18. Fixed assets and depreciation
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 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 for
the period in which they are incurred.
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 net Annual
Category residual value rate depreciation rate
Useful life
(%) (%)
Port and terminal facilities 5-50 years 5.00 1.90-19.00
Buildings and structures 5-50 years 5.00 1.90-19.00
Machinery and equipment, furniture
3-20 years 5.00 4.75-31.67
and fixture and other equipment
Motor vehicles and cargo ships 5-25 years 5.00 3.80-19.00
Estimated net residual value of a fixed asset is the estimated amount that the Group would
currently obtain from disposal of the asset, after deducting the estimated costs of disposal, if the
asset were already of the age and in the condition expected at the end of its useful life.
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 accounts for any change
as a change in accounting estimates.
- 51 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
19. Construction in progress
Construction in progress is measured at its actual costs. The actual costs include various
construction expenditures during the construction period, borrowing costs capitalized before it is
ready for intended use and other relevant costs. Construction in progress is not depreciated.
Construction in progress is transferred to a fixed asset when it is ready for intended use.
20. Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying
asset are capitalized when expenditures for such asset and borrowing costs are incurred and
activities relating to the acquisition, construction or production of the asset that are necessary to
prepare the asset for its intended use or sale have commenced. Capitalization of borrowing costs
ceases when the qualifying asset being acquired, constructed or produced becomes ready for its
intended use or sale. Capitalization of borrowing costs is suspended during periods in which the
acquisition, construction or production of a qualifying asset is interrupted abnormally and when
the interruption is for a continuous period of more than 3 months. Capitalization is suspended
until the acquisition, construction or production of the asset is resumed. Other borrowing costs are
recognized as an expense in the period in which they are incurred.
Where funds are borrowed under a specific-purpose borrowing, the amount of interest to be
capitalized is the actual interest expense incurred on that borrowing for the period less any bank
interest earned from depositing the borrowed funds before being used on the asset or any
investment income on the temporary investment of those funds. Where funds are borrowed under
general-purpose borrowings, the Group determines the amount of interest to be capitalized on
such borrowings by applying a capitalization rate to the weighted average of the excess of
cumulative expenditures on the asset over the amounts of specific-purpose borrowings. The
capitalization rate is the weighted average of the interest rates applicable to the general-purpose
borrowings. During the capitalization period, exchange differences related to a specific-purpose
borrowing denominated in foreign currency are all capitalized. Exchange differences in
connection with general-purpose borrowings are recognized in profit or loss for the period in
which they are incurred.
- 52 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
21. Intangible assets
21.1 Intangible assets
Intangible assets include land use rights, terminal operating rights and others.
An intangible asset is measured initially at cost. Upon being restructured into a stock company,
the intangible assets initially contributed by the state-owned shareholders are recognized based on
the valuation amounts confirmed by the state-owned assets administration department. Except for
terminal operating rights, when an intangible asset with a finite useful life is available for use, its
original cost is amortized over its estimated useful life. The terminal operating rights under the
output method are amortized over 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 indefinite useful life
will not be amortized.
The amortization method, useful life and estimated net residual value of various intangible assets
are as follows:
Category Amortization method Useful life (year) Residual value (%)
Land use rights Straight-line method 40-50 -
Terminal operating right Output/Straight-line method 30-50 -
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 recognized in profit or loss for the period in which it is
incurred.
Expenditure during the development phase that meets all of the following conditions at the same
time is recognized as intangible asset. Expenditure during development phase that does not meet
the following conditions is recognized 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.
- 53 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
21. Intangible assets - continued
21.2 Research and development expenditure - continued
(4) the availability of adequate technical, financial and other resources to complete the
development and the ability to use or sell the intangible asset.
(5) the expenditure attributable to the intangible asset during its development phase can be
reliably measured.
If the expenditures cannot be distinguished between the research phase and development phase,
the Group recognizes all of them in profit or loss for the year. 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 time point when 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 non-financial assets other than goodwill
The Group assesses at the balance sheet date whether there is any indication that long-term equity
investments, investment properties measured at cost method, fixed assets, construction in
progress, right-of-use assets, intangible assets with a finite useful life and assets related to contract
costs 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 an 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.
Once the impairment loss of above-mentioned assets is recognized, it shall not be reversed in any
subsequent period.
23. Long-term prepaid expenses
Long-term prepaid expenses represent expenses incurred that should be borne and amortized over
the current and subsequent periods (together of more than one year). Long-term prepaid expenses
are amortized using the straight-line method over the expected periods in which benefits are
derived.
- 54 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
24. Contract liabilities
Contract liabilities refer to the Group's obligation to transfer goods or services to a customer for
consideration received or receivable from the customer. The contract assets and contract liabilities
under the same contract are presented on a net basis.
25. Employee benefits
Employee benefits are all forms of considerations given by the Group in exchange for services
rendered by employees or for the termination of employment. Employee benefits include short-
term benefits, post-employment benefits, termination benefits and other long-term employee
benefits.
25.1 Short-term employee benefits
Short-term benefits refer to the employee benefits that the Group is required to make full
payments within 12 months after the annual reporting period during which relevant services are
provided by the employees, except the post-employment benefits and termination benefits.
Specifically, the short-term benefits include: employee salaries, bonuses, allowances and
subsidies, employee benefits, social insurance contributions such as the medical insurance and the
work injury insurance, housing funds, trade union funds and employee education funds, short-
term paid absence, short-term profit sharing plan, non-monetary welfare and other short-term
benefits.
Short-term employee benefits payable are recognized as liabilities, with a corresponding charge to
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 they 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 profit or loss for the period or the costs of relevant assets in the
accounting period in which employees provide services.
- 55 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
25. Employee benefits - continued
25.2 Post-employment benefits
Post-employment benefits refer to the rewards and benefits of various forms provided by the
Group after the employees have retired or terminated the labor relationship with the enterprise for
the services rendered by the employees, except the short-term benefits and the termination
benefits. The post-employment benefits consist of the pension insurance, the annuity, the
unemployment insurance and other post-employment benefits.
Post-employment benefit plans are classified by the Group into defined contribution plans and
defined benefit plans. The post-employment benefit plan refers to the agreements the Group
entered into with the employees on the post-employment benefits or the regulations or measures
established by the Group for provisions of the post-employee benefits, among which the defined
contribution plans refer to the post-employment benefit plan under which the Group shall no
longer undertake any obligations of payments after paying fixed expenses to independent funds;
the defined benefit plans refer to the post-employment benefit plans other than the defined
contribution plans. During the accounting period in which employees render services to the
Group, the amounts payable calculated based on the defined contribution plans are recognized as
liabilities and included in profit or loss for the period or costs of related assets.
For defined benefit plans, the Group attributes the welfare obligations arising from the defined
benefit plans to the period in which employees provide services to the Group according to the
formula determined based on the projected cumulative benefit unit method, and includes them in
profit or loss for the period or costs 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 plans (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 for the period or costs of related assets. Remeasurement of the net
defined benefit liabilities (assets) (including actuarial gains and losses, the return on planned
assets, excluding amounts included in net interest on net defined benefit liabilities (assets), and
any changes in the effect of the asset ceiling, excluding amounts included in net interest on net
defined benefit liabilities (assets)) are recognized in other comprehensive income.
The deficit or surplus resulting from the present value of the defined benefit plan obligations less
the fair value of the defined benefit plan assets is recognized as a net defined benefit plan liability
or net asset.
- 56 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
25. Employee benefits - continued
25.3 Termination benefits
Termination benefits refer to the compensations the Group pay to the employees for terminating
the employment relationship with employees before the expiry of the employment contracts or
encouraging employees to accept voluntary redundancy. When the Group provides termination
benefits to employees, employee benefit liabilities are recognized for termination benefits, with a
corresponding charge to 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.
25.4 Other long-term employee benefits
Other long-term employee benefits refer to all employee benefits except for short-term benefits,
post-employment benefits, and termination benefits.
Other long-term employee benefits that qualify as defined contribution plans are treated in
accordance with the relevant provisions of the defined contribution plans mentioned above, except
that the net liability or net asset for other long-term employee benefits is recognized and measured
in accordance with the relevant provisions of the defined benefit plans. At the end of the reporting
period, employee compensation costs arising from other long-term employee benefits are
recognized as three components: service cost, net interest on net liability or net asset for other
long-term employee benefits, and changes resulting from the remeasurement of the net liability or
net asset for other long-term employee benefits. The total net amount of these items is included in
profit or loss for the period or in the costs of related assets.
The Group provides internal retirement benefits to employees accepting the internal retirement
arrangements. Internal retirement benefits refer to the payments of salaries and social security
contributions for employees who reach the retirement age regulated by the country and are
approved to quit the job voluntarily. For internal retirement benefits, the internal retirement
benefits the Group is expected to pay during the period from the date when employees stop
providing services to the date of normal retirement are recognized as liabilities at the present
value and included in profit or loss for the period when relevant recognition requirements of the
internal retirement benefits are met.
26. Provisions
Provisions are recognized when the Group has a present obligation related to a contingency, it is
probable that an outflow of economic benefits will be required to settle the obligation, and the
amount of the obligation can be measured reliably.
- 57 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
26. Provisions - continued
The amount recognized as a provision is the best estimate of the consideration required to settle
the present obligation at the balance sheet date, taking into account factors pertaining to a
contingency such as the risks, uncertainties and time value of money. Where the effect of the time
value of money is material, the amount of the provision is determined by discounting the related
future cash outflows.
Where all or some of the expenditure required to settle a provision is expected to be reimbursed
by a third party, the reimbursement is recognized as a separate asset only when it is virtually
certain that reimbursement will be received, and the amount of reimbursement recognized does
not exceed the carrying amount of the provision.
27. Revenue recognition
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 the performance
obligation when the Group satisfies a performance obligation in the contract, namely, when the
customer obtains control over relevant goods or services. A performance obligation is a
commitment that the Group transfers a distinct goods or service to a customer in the contract. The
transaction price is the amount of consideration to which the Group expects to be entitled in
exchange for transferring promised goods or services to a customer, excluding amounts collected
on behalf of third parties and amounts expected to be refunded to a customer.
It is a performance obligation satisfied during a period of time and the Group recognizes revenue
during a period of time according to the progress of performance if one of the following
conditions is met: (i) the customer obtains and consumes economic benefits at the same time of
the Group's performance; (ii) the customer is able to control goods or services in progress during
the Group's performance; (iii) goods or services generated during the Group's performance have
irreplaceable utilization, and the Group is entitled to collect amounts of cumulative performance
part which have been done up to now. Otherwise, revenue is recognized at a point in time when
the customer obtains control over the relevant goods or services.
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.
- 58 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
27. Revenue recognition - continued
Contract assets refer to the Group's right to consideration in exchange for goods or services that
the Group has transferred to a customer when that right is conditioned on something other than
the passage of time. For the details of accounting policies on impairment of contract assets, please
see Note (IV) 10. The Group's unconditional (i.e., depending on the passage of time only) right to
receive consideration from the customer is separately presented as receivables.
Contract liabilities refer to the Group's obligation to transfer goods or services to a customer for
consideration received or receivable from the customer.
Contract assets and contract liabilities under the same contract will be presented on a net basis.
If there are two or more of performance obligations included in the contract, at the inception of
the contract, the Group allocates the transaction price to each single performance obligation based
on the proportion of stand-alone selling price of goods or services promised in each stand-alone
performance obligation. However, if there is conclusive evidence indicating that the contract
discount or variable consideration is only relative with one or more (not the whole) performance
obligations in the contract, the Group will allocate the contract discount or variable consideration
to relative one or more performance obligations. Stand-alone selling price refers to the price of a
single sale of goods or services. If the stand-alone selling price cannot be observed directly, the
Group estimates the stand-alone selling price through comprehensive consideration of all relative
information that can be reasonably acquired and maximum use of observable inputs.
In case of the existence of variable consideration (such as sales discount) in the contract, the
Group shall determine the best estimate of variable consideration based on the expected value or
the most probably occurred amount. The transaction price including variable consideration shall
not exceed the amount of the cumulatively recognized revenue which is unlikely to be
significantly reversed when relevant uncertainty is eliminated. At each balance sheet date, the
Group re-estimates the amount of variable consideration which should be included in transaction
price.
If the customer pays non-cash consideration, the Group determines the transaction price based on
the fair value of the non-cash consideration. If the fair value of non-cash consideration cannot be
reasonably estimated, the Group shall determine the transaction price indirectly by reference to
the stand-alone selling price of the goods or services promised to transfer to the customer.
In case of the existence of a significant financing component in the contract, the Group shall
determine the transaction price on the assumption that the customer has paid the amount payable
by cash when obtaining the control over the goods or services. Differences between transaction
price and contract consideration are amortized using effective interest method during the contract
life. At the inception of the contract, if the period between when the Group transfers a promised
goods or service to a customer and when the customer pays for that goods or service will be one
year or less, the Group would not consider the significant component in the contract.
- 59 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
27. Revenue recognition - continued
The Group assesses whether it controls each specified goods or service before that goods or
service is transferred to the customer to determine whether the Group is a principal or an agent. If
the Group controls the specified good or service before that good or service is transferred to a
customer, the Group is a principal and recognizes revenue in the gross amount of consideration
received or receivable. Otherwise, the Group is an agent and recognizes revenue in the amount of
any fee or commission to which it expects to be entitled. The fee or commission is the net amount
of consideration that the Group retains after paying the other party the consideration received in
exchange for the goods or services to be provided by that party, or is determined in accordance
with the established commission amount or percentage, etc.
Where the Group receives receipts in advance from a customer for sales of goods or rendering of
services, the amount is first recognized as a liability and then transferred to revenue when the
related performance obligation has been satisfied. When the Group's receipts in advance are not
required to be refunded and it is probable that the customer will waive all or part of its contractual
rights, the Group recognizes the said amounts as revenue on a pro-rata basis in accordance with
the pattern of exercise of the customer's contractual rights, if the Group expects to be entitled to
the amounts relating to the contractual rights waived by the customer; otherwise, the Group
reverses the related balance of the said liabilities to revenue only when it is highly unlikely that
the customer will require performance of the remaining performance obligations.
28. Contract costs
28.1 Costs of obtaining a contract
For the incremental cost of obtaining the contract (cost that will not occur if the contract is not
obtained) that is expected to be recoverable, it is recognized as an asset. If the amortization period
of such asset is less than one year, it is recognized in profit or loss for the period when incurred.
Other expenses incurred for obtaining the contract is included in profit or loss for the period when
incurred, except for those explicitly assumed by the customer.
28.2 Costs to fulfil a contract
If the costs incurred in fulfilling a contract are not within the scope of any standards other than
Revenue Standards, the Group recognizes an asset 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 enhance resources of the Group 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 revenue recognition of
the goods or services to which the asset relates and recognized in profit or loss for the period.
- 60 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
28. Contract costs - continued
28.3 Losses of assets related to contract costs
In determining the impairment losses of assets related to contract costs, the Group first determines
the impairment losses of other assets related to contracts recognized in accordance with other
ASBE; then, for assets related to contract costs, if the carrying amount of the assets is higher than
the difference between: (1) the remaining consideration that the Group expects to obtain for the
transfer of the goods or services related to the assets; and (2) the estimated costs to be incurred for
the transfer of the related goods or services, any excess is provided for impairment and recognized
as impairment loss of assets.
After the provision for impairment of assets related to contract costs is made, if the factors of
impairment in previous periods change so that the difference between the above two is higher than
the carrying amount of the assets, the original provision for impairment of the assets is reversed
and recognized in profit or loss for the period, provided that the carrying amount of the assets
after the reversal does not exceed the carrying amount of the assets at the date of reversal
assuming no provision for impairment was made.
29. 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. If a government grant is in the form of a non-monetary asset, it is
measured at fair value. If the fair value cannot be reliably determined, it is measured at a nominal
amount. A government grant measured at a nominal amount is recognized immediately in profit
or loss for the period.
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. A government grant measured at a nominal
amount is recognized immediately in profit or loss in the current period. Where the relevant asset
is sold, transferred, retired or damaged prior to the end of its useful life, the related undistributed
deferred income is transferred to profit or loss of the disposal period.
- 61 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
29. Government grants - continued
For a government grant related to income, if the grant is a compensation for related expenses or
losses to be incurred in subsequent periods, the grant is recognized as deferred income and
recognized in profit or loss for the period in which the related costs or losses are recognized; If the
grant is a compensation for related expenses or losses already incurred, the grant is recognized
immediately in profit or loss.
For government grants both related to asset and income, different parts are distinguished for
accounting treatment; if it is difficult to distinguish, they should be classified as government
grants related to income as a whole.
A government grant related to the Group's daily activities is recognized in other income based on
the nature of economic activities; a government grant not related to the Group's daily activities is
recognized in non-operating income.
30. Income tax
The income tax expenses include current income tax and deferred income tax.
30.1 Current income tax
At the balance sheet date, current income tax liabilities (or assets) for the current and prior periods
are measured at the amount expected to be paid (or recovered) according to the requirements of
tax laws.
30.2 Deferred tax assets and deferred tax liabilities
For temporary differences between the carrying amounts of certain assets or liabilities and their
tax base, or between the nil carrying amount of those items that are not recognized as assets or
liabilities and their tax base that can be determined according to tax laws, deferred tax assets and
liabilities are recognized using the balance sheet liability method.
Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred
tax assets for deductible temporary differences are recognized to the extent that it is probable that
taxable profits will be available against which the deductible temporary differences can be
utilized. However, for temporary differences associated with the initial recognition of goodwill
and the initial recognition of an asset or liability arising from a transaction, which is not a
business combination that affects neither the accounting profit nor taxable profits (or deductible
losses) at the time of transaction, no deferred tax asset or liability is recognized.
For deductible losses and tax credits that can be carried forward, deferred tax assets are
recognized to the extent that it is probable that future taxable profits will be available against
which the deductible losses and tax credits can be utilized.
- 62 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) 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, associates and joint ventures, except where the Group is able to
control the timing of the reversal of the temporary differences and it is probable that the
temporary differences will not be reversed in the foreseeable future. Deferred tax assets arising
from deductible temporary differences associated with investments in subsidiaries, associates and
joint ventures are recognized to the extent that it is probable that future taxable profits will be
available against which the deductible temporary differences can be utilized and they are expected
to be reversed 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 shareholders' equity, in which case they are recognized in other comprehensive income
or shareholders' equity, and when they arise from business combinations, in which case they
adjust the carrying amount of goodwill.
At the balance sheet date, the carrying amount of deferred tax assets is reviewed and reduced if it
is no longer probable that sufficient taxable profits will be available in the future to allow the
benefit of deferred tax assets to be utilized. Any such reduction in amount is reversed when it
becomes probable that sufficient taxable profits will be available.
30.3 Income tax offsetting
When the Group has a legal right to settle on a net basis and intends either to settle on a net basis
or to realize the assets and settle the liabilities simultaneously, current tax assets and current tax
liabilities are offset and presented on a net basis.
When the Group has a legal right to settle current tax assets and liabilities on a net basis, and
deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable entities which intend either to settle
current tax assets and liabilities on a net basis or to realize the assets and liabilities
simultaneously, in each future period in which significant amounts of deferred tax assets or
liabilities are expected to be reversed, deferred tax assets and deferred tax liabilities are offset and
presented on a net basis.
- 63 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Leases
A lease is a contract in which the lessor, for a certain period of time, gives the lessee the right to
use the assets to obtain a consideration.
For contracts entered into, the Group assesses whether the contract is, or contains, a lease at the
commencement date. Such contract will not be reassessed unless the terms and conditions of the
contract are subsequently changed.
31.1 The Group as lessee
31.1.1 Separating components of a lease
For a contract that contains one or more lease components or non-lease components, the Group
separates each individual lease and non-lease component and allocates the contract consideration
in the relative proportion of the sum of the individual price of each lease component and the
individual price of the non-lease component.
31.1.2 Right-of-use assets
Except for short-term leases and leases of low-value assets, the Group recognizes the right-of-use
assets of the leases at the commencement date. The commencement date of the lease is the date
from which the lessor provides the leased assets to make them available for use by the Group.
Right-of-use assets are initially measured at cost. The cost includes:
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 Group 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 are depreciated from the
commencement date to the end of the useful life of the underlying asset. Otherwise, the right-of-
use assets are 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.
- 64 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) 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 of low-value assets, the Group initially measures lease
liabilities at the present value of the outstanding lease payments at the commencement date. In
calculating the present value of the lease payments, the Group uses the implicit interest rate of the
lease as the discount rate. If it is not possible to determine the implicit interest rate of the lease,
the incremental borrowing rate shall be applied.
The lease payments comprise the following payments by the Group for the right to use the
underlying asset during the lease term:
fixed payments (including in-substance fixed payments), less any lease incentives.
variable lease payments that depend on an index or a rate.
the exercise price of a purchase option if the Group is reasonably certain to exercise that
option.
payments for terminating the lease, if the lease term reflects the Group exercising an option
to terminate the lease.
amounts expected to be payable by the Group under residual value guarantees.
Variable lease payments that depend on an index or a rate, are initially measured using the index
or rate as at the commencement date. Variable lease payments not included in the measurement of
the lease liabilities, are recognized in profit or loss, or in the cost of relevant assets, in the period
of those payments.
After the commencement date, interest expenses on the lease liabilities in each period during the
lease term is calculated by a constant periodic rate of interest, and included in profit or loss or
charged to cost of related assets.
After the commencement date, the Group shall remeasure the lease liabilities and make
corresponding adjustments to the related right-of-use assets in the following circumstances. If the
carrying amount of the right-of-use assets is reduced to zero and there is a further reduction in the
measurement of the lease liabilities, the Group shall recognize the difference in profit or loss:
where 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;
where 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
rate is applied to calculate the present value.
- 65 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) 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 of low-value assets
The Group elects not to recognize right-of-use assets or lease liabilities for short-term leases and
leases of low-value assets, i.e. port and terminal facilities, buildings, machinery and equipment,
furniture, fixture and other equipment, motor vehicles and cargo ships and others. A short-term
lease is a lease that, at the commencement date, has a lease term of 12 months or less and does not
contain a call option. A lease of low-value assets is a lease that, the value of the underlying asset
is less than RMB50,000 when it is new. For short-term leases and leases of low-value assets, the
Group recognizes the lease payments in profit or loss, or in the cost of related assets on a straight-
line basis over each period within 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.
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 liabilities based on the
present value of the changed lease payments and the revised discount rate.
For lease modifications that decrease the scope of the lease or shorten the term of the lease, the
Group should decrease the carrying amount of the right-of-use assets with any gain or loss
relating to the partial or full termination of the lease recognized in profit or loss. For re-
measurement of lease liabilities due to other lease modifications, a corresponding adjustment is
made to the carrying amount of the right-of-use assets.
31.2 The Group as lessor
31.2.1 Separating components of a lease
For a contract that contains lease components and non-lease components, the Group allocates the
contract consideration in accordance with the Revenue Standards on allocation of transaction
prices, based on the respective individual prices of the lease components and the non-lease
components.
- 66 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) 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 recognizes lease receipts from operating leases as rental income using a straight-line
method over the respective periods of the lease term. The Group's initial direct costs incurred in
connection with operating leases are capitalized when the costs incurred, and are allocated to
profit or loss for the period over the lease term on the same basis as the recognition of rental
income.
Variable lease receipts acquired by the Group in connection with operating leases that are not
included in the lease receipts are recognized in profit or loss for the period when they are actually
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 lease investment with assets under finance lease derecognized. The net lease investment
is the sum of any unguaranteed residual value and the present value of the lease receipts over the
lease term discounted at the interest rate implicit in lease.
The lease receivable comprises the following payments collected by the Group from the lessee for
the transfer of the right to use the underlying assets during the lease term:
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.
payments for terminating the lease, provided that the lease term reflects that the lessee will
exercise the option to terminate the lease;
residual value of guarantee provided to the Group by the lessee, a party related to the lessee
and an independent third party with the financial ability to fulfil the guarantee obligations.
Variable lease receipts not included in the net lease investment are recognized in profit or loss
when they are actually incurred.
Interest income for each period over the lease term is calculated and recognized by the Group at a
fixed periodic rate.
- 67 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Leases - continued
31.2 The Group as lessor - continued
31.2.3 Subleases
As the lessor of a sublease, the Group accounts for the original lease contract and the sublease
contract on a separate basis. 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.
A lease modification should be accounted for as a separate lease if there is a modification in a
finance lease and both of the followings 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 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
accounts for the modification as follows:
If the lease would have been classified as an operating lease had the modification been
effective at the commencement 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 assets at the amount equal to the net lease investment before the effective
date of the modification;
If the lease would have been classified as a finance lease had the modification been effective
at the commencement date, the Group should account for it in accordance with the
provisions on contract modification and renegotiation under Accounting Standards for
Business Enterprises No. 22 - Financial Instruments: Recognition and Measurement.
- 68 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Leases - continued
31.3 Sale and leaseback transactions
31.3.1 The Group as the seller-lessee
The Group assesses and determines whether the transfer of an asset in a sale and leaseback
transaction constitutes a sale according to the requirements of Revenue Standards. If the transfer
of an asset does not constitute a sale, the Group continues to recognize the transferred asset and
recognizes a financial liability at an amount equal to the transfer proceeds which is accounted for
under the Accounting Standards for Business Enterprises No. 22 - Financial Instruments:
Recognition and Measurement. If the transfer of an asset constitutes a sale, the Group measures
the right-of-use assets arising from the leaseback transaction at the proportion of the original
carrying amount of the asset that relates to the use right obtained from leaseback, and recognizes
any gain or loss only on the basis of the rights transferred to the lessor.
31.3.2 The Group as the buyer-lessor
If the transfer of an asset in a sale and leaseback transaction does not constitute a sale, the Group
does not recognize the transferred asset but a financial asset at an amount equal to the transfer
proceeds, and accounts for such financial asset under the Accounting Standards for Business
Enterprises No. 22 - Financial Instruments: Recognition and Measurement. If the transfer of an
asset constitutes a sale, the Group accounts for the purchase of the asset in accordance with other
applicable Accounting Standards for Business Enterprises and accounts for the lease of the asset.
32. Exchange of non-monetary assets
When the non-monetary assets are of commercial substance and the fair value of assets received
or the assets given up can be measured reliably, the non-monetary transactions are measured at
fair value. For the asset received, the fair value of the asset given up and related taxes payable are
recognized as the cost at initial recognition; For the asset given up, at derecognition, the
difference between the fair value and the carrying amount is recognized in profit or loss for the
current period. When there is clear evidence indicating that the fair value of the received asset is
more reliable, for the asset received, the fair value of the asset received and related taxes payable
are recognized as the cost at initial recognition; For the asset given up, at derecognition, the
difference between the fair value of the asset received and the carrying amount of the asset given
up is recognized in profit or loss for the current period.
When the non-monetary transactions fail to meet criteria to be measured at fair value, the
transactions are measured at carrying amounts. For the asset received, the carrying amount of the
asset given up and relevant taxes payable are recognized as the cost of at initial recognition. For
the asset given up, at derecognition, no profit or loss is recognized.
- 69 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
33. Discontinued operation
A discontinued operation is a component of the Group that can be clearly distinguished and satisfies
one of the following conditions, and such component has been disposed of or is classified as held-
for-sale:
(1) Such component represents a separate major line of business or geographical area of operations.
(2) Such component is part of the separate major line of business or geographical area of operations
to be disposed of based on the associated plan.
(3) Such component is a subsidiary acquired exclusively for the purpose of resale.
Gains or losses from discontinued operations are presented separately from those from continuing
operations in the income statement. Operating gains or losses such as impairment losses from
discontinued operations and the amount of reversals, and the gains or losses from disposals are
presented as discontinued operations. For discontinued operations presented in the current period,
the Group restates the information previously presented as gains or losses from continuing
operations in the current financial statements as discontinued operations in the comparable
accounting period.
34. Safety production cost
According to the Administrative Measures for the Collection and Utilization of Enterprise Work
Safety Funds (Cai Zi [2022] No. 136) jointly issued by the Ministry of Finance and the
Emergency Department on 13 December 2022, 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, and
transferred to special reserve simultaneously. When safety production cost set aside is utilized, if
the costs incurred can be categorized as expenditure, the costs incurred should be charged against
the special reserve. If the costs set aside are used to build up fixed assets, the costs should be
charged to construction in progress, and reclassified to fixed assets when the safety projects are
ready for intended use. Meantime, expenditures in building up fixed assets are directly charged
against the special reserve with the accumulated depreciation recognized at the same amount.
Depreciation will not be made in the future period on such fixed assets.
35. Share-based payments
A share-based payment is a transaction which the Group grants equity instruments, in return for
services rendered by employees or other parties. The Group's share-based payments include
equity-settled share-based payments.
Equity-settled share-based payments in exchange for services rendered by employees are
measured at fair value of the equity instruments granted to employees at the grant date. Such
amount is recognized as related costs or expenses on a straight-line basis over the vesting period,
based on the best estimate of the number of equity instruments expected to vest/ as related costs or
expenses at the grant date, if the equity instruments could be vested immediately, with a
corresponding increase in capital reserve.
- 70 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) CRITICAL JUDGMENTS IN APPLYING ACCOUNTING POLICIES AND KEY
ASSUMPTIONS AND UNCERTAINTIES IN ACCOUNTING ESTIMATES
In the application of accounting policies and accounting estimates as set out in Note (IV), the
Group 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 experience of the Group's management as well as other factors that are considered to be
relevant. Actual results may differ from these estimates.
The Group 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 the
current period; changes which not only affect the current but the future periods should be
recognized in the current and future periods. At the balance sheet date, key assumptions and
uncertainties in critical judgments and accounting estimates that are likely to lead to significant
adjustments to the carrying amounts of assets and liabilities in the future are as follows:
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 income tax
The Group calculates and makes provision for deferred tax liabilities according to the profit
distribution plans of subsidiaries, associates and joint ventures and relevant provisions of tax law.
For retained earnings of the investee which are not expected to be distributed, since the profits
will be used for the daily operation and future development of the investee, no deferred tax
liabilities are recognized. If the profits to be actually distributed in future years are more or less
than those expected, corresponding deferred tax liabilities will be recognized or reversed in profit
or loss for the period at the earlier of the date on which the profit distribution plan is changed and
the date on which the profit distribution is declared.
Deferred tax assets are recognized based on the deductible temporary differences and the
corresponding tax rate, to the extent that it is probable that future taxable profits will be available
against which the deductible temporary differences can be utilized. If the actual taxable income in
future years are more or less than that expected, corresponding deferred tax assets will be
recognized or reversed in profit or loss for the period in which they are actually incurred.
- 71 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) CRITICAL JUDGMENTS IN APPLYING ACCOUNTING POLICIES AND KEY
ASSUMPTIONS AND UNCERTAINTIES IN ACCOUNTING ESTIMATES - continued
Estimated useful lives and residual value of fixed assets and intangible assets
The Group assesses the estimated useful lives and residual value of fixed assets and intangible
assets. Such estimate is made by reference to the historical experience of actual useful lives and
residual value of fixed assets and intangible assets of similar nature and function, and is subject to
significant changes due to technical innovation and fierce industry competition. Where the
estimated useful lives and residual value of fixed assets and intangible assets are less than the
previous estimates, the Group will increase the depreciation and amortization, or write off or
eliminate the technically obsolete fixed assets or intangible assets.
(VI) CHANGES IN SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES
1. Changes in significant accounting policies
1.1 Interpretation No. 15 of the Accounting Standards for Business Enterprises
The Interpretation No. 15 of the Accounting Standards for Business Enterprises was issued by the
Ministry of Finance on 30 December 2021, which stipulated the accounting treatment of external
sale of products or by-products produced by an enterprise before the fixed assets are ready for
intended use or in the process of research and development, as well as the judgment on onerous
contract.
Accounting treatment of external sale of products or by-products produced by an enterprise before
the fixed assets are ready for intended use or in the process of research and development
In accordance with the Interpretation No. 15, if an enterprise sells products or by-products
produced before the fixed assets are ready for intended use or in the process of research and
development, it shall, in accordance with the provisions of Revenue Standards and Accounting
Standards for Business Enterprises No. 1 - Inventories, respectively conduct accounting treatment
of income and costs related to the trial sale, and include them in profit or loss for the period, but
the balance of the related income from trial sale less cost shall not be used to offset against the
cost of fixed assets or research and development expenses. Concurrently, an enterprise shall
separately disclose in the notes the information including the amount of related income from and
cost of trial sale, the specific presenting items, and the significant accounting estimates applied in
determining the cost of trial sale. The Interpretation became effective from 1 January 2022, and
retroactive adjustments should be made for trial sale that occurred between the beginning of the
earliest presentation period of the financial statements and 1 January 2022.
Upon assessment, the Group considers that the adoption of this Interpretation has no significant
impact on the financial statements of the Group.
- 72 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VI) CHANGES IN SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
1. Changes in significant accounting policies - continued
1.1 Interpretation No. 15 of the Accounting Standards for Business Enterprises - continued
Judgment on onerous contracts
The Interpretation No. 15 clarifies that the "cost to perform the contract" considered by an
enterprise in determining whether a contract is an onerous contract shall include the incremental
cost to perform the contract and the apportioned amount of other costs directly related to the
performance of the contract. The Interpretation became effective from 1 January 2022, and an
enterprise shall implement this Interpretation on contracts to which the obligations have not been
completely fulfilled by 1 January 2022. The accumulative effect is adjusted for the opening
balance of retained earnings for the year when the Interpretation is implemented and other related
items to the financial statements, but not adjusted for the comparative data of prior periods.
Upon assessment, the Group considers that the adoption of this Interpretation has no significant
impact on the financial statements of the Group.
1.2 Interpretation No. 16 of the Accounting Standards for Business Enterprises
The Interpretation No. 16 of the Accounting Standards for Business Enterprises (the
"Interpretation No. 16") was issued by the Ministry of Finance on 30 November 2022, which
stipulated the accounting treatment concerning the income tax effect of dividends on a financial
instrument classified as an equity instrument by the issuer, and the change in cash-settled share-
based payment to equity-settled share-based payment by an enterprise.
Accounting treatment concerning the income tax effect of dividends on a financial instrument
classified as an equity instrument by the issuer
In accordance with the Interpretation No. 16, for a financial instrument classified as an equity
instrument by an enterprise in accordance with the Accounting Standards for Business Enterprises
No. 37 - Presentation of Financial Instruments and other applicable provisions, if the relevant
dividend payments are deductible before enterprise income tax in accordance with the relevant tax
provisions, the enterprise, on recognition of dividends payable, shall include the tax effect of
dividends in profit or loss or owners' equity using the same accounting treatment for previous
transactions or events that generated distributable profits. The Interpretation became effective
from 30 November 2022. Where the recognition of dividends payable by a financial instrument
classified as an equity instrument occurs during the period from 1 January 2022 to the effective
date of the Interpretation, the enterprise shall adjust the tax effect if such effect exists but is not
treated according to the provisions hereinabove. Where the said recognition occurs before 1
January 2022 but the relevant financial instrument has not been derecognized as at 1 January
2022, the enterprise shall adjust the tax effect retrospectively if such effect exists but is not treated
according to the provisions hereinabove.
- 73 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VI) CHANGES IN SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
1. Changes in significant accounting policies - continued
1.2 Interpretation No. 16 of the Accounting Standards for Business Enterprises - continued
Accounting treatment concerning the income tax effect of dividends on a financial instrument
classified as an equity instrument by the issuer - continued
The Group considers that the adoption of this Interpretation has no significant impact on the
financial statements of the Group.
Accounting treatment concerning the change in cash-settled share-based payment to equity-settled
share-based payment by an enterprise
In accordance with the Interpretation No. 16, where an enterprise changes the terms and
conditions of a cash-settled share-based payment agreement to those of an equity-settled share-
based payment agreement, the enterprise shall, on the date of change, measure the equity-settled
share-based payment at fair value of the equity instrument on which it is granted, include the
services received in capital reserve, and at the same time, derecognize the liability that has been
recognized for cash-settled share-based payment on the date of change, with the resulted
difference included in profit or loss for the period. The Interpretation became effective from 30
November 2022. For the aforesaid transactions that are added during the period from 1 January
2022 to the effective date of the Interpretation, the enterprise shall make adjustments in
accordance with the provisions of the Interpretation. If any transaction occurred before 1 January
2022 is not treated in accordance with the aforesaid provisions, the accumulative effect shall
adjusted for the retained earnings at 1 January 2022 and other related items to the financial
statements, but not adjusted for the comparative data of prior periods.
The Group considers that the adoption of this Interpretation has no significant impact on the
financial statements of the Group.
- 74 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VII) TAXES
1. Major taxes and tax rates
Taxes Tax basis Tax rate
Taxable income 8.25%-34% (Note 1)
Enterprise income tax
Dividend income tax 5%,10% (Note 2)
Income from sale of goods 9%,13%
Income from transportation, loading and
Value-added tax unloading business and part of modern 6%
("VAT") (Note 3) service industries
Income from sale of real estate, property
3%, 5%, 9%
management, lease of real estate, etc.
Social contribution tax (Note 4) Income 0.65%-7.6%
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%
Land use tax Land area actually occupied RMB 0.8-12 per square meter
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 is 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
8.25% and 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%, certain domestic subsidiaries are subject to the preferential
tax rate for high-tech enterprises or encouraged industrial enterprises in the region of 15%,
and the other overseas subsidiaries are subject to enterprise income tax rates between 27%
and 34%.
The Company obtains dividends distributed by overseas subsidiaries and should pay
enterprise income tax at a rate of 25% in accordance with relevant Chinese tax laws. The
Company obtains taxable income outside of China, and the amount of income tax that has
been paid abroad can be offset with the current taxable amount. The credit limit is the
taxable amount calculated in accordance with the provisions of the Enterprise Income Tax
Law.
Note 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 on 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%.
Note 3: The VAT amount is the balance of the output tax less the deductible input tax, and the
output tax is calculated in accordance with the sales income and the corresponding tax rate
stipulated in the relevant tax laws of China.
- 75 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VII) TAXES - continued
1. Major taxes and tax rates - continued
Note 4: The social contribution tax is the tax paid by TCP Participaes S.A. (hereinafter referred
to as "TCP"), an overseas subsidiary 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 of China may be subject to enterprise income tax preference in
accordance with relevant local tax policies.
From 1 January 2020 to 31 December 2022, the urban land use tax for some domestic subsidiaries
of the Group on the land for bulk commodity storage facilities is levied at the reduced rate of 50%
of the tax amount applicable to the grade of the land.
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
1. Cash and bank balances
Item 31/12/2022 31/12/2021
Cash 726,960.10 501,446.73
Including: RMB 2,767.60 20,504.26
USD 44,853.90 105,169.96
HKD 26,167.88 23,918.14
BRL 6,536.63 5,600.44
Others 646,634.09 346,253.93
Bank deposits (Note1) 13,061,475,159.69 12,367,010,853.19
Including: RMB 10,688,462,520.89 8,311,399,392.65
USD 1,045,085,866.19 1,481,370,545.88
EUR 745,066,787.31 708,753,319.34
BRL 379,062,088.91 273,845,734.48
HKD 141,668,372.90 1,567,048,304.98
AUD 4,708,056.85 3,805,872.65
Others 57,421,466.64 20,787,683.21
Other cash and bank balances (Note 2) 553,726,619.61 404,837,106.85
Including: RMB 340,778,819.19 404,810,610.86
HKD 212,571,712.02 26,495.99
USD 376,088.40 -
Total 13,615,928,739.40 12,772,349,406.77
Including: Total amount of funds deposited overseas 4,012,922,744.09 4,261,299,895.41
Total amount of funds deposited in Finance Company 1,841,698,554.32 2,178,303,655.54
- 76 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
1. Cash and bank balances - continued
Note 1: The balance of interest receivable on bank deposits was RMB 16,126,969.60, and the
frozen funds of ETC card business amounted to RMB 12,000.00.
Note 2: The balance of the securities margin account totalled RMB 220,246,321.43 in other cash
and bank balances at the end of the year, the principal of the time certificate of deposit that
can be readily withdrawn on demand at the end of the year totalled RMB 301,000,000.00,
the interest of the time certificate of deposit totalled RMB 23,183,152.24, and the
restricted deposit totalled RMB 9,297,145.94.
2. Held-for-trading financial assets
Item 31/12/2022 31/12/2021
Financial assets at FVTPL 2,998,781,599.63 6,921,831,502.55
Including: Debt investment instruments - -
Equity investment instruments 135,742.11 157,196.79
Structured deposits 2,998,645,857.52 6,921,674,305.76
Total 2,998,781,599.63 6,921,831,502.55
3. Notes receivable
(1) Category of notes receivable
Category 31/12/2022 31/12/2021
Commercial acceptance 36,000,000.00 -
Bank acceptance 395,000.00 6,081,611.95
Total 36,395,000.00 6,081,611.95
Less: Provision for credit loss (Note) - -
Carrying amount 36,395,000.00 6,081,611.95
Note: The Group believes that the acceptor of its bank acceptance and commercial acceptance
has high credit ratings with no significant credit risks; therefore, no provision for credit
loss is made.
(2) As at 31 December 2022, the Group has no notes receivable pledged.
(3) As at 31 December 2022, the Group has no endorsed or discounted and not yet matured
notes receivable at the balance sheet date.
- 77 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
3. Notes receivable - continued
(4) As at 31 December 2022, the Group has no notes reclassified to accounts receivable due to
the drawers' inability to settle the notes.
(5) The Group has no notes receivable written off in 2022.
4. Accounts receivable
(1) Aging analysis of accounts receivable
31/12/2022
Aging Accounts Provision for
Proportion (%)
receivable credit loss
Within 1 year 1,296,002,000.92 30,607,095.51 2.36
1-2 years 11,157,744.62 3,209,367.93 28.76
2-3 years 10,897,749.26 9,934,707.42 91.16
More than 3 years 52,105,462.08 50,262,096.58 96.46
Total 1,370,162,956.88 94,013,267.44
(2) Disclosure of accounts receivable by category
Expected 31/12/2022 31/12/2021
Credit
credit loss Gross carrying Provision for Carrying Gross carrying Provision for Carrying
rating
rate (%) amount credit loss amount amount credit loss amount
A 0.00-0.10 757,893,845.42 254,506.65 757,639,338.77 768,959,184.29 195,963.28 768,763,221.01
B 0.10-0.30 437,329,923.88 579,435.66 436,750,488.22 436,073,607.05 1,088,792.71 434,984,814.34
C 0.30-50.00 91,915,183.34 12,581,359.16 79,333,824.18 146,604,738.15 32,286,595.88 114,318,142.27
D 50.00-100.00 83,024,004.24 80,597,965.97 2,426,038.27 55,590,039.99 53,078,639.80 2,511,400.19
Total 1,370,162,956.88 94,013,267.44 1,276,149,689.44 1,407,227,569.48 86,649,991.67 1,320,577,577.81
(3) Changes in provision for credit loss of accounts receivable
Lifetime expected Lifetime expected
Item credit loss (not credit loss (credit- Total
credit-impaired) impaired)
At 1 January 2022 33,571,351.87 53,078,639.80 86,649,991.67
Gross carrying amount of accounts receivable
at 1 January 2022
- Transfer to credit-impaired accounts receivable -2,021,454.72 2,021,454.72 -
- Reversal of accounts receivable that are not
- - -
credit-impaired
Provision for the year 372,106.49 25,723,534.94 26,095,641.43
Reversal for the year -18,929,147.99 -1,226,541.07 -20,155,689.06
Transfer-out due to derecognition of financial
- -5,205.00 -5,205.00
assets (including direct write-down)
Other changes 422,445.82 1,006,082.58 1,428,528.40
At 31 December 2022 13,415,301.47 80,597,965.97 94,013,267.44
- 78 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
4. Accounts receivable - continued
(4) Accounts receivable written off in the year
Arising from
Procedures related party
Item Nature Amount Reason for write-off
performed transactions or
not
Entity 1 Service fees 5,205.00 The business licence was revoked Yes No
Total 5,205.00
(5) The top five balances of accounts receivable at the end of the year classified by debtor
Proportion of the amount Closing balance of
Name of
31/12/2022 Aging to the total accounts provision for
entity
receivable (%) credit loss
Client 1 261,495,217.57 Within 1 year, 2-3 years, more than 3 years 19.08 14,595.06
Client 2 41,867,906.09 Within 1 year, 1-2 years, 2-3 years 3.06 71,348.35
Client 3 24,908,308.44 More than 3 years 1.82 24,908,308.44
Client 4 20,674,309.00 Within 1 year 1.51 -
Client 5 20,134,539.40 Within 1 year 1.47 -
Total 369,080,280.50 26.94 24,994,251.85
5. Receivables financing
(1) Classification of receivables financing
Item 31/12/2022 31/12/2021
Bank acceptance measured at fair value 163,766,913.10 238,429,402.71
(2) As at 31 December 2022, the Group has no pledged receivables financing.
(3) As at 31 December 2022, the Group's receivables financing that have been endorsed or
discounted and have not yet matured at the balance sheet date are as follows:
31/12/2022 31/12/2021
Item
Derecognized Recognized Derecognized Recognized
Bank acceptance measured
105,141,033.28 - 153,044,339.75 -
at fair value
6. Prepayments
(1) Aging analysis of prepayments
31/12/2022 31/12/2021
Gross Gross
Aging Proportion Impairment Proportion Impairment
carrying carrying
(%) provision (%) provision
amount amount
Within 1 year 61,917,391.43 9731 - 51,121,689.93 9906 -
1-2 years 1,589,158.49 2 - 351,693.15 0 -
2-3 years - - - 109,329.76 0 -
More than 3 years 120,875.50 0 - 24,081.36 0 -
Total 63,627,425.42 10000 - 51,606,794.20 10000 -
- 79 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
6. Prepayments - continued
(2) As at 31 December 2022, the Group has no significant prepayments aged more than one
year.
(3) The top five balances of prepayments at the end of the year classified by entities
Proportion of the
Relationship with Reason for not being
Name of entity 31/12/2022 Aging closing balance to the
the Company settled
total prepayments (%)
Entity 1 Non-related party 19,122,938.15 Within 1 year 30.05 Unsettled advance premium
Within 1 year Unsettled prepayment for
Entity 2 Non-related party 8,485,362.69 13.34
and 1-2 years communication charges
Unsettled prepayment for
Entity 3 Non-related party 6,504,288.81 Within 1 year 10.22
dredging expenses
Unsettled prepayment for
Entity 4 Non-related party 2,538,109.18 Within 1 year 3.99
purchase of materials
Entity 5 Non-related party 2,329,721.44 Within 1 year 3.66 Unsettled advance premium
Total 38,980,420.27 61.26
7. Other receivables
7.1 Summary of other receivables
Item 31/12/2022 31/12/2021
Dividends receivable 416,040,485.62 264,626,493.85
Other receivables 532,801,608.68 431,650,102.02
Total 948,842,094.30 696,276,595.87
7.2 Dividends receivable
(1) Presentation of dividends receivable
Name of investee 31/12/2022 31/12/2021
China Nanshan Development (Group) Incorporation
240,591,000.00 185,070,000.00
("Nanshan Group")
Tin-Can Island Container Terminal Ltd 65,121,449.40 19,076,909.00
Qingdao Qianwan United Container Terminal Co., Ltd. 50,000,000.00 -
Zhanjiang Merchants Port City Investment Co., Ltd.
41,847,044.77 41,847,044.77
("Merchants Port City")
COSCO Logistics (Zhanjiang) Co., Ltd. 18,449,001.16 18,403,959.77
Others 448,447.23 493,472.09
Total 416,456,942.56 264,891,385.63
Less: Provision for credit loss 416,456.94 264,891.78
Carrying amount 416,040,485.62 264,626,493.85
- 80 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Other receivables - continued
7.2 Dividends receivable - continued
(2) Significant dividends receivable aged more than 1 year
Impaired or not and
Name of Reason for not being
31/12/2022 31/12/2021 Aging the determination
investee recovered
basis
Undergoing relevant
1-2 years, 2-3 formalities, expected to
Nanshan Group 111,042,000.00 74,028,000.00 No
years be recovered by the end
of 2023
(3) Changes in provision for credit loss of dividends receivable
Stage 1 Stage 2 Stage 3
Lifetime expected Lifetime expected
Item 12-month expected Total
credit loss (not credit loss (credit-
credit loss
credit-impaired) impaired)
At 1 January 2022 264,891.78 - - 264,891.78
Gross carrying amount of
dividends receivable at
1 January 2022
- Transfer to Stage 2 - - - -
- Transfer to Stage 3 - - - -
- Reverse to Stage 2 - - - -
- Reverse to Stage 1 - - - -
Provision for the year 151,565.16 - - 151,565.16
Reversal for the year - - - -
Transfer-out due to
derecognition of financial
- - - -
assets (including direct
write-down)
Other changes - - - -
At 31 December 2022 416,456.94 - - 416,456.94
7.3 Other receivables
(1) Aging analysis of other receivables
31/12/2022
Aging Provision for
Other receivables Proportion (%)
credit loss
Within 1 year 487,428,214.83 229,150,234.71 47.01
1-2 years 192,100,283.58 4,690,780.38 2.44
2-3 years 12,444,128.52 9,740,862.33 78.28
More than 3 years 844,098,122.57 759,687,263.40 90.00
Total 1,536,070,749.50 1,003,269,140.82 65.31
- 81 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Other receivables - continued
7.3 Other receivables - continued
(2) Disclosure of other receivables by nature
Item 31/12/2022 31/12/2021
Operation compensation (Note 1) 859,677,826.43 618,500,035.62
Advance payments 295,592,304.09 260,222,250.12
Land compensation (Note 2) 89,630,000.00 89,630,000.00
Special subsidy 31,716,257.00 24,800,000.00
Deposits 26,402,747.81 25,492,288.59
Compensation for profit or loss on transition - 6,347,258.89
Others 233,051,614.17 165,222,559.00
Total 1,536,070,749.50 1,190,214,392.22
Less: Provision for credit loss 1,003,269,140.82 758,564,290.20
Carrying amount 532,801,608.68 431,650,102.02
Note 1: This represents the operation compensation receivable by a subsidiary of the Company
from the holding company of its minority shareholder in accordance with the agreement.
In 2022, the Group recognized compensation of RMB213,574,591.16. As at 31 December
2022, the Group has fully provided for credit losses on the accumulated outstanding
compensation amounting to RMB859,677,826.43.
Note 2: On 9 October 2021, Zhanjiang Port (Group) Co., Ltd. (hereinafter referred to as
"Zhanjiang Port"), a subsidiary of the Company, entered into the Agreement on Recovery
of State-owned Land Use Rights with the local government. Pursuant to the Agreement,
Zhanjiang Port shall return the land of approximately 195.68 mu located in Zhanjiang
Comprehensive Bonded Zone on the east of Gangshu Avenue, which is amounting to
RMB 89,630,000.00. The above-mentioned land has been returned before 31 December
2021. As at 31 December 2022, the above-mentioned land compensation has not been
recovered yet.
(3) Provision for credit loss of 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 impairment and taking into account the
current and future economic conditions.
- 82 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Other receivables - continued
7.3 Other receivables - continued
(3) Provision for credit loss of other receivables - continued
As at 31 December 2022, the credit risk and expected credit loss of other receivables of each category of customers are presented as below:
31/12/2022 31/12/2021
Lifetime Lifetime Lifetime Lifetime
Expected credit 12-month 12-month
Credit rating expected credit expected credit expected credit expected credit
loss rate (%) expected credit Total expected credit Total
loss (not credit- loss (credit- loss (not credit- loss (credit-
loss loss
impaired) impaired) impaired) impaired)
A 0.00-0.10 532,760,873.61 - - 532,760,873.61 431,741,133.45 - - 431,741,133.45
B 0.10-0.30 - - - - - - - -
C 0.30-50.00 - - - - - - - -
D 50.00-100.00 - - 1,003,309,875.89 1,003,309,875.89 - - 758,473,258.77 758,473,258.77
Gross carrying amount 532,760,873.61 - 1,003,309,875.89 1,536,070,749.50 431,741,133.45 - 758,473,258.77 1,190,214,392.22
Provision for credit loss 24,451.35 - 1,003,244,689.47 1,003,269,140.82 106,031.43 - 758,458,258.77 758,564,290.20
Carrying amount 532,736,422.26 - 65,186.42 532,801,608.68 431,635,102.02 - 15,000.00 431,650,102.02
Including: Significant other receivables for which the provision for credit loss is assessed individually at the end of the year (credit rating of D)
Name 31/12/2022 Provision for credit loss ECL rate (%) Reason for provision
Entity 1 859,677,826.43 859,677,826.43 100.00 Expected to be unrecoverable (Note)
Entity 2 108,624,448.23 108,624,448.23 100.00 Expected to be unrecoverable
Entity 3 14,000,000.00 14,000,000.00 100.00 Expected to be unrecoverable
Total 982,302,274.66 982,302,274.66
Note: Refer to Note (VIII) 7.3(2).
- 83 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Other receivables - continued
7.3 Other receivables - continued
(4) Provision, reversal and write-off of credit loss of other receivables
Stage 1 Stage 2 Stage 3
Lifetime expected Lifetime expected
Provision for credit loss 12-month expected Total
credit loss (not credit loss (credit-
credit loss
credit-impaired) impaired)
At 1 January 2022 106,031.43 - 758,458,258.77 758,564,290.20
Balance of other receivables
at 1 January 2022
- Transfer to Stage 2 - - - -
- Transfer to Stage 3 -37,851.00 - 3785100 -
- Reverse to Stage 2 - - - -
- Reverse to Stage 1 826,764.77 - -826,764.77 -
Provision for the year 17,847.65 - 218,784,542.22 218,802,389.87
Reversal for the year -888,341.50 - -830,770.60 -1,719,112.10
Charge-off for the year - - - -
Write-off for the year - - -400000 -4,000.00
Other changes - - 27,625,572.85 27,625,572.85
At 31 December 2022 24,451.35 - 1,003,244,689.47 1,003,269,140.82
(5) Write-off of other receivables in the year
Arising from
Procedures related party
Item Nature Amount Reason for write-off
performed transactions or
not
Entity 1 Others The business 4,000.00has been revoked Yes No
Total 4,000.00
(6) The top five balances of other receivables at the end of the year classified by debtor
Closing balance
Proportion to total
Name of entity Nature 31/12/2022 Aging of provision for
other receivables (%)
credit loss
Operation Within 1 year, more
Entity 1 859,677,826.43 55.97 859,677,826.43
compensation than 3 years
Entity 2 Advance payments 123,474,649.44 Within 1 year, 1-2 years 8.04 -
Within 1 year, 1-2
Entity 3 Advance payments 108,624,448.23 years, 2-3 years, more 7.07 108,624,448.23
than 3 years
Entity 4 Land compensation 89,630,000.00 1-2 years 5.84 -
Entity 5 Advance payments 45,749,816.80 Within 1 year 2.98 -
Total 1,227,156,740.90 79.90 968,302,274.66
- 84 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Other receivables - continued
7.3 Other receivables - continued
(7) Receivables involving government grants
Time and amount
Name of entity Item 31/12/2022 Aging expected to be received
and its basis
Shantou CM Port Group Co., Ltd. Special subsidy for barge Expected to be recovered by
1-2 years
("Shantou Port") line business the end of 2023
Business development Expected to be recovered by
Shantou Port Within 1 year
subsidy the end of 2023
Total 31,716,257.00
8. Inventories
(1) Category of inventories
31/12/2022 31/12/2021
Provision for Provision for
Item Gross carrying Carrying Gross carrying Carrying
decline in value decline in value
amount amount amount amount
of inventories of inventories
Raw materials 196,425,573.04 1,326,130.64 195,099,442.40 174,693,225.25 730,054.35 173,963,170.90
Finished goods 17,248,970.37 - 17,248,970.37 6,576,244.72 - 6,576,244.72
Others 12,774,408.71 - 12,774,408.71 14,380,720.50 - 14,380,720.50
Total 226,448,952.12 1,326,130.64 225,122,821.48 195,650,190.47 730,054.35 194,920,136.12
(2) Provision for decline in value of inventories
Provision for the year Decrease
Item 31/12/2021 31/12/2022
Provision Others Reversal Write-off
Raw materials 730,05435 573,122.05 22,954.24 - - 1,326,130.64
(3) As at 31 December 2022, the Group has no capitalized borrowing cost in the balance of
inventories.
9. Assets held-for-sale
Carrying amount at Fair value at Carrying amount at Fair value at
Item
31/12/2022 31/12/2022 31/12/2021 31/12/2021
Long-term assets held-for-sale
- - 337,442,757.28 1,380,876,000.00
(Note)
Less: Provision for impairment of
- - - -
assets held-for-sale
Carrying amount - - 337,442,757.28 138087600000
- 85 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
9. Assets held-for-sale - continued
Note: The intangible assets of RMB212,552,105.91, fixed assets of RMB113,712,788.00 and
investment properties of RM B11,177,863.37 were presented as assets held-for-sale by the
Group in 2021. Shantou Municipal Government revised the "Detailed Control Planning of
Shantou Zhugang New Town (Partial) - Zhuchigang Area", and the final plan has not yet
been announced, the schedule for the transfer of the above assets cannot be determined,
which no longer meet the criteria for recognition as assets held-for-sale, therefore, the
intangible assets held-for-sale were reversed to intangible assets, and provision for
impairment of intangible assets of RMB15,537,122.10 was made. Since the fixed assets and
investment properties held-for-sale have been disposed by the Group, non-operating
expenses amounting to RMB 124,890,651.37 were recognized for the period.
10. Non-current assets due within one year
Item 31/12/2022 31/12/2021
Long-term receivables due within one year 903,128,422.35 102,458,920.89
Less: Provision for credit loss 903,128.42 102,458.92
Carrying amount 902,225,293.93 102,356,461.97
11. Other current assets
(1) Category of other current assets
Item 31/12/2022 31/12/2021
Prepaid taxes 98,329,205.73 64,390,050.80
Input tax to be deducted and to be certified 70,627,183.33 254,909,235.38
Others 16,946,751.47 20,385,011.23
Total 185,903,140.53 339,684,297.41
Less: Provision for credit loss - -
Carrying amount 185,903,140.53 339,684,297.41
12. Long-term receivables
(1) Details of long-term receivables
31/12/2022 31/12/2021 Range of discount
Item Gross carrying Provision for Carrying Gross carrying Provision for Carrying rate at the end of
amount credit loss amount amount credit loss amount year
Advances to shareholders (Note1) 3,864,736,673.31 3,864,736.67 3,860,871,936.64 3,566,614,937.93 3,566,614.94 3,563,048,322.99 4.75%-6.00%
Finance lease deposits 10,659,515.88 10,659.52 10,648,856.36 10,000,000.00 10,000.00 9,990,000.00 0-5.37%
Land compensation receivable (Note 2) 2,692,032,000.00 - 2,692,032,000.00 2,692,032,000.00 - 2,692,032,000.00 -
Total 6,567,428,189.19 3,875,396.19 6,563,552,793.00 6,268,646,937.93 3,576,614.94 6,265,070,322.99 -
Less: Long-term receivables
903,128,422.35 903,128.42 902,225,293.93 102,458,920.89 102,458.92 102,356,461.97 -
due within 1 year
Long-term receivables due after 1 year 5,664,299,766.84 2,972,267.77 5,661,327,499.07 6,166,188,017.04 3,474,156.02 6,162,713,861.02 -
- 86 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
12. Long-term receivables - continued
(1) Details of long-term receivables - continued
Note 1: It mainly represents the aggregate principal and interest receivable from Terminal Link
SAS, equivalent to RMB 2,977,517,465.06.
On 26 March 2020, China Merchants Port Holdings Company ("CM Port"), a subsidiary
of the Company, provided a long-term loan to Terminal Link SAS for the terminal
acquisition project and charged interest to Terminal Link SAS at an interest rate of 6%.
Note 2: On 5 November 2019, Shantou Port entered into the Contract for the Acquisition of State-
Owned Land Use Rights in Shantou with Shantou Land Reserve Center. Pursuant to the
contract, the land and attached buildings of approximately 370.96 mu located in Zhuchi
Deepwater Port on the south of Zhongshan East Road of Shantou should be returned to
Shantou Land Reserve Center by Shantou Port, which is amounting to
RMB1,558,032,000.00. Among them, 183.63 mu of land and attached buildings have been
transferred in 2019, and the remaining 187.33 mu of land and attached buildings have
been transferred in 2020. As at 31 December 2022, the land compensation totalling
RMB1,158,032,000.00 has not yet been recovered.
On 21 August 2020, Shantou Port entered into the Contract for the Acquisition of State-
Owned Land Use Rights in Shantou with Land Reserve Center of Shantou Haojiang
District. Pursuant to the contract, the land and attached buildings of approximately 152.34
mu located in Yutianwen, Queshi, Haojiang District, Shantou, should be returned to Land
Reserve Center of Shantou Haojiang District by Shantou Port, which is amounting to
RMB250,000,000.00. The transfer of above-mentioned land and attached buildings was
completed before 31 December 2020. As at 31 December 2022, the land compensation
totalling RMB200,000,000.00 has not yet been recovered.
On 22 December 2020, Shantou Port entered into the Contract for the Acquisition of State-
Owned Land Use Rights in Shantou with Shantou Land Reserve Center. Pursuant to the
contract, the land and attached buildings of approximately 648.78 mu located in Zhuchi
Deepwater Port of Shantou should be returned to Shantou Land Reserve Center by
Shantou Port, which is amounting to RMB2,724,876,000.00. Among them, 320 mu of
land and attached buildings were transferred by 31 December 2020, which is amounting to
RMB1,344,000,000.00, and the remaining 328.78 mu of land and attached buildings have
not been transferred. As at 31 December 2022, the land compensation totalling
RMB1,334,000,000.00 has not yet been recovered.
- 87 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
12. Long-term receivables - continued
(2) Provision for credit loss of long-term receivables
Stage 1 Stage 2 Stage 3
Lifetime expected Lifetime expected
Item 12-month expected Total
credit loss (not credit loss (credit-
credit loss
credit-impaired) impaired)
At 1 January 2022 3,576,614.94 - - 3,576,614.94
Gross carrying amount of long-term receivables at 1 January 2022
- Transfer to Stage 2 - - - -
- Transfer to Stage 3 - - - -
- Reverse to Stage 2 - - - -
- Reverse to Stage 1 - - - -
Provision for the year 298,781.25 - - 298,781.25
Reversal for the year - - - -
Transfer-out due to
derecognition of
- - - -
financial assets (including
direct write-down)
Other changes - - - -
At 31 December 2022 3,875,396.19 - - 3,875,396.19
(3) As at 31 December 2022, there are no long-term receivables derecognized due to the
transfer of financial assets.
(4) As at 31 December 2022, there are no assets and liabilities arising from the transfer or
continuing involvement of long-term receivables.
- 88 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
13. Long-term equity investments
(1) Details of long-term equity investments
Changes for the year
Effect of Closing
Reconciliation
Accounting Investment Cash dividends Provision translation of balance of
Investees 31/12/2021 of other Other equity 31/12/2022
method Increase Decrease income under or profits Others for financial statements provision for
comprehensive movements
equity method declared impairment denominated in impairment
income
foreign currencies
I. Joint ventures
Euro-Asia Oceangate S.àr.l. Equity method 2,371,538,986.74 - - 140,072,915.26 143,397,707.85 - -97,083,253.51 - - 229,278,389.03 2,787,204,745.37 -
Port of Newcastle Equity method 1,959,683,621.36 - - 28,511,394.42 33,437,699.85 - -16,138,675.17 - - 43,187,735.19 2,048,681,775.65 -
Qingdao Qianwan United Container
Equity method 1,490,513,461.30 - - 112,414,404.75 -387,333.34 - -100,000,000.00 - - - 1,502,540,532.71 -
Terminal Co., Ltd.
Yantai Port Group Laizhou Port Co., Ltd. Equity method 791,515,741.44 - - 32,565,975.37 - -669,119.99 -29,259,207.08 - - - 794,153,389.74 -
Others (Note1) Equity method 1,926,751,947.80 655,888,204.58 -12,500,650.29 105,777,032.00 -1,026,371.98 -10,185,533.53 -107,432,671.55 - - 26,940,655.22 2,584,212,612.25 -
Subtotal 8,540,003,758.64 655,888,204.58 -12,500,650.29 419,341,721.80 175,421,702.38 -10,854,653.52 -349,913,807.31 - - 299,406,779.44 9,716,793,055.72 -
II. Associates
Shanghai International Port (Group) Co.,
Ltd. (hereinafter referred to Equity method 28,843,807,383.69 1,894,169,292.91 - 4,762,565,562.93 -147,093,548.23 72,306,099.24 -1,240,688,187.97 - - -13,168,401.40 34,171,898,201.17 -
as "Shanghai Port Group")
Nanshan Group Equity method 6,329,051,540.40 - - 206,680,217.04 -34,040,766.18 4,961,825.16 -129,549,000.00 - - 93,909.79 6,377,197,726.21 -
Terminal Link SAS Equity method 6,037,993,057.12 - - 364,965,366.44 -171,058,040.68 - -395,450,142.52 - - 559,158,928.01 6,395,609,168.37 -
Liaoning Port Co., Ltd. ("Liaoning Port") Equity method 3,972,400,632.03 - - 144,196,061.13 1,662,526.40 6,709,793.53 -73,297,870.21 - - -30,508,264.14 4,021,162,878.74 354,857,305.25
Shenzhen China Merchants Qianhai
Equity method 7,306,935,034.12 - - 218,696,415.40 - - -122,444,928.51 - - - 7,403,186,521.01 -
Industrial Development Co., Ltd.
Ningbo Zhoushan Port Company Limited
Equity method 3,474,840,934.53 14,113,777,882.23 - 351,607,511.90 -958,626.76 114,757,041.82 -75,825,289.44 - - -3,568,909.23 17,974,630,545.05 -
("Ningbo Zhoushan") (Note2)
China Merchants Northeast Asia
Equity method 1,016,048,532.69 - - -13,657,927.07 - 14,619,600.09 - - - - 1,017,010,205.71 -
Development & Investment Co., Ltd.
Others (Note1) Equity method 4,832,370,951.30 3,300,000.00 -202,912,747.32 730,787,219.18 -96,473,213.32 358,440.59 -354,225,443.65 - - 373,600,410.29 5,286,805,617.07 2,310,965.02
Subtotal 61,813,448,065.88 16,011,247,175.14 -202,912,747.32 6,765,840,426.95 -447,961,668.77 213,712,800.43 -2,391,480,862.30 - - 885,607,673.32 82,647,500,863.33 357,168,270.27
Total 70,353,451,824.52 16,667,135,379.72 -215,413,397.61 7,185,182,148.75 -272,539,966.39 202,858,146.91 -2,741,394,669.61 - - 1,185,014,452.76 92,364,293,919.05 357,168,270.27
- 89 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
13. Long-term equity investments - continued
(1) Details of long-term equity investments - continued
Note 1: In 2022, the Group purchased ordinary shares of ASIA AIRFREIGHT TERMINAL
COMPANY LIMITED (hereinafter referred to as "ASIA AIRFREIGHT") at a price
equivalent to RMB 258,669,516.06. After this transaction, the Group's indirect
shareholding in ASIA AIRFREIGHT increased from 20.00% to 34.60%. According to the
joint venture agreement signed in 2022, any decisions on activities related to ASIA
AIRFREIGHT shall be unanimously approved by all shareholders. Therefore, the Group
has joint control over ASIA AIRFREIGHT, which is reclassified as a joint venture from
an associate.
Note 2: On 19 September 2022, Ningbo Zhoushan issued 3,646,971,029 ordinary shares to the
Company in a private placement at RMB 3.87 per share. After the completion of the
private placement, the Company's direct shareholding ratio in Ningbo Zhoushan was
20.98%. Together with the 2.10% equity interest held by CHINA MERCHANTS
INTERNATIONAL PORTS (NINGBO) LIMITED, a subsidiary of the Company, the total
shareholding ratio of the Group was 23.08%.
(2) Provision for impairment of long-term equity investments
Decrease Effect of
Effect of translation of
change in financial
Item 31/12/2021 Increase 31/12/2022
scope of Amount Reason statements
consolidation denominated in
foreign currencies
Liaoning Port 337,700,959.79 - - - - 17,156,345.46 354,857,305.25
HOA THUONG
2,135,644.39 - - - - 175,320.63 2,310,965.02
CORPORATION
Total 339,836,604.18 - - - - 17,331,666.09 357,168,270.27
14. Investments in other equity instruments
(1) Details of investments in other equity instruments
Investee 31/12/2022 31/12/2021
China Ocean Shipping Agency Shenzhen Co., Ltd. 144,301,178.28 144,998,784.69
Others 27,644,096.74 35,253,013.74
Total 171,945,275.02 180,251,798.43
- 90 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
14. Investments in other equity instruments - continued
(2) Details of non-trading equity instruments
Amount
Reason for transfer
Dividends transferred to
Reason for being to retained earnings
income Accumulated retained earnings
Item designated as from other
recognized gains/losses from other
FVTOCI comprehensive
for the year comprehensive
income
income
The intention of holding
China Ocean Shipping Agency the instruments is
- 130,791,178.28 - N/A
(Shenzhen) Co., Ltd. neither for sale nor
profits in short-term
The intention of holding
the instruments is
Others 240,001.46 927,502.00 7,513,669.91 Disposal
neither for sale nor
profits in short-term
Total 240,001.46 131,718,680.28 7,513,669.91
15. Other non-current financial assets
Item 31/12/2022 31/12/2021
Financial assets at FVTPL 1,745,740,896.41 809,515,244.87
Including: Investments in equity instruments 1,745,740,896.41 809,515,244.87
Including: Antong Holdings Co., Ltd. (hereinafter refers to
950,321,309.06 -
as "Antong Holdings") (Note)
Qingdao Port International Co., Ltd. 767,553,775.66 782,723,863.52
Others 27,865,811.69 26,791,381.35
Note: The Company increases its shares in Antong Holdings in the manner of auction and
assignment. As at 31 December 2022, the Company and its subsidiary Zhanjiang Zhongli
Ocean Shipping Tally Co., Ltd. hold 6.83% equity interest in Antong Holdings.
- 91 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
16. Investment properties
(1) Investment properties measured at cost
Buildings and
Item Land use rights Total
structures
I. Cost
1. At 1 January 2022 114,634,546.67 6,181,503,172.76 6,296,137,719.43
2. Increase for the year 13,635,278.71 - 13,635,278.71
(1) Transfer from intangible assets 13,635,278.71 - 13,635,278.71
3. Decrease for the year - 3,900,320.25 3,900,320.25
(1) Disposal - 2,107,378.79 2,107,378.79
(2) Transfer to fixed assets - 1,792,941.46 1,792,941.46
4. At 31 December 2022 128,269,825.38 6,177,602,852.51 6,305,872,677.89
II. Accumulated depreciation
and amortization
1. At 1 January 2022 37,448,342.77 960,450,961.78 997,899,304.55
2. Increase for the year 5,606,648.81 181,787,035.38 187,393,684.19
(1) Provision for the year 2,489,361.98 181,787,035.38 184,276,397.36
(2) Transfer from intangible assets 3,117,286.83 - 3,117,286.83
3. Decrease for the year - 3,110,430.41 3,110,430.41
(1) Disposal - 1,407,136.02 1,407,136.02
(2) Transfer to fixed assets - 1,703,294.39 1,703,294.39
4. At 31 December 2022 43,054,991.58 1,139,127,566.75 1,182,182,558.33
III. Impairment provision
1. At 1 January 2022 - - -
2. Increase for the year - - -
3. Decrease for the year - - -
4. At 31 December 2022 - - -
IV. Carrying amount
1. At 31 December 2022 85,214,833.80 5,038,475,285.76 5,123,690,119.56
2. At 1 January 2022 77,186,203.90 5,221,052,210.98 5,298,238,414.88
(2) Investment properties without ownership certificates
Reasons for not
Carrying amount at Carrying amount at Expected time of
Item obtaining certificate of
31/12/2022 31/12/2021 completion
title
Some buildings and
Buildings, structures, and structures have not yet The certificate of title is
24,008,665.10 17,610,186.51
land use rights obtained certificates of underway
land use rights
- 92 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
17. Fixed assets
17.1 Summary of fixed assets
Item 31/12/2022 31/12/2021
Fixed assets 32,033,317,707.66 31,710,355,613.32
Disposal of fixed assets 8,375.84 157,616.97
Total 32,033,326,083.50 31,710,513,230.29
17.2 Fixed assets
(1) Details of fixed assets
Machinery and
equipment,
Port and terminal Buildings and Motor vehicles and
Item furniture, fixture Total
facilities structures cargo ships
and other
equipment
I. Cost
1. At 1 January 2022 32,137,263,023.73 1,977,485,549.10 1645734011772 2,175,153,444.46 52,747,242,135.01
2. Increase for the year 824,913,338.79 38,430,940.99 840222987 93,115,554.87 1,796,682,763.38
(1) Purchase 64,427,157.97 25,570,736.05 280632862 19,411,445.14 390,042,235.41
(2) Transfer from development expenditure 27,980,396.94 - 34697 - 66,477,389.66
(3) Transfer from construction in progress 732,505,783.88 11,067,263.48 425985714 73,704,109.73 1,243,262,918.56
(4) Transfer from right-of-use assets - - 91772 - 95,107,278.29
(5) Transfer from investment properties - 1,792,941.46 - - 1,792,941.46
3. Decrease for the year 39,575,331.19 2,188,982.50 177018142 34,552,586.47 253,335,034.39
(1) Disposal or retirement 39,575,331.19 2,188,982.50 139582856 34,552,586.47 215,899,795.80
(2) Transfer to long-term prepaid expenses - - 34535 - 37,435,238.59
4.Adjustments to the amount carried forward -248,674.87 -54,830.06 -0 40,150.44 -1,194,859.97
5. Reclassification -59,369,813.73 - 43253 17,997,059.40 -
6. Effect of translation of financial statements
513,272,979.41 13,522,351.53 306188658 62,827,472.13 895,811,438.88
denominated in foreign currencies
7. At 31 December 2022 33,376,255,522.14 2,027,195,029.06 1746717479688 2,314,581,094.83 55,185,206,442.91
II. Accumulated depreciation
1. At 1 January 2022 9,650,764,730.66 546,215,006.96 977417256539 1,008,208,125.97 20,979,360,428.98
2. Increase for the year 1,000,510,758.97 87,949,643.10 858672915 103,336,957.39 2,050,470,351.05
(1) Provision 1,000,510,758.97 86,246,348.71 824986159 103,336,957.39 2,015,080,231.04
(2) Transfer from right-of-use assets - - 36626 - 33,686,825.62
(3) Transfer from investment properties - 1,703,294.39 - - 1,703,294.39
3. Decrease for the year 25,459,493.10 2,062,713.45 159079186 32,825,589.03 219,426,964.20
(1) Disposal or retirement 25,459,493.10 2,062,713.45 124761004 32,825,589.03 185,108,885.98
(2) Transfer to long-term prepaid expenses - - 33872 - 34,318,078.22
4. Reclassification -6,192,288.70 - 62 - -
5. Effect of translation of financial statements
101,374,613.36 3,621,037.39 156343404 16,570,999.47 277,910,050.66
denominated in foreign currencies
6. At 31 December 2022 10,720,998,321.19 635,722,974.00 1063630207750 1,095,290,493.80 23,088,313,866.49
III. Impairment provision
1. At 1 January 2022 57,419,468.96 63,906.47 42,717.28 - 57,526,092.71
2. Increase for the year 127,517.67 5,921,258.38 - - 6,048,776.05
3. Disposal or retirement for the year - - - - -
4. Reclassification - - - - -
5. Other decreases - - - - -
6. At 31 December 2022 57,546,986.63 5,985,164.85 42,717.28 - 63,574,868.76
IV. Carrying amount
1. At 31 December 2022 22,597,710,214.32 1,385,486,890.21 683083000210 1,219,290,601.03 32,033,317,707.66
2. At 1 January 2022 22,429,078,824.11 1,431,206,635.67 668312483505 1,166,945,318.49 31,710,355,613.32
(2) The Group has no fixed assets that are temporarily idle as at 31 December 2022.
- 93 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
17. Fixed assets - continued
17.2 Fixed assets - continued
(3) Fixed assets leased out under operating leases
Carrying amount at Carrying amount at
Item
31/12/2022 31/12/2021
Buildings and structures 196,480,507.61 174,489,188.90
Port and terminal facilities 33,260,157.31 38,957,300.62
Machinery and equipment, furniture, fixture and
7,920,761.45 4,770,103.50
other equipment
Total 237,661,426.37 218,216,593.02
(4) Fixed assets without ownership certificates
Carrying amount at Carrying amount at
Item Remark
31/12/2022 31/12/2021
This is mainly due to the fact that certain buildings
Buildings, structures,
and structures have not yet obtained the land use
port and terminal 1,786,308,720.95 2,086,360,399.74
rights of the corresponding land and the approval
facilities
procedures have not yet been completed.
(5) Details of fixed assets depreciated but still in use and temporarily idle at the end of the
year, and fixed assets disposed and retired in the year:
Item Amount Remark
Cost of fixed assets fully depreciated but still in use
4,705,711,997.19
at the end of the year
Cost of fixed assets temporarily idle at the end of the year -
Fixed assets disposed and retired in the year:
Including: Cost of fixed assets disposed and retired in the year 215,899,795.80
Net book value of fixed assets disposed and retired in the year 30,790,909.82
Loss on disposal or retirement of fixed assets in the year 33,130,668.07
(6) The details of the Group's fixed assets with restricted ownership as at 31 December 2022
are set out in Note (VIII) 63.
17.3 Disposal of fixed assets
Item 31/12/2022 31/12/2021
Machinery and equipment, furniture, fixture
8,375.84 78,950.02
and other equipment
Motor vehicles and cargo ships - 78,666.95
Total 8,375.84 157,616.97
- 94 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
18. Construction in progress
(1) Summary of construction in progress
Item 31/12/2022 31/12/2021
Construction in progress 2,405,872,478.61 2,543,631,289.59
Materials for construction of fixed assets 7,971,929.03 13,953,664.33
Total 2,413,844,407.64 2,557,584,953.92
(2) Details of construction in progress
31/12/2022 31/12/2021
Item Gross carrying Provision for Carrying Gross carrying Provision for Carrying
amount impairment amount amount impairment amount
Port and terminal
1,991,321,268.14 - 1,991,321,268.14 2,177,670,930.47 - 2,177,670,930.47
facilities
Infrastructure 201,444,537.67 - 201,444,537.67 220,531,192.85 - 220,531,192.85
Berths and yards 18,728,577.14 - 18,728,577.14 15,718,097.89 - 15,718,097.89
Others 194,378,095.66 - 194,378,095.66 129,711,068.38 - 129,711,068.38
Total 2,405,872,478.61 - 2,405,872,478.61 2,543,631,289.59 - 2,543,631,289.59
- 95 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
18. Construction in progress - continued
(3) The top ten balances of construction in progress
Effect of
translation Proportion of Interest
Amount of Including:
Other of financial accumulated capitalizati
Increase for Transfer to Construction accumulated Capitalized Capital
Item Budget amount 31/12/2021 decreases for statements 31/12/2022 construction on rate for
the year fixed assets progress (%) capitalized interest for source
the year denominated investment in the current
interest the year
in foreign budget (%) year (%)
currencies
Reconstruction project of HIPG Own funds
2,817,485,265.02 876,374,998.71 - - 136,369,817.80 77,359,903.46 817,365,084.37 57.68 57.68 927,165.93 - -
container, oil terminal and tank area and loans
General cargo terminal project at
Own funds
Donghai Island Port Area of 905,348,400.00 399,676,589.24 49,201,245.80 - - - 448,877,835.04 49.58 49.58 44,364,372.49 - -
and loans
Zhanjiang Port
Phase I project for the stuffing and
Own funds
destuffing service area of Baoman Port 606,521,505.83 133,198,536.39 135,846,817.62 - - - 269,045,354.01 44.36 44.36 19,553,042.20 2,863,541.64 3.80
and loans
Area, Zhanjiang Port
Phase I expansion project for the
Own funds
container terminal at Baoman Port Area, 2,342,775,800.00 180,616,086.92 10,847,597.65 - - - 191,463,684.57 8.17 8.17 953,620.60 - -
and loans
Zhanjiang Port
Back land reclamation project on
Haidagan Bulk Yard and Supporting 61,000,000.00 59,111,396.60 1,464,943.20 - - - 60,576,339.80 99.31 99.31 - - - Own funds
Facilities and Liquid Bulk Berth
28# Warehouse Relocation Project,
67,670,000.00 47,477,624.53 10,091,009.49 - - - 57,568,634.02 85.07 85.07 - - - Own funds
Zhanjiang Port
Installation project of bucket-wheel Own funds
74,800,000.00 37,281,088.36 14,270,438.57 - - - 51,551,526.93 68.92 68.92 1,834,635.19 1,031,500.49 3.80
stacker reclaimer, Zhanjiang Port and loans
Hydraulic structure engineering for the
Own funds
reconstruction project of Berth 1# - 4#, 2,467,361,016.88 55,554,170.62 38,946,560.03 57,254,963.46 2,455,752.20 - 34,790,014.99 98.95 98.95 66,037,883.84 - -
and loans
Haixing Terminal
TCP138 kV gas insulated substation
44,495,436.48 380,307.99 33,031,583.03 - - 254,565.41 33,666,456.43 75.66 75.66 - - - Own funds
project
Reconstruction project of automatic
fire-fighting process at terminal,
51,200,000.00 1,585,078.25 27,193,143.23 - - - 28,778,221.48 56.21 56.21 - - - Own funds
old warehouse area and bonded
warehouse area
Total 9,438,657,424.21 1,791,255,877.61 320,893,338.62 57,254,963.46 138,825,570.00 77,614,468.87 1,993,683,151.64 133,670,720.25 3,895,042.13
- 96 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
18. Construction in progress - continued
(4) Materials for construction of fixed assets
31/12/2022 31/12/2021
Gross Gross
Item Provision for Carrying Provision for Carrying
carrying carrying
impairment amount impairment amount
amount amount
Materials for construction
7,971,929.03 - 7,971,929.03 13,953,664.33 - 13,953,664.33
of fixed assets
19. Right-of-use assets
(1) Details of right-of-use assets
Machinery and
Motor
Port and equipment,
Buildings and vehicles, cargo
Item terminal furniture, Land use rights Total
structures ships and
facilities fixture and
others
other equipment
I. Cost
1. At 1 January 2022 6,607,528,989.94 169,444,697.23 461,374,461.67 2,574,889,099.92 9,309,435.58 9,822,546,684.34
2. Increase for the year 288,309,040.70 393,967.46 18 17,330,062.14 10,283,003.22 316,490,001.78
(1) Purchase 288,309,040.70 393,967.46 18 17,330,062.14 10,283,003.22 316,490,001.78
3. Decrease for the year 556,587.63 6,769,725.12 1103552 - 4,136,016.68 112,485,924.69
(1) Termination of lease 556,587.63 6,769,725.12 53 - 4,136,016.68 17,378,646.40
(2) Transfer to fixed assets - - 91772 - - 95,107,278.29
4. Effect of translation of financial
statements denominated in foreign 519,444,361.48 11,677,345.59 87 241,248,931.09 - 773,249,975.52
currencies
5. At 31 December 2022 7,414,725,804.49 174,746,285.16 3144120 2,833,468,093.15 15,456,422.12 10,799,800,736.95
II. Accumulated depreciation
1. At 1 January 2022 639,047,939.73 44,086,787.40 1992043 260,521,584.16 5,910,786.56 1,079,469,142.15
2. Increase for the year 256,563,424.65 18,661,456.23 29463 40,991,223.00 5,656,348.75 349,846,619.98
(1) Provision 256,563,424.65 18,661,456.23 29463 40,991,223.00 5,656,348.75 349,846,619.98
3. Decrease for the year 555,824.01 5,032,643.80 32121 - 1,262,972.43 46,052,664.36
(1) Termination of lease 555,824.01 5,032,643.80 53 - 1,262,972.43 12,365,838.74
(2) Transfer to fixed assets - - 36626 - - 33,686,825.62
4. Effect of translation of financial
statements denominated in foreign 45,649,809.93 2,034,257.96 72 25,432,286.82 - 73,895,416.85
currencies
5. At 31 December 2022 940,705,350.30 59,749,857.79 1944096 326,945,093.98 10,304,162.88 1,457,158,514.62
III. Impairment provision
1. At 1 January 2022 - - - - - -
2. Increase for the year - - - - - -
3. Decrease for the year - - - - - -
4. At 31 December 2022 - - - - - -
IV. Carrying amount
1. At 31 December 2022 6,474,020,454.19 114,996,427.37 2190023 2,506,522,999.17 5,152,259.24 9,342,642,222.33
2. At 1 January 2022 5,968,481,050.21 125,357,909.83 3142473 2,314,367,515.76 3,398,649.02 8,743,077,542.19
- 97 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
19. Right-of-use assets - continued
(2) Amount recognized in profit or loss
Category 2022
Depreciation expenses of right-of-use assets (Note 1) 349,846,619.98
Interest expenses on lease liabilities (Note 2) 73,619,268.64
Expenses on short-term leases 71,711,821.89
Expenses on leases of low value assets 2,118,098.94
Variable lease payments not included in the measurement of lease liabilities (Note 3) -
Revenue from sublease of right-of-use assets 16,195,950.82
Note 1: In 2022, no depreciation expenses on right-of-use assets are capitalized.
Note 2: In 2022, no interest expenses on lease liabilities are capitalized.
Note 3: In 2022, no variable lease payments are included in the measurement of lease liabilities.
(3) The total cash outflows in relation to leases for the current year amount to RMB
474,672,225.36.
(4) The lease terms of the lease assets of the Group are as follows:
Category Lease term
Port, terminal facilities and land 1-99 years
Buildings and structures 1 -99 years
Machinery and equipment, furniture, fixture and other equipment 1-6 years
Motor vehicles and cargo ships 1-5 years
Others 1-7 years
- 98 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
20. Intangible assets
(1) Details of intangible assets
Terminal management
Items Land use rights Others Total
rights
I. Cost
1. At 1 January 2022 14,631,047,267.00 8,239,023,292.58 1,303,728,681.52 24,173,799,241.10
2. Increase for the year 687,985,073.75 50,660,718.27 124,204,524.49 862,850,316.51
(1) Purchase 135,886,518.56 50,660,718.27 123,235,507.86 309,782,744.69
(2) Effect of changes in the scope of
307,325,684.21 - 10,088.50 307,335,772.71
consolidation (Note 1)
(3) Other increase (Note 2) 244,772,870.98 - 958,928.13 245,731,799.11
3. Decrease for the year 23,764,724.70 - 3,104,160.67 26,868,885.37
(1) Disposal 10,129,445.99 - 2,127,349.47 12,256,795.46
(2) Transfer to investment properties 13,635,278.71 - - 13,635,278.71
(3) Other decrease - - 976,811.20 976,811.20
4. Effect of translation of financial statements
19,249,792.62 744,232,493.19 75,756,252.34 839,238,538.15
denominated in foreign currencies
5. At 31 December 2022 15,314,517,408.67 9,033,916,504.04 1,500,585,297.68 25,849,019,210.39
II. Accumulated amortization
1. At 1 January 2022 3,711,905,647.14 1,519,335,933.88 467,145,279.15 5,698,386,860.17
2. Increase for the year 386,303,253.40 244,762,995.36 71,621,959.52 702,688,208.28
(1) Provision 347,310,872.78 244,762,995.36 71,355,306.18 663,429,174.32
(2) Effect of changes in the scope of
8,085,844.80 - 3,034.88 8,088,879.68
consolidation (Note 1)
(3) Other increase (Note 2) 30,906,535.82 - 263,618.46 31,170,154.28
3. Decrease for the year 9,927,358.38 - 1,221,363.52 11,148,721.90
(1) Disposal 6,810,071.55 - 1,096,272.32 7,906,343.87
(2) Transfer to investment properties 3,117,286.83 - - 3,117,286.83
(3) Other decrease - - 125,091.20 125,091.20
4. Effect of translation of financial statements
8,171,003.50 133,601,781.55 24,717,841.08 166,490,626.13
denominated in foreign currencies
5. At 31 December 2022 4,096,452,545.66 1,897,700,710.79 562,263,716.23 6,556,416,972.68
III. Impairment provision
1. At 1 January 2022 - - - -
2. Increase for the year (Note 2) 15,537,122.10 - - 15,537,122.10
3. Decrease for the year - - - -
4. At 31 December 2022 15,537,122.10 - - 15,537,122.10
IV. Carrying amount
1. At 31 December 2022 11,202,527,740.91 7,136,215,793.25 938,321,581.45 19,277,065,115.61
2. At 1 January 2022 10,919,141,619.86 6,719,687,358.70 836,583,402.37 18,475,412,380.93
Note 1: The Group has acquired 51% equity interest of Guangdong Shunkong Port Development
and Construction Co., Ltd. (hereinafter refer to as "Shunkong Port"), which constitutes an
asset acquisition. Refer to Note (IX) 1(1) for details.
Note 2: It is mainly arising from Shantou Port. Refer to Note (VIII) 9 for details.
(2) Land use rights without ownership certificates as at 31 December 2022:
Carrying amount Carrying amount
Item
at 31/12/2022 at 31/12/2021
Land use rights (Note) 2,511,195,386.58 1,882,080,080.20
- 99 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
20. Intangible assets - continued
(2) Land use rights without ownership certificates as at 31 December 2022: - continued
Note: At 31 December 2022, the land use rights without ownership certificates mainly represent
the land use rights for berth and storage yard within Chiwan Port area obtained by the
Group from Nanshan Group, with an area of 815,234.87 ㎡, and the land use rights for
Dachanwan Port area Phase II obtained by ASJ, of which the costs are RMB
1,235,852,249.87 and RMB 918,521,317.23 respectively.
The land use rights for berth and storage yard within Chiwan Port area obtained by the
Group from Nanshan Group represent the capital contribution from Nanshan Group to the
Company upon restructuring of the Company, while the remaining land use rights are
obtained from Nanshan Group by way of long-term lease. Up to date, Nanshan Group has
not yet obtained the land use rights in respect of the lands within Chiwan watershed,
including aforementioned capital contribution and land lease to the Group, therefore, the
Group cannot obtain the ownership certificate for relevant land and buildings on such
land. The Company's management understood that Nanshan Group is negotiating with
relevant government departments regarding the historical issues, and the date when the
Group can obtain the ownership certificate of relevant land and buildings on such land
cannot be estimated reliably.
21. Development expenditure
Decrease for the year Effect of
translation of
Increase for Transfer to Transfer to Transfer Transfer to financial
Item 31/12/2021 31/12/2022
the year intangible construction to fixed profit or loss statements
assets in progress assets for the year denominated in
foreign currencies
The Greater Bay Area combined port
- 93,915,187.41 - - - 93,915,187.41 - -
program
Intelligent management platform
- 15,151,413.80 - - - 15,151,413.80 - -
system
Development of intelligent gate system - 10,430,246.01 - - - 10,430,246.01 - -
Multifunctional Port BTOS Cloud Edge
- 8,075,139.92 - - - 8,075,139.92 - -
Fusion Platform Phase I R&D Project
RMG automation of the yard operation - 7,986,770.09 - - - 7,986,770.09 - -
Intelligent terminal program - 7,549,814.41 - - - 7,549,814.41 - -
R&D of remote control security system
of collision prevention for RTG - 7,376,402.29 - - - 7,376,402.29 - -
adjacent container
"Hongzhang" Super Computing Cluster
and Port AI model construction - 6,219,670.14 - - - - - 6,219,670.14
system project
Development and application of
automatic control systems for heavy
25,818,970.84 - - - 25,818,970.84 - - -
oil, diesel, gasoline, and methanol
processes
Key technical research for the device
21,874,948.38 - 253,861.16 - 21,621,087.22 - - -
used to load crude oil to a train
Others 34,697,306.63 162,760,457.71 30,006,701.95 - 19,037,331.60 137,221,204.77 - 11,192,526.02
Total 82,391,225.85 319,465,101.78 30,260,563.11 - 66,477,389.66 287,706,178.70 - 17,412,196.16
- 100 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
22. Goodwill
(1) Original carrying amount of goodwill
Effect of
translation of
financial
Investee 31/12/2021 Increase Decrease 31/12/2022
statements
denominated in
foreign currencies
TCP 2,329,133,573.36 - - 387,265,949.02 2,716,399,522.38
Mega Shekou Container
1,815,509,322.42 - - - 1,815,509,322.42
Terminals Limited
China Merchants Port Holdings 993,992,000.00 - - - 993,992,000.00
Shantou Port 552,317,736.65 - - - 552,317,736.65
Zhanjiang Port 418,345,307.68 - - - 418,345,307.68
Shenzhen Mawan Project 408,773,001.00 - - - 408,773,001.00
Ningbo Daxie China Merchants
International Terminals Co. 188,497,194.41 - - - 188,497,194.41
Ltd. ("Ningbo Daxie")
Others 288,255,850.88 - - - 288,255,850.88
Total 6,994,823,986.40 - - 387,265,949.02 7,382,089,935.42
(2) Provision for impairment of goodwill
Effect of
translation of
financial
Investee 31/12/2021 Provision Decrease 31/12/2022
statements
denominated in
foreign currencies
Zhanjiang Port 418,345,307.68 - - - 418,345,307.68
Shantou Port 552,317,736.65 - - - 552,317,736.65
Total 970,663,044.33 - - - 970,663,044.33
(3) Information of asset groups or portfolio of asset groups to which the goodwill belongs
The Group takes the ability to independently generate cash inflows, the way to manage the
production and operation activities (mainly by geographic areas) and the unified decision on the
use and disposal of the assets as the criteria to determine asset groups or portfolio of asset groups,
and performs impairment test of goodwill for the asset groups or portfolio of asset groups on such
basis. As at 31 December 2022, the asset groups or portfolio of asset groups 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., CM Port, Shantou Port, Zhanjiang port, Ningbo Daxie, Shenzhen
Mawan Project, including Shenzhen Mawan Port Waterway Co., Ltd. and Shenzhen Magang
Godown & Wharf Co., Ltd. (hereinafter referred to as "Magang Godown & Wharf").
- 101 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
22. Goodwill - continued
(4) Impairment test of goodwill and key parameters
When testing the goodwill for impairment, the Group compares the carrying amount of related
asset groups and portfolio of asset groups (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 asset groups and portfolio of
asset groups that generate goodwill at fair value less cost of disposal or at present value of
expected future cash flows. The fair value is determined using market approach. The present
value of cash flows is estimated based on the forecast of cash flows for 5 years to 26 years
detailed forecast period and subsequent forecast period. The estimated future cash flows for the
detailed forecast period are based on the business plan established by the management; the
expected future cash flows for the subsequent forecast period are determined in conjunction with
the level of the final year of the detailed forecast period, combined with the Group's business
plans, industry trends and inflation rates. The growth rate adopted will not exceed the long-term
average growth rate of the country where the asset groups and portfolio of asset groups are
located. The key assumptions used by the Group in estimating the present value of future cash
flows include growth rate and discount rate etc. The pre-tax discount rate and the growth rate for
subsequent forecast period adopted in 2022 are 11.20%-20.47% and 2.00%-2.62% 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.
23. Long-term prepaid expenses
Presentation of long-term prepaid expenses:
Increase for Amortization Reason for other
Item 31/12/2021 Other decreases 31/12/2022
the year in the year decreases
Tonggu channel widening project
473,211,130.99 - 17,764,434.24 - 455,446,696.75
(Note 1)
West public channel widening project
252,759,769.78 3,312,887.13 6,635,254.04 - 249,437,402.87
at West port area (Note 2)
Relocation project of Nanhai Rescue
38,661,479.90 - 1,107,368.40 - 37,554,111.50
Bureau
Expenditures for the improvement of
20,786,525.04 2,460,225.71 2,615,577.38 - 20,631,173.37
leased fixed assets
Reclassified to
West public
Dredging project 76,591,867.23 9,291,637.47 13,269,093.07 2,853,992.26 69,760,419.37 channel widening
project at
West port area
Others 113,983,768.58 83,025,999.52 43,482,667.06 - 153,527,101.04
Total 975,994,541.52 98,090,749.83 84,874,394.19 2,853,992.26 986,356,904.90
- 102 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
23. Long-term prepaid expenses - continued
Note 1: This represents the Group's actual expenses on Shenzhen Western Port Area Tonggu
Channel 210-270M Widening Project. According to relevant resolutions of Shenzhen
Municipal Government, the enterprise and government shall bear 60% and 40% of the
expenses incurred for the 210-240M widening project, and 50% and 50% of the expenses
incurred for the 240-270M widening project respectively. The Company's subsidiary has
included the expenses on deepening the channel in the item of "long-term prepaid
expenses", and amortized such expenses over the expected useful lives of the two
widening projects of 35 and 40 years using straight-line method since the completion of
each project in 2008 and 2019, respectively.
Note 2: This represents the Group's actual expenses on Shenzhen West Port Area Public Channel
Widening Project, of which the widening of 240-270M in the first section was completed
on 1 June 2019 and the widening of 240-270M in the second and third sections was
completed on 5 November 2020. According to relevant resolutions of Shenzhen Municipal
Government, the enterprise and government shall bear 50% and 50% of the expenses
incurred for the project respectively. The Company's subsidiary has included the expenses
on deepening the channel in the item of "long-term prepaid expenses", and amortized such
expenses over the expected useful life of 40 years using straight-line method since the
completion of each section of the channel widening project.
24. Deferred income tax
(1) Deferred tax assets without offsetting
31/12/2022 31/12/2021
Deductible Deductible
Item Deferred tax Deferred tax
temporary temporary
assets assets
differences differences
Unrealized profit 756,772,558.79 184,729,651.97 769,833,723.80 187,934,375.63
Provision for credit loss 190,727,520.03 35,544,695.31 134,107,345.89 22,607,019.97
Deductible losses 182,211,924.34 40,193,891.36 243,923,028.71 77,871,713.03
Accrued and unpaid wages 161,026,788.29 35,802,355.38 133,228,573.09 32,069,398.58
Depreciation of fixed assets 154,724,225.49 35,753,675.92 174,310,058.63 38,498,510.97
Deferred income 36,723,054.56 8,709,144.22 37,320,614.70 8,908,126.11
Provisions 35,365,156.43 12,024,153.19 23,243,718.18 7,902,864.18
Amortization of computer software 9,291,532.77 2,322,883.19 9,375,355.92 2,343,838.98
Provision for impairment of assets 5,507,073.16 1,376,768.29 3,858,354.37 964,588.59
Organization costs 3,498,150.00 874,537.50 5,967,432.36 1,491,858.09
Others 57,124,137.75 15,595,505.07 69,133,036.30 17,553,416.71
Total 1,592,972,121.61 372,927,261.40 1,604,301,241.95 398,145,710.84
- 103 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
24. Deferred income tax - continued
(2) Deferred tax liabilities without offsetting
31/12/2022 31/12/2021
Item Taxable temporary Deferred tax Taxable temporary Deferred tax
differences liabilities differences liabilities
Withholding dividend income tax 37,565,601,815.13 2,568,624,605.88 32,834,363,823.45 2,276,809,099.05
Fair value adjustment of assets acquired
7,755,954,464.86 1,762,190,010.27 7,922,514,263.15 1,794,717,729.81
from business combination
Depreciation of fixed assets 1,119,997,714.31 280,579,814.18 855,120,746.48 226,223,855.58
Changes in fair value of other non-current
330,012,225.76 82,503,056.44 478,483,648.29 99,590,902.64
financial assets
Changes in fair value of investments in
130,791,178.28 32,697,794.57 138,988,784.68 34,747,196.17
other equity instruments
Others 1,169,095,183.52 126,676,026.52 1,101,926,283.77 118,328,687.36
Total 48,071,452,581.86 4,853,271,307.86 43,331,397,549.82 4,550,417,470.61
(3) Deferred tax assets or liabilities that are presented at the net amount after offsetting
Balance of deferred
Balance of deferred Offset amount of
Offset amount of tax assets or
tax assets or deferred tax assets
deferred tax assets liabilities after
Item liabilities after and liabilities at the
and liabilities at the offsetting at the
offsetting at the end beginning of the
end of the year beginning of the
of the year year
year
Deferred tax assets - 372,927,261.40 - 398,145,710.84
Deferred tax liabilities - 4,853,271,307.86 - 4,550,417,470.61
(4) Deductible temporary differences and deductible losses for which deferred tax assets are
not recognized
Item 31/12/2022 31/12/2021
Deductible temporary differences 930,204,772.41 944,129,558.25
Deductible losses 2,112,659,943.00 2,197,937,158.38
Total 3,042,864,715.41 3,142,066,716.63
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 are recognized.
- 104 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
24. Deferred income tax - continued
(5) Deductible losses for which deferred tax assets are not recognized will be expired in the
following years:
Year 31/12/2022 31/12/2021
2022 - 418,419,582.20
2023 515,101,493.80 568,545,269.63
2024 488,358,232.03 501,044,247.06
2025 375,208,491.05 385,310,677.29
2026 112,756,494.15 300,322,682.88
2027 600,178,442.73 -
Deductible losses due after 2028 21,056,789.24 24,294,699.32
Total 2,112,659,943.00 2,197,937,158.38
25. Other non-current assets
Item 31/12/2022 31/12/2021
Advances for the channel project (Note) 989,752,762.75 965,997,076.71
Prepayments for fixed assets 117,094,834.14 66,519,391.16
Prepayments for terminal franchise 27,493,116.21 28,084,523.57
Prepayments for land use rights - 132,334,704.86
Others 52,448,665.69 38,157,256.39
Subtotal 1,186,789,378.79 1,231,092,952.69
Less: Impairment provision - -
Total 1,186,789,378.79 1,231,092,952.69
Note: This represents that the Company's subsidiary Zhanjiang Port, upon its reorganization into
a joint stock company in 2007, signed the Channel Arrangement Agreement with State-
owned Assets Supervision and Administration Commission of Zhanjiang ("Zhanjiang
SASAC") and China Merchants International Terminal (Zhanjiang) Co., Ltd. According to
the agreement, the channel belongs to Zhanjiang SASAC, therefore, the Group presented
the advances of channel project that should be repaid by Zhanjiang SASAC as other non-
current assets.
26. Short-term borrowings
(1) Classification of short-term borrowings
Item 31/12/2022 31/12/2021
Credit loan 7,149,322,782.85 12,450,169,472.03
Pledged loans (Note) 15,015,583.33
Guaranteed loan - 1,201,283,333.33
Total 7,164,338,366.18 13,651,452,805.36
- 105 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
26. Short-term borrowings - continued
(1) Classification of short-term borrowings - continued
Note: This represents the short-term borrowings of RMB15,015,583.33 from China Merchants
Bank Co., Ltd. obtained by Guangdong Yide Port Co., Ltd. (hereinafter referred to as "Yide
Port") , a subsidiary of the Company, with its fixed assets as the collateral.
(2) As at 31 December 2022, the Group has no short-term borrowings that are overdue.
27. Notes payable
Category 31/12/2022 31/12/2021
Commercial acceptance - 1,895,987.17
Total - 1,895,987.17
28. Accounts payable
Item 31/12/2022 31/12/2021
Service fee 299,350,272.24 279,969,574.04
Material purchase 132,460,163.17 147,895,793.90
Construction fee 110,687,325.42 189,852,525.62
Equipment payments 87,445,302.02 34,478,229.18
Rental fee 8,304,019.32 6,226,422.72
Others 172,902,315.49 185,397,893.05
Total 811,149,397.66 843,820,438.51
(1) Aging of accounts payable
31/12/2022 31/12/2021
Aging Proportion Proportion
Amount Amount
(%) (%)
Within 1 year (inclusive) 710,976,970.28 87.65 751,095,352.31 89.01
1-2 years (inclusive) 47,038,049.65 5.80 58,151,929.86 6.89
2-3 years (inclusive) 26,667,189.69 3.29 8,515,047.38 1.01
More than 3 years 26,467,188.04 3.26 26,058,108.96 3.09
Total 811,149,397.66 100.00 843,820,438.51 100.00
(2) Significant accounts payable aged more than one year
Reason for outstanding or not
Name of entity 31/12/2022 Aging
being carried forward
The government planning project
Shenzhen City Planning and Land Resources More than has not been completed, and the
21,642,795.50
Committee Nanshan Administration 3 years ownership certificate is not
obtained.
To be paid upon confirmation by
Quanzhou Antong Logistics Co., Ltd. 16,948,161.45 1-2 years
both parties.
Total 38,590,956.95
- 106 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
29. Receipts in advance
Item 31/12/2022 31/12/2021
Rental fee received in advance 6,205,443.31 6,724,007.73
Management fee received in advance - 2,163,886.70
Others 3,681,088.28 425,271.58
Total 9,886,531.59 9,313,166.01
(1) Aging of receipts in advance
31/12/2022 31/12/2021
Aging Proportion Proportion
Amount Amount
(%) (%)
Within 1 year (inclusive) 9,884,079.59 99.98 9,283,472.35 99.68
1-2 years (inclusive) - - 13,943.66 0.15
2-3 years (inclusive) - - - -
More than 3 years 2,452.00 0.02 15,750.00 0.17
Total 9,886,531.59 100.00 9,313,166.01 100.00
(2) As at 31 December 2022, the Group has no significant receipts in advance aged more than
one year.
30. Contract liabilities
(1) Presentation of contract liabilities
Item 31/12/2022 31/12/2021
Service fee received in advance 59,729,035.75 47,772,567.97
Port charges received in advance 55,045,635.27 122,718,356.71
Warehousing fee received in advance 3,048,588.90 15,698,102.34
Others 24,076,291.11 10,595,498.24
Total 141,899,551.03 196,784,525.26
(2) There are no significant changes in the carrying amount of contract liabilities during the
year.
(3) As at 31 December 2022, the Group has no significant contract liabilities aged more than
one year.
(4) Qualitative and quantitative analysis of contract liabilities
Contract liabilities mainly represent the amount received by the Group for the port services
provided to customers. The payment is collected according to the time agreed in the contract. The
Group recognizes contract revenue based on the progress of the contract. The contract liabilities
will be recognized as revenue after the Group fulfils its performance obligations.
- 107 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
30. Contract liabilities - continued
(5) Revenue recognized in the year and included in the carrying amount of contract liabilities
at the beginning of the year
An amount of RMB 140,142,620.89 included in the carrying amount of contract liabilities at the
beginning of 2022 has been recognized as revenue in the current year, including contract
liabilities arising from settled but unfinished construction resulting from the contract of service
fees received in advance amounting to RMB 8,013,654.49, contract liabilities arising from settled
but unfinished construction resulting from the contract of port charges received in advance
amounting to RMB 116,799,424.52, contract liabilities arising from settled but unfinished
construction resulting from contract of warehousing fee received in advance amounting to RMB
5,750,669.26, and contract liabilities arising from settled but unfinished construction resulting
from other contracts amounting to RMB 9,578,872.62.
31. Employee benefits payable
(1) Presentation of employee benefits payable
Effect of
changes in the Increase for the Decrease for the
Item 31/12/2021 31/12/2022
scope of year year
consolidation
1. Short-term benefits 808,913,314.49 - 3,310,660,483.51 3,198,040,372.01 921,533,425.99
2. Post-employment benefits
6,125,899.58 - 343,308,676.05 336,051,060.70 13,383,514.93
- defined contribution plan
3. Termination benefits 5,900,000.00 - 15,889,694.23 19,366,411.45 2,423,282.78
4. Other benefits due within 1 year - - 4,157,316.73 4,157,316.73 -
5. Others -522,798.60 - 4,105,888.70 4,088,595.67 -505,505.57
Total 820,416,415.47 - 3,678,122,059.22 3,561,703,756.56 936,834,718.13
(2) Presentation of short-term benefits
Effect of
changes in the Increase for the Decrease for the
Item 31/12/2021 31/12/2022
scope of year year
consolidation
I. Wages and salaries, bonuses,
783,600,775.04 - 2,695,618,818.79 2,581,777,331.00 897,442,262.83
allowances and subsidies
II. Staff welfare - - 155,387,145.54 155,387,145.54 -
III. Social insurance contributions 9,058,171.24 - 186,709,033.43 185,221,665.23 10,545,539.44
Including: Medical insurance 7,678,856.08 - 158,869,279.10 157,916,591.22 8,631,543.96
Work injury insurance 47,248.95 - 16,735,913.65 16,729,245.83 53,916.77
Others 1,332,066.21 - 11,103,840.68 10,575,828.18 1,860,078.71
IV. Housing funds -74,747.24 - 195,607,230.11 195,627,543.34 -95,060.47
V. Labor union and employee
16,412,863.42 - 46,296,443.95 49,067,177.41 13,642,129.96
education funds
VI. Other short-term benefits -83,747.97 - 31,041,811.69 30,959,509.49 -1,445.77
Total 808,913,314.49 - 3,310,660,483.51 3,198,040,372.01 921,533,425.99
- 108 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
31. Employee benefits payable - continued
(3) Defined benefit plans
Effect of
changes in the Increase for the Decrease for the
Item 31/12/2021 31/12/2022
scope of year year
consolidation
I. Basic pension 5,795,491.40 - 256,851,622.57 252,886,027.83 9,761,086.14
II. Unemployment insurance 43,200.24 - 4,199,055.46 4,193,228.79 49,026.91
III. Enterprise annuity 287,207.94 - 82,257,998.02 78,971,804.08 3,573,401.88
Total 6,125,899.58 - 343,308,676.05 336,051,060.70 13,383,514.93
The Company and its domestic subsidiaries participate in the pension insurance and
unemployment insurance plan established by government institutions as required. According to
such plans, the Group contributes in proportion to the local government. The Group has
established an enterprise annuity system, and accrues and pays the enterprise annuity according to
the enterprise annuity system of the Company and its domestic subsidiaries. In addition to above
contributions, the Group has no further payment obligations. The corresponding expenses are
included in profit or loss for the period or the cost of related assets when incurred.
32. Taxes payable
Item 31/12/2022 31/12/2021
Enterprise income tax 804,846,345.79 2,098,884,089.24
VAT 30,032,002.80 19,025,631.30
Other taxes 83,054,820.50 44,809,531.14
Total 917,933,169.09 2,162,719,251.68
33. Other payables
(1) Summary of other payables
Item 31/12/2022 31/12/2021
Dividends payable 92,374,921.29 48,803,019.31
Other payables 1,663,510,336.97 2,091,305,321.77
Total 1,755,885,258.26 2,140,108,341.08
- 109 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
33. Other payables - continued
(2) Dividends payable
Item 31/12/2022 31/12/2021
Ordinary share dividends 92,374,921.29 48,803,019.31
Including: Zhanjiang Infrastructure Construction Investment
41,400,234.06 -
Group Co., Ltd.
China Merchants Zhangzhou Development Zone Co., Ltd. (Note) 20,000,000.00 20,000,000.00
Dalian Port Container Development Co., Ltd.
14,000,000.00 18,349,264.69
("Dalian Port Container") (Note)
Sri Lanka Ports Authority 10,446,900.00 -
Dalian City Investment Holding Group Co., Ltd. 3,527,787.23 3,527,787.23
Dalian Port Jifa Logistics Co., Ltd. ("Jifa Logistics") 3,000,000.00 4,945,967.80
Qingdao Qingbao Investment Holding Co., Ltd. - 1,979,999.59
Note: As at 31 December 2022, the significant dividends payable over one year include RMB
20,000,000.00 due to China Merchants Zhangzhou Development Zone Co., Ltd. and RMB
14,000,000.00 due to Dalian Port Container, which are dividends not yet distributed to the
investors.
(3) Other payables
(a) Disclosure of other payables by nature
Item 31/12/2022 31/12/2021
Amount payable for construction and quality warranty 643,816,817.51 821,093,777.44
Deposits 221,628,920.81 446,198,541.16
Accrued expenses 190,048,988.98 198,863,463.79
Customer discount (Note) 164,622,341.62 102,393,978.35
Port construction and security fee 36,697,168.04 59,026,576.51
Balance of payment for transfer of land use rights 11,295,700.00 11,295,700.00
Others 395,400,400.01 452,433,284.52
Total 1,663,510,336.97 2,091,305,321.77
Note 1: Refer to Note (VIII) 50 (3) for details.
- 110 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
33. Other payables - continued
(3) Other payables - continued
(b) Significant other payables aged over 1 year
Company name Amount payable Aging Reason for being outstanding
Transport Bureau of Shenzhen Municipality
79,639,296.08 2-3 years and more than 3 years To be paid upon confirmation by both parties
(Ports Administration of Shenzhen Municipality)
Zhanjiang Transportation Bureau 44,941,876.39 1-2 years and 2-3 years To be paid upon confirmation by both parties
The contracted settlement condition has not
Shanghai Zhenhua Heavy Industries Co., Ltd. 35,727,372.57 1-2 years and more than 3 years
been reached
Shantou Transportation Bureau 31,358,355.47 More than 3 years To be paid upon confirmation by both parties
Guangdong JIAYE Reserve Logistics Co., Ltd. 25,000,000.00 2-3 years To be paid upon confirmation by both parties
CCCC Fourth Harbor Engineering Co., Ltd. 23,261,795.77 1-2 years and 2-3 years To be paid upon confirmation by both parties
The contracted settlement condition has not
China First Metallurgical Group Co., Ltd. 16,798,178.60 2-3 years
been reached
The contracted settlement condition has not
Suhua Construction Group Co., Ltd. 12,717,406.19 1-2 years
been reached
Shenzhen Bulk Cement Office 12,238,226.14 More than 3 years To be paid upon confirmation by both parties
Dalian Huarui Heavy Industry Group Co., Ltd 12,169,705.81 2-3 years To be paid upon confirmation by both parties
Wuxi Huadong Heavy Machinery Co., Ltd. 10,090,410.68 1-2 years To be paid upon confirmation by both parties
China Merchants Real Estate (Shenzhen) Co., Ltd. 10,079,369.00 More than 3 years To be paid upon confirmation by both parties
The contracted settlement condition has not
Guangdong Hengtai Guotong Industrial Co., Ltd. 10,000,000.00 More than 3 years
been reached
Shantou Finance Bureau 10,000,000.00 More than 3 years To be paid upon confirmation by both parties
Shenzhen Penglilong Industrial Co., Ltd. 8,157,000.00 2-3 years and more than 3 years To be paid upon confirmation by both parties
Shaanxi Nonferrous Construction Co., Ltd. 7,880,134.55 1-2 years, 2-3 years To be paid upon confirmation by both parties
The contracted settlement condition has not
CCCC Third Harbor Engineering Co., Ltd. 6,829,964.04 1-2 years and more than 3 years
been reached
Shenzhen Aohua Zhongmao Industry Co., Ltd. 6,156,000.00 2-3 years and more than 3 years To be paid upon confirmation by both parties
The contracted settlement condition has not
CCCC Guangzhou Dredging Co., Ltd. 6,059,593.85 1-2 years
been reached
Total 369,104,685.14
34. Non-current liabilities due within one year
Item 31/12/2022 31/12/2021
Long-term borrowings due within one year (Note VIII 36) 2,313,191,859.96 1,187,781,073.61
Including: Credit borrowings 1,368,934,869.99 399,437,084.19
Guaranteed borrowings 219,564,028.82 158,812,554.95
Mortgage and pledged borrowings 724,692,961.15 629,531,434.47
Bonds payable due within one year (Note VIII 37) 8,668,651,537.27 6,554,177,357.66
Lease liabilities due within one year (Note VIII 38) 306,942,164.80 298,117,295.41
Long-term payables due within one year (Note VIII 39) 155,665,725.85 139,696,643.49
Long-term employee benefits payable due within one year
54,414,877.57 64,306,914.00
(Note VIII 40)
Other non-current liabilities due within one year (Note VIII 43) 142,357,523.50 24,130,000.00
Total 11,641,223,688.95 8,268,209,284.17
35. Other current liabilities
Item 31/12/2022 31/12/2021
Short-term bonds payable 3,017,713,424.64 2,002,416,438.36
Accrued professional agency fee 124,799,040.22 128,664,439.94
Others 18,635,061.10 27,416,897.55
Total 3,161,147,525.96 2,158,497,775.85
- 111 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
35. Other current liabilities - continued
Changes in short-term bonds payable:
Interest Amortization of
Date of Term of Amount issued in Repayment in
Name of bond Face value Amount of issue 31/12/2021 accrued based premiums or 31/12/2022
issue the bond the current year the current year
on par value discounts
2.45% RMB 2 billion Super &
2,000,000,000.00 2021-12-13 90 days 2,000,000,000.00 2,002,416,438.36 - 9,665,753.42 - 2,012,082,191.78 -
Short-term Commercial Paper
2.32% RMB 2 billion Super &
2,000,000,000.00 2022-1-17 90 days 2,000,000,000.00 - 2,000,000,000.00 11,441,095.89 - 2,011,441,095.89 -
Short-term Commercial Paper
2.15% RMB 1 billion Super &
1,000,000,000.00 2022-3-2 180 days 1,000,000,000.00 - 1,000,000,000.00 10,602,739.73 - 1,010,602,739.73 -
Short-term Commercial Paper
2.13% RMB 2 billion Super &
2,000,000,000.00 2022-3-28 180 days 2,000,000,000.00 - 2,000,000,000.00 21,008,219.18 - 2,021,008,219.18 -
Short-term Commercial Paper
2.00% RMB 2 billion Super &
2,000,000,000.00 2022-6-14 180 days 2,000,000,000.00 - 2,000,000,000.00 19,726,027.40 - 2,019,726,027.40 -
Short-term Commercial Paper
1.75% RMB 1 billion Super &
1,000,000,000.00 2022-9-1 270 days 1,000,000,000.00 - 1,000,000,000.00 5,657,534.24 - - 1,005,657,534.24
Short-term Commercial Paper
1.93% RMB 2 billion Super &
2,000,000,000.00 2022-9-8 180 days 2,000,000,000.00 - 2,000,000,000.00 12,055,890.40 - - 2,012,055,890.40
Short-term Commercial Paper
Total 12,000,000,000.00 12,000,000,000.00 2,002,416,438.36 10,000,000,000.00 90,157,260.26 - 9,074,860,273.98 3,017,713,424.64
- 112 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
36. Long-term borrowings
Range of year-end
Category 31/12/2022 31/12/2021
interest rate
Credit borrowings 12,319,883,867.05 5,366,543,524.76 1.20%-5.17%
Guaranteed borrowings (Note 1) 1,020,670,858.02 1,076,679,935.08 1.20%-13.58%
Mortgage and pledged borrowings (Note 2) 1,362,736,312.74 1,889,397,484.66 3.72%-7.08%
Total 14,703,291,037.81 8,332,620,944.50
Less: Long-term borrowings due within one year 2,313,191,859.96 1,187,781,073.61
Including: Credit borrowings 1,368,934,869.99 399,437,084.19
Guaranteed borrowings 219,564,028.82 158,812,554.95
Mortgage and pledged borrowings 724,692,961.15 629,531,434.47
Long-term borrowings due after one year 12,390,099,177.85 7,144,839,870.89
Note 1: The borrowings were guaranteed by Magang Godown & Wharf, China Merchants Port
(Shenzhen) Co., Ltd., CM Port and Guangdong Zhanjiang Logistics Co., Ltd.
Note 2: As at 31 December 2022, the Group obtained the long-term borrowings of
RMB1,362,736,312.74 (31 December 2021: RMB1,889,397,484.66) with its entire equity
in Colombo International Container Terminals Limited (hereinafter referred to as
"CICT"), the entire equity in Thesar Maritime Limited (hereinafter referred to as "TML"),
the land use rights with property right, fixed assets and construction in progress of Yide
Port, the land use rights with property right of Shenzhen Haixing Harbor Development
Co., Ltd. (hereinafter referred to as "Shenzhen Haixing"), as well as the land use rights
with property right and fixed assets of CM Port (Zhoushan) RoRo Wharf Co., Ltd.
(hereinafter referred to as "Zhoushan RoRo"), mortgaged as collaterals.
Details of mortgage and pledged borrowings are as follows:
Company name 31/12/2022 31/12/2021 Collateral and pledge
China Development Bank Corporation 494,997,308.55 747,186,761.93 The Group's entire equity in CICT
Bank of China Qianhai Shekou Branch 280,013,198.30 241,370,822.03 Land use rights of Shenzhen Haixing
Land use rights, fixed assets and
China Construction Bank Shunde Branch 236,479,995.32 264,182,129.41
construction in progress of Yide Port
International Finance Corporation 123,849,460.76 230,966,536.60
African Development Bank 56,864,864.36 106,074,913.93
Nederlandse Financierings-Maatschappij voor
46,859,749.65 87,410,830.23
Ontwikkelingslanden N.V.
The OpecFund For International Development 40,139,904.25 74,876,376.58 The Group's entire equity in TML
Societe de Promotion et de Participation pour
40,170,265.09 74,932,105.74
la Cooperation Economique S.A.
Deutsche Investitions-und
33,449,920.21 62,397,008.21
Entwicklungsgesellschaft MBH
Land use rights and fixed assets of
China Minsheng Bank Co., Ltd. Zhoushan Branch 9,911,646.25 -
Zhoushan RoRo
Total 1,362,736,312.74 1,889,397,484.66
Note: See Note (VIII) 63 for the above mortgages and pledges.
- 113 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
37. Bonds payable
(1) Bonds payable
Item 31/12/2022 31/12/2021
4.375% USD 900 million corporate bond 6,371,347,105.64 5,814,296,318.30
5.000% USD 600 million corporate bond 4,227,154,465.35 3,859,622,116.07
4.750% USD 500 million corporate bond 3,542,544,662.47 3,236,350,690.37
4.000% USD 500 million corporate bond 3,482,186,896.02 -
2.690% RMB 3 billion corporate bond 3,027,415,890.40 -
2.450% RMB 3 billion corporate bond 3,023,560,273.97 -
3.520% RMB 2 billion corporate bond 2,050,147,945.19 2,050,147,945.19
3.360% RMB 2 billion corporate bond 2,032,587,397.25 2,032,587,397.26
5.000% USD 500 million corporate bond - 3,207,848,098.69
4.890% RMB 2.5 billion corporate bond - 2,585,407,534.25
IPCA + 7.816% BRL300 million corporate bond - 438,789,671.67
Total 27,756,944,636.29 23,225,049,771.80
Less: Bonds payable due within one year 8,668,651,537.27 6,554,177,357.66
Bonds payable due after one year 19,088,293,099.02 16,670,872,414.14
- 114 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
37. Bonds payable - continued
(2) Changes in bonds payable
Effect of translation
Amount issued Interest accrued Amortization of financial
Date of Term of Repayment in
Name of bonds Face value Amount of issue 31/12/2021 in the current based on par of premiums statements 31/12/2022
issue the bond current year
year value or discounts denominated in
foreign currencies
4.375% USD 900 million corporate bond USD 900,000,000.00 2018-8-6 5 years USD 900,000,000.00 5,814,296,318.30 - 264,896,739.04 11,073,294.93 264,383,189.24 545,463,942.61 6,371,347,105.64
5.000% USD 600 million corporate bond USD 600,000,000.00 2018-8-6 10 years USD 600,000,000.00 3,859,622,116.07 - 201,826,086.88 5,180,268.23 201,434,810.85 361,960,805.02 4,227,154,465.35
4.750% USD 500 million corporate bond USD 500,000,000.00 2015-8-3 10 years USD 500,000,000.00 3,236,350,690.37 - 159,745,629.95 5,992,447.04 159,745,630.01 300,201,525.12 3,542,544,662.47
5.000% USD 500 million corporate bond USD 500,000,000.00 2012-5-4 10 years USD 500,000,000.00 3,207,848,098.69 - 56,051,102.73 2,373,647.20 3,453,390,105.04 187,117,256.42 -
4.890% RMB 2.5 billion corporate bond 2,500,000,000.00 2017-4-21 5 years 2,500,000,000.00 2,585,407,534.25 - 36,842,465.75 - 2,622,250,000.00 - -
3.360% RMB2 billion corporate bond 2,000,000,000.00 2020-7-7 3 years 2,000,000,000.00 2,032,587,397.26 - 67,199,999.99 - 67,200,000.00 - 2,032,587,397.25
3.520% RMB2 billion corporate bond 2,000,000,000.00 2021-4-14 3 years 2,000,000,000.00 2,050,147,945.19 - 70,400,000.00 - 70,400,000.00 - 2,050,147,945.19
IPCA + 7.816% BRL300 million
BRL299,632,900.00 2016-11-7 6 years BRL 299,632,900.00 438,789,671.67 - 52,973,250.12 55,225,349.19 617,313,997.29 70,325,726.31 -
corporate bond
4.000% USD 500 million corporate bond USD 500,000,000.00 2022-6-1 5 years USD 500,000,000.00 - 3,351,484,939.46 79,052,449.94 1,561,139.17 67,422,791.10 117,511,158.55 3,482,186,896.02
2.690% RMB 3 billion corporate bond 3,000,000,000.00 2022-8-29 3 years 3,000,000,000.00 - 3,000,000,000.00 27,415,890.40 - - - 3,027,415,890.40
2.450% RMB 3 billion corporate bond 3,000,000,000.00 2022-9-5 2 years 3,000,000,000.00 - 3,000,000,000.00 23,560,273.97 - - - 3,023,560,273.97
Total 23,225,049,771.80 9,351,484,939.46 1,039,963,888.77 81,406,145.76 7,523,540,523.53 1,582,580,414.03 27,756,944,636.29
Less: Bonds payable due within one year 6,554,177,357.66 8,668,651,537.27
Bonds payable due after one year 16,670,872,414.14 19,088,293,099.02
- 115 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
38. Lease liabilities
(1) Lease liabilities
Category 31/12/2022 31/12/2021
Lease payment 1,963,098,776.36 2,060,643,997.13
Unrecognized financing cost -707,805,697.52 -707,331,795.63
Total 1,255,293,078.84 1,353,312,201.50
Less: Lease liabilities due within one year 306,942,164.80 298,117,295.41
Lease liabilities due after one year 948,350,914.04 1,055,194,906.09
(2) Maturity of lease liabilities
Item 31/12/2022
Minimum lease payments under non-cancellable leases:
1st year subsequent to the balance sheet date 364,803,817.74
2nd year subsequent to the balance sheet date 215,854,408.62
3rd year subsequent to the balance sheet date 48,250,795.11
Subsequent years 1,334,189,754.89
Total 1,963,098,776.36
The Group is not exposed to any significant liquidity risk associated with lease liabilities.
39. Long-term payables
(1) Summary of long-term payables
Item 31/12/2022 31/12/2021
Long-term payables 3,698,632,219.45 3,540,616,228.99
Special payables 8,349,096.71 21,259,780.90
Total 3,706,981,316.16 3,561,876,009.89
Less: Long-term payables due within one year 155,665,725.85 139,696,643.49
Long-term payables due after one year 3,551,315,590.31 3,422,179,366.40
(2) Long-term payables
Item 31/12/2022 31/12/2021
Terminal management rights (Note 1) 3,657,579,951.15 3,125,647,576.58
Finance lease payable (Note 2) 41,052,268.30 -
Payable to minority shareholders of subsidiaries - 411,858,969.58
Others - 3,109,682.83
Total 3,698,632,219.45 3,540,616,228.99
Less: Long-term payables due within one year 155,665,725.85 139,696,643.49
Long-term payables due after one year 3,542,966,493.60 3,400,919,585.50
- 116 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
39. Long-term payables - continued
(2) Long-term payables - continued
Note 1: On 12 August 2011, the Group reached a 35-year building, operation and transfer agreement
through the subsidiary CICT and Sri Lanka Port Authority on the building, operation,
management and development of Colombo Port South Container Terminal (hereinafter referred
to as "BOT"). The above-mentioned amount payable for the acquisition of terminal
management rights 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 2022, the
amount payable for the acquisition of terminal management rights is RMB 867,784,742.01.
TCP, a subsidiary of the Company, entered into a franchise agreement on the Port of
Paranaguáwith the Administration of the Ports of Paranaguá and Antonina- APPA
(hereinafter referred to as "APPA"). The agreement provides for an initial term of 25 years
for the franchising rights. In April 2016, TCP and APPA entered into the Supplemental
Agreement, which extends the term to 50 years and will be expired in October 2048.
On 9 September 2021, TCP, a subsidiary of the Company, entered into a supplemental
agreement to the Lease Agreement with APPA for the franchising rights of the Ports of
Paranaguá and Antonina, pursuant to which the base figure for the calculation of
franchising rights for the Ports of Paranaguáand Antonina was adjusted from Brazil IGP-
M Inflation Index ("IGP-M index") to the Extended National Consumer Price Index
("IPCA index") of Brazilian Institute of Geography and Statistics("IBGE"). In November
2021, TCP readjusted the franchising rights using the IPCA index. As at 31 December
2022, the amount of franchising rights payable was RMB 2,789,795,209.14.
Note 2: On 15 June 2022, Zhoushan RoRo, a subsidiary of the Company, entered into a finance
lease contract for sale and leaseback with China Merchants Finance Leasing (Tianjin) Co.,
Ltd.
(3) Special payables
Increase for Decrease for
Item 31/12/2021 31/12/2022 Reason
the year the year
Refunds of port
12,675,502.52 - 12,675,502.52 - Note 1
construction fee
Employee housing fund 4,686,678.97 439,962.71 - 5,126,641.68 Note 2
Innovation workshop
3,897,599.41 - 675,144.38 3,222,455.03
for model workers
Total 21,259,780.90 439,962.71 13,350,646.90 8,349,096.71
- 117 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
39. Long-term payables - continued
(3) Special payables - continued
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 and terminal
construction, which has been fully used in the current period.
Note 2: This represents the repairing fund for public areas and public facilities and equipment
established after the Group sells 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.
40. Long-term employee benefits payable
(1) Long-term employee benefits payable
Item 31/12/2022 31/12/2021
Post-employment benefits - net liabilities of defined benefit plans 516,950,669.03 463,858,274.44
Termination benefits 64,274,552.96 71,467,335.47
Others (Note) 112,285,587.01 117,662,796.72
Total 693,510,809.00 652,988,406.63
Less: Long-term employee benefits payable due within one year 54,414,877.57 64,306,914.00
Long-term employee benefits payable due after one year 639,095,931.43 588,681,492.63
Note: This represents the employee relocation costs of the Company's subsidiary Shantou Port in
connection with land acquisition and reservation.
(2) Changes in defined benefit plans
Present value of defined benefit plan obligations:
Item 2022 2021
I. Opening balance 463,858,274.44 429,830,989.42
II. Defined benefit cost included in profit or loss for the period 24,392,165.72 26,633,751.24
1. Current service cost 11,191,538.44 11,482,700.68
2. Past service cost - -
3. Interest adjustment 13,200,627.28 15,151,050.56
III. Defined benefit cost included in other comprehensive income 50,820,198.04 31,841,388.55
1. Actuarial gains 49,959,657.35 32,665,927.62
2. Effect of exchange rate changes 860,540.69 -824,539.07
IV. Other changes -22,119,969.17 -24,447,854.77
1. Benefits paid -22,119,969.17 -24,447,854.77
2. Changes in the scope of consolidation - -
V. Closing balance 516,950,669.03 463,858,274.44
- 118 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
40. Long-term employee benefits payable - continued
(2) Changes in defined benefit plans - continued
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 the above-mentioned
retirement benefit plan obligations in an actuarial manner based on the expected cumulative
welfare unit method. The Group recognizes the 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.
41. Provisions
Effect of
translation of
financial
Increase for Decrease for
Item 31/12/2021 statements 31/12/2022 Reason
the year the year
denominated in
foreign
currencies
Pending litigation 23,243,718.18 17,513,729.66 9,547,298.48 4,155,007.07 35,365,156.43 Note
Sales discount - 193,589,600.16 193,589,600.16 - -
Other 1,003,584.24 - 1,003,584.24 - -
Total 24,247,302.42 211,103,329.82 204,140,482.88 4,155,007.07 35,365,156.43
Note: This represents the estimated compensation amount that the Company's subsidiary TCP
may need to pay due to the pending litigation.
42. Deferred income
Decrease for the
Item 31/12/2021 Increase for the year 31/12/2022
year
Government grants 1,075,566,122.15 1,565,800.00 45,858,732.41 1,031,273,189.74
Unrealized sale-and-
391,762.76 - 391,762.76 -
leaseback income
Total 1,075,957,884.91 1,565,800.00 46,250,495.17 1,031,273,189.74
- 119 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
42. Deferred income - continued
Items involving government grants are as follows:
Amount
Related to assets
Category 31/12/2021 Addition recognized in 31/12/2022
/related to income
other income
Refund from marine reclamation land 336,471,484.55 - 19,349,167.92 317,122,316.63 Related to assets
Tonggu channel widening project (Note) 262,314,289.68 - 7,057,783.56 255,256,506.12 Related to assets
Special subsidies for facilities and equipment 233,339,756.18 - 10,372,155.79 222,967,600.39 Related to assets
West public channel widening project at West
208,661,435.58 - 5,439,716.28 203,221,719.30 Related to assets
port area (Note)
Government subsidies for intelligent system 13,471,673.46 1,090,800.00 1,626,034.95 12,936,438.51 Related to assets
Refund of land transfer charges 6,301,466.61 - 267,200.04 6,034,266.57 Related to assets
Subsidy for green and low carbon port project 140,390.02 - 140,390.02 - Related to assets
Others 14,865,626.07 475,000.00 1,606,283.85 13,734,342.22 Related to assets
Total 1,075,566,122.15 1,565,800.00 45,858,732.41 1,031,273,189.74
Note: Refer to Note (VIII) 23 for details.
43. Other non-current liabilities
Item 31/12/2022 31/12/2021
Actuarial cost for the calculation of pension benefit difference
175,742,813.67 176,939,999.96
for the public security bureau staff (Note 1)
Third party borrowings (Note 2) 143,755,523.50 -
Berth priority call right (Note 3) 4,480,217.05 9,595,454.89
Related party borrowings (Note 2) 3,162,000.00 -
Others 1,600,086.28 660,123.68
Total 328,740,640.50 187,195,578.53
Less: Other non-current liabilities due within one year 142,357,523.50 24,130,000.00
Including: Third party borrowings 123,755,523.50 -
Actuarial cost for the calculation of pension benefits
15,440,000.00 24,130,000.00
difference for the public security bureau staff
Related party borrowings 3,162,000.00 -
Other non-current liabilities due after one year 186,383,117.00 163,065,578.53
Note 1: Refer to Note (VIII) 49 for details.
Note 2: This represents the principal and interest on borrowings of the subsidiary of the Company
Shunkong Port from its minority shareholder Guangdong Shunkong City Investment Real
Estate Co., Ltd. and its related party Guangdong Shunkong Transportation Investment Co.,
Ltd.
Note 3: This represents the berth priority call right as agreed in the contract entered into with the
customers in 2003, with total amount of USD14 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 over 20 years using straight-line method. In 2022,
the amount included in operating income is RMB 5,115,237.84.
- 120 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
44. Share capital
Changes for the year
Capitalization
Item 31/12/2021 New issue 31/12/2022
Bonus issue of surplus Others Sub-total
of share
reserve
2022
I. Restricted tradable shares
1. State-owned shares - - - - - - -
2. State-owned legal person shares (Note 1) - 576,709,537.00 - - - 576,709,537.00 576,709,537.00
3. Other domestic shares 9,821.00 - - - -2,455.00 -2,455.00 7,366.00
4. Foreign shares (Note2) 1,148,648,648.00 - - - -1,148,648,648.00 -1,148,648,648.00 -
Total restricted tradable shares 1,148,658,469.00 576,709,537.00 - - -1,148,651,103.00 -571,941,566.00 576,716,903.00
II. Non-restricted tradable shares - - - - - -
1. Ordinary shares denominated in RMB 593,819,745.00 - - - 1,148,648,973.00 1,148,648,973.00 1,742,468,718.00
2. Foreign capital shares listed domestically 179,886,910.00 - - - 2,130.00 2,130.00 179,889,040.00
3. Foreign capital shares listed overseas - - - - - - -
4. Others - - - - - - -
Total non-restricted tradable shares 773,706,655.00 - - - 1,148,651,103.00 1,148,651,103.00 1,922,357,758.00
III. Total shares 1,922,365,124.00 576,709,537.00 - - - 576,709,537.00 2,499,074,661.00
- 121 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
44. Share capital - continued
Changes for the year
Capitalization
Item 31/12/2020 New issue 31/12/2021
Bonus issue of surplus Others Sub-total
of share
reserve
2021
I. Restricted tradable shares
1. State-owned shares - - - - - - -
2. State-owned legal person shares - - - - - - -
3. Other domestic shares 9,496.00 - - - 325.00 325.00 9,821.00
4. Foreign shares 1,148,648,648.00 - - - - - 1,148,648,648.00
Total restricted tradable shares 1,148,658,144.00 - - - 325.00 325.00 1,148,658,469.00
II. Non-restricted tradable shares
1. Ordinary shares denominated in RMB 593,820,070.00 - - - -325.00 -325.00 593,819,745.00
2. Foreign capital shares listed domestically 179,886,910.00 - - - - - 179,886,910.00
3. Foreign capital shares listed overseas - - - - - - -
4. Others - - - - - - -
Total non-restricted tradable shares 773,706,980.00 - - - -325.00 -325.00 773,706,655.00
III. Total shares 1,922,365,124.00 - - - - - 1,922,365,124.00
Note 1: The changes for the year represent 576,709,537 A-shares issued by the Company to Zhejiang Haigang Investment Operation Group Co., Ltd.
in a private placement at RMB 18.50 per share. The net proceeds after deducting all issuing expenses amount to RMB 10,632,533,330.40,
increasing the share capital by RMB 576,709,537.00 and capital reserve by RMB 10,055,823,793.40.
Note 2: On 30 October 2018, pursuant to the Reply of China Securities Regulatory Commission to Approve Shenzhen Chiwan Wharf Holdings Ltd.
on Issuing Shares to China Merchants Investment Development Company Limited for Acquisition of Assets and Raising Supporting Funds
(Zheng Jian Xu Ke [2018] No.1750), the Company issued 1,148,648,648 A-shares to China Merchants Investment Development Company
Limited, which were listed on SZSE on 26 December 2018, subject to a sale restriction for a period of 36 months from the listing date with an
automatic 6-month extension. The restricted shares began to be circulated in 2022, and were transferred into non-restricted shares.
- 122 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
45. Capital Reserve
Item 31/12/2021 Increase Decrease 31/12/2022
2022
Capital premium 23,189,922,809.62 11,018,890,153.88 - 34,208,812,963.50
Including: Capital contributed by investors (Note 1) 7,012,992,483.94 10,055,823,793.40 - 17,068,816,277.34
Differences arising from business combination
13,302,937,205.73 - - 13,302,937,205.73
involving enterprises under common control
Differences arising from acquisition of minority
1,215,209,939.74 950,213,874.28 - 2,165,423,814.02
interests (Note 2)
Others 1,658,783,180.21 12,852,486.20 - 1,671,635,666.41
Other capital reserve 402,779,949.08 151,303,029.21 11,255,106.54 542,827,871.75
Including: Transfer from capital reserve under the previous
-2,781,133.00 - - -2,781,133.00
accounting system
Unexercised share-based payment (Note 3) 9,956,938.60 5,617,671.30 9,983,207.90 5,591,402.00
Other changes in owners' equity of the investee
under equity method other than changes in net
395,604,143.48 145,685,357.91 1,271,898.64 540,017,602.75
profit or loss, profit distribution and other
comprehensive income
Total 23,592,702,758.70 11,170,193,183.09 11,255,106.54 34,751,640,835.25
2021
Capital premium 22,730,949,021.44 501,665,416.93 42,691,628.75 23,189,922,809.62
Including: Capital contributed by investors 7,012,992,483.94 - - 7,012,992,483.94
Differences arising from business combination
13,345,628,834.48 - 42,691,628.75 13,302,937,205.73
involving enterprises under common control
Differences arising from acquisition of minority
714,658,981.71 500,550,958.03 - 1,215,209,939.74
interests
Others 1,657,668,721.31 1,114,458.90 - 1,658,783,180.21
Other capital reserve 108,649,303.12 353,196,864.64 59,066,218.68 402,779,949.08
Including: Transfer from capital reserve under the previous
-2,781,133.00 - - -2,781,133.00
accounting system
Unexercised share-based payment 10,096,607.62 11,870,209.58 12,009,878.60 9,956,938.60
Other changes in owners' equity of the investee
under equity method other than changes in net
101,333,828.50 341,326,655.06 47,056,340.08 395,604,143.48
profit or loss, profit distribution and other
comprehensive income
Total 22,839,598,324.56 854,862,281.57 101,757,847.43 23,592,702,758.70
Note 1: Refer to Note (VIII) 44 for details.
Note 2: The changes for the year mainly represent the dividends attributable to CM Port that the
Company chose to acquire in the form of share replacement and shareholding increase,
which increased the capital reserve by RMB 950,213,874.28. Refer to Note (X) 2 for details.
Note 3: Refer to Note (XIV) 2 for details.
- 123 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
46. Other comprehensive income
2022
Less: Amount
included in other
comprehensive
Attributable to Attributable to
income in the Other
Item 31/12/2021 Pre-tax amount Less: Income tax owners of the minority 31/12/2022
prior period but changes
for the year expenses Company, net of shareholders, net
transferred to
tax of tax
profit or loss in
the current
period
2022
I. Other comprehensive income that will not be reclassified subsequently
81,233,996.26 -72,230,027.20 - 329,334.05 -22,706,023.29 -49,853,337.96 7,513,669.91 51,014,303.06
to profit or loss
Including: Changes arising from remeasurement of defined benefit plans 2,603,415.85 -49,039,668.45 - - -12,793,128.73 -36,246,539.72 - -10,189,712.88
Other comprehensive income that can't be reclassified to
2,643,088.68 -25,906,733.50 - - -11,550,762.02 -14,355,971.48 - -8,907,673.34
profit or loss under equity method
Changes in fair value of other equity instruments 75,987,491.73 2,716,374.75 - 329,334.05 1,637,867.46 749,173.24 7,513,669.91 70,111,689.28
II. Other comprehensive income that will be reclassified subsequently to
-971,359,314.44 1,696,086,234.25 - - 228,808,762.94 1,467,277,471.31 - -742,550,551.50
profit or loss
Including: Other comprehensive income that may be reclassified to
49,431,519.10 -246,633,232.89 - - -110,193,707.53 -136,439,525.36 - -60,762,188.43
profit or loss under equity method
Translation differences of financial statements denominated
-1,020,790,833.54 1,942,719,467.14 - - 339,002,470.47 1,603,716,996.67 - -681,788,363.07
in foreign currencies
Total other comprehensive income -890,125,318.18 1,623,856,207.05 - 329,334.05 206,102,739.65 1,417,424,133.35 7,513,669.91 -691,536,248.44
- 124 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
46. Other comprehensive income - continued
2021
Less: Amount
included in other
comprehensive
Attributable to Attributable to
income in the Other
Item 31/12/2020 Pre-tax amount Less: Income tax owners of the minority 31/12/2021
prior period but changes
for the year expenses Company, net of shareholders, net
transferred to
tax of tax
profit or loss in
the current
period
2021
I. Other comprehensive income that will not be reclassified subsequently
81,416,891.26 -11,657,252.55 - -398,211.33 -316,112.17 -10,942,929.05 -133,217.17 81,233,996.26
to profit or loss
Including: Changes arising from remeasurement of defined benefit plans 11,318,269.18 -32,665,927.62 - - -8,714,853.33 -23,951,074.29 - 2,603,415.85
Other comprehensive income that can't be reclassified to
-6,986,086.44 22,223,934.38 - - 9,495,957.95 12,727,976.43 -133,217.17 2,643,088.68
profit or loss under equity method
Changes in fair value of other equity instruments 77,084,708.52 -1,215,259.31 - -398,211.33 -1,097,216.79 280,168.81 - 75,987,491.73
II. Other comprehensive income that will be reclassified subsequently to
-908,114,194.32 -700,532,642.69 - - -60,790,651.33 -639,741,991.36 2,454,468.79 -971,359,314.44
profit or loss
Including: Other comprehensive income that may be reclassified to
31,725,280.52 42,635,389.45 - - 20,160,707.37 22,474,682.08 2,454,468.79 49,431,519.10
profit or loss under equity method
Translation differences of financial statements denominated
-939,839,474.84 -743,168,032.14 - - -80,951,358.70 -662,216,673.44 - -1,020,790,833.54
in foreign currencies
Total other comprehensive income -826,697,303.06 -712,189,895.24 - -398,211.33 -61,106,763.50 -650,684,920.41 2,321,251.62 -890,125,318.18
- 125 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
47. Special reserve
Item 31/12/2021 Increase Decrease 31/12/2022
Safety production cost 9,184,429.12 62,696,039.72 45,522,208.87 26,358,259.97
48. Surplus reserve
Item 31/12/2021 Increase Decrease 31/12/2022
Statutory surplus reserve 961,182,562.00 40,734,887.15 - 1,001,917,449.15
49. Unappropriated profit
Proportion of
Item Amount appropriation or
allocation
2022
Unappropriated profit at the beginning of the year before adjustment 14,205,879,106.49
Add: Adjustment to unappropriated profit at beginning of the year -
Including: Effect of business combinations involving enterprises
-
under common control
Unappropriated profit at the beginning of the year after adjustment 14,205,879,106.49
Add: Net profit of the year attributable to shareholders of the Company 3,337,446,222.82
Transfer of other comprehensive income 7,513,669.91
Less: Transfer to statutory surplus reserve 40,734,887.15
Transfer to discretionary surplus reserve -
Transfer to general risk reserve -
Ordinary shares' dividends payable 826,617,003.32 Note (1)
Ordinary shares' dividends converted into share capital -
Pension benefit difference 3,798,761.66 Note (2)
Others -
Unappropriated profit at the end of the year 16,679,688,347.09
Proportion of
Item Amount appropriation or
allocation
2021
Unappropriated profit at the beginning of the year before adjustment 12,316,177,395.17
Add: Adjustment to unappropriated profit at beginning of the year 12,942,703.53
Including: Effect of business combinations involving enterprises
12,942,703.53
under common control
Unappropriated profit at the beginning of the year
12,329,120,098.70
after adjustment (restated)
Add: Net profit of the year attributable to shareholders of the Company 2,685,829,204.07
Less: Transfer to statutory surplus reserve 70,492,239.72
Transfer to discretionary surplus reserve -
Transfer to general risk reserve -
Ordinary shares' dividends payable 730,498,747.12
Ordinary shares' dividends converted into share capital -
Pension benefit difference 3,525,104.12
Others 4,554,105.32
Unappropriated profit at the end of the year 14,205,879,106.49
- 126 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
49. Unappropriated profit - continued
Note 1: According to the resolution of shareholders' meeting on 21 April 2022, the Company
distributes cash dividends of RMB 4.30 (inclusive of tax) for every 10 shares, totalling
RMB 826,617,003.32 on the basis of the total shares of 1,922,365,124 at the end of 2021.
Note 2: This represents the difference between the pension benefits under the original standard
and the retirement benefits of Zhanjiang municipal police borne by Zhanjiang Port.
Zhanjiang Port recognizes the related liabilities based on the actuarial results, and
unappropriated profit of RMB 3,798,761.66 is eliminated based on the proportion of
equity interest in Zhanjiang Port.
50. Operating income and operating costs
(1) Operating income and operating costs
2022 2021
Item
Income Cost Income Cost
Principal operation 16,072,394,601.93 9,433,786,605.46 15,099,983,817.24 8,827,960,579.72
Other operations 158,094,525.62 216,675,107.48 183,824,357.36 218,875,602.77
Total 16,230,489,127.55 9,650,461,712.94 15,283,808,174.60 9,046,836,182.49
(2) Revenue from contracts
Bonded logistics
Category of contracts Ports operation Other operations Total
operation
Mainland China, Hong Kong
11,540,287,421.98 406,998,753.60 158,094,525.62 12,105,380,701.20
and Taiwan area
- Pearl River Delta 6,774,045,422.66 263,389,266.60 158,094,525.62 7,195,529,214.88
- Yangtze River Delta 1,139,944,516.62 - - 1,139,944,516.62
- Bohai Rim 74,222,857.10 143,609,487.00 - 217,832,344.10
- Other areas 3,552,074,625.60 - - 3,552,074,625.60
Other countries 4,086,514,642.86 38,593,783.49 - 4,125,108,426.35
Total 15,626,802,064.84 445,592,537.09 158,094,525.62 16,230,489,127.55
- 127 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
50. Operating income and operating costs - continued
(3) Description of performance obligations
The Group provides port service, bonded logistics service and other services. These services are
obligations performed over a period of time. For port services, as the handling time for containers
and bulk cargos is short, the management believes that it is not necessary to recognize revenue
according to the progress towards the completion of contract and it is an appropriate method to
recognize the fulfilment of performance obligation and revenue upon the completion of the
service. For bonded logistics service and other services, the customers evenly obtain and consume
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 volume finally realized within the contract period is
uncertain, the contract consideration is subject to variable factors. The management includes this
part of discount in other payables and provisions. At the end of the year, the variable
considerations arising from sales discount are set out in Note (VIII) 33 (3) and Note (VIII) 41.
51. Taxes and surcharges
Item 2022 2021
Property tax 63,233,633.53 70,389,135.52
Land use tax 36,260,260.97 34,202,909.60
City construction and maintenance tax 8,456,389.09 9,898,436.53
Education surcharges and local education surcharges 6,253,550.00 7,369,925.21
Stamp duty 8,694,943.46 3,995,999.87
Others (Note) 159,350,696.41 66,117,837.58
Total 282,249,473.46 191,974,244.31
Note: Others mainly represent the social contribution tax and tax on services borne by TCP, a
subsidiary of the Company, totalled BRL116,502,509.42 (equivalent to RMB
151,706,417.51) for the year.
52. Administrative expenses
Item 2022 2021
Employee benefits 1,280,394,043.79 1,254,118,714.39
Fees paid to agencies 80,164,840.55 67,169,001.82
Depreciation expenses 79,095,275.09 71,427,267.44
Amortization of intangible assets 54,493,578.78 62,610,371.46
Others 270,946,998.30 273,835,203.39
Total 1,765,094,736.51 1,729,160,558.50
- 128 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
53. Financial expenses
Item 2022 2021
Interest expenses 1,960,177,578.36 1,740,044,260.37
Less: Interest income 469,834,098.05 377,563,874.49
Less: Capitalized interest expenses 30,960,097.84 55,177,640.96
Exchange differences 477,004,284.27 -8,805,663.12
Interest expenses -Terminal management rights (Note) 222,326,056.63 145,044,317.17
Interest expenses on lease liabilities 73,619,268.64 79,937,678.42
Handling fee 21,148,526.03 14,643,061.91
Others 5,232,154.38 7,216,457.99
Total 2,258,713,672.42 1,545,338,597.29
Note: Details are set out in Note (VIII) 39.
54. Other income
Item 2022 2021
Business development subsidy 94,355,004.33 250,536,747.94
Transfer from allocation of deferred income (Note VIII 42) 45,858,732.41 44,110,161.98
Additional deduction of VAT 45,179,805.12 24,740,974.05
Special fund for operation 7,385,898.57 9,947,660.80
Steady post subsidies 5,771,198.38 15,167,723.22
Others 43,097,431.61 18,741,893.09
Total 241,648,070.42 363,245,161.08
55. Investment income
(1) Details of investment income:
Item 2022 2021
Income from long-term equity investments under equity method 7,185,182,148.75 6,290,957,480.59
Including: Income from long-term equity investments of
6,765,840,426.95 6,048,315,587.10
associates under equity method
Income from long-term equity investments of joint ventures
419,341,721.80 242,641,893.49
under equity method
Income from disposal of long-term equity investments -20,508.06 225,846,183.50
Investment income from held-for-trading financial assets 152,728,622.47 72,438,700.63
Investment income from other non-current financial assets 39,525,241.71 40,297,383.53
Dividend income from investments in other equity instruments 240,001.46 7,409,762.66
Total 7,377,655,506.33 6,636,949,510.91
- 129 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
55. Investment income - continued
(2) Details of income from long-term equity investments under equity method
Investee 2022 2021 Reason for changes
SIPG 4,762,565,562.93 4,190,349,799.99 Changes in net profit of investee
Terminal Link SAS 364,965,366.44 476,262,839.86 Changes in net profit of investee
Ningbo Zhoushan 351,607,511.90 229,363,153.19 Changes in net profit of investee
Shenzhen China Merchants Qianhai
218,696,415.40 130,229,025.57 Changes in net profit of investee
Industrial Development Co., Ltd.
Nanshan Group 206,680,217.04 685,312,588.00 Changes in net profit of investee
Liaoning Port 144,196,061.13 177,413,349.12 Changes in net profit of investee
Euro-Asia Oceangate, S.àr.l. 140,072,915.26 57,559,118.21 Changes in net profit of investee
Qingdao Qianwan United Container
112,414,404.75 83,154,378.77 Changes in net profit of investee
Terminal Co., Ltd.
Yantai Port Group Laizhou Port Co., Ltd 32,565,975.37 33,327,096.27 Changes in net profit of investee
Port of Newcastle 28,511,394.42 12,868,828.80 Changes in net profit of investee
China Merchants Northeast Asia
-13,657,927.07 8,262,246.98 Changes in net profit of investee
Development and Investment Co., Ltd
Others 836,564,251.18 206,855,055.83 Changes in net profit of investee
Total 7,185,182,148.75 6,290,957,480.59
56. Gains (Losses) from changes in fair value
Item 2022 2021
Held-for-trading financial assets 34,417,357.38 11,666,053.97
Other non-current financial assets -163,451,007.49 -96,596,314.84
Including: Financial assets at fair value through profit or loss -163,451,007.49 -96,596,314.84
Other non-current liabilities - 306,172,536.04
Including: Financial liabilities at fair value through profit or loss - 306,172,536.04
Total -129,033,650.11 221,242,275.17
57. Gains (losses) from impairment of credit
Item 2022 2021
I. Gains (losses) from impairment of credit of accounts
-5,939,952.37 -13,674,941.27
receivable
II. Gains (losses) from impairment of credit of other receivables -217,234,842.93 -239,661,663.35
III. Gains (losses) from impairment of credit of long-term
-298,781.25 382,987.12
receivables
Total -223,473,576.55 -252,953,617.50
- 130 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
58. Gains (losses) from impairment of assets
Item 2022 2021
Gains (losses) from decline in value of inventories -573,122.05 -
Gains (losses) from impairment of fixed assets -6,048,776.05 -
Gains (losses) from impairment of intangible assets -15,537,122.10 -
Gains (losses) from impairment of long-term equity investments - -2,147,208.07
Gains (losses) from impairment of goodwill - -418,345,307.68
Total -22,159,020.20 -420,492,515.75
59. Gains (losses) on disposal of assets
Amount included in
non-recurring profit
Item 2022 2021
or loss for the current
year
Gains on disposal of non-current assets 55,130,095.52 35,576,459.42 51095
Including: Gains (losses) on disposal of fixed
-1,824,719.58 9,374,568.54 -2798
assets
Gains on disposal of intangible assets 57,590,483.04 30,064,375.22 55080
Other gains (losses) -635,667.94 -3,862,484.34 -9
60. Non-operating income
Amount included in
non-recurring profit
Item 2022 2021
or loss for the current
year
Operation compensation (Note) 213,574,591.16 - 25
Exempted current accounts 25,091,421.77 1,446,930.55 25,091,42
Management service fee and
8,190,857.40 7,912,260.93 8,190,85
directors' remuneration
Income from relocation compensation 6,955,000.00 - 6,955,00
Land rent deduction 6,421,113.49 6,952,470.22 6,421,11
Gains from retirement
3,138,573.24 3,613,726.26 3,138,57
or damage of non-current assets
Including: Gains from retirement
3,138,573.24 3,613,726.26 3,138,57
or damage of fixed assets
Compensation received for violation of
2,930,876.85 3,519,366.77 2,930,87
contracts
Government grants 1,640,553.77 875,528.75 1,640,55
Insurance claims 341,555.58 886,184.77 341,55
Profit from tax saving - 12,743,050.88
Others 10,989,909.51 5,518,018.37 10,989,90
Total 279,274,452.77 43,467,537.50 24
Note: Refer to Note (VIII) 7.3 (2) for details.
- 131 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
61. Non-operating expenses
Amount included in
non-recurring profit
Item 2022 2021
or loss for the current
year
Losses on retirement of non-current assets 19 31 162,620,964.79
Including: Losses on retirement
32 38 32
or damage of fixed assets
Donations 27 19 27
Litigation loss 25 17 25
Compensation, liquidated damages
13 93 13
and penalties
Others 44 30 44
Total 22 99 22
62. Income tax expenses
Item 2022 2021
Current income tax expenses 871,429,455.95 1,162,076,514.07
Deferred income tax expenses 241,750,223.40 267,016,570.24
Total 1,113,179,679.35 1,429,093,084.31
Reconciliation of income tax expenses to the accounting profit is as follows:
Item 2022
Total profit 9,344,862,977.02
Income tax expenses calculated at 25% 2,336,215,744.26
Effect of non-deductible costs, expenses and losses 289,093,163.69
Accrued income tax 396,949,980.28
Effect of deductible temporary differences and deductible losses
179,395,402.49
for which deferred tax assets are not recognized in the year
Effect of tax-free income (Note) -1,014,336,274.34
Effect of tax incentives and changes in tax rate -437,172,907.98
Effect of different tax rates of subsidiaries operating in other jurisdictions -585,607,312.75
Effect of utilizing deductible losses for which deferred tax assets
-106,596,821.30
were not recognized in prior period
Effect of adjustments to income tax of prior year 13,427,061.13
Others 41,811,643.87
Income tax expenses 1,113,179,679.35
Note: This mainly represents the tax effect of income from investments in joint ventures and
associates.
- 132 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
63. Assets with restricted ownership or use right
Item 31/12/2022 31/12/2021
Cash and bank balances (Note 1) 9,309,145.94 12,830,212.33
Equity investment in CICT (Note 2) 2,115,796,097.99 2,026,382,103.10
Equity investment in TML (Note 2) 1,047,063,416.30 411,893,452.06
Fixed assets (Note 3) 341,870,382.84 278,015,952.68
Intangible assets (Note 4) 222,040,259.68 212,232,642.30
Construction in progress (Note 4) 4,298,598.50 12,388,924.87
Total 3,740,377,901.25 2,953,743,287.34
Note 1: Details of restricted cash and bank balances are set out in Note (VIII) 1.
Note 2: Details of mortgaged equity and interests are set out in Note (VIII) 36.
Note 3: Details of mortgage borrowings are set out in Note (VIII) 26 and Note (VIII) 36.
Details of sale and leaseback are set out in (VIII) 39.
Note 4: Details of mortgage borrowings are set out in Note (VIII) 36.
64. Other comprehensive income, net of tax
Details are set out in Note (VIII) 46.
65. Items in cash flow statement
(1) Other cash receipts relating to operating activities:
Item 2022 2021
Interest income 258,843,106.76 133,986,424.52
Government grants 146,183,117.33 300,310,363.33
Insurance indemnities 58,668,674.41 7,390,248.30
Guarantees and deposits 56,548,699.29 38,247,722.18
Rentals 6,633,711.38 9,641,271.39
Refund of port construction fee and service charges - 130,668.41
Others 614,917,616.16 534,021,573.18
Total 1,141,794,925.33 1,023,728,271.31
- 133 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
65. Items in cash flow statement - continued
(2) Other cash payments relating to operating activities
Item 2022 2021
Advance payment 328,830,785.30 275,907,895.42
Operating expenses such as operating costs
136,317,839.62 182,351,696.26
and administrative expenses etc.
Guarantees and deposits 47,134,870.60 28,616,516.45
Rentals 22,559,158.93 14,653,775.08
Harbor dues on cargo 14,619,372.24 15,776,034.06
Port charges 5,422,920.14 11,723,562.35
Port construction fee - 12,001,158.90
Others 471,440,206.57 334,083,168.45
Total 1,026,325,153.40 875,113,806.97
(3) Other cash receipts relating to investing activities
Item 2022 2021
Interest on advances for the project 169,844,015.81 162,918,518.18
Net cash receipts from acquisition of subsidiaries
74,295,900.85 -
and other business units (Note)
Recovered principal for the advances of the project 45,535,614.18 179,243,313.40
Recovered lending - 8,980,037.68
Others 5,388,978.50 86,014,701.83
Total 295,064,509.34 437,156,571.09
Note: Refer to Note (VIII) 65 (4) for details.
(4) Net cash receipts from acquisition of subsidiaries and other business units
Item 2022
Business combination and cash or cash equivalents paid for the year -
Including: Shunkong Port -
Less: Cash and cash equivalents held by subsidiaries at the acquisition date 790
Including: Shunkong Port 790
Net cash receipts for acquisition of subsidiaries 790
Including: Shunkong Port 790
(5) Other cash payments relating to investing activities
Item 2022 2021
Taxes on land acquisition and reserve paid by ATJ 947,426,040.54 -
Staff relocation cost in respect
- 22,231,894.84
of land acquisition and reserve paid by Shantou Port
Others 7,376,441.76 406.11
Total 954,802,482.30 22,232,300.95
- 134 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
65. Items in cash flow statement - continued
(6) Other cash receipts relating to financing activities
Item 2022 2021
Sale and leaseback proceeds 50,000,000.00 -
Others 6,303,169.80 -
Total 56,303,169.80 -
(7) Other cash payments relating to financing activities
Item 2022 2021
Payment for the Company's acquisition of minority interests
660,552,076.54 76,767,514.23
of CM Port
Lease expenses paid 422,373,905.31 412,013,733.57
Payment for non-public shares issued by the Company 7,778,570.52 -
Amount paid by Dalian Port Logistics Network Co., Ltd.
- 8,748,637.26
("DPN") for acquisition of minority interests
Others 33,412,187.98 6,000,631.68
Total 1,124,116,740.35 503,530,516.74
- 135 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
66. Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
Supplementary information 2022 2021
1. Reconciliation of net profit to cash flows from operating activities:
Net profit 8,231,683,297.67 7,655,005,989.75
Add: Provision for impairment of assets 22,159,020.20 420,492,515.75
Provision for impairment of credit 223,473,576.55 252,953,617.50
Depreciation of fixed assets 2,015,080,231.04 1,877,442,392.55
Depreciation of investment properties 184,276,397.36 189,639,743.80
Depreciation of right-of-use assets 349,846,619.98 329,603,141.83
Amortization of intangible assets 663,429,174.32 616,107,419.01
Amortization of long-term prepaid expenses 84,874,394.19 53,478,222.59
Losses (gains) on disposal of fixed assets, intangible assets
-55,130,095.52 -35,576,459.42
and other long-term assets
Losses on retirement of fixed assets, intangible assets
159,482,391.55 27,871,089.13
and other long-term assets
Losses (gains) on changes in fair value 129,033,650.11 -221,242,275.17
Financial expenses 2,532,320,466.47 1,733,787,046.57
Investment loss (income) -7,377,655,506.33 -6,636,949,510.91
Decrease in deferred tax assets 25,218,449.44 22,711,365.92
Increase in deferred tax liabilities 216,531,773.96 244,305,204.32
Decrease (increase) in inventories -30,798,761.65 20,057,846.98
Decrease (increase) in operating receivables -245,987,914.80 -4,503,635.75
Increase (decrease) in operating payables -207,459,774.19 -34,857,143.97
Net cash flows from operating activities 6,920,377,390.35 6,510,326,570.48
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 13,567,309,471.62 12,727,355,238.36
Less: Opening balance of cash 12,727,355,238.36 11,898,618,327.29
Add: Closing balance of cash equivalents - -
Less: Opening balance of cash equivalents - -
Net increase in cash and cash equivalents 839,954,233.26 828,736,911.07
(2) Cash and cash equivalents
Item 31/12/2022 31/12/2021
I. Cash 13,567,309,471.62 12,727,355,238.36
Including: Cash on hand 726,960.10 501,446.73
Bank deposits available for payment at any time 13,045,336,190.09 12,353,104,402.58
Other monetary funds available for payment at any time 521,246,321.43 373,749,389.05
II. Cash equivalents - -
III. Balance of cash and cash equivalents at the end of the year 13,567,309,471.62 12,727,355,238.36
- 136 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
67. Foreign currency monetary items
Closing balance in Closing balance in
Item Exchange rate
foreign currency RMB
Cash and bank balances 187004592556
Including: HKD 23,605,028.38 0.8933 20678
USD 106,236,908.63 6.9646 7398975784
EUR 50,979,458.93 7.4229 3784154269
RMB 730,646,554.18 1.0000 7306465518
Accounts receivable 1786767799
Including: HKD 1,650,559.86 0.8933 142
USD 3,901,868.86 6.9646 21458
EUR 20,211,423.30 7.4229 1500273701
Other receivables 3901358919
Including: HKD 104,683,569.40 0.8933 95335
USD 1,318,255.97 6.9646 913
EUR 4,248,621.51 7.4229 35796
RMB 255,903,845.50 1.0000 2559038450
Other non-current assets 21729
Including: EUR 3,928,091.03 7.4229 21729
Short-term borrowings 409000000000
Including: RMB 4,090,000,000.00 1.0000 409000000000
Accounts payable 40433
Including: HKD 2,235,282.58 0.8933 173
USD 10,927.50 6.9646 76,105.67
EUR 6,151,416.39 7.4229 46147
RMB 300,000.00 1.0000 30
Other payables 8545382923
Including: HKD 41,791,974.49 0.8933 33278
USD 75,312,750.17 6.9646 5245231783
EUR 7,882,441.07 7.4229 55078
RMB 234,171,771.78 1.0000 2341717778
Non-current liabilities due within one year 720494003045
Including: USD 938,308,019.19 6.9646 653494003045
RMB 670,000,000.00 1.0000 6700000000
Long-term borrowings 401388987000
Including: USD 600,000.00 6.9646 470
EUR 45,900,000.00 7.4229 3407111100
RMB 3,669,000,000.00 1.0000 366900000000
Bonds payable 1108829309902
Including: USD 1,592,093,314.62 6.9646 1108829309902
- 137 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
68. Government grants
(1) New government grants for the year
Amount included
Type Amount Item Presentation account in profit or loss
for the year
Related to income 94,355,004.33 Business development subsidy Other income 94,355,004.33
Related to income 7,385,898.57 Special operation subsidy Other income 7,385,898.57
Related to income 5,771,198.38 Steady post subsidies Other income 5,771,198.38
Related to assets 1,090,800.00 Subsidies for intelligent system Deferred income -
Related to income 40,691,109.58 Others Other income 40,691,109.58
Related to income 1,640,553.77 Others Non-operating income 1,640,553.77
Related to assets 475,000.00 Others Deferred income 12,500.00
Total 151,409,564.63 149,856,264.63
69. Leases
(1) Lessor under operating lease
Item Amount
I. Revenue -
Lease income 267,730,741.43
Including: Income related to variable lease payments that are not included
-
in lease receipts
II. Undiscounted lease receipts received after the balance sheet date
1st year 332,586,492.93
2nd year 147,065,372.48
3rd year 126,383,756.18
4th year 114,227,301.08
5th year 89,037,712.60
Over 5 years 232,530,205.50
Note: The operating leases where the Group acts as the lessor are related to port and terminal
facilities, machinery and 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 and equipment, land and buildings. The Group considers that the unguaranteed
balance of leased assets does not constitute significant risk of the Group, as the assets are
properly used.
- 138 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
69. Lease - continued
(2) Lessee
Item Amount
Interest expenses on lease liabilities 73,619,268.64
Short-term lease expenses that are accounted for using simplified approach
71,711,821.89
and included in cost of related assets or profit or loss for the period
Expenses on leases of low-value assets (exclusive of expenses on short-term leases
of low-value assets) that are accounted for using simplified approach and included in 2,118,098.94
cost of related assets or profit or loss for the period
Variable lease payments that are included in cost of related assets or profit or loss
-
but not included in measurement of lease liabilities
Including: The portion arising from sale and leaseback transactions -
Income from sub-lease of right-of-use assets 16,195,950.82
Total cash outflows relating to leases 474,672,225.36
Income (loss) from sale and leaseback transactions -21,082,256.97
Cash inflows from sale and leaseback transactions 50,000,000.00
Cash outflows from sale and leaseback transactions 217,934,853.80
Others -
(IX) CHANGES IN SCOPE OF CONSOLIDATION
1. Changes in scope of consolidation due to other reasons
(1) Subsidiary newly added through asset acquisition
RMB
Name Net assets at the end of the year
Shunkong Port 45,804,616.24
Note: On 18 November 2022, the Company acquired 51% equity interest of Shunkong Port at the
consideration of RMB 50,000,000.00.
The above-mentioned acquisition is an asset acquisition, and does not form a business combination.
- 139 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(X) EQUITY IN OTHER ENTITIES
1. Interests in subsidiaries
(1) Composition of the Group - Major subsidiaries
Registered capital Shareholding ratio
Principal
Place of Nature of (RMB'0000, (%)
Name of the subsidiary place of Acquisition method
incorporation business unless otherwise
business Direct Indirect
specified)
Shenzhen Chiwan International Freight Agency Shenzhen Shenzhen Logistics support
550.00 100.00 - Established through investment
Co., Ltd. China China services
Chiwan Wharf Holdings (Hong Kong) Ltd. (Wharf Investment
HK China HK China HKD 1,000,000 100.00 - Established through investment
Holdings Hong Kong) holding
Dongguan Dongguan Logistics support
Dongguan Shenchiwan Port Affairs Co., Ltd. 45,000.00 85.00 - Established through investment
China China services
Dongguan Dongguan Logistics support
Dongguan Shenchiwan Wharf Co., Ltd. 40,000.00 100.00 - Established through investment
China China services
Shenzhen Shenzhen Logistics support Business combination involving
Shenzhen Chiwan Harbor Container Co. Ltd. 28,820.00 100.00 -
China China services enterprises under common control
Shenzhen Shenzhen Logistics support Business combination involving
Shenzhen Chiwan Port Development Co., Ltd. 10,000.00 100.00 -
China China services enterprises under common control
Shenzhen Shenzhen Logistics support Business combination involving
Chiwan Container Terminal Co., Ltd. USD 95,300,000 55.00 20.00
China China services enterprises under common control
Shenzhen Shenzhen Logistics support Business combination involving
Shenzhen Chiwan Tugboat Co., Ltd. 2,400.00 100.00 -
China China services enterprises under common control
Logistics support Business combination involving
Chiwan Shipping (Hong Kong) Limited HK China HK China HKD 800,000 100.00 -
services enterprises under common control
Investment HKD Business combination involving
CM Port (Note 1) HK China HK China 0.37 45.32
holding 46,668,174,000 enterprises under common control
Shenzhen Shenzhen Logistics support Business combination involving
China Merchants Bonded Logistics Co., Ltd. 70,000.00 40.00 60.00
China China services enterprises under common control
China Merchants Holdings (International)
Shenzhen Shenzhen Business combination involving
Information Technology Co., Ltd. ("CM IT service 8,784.82 13.18 43.74
China China enterprises under common control
International Tech")
Liaoning Business combination involving
DPN Liaoning China IT service 3,200.00 - 79.03
China enterprises under common control
Liaoning Business combination involving
Gangxin Technology Liaoning China IT service 800.00 - 100.00
China enterprises under common control
China Merchants International (China) Investment Shenzhen Shenzhen Investment Business combination involving
USD67,400,000 - 100.00
Co., Ltd. China China holding enterprises under common control
China Merchants International Container Terminal Qingdao Logistics support Business combination involving
Qingdao China USD 206,300,000 - 100.00
(Qingdao) Co., Ltd. China services enterprises under common control
Logistics support Business combination involving
China Merchants Container Services Limited HK China HK China HKD 500,000 - 100.00
services enterprises under common control
Shenzhen Shenzhen Logistics support Business combination involving
China Merchants Port (Shenzhen) Co., Ltd. 55,000.00 - 100.00
China China services enterprises under common control
Engineering
Shenzhen Shenzhen Business combination involving
Shenzhen Haiqin Project Management Co., Ltd. supervision 1,000.00 - 100.00
China China enterprises under common control
service
Preparation for
Shenzhen Shenzhen Business combination involving
ATJ the warehousing HKD 100,000,000 - 100.00
China China enterprises under common control
project
Preparation for
Shenzhen Shenzhen Business combination involving
ASJ the warehousing HKD 100,000,000 - 100.00
China China enterprises under common control
project
China Merchants International Terminal (Qingdao) Qingdao Logistics support Business combination involving
Qingdao China USD 44,000,000 - 90.10
Co., Ltd. China services enterprises under common control
Logistics support Business combination involving
CICT Sri Lanka Sri Lanka USD 150,000,100 - 85.00
services enterprises under common control
Shenzhen Shenzhen Logistics support Business combination involving
Magang Godown & Wharf 33,500.00 - 100.00
China China services enterprises under common control
Shenzhen Shenzhen Logistics support Business combination involving
Shenzhen Mawan Port Services Co., Ltd. 20,000.00 - 100.00
China China services enterprises under common control
Zhangzhou Zhangzhou Logistics support Business combination involving
Zhangzhou China Merchants Tugboat Co., Ltd. 1,500.00 - 70.00
China China services enterprises under common control
Zhangzhou Zhangzhou Logistics support Business combination involving
Zhangzhou China Merchants Port Co., Ltd. 116,700.00 - 60.00
China China services enterprises under common control
Zhangzhou Investment Promotion Bureau
Zhangzhou Zhangzhou Logistics support Business combination involving
Xiamenwan Port Affairs Co., Ltd. ("Xiamenwan 44,450.00 - 31.00
China China services enterprises under common control
Port Affairs") (Note 2)
Shenzhen Shenzhen Logistics support Business combination involving
Shekou Container Terminals Ltd. HKD 618,201,200 - 100.00
China China services enterprises under common control
Shenzhen Shenzhen Logistics support Business combination involving
Shenzhen Lianyunjie Container Terminals Co., Ltd. 60,854.90 - 100.00
China China services enterprises under common control
Anxunjie Container Terminals (Shenzhen) Shenzhen Shenzhen Logistics support Business combination involving
127,600.00 - 100.00
Co., Ltd. China China services enterprises under common control
Preparation for
Anyunjie Port Warehousing Service (Shenzhen) Shenzhen Shenzhen Business combination involving
the warehousing 6,060.00 - 80.00
Co., Ltd. China China enterprises under common control
project
- 140 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(X) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(1) Composition of the Group - Major subsidiaries - continued
Registered capital Shareholding ratio
Principal
Place of Nature of (RMB'0000, (%)
Name of the subsidiary place of Acquisition method
incorporation business unless otherwise
business Direct Indirect
specified)
Shenzhen Shenzhen Logistics support Business combination involving
Shenzhen Haixing 53,072.92 - 67.00
China China services enterprises under common control
Shenzhen Shenzhen Logistics support Business combination involving
Shenzhen Lianyongtong Terminal Co., Ltd. USD 7,000,000 - 100.00
China China services enterprises under common control
Logistics support Business combination involving
Yide Port Foshan China Foshan China 21,600.00 51.00 -
services enterprises under common control
Investment Business combination involving
Mega Shekou Container Terminals Limited BVI BVI USD 120.00 - 80.00
holding enterprises under common control
Republic of Republic of Logistics support Business combination involving
Lome Container Terminal S.A. (Note 3) XOF 200,000,000 - 35.00
Togo Togo services enterprises under common control
Investment Business combination involving
Gainpro Resources Limited BVI BVI USD 1.00 - 76.47
holding enterprises under common control
Hambantota International Port Group (Private) Logistics support USD Business combination involving
Sri Lanka Sri Lanka - 65.00
Limited services 1,145,480,000 enterprises under common control
Shantou Logistics support Business combination involving
Shantou port Shantou China 12,500.00 - 60.00
China services enterprises under common control
Shenzhen Jinyu Rongtai Investment Development Shenzhen Shenzhen Property lease, Business combination involving
80,000.00 - 100.00
Co., Ltd. China China etc. enterprises under common control
Shenzhen Merchants Qianhaiwan Real Estate Shenzhen Shenzhen Property lease, Business combination involving
20,000.00 - 100.00
Co., Ltd China China etc. enterprises under common control
Shenzhen Shenzhen Investment Business combination involving
Juzhongzhi Investment (Shenzhen) Co., Ltd. 4,000.00 - 75.00
China China consulting enterprises under common control
Shenzhen Shenzhen Logistics support Business combination involving
Shenzhen Lianda Tugboat Co., Ltd. 200.00 - 60.29
China China services enterprises under common control
Zhangzhou Zhangzhou Logistics support Business combination involving
China Ocean Shipping Tally Zhangzhou Co., Ltd. 200.00 - 84.00
China China services enterprises under common control
Logistics support Business combination involving
China Merchants Holdings (Djibouti) FZE Djibouti Djibouti USD 38,140,000 - 100.00
services enterprises under common control
Xinda Resources Limited (hereinafter referred to Investment Business combination involving
BVI BVI USD 107,620,000 - 77.45
as "Xinda") holding enterprises under common control
Investment Business combination involving
Kong Rise Development Limited HK China HK China USD 107,620,000 - 100.00
holding enterprises under common control
Logistics support Business combination not involving
TCP Brazil Brazil BRL 68,851,600 - 100.00
services enterprises under common control
Investment Business combination involving
Direcet Achieve Investments Limited HK China HK China USD 814,781,300 - 100.00
holding enterprises under common control
Zhoushan Zhoushan Logistics support
Zhoushan RoRo 17,307.86 51.00 - Asset acquisition
China China services
Shenzhen Shenzhen Logistics support
Shenzhen Haixing Logistics Development Co., Ltd. 7,066.79 - 67.00 Asset acquisition
China China services
Zhanjiang Zhanjiang Logistics support Business combination not involving
Zhanjiang Port 587,420.91 3.42 54.93
China China services enterprises under common control
Zhanjiang Port International Container Terminal Zhanjiang Zhanjiang Logistics support Business combination not involving
60,000.00 - 80.00
Co., Ltd. China China services enterprises under common control
Zhanjiang Port Petrochemical Terminal Co., Ltd. Zhanjiang Zhanjiang Logistics support Business combination not involving
18,000.00 - 50.00
(Note 4) China China services enterprises under common control
Zhanjiang Zhanjiang Logistics support Business combination not involving
China Ocean Shipping Tally Co., Ltd., Zhanjiang 300.00 - 84.00
China China services enterprises under common control
Zhanjiang Port Donghaidao Bulk Cargo Terminal Zhanjiang Zhanjiang Logistics support Business combination not involving
5,000.00 - 100.00
Co., Ltd. China China services enterprises under common control
Zhanjiang Zhanjiang Logistics support Business combination not involving
Guangdong Zhanjiang Port Logistics Co., Ltd. 10,000.00 - 100.00
China China services enterprises under common control
Zhanjiang Zhanjiang Logistics support Business combination not involving
Zhanjiang Port Haichuan Trading Co., Ltd. 200.00 - 100.00
China China services enterprises under common control
Guangdong Zhanjiang Port Longteng Shipping Zhanjiang Zhanjiang Logistics support Business combination not involving
9,000.00 - 70.00
Co., Ltd. China China services enterprises under common control
Logistics support Business combination not involving
Ningbo Daxie (Note 5) Ningbo China Ningbo China 120,909.00 - 45.00
services enterprises under common control
Shantou Logistics support
Shantou Harbor Towage Service Co., Ltd. Shantou China 1,000.00 - 100.00 Established through investment
China services
Logistics support
Sanya Merchants Port Development Co., Ltd. Sanya China Sanya China 1,000.00 51.00 - Established through investment
services
Shenzhen Shenzhen Owning China HKD Business combination not involving
Malai Warehousing (Shenzhen) Co., Ltd - 100.00
China China Qianhai property 1,600,000,000 enterprises under common control
Hong Kong Hong Kong Investment
Ports Development (Hong Kong) Limited (Note 6) 2,768,291.56 100.00 - Established through investment
China China holding
Property
Shunkong Port Foshan China Foshan China development and 6,122.45 51.00 - Asset acquisition
management
- 141 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(X) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(1) Composition of the Group - Major subsidiaries - continued
Note 1: On 19 June 2018, the Company and China Merchants Group (Hong Kong) Co., Ltd.
("CMHK") entered into an "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 CM Port in respect of its voting power of CM Port as entrusted,
and performs the voting as per the Company's opinion. In March 2022, the Company
transferred its 43.00% equity contribution in China Merchants Port Holdings Company
Limited to the wholly-owned subsidiary Ports Development (Hong Kong) Co., Ltd.
In June and October 2022, CM Port respectively distributed 2021 dividends and 2022
interim dividends to shareholders. The shareholders may select to receive the dividends all
in cash or shares, or receive the dividends part in cash and part in new shares. The
Company, Ports Development (Hong Kong) Co., Ltd. and CMHK select to receive all its
share of dividends from the shareholding in CM Port in the form of scrip dividends. In
2022, the Company and Ports Development (Hong Kong) Co., Ltd. acquired 64,556,000
ordinary shares of CM Port from the secondary market. Upon the completion of above
distribution and the transaction, the proportion of the ordinary shares of CM Port held by
the Group to the total issued ordinary shares of CM Port was changed from 43.18% to
45.69%, while the proportion of the ordinary shares of CM Port held by CMHK to the
total issued ordinary shares of CM Port was changed from 21.98% to 22.42%. Therefore,
the Company has 68.11% voting power of CM Port in total and has control over CM Port.
Note 2:The Group and China Merchants Zhangzhou Development Zone Co., Ltd. entered into an
"Equity Custody Agreement", according to which China Merchants Zhangzhou
Development Zone Co., Ltd. entrusted its 29% equity of ZCMG to the Group for operation
and management. Therefore, the Group has 60% voting power of ZCMG and includes it in
the scope of consolidation of the consolidated financial statements.
Note 3:The Group is entitled to the nomination of most members of the executive commission and
has control over Lome Container Terminal S.A. Therefore, the Group includes it in the
scope of consolidation of the consolidated financial statements.
Note 4:The Group holds 50% equity interest in Zhanjiang Port Petrochemical Terminal Co., Ltd.
According to the agreement, the Group has control over Zhanjiang Port Petrochemical
Terminal Co., Ltd., and therefore includes it in the scope of consolidation of the
consolidated financial statements.
- 142 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(X) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(1) Composition of the Group - Major subsidiaries - continued
Note 5: Cyber Chic Company Limited, a subsidiary of the Company, entered into a cooperation
agreement with Ningbo Zhoushan. According to the cooperation agreement, Cyber Chic
Company Limited and Ningbo Zhoushan will negotiate and communicate to reach a
unanimous action before exercising their shareholder rights over Ningbo Daxie. If the
parties to the agreement fail to reach a consensus on matters such as the operation and
management of Ningbo Daxie, the decision will be based on the opinion of Cyber Chic
Company Limited. After the signing of the Cooperation Agreement, Cyber Chic Company
Limited and Ningbo Zhoushan together own more than 50% of the voting rights in Ningbo
Daxie. As a result, the Group is able to exercise control over Ningbo Daxie and includes it
in the scope of consolidation of the consolidated financial statements.
Note 6:Ports Development (Hong Kong) Co., Ltd. is a limited liability company established by
the Company in Hong Kong, China on 16 February 2022.
(2) Significant non-wholly-owned subsidiaries
Proportion of Profit or loss Dividends distributed Balance of
Name of the ownership interest attributable to minority to minority minority interests
subsidiary held by the minority shareholders in the shareholders in the at the end of the
shareholders (%) current year current year year
CM Port 54.31 4,707,642,117.09 1,590,573,974.57 68,280,647,974.87
- 143 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(X) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(3) Key financial information of significant non-wholly-owned subsidiaries
31/12/2022 31/12/2021
Name of the
Non-current Current Non-current Non-current Current Non-current
subsidiary Current assets Total assets Total liabilities Current assets Total assets Total liabilities
assets liabilities liabilities assets liabilities liabilities
CM Port 12,837,082,258.94 137,558,098,661.09 150,395,180,920.03 18,761,895,893.60 25,152,356,977.50 43,914,252,871.10 12,688,479,912.82 129,676,976,538.08 142,365,456,450.90 17,301,652,593.00 26,291,693,462.84 43,593,346,055.84
2022 2021
Name of
Total Total
the Cash flows from Cash flows from
Operating income Net profit comprehensive Operating income Net profit comprehensive
subsidiary operating activities operating activities
income income
CM Port 10,926,649,847.41 7,771,272,424.87 9,468,881,467.49 5,181,954,271.51 9,835,827,140.59 7,324,839,959.14 6,890,512,293.77 4,700,305,072.57
- 144 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(X) EQUITY IN OTHER ENTITIES - continued
2. Transactions resulting from 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 Company's ownership interests in CM Port is changed from 43.18% to
45.69%. Details are set out in Note (X) 1 (1).
(2) Effect of the transactions on minority interests and equity attributable to owners of the
Company
CM Port
Acquisition cost
- Cash 684,350,978.87
- Fair value of non-cash assets 1,408,249,596.23
Total acquisition cost 2,092,600,575.10
Less: Share of net assets of subsidiaries calculated based on the proportion of
3,042,814,449.38
equity acquired
Difference -950,213,874.28
Including: Adjustment to capital reserve 950,213,874.28
Adjustment to surplus reserve -
Adjustment to unappropriated profit -
3. Interests in joint ventures and associates
(1) Significant joint ventures or associates
Proportion of ownership
Accounting treatment
Principal place Place of interests held by the Group
Investee Nature of business of investments in
of business registration (%)
associates
Direct Indirect
Associate
Port and container
SIPG Shanghai, PRC Shanghai, PRC - 28.05 Equity method
terminal business
- 145 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(X) EQUITY IN OTHER ENTITIES - continued
4. Key financial information of significant associate
SIPG
Item 31/12/2022 / 31/12/2021/
2022 2021
Current assets 46,525,054,810.02 50,550,358,636.59
Including: Cash and cash equivalents 26,843,326,028.04 28,494,577,716.81
Non-current assets 135,276,650,788.84 120,237,119,876.27
Total assets 181,801,705,598.86 170,787,478,512.86
Current liabilities 25,863,891,496.14 29,281,912,321.67
Non-current liabilities 34,770,765,671.21 33,699,936,944.88
Total liabilities 60,634,657,167.35 62,981,849,266.55
Minority interests 8,839,640,972.54 8,014,833,731.08
Equity attributable to shareholders of the Company 112,327,407,458.97 99,790,795,515.23
Share of net assets calculated based on the proportion of
31,507,837,792.24 26,584,267,925.26
ownership interests
Adjustments
- Goodwill 2,427,508,397.27 2,066,192,806.75
- Others 236,552,011.66 193,346,651.68
Carrying amount of equity investments in associates 34,171,898,201.17 28,843,807,383.69
Fair value of publicly quoted equity investments
34,877,210,592.30 33,990,040,779.28
in associates
Operating income 37,279,806,723.63 34,288,697,334.43
Net profit 17,910,112,648.83 15,480,719,994.16
Other comprehensive income -526,788,637.24 573,880,124.36
Total comprehensive income 17,383,324,011.59 16,054,600,118.52
Dividends received from associates in the current year 1,240,688,187.97 793,927,959.22
5. Summarized financial information of insignificant associates and joint ventures
31/12/2022 31/12/2021
Item
/2022 / 2021
Joint ventures:
Total carrying amount of investments 9,716,793,055.72 8,540,003,758.64
Aggregate of following items calculated based on
the proportion of ownership interest
- Net profit 419,341,721.80 242,641,893.49
- Other comprehensive income 175,421,702.38 4,375,404.14
- Total comprehensive income 594,763,424.18 247,017,297.63
Associates:
Total carrying amount of investments 48,475,602,662.16 32,969,640,682.19
Aggregate of following items calculated based on
the proportion of ownership interest
- Net profit 2,003,274,864.02 1,857,965,787.11
- Other comprehensive income -300,868,120.56 -92,265,491.63
- Total comprehensive income 1,702,406,743.46 1,765,700,295.48
6. The investees where the Group holds long-term equity investments are not restricted
to transfer funds to the Group.
- 146 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XI) RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS
1. Currency risk
Currency risk is the risk that losses will occur because of changes in foreign exchange rates. The
Group's exposure to the currency risk is primarily associated with HKD, USD and EUR. Except
for part of the purchases and sales, the Group's other principal activities are denominated and
settled in RMB. As at 31 December 2022, the balances 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 currencies. Currency risk arising from the foreign currency balance of
assets and liabilities may have impact on the Group's performance.
Item 31/12/2022 31/12/2021
Cash and bank balances 799,833,569.05 304,226,402.75
Accounts receivable 29,766,083.42 37,640,821.94
Other receivables 360,531,571.16 292,001,737.01
Short-term borrowings 4,090,000,000.00 653,200,000.00
Accounts payable 2,372,883.60 3,534,444.32
Other payables 246,131,122.92 131,844,034.16
Non-current liabilities due within one year 670,000,000.00 2,585,407,534.25
Long-term borrowings 3,669,000,000.00 670,000,000.00
Long-term payables - 3,433,175,756.61
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 on the exchange
rate movements, the management considers it is unlikely that the exchange rate changes in the
next 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:
2022 2021
Effect on Effect on
Item Changes in exchange rate Effect Effect
shareholders' shareholders'
on profit on profit
equity equity
All foreign currencies 5% increase against RMB -383,846,068.61 -383,846,068.61 -146,440,030.80 -146,440,030.80
All foreign currencies 5% decrease against RMB 383,846,068.61 383,846,068.61 146,440,030.80 146,440,030.80
All foreign currencies 5% increase against USD 5,221,127.37 5,221,127.37 5,092,313.03 5,092,313.03
All foreign currencies 5% decrease against USD -5,221,127.37 -5,221,127.37 -5,092,313.03 -5,092,313.03
All foreign currencies 5% increase against HKD 3,837,255.04 3,837,255.04 -201,218,971.96 -201,218,971.96
All foreign currencies 5% decrease against HKD -3,837,255.04 -3,837,255.04 201,218,971.96 201,218,971.96
5% increase against EUR
All foreign currencies 419,047.06 419,047.06 402,049.34 402,049.34
(including FCFA)
5% decrease against EUR
All foreign currencies - 419,047.06 -419,047.06 -402,049.34 -402,049.34
(including FCFA)
- 147 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XI) RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
2. Interest rate risk - changes in cash flows
Risk of changes in cash flows of financial instruments arising from interest rate changes is mainly
related to bank loans with floating interest rate. (See Note (VIII) 26 and Note (VIII) 36). The
Group continuously and closely monitors the impact of interest rate changes on the Group's
interest rate risk. The Group's policy is to maintain these borrowings at floating rates. Presently,
the Group has no arrangement such as interest rate swaps.
Sensitivity analysis on interest rate risk
Sensitivity analysis on interest rate risk is based on the following assumptions:
Fluctuations of market interest rate can affect the interest income or expense of a financial
instrument with floating interest rate;
For a financial instrument at fair value with fixed interest rate, the fluctuations of market interest
rate can only affect its interest income or expense;
For a derivative financial instrument designated as hedging instrument, the fluctuations of market
interest rate affect its fair value, and all interest rate hedges 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:
2022 2021
Changes in Effect on Effect on
Item
interest rate Effect on profit shareholders' Effect on profit shareholders'
equity equity
Short-term borrowings and
1% increase -207,621,560.74 -207,621,560.74 -163,962,806.32 -163,962,806.32
long-term borrowings
Short-term borrowings and
1% decrease 207,621,560.74 207,621,560.74 163,962,806.32 163,962,806.32
long-term borrowings
3. Liquidity risk
In the management of the liquidity risk, the Group monitors and maintains a level of cash and
cash equivalents deemed adequate by the management to finance the Group's operations and
mitigate the effects of fluctuations in cash flows. The management monitors the utilisation of
bank borrowings and ensures compliance with loan covenants.
- 148 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XI) RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
3. Liquidity risk - continued
As at 31 December 2022, the Group had total current liabilities in excess of total current assets of
RMB 6,123,555,489.62. As at 31 December 2022, the Group had available and unused line of
credit and bonds amounting to RMB 74,112,485,433.51, which is greater than the balance of the
net current liabilities. The Group can obtain financial support from the available line of credit and
bonds when needed. Therefore, the Group's management believes that the Group has no
significant liquidity risk.
The following is the maturity analysis for financial assets and financial liabilities held by the
Group which is based on undiscounted remaining contractual obligations:
Item Carrying amount Gross amount Within 1 year 1 to 5 years Over 5 years
Short-term borrowings 7,164,338,366.18 7,235,206,811.18 7,235,206,811.18 - -
Accounts payable 811,149,397.66 811,149,397.66 811,149,397.66 - -
Other payables 1,755,885,258.26 1,755,885,258.26 1,755,885,258.26 - -
Non-current liabilities due
11,571,368,811.38 13,000,513,740.76 13,000,513,740.76 - -
within one year
Other current liabilities 3,161,147,525.96 3,175,491,532.81 3,175,491,532.81 - -
Long-term borrowings 12,390,099,177.85 13,332,739,038.22 - 11,944,558,295.20 1,388,180,743.02
Bonds payable 19,088,293,099.02 20,991,603,102.02 - 16,723,687,844.84 4,267,915,257.18
Lease liabilities 948,350,914.04 1,598,294,958.62 - 364,988,464.83 1,233,306,493.79
Other non-current
20,000,000.00 20,543,476.71 - 20,543,476.71 -
liabilities
Long-term payables 3,542,966,493.60 3,546,292,462.09 - 643,944,866.57 2,902,347,595.52
(XII) DISCLOSURE OF FAIR VALUE
1. Closing balance of assets and liabilities measured at fair value
Fair value at 31/12/2022
Level 1 Level 2 Level 3
Item
Fair value Fair value Fair value Total
measurement measurement measurement
Continuously measured at fair value
Held-for-trading financial assets 135,742.11 2,998,645,857.52 - 2,998,781,599.63
Receivables financing - - 163,766,913.10 163,766,913.10
Investments in other equity instruments - - 171,945,275.02 171,945,275.02
Other non-current financial assets 1,717,875,084.72 - 27,865,811.69 1,745,740,896.41
Total assets continuously measured
1,718,010,826.83 2,998,645,857.52 363,577,999.81 5,080,234,684.16
at fair value
2. Basis for determining the market price of items continuously measured at level 1 fair
value
The market prices of held-for-trading financial assets and other non-current financial assets are
determined based on the closing price of the equity instruments at Stock Exchange at 31
December 2022.
- 149 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XII) DISCLOSURE OF FAIR VALUE - continued
3. Qualitative and quantitative information of valuation techniques and key parameters
adopted for items continuously measured at level 2 fair value
Fair value at
Item Valuation techniques Inputs
31/12/2022
Expected rate of
Held-for-trading financial assets 2,998,645,857.52 Cash flow discounting
return
The fair value of debt instruments at fair value through profit or loss is determined using the cash
flow discounting approach. During the valuation, the Group adopts the expected return as the
input.
4. Qualitative and quantitative information of valuation techniques and key parameters
adopted for items continuously measured at level 3 fair value
Fair value at
Item Valuation techniques Inputs
31/12/2022
Receivables financing 163,766,913.10 Cash flow discounting Discount rate
Investments in other equity
171,945,275.02 Net worth method Carrying amount
instruments
Other non-current financial assets 2,000,000.00 Cash flow discounting Discount rate
Other non-current financial assets 723,955.24 Net worth method Carrying amount
Other non-current financial assets 25,141,856.45 Listed company comparison approach Share price
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 the adjustment of discount and premium.
5. Fair value of financial assets and financial liabilities not measured at fair value
The financial assets and liabilities not measured at fair value mainly include notes receivable,
accounts receivable, other receivables, short-term borrowings, notes payable, accounts payable,
other payables, long-term borrowings, bonds payable, lease liabilities and long-term payables etc.
The Group's management believes that the carrying amounts of financial assets and financial
liabilities at amortized cost in the financial statements approximate their fair values.
- 150 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS
1. Parent of the Company
Proportion of
Proportion of voting
Related party Place of ownership interests
Name of the Company Type of the entity Nature of business Issued share capital power held by the
relationship registration held by the Company
Company (%)
(%)
Broadford Global Limited Parent Private limited company (share limited) Hong Kong Investment holding HKD 21,120,986,262 2.21 63.01 (Note)
Note: Broadford Global Limited directly holds 2.21% equity of the Company, and indirectly holds 14.84% and 45.96% equity of the Company
through the subsidiaries China Merchants Gangtong Development (Shenzhen) Co., Ltd. and China Merchants Port Investment Development
Company Limited (formerly known as China Merchants Investment Development Co., Ltd.) respectively. The ultimate controlling
shareholder of the Company is China Merchants Group.
2. Subsidiaries of the Company
Details of the subsidiaries of the Company are set out in Note (X) 1.
- 151 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XIII) 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 (X) 3.
Other joint ventures or associates that have related party transactions with the Group in the current
year, or formed balances of related party transactions with the Group in the prior year are as
follows:
Name of joint venture or associate Relationship with the Company
Port of Newcastle and its subsidiaries Joint venture
Guizhou East Land Port Operation Co., Ltd. Joint venture
Qingdao Qianwan United Container Terminal Co., Ltd. Joint venture
Qingdao Qianwan West Port United Wharf Co., Ltd. Joint venture
Qingdao Qianwan New United Container Terminal Co., Ltd. Joint venture
COSCO Logistics (Zhanjiang) Co., Ltd. Joint venture
China Ocean Shipping Agency (Zhanjiang) Co., Ltd Joint venture
Yantai Port Group Laizhou Port Co., Ltd. Joint venture
Qingdao Wutong Century Supply Chain Co., Ltd. Joint venture
China Merchants Port (Shenzhen) Industrial Innovation Private Equity
Joint venture
Investment Fund Partnership (Limited Partnership) ("Investment Fund")
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
SIPG Associate
Ningbo Zhoushan and its subsidiaries Associate
Shenzhen Baohong Technology Co., Ltd. Associate
Tianjin Haitian Bonded Logistics Co., Ltd. Associate
Merchants Port City Associate
Zhanjiang Xiagang United Development Co., Ltd. Associate
Zhangzhou COSCO Shipping Agency Co., Ltd. Associate
Chu Kong River Trade Terminal Co., Ltd. Associate
Shantou Zhonglian Tally Co., Ltd Associate
Shantou International Container Terminals Limited Associate
Shenzhen Bay Electricity Industry Co., Ltd. Associate
Tianjin Port Container Terminal Co., Ltd. Associate
Lac Assal Investment Holding Company Limited Associate
CM Port Chuangrong (Shenzhen) Technology Co., Ltd. Associate
Associate, controlled by the same
Liaoning Port and its subsidiaries
ultimate controlling shareholder
- 152 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
4. Other related parties of the Company
Name of other related parties Relationship with the Company
Antong Holdings and its subordinate companies (Note) The same related natural person
Zhanjiang Infrastructure Construction Investment Group Co., Ltd. Minority shareholder of subsidiary
Zhoushan Blue Ocean Investment Co., Ltd. Minority shareholder of subsidiary
Sri Lanka Ports Authority Minority shareholder of subsidiary
Guangdong Shunkong City Investment Real Estate Co. Ltd. Minority shareholder of subsidiary
China Marine Shipping Agency Guangdong Co., Ltd. Controlled by the same ultimate controlling shareholder
Hoi Tung (Shanghai) Company Limited Controlled by the same ultimate controlling shareholder
Hoi Tung (Shenzhen) Company Limited Controlled by the same ultimate controlling shareholder
South China Sinotrans Supply Chain Management Co., Ltd. Controlled by the same ultimate controlling shareholder
EuroAsia Dockyard Enterprise and Development Limited Controlled by the same ultimate controlling shareholder
Qingdao Bonded Logistics Park Sinotrans Warehousing Logistics Co., Ltd. Controlled by the same ultimate controlling shareholder
Qingdao Sinotrans Supply Chain Management Co., Ltd. Controlled by the same ultimate controlling shareholder
Penavico Shenzhen Warehousing Co., Ltd. Controlled by the same ultimate controlling shareholder
Shenzhen Nanyou (Holdings) Ltd. Controlled by the same ultimate controlling shareholder
Sinotrans Shenzhen Qianhai Supply Chain Management Ltd. Controlled by the same ultimate controlling shareholder
Shenzhen Qianhai Shekou Free Trade Investment Development Co. Ltd. Controlled by the same ultimate controlling shareholder
China Merchants International Shipping Agency (Shenzhen) 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 Real Estate Co., Ltd. Controlled by the same ultimate controlling shareholder
Shenzhen Merchants to Home Technology Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Shenzhen Ro-Ro Shipping Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Commercial Property Investment (Shenzhen) Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Property Management (Shenzhen) Co., Ltd. Controlled by the same ultimate controlling shareholder
China Marine Shipping Agency Shenzhen Co., Ltd. Controlled by the same ultimate controlling shareholder
Yiu Lian Dockyards (Shekou) Limited Controlled by the same ultimate controlling shareholder
Yiu Lian Dockyards Limited Controlled by the same ultimate controlling shareholder
China Merchants International Cold Chain (Shenzhen) Company Limited Controlled by the same ultimate controlling shareholder
China Merchants Group Finance Company Limited Controlled by the same ultimate controlling shareholder
China Merchants Port Investment Development Company Limited Controlled by the same ultimate controlling shareholder
China Merchants Finance Lease (Shanghai) 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 Merchant Food (China) Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Tongshang Finance Lease Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Logistics Group Qingdao Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Zhangzhou Development Zone Power Supply Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Securities Co., Ltd. Controlled by the same ultimate controlling shareholder
China Traffic Import and Export Co., Ltd. Controlled by the same ultimate controlling shareholder
Sinotrans Changhang Group Limited Controlled by the same ultimate controlling shareholder
China Merchants Your Cellar (Shenzhen) Co., Ltd. Controlled by the same ultimate controlling shareholder
Shenzhen Dehan Investment Development Co., Ltd. Controlled by the same ultimate controlling shareholder
China Marine Shipping Agency Guangdong Co., Ltd. Controlled by the same ultimate controlling shareholder
Note: Zheng Shaoping resigned as the deputy general manager of the Company on 6 August
2021 and became the chairman of Antong Holdings within 12 months of his departure.
Therefore, the related party relationship between the Group and Antong Holdings lasted
from 22 October 2020 to 6 August 2022.
- 153 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
4. Other related parties of the Company - continued
Name of other related parties Relationship with the Company
China Merchants Healthcare (Qichun) Co., Ltd. Controlled by the same ultimate controlling shareholder
China Ocean Shipping Tally Shenzhen Co., Ltd. Controlled by the same ultimate controlling shareholder
Sinotrans Central China Co., Ltd. Controlled by the same ultimate controlling shareholder
Sinotrans (HK) Shipping Limited Controlled by the same ultimate controlling shareholder
Sinoway Shipping Ltd. Controlled by the same ultimate controlling shareholder
China Merchants (Liaoning) Port Development Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Heavy Industry (Jiangsu) Co., Ltd. Controlled by the same ultimate controlling shareholder
Sinotrans Shantou Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Apartment Development (Shenzhen) Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants-Logistics Shenzhen Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Zhangzhou Development Zone Co., Ltd. Controlled by the same ultimate controlling shareholder
China Ocean Shipping Agency Shenzhen Co. Ltd. Controlled by the same ultimate controlling shareholder
China Marine Shipping Agency Ningbo Co., Ltd. Controlled by the same ultimate controlling shareholder
Sinotrans Container Lines (Hong Kong) Company Limited Controlled by the same ultimate controlling shareholder
Sinotrans Container Lines Co., Ltd. Controlled by the same ultimate controlling shareholder
Yingkou Port Group Co., Ltd. ("Yingkou Port Group") and its subsidiaries Controlled by the same ultimate controlling shareholder
Panjin Port Group Co., Ltd. Controlled by the same ultimate controlling shareholder
Broadford (Shenzhen) Port Development Co., Ltd. Controlled by the same ultimate controlling shareholder
Liaoning Port Group Co., Ltd. Controlled by the same ultimate controlling shareholder
Liaoning Electronic Port Co., Ltd Controlled by the same ultimate controlling shareholder
China Yangtze River Shipping Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Gangrong Big Data Co., Ltd. Controlled by the same ultimate controlling shareholder
Dalian Port Construction Supervision Consulting Co., Ltd. Controlled by the same ultimate controlling shareholder
Dalian Port Group Corporation Limited Controlled by the same ultimate controlling shareholder
Dalian Container Terminal Co., Ltd. Controlled by the same ultimate controlling shareholder
Shenzhen Municipal Public Security Bureau Shekou Police Substation Controlled by the same ultimate controlling shareholder
Shenzhen West Port Security Service Co., Ltd. Controlled by the same ultimate controlling shareholder
Sinotrans South China Co., Ltd. Controlled by the same ultimate controlling shareholder
Dalian Port Container Controlled by the same ultimate controlling shareholder
Jifa Logistics Controlled by the same ultimate controlling shareholder
Dalian Port Communications Engineering Co., Ltd. Controlled by the same ultimate controlling shareholder
Dalian Jifa South Coast International Logistics Co., Ltd. Controlled by the same ultimate controlling shareholder
Dalian Jifa Port Logistics Co., Ltd. Controlled by the same ultimate controlling shareholder
CHINA MERCHANTS SHIPPING AND ENTERPRISES COMPANY
Controlled by the same ultimate controlling shareholder
LIMITED
Ningbo Transocean International Forwarding Agency Co., Ltd. Controlled by the same ultimate controlling shareholder
Qingdao Sinotrans Mining Technology Co., Ltd. Controlled by the same ultimate controlling shareholder
Dalian Bonded Zone Yongdexin Real Estate Development &
Controlled by the same ultimate controlling shareholder
Construction Co., Ltd.
Yingkou Xingang Kuangshi Terminals Co., Ltd. Controlled by the same ultimate controlling shareholder
Dandong Port Group Co., Ltd. Controlled by the same ultimate controlling shareholder
Datong Securities Co., Ltd Significantly influenced by the ultimate controlling shareholder
Dalian Automobile Terminal Co., Ltd Significantly influenced by the ultimate controlling shareholder
Dalian Port Design Research Institute Co., Ltd. Significantly influenced by the ultimate controlling shareholder
Khor Ambado FZCo Significantly influenced by the ultimate controlling shareholder
Djibouti International Hotel Company Significantly influenced by the ultimate controlling shareholder
China Merchants Bank Co., Ltd. Significantly influenced by the ultimate controlling shareholder
China Merchants (Shenzhen) Power Supply Co., Ltd. Significantly influenced by the ultimate controlling shareholder
Shenzhen Wanhai Building Management Co., Ltd. Significantly influenced by the ultimate controlling shareholder
- 154 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions
(1) Rendering and receipt of services
Pricing method and
Content of
Related party decision procedures of 2022 2021
transaction
related transactions
Receipt of services:
Shenzhen Bay Electricity Industry Co., Ltd. Service expense Negotiation 55,476,519.62 52,118,359.34
China Merchants Finance Lease (Shanghai) Co., Ltd. Service expense Negotiation 21,363,353.64 -
Nanshan Group and its subsidiaries Service expense Negotiation 20,553,330.63 12,899,160.06
Hoi Tung (Shanghai) Company Limited Service expense Negotiation 19,923,373.82 9,908,555.07
Qingdao Qianwan West Port United Wharf Co., Ltd. Service expense Negotiation 18,229,532.95 17,429,281.52
Shenzhen Merchants Electricity Supply Co., ltd Service expense Negotiation 17,893,208.32 16,896,892.16
COSCO Logistics (Zhanjiang) Co., Ltd. Service expense Negotiation 16,324,326.06 13,741,598.64
Ningbo Zhoushan Service expense Negotiation 14,417,120.66 14,902,071.93
Shenzhen West Port Security Service Co., Ltd. Service expense Negotiation 11,952,754.94 8,628,090.47
Yiu Lian Dockyards Limited Service expense Negotiation 8,489,653.19 8,484,365.83
China Merchants Property Management (Shenzhen) Co., Ltd. Service expense Negotiation 7,959,601.92 11,411,320.65
Shenzhen Nanyou (Holdings) Ltd. Service expense Negotiation 5,764,441.32 -
China Merchants Port Investment Development Company
Service expense Negotiation 5,571,699.92 2,511,488.39
Limited
China Merchants Zhangzhou Development Zone Power
Service expense Negotiation 5,562,706.02 5,148,081.30
Supply Co., Ltd.
China Merchants Securities Co., Ltd. Service expense Negotiation 5,547,169.80 -
Sinoway Shipping Ltd. Service expense Negotiation 4,886,700.00 -
China Merchants Commercial Property Investment
Service expense Negotiation 3,896,620.63 6,963,663.53
(Shenzhen) Co., Ltd.
Liaoning Port and its subsidiaries Service expense Negotiation 3,612,247.90 1,453,666.27
Yingkou Port Group and its subsidiaries Service expense Negotiation 2,838,787.56 3,655,450.63
China Marine Shipping Agency Guangdong Co., Ltd. Service expense Negotiation 2,619,862.38 5,128,165.14
China Merchant Food (China) Co., Ltd. Service expense Negotiation 2,534,006.83 2,010,522.22
China Marine Shipping Agency Shenzhen Co., Ltd. Service expense Negotiation 2,486,175.66 2,886,771.98
Djibouti International Hotel Company Service expense Negotiation 2,344,919.84 -
Shenzhen Merchants to Home Technology Co. Service expense Negotiation 2,270,488.10 2,529,286.74
China Ocean Shipping Tally Shenzhen Co., Ltd. Service expense Negotiation 2,086,506.13 2,367,078.52
Khor Ambado FZCo Service expense Negotiation 1,765,467.27 -
China Merchants Healthcare (Qichun) Co., Ltd. Service expense Negotiation 1,188,397.44 874,591.30
Shenzhen Municipal Public Security Bureau Shekou Police Service expense Negotiation - 13,215,162.92
Shenzhen Qianhai Shekou Free Trade Investment
Service expense Negotiation - 3,246,406.82
Development Co. Ltd.
Qingdao Wutong Century Supply Chain Co., Ltd. Service expense Negotiation - 1,412,347.77
China Merchants Logistics Group Qingdao Co., Ltd. Service expense Negotiation - 278,746.88
China Merchants Your Cellar (Shenzhen) Co., Ltd. Service expense Negotiation - 145,501.77
Other related parties Service expense Negotiation 6,780,732.36 5,426,539.23
Purchase of
China Merchants Bank Co., Ltd. Negotiation 900,061,111.11 901,314,575.34
structured deposits
China Merchants Group Finance Company Limited Interest expense Negotiation 74,066,413.54 57,267,460.41
China Merchants Bank Co., Ltd. Interest expense Negotiation 8,970,399.98 7,309,189.97
China Merchants Finance Lease (Tianjin) Co., Ltd. Interest expense Negotiation 724,437.17 -
China Merchants Tongshang Finance Lease Co., Ltd. Property utilities Negotiation 4,089,619.16 -
Other related parties Property utilities Negotiation - 1,527,482.73
Total 1,262,251,685.87 1,193,091,875.53
- 155 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(1) Rendering and receipt of services - continued
Pricing method and
Content of
Related party decision procedures of 2022 2021
transaction
related transactions
Rendering of services:
COSCO Logistics (Zhanjiang) Co., Ltd. Service income Negotiation 203,783,472.45 172,689,315.75
Liaoning Port and its subsidiaries Service income Negotiation 165,608,963.82 84,665,638.27
Antong Holdings and its subordinate companies Service income Negotiation 124,308,389.86 149,257,485.43
Qingdao Qianwan United Container Terminal Co., Ltd. Service income Negotiation 61,896,678.04 57,107,934.04
China Ocean Shipping Agency (Zhanjiang) Co., Ltd Service income Negotiation 59,100,409.00 58,774,852.27
China Marine Shipping Agency Guangdong Co., Ltd. Service income Negotiation 57,816,828.74 78,136,291.87
Yingkou Port Group and its subsidiaries Service income Negotiation 41,932,643.50 59,158,823.90
China Merchants International Shipping Agency (Shenzhen) Co., Ltd. Service income Negotiation 29,854,035.10 19,931,387.34
Sinoway Shipping Ltd. Service income Negotiation 22,315,438.97 2,275,910.33
Liaoning Port Group Co., Ltd. Service income Negotiation 19,746,474.90 30,230,480.12
Yiu Lian Dockyards (Shekou) Limited Service income Negotiation 15,088,720.57 15,861,643.81
Sinotrans Central China Co., Ltd. Service income Negotiation 9,600,255.49 2,557.32
CM Port Chuangrong (Shenzhen) Technology Co., Ltd. Service income Negotiation 8,665,860.83 5,060,041.98
Sinotrans Container Lines Co., Ltd. Service income Negotiation 7,891,652.35 9,659,043.11
South China Sinotrans Supply Chain Management Co., Ltd. Service income Negotiation 5,745,399.44 3,315,529.59
Shenzhen Baohong Technology Co., Ltd. Service income Negotiation 5,562,857.25 12,375,371.81
Sinotrans Shenzhen Qianhai Supply Chain Management Ltd. Service income Negotiation 5,354,930.31 8,201,186.45
China Ocean Shipping Agency Shenzhen Co. Ltd. Service income Negotiation 4,966,841.25 6,742,585.37
China Marine Shipping Agency Shenzhen Co., Ltd. Service income Negotiation 4,955,801.22 6,065,850.59
China Yangtze River Shipping Co., Ltd. Service income Negotiation 4,864,882.39 4,015,942.03
Qingdao Bonded Logistics Park Sinotrans Warehousing Logistics
Service income Negotiation 4,633,215.32 2,060,322.30
Co., Ltd.
Qingdao Qianwan West Port United Wharf Co., Ltd. Service income Negotiation 4,335,903.64 3,556,894.16
China Merchants International Cold Chain (Shenzhen) Company
Service income Negotiation 4,050,145.80 -
Limited
Sinotrans Container Lines (Hong Kong) Company Limited Service income Negotiation 3,545,752.04 2,618,545.62
Qingdao Qianwan New United Container Terminal Co., Ltd. Service income Negotiation 3,174,751.23 2,727,630.47
Sinotrans & CSC Holdings Co., Ltd. Service income Negotiation 2,971,698.12 1,349,056.61
SIPG Service income Negotiation 2,633,413.21 1,430,583.02
Shantou Zhonglian Tally Co., Ltd Service income Negotiation 2,509,658.22 2,688,839.07
Yantai Port Group Laizhou Port Co., Ltd. Service income Negotiation 2,075,471.68 2,043,962.25
China Merchants Port Investment Development Company Limited Service income Negotiation 1,907,632.07 6,100,924.53
China Merchants Heavy Industry (Jiangsu) Co., Ltd. Service income Negotiation 1,814,935.95 2,788,745.68
Nanshan Group and its subsidiaries Service income Negotiation 1,707,871.21 1,147,657.18
Merchants Port City Service income Negotiation 1,672,423.95 1,591,345.21
Sinotrans Shantou Co., Ltd. Service income Negotiation 1,610,585.09 1,411,180.98
Tianjin Port Container Terminal Co., Ltd. Service income Negotiation 1,475,548.18 722,817.00
CHINA MERCHANTS SHIPPING AND ENTERPRISES COMPANY
Service income Negotiation 1,204,104.79 459,445.09
LIMITED
Ningbo Transocean International Forwarding Agency Co., Ltd. Service income Negotiation 1,179,815.94 -
Investment Fund Service income Negotiation 1,142,414.06 821,804.81
Shantou International Container Terminals Limited Service income Negotiation 1,068,566.79 2,830,152.56
Dalian Port Construction Supervision Consulting Co., Ltd. Service income Negotiation 1,060,945.09 1,561,447.66
Dalian Automobile Terminal Co., Ltd. Service income Negotiation 968,960.44 2,162,744.31
Dalian Port Group Co., Ltd. Service income Negotiation 890,607.59 1,471,595.43
China Merchants Shekou Industrial Zone Holdings Co., Ltd. Service income Negotiation 867,155.09 2,379,478.59
China Merchants Gangrong Big Data Co., Ltd. Service income Negotiation 833,383.69 3,839,970.76
Shenzhen Dehan Investment Development Co., Ltd. Service income Negotiation 760,365.57 1,106,438.68
Datong Securities Co., Ltd. Service income Negotiation 752,654.88 1,464,247.85
- 156 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(1) Rendering and receipt of services - continued
Pricing method and
Content of
Related party decision procedures of 2022 2021
transaction
related transactions
Rendering of service:
China Marine Shipping Agency Guangdong Co., Ltd. Service income Negotiation 681,455.19 1,234,211.32
Liaoning Electronic Port Co., Ltd. Service income Negotiation 613,207.55 1,007,547.18
Guizhou East Land Port Operation Co., Ltd. Service income Negotiation 592,407.92 2,379,122.83
Dalian Port Design Research Institute Co., Ltd. Service income Negotiation 197,369.99 1,217,915.13
Penavico Shenzhen Warehousing Co., Ltd. Service income Negotiation 160,663.44 206,068.60
China Merchants-Logistics Shenzhen Co., Ltd. Service income Negotiation 107,700.00 364,878.63
Broadford (Shenzhen) Port Development Co., Ltd. Service income Negotiation - 233,023,495.03
China Marine Shipping Agency Ningbo Co., Ltd. Service income Negotiation - 127,750,175.04
China Merchants International Cold Chain (Shenzhen)
Service income Negotiation - 6,932,874.90
Company Limited
Sinotrans (HK) Shipping Limited Service income Negotiation - 1,270,858.60
Guizhou Qiandongnan Continental Land Port Operation Co., Ltd. Service income Negotiation - 975,890.37
China Merchants (Liaoning) Port Development Co., Ltd. Service income Negotiation - 943,396.22
Zhangzhou COSCO Shipping Agency Co., Ltd. Service income Negotiation - 820,987.04
Doraleh Multi-purpose Port Service income Negotiation - 585,604.28
International Djibouti Industrial Parks Operation FZCO Service income Negotiation - 502,024.39
Other related parties Service income Negotiation 26,887,970.55 13,882,596.99
Terminal Link SAS Interest income Negotiation 169,844,015.81 165,180,415.51
Port of Newcastle and its subsidiaries Interest income Negotiation 17,721,583.77 76,683,050.81
China Merchants Group Finance Company Limited Interest income Negotiation 25,519,980.42 24,994,228.38
Tianjin Haitian Bonded Logistics Co., Ltd. Interest income Negotiation 1,558,375.91 1,558,375.91
China Merchants Bank Co., Ltd. Interest income Negotiation 105,426,962.23 32,931,572.09
Merchants Port City Interest income Negotiation - 1,957,067.27
Total 1,259,220,207.90 1,530,266,057.72
(2) Leases with related parties
The Group as the lessor:
Pricing method and Lease income Lease income
Name of the lessee Type of leased assets decision procedures of recognized in the recognized in the
related transactions current year prior year
Qingdao Qianwan West Port United Wharf Co., Ltd. Buildings and structures Negotiation 10,222,395.86 9,711,263.00
China Merchants Real Estate (Shenzhen) Co., Ltd. Buildings and structures Negotiation 7,152,157.00 -
Qingdao Bonded Logistics Park Sinotrans Warehousing Port and terminal
Negotiation 6,876,165.97 5,533,737.88
Logistics Co., Ltd. facilities
China Merchant Food (China) Co., Ltd. Buildings and structures Negotiation 5,683,461.66 5,414,148.96
China Traffic Import and Export Co., Ltd. Buildings and structures Negotiation 5,473,072.56 5,212,396.32
Nanshan Group and its subsidiaries Buildings and structures Negotiation 5,065,342.55 2,478,760.43
Qingdao Sinotrans Mining Technology Co., Ltd Buildings and structures Negotiation 4,750,557.12 -
Qingdao Sinotrans Supply Chain Management Co., Ltd. Buildings and structures Negotiation 3,558,552.62 3,926,471.23
Qingdao Qianwan United Container Terminal Co., Ltd. Buildings and structures Negotiation 3,037,651.81 2,407,032.41
China Merchants Securities Co., Ltd. Buildings and structures Negotiation 2,567,514.78 2,265,123.10
Yiu Lian Dockyards (Shekou) Limited Buildings and structures Negotiation 2,195,466.64 3,008,337.95
Qingdao Wutong Century Supply Chain Co., Ltd. Buildings and structures Negotiation 2,119,296.03 619,965.10
Sinotrans South China Co., Ltd. Buildings and structures Negotiation 564,605.52 1,897,332.07
Buildings and
Other related parties structures, land use Negotiation 6,856,178.26 7,650,774.22
rights
Total 66,122,418.38 50,125,342.67
- 157 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(2) Leases with related parties - continued
The Group as the lessee:
Lease term (disclose
Other significant
Name of the lessor Type of leased assets Rental (year) the period covered by
lease terms
contract)
Nanshan Group and its subsidiaries Buildings and structures 64,589,226.16 2019.01.01-2024.12.31 N/A
China Merchants Finance Lease (Shanghai) Co., Ltd. Port and terminal facilities 58,302,270.50 2018.03.19-2024.03.26 N/A
Machinery and equipment,
China Merchants Finance Lease (Shanghai) Co., Ltd. 57,849,868.06 2018.11.30-2024.11.30 N/A
port and terminal facilities
China Merchants Tongshang Finance Lease Co., Ltd. Machinery and equipment 46,381,918.54 2017.10.31-2023.10.27 N/A
China Merchants Finance Lease (Tianjin) Co., Ltd. Port and terminal facilities 35,733,649.64 2018.03.19-2024.03.26 N/A
China Merchants Shekou Industrial Zone Holdings
Port and terminal facilities 30,584,055.34 2022.01.01-2023.12.31 N/A
Co., Ltd.
China Merchants Tongshang Finance Lease Co., Ltd. Machinery and equipment 17,717,147.04 2016.12.26-2022.11.15 N/A
EuroAsia Dockyard Enterprise and Development
Port and terminal facilities 14,696,367.93 2022.01.01-2022.12.31 N/A
Limited
China Merchants Shekou Industrial Zone Holdings
Others 6,115,067.28 2022.01.01-2024.12.31 N/A
Co., Ltd.
Shenzhen Qianhai Shekou Free Trade Investment
Buildings and structures 4,206,780.00 2022.01.01-2022.12.31 N/A
Development Co. Ltd.
Shenzhen Qianhai Shekou Free Trade Investment
Others 3,968,660.38 2022.01.15-2022.07.31 N/A
Development Co. Ltd.
China Merchants Commercial Property Investment
Buildings and structures 3,889,563.40 2021.01.01-2022.12.31 N/A
(Shenzhen) Co., Ltd.
Nanshan Group and its subsidiaries Others 3,795,785.53 2022.01.01-2024.12.31 N/A
With progressively
China Merchants Finance Lease (Tianjin) Co., Ltd. Port and terminal facilities 3,105,625.00 2022.06.16-2025.06.16 increasing and
decreasing rent
Nanshan Group and its subsidiaries Buildings and structures 3,083,925.40 2022.01.01-2022.12.31 N/A
Shenzhen Nanyou (Holdings) Ltd. Others 1,995,553.15 2022.01.01-2022.12.31 N/A
China Merchants Commercial Property Investment With progressively
Buildings and structures 1,342,488.00 2021.01.01-2022.12.31
(Shenzhen) Co., Ltd. increasing rent
China Merchants Commercial Property Investment
Buildings and structures 1,241,376.00 2022.01.01-2022.12.31 N/A
(Shenzhen) Co., Ltd.
Nanshan Group and its subsidiaries Buildings and structures 1,200,466.97 2022.01.01-2022.09.30 N/A
With progressively
Shenzhen Wanhai Building Management Co., Ltd. Buildings and structures 1,202,209.02 2021.06.15-2024.06.14
increasing rent
China Merchants International Cold Chain (Shenzhen)
Port and terminal facilities 1,032,762.89 2021.05.01-2024.04.30 N/A
Company Limited
China Merchants International Cold Chain (Shenzhen)
Buildings and structures 861,000.00 2022.03.22-2023.02.28 N/A
Company Limited
China Merchants International Cold Chain (Shenzhen)
Buildings and structures 840,000.00 2021.03.01-2022.02.28 N/A
Company Limited
Qingdao Qianwan United Container Terminal Co., Ltd. Buildings and structures 662,285.71 2022.05.01-2023.12.31 N/A
Dalian Free Trade Zone Yongdexin Real Estate
Buildings and structures 408,741.23 2023.01.01-2023.12.31 N/A
Development and Construction Co., Ltd.
Attached with
China Nanshan Development (Group) Co., Ltd. Buildings and structures 319,869.42 2019.01.01-2023.12.31
renewal option
China Nanshan Development (Group) Co., Ltd. Others 230,502.86 2021.01.01-2023.12.31 N/A
China Merchants Apartment Development China
Buildings and structures 142,674.30 2022.01.01-2022.12.31 N/A
Merchants Apartment Development
Nanshan Group and its subsidiaries Buildings and structures 118,800.00 2019.01.01-2023.12.31 N/A
Attached with
Nanshan Group and its subsidiaries Port and terminal facilities 108,078.38 2019.01.01-2024.12.31
renewal option
Dalian Port Group Corporation Limited Buildings and structures 80,000.00 2022.01.01-2022.12.31 N/A
Nanshan Group and its subsidiaries Buildings and structures 53,931.60 2022.09.01-2023.08.31 N/A
Dalian Port Communications Engineering Co., Ltd. Buildings and structures 50,000.00 2022.01.01-2022.12.31 N/A
China Merchants International Cold Chain (Shenzhen)
Buildings and structures 48,604.84 2022.03.01-2022.03.21 N/A
Company Limited
Nanshan Group and its subsidiaries Others 11,592.00 2021.07.01-2022.06.30 N/A
Total 365,970,846.57
- 158 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(3) Related party guarantees
The Group as the guarantor
Guaranteed The guarantee has
Secured party Credit line Commencement date Maturity
amount been completed or not
2022
Terminal Link SAS (Note 1) 66,490,102.62 66,490,102.62 1 June 2013 2033 No
Khor Ambado FZCo (Note 2) 200,580,480.00 120,182,425.59 24 May 2019 2032 No
Total 267,070,582.62 186,672,528.21
2021
Terminal Link SAS (Note 1) 65,122,443.30 65,122,443.30 1 June 2013 2033 No
Khor Ambado FZCo (Note 2) 253,381,120.00 110,394,672.56 24 May 2019 2032 No
Total 318,503,563.30 175,517,115.86
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
provide guarantee for its bank loans and other liabilities to Terminal Link SAS to the
extent of the Group's 49% ownership interest in the company. The actual guaranteed
amount is RMB 66,490,102.62 as at 31 December 2022. If any guarantee liability occurs,
the Group will compensate CMA CGM S.A.
Note 2: Khor Ambado FZCo is a related party of the Group's ultimate controlling shareholder.
The Group provides guarantee for its bank loans and other liabilities, the actual amount of
which as at 31 December 2022 is RMB 120,182,425.59.
(4) Borrowings and loans with related parties
Commencement
Related party Amount Maturity date Description
date
2022
Borrowings
Actual borrowing Agreed repayment
China Merchants Group Finance Company Limited 604,990,472.82 Short-term borrowings
date date
Actual borrowing Agreed repayment
China Merchants Bank Co., Ltd. 140,139,852.77 Long-term borrowings
date date
Actual borrowing Agreed repayment
China Merchants Group Finance Company Limited 31,618,224.87 Long-term borrowings
date date
Actual borrowing Agreed repayment
China Merchants Bank Co., Ltd. 15,015,583.33 Short-term borrowings
date date
Total 791,764,133.79
(5) Asset transfer from related parties
Pricing method and
Related party Content of transaction decision procedures of 2022 2021
related transactions
Hoi Tung (Shanghai) Company Limited Fixed assets Negotiation 8,831,858.42 4,115,044.26
Hoi Tung (Shanghai) Company Limited Construction in progress Negotiation 4,853,097.34 -
Broadford (Shenzhen) Port Development Co., Ltd. Equity investment Valuation - 384,000,000.00
Hoi Tung (Shenzhen) Company Limited Machinery and equipment Market price - 1,345,132.74
Other related parties Construction in progress Negotiation - 485,704.85
Total 13,684,955.76 389,945,881.85
- 159 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(6) Compensation for key management personnel
Item 2022 2021
Compensation for key management personnel 20,313,774.52 14,796,861.98
6. Amounts due from/to related parties
(1) Amounts due from related parties
Item Related party 31/12/2022 31/12/2021
China Merchants Bank Co., Ltd. 3,387,973,124.59 2,563,011,212.30
Cash and bank balances China Merchants Group Finance Company Limited 1,841,698,554.32 2,178,303,655.54
Total 5,229,671,678.91 4,741,314,867.84
Held-for-trading
China Merchants Bank Co., Ltd. 900,061,111.11 901,314,575.34
financial assets
Ningbo Zhoushan and its subsidiaries 20,289,988.06 -
China Marine Shipping Agency Guangdong Co., Ltd. 17,505,768.03 1,970,902.79
Antong Holdings and its subordinate companies 8,395,245.04 13,014,575.59
SINOWAY SHIPPING LIMITED 4,564,389.71 512,749.94
COSCO Logistics (Zhanjiang) Co., Ltd. 4,045,734.88 5,211,554.51
Qingdao Qianwan West Port United Wharf Co., Ltd. 3,749,064.99 2,315,131.88
Liaoning Port Co., Ltd. 3,680,900.00 1,414,964.00
Yiu Lian Dockyards (Shekou) Limited 3,554,521.60 4,414,431.20
Khor Ambado FZCo 3,108,610.49 2,842,053.59
Dalian Jifa Port Logistics Co., Ltd. 2,220,941.63 337,180.00
Great Horn Development Company FZCo 2,157,859.50 2,606,831.64
Dalian Container Terminal Co., Ltd. 1,957,840.00 330,000.60
Dalian Jifa South Coast International Logistics Co., Ltd. 1,839,478.79 817,625.00
Liaoning Port Group Co., Ltd. 1,821,581.00 733,681.00
Port de Djibouti S.A. 1,770,749.55 1,618,911.45
Accounts receivable Qingdao Qianwan United Container Terminal Co., Ltd. 1,729,380.01 1,049,999.99
China Merchants International Shipping Agency (Shenzhen)
1,530,505.68 1,341,323.72
Co., Ltd.
Nanshan Group and its subsidiaries 1,404,627.23 -
Sinotrans Container Lines Co., Ltd. 1,287,851.75 1,436,388.75
China Ocean Shipping Agency Shenzhen Co., Ltd. 758,113.05 1,418,539.82
South China Sinotrans Supply Chain Management Co., Ltd. 659,854.40 475,477.60
Sinotrans (HK) Shipping Limited 375,748.78 1,068,888.42
China Marine Shipping Agency Ningbo Co., Ltd. 164,981.21 6,502,287.89
Yingkou Port Group and its subsidiaries 160,491.00 3,333,618.62
Panjin Port Group - 1,467,000.00
China Merchants International Cold Chain (Shenzhen)
- 1,215,660.73
Company Limited
Guizhou East Land Port Operation Co., Ltd. - 89,177.60
Other related parties 13,549,055.64 8,951,295.22
Total 102,283,282.02 66,490,251.55
- 160 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from/to related parties - continued
(1) Amounts due from related parties - continued
Item Related party 31/12/2022 31/12/2021
Nanshan Group 240,591,000.00 185,070,000.00
Tin-Can Island Container Terminal Ltd 65,121,449.40 19,076,909.00
Qingdao Qianwan United Container Terminal Co., Ltd. 50,000,000.00 -
Dividends receivable Merchants Port City 41,847,044.77 41,847,044.77
COSCO Logistics (Zhanjiang) Co., Ltd. 18,449,001.16 18,403,959.77
Other related parties 232,047.23 277,072.09
Total 416,240,542.56 264,674,985.63
Chu Kong River Trade Terminal Co., Ltd. 36,053,588.00 32,953,940.00
Port de Djibouti S.A. 24,808,664.70 22,681,372.48
Shenzhen Nanyou (Holdings) Ltd. 6,725,260.86 110,902.00
Shenzhen Qianhai Shekou Free Trade Investment Development
6,310,000.00 6,000,000.00
Co., Ltd.
Zhoushan Blue Ocean Investment Co., Ltd. 4,996,989.39 4,996,989.39
China Merchants Shenzhen Ro-Ro Shipping Co., Ltd. 2,899,163.95 2,899,163.95
EuroAsia Dockyard Enterprise and Development Limited 1,510,055.76 1,380,231.20
Other receivables
China Merchants Commercial Property Investment (Shenzhen)
1,132,846.40 1,132,846.40
Co., Ltd.
Nanshan Group and its subsidiaries 1,009,839.70 129,239.70
China Merchants Port Investment Development Company Limited - 5,000,000.00
Zhanjiang Infrastructure Construction Investment Group Co., Ltd. - 4,907,365.06
COSCO Logistics (Zhanjiang) Co., Ltd. - 2,190,539.40
Other related parties 3,550,453.73 6,477,504.63
Total 88,996,862.49 90,860,094.21
Nanshan Group and its subsidiaries 9,000.00 -
Prepayments Other related parties 6,351.75 -
Total 15,351.75 -
Port of Newcastle and its subsidiaries 852,919,208.25 60,029,243.30
Non-current assets due Terminal Link SAS 46,409,214.10 42,429,677.59
within one year China Merchants Finance Lease (Tianjin) Co., Ltd. 3,800,000.00 -
Total 903,128,422.35 102,458,920.89
Terminal Link SAS 2,931,108,250.96 2,679,769,106.42
Tianjin Haitian Bonded Logistics Co., Ltd. 34,300,000.00 34,300,000.00
China Merchants Finance Lease (Shanghai) Co., Ltd. 6,200,000.00 -
Long-term receivables
China Merchants Finance Lease (Tianjin) Co., Ltd. 659,515.88 10,000,000.00
Port of Newcastle and its subsidiaries - 750,086,910.62
Total 2,972,267,766.84 3,474,156,017.04
Other non-current assets China Traffic Import and Export Co., Ltd. - 20,854,077.98
- 161 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from/to related parties - continued
(2) Amounts due to related parties
Item Related party 31/12/2022 31/12/2021
China Merchants Group Finance Company Limited 413,453,629.50 3,393,366,381.96
Short-term borrowings China Merchants Bank Co., Ltd. 15,015,583.33 -
Total 428,469,212.83 3,393,366,381.96
Other current liabilities China Merchants Group Finance Company Limited 10,056,575.34 10,012,082.19
Antong Holdings and its subordinate companies 16,948,161.45 -
Ningbo Zhoushan and its subsidiaries 16,725,206.29 1,159,307.43
Qingdao Qianwan West Port United Wharf Co., Ltd. 8,007,474.16 6,742,200.79
Shenzhen Bay Electricity Industry Co., Ltd. 4,920,501.06 4,987,709.79
SINOWAY SHIPPING LIMITED 4,886,700.00 -
Nanshan Group and its subsidiaries 4,259,215.79 3,154,427.56
Accounts payable
EuroAsia Dockyard Enterprise and Development Limited 2,363,408.70 3,142,704.91
China Merchants Port Investment Development Company Limited 1,203,536.99 37,539.37
Yiu Lian Dockyards Limited 792,07794 2,651,200.00
China Marine Shipping Agency Shenzhen Co., Ltd. 248,14917 633,810.99
Other related parties 4,212,603.81 3,064,781.40
Total 64,567,035.36 25,573,682.24
Qingdao Wutong Century Supply Chain Co., Ltd. 196,30130 -
Receipts in advance Other related parties 160,60000 53,057.84
Total 356,90130 53,057.84
Dalian Container Terminal Co., Ltd. 9,679,785.44 3,573,179.78
Dandong Port Group Co., Ltd. 3,842,709.07 -
Qingdao Qianwan United Container Terminal Co., Ltd. 1,556,753.55 1,050,000.00
Yingkou Xingang Kuangshi Terminals Co., Ltd. 1,514,844.30 -
Contract liabilities Antong Holdings and its subordinate companies 1,468,616.91 1,994,209.18
COSCO Logistics (Zhanjiang) Co., Ltd. 1,275,397.28 -
Qingdao Sinotrans Supply Chain Management Co., Ltd. 368,48460 1,578,302.00
Other related parties 2,508,480.44 2,897,061.68
Total 22,215,071.59 11,092,752.64
Zhanjiang Infrastructure Construction Investment Group Co., Ltd. 41,400,234.06 -
China Merchants Zhangzhou Development Zone Co., Ltd. 20,000,000.00 20,000,000.00
Dalian Port Container 14,000,000.00 18,349,264.69
Dividends payable
Sri Lanka Ports Authority 10,446,900.00 -
Jifa Logistics 3,000,000.00 4,945,967.80
Total 88,847,134.06 43,295,232.49
Lac Assal Investment Holding Company Limited 47,359,371.46 -
Antong Holdings and its subordinate companies 12,730,734.37 8,077,252.00
China Merchants Real Estate (Shenzhen) Co., Ltd. 10,079,369.00 10,079,369.00
China Merchants Shekou Industrial Zone Holdings Co., Ltd. 6,420,820.68 -
China Merchants Port Investment Development Company Limited 4,130,081.82 7,417,802.54
China Merchants Commercial Property Investment (Shenzhen)
3,750,000.03 7,839,816.47
Co., Ltd.
China Merchants Real Estate Co., Ltd. 3,263,853.86 -
Other payables
Sinotrans Shenzhen Qianhai Supply Chain Management Ltd. 1,628,515.12 1,579,720.16
Zhanjiang Xiagang United Development Co., Ltd. 1,439,753.57 1,433,473.84
China Merchant Food (China) Co., Ltd. 1,069,017.00 1,069,017.00
Shenzhen Baohong Technology Co., Ltd. 749,26939 -
Port de Djibouti S.A. - 254,894,592.46
Terminal Link SAS - 3,910,337.39
Other related parties 6,732,058.14 5,419,228.21
Total 99,352,844.44 301,720,609.07
- 162 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from/to related parties - continued
(2) Amounts due to related parties - continued
Item Related party 31/12/2022 31/12/2021
China Merchants Group Finance Company Limited 110,838,087.45 27,106,533.22
China Merchants Finance Lease (Shanghai) Co., Ltd. 103,236,707.51 104,204,701.37
Nanshan Group and its subsidiaries 65,165,836.97 56,174,150.92
China Merchants Tongshang Finance Lease Co., Ltd. 45,115,824.42 60,639,407.07
China Merchants Shekou Industrial Zone Holdings Co., Ltd. 37,012,422.69 -
China Merchants Finance Lease (Tianjin) Co., Ltd. 32,339,542.44 32,788,124.97
EuroAsia Dockyard Enterprise and Development Limited 14,255,883.08 13,030,256.95
Non-current liabilities
China Merchants Bank Co., Ltd. 11,362,639.43 4,227,333.34
due within one year
Guangdong Shunkong City Investment Real Estate Co. Ltd. 3,162,000.00 -
China Merchants International Cold Chain (Shenzhen)
1,050,270.17 -
Company Limited
China Merchants Commercial Property Investment (Shenzhen)
- 6,029,278.06
Co., Ltd.
Other related parties 1,962,815.09 961,513.13
Total 425,502,029.25 305,161,299.03
Other non-current
Nanshan Group and its subsidiaries - 1,020,381.51
liabilities
China Merchants Group Finance Company Limited 445,490,692.58 543,744,022.45
Long-term borrowings China Merchants Bank Co., Ltd. 325,000,000.00 196,000,000.00
Total 770,490,692.58 739,744,022.45
China Merchants Finance Lease (Shanghai) Co., Ltd. 75,833,546.45 177,500,213.13
Nanshan Group and its subsidiaries 65,431,073.09 58,651,209.31
China Merchants Finance Lease (Tianjin) Co., Ltd. 15,833,403.29 47,500,069.97
China Merchants Shekou Industrial Zone Holdings Co., Ltd. 5,993,041.70 -
Lease liabilities China Merchants International Cold Chain (Shenzhen)
253,362.41 1,353,404.41
Company Limited
China Merchants Tongshang Finance Lease Co., Ltd. - 44,730,575.22
Other related parties 803,148.25 181,987.02
Total 164,147,575.19 329,917,459.06
Long-term payables China Merchants Finance Lease (Tianjin) Co., Ltd. 41,052,268.30 -
(XIV) SHARE-BASED PAYMENTS
1. Overall share-based payments
Total equity instruments granted by the Company in the year None
Total equity instruments exercised by the Company in the year None
Total equity instruments of the Company that became invalid in the year 5,948,200 shares
Range of exercise prices and remaining contractual life of the Company's Exercise price: RMB 14.71 to RMB 16.69;
stock options outstanding at the end of the year The remaining contractual life: 49 months
Range of exercise prices and remaining contractual life of the Company's
None
other equity instruments outstanding at the end of the year
- 163 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XIV) SHARE-BASED PAYMENTS - continued
2. Equity-settled share-based payments
The method used to determine the fair value of equity instruments The cost of granted stock options was estimated
at the grant date using the Black Scholes Model.
At each balance sheet date in the vesting period,
the best estimate was made and the estimated
number of exercisable equity instruments was
The basis for determining the number of exercisable equity instruments
modified according to the latest changes in the
number of employees who can exercise the rights
and other subsequent information.
Reasons for the significant difference between the estimates Criteria of exercising in vesting period of batch 2
of the current year and the estimates of prior year are not satisfied
The aggregate amount of equity-settled share-based payments that is
5,591,402.00
included in capital reserve
Total expenses recognized for the equity-settled share-based payments
-7,631,891.11
in the year
Pursuant to the Official Reply on the Implementation of the Stock Option Incentive Plan of China
Merchants Port Group Co., Ltd. by State-owned Assets Supervision and Administration
Commission of the State Council (No. 748 [2019], SASAC), which was deliberated and approved
by the 1st Extraordinary General Meeting of the Company in 2020 on 3 February 2020, the
Company implemented a stock option plan with effect from 3 February 2020 to grant 238
incentive recipients 17,198,000 stock options with an exercise price of RMB17.80 per share. With
a lockup period of 24 months from the grant date, the stock options are exercisable upon expiry of
the 24-month lockup period in the premise that the vesting conditions are satisfied. The stock
options are exercisable in three batches, specifically, 40% for the first batch (after 24 months but
within 36 months subsequent to the grant date), 30% for the second batch (after 36 months but
within 48 months subsequent to the grant date) and the remaining 30% for the third batch (after 48
months but within 84 months subsequent to the grant date). Each stock option entitles the holder
to subscribe for one ordinary share of the Company.
On 5 March 2021, the granting of stock option (reserved portion) under stock option inventive
plan (phase I) was completed. The reserved portion of stock option targets to total 3 persons,
granting 530,000 shares of stock option with exercise price of RMB15.09 per share. The grant
date is 29 January 2021. With a lockup period of 24 months from the grant date, the stock options
are exercisable upon expiry of the 24-month lockup period in the premise that the vesting
conditions are satisfied. The stock options are exercisable in two batches, specifically, 50% for the
first batch (after 24 months but within 36 months subsequent to the grant date), and the remaining
50% for the second batch (after 36 months but within 72 months subsequent to the grant date).
Each stock option entitles the holder to subscribe for one ordinary share of the Company.
- 164 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XIV) SHARE-BASED PAYMENTS - continued
2. Equity-settled share-based payments - continued
According to Article 32 of Stock Option Incentive Plan, since the grant date of the stock option, if
the Company distributes dividends prior to the exercise of the option, the exercise price shall be
adjusted accordingly. Therefore, the Company uniformly adjusted the exercise price from
RMB17.80 per share to 17.34 per share in respect of the first batch of stock option granted under
stock option incentive plan (phase I) on 30 January 2021; the Company uniformly adjusted the
exercise price from RMB 17.34 per share to 16.69 per share in respect of the first batch of stock
option granted under stock option incentive plan (phase I), and the exercise price of the reserved
portion of stock option from RMB 15.09 per share to 14.71 per share on 29 January 2022.
As at the date on which the financial statements are issued, as the criteria of exercise in the second
vesting period of the stock option (1st batch) under the stock option incentive plan (phase I) are
not satisfied, the Company has cancelled the 3,886,800 shares of stock option corresponding to
the second vesting period of the stock option (1st batch) under the stock option incentive plan
(phase I). Since the criteria of exercise in the first vesting period of the stock option (the reserved
portion) under the stock option incentive plan (phase I) are not satisfied, the Company has
cancelled the 265,000 shares of stock option corresponding to the first vesting period of the stock
option (the reserved portion) under the stock option incentive plan (phase I). As 21 of the
incentive targets have retired or no longer serve the Company, the corresponding 1,796,400 shares
of stock option have been cancelled.
(XV) COMMITMENTS AND CONTINGENCIES
1. Significant commitments
Item 31/12/2022 31/12/2021
Commitments that have been entered into but have not
been recognized in the financial statements
- Commitment to make contributions to the investees 38,956,185.01 211,620,680.00
- Commitment to acquire and construct long-term assets 1,802,316,899.52 1,755,687,773.54
- Commitment to invest port construction 5,571,690.76 5,093,914.88
- Others 383,560.31 -
Total 1,847,228,335.60 1,972,402,368.42
2. Contingencies
Item 31/12/2022 31/12/2021
Contingent liabilities brought by external litigations (Note 1) 279,438,527.06 207,807,928.33
Guarantee for borrowings of related parties (Note 2) 186,672,528.21 175,517,115.86
Total 466,111,055.27 383,325,044.19
- 165 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XV) COMMITMENTS AND CONTINGENCIES - continued
2. Contingencies - continued
Note 1: This mainly represents the significant contingent liabilities arising from the litigations
between TCP and its subsidiaries and local tax authority, employee or former employee of
TCP and its subsidiaries in Brazil at as the year end. According to the latest estimates of
the Group's management, the possible compensation is RMB279,438,527.06 but it is not
likely to cause outflow of economic benefits from the Group. Therefore, the contingent
liabilities arising from the above pending litigations are not recognized as provisions. The
counter-bonification where the Group as the beneficiary will be executed by the former
TCP shareholder that disposed the shares. According to the counter-bonification
agreement, the former TCP shareholder needs 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.
Zhanjiang Port, a subsidiary of the Company, entered into an EPC contract for the General
Cargo Terminal Project at Donghai Island Port Area of Zhanjiang Port with CCCC Water
Transport Planning and Design Institute Co., Ltd. on 28 June 2016, with the agreed
construction period from 28 June 2016 to 8 June 2018. After the contract was signed, the
overall progress of the project construction was delayed due to the optimization and
adjustment of the layout plan and process design for the terminal. In December 2022,
CCCC Water Transport Planning and Design Institute Co., Ltd. filed a litigation to the
court for losses caused by delay in construction, adjustment to project scale, changes in
design, and other reasons, and may require Zhanjiang Port for compensation.
As at 31 December 2022, the claims of CCCC Water Transport Planning and Design
Institute Co., Ltd. were inconsistent with those agreed in the contract, the relevant result of
the litigation could not be reasonably estimated, and the management of the Group
believed that the possibility of loss was quite low, therefore, no provisions were made for
the above pending litigation.
Note 2: As at 31 December 2022, the guarantees provided by the Group for related parties are
detailed in Note XIII 5(3).
As at 31 December 2022, the directors of the Company evaluated the default risks of
related companies on the above-mentioned loan financing and other liabilities, and
believed that the risks were not significant and the possibility of guaranteed payments was
very small.
Except for the above-mentioned contingencies, as at 31 December 2022, the Group had no
other major guarantees and other contingencies that need to be explained.
- 166 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XVI) EVENTS AFTER THE BALANCE SHEET
According to the profit distribution plan for 2022 and as approved by the 7th meeting of the 10th
board of directors on 31 March 2023, the Company, based on the total shares of 2,499,074,661 as
at 31 December 2022, distributes cash dividends at RMB 4.50 for every 10 shares, totalling RMB
1,124,583,597.45. The above profit distribution plan has not yet been approved by shareholders'
meeting.
(XVII) 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 considers the operation of the Group in terms of business and locations.
Individual operating segments for which discrete financial information is available are identified
by the CODM and are operated by their respective management teams. These individual operating
segments are aggregated in arriving at the reporting segments of the Group.
From business and location perspectives, the 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 ports operation is presented as follows:
(a) Mainland China, Hong Kong and Taiwan
Pearl River Delta
Yangtze River Delta
Bohai Rim
Others
(b) Other locations outside of Mainland China, Hong Kong and Taiwan
Bonded logistics operation
Bonded logistics operation includes logistics park operation, ports transportation and airport cargo
handling operated by the Group and its associates and joint ventures.
- 167 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XVII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(1) Basis for determining reporting segments and accounting policies - continued
Other operations
Other operations mainly include property development and investment and logistics business
operated by the Group's associates, property investment operated by the Group and corporate
function.
Each of the segments under ports operation includes the operations of a number of ports in
various locations within one geographic location. 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 nature of
their operations to give rise to more meaningful presentation.
There are no material sales or other transactions between the segments.
The revenue from a major customer of ports operation amounts to RMB1,672,365,283.13,
representing 10.30% (2021: 11.52%) of the Group's operating income for 2022.
- 168 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XVII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Financial information of reporting segments
Segment financial information for 2022 is as follows:
Ports operation
Mainland China, Hong Kong and Taiwan Bonded logistics Unappropriated
Item Others Total
Yangtze River Other locations Sub-total operation amount
Pearl River Delta Bohai Rim Others
Delta
Operating income 6,774,045,422.66 1,139,944,516.62 74,222,857.10 3,552,074,625.60 4,086,514,642.86 15,626,802,064.84 445,592,537.09 158,094,525.62 - 16,230,489,127.55
Operating cost 3,849,914,782.32 696,788,162.45 62,264,300.65 2,691,172,225.32 1,853,376,921.16 9,153,516,391.90 280,270,213.56 216,675,107.48 - 9,650,461,712.94
Segment operating profit
2,924,130,640.34 443,156,354.17 11,958,556.45 860,902,400.28 2,233,137,721.70 6,473,285,672.94 165,322,323.53 -58,580,581.86 - 6,580,027,414.61
(loss)
Taxes and surcharges 32,239,840.06 5,674,557.52 1,102,665.95 49,561,307.23 152,923,436.63 241,501,807.39 22,188,514.91 18,305,796.73 253,354.43 282,249,473.46
Administrative expense 435,544,849.33 37,586,936.77 9,903,393.91 536,045,336.65 266,594,657.88 1,285,675,174.54 46,846,479.95 1,356,901.51 431,216,180.51 1,765,094,736.51
R&D expenses 227,962,954.81 40,790,798.38 - 18,952,425.51 - 287,706,178.70 - - - 287,706,178.70
Financial expenses 43,042,474.05 12,623,313.35 16,617,530.89 105,755,359.90 202,779,070.53 380,817,748.72 11,831,333.17 42,509,881.22 1,823,554,709.31 2,258,713,672.42
Other income 128,422,018.54 6,905,602.77 99,278.36 73,123,957.51 - 208,550,857.18 20,996,809.22 2,259,661.58 9,840,742.44 241,648,070.42
Investment income 222,543,823.37 5,152,876,665.17 334,188,303.02 53,824,558.05 1,070,198,985.49 6,833,632,335.10 94,330,245.64 425,089,497.20 24,603,428.39 7,377,655,506.33
Gains (losses) from changes in
34,481,879.58 - -28,084,576.60 1,009,908.14 - 7,407,211.12 -136,440,861.23 - - -129,033,650.11
fair value
Gains from impairment of credit
-5,932,959.08 - 269,053.38 19,276,798.42 -221,119,087.29 -207,506,194.57 -15,967,381.98 - - -223,473,576.55
(losses)
Gains (losses) from impairment
-573,122.05 - - -21,585,898.15 - -22,159,020.20 - - - -22,159,020.20
of assets
Gains (losses) from disposal of
-186,834.36 - - -2,189,571.61 61,495.66 -2,314,910.31 104,763.84 57,352,755.05 -12,513.06 55,130,095.52
assets
Operating profit (loss) 2,564,095,328.09 5,506,263,016.09 290,807,023.86 274,047,723.35 2,459,981,950.52 11,095,195,041.91 47,479,570.99 363,948,752.51 -2,220,592,586.48 9,286,030,778.93
- 169 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XVII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Financial information of reporting segments - continued
Segment financial information for 2022 is as follows: - continued
Ports operation
Mainland China, Hong Kong and Taiwan Bonded logistics Unappropriated
Item Others Total
Yangtze River Other locations Sub-total operation amount
Pearl River Delta Bohai Rim Others
Delta
Non-operating income 18,342,596.09 2,900,356.17 22,378,312.31 10,237,915.83 221,044,827.94 274,904,008.34 50,933.02 992,336.45 3,327,174.96 279,274,452.77
Non-operating expenses 23,387,870.39 1,035,713.16 - 148,923,783.29 29,888,387.79 203,235,754.63 10,000.00 - 17,196,500.05 220,442,254.68
Total profit (loss) 2,559,050,053.79 5,508,127,659.10 313,185,336.17 135,361,855.89 2,651,138,390.67 11,166,863,295.62 47,520,504.01 364,941,088.96 -2,234,461,911.57 9,344,862,977.02
Income tax expenses 517,928,967.15 218,235,972.45 19,104,784.49 39,483,784.58 225,040,819.77 1,019,794,328.44 17,884,281.49 73,694,575.33 1,806,494.09 1,113,179,679.35
Net profit (loss) 2,041,121,086.64 5,289,891,686.65 294,080,551.68 95,878,071.31 2,426,097,570.90 10,147,068,967.18 29,636,222.52 291,246,513.63 -2,236,268,405.66 8,231,683,297.67
Segment assets 24,257,996,252.39 58,080,072,708.01 9,491,073,768.13 27,095,782,491.19 44,322,822,242.58 163,247,747,462.30 4,719,190,904.43 19,523,260,761.95 10,035,331,759.08 197,525,530,887.76
Total assets in the financial statements 197,525,530,887.76
Segment liabilities 10,543,319,204.88 1,993,414,192.41 142,428,100.05 7,095,951,456.64 7,184,350,827.79 26,959,463,781.77 472,931,692.54 849,543,150.07 40,981,807,066.15 69,263,745,690.53
Total liabilities in the financial statements 69,263,745,690.53
Supplementary information:
Depreciation and amortization 1,119,781,238.27 214,719,968.82 882,688.51 851,694,182.33 801,221,249.28 2,988,299,327.21 98,440,779.50 184,744,488.91 26,022,221.27 3,297,506,816.89
Interest income 49,428,469.37 2,890,732.29 543,508.80 27,921,113.89 255,001,470.66 335,785,295.01 1,231,657.13 1,329,524.29 131,487,621.62 469,834,098.05
Interest expense 86,468,640.13 10,921,214.61 - 128,204,357.08 415,728,796.45 641,323,008.27 13,108,859.14 26,701,866.03 1,544,029,072.35 2,225,162,805.79
Investment income from
long-term equity investments 134,882,198.77 5,114,173,074.83 293,371,940.22 53,436,206.60 1,070,198,985.49 6,666,062,405.91 94,330,245.64 424,789,497.20 - 7,185,182,148.75
under equity method
Long-term equity investments
1,741,189,123.54 52,146,528,746.22 8,605,621,312.90 1,094,348,450.19 13,193,855,158.62 76,781,542,791.47 1,496,017,782.58 14,086,733,345.00 - 92,364,293,919.05
under equity method
Non-current assets other than
18,338,841,436.04 4,203,682,076.56 15,863,803.61 21,159,269,860.52 25,053,023,827.83 68,770,681,004.56 2,058,218,100.73 5,083,564,521.74 880,089,692.55 76,792,553,319.58
long-term equity investments
- 170 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XVII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Financial information of reporting segments - continued
Segment financial information for 2021 is as follows:
Ports operation
Mainland China, Hong Kong and Taiwan Bonded logistics Unappropriated
Item Others Total
Yangtze River Other locations Sub-total operation amount
Pearl River Delta Bohai Rim Others
Delta
Operating income 6,169,011,494.33 955,807,808.06 69,178,976.05 3,746,197,331.61 3,695,214,463.69 14,635,410,073.74 464,573,743.50 183,824,357.36 - 15,283,808,174.60
Operating cost 3,453,475,366.43 597,481,157.49 54,665,813.81 2,783,662,072.53 1,680,840,428.09 8,570,124,838.35 257,835,741.37 218,875,602.77 - 9,046,836,182.49
Segment operating profit
2,715,536,127.90 358,326,650.57 14,513,162.24 962,535,259.08 2,014,374,035.60 6,065,285,235.39 206,738,002.13 -35,051,245.41 - 6,236,971,992.11
(loss)
Adjustments:
Taxes and surcharges 33,618,026.16 1,740,839.69 1,145,292.35 46,827,778.00 59,226,541.93 142,558,478.13 25,369,242.73 23,905,217.75 141,305.70 191,974,244.31
Administrative expense 459,095,114.37 41,447,191.06 10,094,331.91 530,495,769.77 239,606,436.10 1,280,738,843.21 43,767,439.19 1,021,783.02 403,632,493.08 1,729,160,558.50
R&D expenses 162,845,174.00 38,114,947.70 - 16,945,513.97 - 217,905,635.67 - - - 217,905,635.67
Financial expenses 77,467,350.81 5,641,533.68 -2,466,397.16 120,310,978.09 195,175,809.87 396,129,275.29 12,385,910.10 22,982,823.67 1,113,840,588.23 1,545,338,597.29
Other income 282,932,907.60 9,484,000.67 5,469.40 57,374,140.86 - 349,796,518.53 13,193,859.62 254,782.93 - 363,245,161.08
Investment income 440,035,665.04 4,238,562,309.59 277,273,943.74 345,017,458.52 468,204,189.40 5,769,093,566.29 -12,031,120.80 856,291,297.44 23,595,767.98 6,636,949,510.91
Gains (losses) from changes in
9,359,683.02 - -98,965,383.40 2,347,751.88 306,172,536.00 218,914,587.50 - - 2,327,687.67 221,242,275.17
fair value
Gains (losses) from impairment
-6,838,168.58 1,020,000.00 - -7,045,279.31 -192,031,975.00 -204,895,422.89 -48,058,194.61 - - -252,953,617.50
of credit
Gains (losses) from impairment
- - - -418,345,307.68 -2,147,208.07 -420,492,515.75 - - - -420,492,515.75
of assets
Gains (losses) from disposal of
2,962,025.35 13,209.72 6,430,654.08 25,740,511.52 266,566.00 35,412,966.67 212,611.41 - -49,118.66 35,576,459.42
assets
Operating profit (loss) 2,710,962,574.99 4,520,461,658.42 190,484,618.96 253,044,495.04 2,100,829,356.03 9,775,782,703.44 78,532,565.73 773,585,010.52 -1,491,740,050.02 9,136,160,229.67
- 171 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XVII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Financial information of reporting segments - continued
Segment financial information for 2021 is as follows: - continued
Ports operation
Mainland China, Hong Kong and Taiwan Bonded logistics Unappropriated
Item Others Total
Yangtze River Other locations Sub-total operation amount
Pearl River Delta Bohai Rim Others
Delta
Non-operating income 13,008,411.38 574,013.03 508,302.39 9,629,274.10 14,567,738.63 38,287,739.53 27,449.61 597,934.35 4,554,414.01 43,467,537.50
Non-operating expenses 6,917,726.39 2,166,481.95 - 53,226,742.91 24,897,586.02 87,208,537.27 20,000.00 -0.01 8,300,155.85 95,528,693.11
Total profit (loss) 2,717,053,259.98 4,518,869,189.50 190,992,921.35 209,447,026.23 2,090,499,508.64 9,726,861,905.70 78,540,015.34 774,182,944.88 -1,495,485,791.86 9,084,099,074.06
Income tax expenses 524,164,148.32 221,408,593.92 7,548,598.15 61,714,339.27 307,146,501.14 1,121,982,180.80 11,538,241.85 53,526,346.43 242,046,315.23 1,429,093,084.31
Net profit (loss) 2,192,889,111.66 4,297,460,595.58 183,444,323.20 147,732,686.96 1,783,353,007.50 8,604,879,724.90 67,001,773.49 720,656,598.45 -1,737,532,107.09 7,655,005,989.75
Segment assets 28,287,890,207.35 36,766,156,834.80 7,570,933,282.53 27,838,467,531.77 41,135,106,798.84 141,598,554,655.29 3,462,069,538.25 18,978,652,576.39 11,944,824,398.73 175,984,101,168.66
Total assets in the financial statements 175,984,101,168.66
Segment liabilities 10,300,340,684.26 1,641,664,024.25 149,926,571.36 7,645,454,637.72 7,851,403,330.63 27,588,789,248.22 533,057,935.76 1,017,520,046.89 35,809,307,046.31 64,948,674,277.18
Total liabilities in the financial statements 64,948,674,277.18
Supplementary information:
Depreciation and amortization 889,758,581.06 197,464,949.23 1,093,508.89 917,975,691.54 766,865,123.91 2,773,157,854.63 72,861,519.89 175,029,480.65 45,222,064.61 3,066,270,919.78
Interest income 13,898,280.21 4,223,041.44 402,788.78 32,826,269.88 246,477,465.44 297,827,845.75 1,120,075.68 2,177,357.15 76,438,595.91 377,563,874.49
Interest expense 96,364,688.47 5,094,276.48 - 153,293,454.39 383,901,414.22 638,653,833.56 15,348,819.97 31,819,095.28 1,224,026,866.19 1,909,848,615.00
Investment income from
long-term equity investments 361,451,468.54 4,238,562,309.59 236,693,226.55 141,786,109.87 468,204,189.40 5,446,697,303.95 -12,031,120.80 856,291,297.44 - 6,290,957,480.59
under equity method
Long-term equity investments
6,010,920,490.10 30,734,063,685.69 6,722,000,869.89 508,063,722.03 11,990,041,710.35 55,965,090,478.06 672,691,660.83 13,715,669,685.63 - 70,353,451,824.52
under equity method
Non-current assets other than
18,760,635,381.65 4,126,611,225.22 16,711,625.75 24,186,695,730.85 20,329,634,458.61 67,420,288,422.08 2,126,565,848.52 4,930,963,314.80 620,648,598.94 75,098,466,184.34
long-term equity investments
- 172 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XVII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Financial information of reporting segments - continued
The Group's total revenue from external transactions in Mainland China and other countries and
regions, and total non-current assets other than financial assets and deferred tax assets located in
Mainland China and other countries and regions are presented as follows
Revenue from external transactions 2022 2021
Mainland China, Hong Kong and Taiwan 12,105,380,701.20 11,550,563,244.63
Pearl River Delta 7,195,529,214.88 6,646,437,978.26
Yangtze River Delta 1,139,944,516.62 955,807,808.06
Bohai Rim 217,832,344.10 202,120,126.70
Others 3,552,074,625.60 3,746,197,331.61
Other locations 4,125,108,426.35 3,733,244,929.97
Total 16,230,489,127.55 15,283,808,174.60
Total non-current assets 31/12/2022 31/12/2021
Mainland China, Hong Kong and Taiwan 130,723,044,577.52 109,645,185,780.08
Pearl River Delta 42,150,053,552.57 45,414,657,732.10
Yangtze River Delta 56,350,210,822.78 34,860,356,989.30
Bohai Rim 9,147,542,234.74 7,318,137,784.88
Others 23,075,237,967.43 22,052,033,273.80
Other locations 38,433,802,661.11 35,806,732,228.78
Total 169,156,847,238.63 145,451,918,008.86
(3) Degree of reliance on major customers
The total operating income derived from the top five customers of the Group is RMB
3,298,081,685.23, accounting for 20.32% of the Group's operating income.
(XVIII) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS
1. Other receivables
1.1 Summary of other receivables
Item 31/12/2022 31/12/2021
Dividends receivable 147,896,763.88 177,295,422.67
Other receivables 2,601,740,991.35 1,079,447,548.34
Total 2,749,637,755.23 1,256,742,971.01
- 173 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XVIII) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
1. Other receivables - continued
1.2 Dividends receivable
(1) Presentation of dividends receivable
Investee 31/12/2022 31/12/2021
Chiwan Wharf Holdings (Hong Kong) Ltd. 147,680,363.88 147,680,363.88
Shenzhen Petrochemical Industry (Group) Co., Ltd. 216,400.00 216,400.00
China Merchants Bonded Logistics Co., Ltd. - 15,707,120.00
Dongguan Shenchiwan Wharf Co., Ltd. - 13,691,538.79
Total 147,896,763.88 177,295,422.67
Less: Provision for credit loss - -
Carrying amount 147,896,763.88 177,295,422.67
(2) Significant dividends receivable aged over 1 year
Impaired or not and
Reason for
Item 31/12/2022 31/12/2021 the determination
outstanding
basis
In processing and
Chiwan Wharf Holdings
147,680,363.88 147,680,363.88 expected to be No
(Hong Kong) Ltd.
recovered in 2023
Total 147,680,363.88 147,680,363.88
1.3 Other receivables
(1) Aging analysis of other receivables
31/12/2022
Aging Provision for Proportion of
Other receivables
credit loss provision (%)
Within 1 year 1,526,322,695.78 - -
1 to 2 years 289,656,927.75 - -
2 to 3 years 457,984,135.87 - -
More than 3 years 328,160,688.55 383,456.60 0.12
Total 2,602,124,447.95 383,456.60
(2) Disclosure of other receivables by nature
Item 31/12/2022 31/12/2021
Amounts due from related parties 2,596,356,894.67 1,072,941,653.53
Advances 2,467,600.00 4,741,428.81
Others 3,299,953.28 2,147,922.60
Total 2,602,124,447.95 1,079,831,004.94
Less: Provision for credit loss 383,456.60 383,456.60
Carrying amount 2,601,740,991.35 1,079,447,548.34
- 174 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XVIII) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
1. Other receivables - continued
1.3 Other receivables - continued
(3) 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 rate of other receivables under each credit rating.
Such expected average loss rate is based on historical actual impairment and takes into
consideration of current and expected future economic conditions.
At 31 December 2022, the credit risk and expected credit loss of other receivables by category of
customers are as follows:
31/12/2022 31/12/2021
Expected Lifetime Lifetime Lifetime
Lifetime ECL
Credit rating credit loss ECL (not ECL ECL
12-month ECL (credit- Total 12-month ECL Total
rate (%) credit- (not credit- (credit-
impaired)
impaired) impaired) impaired)
A 0.00-0.10 2,601,740,991.35 - - 2,601,740,991.35 1,079,447,548.34 - - 1,079,447,548.34
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
Gross carrying
2,601,740,991.35 - 383,456.60 2,602,124,447.95 1,079,447,548.34 - 383,456.60 1,079,831,004.94
amount
Provision for
- - 383,456.60 383,456.60 - - 383,456.60 383,456.60
credit loss
Carrying
2,601,740,991.35 - - 2,601,740,991.35 1,079,447,548.34 - - 1,079,447,548.34
amount
(4) Provision, recovery and reversal of credit loss of other receivables
Stage 1 Stage 2 Stage 3
Item Lifetime ECL Lifetime ECL Total
12-month ECL
(not credit-impaired) (credit-impaired)
At 1 January 2022 - 383,456.60 383,456.60
Balance of other receivables
at 1 January 2022
- Transfer to Stage 2 - - - -
- Transfer to Stage 3 - - - -
- Reverse to Stage 2 - - - -
- Reverse to Stage 1 - - - -
Provision for the year - - - -
Reversal for the year - - - -
Transfer out due to derecognition of - - - -
financial assets (including direct
write-down)
Other changes - - - -
At 31 December 2022 - - 383,456.60 383,456.60
(5) The Company has no recovery or reversal of significant provision for credit loss in the
current year.
- 175 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XVIII) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
1. Other receivables - continued
(6) The Group has no other receivables written off during the year.
(7) The top five balances of other receivables at the end of the year classified by debtor
Proportion Closing
Relationship to total balance of
Name of entity with the Nature Closing balance Aging other provision
Company receivables for credit
(%) loss
Within 1 year,
Loan to 1-2 years, 2-3
Shenzhen Haixing Subsidiary 1,302,461,738.81 50.05 -
related parties years, More
than 3 years
Chiwan Wharf Holdings (Hong Loan to
Subsidiary 1,151,028,753.86 Within 1 year 44.23 -
Kong) Ltd. related parties
Loan to
Shunkong Port Subsidiary 142,866,402.00 Within 1 year 5.49 -
related parties
CM International Tech Subsidiary Advances 2,467,600.00 Within 1 year 0.09 -
Shenzhen Shekou Local Taxation More than 3
Third party Others 711,772.07 0.03 -
Bureau years
Total 2,599,536,266.74 99.89 -
- 176 -
CHINA MERCHANTS PORT GROUP CO., LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XVIII) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS - continued
2. Long-term equity investments
Changes for the year
Closing
Reconciliation
Investment Cash dividends Provision balance of
Investee 31/12/2021 of other Other equity 31/12/2022
Increase Decrease income under or profit for Others provision for
comprehensive movements
equity method declared impairment impairment
income
I. Subsidiaries
Ports Development (Hong Kong) Limited (Note 1) - 29,203,045,326.23 - - - - - - - 29,203,045,326.23 -
Zhanjiang Port 3,381,825,528.52 - - - - - - - - 3,381,825,528.52 -
Chiwan Container Terminal Co., Ltd. 421,023,199.85 - - - - - - - - 421,023,199.85 -
Shenzhen Chiwan Harbor Container Co. Ltd. 250,920,000.00 - - - - - - - - 250,920,000.00 -
Shenzhen Chiwan Port Development Co., Ltd. 206,283,811.09 - - - - - - - - 206,283,811.09 -
Dongguan Shenchiwan Port Affairs Co., Ltd. 186,525,000.00 - - - - - - - - 186,525,000.00 -
Dongguan Shenchiwan Wharf Co., Ltd. 175,000,000.00 - - - - - - - - 175,000,000.00 -
CM Port (Note 2) 29,290,281,157.45 81,605,936.30 -29,203,045,325.40 - - - - - - 168,841,768.35 -
CM Port (Zhoushan) RoRo Logistics Co., Ltd. 149,709,800.00 - - - - - - - - 149,709,800.00 -
Yide Port (Note 3) - 131,866,700.00 - - - - - - - 131,866,700.00 -
Shunkong Port (Note 4) - 50,000,000.00 - - - - - - - 50,000,000.00 -
Shenzhen Chiwan Tugboat Co., Ltd. 24,000,000.00 - - - - - - - - 24,000,000.00 -
CM International Tech 20,561,075.02 - - - - - - - - 20,561,075.02 -
Shenzhen Chiwan International Freight Agency Co., Ltd. 5,500,000.00 - - - - - - - - 5,500,000.00 -
Sanya Merchants Port Development Co., Ltd. 2,040,000.00 - - - - - - - - 2,040,000.00 -
Chiwan Wharf Holdings (Hong Kong) Ltd. 1,070,000.00 - - - - - - - - 1,070,000.00 -
Chiwan Shipping (Hong Kong) Limited 1,051,789.43 - - - - - - - - 1,051,789.43 -
Sub-total 34,115,791,361.36 29,466,517,962.53 -29,203,045,325.40 - - - - - - 34,379,263,998.49 -
II. Associates
Ningbo Zhoushan (Note 5) 1,792,998,234.68 14,113,777,882.23 - 258,454,001.50 261,596.32 102,528,280.42 -39,140,468.28 - - 16,228,879,526.87 -
China Merchants Northeast Asia Development &
1,016,048,532.69 - - -13,657,927.07 - 14,619,600.09 - - - 1,017,010,205.71 -
Investment Co., Ltd.
China Merchants Bonded Logistics Co., Ltd. 395,249,112.00 - - 17,113,806.79 - - - - - 412,362,918.79 -
Sub-total 3,204,295,879.37 14,113,777,882.23 - 261,909,881.22 261,596.32 117,147,880.51 -39,140,468.28 - - 17,658,252,651.37 -
III. Joint ventures
Yantai Port Group Laizhou Port Co., Ltd. 791,515,741.44 - - 32,565,975.37 - -669,119.99 -29,259,207.08 - - 794,153,389.74 -
Fujian Zhaohang Logistics Management Partnership
511,210,432.62 - - 91,193,783.34 - -10,269,949.21 - - - 592,134,266.75 -
(Limited Partnership) ("Zhaohang Logistics")
Shenzhen Gangteng Internet Technology Co., Ltd. (Note 6) - 11,250,000.00 - -1,440,834.86 - - - - - 9,809,165.14 -
China Merchants Antong Logistics Management Company
9,727,878.94 - -9,794,887.44 67,008.50 - - - - - - -
(Note 7)
Investment Fund - 1,085,852.21 -1,047,401.66 -38,450.55 - - - - - - -
Sub-total 1,312,454,053.00 12,335,852.21 -10,842,289.10 122,347,481.80 - -10,939,069.20 -29,259,207.08 - - 1,396,096,821.63 -
Total 38,632,541,293.73 43,592,631,696.97 -29,213,887,614.50 384,257,363.02 261,596.32 106,208,811.31 -68,399,675.36 - - 53,433,613,471.49 -
- 177 -
CHINA MERCHANTS PORT GROUP CO., LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XVIII) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
2. Long-term equity investments - continued
Note 1: Details are set out in Note (X) 1. (1).
Note 2: Details are set out in Note (X) 1. (1).
Note 3: The Company has entered into an equity transfer agreement with its subsidiary China
Merchants International Port Development (Hong Kong) Limited (hereinafter referred to
as "Port Development") on 22 December 2022. Pursuant to the agreement, Port
Development transfers 51% of equity interests in Yide Port to the Company. Upon the
completion of the transaction, the Company directly holds and has control over Yide Port.
Note 4: Details are set out in Note (IX) 1.
Note 5: Details are set out in Note (VIII) 13 (1).
Note 6: Shenzhen Gangteng Internet Technology Co., Ltd. is a joint venture established jointly by
the Company, Shenzhen Tencent Industry Venture Capital Co., Ltd., CM International
Tech, Haixing Port and Shenzhen Zhigangbilin Internet Technology Partnership (LP). The
Company has paid the capital contribution of RMB 11,250,000.00 on 23 February 2022.
Note 7: On 7 May 2022, the Company, Shandong Xincheng Hengye Group Co., Ltd. and
Quanzhou Antong Internet of Things Co., Ltd. reached an agreement unanimously on the
dissolution of the logistics business, and implemented corresponding liquidation and
cancellation procedures.
3. Operating income and operating costs
2022 2021
Item
Income Cost Income Cost
Principal operation - - - -
Other operations 3,669,891.36 2,276,202.60 2,642,001.75 2,265,959.45
Total 3,669,891.36 2,276,202.60 2,642,001.75 2,265,959.45
- 178 -
CHINA MERCHANTS PORT GROUP CO., LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
(Unless otherwise specified, the monetary unit shall be RMB.)
(XVIII) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
4. Investment income
(1) Details of investment income
Item 2022 2021
Income from long-term equity investments under cost method 549,150,517.02 1,324,423,832.08
Income from long-term equity investments under equity
384,257,363.02 226,225,111.65
method
Income from held-for-trading financial assets 120,227,079.12 38,750,781.56
Income from investments in other equity instruments - 7,409,500.00
Income from disposal of long-term equity investments -20,508.07 -
Total 1,053,614,451.09 1,596,809,225.29
(2) Income from long-term equity investments under cost method
Investee 2022 2021 Reason for changes
Shenzhen Chiwan Harbor Container Co. Ltd. 173,751,858.77 143,574,378.69 Changes in profit distribution of investee
Chiwan Container Terminal Co., Ltd. 166,925,696.05 115,287,847.14 Changes in profit distribution of investee
Zhanjiang Port 91,862,080.91 23,395,773.67 Changes in profit distribution of investee
Dongguan Shenchiwan Wharf Co., Ltd. 37,543,998.58 48,020,128.82 Changes in profit distribution of investee
Shenzhen Chiwan Tugboat Co., Ltd. 29,238,925.84 30,409,076.03 Changes in profit distribution of investee
Shenzhen Chiwan Port Development Co., Ltd. 20,415,654.72 14,577,752.63 Changes in profit distribution of investee
Shenchiwan Port Affairs 18,111,237.23 2,664,219.41 Changes in profit distribution of investee
CM Port 11,069,965.98 946,405,578.84 Changes in profit distribution of investee
Shenzhen Chiwan International Freight Agency
231,098.94 89,076.85 Changes in profit distribution of investee
Co., Ltd.
Total 549,150,517.02 1,324,423,832.08
- 179 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
1. BREAKDOWN OF NON-RECURRING PROFIT OR LOSS
Item Amount Remark
Gains or losses on disposal of non-current assets -104,372,804.10
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
196,086,614.17
in amounts and quantities fixed in accordance with the national
standard)
Income earned from lending funds to non-financial institutions and
189,123,975.49
recognized in profit or loss
The excess of attributable fair value of identifiable net assets
over the consideration paid for subsidiaries, associates and -
joint ventures
Gains or losses on exchange of non-monetary assets -
Gains or losses on entrusted investments or asset management -
Provision of impairment of assets 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 in fair value of held-for-trading financial
assets, derivative financial assets, other non-current financial
assets, held-for-trading financial liabilities, derivative financial
-129,033,650.11
liabilities other than effective hedging operation relating to
the Company's normal operations, and the investment income
from disposal of the above financial assets/financial liabilities
Reversal of provision for accounts receivable that are tested for
18,730,660.58
credit loss individually
Gains or losses on entrusted loans -
Gains or losses on changes in 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 216,674,035.87
Other profit or loss that meets the definition of non-recurring
-213,574,591.16 Note
profit or loss
Tax effects -12,258,847.06
Effects of minority interests (after tax) -169,099,324.67
Total -7,723,930.99
Note: Refer to Note (VIII) 7.3 (2) for details.
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2. RETURN ON NET ASSETS AND EARNINGS PER SHARE ("EPS")
The return on net assets and EPS have been prepared by the Company in accordance with
Information Disclosure and Presentation Rules for Companies Making Public Offering No. 9 -
Calculation and Disclosure of Return on Net Assets and Earnings per Share (revised in 2010)
issued by China Securities Regulatory Commission.
Weighted average EPS
Item return on net
Basic EPS Diluted EPS
assets (%)
Net profit attributable to ordinary shareholders 7.5443 1 1
Net profit attributable to ordinary shareholders after
7.5617 1 1
deducting non-recurring profit or loss
