CHINA MERCHANTS PORT GROUP CO., LTD.

FINANCIAL STATEMENTS AND AUDITOR'S REPORTFOR THE YEAR ENDED 31 DECEMBER 2024

FINANCIAL STATEMENTS AND AUDITOR'S REPORTFOR THE YEAR ENDED 31 DECEMBER 2024

CONTENTS PAGE(S)

AUDITOR'S REPORT 1 - 7

CONSOLIDATED BALANCE SHEET 8- 10

BALANCE SHEET OF THE COMPANY 11 - 13

CONSOLIDATED INCOME STATEMENT 14 - 15

INCOME STATEMENT OF THE COMPANY 16

CONSOLIDATED CASH FLOW STATEMENT 17

CASH FLOW STATEMENT OF THE COMPANY 18

CONSOLIDATED STATEMENT OF CHANGES INSHAREHOLDERS' EQUITY 19 - 20

THE COMPANY'S STATEMENT OF CHANGES INSHAREHOLDERS' EQUITY 21 - 22

NOTES TO THE FINANCIAL STATEMENTS 23 - 203

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AUDITOR'S REPORT

毕马威华振审字第2507318号

To all the shareholders of China Merchants Port Group Co., Ltd.,

I. Audit Opinion

We have audited the accompanying financial statements of China Merchants Port Group Co., Ltd.("China Merchants Port Group"), which comprise the consolidated and company balance sheets as at 31December 2024, the consolidated and company income statements, the consolidated and company cashflow statements, the consolidated and company statements of changes in shareholders' equity for theyear then ended, and notes to the financial statements.

In our opinion, the accompanying financial statements present fairly, in all material respects, theconsolidated and company financial position of China Merchants Port Group as at 31 December 2024,and the consolidated and company financial performance and cash flows of China Merchants Port Groupfor the year then ended in accordance with Accounting Standards for Business Enterprises issued by theMinistry of Finance of the People’s Republic of China.

II. Basis for the Opinion

We conducted our audit in accordance with China Standards on Auditing for Certified PublicAccountants (“CSAs”). Our responsibilities under those standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We are independent ofChina Merchants Port Group in accordance with China Code of Ethics for Certified Public Accountants(“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. Webelieve that the audit evidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.

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AUDITOR'S REPORT - continued

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III. Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in ouraudit of the financial statements of the current period. These matters were addressed in the context ofour audit of the financial statements as a whole, and in forming our opinion thereon, and we do notprovide a separate opinion on these matters.

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AUDITOR'S REPORT - continued

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III. Key Audit Matters - continued

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AUDITOR'S REPORT - continued

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III. Key Audit Matters - continued

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AUDITOR'S REPORT - continued

毕马威华振审字第2507318号

IV. Other Information

China Merchants Port Group’s management is responsible for the other information. The otherinformation comprises all the information included in 2024 annual report of China Merchants Port Group,other than the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we do not express anyform of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with thefinancial statements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, 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

Management is responsible for the preparation and fair presentation of the financial statements inaccordance with the Accounting Standards for Business Enterprises, and for the design, implementationand maintenance of such internal control necessary to enable that the financial statements are free frommaterial misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing China Merchants PortGroup’s ability to continue as a going concern, disclosing, as applicable, matters related to going concernand using the going concern basis of accounting unless management either intends to liquidate ChinaMerchants Port Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing China Merchants Port Group’s financialreporting process.

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AUDITOR'S REPORT - continued

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VI. Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole arefree from material misstatement, whether due to fraud or error, and to issue an auditor’s report thatincludes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that anaudit conducted in accordance with CSAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with CSAs, we exercise professional judgement and maintainprofessional scepticism throughout the audit. We also:

? Identify and assess the risks of material misstatement of the financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidencethat is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error, as fraud may involvecollusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

? Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances.

? Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures made by management.

? Conclude on the appropriateness of management’s use of the going concern basis of accountingand, based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on China Merchants Port Group’s ability to continue as agoing concern. If we conclude that a material uncertainty exists, we are required to draw attention in ourauditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate,to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor’s report. However, future events or conditions may cause China Merchants Port Group to ceaseto continue as a going concern.

? Evaluate the overall presentation, structure and content of the financial statements, including thedisclosures, and whether the financial statements represent the underlying transactions and events in amanner that achieves fair presentation.

? Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within China Merchants Port Group to express an opinion on the financial statements.We are responsible for the direction, supervision and performance of the group audit. We remain solelyresponsible for our audit opinion.

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AUDITOR'S REPORT - continued

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VI. Auditor's Responsibilities for the Audit of the Financial Statements - continued

We communicate with those charged with governance regarding, among other matters, the plannedscope and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence, and communicate with them all relationships and othermatters that may reasonably be thought to bear on our independence and, where applicable, relatedsafeguards.

From the matters communicated with those charged with governance, we determine those matters thatwere of most significance in the audit of the financial statements of the current period and are thereforethe key audit matters. We describe these matters in our auditor’s report unless law or regulationprecludes public disclosure about the matter or when, in extremely rare circumstances, we determinethat a matter should not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of such communication.

KPMG Huazhen LLP Certified Public AccountantsRegistered in the People’sRepublic of China

王 洁 (Engagement Partner)

Beijing, China 吴惠煌

1 April 2025

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As at 31 DECEMBER 2024

Consolidated Balance Sheet

RMB

The accompanying notes form part of the financial statements.

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As at 31 DECEMBER 2024

Consolidated Balance Sheet - continued

RMB

The accompanying notes form part of the financial statements.

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As at 31 DECEMBER 2024

Consolidated Balance Sheet - continued

RMB

The accompanying notes form part of the financial statements.

The financial statements were signed by the following:

Xu Song Huang Zhenzhou Liu Shixia_______________________ _______________________ ___________________________Legal Representative Chief Financial Officer Head of Accounting Department

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As at 31 DECEMBER 2024

Balance Sheet of the Company

RMB

The accompanying notes form part of the financial statements.

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As at 31 DECEMBER 2024

Balance Sheet of the Company - continued

RMB

The accompanying notes form part of the financial statements.

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As at 31 DECEMBER 2024

Balance Sheet of the Company - continued

RMB

The accompanying notes form part of the financial statements.

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FOR THE YEAR ENDED 31 DECEMBER 2024

Consolidated Income Statement

RMB

The accompanying notes form part of the financial statements.

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FOR THE YEAR ENDED 31 DECEMBER 2024

Consolidated Income Statement - continued

RMB

The accompanying notes form part of the financial statements.

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FOR THE YEAR ENDED 31 DECEMBER 2024

Income Statement of the Company

RMB

The accompanying notes form part of the financial statements.

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FOR THE YEAR ENDED 31 DECEMBER 2024

Consolidated Cash Flow Statement

RMB

The accompanying notes form part of the financial statements.

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FOR THE YEAR ENDED 31 DECEMBER 2024

Cash Flow Statement of the Company

RMB

The accompanying notes form part of the financial statements.

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FOR THE YEAR ENDED 31 DECEMBER 2024

Consolidated Statement of Changes in Shareholders' Equity

RMB

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FOR THE YEAR ENDED 31 DECEMBER 2024

Consolidated Statement of Changes in Shareholders' Equity - continued

RMB

The accompanying notes form part of the financial statements.

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FOR THE YEAR ENDED 31 DECEMBER 2024

The Company's Statement of Changes in Shareholders' Equity

RMB

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FOR THE YEAR ENDED 31 DECEMBER 2024

The Company's Statement of Changes in Shareholders' Equity - continued

RMB

The accompanying notes form part of the financial statements.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(I) GENERAL INFORMATION OF THE COMPANY

China Merchants Port Group Co., Ltd. (hereinafter referred to as the "Company") is a joint-stockcompany incorporated in Shenzhen, Guangdong Province, on 16 January 1993.

The headquarters of the Company is located in Shenzhen, Guangdong Province. The Company andits subsidiaries (collectively the "Group") are actually engaged in the principal operating activitiesof port services, bonded logistics services and other businesses such as property development andinvestment.

The Company's and consolidated financial statements were approved by the Board of Directors on1 April 2025.

(II) BASIS OF PREPARATION OF FINANCIAL STATEMENTS

Basis of preparation of financial statements

The Group has adopted the Accounting Standards for Business Enterprises (hereinafter referred toas "ASBE") issued by the Ministry of Finance. In addition, the Group has disclosed relevantfinancial information in accordance with Information Disclosure and Presentation Rules forCompanies Offering Securities to the Public No. 15 - General Provisions on Financial Reporting(Revised in 2023).

Going concern

As at 31 December 2024, the Group had total current liabilities in excess of total current assets byRMB 6,685,293,596.39. As at 31 December 2024, the Group had available and unused creditfacilities and bonds amounting to RMB 40,616,331,020.58, which is greater than the balance of thenet current liabilities. The Group can obtain financial support from the available line of credit andbonds when needed. Therefore, the financial statements have been prepared on a going concernbasis.

(III) STATEMENT OF COMPLIANCE WITH THE ASBE

The financial statements prepared by the Company comply with the requirements of the AccountingStandards for Business Enterprises, and truly and completely reflect the consolidated andCompany's financial position as at 31 December, 2024, and the consolidated and Company'soperating results, consolidated and Company's shareholders’ equity, and consolidated andCompany's cash flow for the year ended 31 December 2024.

(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES

1. Accounting year

The financial year of the Group is from 1 January to 31 December of the Gregorian calendar year.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

2. Operating cycle

Business cycle refers to the period from the purchase of assets for processing to the realization ofcash or cash equivalents. The Group is actually engaged in the principal operating activities of portservices, bonded logistics services and other businesses such as property development andinvestment.

3. Functional currency

The Company’s functional currency is Renminbi (hereinafter referred to as "RMB"), and thesefinancial statements are presented in RMB. The Company and its domestic subsidiaries use RMBas their bookkeeping base currency. The Company's overseas subsidiaries determine theirfunctional currency according to the currency in the primary economic environment in which theyoperate. 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 financial instruments which aremeasured at fair value, the Group adopts the historical cost as the principle of measurement of thefinancial statements. Upon being restructured into a stock company, the fixed assets and intangibleassets initially contributed by the state-owned shareholders are recognized based on the valuationamounts 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 ofcash or cash equivalents paid or the fair value of the consideration given to acquire them at the timeof their acquisition. Liabilities are recorded at the amount of proceeds or assets received or thecontractual amounts for assuming the present obligation, or, at the amounts of cash or cashequivalents 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 anorderly transaction between market participants at the measurement date, regardless of whether thatprice is directly observable or estimated using valuation technique. Fair value measurement anddisclosure 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 utilizesuch assets to generate most economic benefits, or the ability to sell such assets to other marketparticipants who are able to best utilize the assets to generate economic benefits is taken intoaccount.

For financial assets of which transaction prices are the fair value on initial recognition, and of whichvaluation technique involving unobservable input is used in subsequent measurement, the valuationtechnique in the course of valuation is adjusted to enable the result of initial recognition based onthe valuation technique equal to the transaction price.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

4. Basis of accounting and principle of measurement - continued

Fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputsto the fair value measurements are observable and the significance of the inputs to the fair valuemeasurement in its entirety, which are described as follows:

? Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities thatthe entity can access at the measurement date;? Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observablefor the asset or liability, either directly or indirectly; and? Level 3 inputs are unobservable inputs for the asset or liability.

5. Method for determination of materiality criteria and basis for selection

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

6. Business combinations

Business combinations are classified into business combinations involving enterprises undercommon control and business combinations not involving enterprises under common control.

6.1 Business combinations involving enterprises under common control

A business combination involving enterprises under common control is a business combination inwhich all of the combining enterprises are ultimately controlled by the same party or parties bothbefore and after the combination, and that control is not transitory.

Assets and liabilities obtained by the combining party shall be measured at their respective carryingamounts as recorded by the final controlling party in the consolidated financial statements at thedate of the combination. The difference between share of the carrying amount of the net assetsobtained and the carrying amount of the consideration paid for the combination (or total par valueof issued shares) is adjusted to the share premium in capital reserve. If the share premium is notsufficient to absorb the difference, any excess shall be adjusted against surplus reserve and retainedearnings in turn.

Costs that are directly attributable to the combination are charged to profit or loss in the period inwhich they are incurred. The merger date is the date on which the combining party actually obtainscontrol over the combined party.

6.2 Business combinations not involving enterprises under common control

A business combination not involving enterprises under common control is a business combinationin which all of the combining enterprises are not ultimately controlled by the same party or partiesbefore and after the combination.

The cost of combination is the aggregate of the fair values, at the acquisition date, of the assetsgiven, liabilities incurred or assumed, and equity securities issued by the acquirer, in exchange forcontrol of the acquiree. The intermediary expenses (fees in respect of auditing, legal services,valuation and consultancy services, etc.) and other general and administrative expenses attributableto 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 abusiness combination that meet the recognition criteria shall be measured at fair value at theacquisition date. The acquisition date refers to the date on which the acquirer actually obtainscontrol over the acquiree.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

6. Business combinations - continued

6.2 Business combinations not involving enterprises under common control - continued

Where the cost of combination exceeds the acquirer's interest in the fair value of the acquiree'sidentifiable net assets, after considering the impact of relevant deferred income tax, the differenceis 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'sidentifiable net assets, the acquirer reassesses the measurement of the fair values of the acquiree'sidentifiable 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 fairvalue of the acquiree's identifiable net assets, the acquirer recognizes the remaining differenceimmediately in profit or loss for the current period.

7. Goodwill

Goodwill arising from a business combination is measured at cost less accumulated impairmentlosses, and is presented separately in the consolidated financial statements. Goodwill shall besubject to impairment testing at least at the end of each year.

The impairment testing of goodwill shall be conducted in combination with the relevant assetsgroup or assets group combination. That is, since the purchase date, the book value of goodwill isapportioned to the assets group or combination of assets groups that can benefit from the synergisticeffect of business combination in a reasonable way. If the recoverable amount of the assets groupor combination of assets groups containing apportioned goodwill is lower than its book value, thecorresponding impairment loss is recognized. The amount of impairment loss shall first offset thebook value of goodwill apportioned to the assets group or assets group portfolio, and then offset thebook value of other assets in proportion to the proportion of the book value of other assets otherthan goodwill in the assets group or assets group portfolio.

The recoverable amount is the higher of the net amount of the fair value of the assets minus thedisposal expenses and the present value of the estimated future cash flow of the assets.

The impairment loss of goodwill shall be included in the current profit and loss when it occurs, andshall not be reversed in future accounting periods.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

8. Consolidated financial statements

The consolidation scope of 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 variablereturns from its involvement with the investee; and has the ability to use its power over the investeeto affect its returns. The Group reassesses whether or not it controls an investee if facts andcircumstances 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 ceaseswhen the Group loses control of the subsidiary.

For a subsidiary already disposed of by the Group, the operating results and cash flows before thedate of disposal (the date when control is lost) are included in the consolidated income statementand consolidated cash flow statement, as appropriate.

For subsidiaries acquired through a business combination involving enterprises not under commoncontrol, when preparing the consolidated financial statements of the current period, the purchasedsubsidiary will be included in the consolidation scope of the Company from the acquisition date onthe basis of the fair value of the identifiable assets and liabilities of the purchased subsidiarydetermined on the acquisition date. The operating results and cash flows from the acquisition date(the date when control is obtained) are included in the consolidated income statement andconsolidated cash flow statement, as appropriate.

No matter when the business combination occurs in the reporting period, subsidiaries acquiredthrough a business combination involving enterprises under common control, when preparing theconsolidated financial statements of the current period, the book value of each assets and liabilityof the consolidated subsidiary in the final controller's financial statements is taken as the basis, asif they had been included in the scope of consolidation from the date when they first came underthe common control of the ultimate controlling party. Their operating results and cash flows fromthe date when they first came under the common control of the ultimate controlling party areincluded in the consolidated income statement and consolidated cash flow statement, as appropriate.

The significant accounting policies and accounting periods adopted by the subsidiaries aredetermined based on the uniform accounting policies and accounting periods set out by theCompany.

Where the accounting policies and accounting periods adopted by subsidiaries are inconsistent withthose of the Company, appropriate adjustments are made to the subsidiaries' financial statements inaccordance with the accounting policies of the Company.

All significant intra-group balances and transactions are eliminated on consolidation.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

8. Consolidated financial statements - continued

The portion of subsidiaries' equity that is not attributable to the Company is treated as non-controlling interests and presented as " non-controlling interests " in the consolidated balance sheetunder the line item of shareholders' equity. The portion of net profits or losses of subsidiaries forthe period attributable to non-controlling interests is presented as " non-controlling interests " in theconsolidated income statement under the line item of "net profit". The portion of comprehensiveincome of subsidiaries for the period attributable to non-controlling interests is presented as "attributable to non-controlling interests " in the consolidated income statement under the line itemof "total comprehensive income".

When the amount of loss for the period attributable to the non-controlling shareholders of asubsidiary exceeds the non-controlling shareholders' portion of the opening balance of owners'equity of the subsidiary, the excess amount is still allocated against non-controlling interests.

Acquisition of non-controlling interests or disposal of interests in a subsidiary that does not resultin the loss of control over the subsidiary is accounted for as equity transactions. The carryingamounts of the Company's interests and non-controlling interests are adjusted to reflect the changesin their relative interests in the subsidiary. The difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is adjustedto capital reserve. If the capital reserve is not sufficient to absorb the difference, surplus reserve andretained earnings shall be offset in turn.

For the stepwise acquisition of equity interest till acquiring control after a few transactions andleading to business combination not involving enterprises under common control, it shall be dealtwith based on whether it belongs to 'package deal': if it belongs to 'package deal', it will beaccounted for as a transactions to acquire control; if it does not belong to 'package deal', it will beaccounted 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 andcarrying amount will be recognized in profit or loss of the current period; if acquiree' shares heldbefore acquisition date involve changes in other comprehensive income and other changes inowners' 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 otherreasons, any retained interest is re-measured at its fair value at the date when control is lost. Thedifference between the sum of the consideration obtained from the disposal of equity and the fairvalue of the remaining equity, less the share of the net assets of the parent company that should becontinuously calculated from the purchase date based on the original shareholding ratio, is includedin the investment income of the current period when the control right is lost, and at the same time,the goodwill is offset. Other comprehensive income associated with investment in the formersubsidiary is reclassified to investment income in the period in which control is lost.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

8. Consolidated financial statements - continued

When the Group loses control of a subsidiary in two or more arrangements (transactions), termsand conditions of the arrangements (transactions) and their economic effects are considered. Oneor 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) theyform a complete transaction designed to achieve an overall commercial effect; (iii) the occurrenceof one transaction is dependent on the occurrence of at least one other transaction; (iv) onetransaction alone is not economically justified, but it is economically justified when consideredtogether with other transactions. Where the transactions of disposal of equity investments in asubsidiary until the loss of control are assessed as a package deal, these transactions are accountedfor as one transaction of disposal of a subsidiary with loss of control. Before losing control, thedifference of consideration received on disposal and the share of net assets of the subsidiarycontinuously calculated from acquisition date is recognized as other comprehensive income. Whenlosing control, the cumulated other comprehensive income is transferred to profit or loss of theperiod of losing control. If the transactions of disposal of equity investments in a subsidiary are notassessed as a package deal, these transactions are accounted for as unrelated transactions.

9. Joint arrangements

Joint venture arrangement refers to an arrangement jointly controlled by two or more participants.The joint venture arrangement of the Group has the following characteristics: (1) all participantsare bound by the arrangement; (2) Two or more participants exercise joint control over thearrangement. None of the participants can control the arrangement alone, and none of theparticipants with joint control over the arrangement can prevent other participants or a combinationof participants from controlling the arrangement alone.

Joint control refers to the common control over an arrangement according to relevant agreements,and the relevant activities of the arrangement must be agreed by the participants sharing the controlright before making decisions.

There are two types of joint arrangements - joint operations and joint ventures. The classification isbased on the rights and obligations of the parties under the joint venture arrangement, taking intoaccount factors such as the structure, legal form and contractual terms of the arrangement. A jointoperation is a joint arrangement whereby the parties that have joint control of the arrangement haverights to the assets, and obligations for the liabilities, relating to the arrangement. A joint venture isa joint arrangement whereby the parties that have joint control of the arrangement have rights to thenet assets of the arrangement.

The Group accounts for investments in joint ventures using equity method. Refer to Note (IV),

14.3.2 "Long-term equity investments accounted for using the equity method" for details.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

9. Joint arrangements - continued

When a group entity undertakes its activities under joint operations, the Group as a joint operatorrecognizes in relation to its interest in a joint operation: - its assets, including its share of any assetsheld jointly; its liabilities, including its share of any liabilities incurred jointly; its revenue from thesale of its share of the output arising from the joint operation; its share of the revenue from the saleof the output by the joint operation, and its expenses, including its share of any expenses incurredjointly. The Group accounts for the assets, liabilities, revenues and expenses relating to its interestin a joint operation in accordance with the accounting standards applicable to the particular assets,liabilities, revenues and expenses.

10. Cash and cash equivalents

Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cashequivalents 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 aresubject to an insignificant risk of changes in value.

11. Financial instruments

The Group recognizes a financial asset or a financial liability when it becomes a party to thecontractual provisions of the financial instrument.

For financial assets purchased or sold in regular ways, assets to be received and liabilities to beassumed 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 (the method fordetermining the fair values of the financial assets and financial liabilities is set out in relateddisclosures under "basis of accounting and principle of measurement" in note (IV) 4). For financialassets and financial liabilities at fair value through profit or loss, transaction costs are immediatelyrecognized in profit or loss. For other financial assets and financial liabilities, transaction costs areincluded in their initial recognized amounts. Upon initial recognition of contract assets, billsreceivable and accounts receivable that do not contain significant financing component or withoutconsidering the financing component included in the contract with a term not exceeding one yearunder the Accounting Standards for Business Enterprises No. 14 - Revenue (hereinafter referred toas "Revenue Standards"), the Group adopts the transaction price as defined in the RevenueStandards for initial measurement.

When there is a difference between the fair value of financial assets or financial liabilities initiallyrecognized and the transaction price, if the fair value is not determined based on the quotation ofthe same assets or liabilities in the active market or based on the valuation technology only usingobservable market data, no gains or losses will be recognized when the financial assets or financialliabilities are initially recognized.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

11. Financial instruments - continued

The effective interest method is a method of calculating the amortized cost of a financial asset or afinancial liability and of allocating the interest income or interest expenses over the relevantaccounting periods.

The effective interest rate is the rate that exactly discounts estimated future cash flows through theexpected life of the financial asset or financial liability to the book value of the financial asset or tothe amortized cost of the financial liability. When calculating the effective interest rate, the Groupestimates future cash flows considering all contractual terms of the financial asset or financialliability (such as repayment in advance, extension, call option or other similar options etc.) (withoutconsidering the expected credit losses).

The amortized cost of a financial asset or a financial liability is the amount of a financial asset or afinancial liability initially recognized net of principal repaid, plus or less the cumulative amortizedamount arising from amortization of the difference between the amount initially recognized and theamount at the maturity date using the effective interest method, net of cumulative credit lossallowance (only applicable to financial assets).

11.1 Classification, recognition and measurement of financial assets

Subsequent to initial recognition, the Group's financial assets of various categories are subsequentlymeasured at amortized cost, at fair value through other comprehensive income or at fair valuethrough profit or loss.

If the contractual terms of the financial asset give rise on specified dates to cash flows that are solelypayments of principal and interest on the principal amount outstanding, and the financial asset isheld within a business model whose objective is achieved by collecting contractual cash flows, theGroup classifies such financial asset as financial assets at amortized cost, which include cash andbank balances, bills receivable, accounts receivable, other receivables, and long-term receivablesetc.

If the contractual terms of the financial asset give rise on specified dates to cash flows that are solelypayments of principal and interest on the principal amount outstanding, and the financial asset isheld within a business model whose objective is achieved by both collecting contractual cash flowsand selling the financial asset, the Group classifies such financial asset as financial assets atFVTOCI. The accounts receivable and bills receivable classified as at FVTOCI upon acquisitionare presented under receivables under financing, while the remaining items due within one year(inclusive) upon acquisition are presented under other current assets. Other financial assets of suchtype are presented as other debt investments if they are due after one year since the acquisition, orpresented under non-current assets due within one year if they are due within one year (inclusive)since the balance sheet date.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

11. Financial instruments - continued

11.1 Classification, recognition and measurement of financial assets - continued

On initial recognition, the Group may irrevocably designate non-trading equity instruments, otherthan contingent consideration recognized through business combination not involving enterprisesunder common control, as financial assets at FVTOCI on an individual basis. Such financial assetsat FVTOCI are presented as investments in other equity instruments.

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 ofshort-term profit-taking; or? Related financial assets are derivatives. However, the derivatives meeting the definition of

financial guarantee contract and those designated as effective hedging instruments areexcluded.

Financial assets measured at fair value through profit or loss (hereinafter referred to as "FVTPL")include those classified as financial assets at FVTPL and those designated as financial assets atFVTPL.

? 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 at FVTPLif doing so eliminates or significantly reduces accounting mismatch.

Financial assets at FVTPL other than derivative financial assets are presented as financial assetsheld for trading. Financial assets with a maturity over one year since the balance sheet date (orwithout a fixed maturity) and expected to be held for over one year are presented under other non-current financial assets.

11.1.1 Financial assets measured at amortized cost

Financial assets measured at amortized cost are subsequently measured at amortized cost using theeffective interest method. Gain or loss arising from impairment or derecognition is recognized inprofit or loss.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

11. Financial instruments - continued

11.1 Classification, recognition and measurement of financial assets - continued

11.1.1 Financial assets measured at amortized cost - continued

For financial assets measured at amortized cost, the Group recognizes interest income usingeffective interest method. The Group calculates and recognizes interest income through book valueof 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 effectiveinterest rate through credit adjustment since initial recognition.? For financial assets that have not suffered from credit impairment but have become credit

impairment in subsequent periods, the Group will calculate and determine their interestincome according to the amortized cost and effective interest rate of the financial assets insubsequent periods. If the financial instruments no longer has credit impairment due to theimprovement of its credit risk in the subsequent period, and this improvement can be relatedto an event that occurs after the application of the above provisions, the Group will calculateand determine interest income by multiplying the actual interest rate by the book value of thefinancial asset.

11.1.2 Financial assets at FVTOCI

For financial assets classified as at FVTOCI, except for the impairment losses or gains and theinterest income and exchange losses or gains calculated using the effective interest method whichare included in profit or loss for the period, the changes in fair value are included in othercomprehensive income. The amounts included in profit or loss for each period are equivalent to thatas if the financial assets have been always measured at amortized cost. Upon derecognition, theaccumulated gains or losses previously included in other comprehensive income are transferred toprofit or loss for the period.

Changes in fair value of non-trading equity instrument investments designated as financial assets atFVTOCI are recognized in other comprehensive income, and the cumulative gains or lossespreviously recognized in other comprehensive income allocated to the part derecognized aretransferred 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 currentperiod when (1) the Group has established the right of collecting dividends; (2) it is probable thatthe associated economic benefits will flow to the Group; and (3) the amount of dividends can bemeasured reliably.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

11. Financial instruments - continued

11.1 Classification, recognition and measurement of financial assets - continued

11.1.3 Financial assets at FVTPL

Financial assets at FVTPL are subsequently measured at fair value. Gain or loss arising fromchanges in fair value and dividends and interest related to the financial assets are recognized inprofit or loss.

11.2 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 liabilitiesthat are not at FVTPL and financial guarantee contracts that are not qualified for derecognition dueto the transfer of financial assets or financial liabilities arising from continuing involvement of thetransferred financial assets, the Group accounts for the impairment and recognizes the provision forlosses on the basis of expected credit loss (hereinafter referred to as "ECL").

For all contract assets, bills receivable and accounts receivable arising from transactions regulatedby Revenue Standards, and lease receivables arising from transactions regulated by the AccountingStandards for Business Enterprises No. 21 - Leases, the Group recognizes the provision for lossesat an amount equivalent to lifetime ECL.

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 financialinstruments at each balance sheet date. If the credit risk has increased significantly since initialrecognition of the financial instruments, the Group recognizes the provision for losses at an amountequivalent to lifetime ECL; if the credit risk has not increased significantly since initial recognitionof the financial instruments, the Group recognizes the provision for losses at an amount equivalentto 12-month ECL. The increase or reversal of credit impairment for financial assets other than thoseclassified as at FVTOCI is recognized as impairment loss or gain and included in profit or loss forthe period. For financial assets classified as at FVTOCI, the provision for bad debts is recognizedin other comprehensive income and the impairment loss or gain is included in profit or loss for theperiod 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 ofa financial instrument in prior accounting period, but the financial instrument no longer satisfies thecriteria 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 equivalentto 12-month ECL at the current balance sheet date, with any resulting reversal of provision forlosses recognized as impairment gains in profit or loss for the period.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

11. Financial instruments - continued

11.2 Impairment of financial instruments - continued

11.2.1 Significant increase of credit risk

The Group uses reasonable and supportable forward-looking information to assess whether thecredit risk has increased significantly since initial recognition by comparing the risk of a defaultoccurring on the financial instrument at the balance sheet date with the risk of a default occurringon the financial instrument at the date of initial recognition. For loan commitments and financialguarantee contracts, the date on which the Group becomes a party to the irrevocable commitmentis considered to be the date of initial recognition in the application of criteria related to the financialinstrument for impairment.

In particular, the following information is taken into account when assessing whether credit risk hasincreased 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 stringentcovenants, increased amounts of collateral or guarantees, or higher rate of return, etc.);

(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. Theseindicators include: credit spreads, credit default swap prices against borrower, length of timeand extent to which the fair value of financial assets is less than their amortized cost, andother market information related to the borrower (such as the borrower's debt instrumentsor 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 economicmotives 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 requirementfor additional collateral or guarantees, or other changes in the contractual framework forfinancial instruments that may result from the breach of contract;

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

11. Financial instruments - continued

11.2 Impairment of financial instruments - continued

11.2.1 Significant increase of credit risk - continued

(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.

The Group assumes that the credit risk on a financial instrument has not increased significantlysince initial recognition if the financial instrument is determined to have lower credit risk at thebalance sheet date. A financial instrument is determined to have lower credit risk if: i) it has a lowerrisk of default, ii) the borrower has a strong capacity to meet its contractual cash flow obligationsin the near term and iii) adverse changes in economic and business conditions in the longer termmay, but will not necessarily, reduce the ability of the borrower to fulfil its contractual cash flowobligations.

11.2.2 Credit-impaired financial assets

When an event or several events that are expected to have adverse impact on the future cash flowsof the financial assets have occurred, the financial assets become credit-impaired. The evidences ofcredit 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 becomes 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 defaultoccurs when information developed internally or obtained from external sources indicates that thedebtor is unlikely to pay its creditors, including the Group, in full (without taking into account anycollaterals held by the Group).

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

11. Financial instruments - continued

11.2 Impairment of financial instruments - continued

11.2.3 Determination of expected credit loss

The Group determines the credit loss of leases receivables on the basis of single assets, anddetermines the credit loss of related financial instruments on the basis of combination of cash atbank and on hand, bills receivable, accounts receivable, other receivables, long-term receivables,etc. with impairment matrix. The Group divides financial instruments into different groups basedon common risk characteristics. Common credit risk characteristics adopted by the Group include:

type of financial instruments, credit risk rating, type of collateral, initial recognition date, remainingcontract period, industry of the debtor, geographical location of the debtor, value of collateralrelative to financial assets, etc.

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 theGroup expects to receive;? For financial guarantee contracts (refer to Note IV, 11.4.1.3 for the detail of accountingpolicies), the credit loss is the present value of the expected payments to reimburse the holderfor 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 originatedcredit-impaired, the credit loss is the difference between the book value of the financial assetsand the present value of estimated future cash flows discounted at the original effectiveinterest rate.

The factors reflected by the Group's measurement of ECL of financial instruments include: unbiasedprobability weighted average amount recognized by assessing a series of possible results; time valueof money; reasonable and supportable information related to historical events, current conditionand forecast of future economic position that is available without undue cost or effort at the balancesheet date.

11.2.4 Write-off of financial assets

When the Group no longer reasonably expects that the contractual cash flows of financial assetscan be collected in aggregate or in part, the Group will directly write down the book value of thefinancial assets, which constitutes derecognition of relevant financial assets.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

11. Financial instruments - continued

11.3 Transfer of financial assets

The Group will derecognize a financial asset if one of the following conditions is satisfied: (i) thecontractual rights to the cash flows from the financial asset expire; (ii) the financial asset has beentransferred and substantially all the risks and rewards of ownership of the financial asset istransferred to the transferee; or (iii) although the financial asset has been transferred, the Groupneither transfers nor retains substantially all the risks and rewards of ownership of the financialasset 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 afinancial asset, and it retains control of the financial asset, the Group will recognize the financialasset to the extent of its continuing involvement in the transferred financial asset and recognize anassociated 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 involvementless amortized cost of the Group's retained rights (if the Group retains relevant rights upontransfer of financial assets) with addition of amortized cost of obligations assumed by theGroup (if the Group assumes relevant obligations upon transfer of financial assets). Relevantliabilities 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 fairvalue of the Group's retained rights (if the Group retains relevant rights upon transfer offinancial assets) with addition of fair value of obligations assumed by the Group (if the Groupassumes relevant obligations upon transfer of financial assets). Accordingly, the fair value ofrelevant 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, thedifference between (1) the carrying amount of the financial asset transferred and (2) the sum of theconsideration received from the transfer and any cumulative gain or loss that has been recognizedin 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 lossespreviously recognized in other comprehensive income are transferred out and included in retainedearnings.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

11. Financial instruments - continued

11.3 Transfer of financial assets - continued

If a part of the transferred financial asset qualifies for derecognition, the overall carrying amount ofthe financial asset prior to transfer is allocated between the part that continues to be recognized andthe 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 ofderecognition; and (2) the sum of the consideration received for the part derecognized and anycumulative gain or loss allocated to the part derecognized which has been previously recognized inother 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 lossespreviously recognized in other comprehensive income are transferred out and included in retainedearnings.

For a transfer of a financial asset in its entirety that does not satisfy the derecognition criteria, theGroup continues to recognize the transferred financial asset in its entirety. The considerationreceived from transfer of assets is recognized as a financial liability upon receipt.

11.4 Classification of financial liabilities and equity instruments

Financial instruments issued by the Group or their components are classified into financial liabilitiesor equity instruments on the basis of the substance of the contractual arrangements and the economicnature not only the legal form, together with the definition of financial liability and equityinstrument on initial recognition.

11.4.1 Classification, recognition and measurement of financial liabilities

On initial recognition, financial liabilities are classified into financial liabilities at FVTPL and otherfinancial liabilities.

11.4.1.1 Financial liabilities at FVTPL

Financial liabilities at FVTPL consist of financial liabilities held for trading (including derivativesclassified as financial liabilities) and those designated as at FVTPL. Except for derivative financialliabilities presented separately, the financial liabilities at FVTPL are presented as held-for-tradingfinancial 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 Groupmanages together and there is objective evidence that the Group has a recent actual pattern ofshort-term profit-taking; or? It is a derivative that is not a financial guarantee contract or designated and effective as ahedging instrument.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

11. Financial instruments - continued

11.4 Classification of financial liabilities and equity instruments - continued

11.4.1 Classification, recognition and measurement of financial liabilities - continued

11.4.1.1 Financial liabilities at FVTPL - continued

A financial liability may be designated as at FVTPL on initial recognition when one of the followingconditions 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, inaccordance with the Group's formally documented risk management or investment strategy, andreports to key management personnel on that basis. (iii) The qualified hybrid financial instrumentcombines financial asset with embedded derivatives.

Held-for-trading financial liabilities are subsequently measured at fair value. Any gains or lossesarising from changes in fair value and any dividends or interest expenses paid on the financialliabilities are recognized in profit or loss.

For a financial liability designated as at FVTPL, the amount of changes in fair value of the financialliability that are attributable to changes in the credit risk of that liability shall be presented in othercomprehensive income, while other changes in fair value are included in profit or loss for the currentperiod. Upon the derecognition of such financial liability, the accumulated amount of changes infair value that are attributable to changes in the credit risk of that liability, which was recognized inother comprehensive income, is transferred to retained earnings. Any dividend or interest expenseon the financial liabilities is recognized in profit or loss. If the accounting treatment for the impactof the change in credit risk of such financial liability in the above ways would create or enlarge anaccounting 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 theacquirer in the business combination not involving enterprises under common control, the Groupmeasures such financial liabilities at fair value through profit or loss, and includes the changes inthe financial liabilities in profit or loss for the period.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

11. Financial instruments - continued

11.4 Classification of financial liabilities and equity instruments - continued

11.4.1 Classification, recognition and measurement of financial liabilities - continued

11.4.1.2 Other financial liabilities

Except for financial liabilities, financial guarantee contracts and loan commitments arising fromtransfer of financial assets that do not meet the derecognition criteria or those arising fromcontinuing involvement in the transferred financial assets, other financial liabilities aresubsequently measured at amortized cost, with gain or loss arising from derecognition oramortization recognized in profit or loss.

If the modification or renegotiation for the contract by the Group and its counterparties does notresult in derecognition of a financial liability subsequently measured at amortized cost but thechanges in contractual cash flows, the Group will recalculate the carrying amount of the financialliability, with relevant gain or loss recognized in profit or loss. The Group will determine thecarrying amount of the financial liability based on the present value of renegotiated or modifiedcontractual cash flows discounted at the original effective interest rate of the financial liability. Forall costs or expenses arising from modification or renegotiation of the contract, the Group will adjustthe modified carrying amount of the financial liability and make amortization during the remainingterm of the modified financial liability.

11.4.1.3 Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments toreimburse the holder of the contract for a loss it incurs because a specified debtor fails to makepayment 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 financialliabilities at fair value through profit or loss or financial liabilities arising from transfer of financialassets that do not meet the derecognition criteria or those arising from continuing involvement inthe transferred financial assets, are measured at the higher of amount of loss provision; and theamount initially recognized less cumulative amortization amount determined based on the revenuestandards.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

11. Financial instruments - continued

11.4 Classification of financial liabilities and equity instruments - continued

11.4.2 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 replacethe original financial liability with a new financial liability with substantially different terms isaccounted for as an extinguishment of the original financial liability and the recognition of a newfinancial liability.

When the Group derecognizes a financial liability or a part of it, it recognizes the difference betweenthe carrying amount of the financial liability (or part of the financial liability) derecognized and theconsideration paid (including any non-cash assets transferred or new financial liabilities assumed)in profit or loss.

11.4.3 Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Groupafter deducting all of its liabilities. Equity instruments issued (including refinanced), repurchased,sold and cancelled by the Group are recognized as changes in equity. The Group's issuance ofequity instruments is recorded in the owner's equity at the actual issue price, and the relevanttransaction costs are deducted from the owner's equity (capital reserve). If the capital reserve isinsufficient to offset, the surplus reserve and retained earnings are offset in turn. The considerationand transaction costs paid for repurchasing the Company's equity instruments reduce the owner'sequity.

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.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

11. Financial instruments - continued

11.5 Derivatives and embedded derivatives

Derivatives include forward exchange contracts, currency swaps, interest rate swaps and foreignexchange options, etc. Derivatives are initially measured at fair value at the date when the derivativecontracts 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 offinancial assets as a whole.

Derivatives embedded in hybrid contracts with hosts that are not financial assets are separated andtreated 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.

For the embedded derivative separated from the host contracts, the Group accounts for the hostcontracts in the hybrid contracts with applicable accounting standards. When the embeddedderivatives whose fair value cannot be measured reliably by the Group according to the terms andconditions of the embedded derivatives, the fair value of such derivatives are measured at thedifference between the fair value of the hybrid contracts and the fair value of the host contracts. Byadopting the above method, if the embedded derivative cannot be measured on a stand-alone basisat the time when it is acquired or at subsequent balance sheet dates, the hybrid instrument isdesignated as financial instruments at fair value through profit or loss as a whole.

11.6 Offsetting financial assets and financial liabilities

Where the Group has a legal right that is currently enforceable to set off the recognized financialassets and financial liabilities, and intends either to settle on a net basis, or to realize the financialasset and settle the financial liability simultaneously, a financial asset and a financial liability shallbe 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 shallnot be offset.

11.7 Compound instruments

For convertible bonds issued by the Group that contain both liabilities and conversion option thatmay convert the liabilities to its own equity instrument, upon initial recognition, the bonds are splitinto liabilities and conversion option which are separately recognized. Therein, the conversionoption that exchanges a fixed amount of cash or other financial assets for a fixed amount of equityinstruments is accounted for as an equity instrument.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

11. Financial instruments - continued

11.7 Compound instruments - continued

Upon initial recognition, the fair value of liability portion is determined based on the prevailingmarket price of the bonds containing no conversion option. The overall issue price of the convertiblebonds net of the fair value of the liability portion is considered as the value of the conversion optionthat enables the bonds holder to convert the bonds to equity instruments, and is included in otherequity instruments.

The liability portion of the convertible bonds is subsequently measured at amortized cost usingeffective interest method; the value of the conversion option classified as equity instrument isremained in equity instrument. The expiry or conversion of convertible bonds will not result in lossor gain.

The transaction costs incurred for issuance of the convertible bonds are allocated between theliability portion and equity instrument portion in proportion to their respective fair values. Thetransaction 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 theliability, and amortized over the lifetime of the convertible bonds using effective interest method.

11.8 Reclassification of financial instruments

When the Group changes the business model to manage the financial assets, the financial assetsaffected 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 dateof reclassification (i.e., the first date of the initial reporting period after the business model of whichthe 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 throughprofit or loss by (hereinafter referred to as "FVTPL") the Group, such financial asset is measuredat fair value at the date of reclassification and the difference between the original carrying amountand 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 throughother comprehensive income (hereinafter referred to as "FVTOCI") by the Group, such financialasset is measured at fair value at the date of reclassification, and the difference between the originalcarrying 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 aretransferred out and the fair value at the date of reclassification is adjusted. The adjusted fair valueis determined as the new carrying amount, as if the financial asset has been always measured atamortized cost. The reclassification of the financial asset shall not affect its effective interest rateor the measurement of ECL.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

11. Financial instruments - continued

11.8 Reclassification of financial instruments - continued

Where a financial asset at FVTOCI is reclassified as a financial asset at FVTPL by the Group, suchfinancial asset continues to be measured at fair value. At the same time, the accumulated gains orlosses previously recognized in other comprehensive income are transferred to profit or loss for theperiod.

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 book value.

Where a financial asset at FVTPL is reclassified as a financial asset at FVTOCI by the Group, suchfinancial asset continues to be measured at fair value.

Where a financial asset at FVTPL is reclassified, the effective interest rate is determined on thebasis of the fair value of the financial asset at the date of reclassification.

12. Receivables

12.1 Determination and accounting methods for expected credit losses of receivables

The Group assesses the credit risk of receivables with significantly different credit risks on anindividual basis, and determine the credit losses of receivables on a portfolio basis using animpairment matrix for other receivables. The amount of increase in or reversal of allowance forexpected credit losses on receivables is included in profit or loss for the period as credit losses orgains.

12.2 Categories of portfolios for which provision for bad debts is assessed on a portfolio basis

according to credit risk characteristics and the basis for determination

The Group classifies receivables into groups A, B and C based on common risk characteristics. Thecommon credit risk characteristics adopted by the Group include: type of financial instrument,credit risk rating, initial recognition date, remaining contractual term, industry of the debtor,geographical location of the debtor, etc.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

12. Receivables - continued

12.2 Categories of portfolios for which provision for bad debts is assessed on a portfolio basis

according to credit risk characteristics and the basis for determination - continued

The Group makes internal credit ratings on customers and determines expected loss rate ofreceivables. Basis for determining ratings and the expected loss rates are as follows:

12.3 Determination criteria for provision for bad debts on an individual basis

13. Inventories

13.1 Categories of inventories, measurement method of cost of inventories, inventory count

system, amortization method of low-value consumables and packaging materials

13.1.1 Categories of inventories

The Group's inventories mainly include raw materials, merchandise and others. Inventories areinitially measured at cost. Cost of inventories comprises all costs of purchase, costs of conversionand other expenditures incurred in bringing the inventories to their present location and condition.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

13. Inventories - continued

13.1 Categories of inventories, measurement method of cost of inventories, inventory count

system, amortization method of low-value consumables and packaging materials -continued

13.1.2 Measurement method of cost of inventories

Cost of inventories recognised is calculated using the first-in-first-out and weighted average method.

13.1.3 Inventory count system

The perpetual inventory system is perpetual inventory system.

13.1.4 Amortization method for low cost and low-value consumables items and packaging

materials

Packaging materials and low cost and short-lived consumable items are amortized using theimmediate write-off method.

13.2 Recognition criteria and provision method for decline in value of inventories

At the balance sheet date, inventories are measured at the lower of cost and net realizable value. Ifthe cost of inventories is higher than the net realizable value, a provision for decline in value ofinventories is made.

Net realizable value is the estimated selling price in the ordinary course of business less theestimated 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 intoconsideration 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 overits net realizable value on an item-by-item basis.

After the provision for decline in value of inventories is made, if the circumstances that previouslycaused inventories to be written down below cost no longer exist so that the net realizable value ofinventories is higher than their cost, the original provision for decline in value is reversed and thereversal is included in profit or loss for the period.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

14. Long-term equity investments

14.1 Basis for determining joint control and significant influence over investee

Control means that the investor has the power over the investee, enjoys variable returns byparticipating in the relevant activities of the investee, and has the ability to use the power over theinvestee to affect its return amount. Joint control refers to the common control over an arrangementaccording to relevant agreements, and the relevant activities of the arrangement must be agreed bythe participants sharing the control right before making decisions. Significant influence refers tohaving the right to participate in the decision-making of the investee's financial and operatingpolicies, but not being able to control or jointly control the formulation of these policies with otherparties. When determining whether it is possible to control or exert significant influence on theinvestee, the convertible corporate bonds, executable warrants and other potential voting rights ofthe investee held by the investor and other parties have been considered.

14.2 Determination of initial investment cost

For a long-term equity investment acquired through business combination involving enterprisesunder common control, share of carrying amount of owners' equity of the acquiree in theconsolidated financial statements of ultimate controlling party is recognized as initial investmentcost of long-term equity investment at the date of combination. The difference between initialinvestment cost of long-term equity investment and cash paid, non-cash assets transferred andcarrying amount of liabilities assumed, is adjusted in capital reserve. If the balance of capital reserveis not sufficient to absorb the difference, surplus reserve and retained earnings shall be offset inturn. If the consideration of the combination is satisfied by the issue of equity securities, the initialinvestment cost of the long-term equity investment is the share of carrying amount of owners' equityof the acquiree in the consolidated financial statements of ultimate controlling party at the date ofcombination. The aggregate face value of the shares issued is accounted for as share capital. Thedifference between the initial investment cost and the aggregate face value of the shares issued isadjusted to capital reserve. If the balance of capital reserve is not sufficient to absorb the difference,surplus reserve and retained earnings shall be offset in turn.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

14. Long-term equity investments - continued

14.2 Determination of initial investment cost - continued

For a long-term equity investment acquired through business combination not involving enterprisesunder common control, the initial investment cost of the long-term equity investment acquired isthe cost of acquisition.

The expenses incurred by the acquirer in respect of auditing, legal services, valuation andconsultancy services and other associated general and administrative expenses attributable to thebusiness combination are recognized in profit or loss when they are incurred.

The long-term equity investment acquired otherwise than through a business combination is initiallymeasured at its cost. When the entity is able to exercise significant influence or joint control (butnot control) over an investee due to additional investment, the cost of long-term equity investmentsis the sum of the fair value of previously-held equity investments determined in accordance withAccounting Standards for Business Enterprises No.22 - Financial Instruments: Recognition andMeasurement (ASBE No. 22) and the additional investment cost.

14.3 Subsequent measurement and recognition of profit or loss

14.3.1 Long-term equity investments accounted for using the cost method

Long-term equity investments in subsidiaries are accounted for using the cost method in Company'sseparate 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. Whenadditional investment is made or the investment is recouped, the cost of the long-term equityinvestment is adjusted accordingly. Investment income is recognized in the period in accordancewith the attributable share of cash dividends or profit distributions declared by the investee.

14.3.2 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. Anassociate is an entity over which the Group has significant influence and a joint venture is a jointarrangement 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 exceedsthe 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 thanthe 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 equityinvestment is adjusted accordingly.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

14. Long-term equity investments - continued

14.3 Subsequent measurement and recognition of profit or loss - continued

14.3.2 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 othercomprehensive income of the investee for the period as investment income and othercomprehensive income for the period. Meanwhile, the carrying amount of long-term equityinvestment is adjusted; the carrying amount of long-term equity investment is decreased inaccordance with its share of the investee's declared profit or cash dividends; other changes inowners' equity of the investee other than net profit or loss, other comprehensive incomed and profitdistribution 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 lossbased on the fair value of the investee's individual identifiable assets, etc. at the acquisition dateafter making adjustments. When the investee's accounting policies and accounting period areinconsistent with those of the Group, the Group recognizes investment income and othercomprehensive income after making appropriate adjustments to conform to the Group's accountingpolicies and accounting period. However, unrealized gains or losses resulting from the Group'stransactions with its associates and joint ventures and assets invested or sold, which do notconstitute a business, are eliminated based on the proportion attributable to the Group and theninvestment gains or losses are recognized. However, unrealized losses resulting from the Group'stransactions with its associates and joint ventures which represent impairment losses on thetransferred assets are not eliminated.

When recognizing the net loss of the investee that should be shared, the book value of the long-term equity investments and other long-term interests that substantially constitute the net investmentin the investee should be written down to zero. In addition, if the Group has incurred obligations toassume additional losses, a provision is recognized according to the obligation expected, andrecorded in the investment loss for the period. Where net profits are subsequently made by theinvestee, the Group resumes recognizing its share of those profits only after its share of the profitsexceeds the share of losses previously not recognized.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

14. Long-term equity investments - continued

14.4 Disposal of long-term equity investments

On disposal of a long-term equity investment, the difference between the proceeds actually receivedand receivable and the carrying amount is recognized in profit or loss for the period. For long-termequity investments accounted for using the equity method, if the remaining interest after disposalis still accounted for using the equity method, other comprehensive income previously recognizedusing the equity method is accounted for on the same basis as would have been required if theinvestee had directly disposed of related assets or liabilities, and transferred to profit or loss for theperiod on a pro rata basis; owners' equity recognized due to other changes in owners' equity of theinvestee (other than net profit or loss, other comprehensive income and profit distribution) istransferred to profit or loss for the period on a pro rata basis. For long-term equity investmentsaccounted for using the cost method, if the remaining interest after disposal is still accounted forusing the cost method, other comprehensive income previously recognized using the equity methodor in accordance with the standards for the recognition and measurement of financial instrumentsbefore obtaining the control over the investee, is accounted for on the same basis as would havebeen required if the investee had directly disposed of related assets or liabilities, and transferred toprofit or loss for the period on a pro rata basis; other changes in owners' equity in the investee's netassets recognized under the equity method (other than net profit or loss, other comprehensiveincome 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 preparingthe separate financial statements, remaining shares after disposal can have joint control orsignificant influence over the investee, the equity method shall be adopted to adjust the remainingshares as they are accounted for under equity method since the acquisition date. If remaining sharesafter disposal cannot have joint control or significant influence over the investee, they are accountedfor in accordance with the standards for recognition and measurement of financial instruments, andthe difference between fair value on date of losing control and carrying amount is recognized inprofit or loss for the period. Other comprehensive income recognized using the equity method or inaccordance with the standards for the recognition and measurement of financial instruments beforelosing control over the investee, is accounted for on the same basis as would have been required ifthe investee had directly disposed of related assets or liabilities when the control over the investeeis lost; other changes in owners' equity in the investee's net assets recognized under the equitymethod (other than net profit or loss, other comprehensive income and profit distribution) istransferred to profit or loss for the period. Where remaining shares after disposal are accounted forunder equity method, other comprehensive income and other owners' equity are transferred on apro rata basis. Where remaining shares after disposal are accounted for in accordance with thestandards for recognition and measurement of financial instruments, other comprehensive incomeand other owners' equity are all transferred.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

14. Long-term equity investments - continued

14.4 Disposal of long-term equity investments - continued

Where the Group loses joint control or significant influence over the investee after part disposal ofshares, remaining shares after disposal are accounted for in accordance with the standards forrecognition and measurement of financial instruments, and the difference between fair value at thedate of losing joint control or significant influence and carrying amount is recognized in profit orloss 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 disposedof 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 aretransferred 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 bystep until it loses control over the subsidiaries. If these transactions belong to "package deal", alltransactions are deemed as one transaction on disposal of equity investment in subsidiaries, and thedifference between the amount of disposal and carrying amount of long-term equity investment isrecognized as other comprehensive income before the loss of control, and transferred to profit orloss for the period when the control is lost.

15. Investment properties

Investment property is the property held by the Group to earn rentals or for capital appreciation orboth. 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 suchinvestment property are included in the cost of the investment property if it is probable thateconomic benefits associated with the investment property will flow to the Group and thesubsequent expenditures can be measured reliably. Other subsequent expenditures are recognizedin profit or loss for the period in which they are incurred.

The Group uses the cost model for subsequent measurement of investment property, and theinvestment properties are depreciated over their useful lives using the straight-line method. Thedepreciation life, estimated residual value rate and annual depreciation rate of each category ofinvestment properties are as follows:

An investment property is derecognized upon disposal or when the investment property ispermanently withdrawn from use and it is estimated that no economic benefits can be obtained fromits disposal, the investment properties is derecognized.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

15. Investment properties - continued

When an investment property is sold, transferred, retired or damaged, the Group recognizes theamount of any proceeds on disposal net of the carrying amount and related taxes in profit or lossfor the period.

16. 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 oneaccounting year. A fixed asset is recognized only when it is probable that economic benefitsassociated 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 fixedassets initially contributed by the state-owned shareholders are recognized based on the valuationamounts 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 itis probable that economic benefits associated with the asset will flow to the Group and thesubsequent expenditures can be measured reliably. Meanwhile the carrying amount of the replacedpart is derecognized. Other subsequent expenditures are recognized in profit or loss for the periodin which they are incurred.

A fixed asset is depreciated over its useful life using the straight-line method starting from themonth subsequent to the one in which it is ready for intended use. The depreciation life, estimatednet residual value rate and annual depreciation rate of each category of fixed assets are as follows:

Estimated net residual value of a fixed asset is the estimated amount that the Group would currentlyobtain from disposal of the asset, after deducting the estimated costs of disposal, if the asset werealready 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 fromits use or disposal, the fixed asset is derecognized. When a fixed asset is sold, transferred, retiredor damaged, the amount of any proceeds on disposal of the asset net of the carrying amount andrelated 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 thedepreciation method applied at least once at each financial year-end, and accounts for any changeas a change in accounting estimates.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

17. Construction in progress

Construction in progress is measured at its actual costs. The actual costs include variousconstruction expenditures during the construction period, borrowing costs capitalized before it isready for intended use and other relevant costs. Construction in progress is not depreciated.

Construction in progress is accounted for by categories of projects initiated, and is transferred to afixed asset when it is ready for intended use. The criteria for judging the intended use shall be oneof the following:

(1) The physical construction (including installation) of fixed assets has been fully or

substantially completed;

(2) The trial production or trial operation has been carried out and the results of which indicate

that the asset is capable of normal operation or producing qualified products on a stablebasis, or the results of which indicate that it is capable of normal functioning or operation;

(3) The fixed assets and intangible assets acquired and constructed have met the design or

contractual requirements or are basically in compliance with the design or contractualrequirements.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

18. Intangible assets

18.1 Useful life and the basis for determination, estimates, amortization method or review

procedures

Intangible assets include land use rights, terminal operating rights, data resources and others.

An intangible asset is measured initially at cost. Upon being restructured into a stock company, theintangible assets initially contributed by the state-owned shareholders are recognized based on thevaluation amounts confirmed by the state-owned assets administration department. Except forterminal operating rights, when an intangible asset with a finite useful life is available for use, itsoriginal cost minus the expected net residual value and the accumulated amount of impairmentprovision is amortized over its estimated useful life by using straight-line method. The terminaloperating rights under the output method are amortized over periods according to the ratio of theestimated minimum guaranteed throughput to the estimated minimum guaranteed total throughputduring the operation period. When the estimated minimum guaranteed throughput cannot bemeasured reliably, the straight-line method will be used for amortization. An intangible asset withindefinite useful life will not be amortized.

The amortization method, useful life and estimated net residual value rate of each category ofintangible assets are as follows:

For an intangible asset with a finite useful life, the Group reviews the useful life and amortizationmethod at the end of the year, and makes adjustments when necessary.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

18. Intangible assets - continued

18.2 Scope of R&D expenditure and method for accounting treatment

Expenditure during the research phase is recognized in profit or loss for the period in which it isincurred.

Expenditure during the development phase that meets all of the following conditions at the sametime is recognized as intangible asset. Expenditure during development phase that does not meetthe 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 intangibleasset or the intangible asset itself or, if it is to be used internally, the usefulness of theintangible asset.

(4) the availability of adequate technical, financial and other resources to complete the

development and the ability to use or sell the intangible asset.

(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, theGroup recognizes all of them in profit or loss for the year. The costs of intangible assets generatedby the internal research only include the total expenditure incurred for the period from the timepoint of capitalization to the time point when the intangible assets are ready for intended use. Forthe identical intangible asset, the expenditures recorded as expenses before they qualify forcapitalization during the development process are not adjusted.

The Group classifies the expenditures on an internal research and development project intoexpenditures in the research phase and expenditures in the development phase. The scope of R&Dexpenditures refer to those directly related to the R&D activities, including wages, salaries, andwelfare expenses of personnel directly engaged in R&D activities, materials directly consumed inR&D activities, depreciation expenses for instruments and equipment used in R&D activities, travel,transportation, and communication expenses required for research and experimental development,etc. Technical feasibility and economic viability studies are adopted as specific criteria forclassifying the research and development phases once such studies have been evaluated andapproved.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

19. Long-term deferred expenses

Long-term deferred expenses refer to various expenses that have been incurred but should be bornein the current and subsequent periods with an apportionment period of more than one year. Long-term deferred expenses are amortized using the straight-line method over the expected periods inwhich benefits are derived.

20. Impairment of non-financial assets other than goodwill

On each balance sheet date, the Group checks whether there is any sign of possible impairment oflong-term equity investments, investment properties measured by cost model, fixed assets,construction in progress, right-of-use assets, long-term deferred expenses, and intangible assetswhose service life is determined. If there is any indication that such assets may be impaired,recoverable amounts are estimated for such assets. Intangible assets with indefinite useful life andintangible assets not yet available for use are tested for impairment annually, irrespective of whetherthere is any indication that the assets may be impaired.

Recoverable amount is estimated on an individual basis. If it is not practical to estimate therecoverable amount of an individual asset, the recoverable amount of the asset group to which theasset belongs will be estimated. The recoverable amount of an asset or assets group is the higher ofits fair value less costs of disposal and the present value of the future cash flows expected to bederived from the asset.

The present value of the estimated future cash flow of the assets is determined according to theestimated future cash flow generated during the continuous use and final disposal of the assets, andthe amount discounted which is determined by selecting an appropriate pre tax discount rate.

If the recoverable amount of an asset is less than its carrying amount, the deficit is accounted for asan impairment losses and is recognized in profit or loss.

Once the impairment losses of above-mentioned assets is recognized, it shall not be reversed in anysubsequent period.

When determining the impairment losses of assets related to contract costs, first determine theimpairment losses of other assets related to contracts that are recognized in accordance with otherrelevant accounting standards for business enterprises; Then, if the book value of the assets relatedto the contract costs is higher than the difference between the following two items, the excess partof the provision for impairment shall be recognized as impairment losses: (i) the Group's expectedremaining consideration for the transfer of goods or services related to the assets; (ii) Estimate thecost to be incurred for the transfer of the relevant goods or services.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

20. Impairment of non-financial assets other than goodwill - continued

Except for the impairment losses related to the contract costs, once the above impairment losses isrecognized, it will not be reversed in future accounting periods. After the provision for impairmentof assets related to contract costs has been made, if the factors of impairment in previous periodshave changed resulting in the above two differences are higher than the book value of the assets,the provision for impairment of the assets that has been made is reversed and included in the currentprofits and losses, but the book value of the assets after reversal does not exceed the book value ofthe assets on the reversal date assuming that no provision for impairment is made.

21. Provisions

Provisions are recognized when the Group has a present obligation related to a contingency, it isprobable result in an outflow of economic benefits to settle the obligation, and the amount of theobligation can be measured reliably.

The amount recognized as a provision is the best estimate of the consideration required to settle thepresent obligation at the balance sheet date, taking into account factors pertaining to a contingencysuch as the risks, uncertainties and time value of money. Where the effect of the time value of moneyis material, the amount of the provision is determined by discounting the related future cashoutflows.

If all or part of the expenses required to settle the estimated liabilities are expected to becompensated by a third party, the compensation amount will be separately recognized as assetswhen it is basically determined that it can be received, and the recognized compensation amountwill not exceed the book value of the estimated liabilities.

22. Employee benefits

22.1 Short-term employee benefits

Short-term benefits refer to the employee benefits that the Group is required to make full paymentswithin 12 months after the annual reporting period during which relevant services are provided bythe employees, except the post-employment benefits and termination benefits. Specifically, theshort-term benefits include: employee salaries, bonuses, allowances and subsidies, employeebenefits, 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 toprofit or loss for the period or in the costs of relevant assets according to the beneficiaries of servicesprovided by employees 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 thecosts of relevant assets based on the actually occurred amounts when they actually occurred. Non-monetary staff welfare expenses are measured at fair value.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

22. Employee benefits - continued

22.1 Short-term employee benefits - continued

Payment made by the Group of social security contributions for employees such as premiums orcontributions on medical insurance, work injury insurance and maternity insurance, etc. andpayments of housing funds, as well as union running costs and employee education costs providedin accordance with relevant requirements, are calculated according to prescribed bases andpercentages 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 theaccounting period in which employees provide services.

22.2 Post-employment benefits

Post-employment benefits refer to the rewards and benefits of various forms provided by the Groupafter the employees have retired or terminated the labor relationship with the enterprise for theservices 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 unemploymentinsurance and other post-employment benefits.

Post-employment benefit plans are classified by the Group into defined contribution plans anddefined benefit plans. The post-employment benefit plan refers to the agreements the Group enteredinto with the employees on the post-employment benefits or the regulations or measures establishedby the Group for provisions of the post-employee benefits, among which the defined contributionplans refer to the post-employment benefit plan under which the Group shall no longer undertakeany obligations of payments after paying fixed expenses to independent funds; the defined benefitplans refer to the post-employment benefit plans other than the defined contribution plans. Duringthe accounting period in which employees render services to the Group, the amounts payablecalculated based on the defined contribution plans are recognized as liabilities and included in profitor loss for the period or costs of related assets.

For defined benefit plans, the Group attributes the welfare obligations arising from the definedbenefit plans to the period in which employees provide services to the Group according to theformula determined based on the projected cumulative benefit unit method, and includes them inprofit 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 ofplanned 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.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

22. Employee benefits - continued

22.2 Post-employment benefits - continued

Service costs and net interest of net liabilities and net assets of defined benefit plans are recognizedin profit or loss for the period or costs of related assets. Remeasurement of the net defined benefitliabilities (assets) (including actuarial gains and losses, the return on planned assets, excludingamounts included in net interest on net defined benefit liabilities (assets), and any changes in theeffect of the asset ceiling, excluding amounts included in net interest on net defined benefitliabilities (assets)) are recognized in other comprehensive income.

The deficit or surplus resulting from the present value of the defined benefit plan obligations lessthe fair value of the defined benefit plan assets is recognized as a net defined benefit plan liabilityor net asset.

22.3 Termination benefits

Termination benefits refer to the compensations the Group pay to the employees for terminating theemployment relationship with employees before the expiry of the employment contracts orencouraging employees to accept voluntary redundancy. When the Group provides terminationbenefits to employees, employee benefit liabilities are recognized for termination benefits, with acorresponding charge to profit or loss for the period at the earlier of: (1) when the Group cannotunilaterally withdraw the offer of termination benefits because of the termination plan or acurtailment proposal; and (2) when the Group has a detailed and formal restructuring plan involvingthe payment of dismissal benefit; In addition, the restructuring plan has been implemented or themain contents of the plan have been notified to the affected parties, so that all parties have formeda reasonable expectation that the Group will implement the restructuring.

22.4 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 inaccordance with the relevant provisions of the defined contribution plans mentioned above, exceptthat the net liability or net asset for other long-term employee benefits is recognized and measuredin accordance with the relevant provisions of the defined benefit plans. At the end of the reportingperiod, employee compensation costs arising from other long-term employee benefits arerecognized 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 netasset for other long-term employee benefits. The total net amount of these items is included in profitor loss for the period or in the costs of related assets.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

22. Employee benefits - continued

22.4 Other long-term employee benefits - continued

The Group provides internal retirement benefits to employees accepting the internal retirementarrangements. Internal retirement benefits refer to the payments of salaries and social securitycontributions for employees who have not reached the retirement age regulated by the country andare approved to quit the job voluntarily. For internal retirement benefits, the internal retirementbenefits the Group is expected to pay during the period from the date when employees stopproviding services to the date of normal retirement are recognized as liabilities at the presentvalueand included in profit or loss for the period when relevant recognition requirements of theinternal retirement benefits are met.

23. Share-based payments

A share-based payment is a transaction which the Group grants equity instruments, in return forservices 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 measuredat fair value of the equity instruments granted to employees at the grant date. Such amount isrecognized as related costs or expenses on a straight-line basis over the vesting period, based on thebest estimate of the number of equity instruments expected to vest/ as related costs or expenses atthe grant date, if the equity instruments could be vested immediately, with a corresponding increasein capital reserve.

24. Bonds payable

The Group's bonds payable are measured at fair value when initially recognized, and relevanttransaction costs are included in the initially recognized amount. It is subsequently measured atamortized cost.

The difference between the bond issue price and the total face value of the bonds is regarded as thebond premium or discount, which is amortized at the time of interest accrual according to theeffective interest method during the duration of the bonds, and is treated according to the principleof handling borrowing costs.

25. Preference shares, perpetual bonds and other financial instruments

The actual issue price for the issuance of equity instruments is included in shareholders' equity afterdeducting relevant transaction costs from shareholders’ equity (capital reserve). If the capitalreserve is insufficient to offset, surplus reserve and retained earnings will be offset in turn. Theconsideration and transaction costs paid for repurchasing the Group's equity instruments reduceshareholders’ equity.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

25. Preference shares, perpetual bonds and other financial instruments - continued

The Group classifies financial instruments, or their components, as financial liabilities or equityinstruments at initial recognition based on the contractual terms of the issued perpetual bonds andtheir reflected economic substance, combined with the definitions of financial liabilities and equityinstruments.

For financial instruments such as perpetual bonds classified as equity instruments, interest expenseor dividend (dividend) distributions are treated as profit distributions of the Group, and theirrepurchases, write-offs, etc., are treated as changes in equity, and related transaction costs arededucted from equity.

26. Revenue recognition

26.1 Disclosure of accounting policies adopted for revenue recognition and measurement by type

of business

Revenue refers to the total inflow of economic benefits formed in the daily activities of the Group,which will lead to the increase of owner's equity and has nothing to do with the capital invested byowners. The Group's revenue is mainly from port business, bonded logistics business and otherbusinesses.

The Group recognizes revenue based on the transaction price allocated to the performanceobligation when the Group satisfies a performance obligation in the contract, namely, when thecustomer obtains control over relevant goods or services. A performance obligation is acommitment that the Group transfers a distinct goods or service to a customer in the contract. Thetransaction price is the amount of consideration to which the Group expects to be entitled inexchange for transferring promised goods or services to a customer, excluding amounts collectedon behalf of third parties and amounts expected to be refunded to a customer. The transaction pricerecognized by the Group does not exceed the amount of accumulated recognized revenue that isunlikely to be significantly reversed when the relevant uncertainty is eliminated.

The Group evaluates the contract on the contract start date, identifies each individual performanceobligation contained in the contract, and determines whether each individual performanceobligation is performed within a certain period or at a certain time point. It is a performanceobligation satisfied during a period of time and the Group recognizes revenue during a period oftime according to the progress of performance if one of the following conditions is met: (i) thecustomer 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 theGroup is entitled to collect amounts of cumulative performance part which have been done up tonow. Otherwise, revenue is recognized at a point in time when the customer obtains control overthe relevant goods or services.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

26. Revenue recognition - continued

26.1 Disclosure of accounting policies adopted for revenue recognition and measurement by type

of business - continued

The Group adopts output method, i.e., the value of goods or services transferred to customers todetermine the appropriate progress of performance. Where the progress cannot be determinedreasonably, the revenue is recognized based on the amount of cost that is expected to becompensated based on the cost already incurred, until the progress of performance is reasonablydetermined.

Contract assets refer to the right that the Group has transferred goods or services to customers andis entitled to receive consideration, and the right depends on other factors other than the passage oftime. Please refer to Note (IV) 11 for details of the accounting policies for the impairment ofcontract assets. The Group's unconditional (that is, only depending on the passage of time) right tocollect consideration from customers is separately listed as receivables.

Contract liabilities refer to the Group's obligation to transfer goods or services to a customer forconsideration received or receivable from the customer.

Contract assets and contract liabilities under the same contract are presented in net amount.

If there are two or more of performance obligations included in the contract, at the inception of thecontract, the Group allocates the transaction price to each single performance obligation based onthe proportion of stand-alone selling price of goods or services promised in each stand-aloneperformance obligation. However, if there is conclusive evidence indicating that the contractdiscount or variable consideration is only relative with one or more (not the whole) performanceobligations in the contract, the Group will allocate the contract discount or variable considerationto relative one or more performance obligations. Stand-alone selling price refers to the price of asingle sale of goods or services. If the stand-alone selling price cannot be observed directly, theGroup estimates the stand-alone selling price through comprehensive consideration of all relativeinformation 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 Groupshall determine the best estimate of variable consideration based on the expected value or the mostprobably occurred amount. The transaction price including variable consideration shall not exceedthe amount of the cumulatively recognized revenue which is unlikely to be significantly reversedwhen relevant uncertainty is eliminated. At each balance sheet date, the Group re-estimates theamount of variable consideration which should be included in transaction price.

If the customer pays non-cash consideration, the Group determines the transaction price based onthe fair value of the non-cash consideration. If the fair value of non-cash consideration cannot bereasonably estimated, the Group shall determine the transaction price indirectly by reference to thestand-alone selling price of the goods or services promised to transfer to the customer.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

26. Revenue recognition - continued

26.1 Disclosure of accounting policies adopted for revenue recognition and measurement by type

of business - continued

In case of the existence of a significant financing component in the contract, the Group shalldetermine the transaction price on the assumption that the customer has paid the amount payableby cash when obtaining the control over the goods or services. Differences between transactionprice and contract consideration are amortized using effective interest method during the contractlife. At the inception of the contract, if the period between when the Group transfers a promisedgoods or service to a customer and when the customer pays for that goods or service will be oneyear or less, the Group would not consider the significant component in the contract.

The Group assesses whether it controls each specified goods or service before that goods or serviceis transferred to the customer to determine whether the Group is a principal or an agent. If the Groupcontrols the specified good or service before that good or service is transferred to a customer, theGroup is a principal and recognizes revenue in the gross amount of consideration received orreceivable. Otherwise, the Group is an agent and recognizes revenue in the amount of any fee orcommission to which it expects to be entitled. The fee or commission is the net amount ofconsideration that the Group retains after paying the other party the consideration received inexchange for the goods or services to be provided by that party, or is determined in accordance withthe established commission amount or percentage, etc.

Where the Group receives receipts in advance from a customer for sales of goods or rendering ofservices, the amount is first recognized as a liability and then transferred to revenue when the relatedperformance obligation has been satisfied. When the Group's advance payments received are notrequired to be refunded and it is probable that the customer will waive all or part of its contractualrights, the Group recognizes the said amounts as revenue on a pro-rata basis in accordance with thepattern of exercise of the customer's contractual rights, if the Group expects to be entitled to theamounts relating to the contractual rights waived by the customer; otherwise, the Group reversesthe related balance of the said liabilities to revenue only when it is highly unlikely that the customerwill require performance of the remaining performance obligations.

For port business, the revenue from the handling of containers and bulk cargos is recognized overtime based on the progress of completed services, and the revenue from the storage of containersand bulk cargos is recognized on a straight-line basis over the period of storage.

For bonded logistics business, the revenue is recognized based on the progress of services rendered,where the progress of completed services is determined based on the proportion of days on servicesprovided to the estimated total number of service days. As at the balance sheet date, the Group hasre-estimated the progress of completed bonded logistics service so that it reflects the changes inperformance status.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

26. Revenue recognition - continued

26.2 Similar operations under different business models which involve different revenue

recognition and measurement methods

The Group has no similar operations under different business models which involve differentrevenue recognition and measurement methods.

26.3 Costs of obtaining a contract

For the incremental cost of obtaining the contract (cost that will not occur if the contract is notobtained) that is expected to be recoverable, it is recognized as an asset. If the amortization periodof 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 whenincurred, except for those explicitly assumed by the customer.

26.4 Costs to fulfil a contract

If the costs incurred in fulfilling a contract are not within the scope of any standards other thanRevenue Standards, the Group recognizes an asset only if those costs meet all of the followingcriteria: (1) the costs relate directly to a contract or to an anticipated contract that the Group canspecifically identify; (2) the costs enhance resources of the Group that will be used in satisfyingperformance obligations in the future; and (3) the costs are expected to be recovered. The assetmentioned above shall be amortized on a basis that is consistent with the revenue recognition of thegoods or services to which the asset relates and recognized in profit or loss for the period.

27. Government grants

Government grants refer to monetary assets and non-monetary assets obtained by the Group fromthe government free of charge. Government grants are recognized when they can meet theconditions attached to government grants and can be received.

If a government grant is in the form of a transfer of a monetary asset, it is measured at the amountreceived or receivable. If a government grant is in the form of a non-monetary asset, it is measuredat fair value. If the fair value cannot be reliably determined, it is measured at a nominal amount. Agovernment grant measured at a nominal amount is recognized immediately in profit or loss for theperiod.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

27. Government grants - continued

27.1 Determination basis and accounting treatment of government grant related to assets

Government grants of the Group mainly include grants for intelligent system, etc., and thesegovernment grants relate to assets as they will form long-term assets.

A government grant related to an asset is recognized as deferred income, and included in profit orloss by stages over the useful life of the related asset in a reasonable and systematic way. Agovernment grant measured at a nominal amount is recognized immediately in profit or loss in thecurrent period. Where the relevant asset is sold, transferred, retired or damaged prior to the end ofits useful life, the related undistributed deferred income is transferred to profit or loss of the disposalperiod.

27.2 Determination basis and accounting treatment of government grant related to income

Government grants of the Group mainly include grants for business development and specializedoperations, etc., and these government grants relate to income as they will not form long-term assets.The Group classifies government grants that are difficult to be distinguished as government grantsrelated to income aggregately.

For a government grant related to income, if the grant is a compensation for related expenses orlosses to be incurred in subsequent periods, the grant is recognized as deferred income andrecognized in profit or loss for the period in which the related costs or losses are recognized; If thegrant is a compensation for related expenses or losses already incurred, the grant is recognizedimmediately in profit or loss.

A government grant related to the Group's daily activities is recognized in other income; agovernment grant not related to the Group's daily activities is recognized in non-operating income.

28. Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifyingasset are capitalized when expenditures for such asset and borrowing costs are incurred andactivities relating to the acquisition, construction or production of the asset that are necessary toprepare the asset for its intended use or sale have commenced. Capitalization of borrowing costsceases when the qualifying asset being acquired, constructed or produced becomes ready for itsintended use or sale. Capitalization of borrowing costs is suspended during periods in which theacquisition, construction or production of a qualifying asset is interrupted abnormally and when theinterruption is for a continuous period of more than 3 months. Capitalization is suspended until theacquisition, construction or production of the asset is resumed. Other borrowing costs arerecognized as an expense in the period in which they are incurred.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

28. Borrowing costs - continued

Where funds are borrowed under a specific-purpose borrowing, the amount of interest to becapitalized is the actual interest expense incurred on that borrowing for the period less any bankinterest earned from depositing the borrowed funds before being used on the asset or any investmentincome 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 suchborrowings by applying a capitalization rate to the weighted average of the excess of cumulativeexpenditures on the asset over the amounts of specific-purpose borrowings. The capitalization rateis the weighted average of the interest rates applicable to the general-purpose borrowings. Duringthe capitalization period, exchange differences related to a specific-purpose borrowing denominatedin foreign currency are all capitalized. Exchange differences in connection with general-purposeborrowings are recognized in profit or loss for the period in which they are incurred.

29. Income tax

The income tax expenses include current income tax and deferred income tax.

29.1 Current income tax

At the balance sheet date, current income tax liabilities (or assets) for the current and prior periodsare measured at the amount expected to be paid (or recovered) according to the requirements of taxlaws.

29.2 Deferred tax assets and deferred tax liabilities

For temporary differences between the carrying amounts of certain assets or liabilities and their taxbase, or between the nil carrying amount of those items that are not recognized as assets or liabilitiesand their tax base that can be determined according to tax laws, deferred tax assets and liabilitiesare recognized using the balance sheet liability method.

Deferred income tax are generally recognized for all taxable temporary differences. Deferred taxassets for deductible temporary differences are recognized to the extent that it is probable thattaxable 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 theinitial recognition of an asset or liability arising from a transaction, which is not a businesscombination that affects neither the accounting profit nor taxable profits (or deductible losses) andwill not result in taxable temporary differences and deductible temporary differences in equivalentamounts 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 recognizedto the extent that it is probable that future taxable profits will be available against which thedeductible losses and tax credits can be utilized.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

29. Deferred tax assets/ deferred tax liabilities - continued

29.2 Deferred tax assets and deferred tax liabilities - continued

Deferred tax liabilities are recognized for taxable temporary differences associated withinvestments in subsidiaries, associates and joint ventures, except where the Group is able to controlthe timing of the reversal of the temporary differences and it is probable that the temporarydifferences will not be reversed in the foreseeable future. Deferred tax assets arising from deductibletemporary differences associated with investments in subsidiaries, associates and joint ventures arerecognized to the extent that it is probable that future taxable profits will be available against whichthe deductible temporary differences can be utilized and they are expected to be reversed in theforeseeable future.

At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates applicablein 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, exceptwhen they arise from transactions or events that are directly recognized in other comprehensiveincome or shareholders' equity, in which case they are recognized in other comprehensive incomeor shareholders' equity, and when they arise from business combinations, in which case they adjustthe carrying amount of goodwill.

At the balance sheet date, the carrying amount of deferred tax assets is reviewed and reduced if itis no longer probable that sufficient taxable profits will be available in the future to allow the benefitof deferred tax assets to be utilized. Any such reduction in amount is reversed when it becomesprobable that sufficient taxable profits will be available.

29.3 Income tax offsetting

When the Group has a legal right to settle on a net basis and intends either to settle on a net basisor to realize the assets and settle the liabilities simultaneously, current tax assets and current taxliabilities 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, anddeferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxationauthority on either the same taxable entity or different taxable entities which intend either to settlecurrent 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 expectedto be reversed, deferred tax assets and deferred tax liabilities are offset and presented on a net basis.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

30. Transactions denominated in foreign currencies and translation of financial

statements denominated in foreign currencies

30.1 Transactions denominated in foreign currencies

A foreign currency transaction is recorded, on initial recognition, by applying the spot exchangerate on the date of the transaction.

At the balance sheet date, foreign currency monetary items are translated into functional currencyusing the spot exchange rates at the balance sheet date. Exchange differences arising from thedifferences between the spot exchange rates prevailing at the balance sheet date and those on initialrecognition 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 foreigncurrency that qualify for capitalization are capitalized as part of the cost of the qualifying assetduring the capitalization period; (2) exchange differences related to hedging instruments for thepurpose 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 othercomprehensive income.

When the consolidated financial statements include foreign operation(s), if there is foreign currencymonetary item constituting a net investment in a foreign operation, exchange differences arisingfrom changes in exchange rates are recognized as "exchange differences arising from translation offinancial statements denominated in foreign currencies" in other comprehensive income, and inprofit 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 infunctional currency at the spot exchange rates on the dates of the transactions. Foreign currencynon-monetary items measured at fair value are re-translated at the spot exchange rate on the datewhen the fair value is determined. Difference between the re-translated functional currency amountand the original functional currency amount is treated as changes in fair value (including changesin exchange rate) and is recognized in profit or loss or as other comprehensive income.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

30. Transactions denominated in foreign currencies and translation of financial

statements denominated in foreign currencies - continued

30.2 Translation of financial statements denominated in foreign currencies

For the purpose of preparing the consolidated financial statements, financial statements of a foreignoperation are translated from the foreign currency into RMB using the following method: assetsand liabilities on the balance sheet are translated at the spot exchange rate prevailing at the balancesheet date; shareholders' equity items except for translation differences arising from translation offoreign currency financial statements items in retained earnings and other comprehensive incomeare translated at the spot exchange rates at the dates on which such items arose; all items in theincome statement as well as items reflecting the distribution of profits are translated at the averageexchange rates of the accounting period of the consolidated financial statements; retained earningsat the beginning of the year are the converted year-end retained earnings of the previous year. Theyear-end retained earnings are calculated and presented in accordance with the items of profitdistribution after conversion. The difference between the translated assets and the aggregate ofliabilities and shareholders' equity items is recognized as other comprehensive income and includedin shareholders' equity.

Cash flows arising from a transaction in foreign currency and the cash flows of a foreign subsidiaryare translated at average exchange rate during the accounting period of consolidated financialstatements. The effect of exchange rate changes on cash and cash equivalents is regarded as areconciling item and presented separately in the cash flow statement as "effect of exchange ratechanges on cash and cash equivalents".

The amount at the beginning of the year and the comparative figures of previous year are presentedat the translated amounts in the previous year's financial statements.

On disposal of the Group's entire interest in a foreign operation, or upon a loss of control over aforeign operation due to disposal of certain interest in it or other reasons, the Group transfers theaccumulated exchange differences arising from translation of financial statements of this foreignoperation attributable to the owners' equity of the Company and presented under othercomprehensive 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 percentagein foreign operations but does not result in the Group losing control over a foreign operation, theexchange differences arising from the translation difference of financial statements denominated inforeign currencies related to this disposed part are re-attributed to non-controlling interests and arenot recognized in profit or loss. For partial disposals of equity interests in foreign operations whichare associates or joint ventures, the proportionate share of the accumulated exchange differencesarising from translation difference of financial statements denominated in foreign currencies isreclassified to profit or loss.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(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 touse the assets to obtain a consideration.

On the contract start date, the Group assesses whether the contract is a lease or includes a lease. Ifone party in the contract transfers the right to control the use of one or more identified assets withina certain period in exchange for consideration, the contract is a lease or includes a lease. Unless thecontract terms and conditions change, the Group will not re-evaluate whether the contract is a leaseor includes a lease.

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 Groupseparates each individual lease and non-lease component and allocates the contract considerationin the relative proportion of the sum of the individual price of each lease component and theindividual 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-useassets of the leases at the commencement date. The commencement date of the lease is the datefrom 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 underlyingasset, restoring the site on which it is located or restoring the underlying asset to the conditionrequired 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 tothe Group by the end of the lease term, the right-of-use assets are depreciated from thecommencement 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 lifeof the right-of-use assets or the end of the lease term.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(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 leaseliabilities at the present value of the outstanding lease payments at the commencement date. Incalculating the present value of the lease payments, the Group uses the implicit interest rate of thelease as the discount rate. If it is not possible to determine the implicit interest rate of the lease, theincremental borrowing rate shall be applied.

The lease payments comprise the following payments by the Group for the right to use theunderlying 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 optionto 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 orrate as at the commencement date. Variable lease payments not included in the measurement of thelease liabilities, are recognized in profit or loss, or in the cost of relevant assets, in the period ofthose payments.

After the commencement date, interest expenses on the lease liabilities in each period during thelease term is calculated by a constant periodic rate of interest and included in profit or loss orcharged to cost of related assets.

After the commencement date, the Group shall remeasure the lease liabilities and makecorresponding adjustments to the related right-of-use assets in the following circumstances. If thecarrying amount of the right-of-use assets is reduced to zero and there is a further reduction in themeasurement 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 leases

payments 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.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(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 andleases 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-termlease is a lease that, at the commencement date, has a lease term of 12 months or less and does notcontain a call option. A lease of low-value assets is a lease that, the value of the underlying asset islower when it is new. For short-term leases and leases of low-value assets, the Group recognizesthe lease payments in profit or loss, or in the cost of related assets on a straight-line basis over eachperiod 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 moreunderlying assets.? the consideration for the lease increases by an amount commensurate with the stand-aloneprice for the increase in scope and any appropriate adjustments to that stand-alone priceaccording 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 leasemodification, the Group should allocate the consideration in the modified contract, determine thelease term of the modified lease and remeasure the lease liabilities based on the present value of thechanged lease payments and the revised discount rate.

For lease modifications that decrease the scope of the lease or shorten the term of the lease, theGroup should decrease the carrying amount of the right-of-use assets with any gain or loss relatingto the partial or full termination of the lease recognized in profit or loss. For re-measurement oflease liabilities due to other lease modifications, a corresponding adjustment is made to the carryingamount of the right-of-use assets.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

31. Leases - continued

31.1 The Group as lessee - continued

31.1.6 Sale and leaseback transactions

The Group as seller-lessee

The Group applies the requirements of Revenue Standard to determine whether the transfer of anasset is accounted for as a sale of that asset. If the transfer of an asset does not constitute a sale, theGroup shall continue to recognize the transferred assets, recognize a financial liability equal to thetransfer proceeds and accounts for such financial liability in accordance with the AccountingStandards for Business Enterprises No. 22 - Financial Instruments: Recognition and Measurement.If the transfer of an asset is a sale, the Group shall measure the right-of-use assets arising from theleaseback at the proportion of the previous carrying amount of the asset that relates to the right ofuse, and recognize any gain or loss for rights transferred to the lessor only.

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 thecontract 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.

31.2.2 Classification of leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all therisks 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-linemethod over the respective periods of the lease term. The Group's initial direct costs incurred inconnection with operating leases are capitalized when the costs incurred, and are allocated to profitor 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 notincluded in the lease receipts are recognized in profit or loss for the period when they are actuallyincurred.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

31. Leases - continued

31.2 The Group as lessor - continued

31.2.2 Classification of leases - continued

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 tothe net lease investment with assets under finance lease derecognized. The net lease investment isthe sum of any unguaranteed residual value and the present value of the lease receipts over the leaseterm discounted at the interest rate implicit in lease.

The lease receivable comprises the following payments collected by the Group from the lessee forthe 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 leaseincentives.? 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 thelessee 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 whenthey are actually incurred.

Interest income for each period over the lease term is calculated and recognized by the Group at afixed periodic rate.

31.2.3 Subleases

As the lessor of a sublease, the Group accounts for the original lease contract and the subleasecontract on a separate basis. The Group classifies the subleases based on the right-of-use assetsgenerating from the original lease rather than the underlying assets of the original lease.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

31. Leases - continued

31.2 The Group as lessor - continued

31.2.4 Lease modifications

The Group accounts for a modification to an operating lease as a new lease from the effective dateof the modification, considering any lease advances or receivables relating to the original lease asthe lease receipts for the new lease.

A lease modification should be accounted for as a separate lease if there is a modification in afinance lease and both of the followings apply:

? the modification increases the scope of the lease by adding the right to use one or moreunderlying assets; and? the consideration for the lease increases by an amount commensurate with the stand-aloneprice 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 accountsfor 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 asa new lease from the effective date of the modification, and measure the carrying amount ofthe underlying assets at the amount equal to the net lease investment before the effective dateof 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 provisionson contract modification and renegotiation under Accounting Standards for BusinessEnterprises No. 22 - Financial Instruments: Recognition and Measurement.

31.2.5 Sale and leaseback transactions

The Group as the buyer-lessor

If the transfer of an asset in a sale and leaseback transaction does not constitute a sale, the Groupdoes not recognize the transferred asset but a financial asset at an amount equal to the transferproceeds, and accounts for such financial asset under the Accounting Standards for BusinessEnterprises No. 22 - Financial Instruments: Recognition and Measurement. If the transfer of anasset constitutes a sale, the Group accounts for the purchase of the asset in accordance with otherapplicable Accounting Standards for Business Enterprises and accounts for the lease of the asset.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

32. Safety production cost

According to the Administrative Measures for the Collection and Utilization of Enterprise WorkSafety Funds (Cai Zi [2022] No. 136) jointly issued by the Ministry of Finance and the EmergencyDepartment on 13 December 2022, safety production cost set aside by the Group is directly includedin the cost of relevant products or recognized in profit or loss for the period, and transferred tospecific reserve simultaneously. When safety production cost set aside is utilized, if the costsincurred can be categorized as expenditure, the costs incurred should be charged against the specificreserve. If the costs set aside are used to build up fixed assets, the costs should be charged toconstruction in progress, and reclassified to fixed assets when the safety projects are ready forintended use. Meantime, expenditures in building up fixed assets are directly charged against thespecific reserve with the accumulated depreciation recognized at the same amount. Depreciationwill not be made in the future period on such fixed assets.

33. Exchange of non-monetary assets

When the non-monetary assets are of commercial substance and the fair value of assets received orthe assets given up can be measured reliably, the non-monetary transactions are measured at fairvalue. For the asset received, the fair value of the asset given up and related taxes payable arerecognized as the cost at initial recognition; For the asset given up, at derecognition, the differencebetween 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, forthe asset received, the fair value of the asset received and related taxes payable are recognized asthe cost at initial recognition; For the asset given up, at derecognition, the difference between thefair value of the asset received and the carrying amount of the asset given up is recognized in profitor loss for the current period.

When the non-monetary transactions fail to meet criteria to be measured at fair value, thetransactions are measured at carrying amounts. For the asset received, the carrying amount of theasset given up and relevant taxes payable are recognized as the cost of at initial recognition. For theasset given up, at derecognition, no profit or loss is recognized.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(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 Groupis required to make judgments, estimates and assumptions about the carrying amounts of items inthe financial statements that cannot be measured accurately, due to the internal uncertainty of theoperating activities. These judgments, estimates and assumptions are based on historical experienceof the Group's management as well as other factors that are considered to be relevant. Actual resultsmay 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 thecurrent period; changes which not only affect the current but the future periods should be recognizedin the current and future periods.

1. Key assumptions and uncertainties used in important judgments and accounting

estimates

At the balance sheet date, key assumptions and uncertainties in critical judgments and accountingestimates that are likely to lead to significant adjustments to the carrying amounts of assets andliabilities in the future are as follows:

1.1 Goodwill impairment

The book value of goodwill on 31 December 2024 is RMB 5,933,310,929.34. The Group willconduct impairment testing on goodwill at least annually. For the purpose of impairment testing,the recoverable amount of each assets group and combination of assets groups that generategoodwill of the Group is determined by fair value less estimated disposal expenses and by thepresent value of estimated future cash flows, which involve the judgment of management.

1.2 Recognition of deferred income tax

The Group calculates and makes provision for deferred tax liabilities according to the profitdistribution 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 willbe used for the daily operation and future development of the investee, no deferred tax liabilitiesare recognized. If the profits to be actually distributed in future years are more or less than thoseexpected, corresponding deferred tax liabilities will be recognized or reversed in profit or loss forthe period at the earlier of the date on which the profit distribution plan is changed and the date onwhich the profit distribution is declared.

Deferred tax assets are recognized based on the deductible temporary differences and thecorresponding tax rate, to the extent that it is probable that future taxable profits will be availableagainst which the deductible temporary differences can be utilized. If the actual taxable income infuture years are more or less than that expected, corresponding deferred tax assets will berecognized or reversed in profit or loss for the period in which they are actually incurred.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(V) CRITICAL JUDGMENTS IN APPLYING ACCOUNTING POLICIES AND KEY

ASSUMPTIONS AND UNCERTAINTIES IN ACCOUNTING ESTIMATES - continued

1. Key assumptions and uncertainties used in important judgments and accounting

estimates - continued

1.3 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 residualvalue of fixed assets and intangible assets of similar nature and function, and is subject to significantchanges due to technical innovation and fierce industry competition. Where the estimated usefullives 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 technicallyobsolete fixed assets or intangible assets.

(VI) CHANGES IN SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING

ESTIMATES

1. Changes in significant accounting policies and their impacts

(1) For the year ended 31 December 2024, the Group implemented the relevant provisions andguidelines of the Accounting Standards for Business Enterprises issued by the Ministry of Financein recent years, mainly including:

1) Provisions on "Division of current liabilities and non-current liabilities" in Accounting Standardsfor Business Enterprises Interpretation No. 17 (CK [2023] No. 21) (hereinafter referred to as"Interpretation No. 17")

According to Interpretation No. 17, when the Group classifies the liquidity of liabilities, it onlyconsiders whether the Group has the substantive right to postpone the settlement of liabilities tomore than one year after the balance sheet date (hereinafter referred to as "the right to postpone thesettlement of liabilities"), without considering whether the Group has the subjective possibility ofexercising the above rights.

For the liabilities arising from the Group's loan arrangements, if the right of the Group to postponethe repayment of the liabilities depends on whether the Group has complied with the conditionsspecified in the loan arrangements (hereinafter referred to as "contractual conditions"), the Grouponly considers the contractual conditions that should be complied with on or before the balancesheet date when dividing the liquidity of the relevant liabilities, without considering the impact ofcontractual conditions that should be complied with by the Group after the balance sheet date.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(VI) CHANGES IN SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING

ESTIMATES - continued

1. Changes in significant accounting policies and their impacts - continued

If the Group classifies the above options as equity instruments and recognizes them separately asequity components of composite financial instruments in accordance with the Accounting Standardsfor Business Enterprises No. 37- Presentation of financial instruments, the liquidity division of theliabilities that the Group pays off by delivering its own equity instruments at the option of thecounterparty will not be affected; On the contrary, if the above options cannot be classified as equityinstruments, it will affect the liquidity classification of the liabilities.

The adoption of this provision has not had a significant impact on the Group's financial position andoperating results.

2) Provisions on "Accounting treatment for quality assurance of guarantee type that does not belongto individual performance obligations" in Accounting Standards for Business EnterprisesInterpretation No. 18 (CK [2024] No. 24) (hereinafter referred to as "Interpretation No. 18").

According to the provisions of Interpretation No. 18, the company will include the accrued warrantycost in the " operating costs ".

The adoption of this provision has not had a significant impact on the Company's financial positionand operating results.

(VII) TAXES

1. Major taxes and tax rates

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(VII) TAXES - continued

1. Major taxes and tax rates - continued

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 of25%, 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 enterpriseincome tax rate of 25%, and the other overseas subsidiaries are subject to enterpriseincome tax rates between 10% and 34%.

The Company obtains dividends distributed by overseas subsidiaries and should payenterprise income tax at a rate of 25% in accordance with relevant Chinese tax laws. TheCompany obtains taxable income outside of China, and the amount of income tax that hasbeen paid abroad can be offset with the current taxable amount. The credit limit is thetaxable amount calculated in accordance with the provisions of the Enterprise Income TaxLaw.

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 withthe relevant provisions on the PRC enterprise income tax. For companies incorporated incertain regions (including Hong Kong and Singapore), if the companies meet relevantconditions, 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 ratestipulated in the relevant tax laws of China.

Note 4: The social contribution tax is the tax paid by TCP Participa??es S.A. (hereinafter referred

to as "TCP"), an overseas subsidiary of the Group, to the local government.

2. Tax preference and approval documents

Certain subsidiaries of the Group in China are recognized as high-tech enterprises or encouragedindustrial enterprises in the region and are subject to an enterprise income tax rate of 15%. Some ofGroup's some subsidiaries inside of China may pay corporate income tax at the rate of 15%according to the preferential policies of Qianhai Shenzhen Hong Kong Modern Service IndustryCooperation Zone.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(VII) TAXES - continued

2. Tax preference and approval documents - continued

Certain subsidiaries of the Group in China are small and micro enterprises and are subject to apreferential tax rate of 20%. In accordance with the Announcement on Relevant Tax and FeePolicies for Further Supporting the Development of Micro and Small Enterprises and IndividualIndustrial and Commercial Households (Announcement No. 12 of the Ministry of Finance and theState Administration of Taxation in 2023), for small and micro enterprises, the taxable income iscalculated at a reduced rate of 25% and the enterprise income tax is paid at a rate of 20% from 1January 2023 and 31 December 2027.

Some subsidiaries of the Group outside China can reduce or exempt corporate income tax accordingto relevant local tax policies.

From 1 January 2023 to 31 December 2027, the urban land use tax for certain domestic subsidiariesof 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.

As approved by Shekou Taxation Sub-bureau of Shenzhen Tax Bureau, State Administration ofTaxation on 12 October 2017, certain subsidiaries of the Group are exempted from VAT forauxiliary logistics services (warehousing services, excluding delivery services) provided tooverseas enterprises.

(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS

1. Cash and bank balances

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued

1. Cash and bank balances - continued

Note 1: The interest receivable at the end of the year amounted to RMB 35,470,534.89.

Note 2: Cash deposited in the finance company included the interest receivable amounting to

RMB 35,221,381.65.

Note 3: Restricted use of cash at bank and on hand at the end of the year.

2. Financial assets held for trading

3. Bills receivable

(1) Category of bills receivable

Note: For the year ended 31 December 2024, no provision for bad debts of bills receivable is

assessed on an individual basis and, the acceptor of bank acceptance and commercialacceptance for which provision for bad debts is assessed on a portfolio basis has high creditratings with no significant credit risks, therefore, no provision for bad debts is made.

(2) As at 31 December 2024, the Group has no bills receivable pledged.

(3) As at 31 December 2024, bills receivable endorsed or discounted by the Group and not yet

due on the balance sheet date.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued

3. Bills receivable - continued

(4) As at 31 December, 2024, the Group has no bills transferred to accounts receivable due to

the drawer's failure to perform.

(5) The Group has no bills receivable written off for the year ended 31 December 2024.

4. Accounts receivable

(1) Overall situation of accounts receivable

(2) Aging analysis of accounts receivable

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued

4. Accounts receivable - continued

(3) Disclosure of accounts receivable by category

Including: Provision for bad debts assessed on an individual basis at the end of the year:

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued

4. Accounts receivable - continued

(4) Measurement of expected credit loss at an amount equivalent to the lifetime expected credit

loss

(5) For the year ended 31 December 2024, the Group has no significant provision for bad debts

recovered or reversed this year.

(6) Accounts receivable written off in the year

(7) The top five balances of accounts receivable at the end of the year classified by debtor

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued

5. Receivables under financing

(1) Classification of receivables under financing

(2) As at 31 December 2024, the Group has no pledged receivables under financing.

(3) At the end of the year, there is no Company's receivables under financing that have been

endorsed or discounted and have not yet matured at the balance sheet date.

6. Prepayments

(1) Aging analysis of prepayments

(2) As at 31 December 2024, 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

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued

7. Other receivables

7.1 Presentation of other receivables

7.2 Dividends receivable

(1) Presentation of dividends receivable by aging

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued

7. Other receivables - continued

7.2 Dividends receivable - continued

(2) Changes in provision for credit loss of dividends receivable

(3) Details of provision for bad debts

7.3 Other receivables

(1) Aging analysis of other receivables

(2) Disclosure of other receivables by nature

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(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 - continued

Note 1: It is the operating compensation that the subsidiary of the Company shall collect from the

holding company of its non-controlling shareholders according to the agreement. As at 31December 2023, the Group has accumulated the compensation that has not been received,equivalent to RMB 857,551,782.45, and has withdrawn the provision for bad debts in full.For the year ended 31 December 2024, the Group recovers the compensation equivalentto RMB 316,715,160.00, and transfer back the provision for bad debts of RMB316,715,160.00 accordingly. As at 31 December 2024, the Group has accumulated thecompensation that has not been received, which is equivalent to RMB 512,608,434.72.The provision for bad debts have been fully withdrawn.

Note 2: On 9 October 2021, Zhanjiang Port (Group) Co., Ltd. (hereinafter referred to as

"Zhanjiang Port"), a subsidiary of the Company, signed the Agreement on the Recovery ofState owned Land Use Rights with local government agencies, which stipulates thatZhanjiang Port will return 195.68 mu of land located in Zhanjiang Comprehensive BondedZone, east of Shugang Avenue, to local government agencies at a price of RMB89,630,000.00. The above land has been handed over before 31 December 2021. As at 31December 2024, the above land compensation of RMB 89,630,000.00 has not beenrecovered.

On 4 September 2024, Zhanjiang Port signed the Agreement on the Recovery of Stateowned Land Use Rights with local government agencies, which stipulates that ZhanjiangPort will return 146,970.20 square meters of land and assets on the ground located in thenorth of Xiashan Port District of Zhanjiang to local government agencies at a price ofRMB 107,632,369.00. The above land and above ground assets have been transferredbefore 18 September 2024. As at 31 December 2024, the above land compensation ofRMB 107,632,369.00 has not been recovered.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(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

Significant other receivables for which provision for bad debts is assessed on an individual basis (credit rating of D)

Note: Refer to Note (VIII) 7.3(2).

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued

7. Other receivables - continued

7.3 Other receivables - continued

(4) Provision for bad debts

(5) The provision for bad debts recovered or reversed for the period that is significant inamount is listed as below:

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued

7. Other receivables - continued

7.3 Other receivables - continued

(6) The Group has no other receivables actually written off this year.

(7) The top five balances of other receivables at the end of the year classified by debtor

8. Inventories

(1) Inventories by category

(2) Provision for impairment of inventories

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued

8. Inventories - continued

(2) Provision for impairment of inventories - continued

Provision for decline in value of inventories is made on an item-by-item basis and no provision fordecline in value of inventories is made on a portfolio basis. The reason for the write off of provisionfor impairment of inventories in this year is requisition and consumption.

(3) As at 31 December 2024, the Group has no capitalized borrowing cost in the balance of

inventories.

9. Non-current assets due within one year

(1) Presentation of non-current assets due within one year

10. Other current assets

11. Long-term receivables

(1) Details of long-term receivables

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued

11. Long-term receivables - continued

Note 1: It mainly represents the aggregate principal and interest receivable from Port of Newcastle

and Terminal Link SAS, equivalent to RMB 920,674,796.27 and RMB 215,013,954.38,respectively.

On 14 June 2018, China Merchants Port Holdings Company (hereinafter referred to as"CM Port"), a subsidiary of the Company, provided a long-term loan to Port of Newcastle,which signed in 2023 and has been extended to 31 December 2034. The loan carriesinterest at a rate of weighted average interest rate on debt as determined by local authorityof Port of Newcastle plus 0.5%.

On 31 May 2023, CM Port, a subsidiary of the Company, provided a long-term loan toTerminal Link SAS for making additional capital injection to Saigang project and chargedinterest to Terminal Link SAS at an interest rate of 6.15%.

Note 2: On 5 November 2019, Shantou CM Port Group Co., Ltd. (hereinafter referred to as

"Shantou Port"), a subsidiary of the Company entered into the Contract for the Acquisitionof State-Owned Land Use Rights in Shantou with Shantou Land Reserve Center. Pursuantto the contract, the land and attached buildings of approximately 370.96 mu located inZhuchi Deepwater Port on the south of Zhongshan East Road of Shantou should bereturned to Shantou Land Reserve Center by Shantou Port, which is amounting toRMB1,558,032,000.00. Among them, 183.63 mu of land and attached buildings have beentransferred in 2019, and the remaining 187.33 mu of land and attached buildings havebeen transferred in 2020. As at 31 December 2024, the land compensation ofRMB1,158,032,000.00 has not yet been recovered.

On 21 August 2020, Shantou Port and Shantou Haojiang District Land Reserve Centersigned the Shantou City State owned Land Use Right Purchase Contract, which stipulatesthat Shantou Port will hand back 152.34 mu of land and attached buildings located inWutian Farm, Yushi, Haojiang District, Shantou City to Shantou Haojiang District LandReserve Center at a price of RMB250,000,000.00. The above land and attached buildingshave been handed over before 31 December 2020. As at 31 December 2024, the landcompensation of 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 thecontract, the land and attached buildings of approximately 648.78 mu located in ZhuchiDeepwater Port of Shantou should be returned to Shantou Land Reserve Center byShantou Port, which is amounting to RMB2,724,876,000.00. Among them, 320 mu ofland and attached buildings were transferred by 31 December 2020, which is amountingto RMB1,344,000,000.00, and the remaining 328.78 mu of land and attached buildingshave not been transferred. As at 31 December 2024, the land compensation of RMB1,283,900,000.00 has not yet been recovered.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued

11. Long-term receivables - continued

(2) Long-term receivables disclosed by method of provision for bad debts

Provision for bad debts assessed on a portfolio basis

(3) Provision for bad debts of long-term receivables

(4) Details of provision for bad debts

(5) There are no long-term receivables written off during the year.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

- 98 -

(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued

12. Long-term equity investments

(1) Classification of long-term equity investments

(2) Details of long-term equity investments

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

- 99 -

(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued

12. Long-term equity investments - continued

(2) Changes in provision for impairment of long-term equity investments are as follows

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued

13. Investments in other equity instruments

(1) Details of investments in other equity instruments4

(2) There are no other equity instruments derecognized for the year.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued

14. Other non-current financial assets

15. Investment properties

(1) Investment properties measured at cost

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued

15. Investment properties - continued

(2) Investment properties without ownership certificates

16. Fixed assets

16.1 Summary of fixed assets

16.2 Fixed assets

(1) Details of fixed assets

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2024(Unless otherwise specified, the monetary unit shall be RMB)

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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued

16. Fixed assets - continued

16.2 Fixed assets - continued

(2) The Group has no fixed assets that are temporarily idle as at 31 December 2024.

(3) Fixed assets leased out under operating leases

(4) 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: