SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

2013 Annual Report

Disclosed on 29 March 2014

2013 Annual Report

Section I. Important Reminders, Catalogue & Explanation

The Board of Directors, the Supervisory Committee, directors, supervisors and senior management staff of Shenzhen Chiwan Wharf Holdings Limited (hereinafter referred to as “the Company”) warrant that this report is factual, accurate and complete without any false record, misleading statement or material omission. And they shall be jointly and severally liable for that. This report has been reviewed and approved at the 7th Session of the 7th Board of Directors, which all directors attended. The Company’s profit distribution preplan upon review and approval of this board session: Based on the total 644,763,730 shares of the Company as at 31 Dec. 2013, a cash dividend of RMB 3.90 (tax included) will be distributed for every 10 shares held by shareholders. No bonus shares will be granted and no capital reserve will be turned into share capital. Chairman of the Board Mr. Zheng Shaoping, Chief Financial Officer Mr. Zhang Fang and Financial Manager Ms. Li Li hereby confirm that the Financial Report in the Annual Report is true, accurate and complete. This report involves future plans, development strategies and some other forward-looking statements, which shall not be considered as virtual promises of the Company to investors. And investors are kindly reminded to pay attention to possible risks. This report is prepared in both Chinese and English. Should there be any discrepancy between the two versions, the Chinese version shall prevail. According to certain regulations issued by China Securities Regulatory Commission, the Company needn't to prepare Financial Statements under International Financial Reporting Standards, and thus all the financial data disclosed in this report were prepared under Chinese Accounting Standards.

1 2013 Annual Report

Catalogue

Section I. Important Reminders, Catalogue & Explanation...... 1

Section II. Company Profile...... 5

Section III. Accounting & Business Highlights ...... 7

Section IV. Report of the Board of Directors...... 8

Section V. Significant Events...... 22

Section VI. Change in Shares & Shareholders...... 32

Section VII. Directors, Supervisors, Senior Management Staff and Employees...... 36

Section VIII. Corporate Governance ...... 45

Section IX. Internal Control ...... 54

Section X. Auditor's Report (See attached) ...... 58

Section XI. Documents for Reference...... 59

2 2013 Annual Report Explanation

Term Refers to Contents Company, the Company or Chiwan Refers to Shenzhen Chiwan Wharf Holdings Limited Wharf China Merchants Group Refers to China Merchants Group Limited

CMHI Refers to China Merchants Holdings (International) Company Limited

CND Group Refers to China Nanshan Development (Group) Inc.

Malai Storage Refers to Shenzhen Malai Storage Co., Ltd.

KFEL Refers to Keen Field Enterprises Limited State-Owned Assets Supervision and Administration SASAC of the State Council Refers to Commission of the State Council The Ministry of Commerce Refers to The Ministry of Commerce of the People’s Republic of China

CSRC Refers to China Securities Regulation Commission

Shenzhen CSRC Refers to Shenzhen Bureau of China Securities Regulatory Commission

SZSE Refers to Shenzhen Stock Exchange

“the Company Law” Refers to “the Company Law of the People’s Republic of China”

“the Securities Law” Refers to “the Securities Law of the People’s Republic of China” “the Articles of Association of Shenzhen Chiwan Wharf “the Articles of Association” Refers to Holdings Limited” “the Stock Listing Rules” Refers to “the Stock Listing Rules of Shenzhen Stock Exchange”

3 2013 Annual Report

Warning of Significant Risks

1. Risk concerning the industry situation

Complicated elements still exist in the global economy and the international shipping market stays weak. With new opportunities and challenges arising from the allied operation of liners, the container business of the Company maintains relative stability but is still under quite some pressure. In view of that, the Company proactively improves its operation and service at wharfs, and continues to expand the Asian and African routes, as well as the local cargo sources, trying to maintain basic stability of its key clients and market share.

2. Risk concerning market competition

Structural overcapacity of containers at the Pearl River Delta wharfs stands out, heating up the competition among wharfs in the region. Thanks to its advanced experience in wharf operation, stable clients and professional services, the Company is still a strong competitor. In addition, the Company will focus more on cooperation with other wharfs in the region, trying to realize positive interaction and avoid vicious competition.

3. Risk concerning rising cost

The rise of labor cost is irreversible, causing more cost pressure on the Company. Therefore, the carries on with R&D innovation and lean management, attaches great importance to the study and application of new technologies and skills, and cuts down the staff, which reduces the cost pressure to some degree.

Securities Times, Ta Kung Pao (HK) and www.cninfo.com.cn were designated by the Company as the media for information disclosure for 2013. All information of the Company shall be subject to what is released by the Company on the said media. And Investors are kindly reminded to pay attention to possible investment risks.

4 2013 Annual Report

Section II. Company Profile

I. Company information

Stock abbreviation Chiwan Wharf A, Chiwan Wharf B Stock code 000022, 200022 Stock exchange listed with Shenzhen Stock Exchange Chinese name of the Company 深圳赤湾港航股份有限公司 Abbr. of the Chinese name of the Company 深赤湾 English name of the Company Shenzhen Chiwan Wharf Holdings Limited Abbr. of the English name of the Company Chiwan Wharf Legal representative of the Company Mr. Zheng Shaoping, Chairman Registered address Chiwan, Shenzhen, PRC Postal code for the registered address 518067 Office address 8/F, Chiwan Petroleum Building, Shenzhen, PRC Postal code for the office address 518067 Internet website of the Company http://www.szcwh.com Email address [email protected]

II. Contact information

Company Secretary Securities Affairs Representative Name Ms. Bu Dan Ms. Hu Jingjing Contact address 8/F, Chiwan Petroleum Building, Shenzhen, PRC Tel. +86 755 26694222 +86 755 26694222 Fax +86 755 26684117 +86 755 26684117 E-mail [email protected] [email protected]

III. About information disclosure and where this report is placed

Newspapers designated by the Company for information disclosure Securities Times, Ta Kung Pao (HK) Internet website designated by CSRC for disclosing this report http://www.cninfo.com.cn Where this report is placed Company Secretary Office

5 2013 Annual Report

IV. Change of the registered information

Registration Registration Business Registration code of Organizational Query index date place license No. taxation code Initial Chiwan, 4403015011 SSDZ No. Market 19 Jul. 1990 61883296-8 registration Shenzhen 24494 440300618832968 Supervision Administration At the end Bureau of of the Chiwan, 4403015011 SSDZ No. Shenzhen 24 Apr. 2013 61883296-8 reporting Shenzhen 24494 440300618832968 Municipality period (http://www.szaic. gov.cn) Changes of the main business since listing (if Unchanged any) Changes of the controlling N/A shareholder (if any)

V. Other information

The CPAs firm hired by the Company:

Name Deloitte Touche Tohmatsu Certified Public Accountants LLP Office address 30/F, 222 Yan An Road East, Huangpu District, Shanghai, P.R.C. Signing accountants Li Weihua, Su Min

6 2013 Annual Report

Section III. Accounting & Business Highlights

I. Major accounting data and financial indicators Unit: RMB Increase or decrease 2013 2012 of this year over last 2011 year Total operating income 1,780,774,836.30 1,783,846,134.76 -0.17% 1,708,136,899.00 Net profit attributable to 502,894,547.79 467,103,270.43 7.66% 505,645,137.00 shareholders of the parent Net profit attributable to shareholders of the parent after 502,469,158.84 464,592,323.43 8.15% 505,629,810.00 extraordinary gains and losses Net cash flows from operating 897,178,297.23 698,472,452.71 28.45% 746,190,596.00 activities Basic EPS (RMB/share) 0.780 0.724 7.73% 0.784 Diluted EPS (RMB/share) 0.780 0.724 7.73% 0.784 ROE (%) 13.26% 13.15% 0.11% 15.19% Increase or decrease As at 31 Dec. 2013 As at 31 Dec. 2012 of this year-end than As at 31 Dec. 2011 last year-end Total assets 7,346,529,214.70 6,781,130,451.10 8.34% 6,540,228,435.00 Tatal shareholder’s equity attributable to equity holders of 3,947,846,392.77 3,678,032,085.18 7.34% 3,467,796,751.00 the parent

II. Differences between accounting data under domestic and overseas accounting standards Unit: RMB Net profit attributable to shareholders of Net assets attributable to shareholders of the the parent parent 2013 2012 Closing amount Opening amount According to Chinese 502,894,547.79 467,103,270.43 3,947,846,392.77 3,678,032,085.18 accounting standards According to international and overseas accounting standards N/A

III. Items and amounts of extraordinary gains and losses Unit: RMB Item 2013 2012 2011 Profit or loss on disposal of non-current assets (1,697,013.72) (1,749,511.00) (1,889,222.00) Government grants recognized in profit or loss 460,819.18 494,730.00 - Other non-operating income aor expenses other than 1,941,846.95 5,064,433.00 1,731,897.00 above Tax effects (127,755.32) (251,327.00) 33,863.00 Effects of minority interest (152,508.15) (1,047,378.00) 138,789.00 Total 425,388.95 2,510,947.00 15,327.00

7 2013 Annual Report

Section IV. Report of the Board of Directors

I. Overview The Company is principally engaged in the handling, warehousing and transportation of containers and bulk cargoes, as well as the provision of related services. The global economy saw a gradual and non equilibrium recovery in 2013. Stimulated by quite a few rounds of quantitative easing and the re-industrialization progress, the U.S. economy kept recovering. Euro-zone economies bottomed out and showed a slight growth. Japan saw a strong rebound upon a series of economic stimulus policies, with the deflation situation improved. Emerging economies commenced re-structuring and slowed down in the overall growth. And China’s economy was stable and recorded a GDP growth of 7.7% for 2013, with foreign trade showing a growth of 7.6% from last year. Meanwhile, International Monetary Fund (IMF) estimated a growth of 3.0% and 2.7% in 2013 for the global economy and trade respectively. Overcapacity still existed in the container shipping market and liner companies generally suffered from gloomy earnings. Due to a weak foreign demand and increasing competition among wharfs, the container business of the Company was under a lot of pressure. However, the Company still managed to maintain relative stability of its container throughput and market share through proactively expanding local import and export cargo resources, near-sea shipping routes, liner branch routes and emerging business. As for the bulk cargo business, in view of a sluggish demand in foreign trade, the Company adapted itself to the said market change and proactively sought for more needs in inner trade, which offset the drop in the cargo volume caused by the declining foreign trade. In addition, the operation rates for main cargos were effectively increased. For the reporting year, the Company achieved a container throughput of 5,346 thousand TEU, representing a small YoY increase of 0.7%, slightly lower than the 1.7% growth of the average container throughput of all Shenzhen wharfs. The container throughput of the Company represented a 23% market share of Shenzhen wharfs, almost the same as last year. Chiwan port achieved a throughput of 3,990 thousand TEU, a 1.1% increase over last year. Throughout the year, the bulk cargo throughput achieved by the Company was 13,311 thousand tons, up 24.4% over last year. To be specific, Chiwan Port optimized its business structure and achieved a throughput growth of 10.6% over last year despite limited resources. And Machong Port saw the gradual release of new resource capacity, which resulted in a considerable throughput growth of 46.2% over last year. For the year 2013, the Company achieved a total throughput of 65.894 million tons, representing an increase of 7.1% over 2012, of which Chiwan Port achieved 59.806 million tons, up 4.2% over 2012, accounting for 25.6% of the overall throughput at Shenzhen ports, up by 40 basic points as compared with 2012. Business highlights of the Company for the past three years are set out as follows:

Business highlight 2013 2012 2011

Total throughput (thousand tons) 65,894 61,533 63,840 Among which: Container throughput (thousand TEU) 5,346 5,311 5,793 Chiwan Port 3,990 3,946 4,122

8 2013 Annual Report

Mawan Port 1,356 1,365 1,671 Throughput of bulk cargos (thousand tons) 13,311 10,699 9,251 Chiwan Port 7,223 6,534 6,532 Machong Port 6,088 4,165 2,719 Hours charged for tow trucks (thousand hours) 1,230 1,179 1,231 Hours charged for tugboats (hour) 30,247 31,707 32,121 In 2013, the Company attached importance to and continued improving customer service to stabilize core customers. Meanwhile, it proactively sought for new customers and adopted more flexible business strategies to enhance customers’ reliance on it and its routes. It also enhanced exchange and cooperation with other wharfs in the region to maintain a good order in market competition. The Company pushed forward R&D innovation and lean management; increased operation efficiency and resource utilization efficiency through operation process improvement, work flow optimization and technical innovation; and eased the pressure brought by limited resources and rising labor cost. In 2013, the Company accelerated the transition from technical innovation achievements to actual productivity, which produced an excellent result. It also vigorously carried forward innovation in organization, management and mechanism. Through a series of lean management measures such as optimization of the organizational structure, IT application in management and cost control, the Company successfully reduced costs, increased efficiency and greatly improved the overall management capability.

II. Main business analysis

1. Overview

Unit: RMB Item 2013 2012 +/- Total operating income 1,780,774,836.30 1,783,846,134.76 -0.17% Operating profit 759,282,870.84 737,084,907.08 3.01% Net profits attributable to shareholders of the parent 502,894,547.79 467,103,270.43 7.66%

No significant change occurred to the structures of the main business and profit during the reporting period. Operating revenue was almost the same as that of last year. Operating profit went up by 3.01% mainly because ① business tax and surtaxes recorded a considerable drop of 89% when VAT replaced business tax; ② RMB appreciation generated exchange earnings; and ③ jointly-run and associated companies recorded YoY growth in profit due to the macro market environment, bringing up the relevant investment earnings by 22% on the year- on-year basis. Net profit attributable to shareholders of the Company (without subsidiaries) recorded a growth of 7.66% mainly because ① the extension of Berth 13# was put into use in Aug. 2012, which enabled the Company to enjoy a preferential treatment of relevant income tax reduction or exemption; and ② interest expenses decreased, RMB appreciated and financial expenses decreased.

9 2013 Annual Report 2. Income

Unit: RMB Core business Industry Operating income Proportion Operating profit Proportion Load and Load and unload services 1,668,049,422.40 90.33% 666,919,721.32 87.84% unload services Supporting service for Related road 81,079,270.81 4.39% 8,436,121.42 1.11% load and unload services transportation Related Tugboat services 79,909,986.21 4.33% 28,615,684.06 3.77% shipping Agency and others services Agency 17,618,167.70 0.95% 55,311,344.04 7.28% Subtotal 1,846,656,847.12 100% 759,282,870.84 100% Elimination (65,882,010.82) - - - Total 1,780,774,836.30 100% 759,282,870.84 100% Major customers:

Total sales to the top 5 customers (RMB) 964,135,795.69 Ratio of the total sales to the top 5 customers to the annual total sales (%) 54.14%

3. Costs

Unit: RMB 2013 2012 Industry Item Proportion in Proportion in YoY +/- Amount Amount operating costs operating costs Load and unload Load and 858,643,893.87 94.34% 792,177,702.37 93.79% 8.39% services unload services Supporting services Related road for load and unload transportation 49,035,130.20 5.39% 50,589,617.89 5.99% -3.07% services and shipping Agency and others Agency 2,455,715.83 0.27% 1,834,098.26 0.22% 33.89% services Total 910,134,739.90 100% 844,601,418.52 100% 7.76%

4. Expense

Unit: RMB Item 2013 2012 YoY +/- Financial expenses 40,956,491.50 70,763,164.30 -42.12% Impairment losses of assets 448,204.74 331,339.05 35.27%

Financial expenses decreased mainly because the average interest rate of loans decreased due to optimization of the loan structure, and RMB appreciated by 3% over the year-begin, generating more exchange earnings. Impairment losses of assets increased mainly because inventory falling-price loss increased.

10 2013 Annual Report 5. Cash flows Unit: RMB Item 2013 2012 YoY +/- Subtotal of cash inflows from operating activities 1,867,847,176.58 1,754,822,862.83 6.44% Subtotal of cash outflows from operating activities 970,668,879.35 1,056,350,410.12 -8.11% Net cash flows from operating activities 897,178,297.23 698,472,452.71 28.45% Subtotal of cash inflows from investing activities 69,919,307.66 77,630,142.00 -9.93% Subtotal of cash outflows from investing activities 405,953,935.88 592,432,594.36 -31.48% Net cash flows from investing activities (336,034,628.22) (514,802,452.36) 34.73% Subtotal of cash inflows from financing activities 1,922,097,800.00 2,216,960,000.00 -13.30% Subtotal of cash outflows from financing activities 2,079,235,781.45 2,564,602,356.70 -18.93% Net cash flows from financing activities (157,137,981.45) (347,642,356.70) 54.80% Net increase in cash and cash equivalents 400,683,948.94 (163,933,375.22) 344.42%

Subtotal of cash inflows from operating activities increased mainly because the Company attached great importance to managing & collecting receivables, and cash received from selling goods and providing services increased significantly. Subtotal of cash outflows from operating activities decreased mainly because the “business tax to VAT” policy and the relevant tax exemption resulted in a drop in tax and fare expenses. Subtotal of cash inflows from investing activities decreased mainly because the bonuses from jointly-run companies and associates decreased and the cash inflows from disposal of fixed assets, intangible assets and other long-term assets decreased as well. Subtotal of cash outflows from investing activities decreased mainly because fixed asset investment slowed down, and the Company invested RMB 100 million in China Development Finance Co., Ltd. last year while there was no outward investment this year. Subtotal of cash inflows from financing activities decreased mainly because the Company optimized the loan structure and reduced loans. Subtotal of cash outflows from financing activities decreased mainly because last year, subsidiaries distributed bonuses for the previous year, while there was no such event this year. III. Breakdown of main business Unit: RMB Operating YoY +/-of YoY +/-of YoY +/-of Operating income Operating costs profit operating income operating costs margin profit margin Classified by industry: Load and unload 1,668,049,422.40 858,643,893.87 48.52% 0.23% 8.39% -3.88% services Classified by region: China Mainland 1,699,914,732.06 900,138,084.80 47.05% -0.24% 7.89% -3.99%

11 2013 Annual Report IV. Asset and liability analysis

1. Major changes of asset items

Unit: RMB As at 31 Dec. 2013 As at 31 Dec. 2012 Proportion Proportion in Proportion in Amount Amount change total assets total assets Currency funds 715,539,516.48 9.74% 314,855,567.54 4.64% 5.10% Accounts receivable 223,441,476.99 3.04% 251,420,961.37 3.71% -0.67% Inventories 21,253,356.18 0.29% 21,325,571.29 0.31% -0.02% Investment property 32,247,721.85 0.44% 33,463,475.57 0.49% -0.05% Long-term equity 1,574,597,485.03 21.43% 1,544,951,108.34 22.78% -1.35% investments Fixed assets 2,828,481,942.32 38.50% 2,701,093,453.30 39.83% -1.33% Construction in 615,064,297.08 8.37% 609,932,608.74 8.99% -0.62% progress

Currency funds increased mainly because the Company carried out bond financing and last year, subsidiaries distributed bonuses to minority shareholders for the previous year, while there was no such event this year. Construction in progress increased mainly because input went into construction of the Machong Port project as scheduled. Long-term equity investments increased mainly because associated and jointly-run companies achieved better business results. Fixed assets increased mainly because construction in process of the Machong Port project was shifted to fixed assets.

2. Major changes of liability items Unit: RMB 2013 2012 Proportion in total Proportion in total Proportion change Amount Amount assets assets Short-term 550,340,000 7.49% 1,180,929,700 17.41% -9.92% borrowings Other-current 500,000,000 6.81% - - 6.81% liabilities Long-term - - 150,000,000 2.21% -2.21% borrowings Bonds payable 993,510,137 13.52% 496,545,753 7.32% 6.20%

The liability items changed mainly because the Company properly adjusted the structure of short and long-term loans in RMB or other currencies to reduce liquidity risk and exchange rate risk. The Company issued short-term financing bonds of RMB 500 million in Jun. 2013 and corporate bonds of RMB 500 million in Oct. 2013.

12 2013 Annual Report 3. Assets and liabilities measured at fair value

Unit: RMB Gain/loss Accumulated Sold on fair fair value Impairment Purchased Opening amount Closing Item value changes provided in amount in balance in the balance change in included in the period the period period the period equity Financial assets 1. Financial assets at fair value through profit or loss 2. Derivative financial assets 3. Available-for-sale 5,210,000 277,500 5,580,000 financial assets Subtotal of financial assets 5,210,000 277,500 5,580,000 Investing property Bearer biological assets Other Total 5,210,000 277,500 5,580,000 Financial liabilities

V. Core competitiveness analysis

Upon 30 years of development, the Company has gathered a pool of experienced professionals and an excellent managerial team, with its business management highly recognized by shareholders and clients. It has stable client sources, high efficient business operation and industry-leading operating efficiency. As a mature listed port company in China, the Company owns an excellent brand and reputation in the market. Major changes of the Company’s core competitiveness during the reporting period: In 2013, grain warehouses of Machong Port Phase I were completed and put into use, which greatly eased the pressure imposed by limited warehousing resources and strengthened the overall competitiveness of the wharf. In addition, the framework of the wharf in Machong Port Phase II was also completed and expected to be put into use in 2014.

VI. Investment analysis

1. Investments in equities of external parties

(1) Investments in external parties

No new investment in any external party during the reporting period

(2) Equity-holdings in financial enterprises

No new equity-holding in any financial enterprise during the reporting period

13 2013 Annual Report (3) Securities investments

Gain/loss Initial Number of Number of Variety Shareholding Shareholding Closing for Code of Name of investment shares held shares held Accounting Source of of percentage at percentage at book value reporting securities securities cost at period- at period- title stock securities period-begin period-end (RMB) period (RMB) begin end (RMB) Long-term Shares held Petro- Stock 400032 3,500,000 780,000 0.26% 780,000 0.26% 382,200 - equity by legal chemical A1 investment entity

Long-term Shares held Stock 400009 Guang Jian 1 27,500 20,000 0.02% 20,000 0.02% 17,000 - equity by legal investment entity

Shares held by legal Available- entity, Ninghu for-sale which is Stock 600377 1,120,000 1,000,000 0.02% 1,000,000 0.02% 5,580,000 - Expressway financial allowed for assets circulation after share reform

Total 4,647,500 1,800,000 -- 1,800,000 -- 5,979,200 - -- --

2. Wealth management entrustment, derivative investments and entrustment loans

The Company was not involved in any wealth management entrustment, derivative investment or entrustment loan during the reporting period.

3. Use of raised funds

（1）Overview of the use of raised funds Unit: RMB’000 Total raised funds 1,000,000 Raised funds input in the reporting period 1,000,000 Raised funds accumulatively input 1,000,000 Raised funds with changed use in the reporting period 0 Accumulative raised funds with changed use 0 Proportion of accumulative raised funds with changed use (%) 0% Overview of the use of raised funds The Company issued short-term financing bonds of RMB 500 million in Jun. 2013 and corporate bonds of RMB 500 million in Oct. 2013. And the raised funds has been used to repay bank loans and supplement the working capital.

14 2013 Annual Report （2）Projects promised to be invested with raised funds

Unit: RMB’000 Project Date when Material Projects invested with Investment Profit Reach changed Raised Input in Accumulati the project change in raised capital as Investment progress up generated the or not capital the ve input up reaches the the promised and after to the in the expected (including input as reporting to the expected project investments with over- adjustment period-end reporting profit or partially promised year period-end usable feasibility raised capital (%) period not changed) condition or not Projects invested with raised capital as promised For repaying bank -- 431,000 431,000 431,000 431,000 100% ------loans For supplementing -- 569,000 569,000 569,000 569,000 100% ------working capital Subtotal of promised -- 1,000,000 1,000,000 1,000,000 1,000,000 ------investment projects Investments of over-raised capital

N/A 0 0 0 0 0% 0 Subtotal of investments -- 0 0 0 0 -- -- 0 -- -- with over-raised capital Total -- 1,000,000 1,000,000 1,000,000 1,000,000 -- -- 0 -- -- Reason for failing to reach scheduled progress or projected N/A income (explain one project by one project) Explanation on significant changes in N/A feasibility of projects Amount, usage and usage progress of over- N/A raised capital Change of the implementation location of any raised N/A funds investment project Adjustment of the implementation method of any raised N/A funds investment project Advance input and exchange of any raised N/A funds investment project Idle raised capital for temporarily N/A supplementing working capital Outstanding raised funds in project N/A implementation and reasons Usage and whereabouts N/A of unused raise capital Problems found in the usage and information disclosure of raised N/A capital and other matters

15 2013 Annual Report 4. Analysis to main subsidiaries and stock-participating companies Unit: RMB Company Main Registered Company name Industry Total assets Net assets Net profit variety products/services capital Non- Handling and Harbor Division independent Transportation warehousing of N/A 302,823,540.70 272,975,035.48 (18,358,350.05) legal entity imported fertilizers Shenzhen Chiwan Handling and storage RMB 50 Subsidiary Transportation 141,570,368.86 101,618,730.10 50,231,186.71 Terminal Co., Ltd of grains million Loading and Shenzhen Chiwan unloading, RMB 45 Trans-Grains Subsidiary Transportation 115,251,794.32 68,495,347.88 27,239,907.16 warehousing and million Terminal Limited packaging of grains Dongguan Chiwan Wharf Handling and storage RMB 450 Subsidiary Transportation 996,462,091.38 515,516,692.88 49,448,589.54 Company of bulk cargos million Limited Shenzhen Chiwan Tow truck service for RMB 15 Transportation Subsidiary Transportation 73,544,864.11 33,654,003.93 6,236,547.41 containers in the port million Co., Ltd. Shenzhen Chiwan Shipping & RMB 24 Subsidiary Transportation Tugboat service 142,031,278.33 51,147,181.71 21,257,835.88 Transportation million Co., Ltd. Handling and China Overseas Stock- warehousing of Harbour Affairs USD participating Transportation petroleum, liquefied 2,168,222,302.71 1,890,318,660.46 71,238,919.38 (Laizhou) Co., 176,407,700 subsidiary products and bulk Ltd. cargos

Subsidiaries and stock-participating companies with an impact over 10% (inclusive) on net profit of the Company Unit: RMB Main Company Registere Operating Operating Company name Industry products/se Total assets Net assets Net profit variety d capital income profit rvices Chiwan Container Transporta Container USD 95.3 Subsidiary 2,386,993,690.35 1,557,259,765.36 851,059,962.78 350,395,124.71 293,706,841.19 Terminal Co., tion handling million Ltd. Shenzhen RMB Chiwan Harbor Transporta Container Subsidiary 288.2 679,827,323.81 464,640,146.45 334,079,159.87 187,084,106.21 176,470,422.46 Container Co. tion handling million Ltd. Chiwan Wharf Investment Investment HKD 1 (Hong Kong) Subsidiary 1,247,883,280.30 1,229,789,355.82 - 102,340,802.64 96,965,887.08 holding holding million Ltd.

5. Significant projects invested with non-raised funds Unit: RMB’000 Cumulative Total planned Input for this Project Project Project name actual input as at investment period progress earnings the period-end Berth 4#-5#, Machong Port 624,225.2 227,598.4 611,121.7 94% -- Berth 2#-3#, Machong Port 240,652.1 21,618.7 240,652.1 100% -- Equipment for berth 2#-3#, Machong Port 37,712.0 25,397.3 25,397.3 67% Total 902,589.3 274,614.4 877,171.1 -- --

16 2013 Annual Report VII. Outlook of the Company’s future development

1. Development trends and competition status of the industry in which the Company is engaged

In 2014, the global economy will keep the moderate recovery trend with the overall situation expected to be better than 2013. However, there will still be challenges such as withdrawal of American QE, the weak European economy and re-structuring of emerging markets. It will be difficult to see a fundamental improvement of the supply and demand imbalance in the shipping market, and the freight rates may fluctuate more frequently. “Allied container shipping” of liner companies will keep upgrading and the global map of liner routes may be re-drawn. New opportunities and challenges are ahead for container wharfs. Thanks to more and more in-transit containers, the container throughput of Shenzhen surpassed Hong Kong and became No. 3 in the world in 2013. But in the long run, the declining foreign demand and the ongoing industry relocation from the Pearl River Delta will lead to a limited growth of containerizable goods in the hinterland, and the container throughput of Shenzhen wharfs will enter a period of steady growth at a low speed. In terms of its container business in the long run, the Company will devote itself to maintaining stable core clients and main shipping routes through increasing the wharf operation efficiency and carrying out a quality service strategy. Meanwhile, along with the upgrading of the berths, there will still be some room for the throughput to grow. As for the bulk cargo business, the overall resource capability of the Company improves significantly as the wharf of Machong Phase II is put into use. The Company becomes a stronger competitor in the traditional cargo market and there is room for it to expand the emerging cargo market. In the future, the bulk cargo business of the Company will keep growing steadily. 2. Business plan for 2014 The Company will pay close attention to developments in the macro-economy and social changes, proactively study the industry situation and market changes, and adjust operating strategies based on its actual situation so as to maximize operating earnings. In terms of the container business, the Company will proactively deal with more and more larger ships and allied liner companies, as well as push forward the upgrading of berths. It will take the initiative to seize market opportunities and expand local cargo sources and near-sea shipping routes. And it will also continue to optimize the port environment and increase the customs clearance efficiency. As for the bulk cargo business, the Company will put the wharf of Machong Port Phase II into use as scheduled, input great efforts in business expansion, and accelerate market cultivation. It will also carry forward the relocation of the fertilizer business to Machong Port step by step as planned. At the same time, it will try to achieve the optimal resource allocation and a coordinative development between Chiwan Port and Machong Port. The Company will continue to provide quality and efficient comprehensive port services for clients, and maintain a steady growth of the overall business scale. Meanwhile, it will seek for cooperation with other wharfs in the region to keep competition in a healthy state. It will also deepen R&D

17 2013 Annual Report innovation and lean management; improve resource utilization efficiency and the overall management capability; and carry on with its various tasks such as reducing costs and increasing efficiency, saving energy and reducing emission, and building green wharfs. 3. Capital needs and expenditure plan for 2014 To implement our future development strategies and achieve business goals we have set, a capital expenditure of RMB 334.68 million is planned for 2014, of which RMB 193.11 million will be invested in wharf warehouses, RMB 106.32 million in equipments and ships, RMB 15.80 million in IT and RMB 19.45 million in administration and offices. The above capital expenditures will be mainly funded by cash inflows from operating activities of the Company and bank borrowings.

VIII. Explain any change of the accounting policies, the accounting estimates and the accounting methods when compared to the financial report for last year

According to “Motion to change the provision method and proportion of accounts receivables” considered and approved on the 4th Special Session of the 7th Board of Directors for 2013 on 8 Mar. 2013. The announcement on the said change of accounting estimates (announcement No.: 2013-018) was released on Securities Times, Ta Kung Pao (HK) and www.cninfo.com.cn dated 12 Mar. 2013.

The changes in accounting estimates reduced the consolidated net profit for the year 2013 by RMB 295,850.01, of which RMB 216,791.16 attributable to shareholders of the parent company's net profit.

IX. Profit allocation and dividend payout

1. Formulation, execution or adjustment of the Company’s profit allocation policy, especially the cash dividend policy

Pursuant to the guiding spirit of the Notice of CSRC on Further Implementing Matters Related to Cash Dividends of Listed Companies, the Notice of CSRC Shenzhen Bureau on Fully Implementing the Notice of CSRC on Further Implementing Matters Related to Cash Dividends of Listed Companies (Shen-Zheng-Ju-Gong-Si-Zi (2012) No. 43), the Company has revised some articles in its Articles of Association in relation to the profit distribution policy, which involves the specific policy, the decision-making procedure and mechanism, the adjustment and implementation of the profit distribution policy, profit distributed to foreign shareholders and other aspects (for the revised Articles of Association of the Company, see www.cninfo.com.cn). The revised Articles of Association of the Company was reviewed and approved on the 5th Special Session of the 7th Board of Directors for 2012 on 3 Aug. 2012, and later on the 1st Special Shareholders’ General Meeting for 2012 on 21 Aug. 2012. During the reporting period, the Company executed the profit allocation policy in strict compliance with the revised Articles of Association, and it did not again alter the profit allocation policy, especially the cash dividend policy.

18 2013 Annual Report Special statement about the cash dividend policy In compliance with the Company’s Articles of Association and the resolution of the Yes general meeting Specific and clear dividend standard and ratio Yes Complete decision-making procedure and mechanism Yes Independent directors fulfilled their responsibilities and played their due role. Yes Minority shareholders have the chance to fully express their opinion and desire and their Yes legal rights and interests were fully protected. In adjustment or alteration of the cash dividend policy, the conditions and procedure were Yes in compliance with regulations and transparent.

2. Profit allocation plans of the Company for the recent three years (including the reporting year)

(1) Profit allocation and dividend distribution plan for 2011 As audited by PricewaterhouseCoopers Zhong Tian Certified Public Accountants Co., Ltd., the net profit of the Company (without subsidiaries) for 2011 stood at RMB 430,118,633 and the cumulative distributable profit at RMB 668,245,566. 1) According to the Company Law and the Articles of Association of the Company, RMB 43,011,863, 10% of the audited net profit of the Company (without subsidiaries) for 2011 was taken out as statutory surplus reserve. 2) As planned, based on the total 644,763,730 shares as at the end of 2011, a cash dividend of RMB 4.00 (tax included) was to be distributed for every 10 shares, with a total of RMB 257,905,492 being distributed. After the aforesaid allocations, the retained profit of the Company (without subsidiaries) stood at RMB 367,328,211. The Board of the Company disclosed a notice in respect of payment of dividend for the year 2011 in Securities Times and Ta Kung Pao on 12 July 2012, and completed the dividends payment for both A shares and B shares on 20 July and 24 July 2012 respectively.

(2) Profit allocation and dividend distribution plan for 2012 As audited by Deloitte Touche Tohmatsu Certified Public Accountants LLP, the net profit of the Company (without subsidiaries) for 2012 stood at RMB 189,814,396 and the cumulative distributable profit at RMB 557,142,607. 1) According to the Company Law and the Articles of Association of the Company, RMB 18,981,440, 10% of the audited net profit of the Company (without subsidiaries) for 2012 was taken out as statutory surplus reserve. 2) As planned, based on the total 644,763,730 shares as at the end of 2012, a cash dividend of RMB 3.63 (tax included) was to be distributed for every 10 shares, with a total of RMB 234,049,234 being distributed. After the aforesaid allocations, the retained profit of the Company (without subsidiaries) stood at RMB 304,111,933. The Board of the Company disclosed a notice in respect of payment of dividend for the year 2012 in Securities Times and Ta Kung Pao on 9 July 2013, and completed the dividends payment for both A shares and B shares on 17 July and 19 July 2013 respectively.

19 2013 Annual Report (3) Profit allocation and dividend distribution pre-plan for 2013 As audited by Deloitte Touche Tohmatsu Certified Public Accountants LLP, the net profit of the Company (without subsidiaries) for 2013 stood at RMB 363,887,260.39 and the cumulative distributable profit at RMB 667,999,192.32. 1) According to the Company Law and the Articles of Association of the Company, RMB 36,388,726.04, 10% of the audited net profit of the Company (without subsidiaries) for 2013 was taken out as statutory surplus reserve. 2) As planned, based on the total 644,763,730 shares as at the end of 2013, a cash dividend of RMB 3.90 (tax included) was to be distributed for every 10 shares, with a total of RMB 251,457,854.70 being distributed. After the aforesaid allocations, the retained profit of the Company (without subsidiaries) stood at RMB 380,152,611.58. The above-mentioned allocation plan shall be submitted to the Shareholders’ General Meeting for review and approval.

3. Cash dividend distribution of the Company over the recent three years

Unit: RMB Ratio the amount of cash Net profit attributable to dividend to the net profit Amount of cash dividend shareholders of the parent in Year attributable to shareholders (tax included) the consolidated statement for of the parent in the the year consolidated statement 2013 251,457,854 502,894,547 50% 2012 234,049,234 467,103,270 50.11% 2011 257,905,492 505,645,137 51.01%

X. Pre-plan for profit allocation and turning capital reserve into share capital for the reporting period

Bonus shares for every 10 shares (share) 0 Dividend for every 10 shares (RMB) (tax included) 3.90 Increased shares for every 10 shares (share) 0 Total shares as the basis for the allocation preplan (share) 644,763,730 Total cash dividends (RMB) (tax included) 251,457,854.70 Distributable profit (RMB) 667,999,192.32 Percentage of the cash dividends in the total distributed profit (%) 100% Cash dividend policy According to the profit allocation policy stipulated in the Company’s Articles of Association, under the premises of meeting the conditions for distributing cash dividends and ensuring its normal operation and long-term development, the Company shall distribute cash dividends for once every year; and the Company shall keep a consistent and stable policy of profit allocation, with the profit distributed in cash per year not less than 10% of the distributable profit achieved in the year in principle. For 2013, the cash dividends to be distributed planned to account for 50% of the consolidated net profit attributable to shareholders of the Company.

20 2013 Annual Report Details about the pre-plan for profit allocation and turning capital reserve into share capital As audited by Deloitte Touche Tohmatsu Certified Public Accountants LLP, the net profit of the Company (without subsidiaries) for 2013 stood at RMB 363,887,260.39 and the cumulative distributable profit at RMB 667,999,192.32. 1) According to the Company Law and the Articles of Association of the Company, RMB 36,388,726.04, 10% of the audited net profit of the Company (without subsidiaries) for 2013 was taken out as statutory surplus reserve. 2) As planned, based on the total 644,763,730 shares as at the end of 2013, a cash dividend of RMB 3.90 (tax included) was to be distributed for every 10 shares, with a total of RMB 251,457,854.70 being distributed. After the aforesaid allocations, the retained profit of the Company (without subsidiaries) stood at RMB 380,152,611.58.. The above-mentioned allocation plan shall be submitted to the Shareholders’ General Meeting for review and approval.

XI. Social responsibilities

Always keeping fulfillment of its social responsibilities in mind and with building “energy saving” and “environment friendly” green wharfs as the goal, the Company has been devoting itself to achieve healthy and harmonious development between the Company and its employees, between the Company and society and between the Company and environment. The Company has built up a scientific management system of safe production, strict operation rules and sound emergency plans. Meanwhile, it also has a safety committee to perfect the examination and supervision mechanism. It proactively promotes compliance of safety standards in its production. And Chiwan Port and Machong Port have both reached the Safe Production Standard Level A of the Ministry of Transport. In the meantime, it continues to push forward technical innovation and technique & work flow improvement for energy saving and emission reduction. It encourages employees to save resources and protect the environment. It plays an active role in activities in the industry to fulfill social and industry responsibilities. In 2013, entrusted by the State Administration of Work Safety, it took the lead in drafting the “Safety Instructions Concerning Working in the Explosive Dust Environment at Wharfs and Maintenance of Handling Facilities” (AQ4231-2013). The Company protects various legal rights and interests of its employees, cares for them and tries to promote harmonious labor relations.

XII. Particulars about researches, visits and interviews received in this reporting period

Main discussion and Place of Way of Time of reception Visitor type Visitor materials provided by the reception reception Company Basic information of Jan. to the end of Telephone Individual Individual investors operations and Dec. 2013 communication Shenzhen investments of the Online Q&A Company and the 13 Sept. 2013 Individual Individual investors for all financial status of the Company Rare Infrastructure Limited, One-on-one Information provided: 7 Nov. 2013 Beijing Institution Value Partners, New Silk meeting Brochure of the Road Investment Company

21 2013 Annual Report

Section V. Significant Events

I. Significant lawsuits or arbitrations

There was no significant lawsuit or arbitration during the reporting period.

II. Media’s doubts

There was no such case in the reporting period where most of the media raised the same doubt about the Company.

Index to the disclosed Rumor explanation Date of disclosure announcement On 25 Jan. 2013, an article named “Multiple Concepts to Create a New and Better Chiwan Wharf” was posted on the 21st Century website (www.21cbh.com). In order to protect investors’ interests, the Company applied for trading suspension of its A and B shares starting from 28 Jan. 2013 and See http://www.cninfo.com.cn would resume trading after relevant checks were 28 Jan. 2013 for the relevant finished and the relevant announcement was 30 Jan. 2013 announcements (No. 2013- disclosed. On 29 Jan. 2013, upon checks, the 011, No. 2013-012) Company found the “reorganization concept, Qianhai concept and B-share to H-share concept” not in compliance with the actual situation. On 30 Jan. 2013, it released the clarification and share trading resumption announcement.

III. Occupation of the Company’s capital by the controlling shareholder or its related parties for non-operating purposes

During the reporting period, the controlling shareholder or its related parties did not occupy capital for non-operating purposes or repay such capital. Deloitte Touche Tohmatsu Certified Public Accountants LLP issued the “Special Report on Capital Occupation by the Controlling Shareholder and Other Related Parties of Shenzhen Chiwan Wharf Holdings Limited. For the detailed report, see the website designated by the Company for information disclosure(www.cninfo.com.cn).

IV. Matters concerning bankruptcy and reorganization

The Company was not involved in any matter concerning bankruptcy or reorganization during the reporting period.

V. Asset transactions

1. Acquisition of assets

No significant acquisition of assets during the reporting period

22 2013 Annual Report 2. Sale of assets

No significant sale of assets during the reporting period

3. Business combination

The “Proposal on the Company Merging Shenzhen Chiwan Terminal Co., Ltd. and Shenzhen Chiwan Trans-Grains Terminal Limited” was reviewed and approved at the 5th Special Session of the 7th Board of Directors for 2013 on 23 Apr. 2013 and later at the 2012 Annual Shareholders’ General Meeting on 21 May 2013, agreeing the Company to merge Shenzhen Chiwan Terminal Co., Ltd. and Shenzhen Chiwan Trans-Grains Terminal Limited into itself to operate the bulk cargo handing business in Chiwan Port under unified management. After the merge, Shenzhen Chiwan Terminal Co., Ltd. and Shenzhen Chiwan Trans-Grains Terminal Limited will be crossed off and the Company will become the main operating unit of the bulk cargo handling business in Chiwan Port. For the relevant resolution announcements, see the announcements (No. 2013-027 and 2013- 034) disclosed on Securities Times, Ta Kung Pao (HK) and www.cninfo.com.cn dated 24 Apr. 2013 and 22 May 2013. In Nov. 2013, the Company received the “Reply of the Economy, Trade and Information Commission of Shenzhen Municipality about Preliminary Approval to the Merge of Shenzhen Chiwan Terminal Co., Ltd. into Shenzhen Chiwan Wharf Holdings Limited” (SJMXXZZ [2013] No. 1883). And the relevant progress announcement (No. 2013-059) was disclosed on Securities Times, Ta Kung Pao (HK) and www.cninfo.com.cn dated 22 Nov. 2013. In Jan. 2014, the Company received the “Reply of the Economy, Trade and Information Commission of Shenzhen Municipality about Approval to the Merger between Shenzhen Chiwan Wharf Holdings Limited and Shenzhen Chiwan Terminal Co., Ltd.” (SJMXXZZ [2014] No. 109), approving the combination of the two companies in the form of a merger. The Company survived the merger; and Shenzhen Chiwan Terminal Co., Ltd. was dissolved in the merger and all its creditor’s rights, liabilities and properties were assumed by the Company. After the merger, the total share capital and registered capital of the Company remained the same. And the relevant announcement (No. 2014-005) was disclosed on Securities Times, Ta Kung Pao (HK) and www.cninfo.com.cn dated 14 Feb. 2014. In Feb. 2014, Shenzhen Chiwan Terminal Co., Ltd. canceled its registration with the Market Supervision Administration Bureau of Shenzhen Municipality and received the “Enterprise Cancellation Notice” issued by the Bureau. And the relevant announcement (No. 2014-007) was disclosed on Securities Times, Ta Kung Pao (HK) and www.cninfo.com.cn dated 28 Feb. 2014.

VI. Implementation of equity incentive and its influence

The Company did not work out any equity incentive plan during the reporting period.

23 2013 Annual Report VII. Significant related-party transactions

1. Related-party transactions concerning routine operation

Unit: RMB Type of Pricing Settlement Contents of Proportion Related the principle of method of Index to Relati the related- Transaction Transaction in same Date of transacti related- the related- the related- Market price the onship party price amount kind of disclosure on party party party party disclosed transaction transactions transaction transaction transaction See http://www .cninfo.co m.cn for CND Share Land use Mutual Payment 27 Mar. Lease 65,266,429.79 65,266,429.79 83% 65,266,429.79 the Group holder fee negotiation by month 2013 resolution announcem ent (No. 2013-023) Total -- -- 65,266,429.79 83% ------

Details about return of large-amount sales N/A It’s needed for daily operation of the Company. The Company Necessity and consistency of the related-party transaction, as well as the reasons and its controlled subsidiaries lease yards every year from CND why the related party is chosen over other parties in the market to deal with Group for containers and bulk cargoes. Influence of the related-party transaction on independency of the Company

The Company’s independence on the related part and the relevant solutions (if any) Where the Company classifies and estimates the total amount of routine related- N/A party transactions for the reporting period, explain the actual implementation during the reporting period (if any) Explain why the transaction price is greatly different from the market price

2. Credits and liabilities with related parties

Unit: RMB’000 Non-operating Amount Type of Reason for capital Opening during Closing Related party Relation credit/liability credit/liability occupation balance reporting balance (Yes/No) period A director of the Company’s actual Credit China controller is also receivable Merchants Bank deposits No 50,688.7 2,566,066.1 152,851.2 a director of from related Bank Co., Ltd. China Merchants party Bank.

VIII. Particulars about significant contracts and their fulfillment

1. Trusteeship

On 17 Sept. 2012, CMHI and CND Group signed the “Agreement of China Merchants Holdings (International) Co., Ltd. and China Nanshan Development (Group) Inc. Concerning Custody of Shares of Shenzhen Chiwan Wharf Holdings Limited”. According to the Agreement, CND Group would entrust CMHI as a custodian with its 370,878,000 A-shares in the Company (representing a 24 2013 Annual Report shareholding percentage of 57.52%). The custody announcement (No. 2012-035) was released on 20 Sept. 2012 on Securities Times, Ta Kung Pao (HK) and www.cninfo.com.cn. Meanwhile, CMHI indirectly holds 55,314,200 B-shares of the Company (representing a shareholding percentage of 8.58%) via its wholly-funded subsidiary KFEL. As such, CMHI controls 66.10% equity interests of the Company. On 1 Nov. 2012, China Securities Regulatory Commission issued the ZJXK [2012] No. 1428 Document—“Reply on Approving CMHI to Disclose the Acquisition Report on Shenzhen Chiwan Wharf Holdings Limited and Exempting It from the Tender Offer Duty”, exempting its tender offer duty due to being the custodian of 370,878,000 shares of the Company, which made it the controller of the Company’s 426,192,200 shares in all, accounting for 66.10% of the Company’s total shares. On 27 Dec. 2012, CND Group and Malai Storage (a wholly-funded subsidiary of CMHI) signed the “Agreement between China Nanshan Development (Group) Inc. and Shenzhen Malai Storage Co., Ltd. Concerning Transferring Shares of Shenzhen Chiwan Wharf Holdings Limited”. According to the Agreement, CND Group transferred a number of 161,190,933 RMB ordinary shares of the Company (representing a shareholding percentage of 25%) to Malai Storage. The said transaction was approved by SASAC of the State Council and the transfer registration formalities were finished, with the relevant announcements (No. 2013-019 and No. 2013-030) disclosed Securities Times, Ta Kung Pao (HK) and www.cninfo.com.cn dated 12 Mar. 2013 and 27 Apr. 2013 respectively. After the equity transfer, CMHI indirectly held 161,190,933 A-shares of the Company (a stake of 25%) via its wholly-funded subsidiary Malai Storage, and held 55,314,208 B-shares of the Company (a stake of 8.58%) via its wholly-funded subsidiary KFEL, representing a combined stake of 33.58% in the Company. Meanwhile, CMHI was entrusted to manage the 209,687,067 A-shares of the Company (a stake of 32.52%) held by CND Group, which meant that CMHI controlled a stake of 66.10% in the Company. The actual controller of the Company remained China Merchants Group.

2. Guarantees provided by the Company

Unit: RMB’000 Guarantees provided by the Company for its subsidiaries Disclosure date Guarantee Date of of the public for a occurrence Execution Guaranteed notice in Amount of Actual amount Type of Term of related (date of completed party relation to the guarantee of guarantee guarantee guarantee party or signing or not guarantee not (Yes agreement) amount or No) Dongguan Chiwan 26 Apr. 2012 100,000 N/A N/A N/A N/A N/A N/A Terminal Co., Ltd. Shenzhen Chiwan Harbor Joint-liability 26 Apr. 2012 100,000 18 Jun. 2013 31,448 1 year Yes No Container Co., guarantee Ltd. Total amount of guarantees for Total actual amount of subsidiaries as above approved 0 guarantees for subsidiaries in 31,448 in the reporting period the reporting period (new) Total amount of guarantees for Total actual balance of 200,000 0 subsidiaries approved by the guarantees for subsidiaries at 25 2013 Annual Report period-end the period-end Total guarantee amount of the Company (combination of the two kinds of guarantees above) Total guarantee amount as Total actual guarantee above approved in the reporting 0 amount in the reporting 31,448 period period (new) Total guarantee amount Total actual guarantee 200,000 0 approved by the period-end balance at the period-end Proportion of the total actual guarantee balance in the 0 Company’s net assets Explanation on possibility to bear joint liability due to N/A undue guarantees Explanation on the external guarantees in violation of N/A stipulated procedures In Oct. 2013, subsidiary Shenzhen Chiwan Harbor Container Co. Ltd. repaid the loan at full amount guaranteed by the Company.

IX. Fulfillment of commitments

Commitments made by the Company or shareholders holding over 5% of the Company’s shares in the reporting period, or such commitments carried down into the reporting period

Time of Commitment Period of Commitment Contents making Fulfillment maker commitment commitment It is promised that the horizontal competition issue 1. Commitments made by CMHI about share will be solved custody; through ways 2. Commitment made by CMHI about such as asset In the guaranteeing the independency of the Company; 17 Sept. Commitment CMHI reorganization in process of 3. Commitment made by CMHI about horizontal 2012 in the the coming 3-5 execution competition; and acquisition years. Other three 4. Commitment made by CMHI about regulating report or the commitments are related-party transactions report on valid within the equity share entrustment changes period. 1. Commitment made by Malai Storage about guaranteeing the independency of the Company; Whenever Malai In the Malai 2. Commitment made by Malai Storage about Storage holds the 27 Dec. 2012 process of Storage horizontal competition; and Company’s execution 3. Commitment made by Malai Storage about shares regulating related-party transactions CND Group irrevocably and unconditionally agrees that if Chiwan Wharf suffers from any loss, expense, liability, demanded compensation Other or law suit due to any actual or potential 20 Mar. commitments illegality or unenforceability in any land use 2001; 18 Jun. In the made to CND Group agreement or relevant documents signed or to be 2003; 29 Standing process of minority signed by CND Group or other related problems, Sept. 2004 execution shareholders CND Group promises to give full immunity to the recipient party of the land use right and its inheritor and the recipient person regarding the aforesaid matters.

26 2013 Annual Report If the Company cannot pay interest on time, pay principals upon maturity or is involved in any violation, it shall at least take the following Whenever any of measures: 26 Apr. the corporate 1. Not to distribute profit to shareholders; In the The 2012; 18 bonds of “11 2. Suspend capital outlay projects such as process of Company Oct. 2013 Chiwan 01” and significant outward investments or mergers; execution “13 Chiwan 01” 3. Reduce or stop salaries and bonuses for exists directors and senior management staff; and 4. Not to remove the persons held chiefly responsible. Executed in Yes time or not? Specific reason for failing to fulfill the N/A commitment and plan for the next step (if any) The announcement on the aforesaid commitments (No. 2014-006) was disclosed on Securities Times, Ta Kung Pao (HK) and www.cninfo.com.cn dated 15 Feb. 2014.

X. Particulars about engagement and disengagement of CPAs firm

1. Present CPAs firm:

Name of domestic CPAs firm Deloitte Touche Tohmatsu Certified Public Accountants LLP Remuneration for domestic CPAs firm for the RMB 2.014 million reporting period Consecutive years of the audit services provided 2 years by domestic CPAs firm Names of the certified public accountants from Li Weihua, Su Min the CPAs firm

2. Not to change the CPAs firm during the reporting period.

3. CPAs firm, financial accountant or sponsor engaged for the audit of internal control:

As approved by the 1st Session of the Audit Committee under the 7th Board of Directors for 2013, the 5th Session of the 7th Board of Directors and the Annual General Meeting for 2012, it was agreed to renew the employment of Deloitte Touche Tohmatsu Certified Public Accountants LLP as the Company’s accounting firm for 2013 to audit the annual financial report and internal control. The fee for auditing the financial report for 2013 and internal control are RMB 1,696,000 and RMB 318,000 respectively, totaling RMB 2,014,000.

During the reporting period, the Company issued “13 Chiwan 01” corporate bonds and thus hired China Merchants Securities Co., Ltd. and Hua Ying Securities Co., Ltd. as the sponsor and the lead underwriter respectively, for which the Company paid a total of RMB 4 million for services of underwriting, sponsoring and management in trust.

27 2013 Annual Report XI. Other significant events

1. Change of directors and supervisors during the reporting period

In Jan. 2013, due to post adjustment, former directors Mr. Tian Junyan, Ms. Wang Fen, Mr. Fan Zhaoping, Mr. Yuan Yuhui and Mr. Zhang Ning resigned as director; and former supervisors Ms. Huang Huizhen and Ms. Guo Songhua resigned as supervisor. On 7 Jan. 2013, the Company convened the 1st Special Session of the 7th Board of Directors for 2013, at which the “Proposal on Change of Directors” was reviewed and approved, agreeing to nominate Mr. Zhang Rizhong, Mr. Deng Weidong, Mr. Wang Zhixian, Mr. Li Yubin and Mr. Zhang Jianguo as the director candidates for the 7th Board of Directors to be elected on the 1st Special Shareholders’ General Meeting for 2013. On the same day, the Company convened the 1st Special Session of the 7th Supervisory Committee for 2013, at which the “Proposal on Change of Supervisors” was reviewed and approved, agreeing to nominate Ms. Wen Ling and Ms. Zhao Jianli as the supervisor candidates for the 7th Supervisory Committee to be elected on the 1st Special Shareholders’ General Meeting for 2013. On 30 Jan. 2013, the Company convened the 1st Special Shareholders’ General Meeting for 2013, at which the “Proposal on Change of Directors” and the “Proposal on Change of Supervisors” were reviewed and approved, with Mr. Zhang Rizhong, Mr. Deng Weidong, Mr. Wang Zhixian, Mr. Li Yubin and Mr. Zhang Jianguo being elected as directors for the 7th Board of Directors; and Ms. Wen Ling and Ms. Zhao Jianli being elected as supervisors for the 7th Supervisory Committee. The office term of the said directors and supervisors will expire in May 2014. The relevant announcements (No. 2013-002 to 2013-005, No. 2013-013) were disclosed on Securities Times, Ta Kung Pao (HK) and www.cninfo.com.cn dated 8 Jan. 2013 and 31 Jan. 2013 respectively.

2. Change in shareholdings of shareholders with a stake over 5%

On 27 Dec. 2012, the Company’s shareholder CND Group and Malai Storage signed the “Agreement between China Nanshan Development (Group) Inc. and Shenzhen Malai Storage Co., Ltd. Concerning Transferring Shares of Shenzhen Chiwan Wharf Holdings Limited”, according to which it was agreed that CND Group transferred 161,190,933 circulating A-shares of the Company (representing a shareholding percentage of 25%) to Malai Storage at the agreed price of RMB 11.088 per share. The equity transfer announcement (No. 2012-054) was published on Securities Times, Ta Kung Pao (HK) and www.cninfo.com.cn dated 29 Dec. 2012. The said transaction was approved by SASAC of the State Council and the transfer registration formalities were finished, with the relevant announcements (No. 2013-019 and No. 2013-030) disclosed Securities Times, Ta Kung Pao (HK) and www.cninfo.com.cn dated 12 Mar. 2013 and 27 Apr. 2013 respectively.

3. In the reporting period, the Company disclosed the following significant events on Securities Times, Ta Kung Pao (HK) and www.cninfo.com.cn:

Announcement No. Title Date 2013-001 Announcement on Resignation of Vice GM & CFO 4 Jan. 2013 2013-002 Announcement on Resignation of Director 8 Jan. 2013 2013-003 Announcement on Resignation of Supervisor 8 Jan. 2013

28 2013 Annual Report Announcement on Resolutions Made at the 1st Special Session of the 7th 2013-004 8 Jan. 2013 Board of Directors for 2013 Announcement on Resolutions Made at the 1st Special Session of the 7th 2013-005 8 Jan. 2013 Supervisory Committee for 2013 2013-006 Announcement on the Volume of Business for Dec. 2012 11 Jan. 2013 Announcement on Resolutions Made at the 2nd Special Session of the 7th 2013-007 14 Jan. 2013 Board of Directors for 2013 2013-008 Notice on Convening the 1st Special Shareholders’ General Meeting for 2013 14 Jan. 2013 2013-009 Announcement on Change of the Name of the CPAs Firm 16 Jan. 2013 2013-010 Announcement on Abnormal Fluctuation in Share Trading 24 Jan. 2013 2013-011 Announcement on Share Trading Suspension 28 Jan. 2013 2013-012 Announcement on Clarification & Share Trading Resumption 30 Jan. 2013 Announcement on Resolutions Made at the 1st Special Shareholders’ General 2013-013 31 Jan. 2013 Meeting for 2013 Announcement on Resolutions Made at the 3rd Special Session of the 7th 2013-014 31 Jan. 2013 Board of Directors for 2013 2013-015 Announcement on the Volume of Business for Jan. 2013 7 Feb. 2013 2013-016 Announcement on the Volume of Business for Feb. 2013 8 Mar. 2013 Announcement on Resolutions Made at the 4th Special Session of the 7th 2013-017 12 Mar. 2013 Board of Directors for 2013 2013-018 Announcement on Change of Accounting Estimate 12 Mar. 2013 Announcement on SASAC of the State Council Replying on Matters Related 2013-019 12 Mar. 2013 to Contractual Transfer of the Company’s State-owned Shares Announcement on Resolutions Made at the 5th Session of the 7th Board of 2013-020 27 Mar. 2013 Directors Announcement on Resolutions Made at the 5th Session of the 7th Supervisory 2013-021 27 Mar. 2013 Committee 2013-022 Abstract of the 2012 Annual Report 27 Mar. 2013 2013-023 Announcement on Expected Routine Related-party Transactions for 2013 27 Mar. 2013 2013-024 Notice on Convening the 2012 Annual Shareholders’ General Meeting 27 Mar. 2013 2013-025 Announcement on the Volume of Business for Mar. 2013 10 Apr. 2013 Announcement of Shenzhen Chiwan Wharf Holdings Limited on Payment of 2013-026 19 Apr. 2013 Interest in 2013 for the 2011 Corporate Bonds (Phase I) Announcement on Resolutions Made at the 5th Special Session of the 7th 2013-027 24 Apr. 2013 Board of Directors for 2013 Announcement on the Wholly-funded Subsidiary Shenzhen Chiwan Harbor 2013-028 24 Apr. 2013 Container Co., Ltd. Providing Guarantee for the Company 2013-029 Report on the First Quarter of 2013 24 Apr. 2013 2013-030 Announcement on Completion of Share Ownership Transfer by Shareholder 27 Apr. 2013 Announcement on Adding Interim Proposals for the 2012 Annual 2013-031 Shareholders’ General Meeting & Supplementary Notice on Convening the 7 May 2013 2012 Annual Shareholders’ General Meeting 2013-032 Announcement on the Volume of Business for Apr. 2013 9 May 2013 Announcement on Registration Approval of the Issue of Short-term 2013-033 10 May 2013 Financing Notes Announcement on Resolutions Made at the 2012 Annual Shareholders’ 2013-034 22 May 2013 General Meeting 2013-035 Announcement on the Corporate Bonds Follow-up Rating Result 24 May 2013 2013-036 Suggestive Announcement on Issue of the First Phase of Short-term 6 Jun. 2013 29 2013 Annual Report Financing Notes for 2013

2013-037 Announcement on the Volume of Business for May 2013 6 Jun. 2013 Announcement on the Issue Result of the First Phase of Short-term Financing 2013-038 18 Jun. 2013 Notes for 2013 2013-039 Announcement on the Volume of Business for Jun. 2013 9 Jul. 2013 2013-040 Announcement on Implementation of Dividend Payout for 2012 9 Jul. 2013 Announcement on Progress of the Joint Investment and Incorporation of a 2013-041 29 Jul. 2013 Finance Company with Related Party 2013-042 Announcement on the Volume of Business for Jul. 2013 8 Aug. 2013 Announcement on Resolutions Made at the 6th Session of the 7th Board of 2013-043 28 Aug. 2013 Directors 2013-044 Abstract of the 2013 Semi-annual Report 28 Aug. 2013 Announcement on Resolutions Made at the 6th Special Session of the 7th 2013-045 31 Aug. 2013 Board of Directors for 2013 2013-046 Notice on Convening the 2nd Special Shareholders’ General Meeting for 2013 31 Aug. 2013 2013-047 Announcement on the Volume of Business for Aug. 2013 7 Sept. 2013 Suggestive Announcement on Convening the 2nd Special Shareholders’ 2013-048 11 Sept. 2013 General Meeting for 2013 2013-049 Announcement on Abnormal Fluctuation in Share Trading 11 Sept. 2013 Announcement on Resolutions Made at the 2nd Special Shareholders’ General 2013-050 17 Sept. 2013 Meeting for 2013 Announcement on Resolutions Made at the 7th Special Session of the 7th 2013-051 18 Sept. 2013 Board of Directors for 2013 2013-052 Announcement on the Volume of Business for Sept. 2013 11 Oct. 2013 Announcement on Offering of Corporate Bonds (Phase I) for 2013 2013-053 Abstract of the Prospectus of the Public Offering of Corporate Bonds (Phase 16 Oct. 2013 I) for 2013 2013-054 Announcement on the Coupon Rate of Corporate Bonds (Phase I) for 2013 18 Oct. 2013 2013-055 Announcement on the Offer Results of Corporate Bonds (Phase I) for 2013 25 Oct. 2013 Announcement on Resolutions Made at the 8th Special Session of the 7th 2013-056 25 Oct. 2013 Board of Directors for 2013 2013-057 Report on the Third Quarter of 2013 25 Oct. 2013 2013-058 Announcement on the Volume of Business for Oct. 2013 8 Nov. 2013 Announcement on the Progress of Merging Wholly-funded Subsidiaries and 2013-059 22 Nov. 2013 Notifying Creditors 2013-060 Listing Particulars of Corporate Bonds (Phase I) for 2013 25 Nov. 2013 2013-061 Notice on the Conference of Holders of “11 Chiwan 01” 2013 Phase I Bonds 3 Dec. 2013 2013-062 Notice on the Conference of Holders of “13 Chiwan 01” 2013 Phase I Bonds 3 Dec. 2013 2013-063 Announcement on the Volume of Business for Nov. 2013 11 Dec. 2013 Announcement on the Results of the Conference of Holders of “11 Chiwan 2013-064 21 Dec. 2013 01” 2013 Phase I Bonds Announcement on the Results of the Conference of Holders of “13 Chiwan 2013-065 21 Dec. 2013 01” 2013 Phase I Bonds Announcement on Subsequent Matters of the Conference of Holders of “11 2013-066 24 Dec. 2013 Chiwan 01” 2013 Phase I Bonds Announcement on Subsequent Matters of the Conference of Holders of “13 2013-067 24 Dec. 2013 Chiwan 01” 2013 Phase I Bonds

30 2013 Annual Report XII. Offering of corporate bonds

On 25 Nov. 2011, the Company was approved to publicly issue the corporate bonds with par value not more than 1 billion in accordance with CSRC Zheng-Jian-Xu-Ke [2011] No. 1889. The corporate bonds were offered in two stages. And the 2011 Corporate Bonds (Phase I) of RMB 500 million ended on 4 May 2012; and the remaining RMB 500 million also ended on 24 Oct. 2013, with details as follows: The total issuing amount of corporate bonds for the Company in 2013 (Phase I) stood at RMB 0.5 billion with an expiration period of five years (attached with the resell rights of investors, repurchase rights of issuer and right of increasing the coupon rate at the end of the third year) and a par value of RMB100 by way of parity issuance. The coupon rate is 5.60% and the value date is 18 Oct. 2013, as well as the interest paying date is each 18 Oct. from the year of 2014 to 2018. As approved by the Shenzhen Stock Exchange Shen-Zheng-Shang [2012] No. 142, the corporate bonds has been listed for trading in Shenzhen Stock Exchange since 26 Nov. 2013 with the bond abbreviation of “13 Chiwan 01” and bond code of “101650”. (For details, please refer to the Public Notice on the Listing Particulars of Corporate Bonds in 2013 for Shenzhen Chiwan Wharf Holdings Limited (Phase I) , Announcement No: 2013-060).

XIII. Offering of short-term financing bonds

The “Proposal on Planning to Apply for Offering of Short-term Financing Bonds” was reviewed and approved on the 2nd Special Shareholders’ General Meeting for 2012 on 5 Dec. 2012, approving the Company to apply to National Association of Financial Market Institutional Investors (“NAFMII”) for offering of short-term financing bonds not exceeding RMB 1.6 billion. On 7 May 2013, the Company received the “Registration Acceptance Notice” (ZSXZ [2013] No. CP171) signed and issued by NAFMII on 3 May 2013. According to the Notice, NAFMII decided to accept the registration of the Company’s short-term financing bonds, with the registered line valid within 2 years since the issue of the “Registration Acceptance Notice” by NAFMII. And the relevant announcements (No. 2012-050 and No. 2013-033) were disclosed on Securities Times, Ta Kung Pao (HK) and www.cninfo.com.cn dated 6 Dec. 2012 and 10 May 2013 respectively. The 2013 Phase I Short-term Financing Bonds were offered to the public on the national financial market of bonds on 14 Jun. 2013, with the total par value at RMB 500 million, a term of 365 days, RMB 100/bond and the coupon rate at 4.6%. The principals and interest would be paid at full amount upon maturity. On 17 Jun. 2013, all the funds arrived at the account. The relevant announcement (No. 2013-038) was disclosed on Securities Times, Ta Kung Pao (HK) and www.cninfo.com.cn dated 18 Jun. 2013.

31 2013 Annual Report

Section VI. Change in Shares & Shareholders

I. Changes in shares

Unit: share Before the change Increase (+)/ decrease (-) After the change Issue of Reser Bonus Number Percentage addition ves to Other Sub-total Number Percentage issue al shares stocks 1.Shares subject to trading moratorium 735,466 0.114% -347,957 -347,957 387,509 0.060% a. State-owned shares b. State-owned legal person shares c. Other domestic shares 735,466 0.114% -347,957 -347,957 387,509 0.060% Including: Shares held by domestic legal persons Shares held by domestic individuals 735,466 0.114% -347,957 -347,957 387,509 0.060% d. Shares held by overseas shareholders Including: Shares held by overseas legal persons Shares held by overseas individuals 2. Shares not subject to trading 644,028,264 99.886% 347,957 347,957 644,376,221 99.940% moratorium a. Ordinary shares denominated in 464,789,805 72.087% 77,519 77,519 464,867,324 72.099% RMB b. Domestically listed foreign shares 179,238,459 27.799% 270,438 270,438 179,508,897 27.841% c. Overseas listed foreign shares d. Others 3.Total shares 644,763,730 100% 644,763,730 100% Reasons for the changes in shares: 1. Changes of shares resulted from movement of directors and senior management staff: The shares held by some directors and supervisors were unlocked half a year after their resignation. 2. Some directors and supervisors sold their unlocked shares.

Ⅱ. Issuance and listing of securities

Securities issues in the recent three years

Name of stock and Date of Issuing price Amount of Amount approved Period for the its derivative Public date issuance (RMB/share) the issue for trading issue securities Corporate Bond 26 April 2012 100 5 million 1 Jun. 2012 5 million 3+2 years for 2011 (Phase I) Corporate Bond 18 Oct. 2013 100 5 million 26 Nov. 2013 5 million 3+2 years for 2013 (Phase I)

32 2013 Annual Report Ⅲ. Shareholders and actual controller

1. Total number of shareholders and their shareholdings Unit: share Total number of 37,120 shareholders, with Total number of shareholders at 35,762 shareholders, with 27,490 shareholders at the 29,087 being A-share the end of the fifth trading day being A-share holders, and 8,272 end of the reporting holders, and 8,033 being B- before the disclosure date of the being B-share holders period share holders annual report Shareholdings of top ten shareholders (all being shareholders holding shares not subject to trading moratorium) Type Shares not Shares of Percentage Increase/decrease subject to Nature of pledged shares Name of shareholder of in reporting trading shareholder or frozen (A, B, shareholding period moratorium (share) H or (share) other) CHINA NANSHAN A 32.52% -161,190,933 209,687,067 0 DEVELOPMENT (GROUP) INC. share SHENZHEN MALAI STORAGE A 25% 161,190,933 161,190,933 0 CO., LTD. share KEEN FIELD ENTERPRISES Foreign- B 8.58% 0 55,314,208 Unknown LIMITED funded share CMBLSA RE FTIF TEMPLETON Foreign- B 7.43% 0 47,914,954 Unknown ASIAN GRW FD GTI 5496 funded share GOVERNMENT OF SINGAPORE Foreign- B 0.66% -470,468 4,275,390 Unknown INV. CORP.- A/C "C" funded share Foreign- B BAYVK A2-FONDS 0.58% 2,747,000 3,732,089 Unknown funded share Foreign- B EMPLOYEES PROVIDENT FUND 0.56% 0 3,586,266 Unknown funded share TEMPLETON ASIAN GROWTH Foreign- B 0.41% 0 2,657,852 Unknown FUND funded share BBH A/C VANGUARD Foreign- B EMERGING MARKETS STOCK 0.4% 2,380,818 2,595,918 Unknown funded share INDEX FUND CMBNA/STICHTING PENS FND Foreign- B 0.39% 778,008 2,504,856 Unknown ABP funded share Explanation on associated CMHI was a shareholder of CND Group., Shenzhen Malai Storage Co., Ltd. was a relationship or/and persons acting in wholly-funded subsidiary of CMHI, and KFEL was also a wholly-funded concert among the above-mentioned subsidiary of CMHI. Other than that, the Company does not know whether the shareholders: other non-restricted shareholders are related parties or not.

2. Particulars about the controlling shareholder

Legal Name of controlling representative Date of Registered Organization code Business scope shareholder / company establishment capital principal Port services, China Merchants Registration No.: bonded logistic and Holdings 312158; Business RMB 500 cold chain services, Fu Yuning 28 May 1991 (International) Co., license No.: 14602056- million property Ltd. 000-05-12-2 development and investment China Merchants Holdings (International) Co., Ltd. (“CMHI”) is the largest public port Basic introduction operator in China, as well as a leading one in the world. It has a sound port network

33 2013 Annual Report expanding across main coastal hub ports in China. It invests or invests and manages wharfs in Hong Kong, Shenzhen, Ningbo, Shanghai, Qingdao, Tianjin, Xiamen Bay, Zhangjiang and other container hub ports, with its hands also successfully reaching out for ports in South Asia, Africa, etc. Up until now, CMHI invests in over 30 ports and more than 180 container berths and container throughput for the year exceeded 70 million TEU., accounting for over 30% of the China Mainland market. Shares held by the controlling shareholder in other CMHI, the controlling shareholder of the Company, held 24.49% shares of Shanghai listed companies by International Port (Group) Co., Ltd., 25.54% shares of China International Marine holding or Containers (Group) Co., Ltd. and 4.55% shares of Ningbo Port Co., Ltd.. shareholding during the reporting period

3. Particulars about the actual controller

Legal Name of the representat Date of Organization Registered actual ive / establish Business scope code capital controller company ment principal lease and agency of water/land passenger-cargo transportation, water/land conveyance and facilities; investment and management of port and storage business; salvage, refloatation and tugboat; industrial production; construction, repairing, checking and marketing of shipping, offshore petroleum drilling equipment; repairing and checking of drilling platform and drilling container; overall contracting of water/land construction projects and the related offshore petroleum development projects, and their construction organization and logistic services; procurement, China 14 Oct. RMB 11.55 supply and sale of water/land communication and Merchants Fu Yuning 10000522-0 1986 billion transportation equipment; export and import Group business of transportation; investment and management of finance, insurance, trust, securities, futures business; investment and management of tourism, hotels, catering services and relevant service; real estate development, management and consultancy of property; investment and management of petroleum and chemical industry; investment and operation of infrastructure of communication; overseas assets management. Development and management of Shenzhen Shekou Industrial Zone and Fujian Zhangzhou Development Zone. Currently, China Merchants Group focuses on three core business sectors, namely, construction, operation and services concerning transportation & related infrastructure Basic introduction (ports, roads, energy transportation and logistics); financial investment and management; and property development and management.

34 2013 Annual Report 4. Relation between the Company and its actual controller in the form of diagram

State-Owned Assets Supervision and Administration Commission of the State Council

100%

China Merchants Group

55.10%

China Merchants Holdings (International) Company Limited entrusted to manage 32.52% of the 100% 100% 37.02% Company's Shenzhen Malai Keen Field China Nanshan Development shares held by Storage Co., Ltd. Enterprises Limited (Group) Incorporation CND 25% 8.58% 32.52%

Shenzhen Chiwan Wharf Holdings Limited

Note: For details of share entrustment and transfer, see Section V. VIII. 1 of this report.

5. Other corporate shareholders with a stake over 10%

Legal Name of corporate representative / Date of Organization Registered capital Business scope shareholder company establishment code principal Land development, port transportation, related China Nanshan manufacture, Development Fu Yuning 28 Sept. 1982 618832976 RMB 900 million commerce, real estate, (Group) Inc. tourism, bonded yards and warehouses, etc. Logistics information consulting for goods, Shenzhen Malai Wang Zhixian 14 Sept. 2006 792553729 HKD 30 million related technical Storage Co., Ltd. service, warehousing projects (in preparation)

35 2013 Annual Report

Section VII. Directors, Supervisors, Senior Management Staff and Employees

I. Changes in shareholding of directors, supervisors and senior management staff

Number of Number of Shares held shares shares held Current/ Starting and ending at the year- increased/ Name Office title Sex Age at the former dates of office term begin decreased at period-end (share) the reporting (share) period (share) Zheng Chairman of Current Male 51 May 2011-May 2014 212,652 0 212,652 Shaoping the Board Zhang Director Current Male 45 Jan. 2013-May 2014 0 0 0 Rizhong Deng Director Current Male 46 Jan. 2013-May 2014 0 0 0 Weidong Wang Director Current Male 49 Jan. 2013-May 2014 0 0 0 Zhixian Li Yubin Director Current Male 42 Jan. 2013-May 2014 0 0 0 Zhang Director Current Male 49 Jan. 2013-May 2014 98,782 -24,500 74,282 Jianguo Independent Li Wuzhou Current Male 74 May 2011-May 2014 0 0 0 director Hao Independent Current Male 61 May 2011-May 2014 0 0 0 Zhujjiang director Zhang Independent Current Male 49 May 2011-May 2014 0 0 0 Jianjun director Chairman of Yu Liming the Supervisory Current Male 51 May 2011-May 2014 0 0 0 Committee Wen Ling Supervisor Current Female 49 Jan. 2013-May 2014 0 0 0

Zhao Jianli Supervisor Current Female 50 Jan. 2013-May 2014 0 0 0 Zhao Supervisor Current Male 48 May 2011-May 2014 64,954 0 64,954 Chaoxiong Ni Keqin Supervisor Current Female 49 May 2011-May 2014 38,772 -9,561 29,211 Zhao GM Current Male 51 Oct. 2012-May 2014 15,103 0 15,103 Qiang Xiong Vice GM, chief Current Male 50 May 2011-May 2014 83,147 0 83,147 Haiming engineering Zhang CFO Current Male 49 Jan. 2013-May 2014 3,267 0 3,267 Fang Company Bu Dan Current Female 36 Jan. 2012-May 2014 0 0 0 secretary

Tian Director Former Male 52 May 2011-Jan. 2013 0 0 0 Junyan

36 2013 Annual Report

Wang Fen Director Former Female 59 May 2011-Jan. 2013 82,632 0 82,632 Fan Director Former Male 59 May 2011-Jan. 2013 53,877 0 53,877 Zhaoping Yuan Director Former Male 63 May 2011-Jan. 2013 14,040 0 14,040 Yuhui Executive Zhang director, vice Former Male 53 May 2011-Jan. 2013 146,991 -146,991 0 Ning GM Huang Supervisor Former Female 57 May 2011-Jan. 2013 0 0 0 Huizhen Guo Supervisor Former Female 55 May 2011-Jan. 2013 0 0 0 Songhua Pan Ke Vice GM Former Male 36 Oct. 2012-Mar. 2014 0 0 0

Total ------814,217 -181,052 633,165

Reason for the changes in shares: Some current directors and supervisors, as well as some former directors who had resigned for half a year, sold their unlocked shares.

II. Particulars about important personnel 1. Main working experience of current directors, supervisors and senior management staff over the past five years:

Chairman of the Board Mr. Zheng Shaoping majored in Maritime Law and graduated from Dalian Marine College with a Master’s Degree, received an MBA from University of Wales. He ever took posts of Vice GM of CND, Chairman of the Board of Shenzhen Chiwan Harbour Container Co., Ltd., Vice GM, GM and Vice Chairman of the Board of the Company. Presently, he acts as Executive Director & Vice GM of China Merchants Holdings (International) Company Limited, Vice Chairman of China Merchants Bonded Logistics Co., Ltd., Chairman of the Board of Shekou Container Terminals Ltd. and Chiwan Container Terminal Co., Ltd., and GM of Shenzhen Chiwan Harbour Container Co., Ltd. Director of the Company since May 1999. GM of the Company from Sept. 2004 to Jan. 2011. He was elected as Vice Chairman of the Company in Apr. 2010, and has been Chairman of the Board of the Company since Jan. 2011.

Director Mr. Zhang Rizhong graduated from Central University of Finance and Economics (China) and Westminster University (Britain) with a bachelor’s degree in Economics and a MBA, ACCA member. He has worked in finance and accounting for over 20 years, with rich experience in financial management. He was once a vice GM of the Financial Department of China Merchants Group and the CFO of China Merchants Holdings (U.K.) Co., Ltd.. Joining in in 2005, he is now a vice GM and the CFO of China Merchants Holdings (International) Company Limited. He has been a director of the Company since Jan. 2013.

Director Mr. Deng Weidong graduated in 1994 from Nanjing University in physical geography with a doctor’s degree and graduated in Sept. 2002 from Dalhousie University in Canada in marine stewardship with a master’s degree. With rich experience in port operation and management, he was

37 2013 Annual Report once an employee of the Administration Bureau of Hainan Yangpu Economic Development Zone, the GM of the Development Department of CND Group, a vice GM of Chiwan Container Terminal Co., Ltd., the GM of Shenzhen Mawan Port Services Co., Ltd. and the GM of Shenzhen Mawan Terminals Co., Ltd.. Joining in in Jul. 2009, he is now a vice GM of China Merchants Holdings (International) Company Limited. He has been a director of the Company since Jan. 2013.

Director Mr. Wang Zhixian graduated from Tianjin University and Shanghai Jiao Tong University with a master’s degree in engineering and then graduated from the Guanghua School of Management of Peking University with an MBA degree. He has rich experience in port management. Joining CMHI in Jul. 1992, he was once a vice GM of the Industrial Management Department and the GM of the Company Planning Department of CMHI, a vice GM of Shenzhen Mawan Port Services Co., Ltd., the Chairman and CEO of China Merchants International Terminals Co., Ltd. Daxie Ningbo Port.D and the Managing Director of China Merchants Port Service (Shenzhen) Co., Ltd. and Shenzhen Haixing Harbor Development Co., Ltd. He is now a vice GM of CMHI, the Chairman of China Merchants Port Service (Shenzhen) Co., Ltd. and Shenzhen Haixing Harbor Development Co., Ltd., and the Vice Chairman of Zhangzhou China Merchants Port Co., Ltd. He has been a director of the Company since Jan. 2013.

Director Mr. Li Yubin graduated from Tianjin University with a bachelor’s degree in port & sea- route engineering and a master’s degree in engineering management, and graduated in 2007 from the University of Hong Kong with a doctor’s degree in real estate and construction. He has rich experience in port construction & operation and logistics management. Joining in CMHI in 2007, he was once an assistant to the GM of the R&D Department, the Overseas Operation Department and the Planning & Business Department of CMHI and a vice GM of China Merchants Bonded Logistics Co., Ltd.. He is now the GM of the Planning & Business Department of CMHI. And he has been a director of the Company since Jan. 2013.

Director Mr. Zhang Jianguo graduated from Shanxi Finance & Economics Institute in accounting with a bachelor’s degree in economics. Financial Manager of the Company since 1997, Chief Financial Officer of the Company from Sept. 1999 to 31 Dec. 2012, and Vice GM of the Company from Feb. 2011 to 31 Dec. 2012. He is now the CFO of CND Group. And he has been a director of the Company since Jan. 2013.

Independent Director Mr. Li Wuzhou got Bachelor's Degree in Tianjin University. Previously, Vice Director of Construction Department, Deputy Director of Water Transportation Department of the Ministry of Transport, Head of the Preparation Team and President of China Water Transportation Construction Association. Currently, Honorary President of China Water Transportation Construction Association, and Independent Director of the Company since May 2008.

Independent Director Mr. Hao Zhujiang got Bachelor's Degree in Southwest University of Political Science and Law. Previously, Director and Secretary of Party Committee of the Bureau of Legislative Affairs of Shenzhen Municipality, Director of the Administrative Reconsideration Office of Shenzhen Municipal Government, Director of the Legal Advice Office of Shenzhen

38 2013 Annual Report Municipal Government. He retired in 2001. Currently, he is a partner and lawyer of Horizon Law Firm, Shenzhen Office. And Independent Director of the Company since May 2008.

Independent Director Mr. Zhang Jianjun got Doctoral Degree in Shanghai University of Finance and Economics. Previously, Deputy Dean and professor of the Accounting School of Jiangxi University of Finance and Economics, Vice President of Pengyuan Credit Rating Co., Ltd. (formerly, Sino-Hawk Credit Rating Co., Ltd.), Dean and professor of Business School of Shenzhen University. Currently, he is the Director and a professor of Accounting & Finance Institute of Shenzhen University. And Independent Director of the Company since May 2008.

Chairman of the Supervisory Committee Mr. Yu Liming got Doctoral Degree in Management from Fudan University. He graduated from South China University of Technology in 1982 and studied in Rotterdam, Netherlands and the IHE Institute, Delft from 1987 to 1988. He joined China Merchants Group in 1984 and has extensive experiences in strategic management, asset acquisition and business combination, port management and architecture. Currently, Vice President of China Merchants Group and Executive Director of CMHI. And Supervisor of the Company since Oct. 2009.

Supervisor Ms. Wen Ling graduated from Southwestern University of Finance and Economics with a postgraduate degree. She was once the Vice Financial Manager of China Merchants Port Service (Shenzhen) Co., Ltd., the Financial Manager of Shenzhen Mawan Port Services Co., Ltd. and the Vice Financial Manager of CMHI. Joining CMHI in 2004, she is now a senior vice GM of the Financial Department of CMHI. And she has been a supervisor of the Company since Jan. 2013.

Supervisor Ms. Zhao Jianli has a bachelor’s degree in transportation management engineering and a master’s degree in financial management of Xi’an Highway Institute. Joining CMHI in Sept. 2003, she is now the internal control and audit GM of CMHI. She was once the internal control and audit manager, an assistant to the GM and a vice GM of CMHI. And she has been a supervisor of the Company since Jan. 2013.

Supervisor Mr. Zhao Chaoxiong is a university graduate, Vice Manager and Manager of the Business Department of the Company since Dec. 1999. Currently, Vice GM of the Harbour Division of the Company. And Supervisor of the Company since Aug. 2009.

Supervisor Ms. Ni Keqin, joined Chiwan Container Terminal Co., Ltd. (“CCT”) in May 1993 and took the positions of Manager Assistant, Vice Manager as well as Manager of the Operation Department and GM Assistant of CCT successively. Currently, Vice GM of CCT. And Supervisor of the Company since May 2008.

General Manager Mr. Zhao Qiang got a Bachelor’s Degree of Land and Chemistry from Jilin Agricultural University. Previously, he took posts of GM of Harbour Division of the Company, Vice GM of Chiwan Shipping (H.K.) Company Limited and GM Assistant of the Company. Presently, he is GM of Harbour Division of the Company and Vice GM of Chiwan Shipping (H.K.) Company Limited. He was Vice GM of the Company from Feb. 2011 to Oct. 2012. And he has been the GM of the Company since Oct. 2012.

39 2013 Annual Report

Vice GM and Chief Engineer Mr. Xiong Haiming graduated from South China University of Technology with a Bachelors’ Degree of Naval Architecture Engineering. Previously, he took posts of Vice GM, GM of Engineering Technology Division and GM Assistant of Chiwan Container Terminal Co., Ltd. Presently, he is Chief Engineer of the Company. He has been Vice GM of the Company since Feb. 2012.

CFO Mr. Zhang Fang graduated from Xi’an Highway Institute with a bachelor’s degree in finance and accounting of transportation. Joining the Company in Mar. 1996, he was once the Financial Manager of Shenzhen Chiwan Transportation Co., Ltd., Shenzhen Chiwan Harbor Container Co., Ltd. and Chiwan Container Terminal Co., Ltd.. He has been the CFO of the Company since Jan. 2013.

Company Secretary Ms. Bu Dan got a Bachelor Degree of Accounting and a Master Degree of Enterprise Management from Liaoning Technical University. She was Securities Affairs Representative of the Company from Sept. 2003 to Aug. 2008, and GM of Enterprise Risk Management of Deloitte Touche Tohmatsu CPA from Sept. 2008 to Oct. 2011. She has been Company Secretary of the Company since Jan. 2012.

2. Taking positions in shareholder units

Remuneration or Position in shareholder Starting and ending Name Shareholder unit allowance from unit dates of office term shareholder unit (Yes/No) Zheng Executive director Feb. 2012-now CMHI Yes Shaoping Vice GM Jan. 2013-now Vice GM Mar. 2012-now Zhang CMHI Yes CFO Feb. 2009-now Rizhong Malai Storage Director Oct. 2012-now No Deng CMHI Vice GM Dec. 2011-now Yes Weidong

Wang CMHI Vice GM Jul. 2012-now Yes Zhixian Malai Storage Board Chairman Oct. 2012-now No GM of Commercial and Li Yubin CMHI May 2012-now Yes Strategic Planning Dept. Zhang CND Group CFO Jan. 2013-now Yes Jianguo Yu Liming CMHI Executive director Dec. 1998-now No CMHI Senior vice financial GM Sept. 2010-now Yes Wen Ling Malai Storage CFO Dec. 2012-now No Internal control and audit CMHI Jun. 2010-now Yes Zhao Jianli GM Malai Storage Supervisor Mar. 2013-now No

40 2013 Annual Report 3. Taking positions in other units

Remuneration or Position in Starting and ending allowance from Name Other unit other unit dates of office term other unit (Yes/No) Chiwan Container Terminal Co., Ltd. Chairman Mar. 2011-now No Shenzhen Mawan Terminals Co., Ltd. Chairman Aug. 2011-now No Zheng Shenzhen Mawan Port Services Co., Ltd. Chairman Aug. 2011-now No Shaoping Shenzhen Mawan Wharf Co., Ltd. Chairman Aug. 2011-now No Shekou Container Terminals Ltd. Chairman Apr. 2011-now No China Merchants Bonded Logistics Co., Ltd. Vice Chairman Apr. 2010-now No Shenzhen Haixing Harbor Development Co., Vice Chairman Jun. 2009-now No Ltd. China Merchants Port Service (Shenzhen) Zhang Vice Chairman Apr. 2010-now No Rizhong Co., Ltd. Shekou Container Terminals Ltd. Director May 2009-now No Shanghai International Port (Group) Co., Ltd. Supervisor Apr. 2011-Apr. 2014 No Chiwan Container Terminal Co., Ltd. Vice Chairman Sept. 2012-now No Deng China Merchants Bonded Logistics Co., Ltd. Director Dec. 2011-now No Weidong Shekou Container Terminals Ltd. Director Jul. 2010-now No Shenzhen Haiqin Engineering Management Chairman Aug. 2012-now No Co., Ltd. China Merchants Port Service (Shenzhen) Chairman Sept. 2012-now No Co., Ltd. Wang Shenzhen Haixing Harbor Development Co., Chairman Aug. 2012-now No Zhixian Ltd. Zhangzhou China Merchants Port Co., Ltd. Vice Chairman May 2013-now No Ningbo Daxie China Merchants International Director Jul. 2012-now No Terminals Co., Ltd. Shekou Container Terminals Ltd. Director Aug. 2012-now No Shenzhen Mawan Wharf Co., Ltd. Director Sept. 2012-now No Li Yubin China Merchants Holdings (International) Director Apr. 2012-now No Information Technology Co., Ltd. China Development Finance Co., Ltd. Director Jul. 2013-now No Zhang Convener of Shenzhen Chiwan Petroleum Supply Base Jianguo the Supervisory May 2013-now No Co., Ltd. Committee China Merchants Holdings (Hong Kong) Ltd. Director Apr. 2000-now No China Merchants Loscam International Director Jun. 2010-now No Yu Holdings Co., Ltd. Liming Modern Terminals Limited Director Apr. 2007-now No China Merchants Finance Holdings Co., Ltd. Director Feb. 2011-now No China Merchants Capital Co., Ltd. Director Jan. 2012-now No

Wen Ling Zhanjiang Port (Group) Co., Ltd. Vice Chairman Nov. 2011-now No of the 41Supervisory 2013 Annual Report Committee Shenzhen Haiqin Engineering Management Supervisor Sept. 2012-now No Co., Ltd. China Merchants Port Service (Shenzhen) Supervisor Mar. 2008-now No Co., Ltd. China Merchants Port Service (Shenzhen) Director Apr. 2010-now No Co., Ltd. Shekou Container Terminals Ltd. Director Sept. 2013-now No Zhao Jianli Shenzhen Mawan Terminals Co., Ltd. Director Apr. 2013-now No Shenzhen Mawan Port Services Co., Ltd. Director Apr. 2013-now No Shenzhen Mawan Wharf Co., Ltd. Director Apr. 2013-now No

III. Remuneration for directors, supervisors and senior management

1. Decision-making procedure, determining basis and actual payment for the remuneration of directors, supervisors and senior management

(1) Decision-making procedure for the remuneration of directors, supervisors and senior management: Remunerations for the Company’s directors, supervisors and senior management shall be nominated by the Board of Directors and determined upon review of the Remuneration and Appraisal Committee. Allowance for Independent Directors is RMB 100,000/year (tax included), which has been approved at the 2010 Annual General Meeting with effect from 1 Jun. 2011. (2) Determining basis for the remuneration of directors, supervisors and senior management The modes and amounts of the remuneration for directors, supervisors and senior management are determined according to the market levels with the post value, responsibilities, etc. taken into account. (3) Actual payment for the remuneration of directors, supervisors and senior management: Salaries and independent director allowances were paid to directors, supervisors and senior executives on a monthly basis. And the other bonuses were paid all at one time according to the performance of each of them.

2. Remuneration of the directors, supervisors and senior management of the Company during the reporting period

Unit: RMB’000 Total before-tax Total before-tax Name Position Current/former remuneration gained remuneration gained from from the Company shareholder’s unit Chairman of the Zheng Shaoping Current - 1,490 Board Zhang Rizhong Director Current - 1,550 Deng Weidong Director Current - 1,280 Wang Zhixian Director Current - 1,210

42 2013 Annual Report Li Yubin Director Current - 1,050 Zhang Jianguo Director Current 610 540 Li Wuzhou Independent director Current 100 - Hao Zhujiang Independent director Current 100 - Zhang Jianjun Independent director Current 100 - Wen Ling Supervisor Current - 750 Zhao Jianli Supervisor Current - 820 Zhao Chaoxiong Supervisor Current 940 - Ni Keqin Supervisor Current 940 - Zhao Qiang GM Current 1,390 - Vice GM, Chief Xiong Haiming Current 1,130 - Engineer Zhang Fang CFO Current 610 - Bu Dan Company Secretary Current 750 - Tian Junyan Director Former - 1,490 Wang Fen Director Former - 1,380 Fan Zhaoping Director Former - 1,280 Yuan Yuhui Director Former - 880 Director, Standing Zhang Ning Former 290 980 Vice GM Guo Songhua Supervisor Former - 720 Pan Ke Vice GM Former 1,110 -

※ As at the end of the reporting period, the actual before-tax remunerations paid to all the directors, supervisors and senior executives of the Company stood at RMB 23.49 million. The pre-tax emoluments paid by the Company to Director Zhang Jianguo and Mr. Zhang Ning were due to their services as CFO and director in 2012 respectively.

The Company did not formulate any equity incentive plan during the reporting period.

IV. Directors, supervisors and senior management staff leaving office

Name Position Type Date Reason Tian Junyan Director Resign 30 Jan. 2013 Change of job Wang Fen Director Resign 30 Jan. 2013 Change of job Fan Zhaoping Director Resign 30 Jan. 2013 Change of job Yuan Yuhui Director Resign 30 Jan. 2013 Change of job Zhang Ning Director Resign 30 Jan. 2013 Change of job Huang Huizhen Supervisor Resign 7 Jan. 2013 Change of job Guo Songhua Supervisor Resign 7 Jan. 2013 Change of job Pan Ke Vice GM Resign 7 Mar. 2014 Change of job

43 2013 Annual Report V. Particulars about work force

As at 31 December 2013, the Company had 1,781 employees, with 820 being university graduates or above, 67 financial personnel, 65 sales persons, 263 technicians, 67 administrative personnel, and the others being staff for production. The Company did not need to pay remuneration or any fees for retired staff.

44 2013 Annual Report

Section VIII. Corporate Governance

I. Basic details of corporate governance

(I) Ever since its establishment, the Company has been in strict compliance with the company law and securities law, as well as relevant laws and regulations issued by CSRC. And it has timely formulated and amended its relevant management rules according to the Code of Corporate Governance for Listed Companies, which are conscientiously and carefully executed. An effective system of internal control has thus taken shape in the Company. Details about corporate governance within the reporting period are set out as below: 1. According to the requirement of National Association of Financial Market Institutional Investors, there should be an information disclosure mechanism for the inter-bank market debt financing instrument when issuing bonds in the inter-bank market. Considering its need to issue short-term financing bonds in the inter-bank market, the Company formulated the “Information Disclosure Management Rules for the Inter-bank Debt Financing Instrument of Shenzhen Chiwan Wharf Holdings Limited” according to relevant laws, regulations, the Company’s Management Rules for Information Disclosure, Articles of Association, etc., which was reviewed and approved at the 4th Special Session for 2013 of the 7th Board of Directors on 8 Mar. 2013. 2. In order to adapt to the changes in the external operating environment and satisfy needs arising from the internal control rectification, the Company revised the “Management Rules for Investment in External Parties” according to its actual operation needs, which was reviewed and approved on the 8th Special Session of the 7th Board of Directors for 2013 on 23 Oct. 2013. 3. Shareholders and shareholders’ general meeting: the Company ensures that all the shareholders, especially minority shareholders, are equal and could enjoy their full rights. The Company called and held shareholders’ general meeting strictly in compliance with the Rules for Shareholders’ General Meeting. 4. Relationship between the controlling shareholder and the Company: controlling shareholder of the Company acted in line with rules during the reporting period, did not intervened the decisions, productions or operations of the Company directly or indirectly in exceeding the authority of the shareholders’ general meeting, and did not appropriate any funds of the Company. 5. Directors and the Board of Directors: the Company elected directors in strict accordance with the Articles of Association. Number and composition of members of the Board were in compliance with relevant laws and regulations; all Directors attend Board meetings and shareholders’ general meeting in a serious and responsible manner and participated enthusiastically relevant training so as to know better about laws and regulations as well as the rights, obligations and liabilities of Directors. The Company set up the Audit Committee as approved by the First Special Shareholders’ Meeting for Y2004 and the Nomination, Remuneration and Evaluation Committee and Strategy Committee of the Board as approved by the Annual General Meeting for Y2005, with a view to ensuring the efficient operation and scientific decision-making of the Board of Directors.

45 2013 Annual Report 6. Supervisors and the Supervisory Committee: number and composition of the members of the Supervisory Committee were in compliance with the requirements of laws and regulations. The supervisors diligently and seriously performed their duties and obligations, took responsible attitudes to all shareholders and supervised the financial affair as well as the performance by the Company’s Directors, managers and other senior executives of their duties in compliance with the laws and regulations. 7. Stakeholders: the Company fully respected and safeguarded the legal rights and interests of the banks and other creditors, staff, consumers and other stakeholders so as to develop the Company in a consistent and healthy way. 8. Information disclosure and transparency: the Company authorized the Company Secretary to take charge of information disclosure, and the Chairman as well as related Directors to meet with shareholders. The Company disclosed relevant information in a true, accurate, complete and timely way in strict accordance with the requirements of laws, regulations and the Articles of Association, formulated the Management Rules on Information Disclosure, the Management System on Inside Information and Insiders and the Rules on the Management of Investors Relations, and designated Securities Times, Ta Kung Pao and http://www.cninfo.com.cn as its newspaper and website for information disclosure, so as to ensure all shareholders have equal opportunity to obtain the information. 9. Corporate governance mechanisms and rules that the Company already established: Articles of Association of the Company, Rules of Procedure for General Meetings, Working Articles of Audit Committee of the Board of Directors, Working Rules of Annual Report for Audit Committee of the Board of Directors, Working Articles for Nomination, Remuneration and Evaluation Committee of the Board of Directors; Working Articles of Strategy Committee of the Board of Directors, Working System for Independent Directors, Working Rules of Annual Report for Independent Directors, Rules of Procedure for Supervisory Committee, Working Articles of General Manager, Management System for Company Shares held by Directors, Supervisors and Senior Executives and Its Changes, Management System of Foreign Investment, Decision-making Mechanism of Related Transactions, Management System of Fund-raising, Management Rules on Information Disclosure, Rules of Accountability for Significant Mistakes in Annual Report Information Disclosure, Management System on Inside Information and Insiders, Internal Audit System, Management System of Investors’ Relations, Specific System for Engaging Accountants, Management Method of Financial Tools, Management System on Person in Charge of Finance and CFO, Information Disclosure Management Rules for the Inter-bank Debt Financing Instrument, etc. Details for the above systems please refer to website of the Company http://www.szcwh.com. There isn’t difference between the actual circumstances of the Company and all established systems. Since the foundation, the Company was consistently in strict accordance with Company Law and relevant laws and regulations to make a standard operation, continued business-running in line with relevant requirements of Corporate Governance Principle for Listed Companies and earnestly made effort to protect profit and interests of shareholders and stakeholders. 10. Non-compliance of corporate governance standards by the Company

46 2013 Annual Report On 23 Apr. 2013, the “Proposal on Providing Undisclosed Information for the Majority Shareholder” was reviewed and approved at the 5th Special Session of the 7th Board of Directors for 2013. And the Company has kept a file of information insiders for management in strict accordance with the “Rules for Management of Insider Information and Information Insiders”. The aforesaid matter does not affect the independence of the Company and the Company will properly provide relevant information according to the regulators’ requirements.

(II) Special campaigns for corporate governance & formulation and implementation of the registration management rules for information insiders

1. Work conference on insider trading prevention and control On 19 Mar. 2013, the Company Secretary attended the “Work Conference on Insider Trading Prevention and Control in Listed Companies of Shenzhen” convened by CSRC Shenzhen. After the conference, the Company handed out relevant materials to its directors, supervisors, senior management staff and other staff that may be exposed to insider information and carried out a special training on insider trading prevention and control. With help from the relevant materials and training, the relevant staff became aware of the danger of insider trading. The awareness of insider trading prevention and control was enhanced among the staff. The Company will pay more attention to management and secrecy of insider information and keep a file of information insiders for management in strict accordance with the “Rules for Management of Insider Information and Information Insiders”. 2. Establishment and Execution of the Management Rules on Insider Information and Insiders The Company established the Management Rules on Inside Information and Insiders in accordance with the Articles of Association of the Company and other laws and regulations, which was reviewed and approved at the Seventh Special Session of the Sixth Board of Directors for 2009 held on 29 Oct. 2009. In compliance with the document requirement of Regulation on Establishing Management Rules of Insiders Registration in Listed Company from CSRC, Notice on Establishing Management Rules of Insiders Registration from Shenzhen Securities Regulatory Bureau and Memorandum of Information Disclosure No. 34— Management Issues on Insiders Registration from Shenzhen Stock Exchange, the Company revised the Management Rules on Inside Information and Insiders by connecting with the practice, which was reviewed and approved at the First Special Session of the Seventh Board of Directors for 2012 on 27 Feb. 2012. The rules set forth specific provisions regarding the management on information submitted to external entities. No information insiders have been found trading the Company’s shares by taking advantage of insider information.

47 2013 Annual Report II. Particulars about the annual shareholders’ general meeting and special shareholders’ general meetings held during the reporting period

1. Particulars about annual shareholders’ general meeting held during the reporting period

Convening Disclosure Index to the Session Name of proposal Resolution date date disclosed 1. 2012 Annual Work Report of the Board of Directors; 2. 2012 Annual Work Report of the Supervisory Committee; For the 3. 2012 Annual Final Financial Report; resolution 4. 2012 Annual Preplan for Profit 2012 Annual Reviewed announcement 21 May Allocation and Dividend Shareholders’ and 22 May 2013 (No. 2013- 2013 Distribution; General Meeting approved 034), see 5. Proposal on Reengaging the CPAs http://www.cni Firm for 2013; nfo.com.cn 6. Proposal on Absorbing Shenzhen Chiwan Terminal Co., Ltd. and Shenzhen Chiwan Trans-Grains Terminal Limited

2. Particulars about special shareholders’ general meetings held during the reporting period

Convening Disclosure Index to the Session Name of proposal Resolution date date disclosed For the resolution The First Special 1. Proposal on Change of Directors; Reviewed announcement (No. Shareholders’ 30 Jan. 2. Proposal on Change of and 31 Jan. 2013 2013-013), see General Meeting 2013 Supervisors approved http://www.cninfo. for 2013 com.cn The Second For the resolution Proposal on Extending the Valid Special Reviewed announcement (No. 16 Sept. Term of the Corporate Bond 17 Sept. Shareholders’ and 2013-050), see 2013 Offering Resolution of Shenzhen 2013 General Meeting approved http://www.cninfo. Chiwan Wharf Holdings Limited for 2013 com.cn

III. Performance of the Independent Directors

1. Particulars about the independent directors attending the board sessions and the shareholders’ general meetings

Particulars about the independent directors attending the board sessions Sessions required to Attendance by way Number of Non-attendance in Attendance Attendance Name attend during the of times of person for two in person by proxy reporting period telecommunication absence consecutive times Li Wuzhou 10 3 7 0 0 No Hao Zhujiang 10 2 7 1 0 No Zhang Jianjun 10 3 7 1 0 No General meetings sat in on by independent directors 3

48 2013 Annual Report 2. Particulars about independent directors proposing objection on relevant events

During the reporting period, no independent directors proposed any objection on relevant events of the Company.

3. Other explanations about the duty performance of independent directors

During the reporting period, all independent directors of the Company honestly performed their duties and brought their roles as independent directors into full play by participating in discussions on reports reviewed at board sessions and other issues of the Company, and proposed constructive suggestions which had been adopted by the Company. They carefully reviewed and issued independent opinions in written form on significant events such as material related-party transactions in accordance with relevant requirements. In accordance with the requirements of CSRC and Shenzhen Stock Exchange, the “Working Rules for Independent Directors” and the “Working Rules for Independent Directors Concerning Annual Reports, they performed their obligations with due diligence and fully oversaw the preparation and disclosure of the Annual Report of the Company for 2012. Independent directors of the Company proactively performed their duties, monitored the Company’s business and operation, actively protected the interests of minority shareholders, and thus played significant roles in the scientific decision-making by the Board of Directors. For details of performance by independent directors of their duties, please refer to the work report of independent directors for 2013 as disclosed at http://www.cninfo.com.cn.

IV. Performance of the Special Committees under the Board during the reporting period

(I) Establishment, improvement and principal contents of the working rules for the Audit Committee and performance of the Audit Committee

In accordance with the Company Law of the PRC, the Corporate Governance Principle for Listed Companies, the Articles of Association and other relevant requirements, the Company established the Audit Committee under its Board of Directors and formulated the Working Rules for the Audit Committee of the Board (“Working Rules”) and the Working Practices for the Audit Committee of the Board on Annual Report (“Working Practices”). The Working Rules and the Working Practices set forth specific provisions regarding the composition, responsibility and authority, decision- making process and rules of the Audit Committee and the works that need to be done in preparing and auditing annual reports, which improved the Company’s corporate governance structure and mechanism, reinforced the construction of internal control of the Company, and brought into full play the critical role of the Audit Committee of the Board in preventing risks.

1. The Audit Committee of the Company held a total of three meetings during the year, with details as follows:

(1) On 25 Mar. 2013, the First Session of the Audit Committee of the Seventh Board of Directors for 2013 was held at 9:00 a.m. at Conference Room I, 8/F., Chiwan Petroleum Building, Shenzhen, at which the following proposals were reviewed and approved unanimously:

49 2013 Annual Report ● “Internal Auditing Report of the Company for 2012” was reviewed and approved; ● “Internal Auditing Plan of the Company for 2013” was reviewed and approved; ● “Working Report of the Audit Committee of the Board in 2012” was reviewed and approved; ● “The Financial Statements of 2012” was reviewed and approved and was submitted to the Board of Directors of the Company for approval; ● “Working Report of the Accounting Firm in 2012” was reviewed and approved and was submitted to the Board of Directors of the Company for approval; ● “Report on the Change of the Accounting Firm for 2013” was reviewed and approved. The Audit Committee proposed to change the CPAs firm of the Company to Deloitte Touche Tohmatsu Certified Public Accountants LLP to shoulder the audit of the annual financial statements and the internal audit for 2013. This proposal was submitted to the Board of Directors of the Company for approval. (2) On 26 Aug. 2013, the Second Session of the Audit Committee of the Seventh Board of Directors for 2013 was held at 1:00 p.m. at the Conference Room on 11/F., Chiwan Haiyun Building, Shenzhen, at which the following proposals were reviewed and approved unanimously: ● “The Semi-Annual Financial Report for 2013 of the Company” was reviewed and approved and was submitted to the Board of Directors of the Company for approval; ● “The Semi-Annual Internal Auditing Report of the Company for 2013” was reviewed and approved. (3) On 23 Dec. 2013, the First Special Session of the Audit Committee of the Seventh Board of Directors for 2013 was held at 9:00 a.m. at Conference Room I, 8/F., Chiwan Petroleum Building, Shenzhen, at which the Report on the Company’s Auditing Work of Finance and Internal Control by Deloitte Touche Tohmatsu Certified Public Accountants LLP for 2013 was debriefed. 2. In accordance with relevant requirements of CSRC and Shenzhen Stock Exchange, the specific working rules and procedure for the Audit Committee, during the reporting period, the Audit Committee of the Board of the Company oversaw the auditing of the Annual Report of the Company for 2012 with due diligence, details of which are as follows: (1) Before the auditors started their work, the Audit Committee discussed with the principal auditor of the accounting firm and determined, inter alia, the timing schedule for the auditing work of the financial statements for the year. (2) The Audit Committee expressed its audit opinions two times on the annual financial statements of the Company for 2012. During the reporting period, the Audit Committee expressed its audit opinions two times on the annual financial statements of the Company for 2012 in accordance with relevant requirements from CSRC. The Audit Committee reviewed the Financial Statements prepared by the Company and issued the following opinions before the Auditors started their work: the Company was in full compliance with relevant laws, regulations and the Articles of Association of the Company, the units and items of the Company's financial statements to be consolidated were complete, and the consolidation basis thereof was accurate and the information included in the Financial Statements submitted by the Company was objective, comprehensive and true. The Company's accounting policies were properly adopted and the accounting estimates made were reasonable. No significant mistake or omission has been identified so far. Due to the time-lag between this review of Financial Statements

50 2013 Annual Report and the dates of the Auditors' Report, we suggest the Finance Department focus on and deal with subsequent events properly in accordance with the New Enterprises Accounting Standards to ensure the fairness, truthfulness and completeness of the Financial Statements. After the Auditors issued their preliminary audit opinions, the Audit Committee reviewed the Financial Statements again and issued the following opinions: the Company prepared the Financial Statement in full compliance with the New Enterprise Accounting Standards and relevant provisions of the financial control system of the Company, the procedures for the preparation of the Financial Statements were reasonable and proper, which gave a true and fair view of the Company's assets, liabilities, equity interests and operation results as at 31 December 2012. Information included in the Financial Statements was objective and complete. Financial Statements for 2012 which was preliminarily audited by Deloitte Touche Tohmatsu Certified Public Accountants LLP may be submitted for review at the 5th Session of the Seventh Board of Directors. (3) Supervision over the Auditing Work of the Accounting firm The Audit Committee issued letters to Deloitte Touche Tohmatsu Certified Public Accountants LLP on 22 Jan. and 18 Feb. 2013 respectively to urge them to produce their audit report in a timely manner, so as to ensure the annual audit and information disclosure proceed as scheduled. (4) Opinions on the Auditing Work Performed by the Accountants for the previous year During the auditing period, the Audit Committee of the Board focused on the problems discovered in process of audit, urged auditors to finish the preparation of their report within a prescribed period of time and ensured the truthfulness, accuracy and completeness of the annual report. The Certified Public Accountants issued a standard unqualified audit report on 25 Mar. 2013. The Audit Committee considered that the Certified Public Accountants conducted their audit in accordance with China’s Independent Auditing Standards, the audit time was sufficient, the deployment of the auditors was appropriate and their practicing capability was excellent, and that the audit report issued sufficiently reflected the Company's financial condition as at 31 Dec. 2012 and its operation results and cash flows for the year 2012 and the audit conclusion made was in line with the actual situation of the Company. 3. During the reporting period, the Audit Committee placed great emphasis on the establishment of the internal control and supervision department of the Company and its personnel deployment. The Audit Department was required to submit its working report for the previous year and working plan for the current year to the Audit Committee and report the establishment and implementation of the internal control system, which enabled the Audit Committee to understand the implementation and effect of the internal control system. In addition, the Audit Committee advised on the improvement for the work of the Audit Department and the Company relating to internal control for the next year. (II) Performance of the Nomination, Remuneration and Evaluation Committee During the reporting period, the Nomination, Remuneration and Evaluation Committee under the Board of Directors held a total of two meetings, details of which are as follows: 1. On 4 Jan. 2013, the First Special Session of the Nomination, Remuneration and Evaluation Committee of the Seventh Board of Directors for 2013 was held by way of telecommunication voting, at which the “Proposal on Examining Director Candidates” and the “Proposal on Engagement of CFO” were reviewed and approved unanimously and submitted to the Board of Directors of the Company for approval. 2. On 25 Mar. 2013, the Second Session of the Nomination, Remuneration and Evaluation Committee of the Seventh Board of Directors for 2013 was held at 10 a.m. at Conference Room I,

51 2013 Annual Report 8/F, Chiwan Petroleum Building, Shenzhen, at which the “Working Report of the Nomination, Remuneration and Evaluation Committee of the Board for 2012” and the “Report on the Remuneration of the Directors, Supervisors and Senior Management Staff for 2012” were reviewed and approved. (III) Performance of the Strategy Committee On 25 Mar. 2013, the First Session of the Strategy Committee of the Seventh Board of Directors for 2013 was held at 10:30 a.m. at Conference Room I, 8/F, Chiwan Petroleum Building, Shenzhen, at which the “Working Report of the Strategy Committee of the Board for 2012” and the “Business Development Plan for 2013 to 2017” were reviewed and approved unanimously. During the reporting period, members of the Strategy Committee conducted research and advised on the investment plans and assets operation projects related to the medium to long term development strategy of the Company.

V. Performance of the Supervisory Committee

The Supervisory Committee has no objection on the supervised events during the reporting period.

VI. Particulars about the Company’s separation from the controlling shareholder in respect of business, personnel, assets, organization and financial affairs

The Company is absolutely independent in business, personnel, assets, finance and organization from its controlling shareholder. Details are set out as follows. Separation in business: The Company has its own assets, personnel, qualifications and ability to carry out operating activities and is able to operate independently in the market. Separation in personnel: The Company has basically separated its staff from its controlling shareholder. No senior management staff of the Company holds positions at controlling shareholder of the Company. Separation in assets: The Company possesses its own self-governed assets and domicile. Separation in organization: The Company has established and improved the corporate governance structure according to law and has an independent and complete organizational structure. Separation in finance: The Company has set up its own financial department as well as normative accounting system and the financial management system on its subsidiaries. The Company has its own bank accounts and does not share the same bank account with its controlling shareholder. The Company has been paying tax in accordance with the laws and regulations on its own behalf.

VII. Horizontal competition

On 17 Sept. 2012, China Merchants Holdings (International) and CND Group signed the “Agreement of China Merchants Holdings (International) Co., Ltd. and China Nanshan Development (Group) Inc. Concerning Custody of Shares of Shenzhen Chiwan Wharf Holdings Limited”. According to the Agreement, CND Group would entrust Merchants Holdings (International) as a custodian with its A-shares in the Company (representing a stake of 57.52%). China Merchants Holdings (International) Company Limited (“CMHI”) went public in the Stock Exchange of Hong Kong in Jul. 1992. It is mainly engaged in handling of containers and bulk cargos at ports, with the ports it invests in and manages covering Mainland China, Hong Kong, China, Southeast Asia, Africa and some other regions. Within Shenzhen, there is some horizontal competition between the Company and CMHI in the container terminal business in the port area of

52 2013 Annual Report West Shenzhen due to historical reasons; and there is also market competition with Yantian Port and Dachanwan Port in Shenzhen. However, comparatively speaking, thanks to the coordination of the actual controller China Merchants Group, the cooperation between the Company and CMHI is greater than competition. The aforesaid management entrustment is mainly a response to the deteriorating port markets. It is a strategic move to boost CMHI’s business in ports of West Shenzhen, increase the Company’s overall market competitiveness, keep the operation of ports of West Shenzhen in order and improve the market competition environment of the port area in West Shenzhen. On 17 Sept. 2012, CMHI has promised to completely solve the horizontal competition problem through asset reorganization, etc. in the coming 3 to 5 years.

VIII. Performance Evaluation and Incentive Mechanism for Senior Management Staff

All senior management staff of the Company is appointed by the Board of Directors. The Board sets up the Company’s business objectives and financial budget for each year and signs KPI contracts accordingly with senior management staff. The Board then determines the incentive standards to senior management staff according to their respective performance during the year.

53 2013 Annual Report

Section IX. Internal Control

I. Internal control progress

Based on the Basic Norms for Internal Control of Enterprises and the mating guideline, the Company worked out the “Work Plan for Internal Control of 2013”. The Company kept the original two-tier internal control task group and changed some members. At the tier of the Company, the task group was headed by the chairman of the board, with divisional leaders and departmental leaders as the members for the internal control steering committee, and important professionals of all functional departments as the members for the task group. At the tier of a subsidiary, the task group was headed by the general manager of the subsidiary, with important professionals in the subsidiary as the members for the task group. In order to optimize the internal control system and improve the internal control capability, according to the features and significant levels of its business lines, the scope of the Company’s internal control task for 2013 was extended to cover various processes and links of its operation. 1. Subjects included in the internal control improvement and self-evaluation task for 2013 were: the Company, Chiwan Container Terminal Co., Ltd., Shenzhen Chiwan Harbor Container Co. Ltd., Shenzhen Chiwan Terminal Co., Ltd., Shenzhen Chiwan Trans-Grains Terminal Limited, Dongguan Chiwan Wharf Company Limited and Dongguan Chiwan Terminal Company Limited. The combined assets of the aforesaid entities included in the appraisal scope accounted for 96% of the Company’s total consolidated assets. And their combined operating revenue accounted for 94% of the Company’s total consolidated operating revenue. 2. Internal control processes included in the internal control improvement and self-evaluation task for 2012 were: the organizational structure, development strategy, human resources, social responsibilities, corporate culture, capital operation, procurement, asset management, marketing, R&D, engineering projects, guarantees, outsourcing, financial reporting, overall budget, contract management, internal information transmission and the information system. According to the contents and schedule of the work plan, internal control task groups, through examining processes, evaluating the existing process and mechanism design and other measures, completed the defect-looking phase for the internal control improvement project, formulated internal control defect lists and rectification plans, and rectified internal control problems found. The Audit Office of the Company organized and carried out the self-evaluation of internal control. Via talks and sampling tests, and according to the previously-set evaluation standards, the office evaluated the defects found, prepared a defect evaluation summary sheet, and then offered their rectification advice. It then, according to the results of its aforesaid work, prepared the 2013 annual internal control self-evaluation report, which was later reviewed and approved at the 7th Session of the 7th Board of Directors. The Company engaged Deloitte Touche Tohmatsu Certified Public Accountants LLP to audit the effectiveness of its 2013 financial reporting internal control. A standard auditor’s report with

54 2013 Annual Report unqualified opinion was issued by DDT and later disclosed by the Company as required by the regulator. II. Board statement on its responsibility towards internal control As required by the CSRC and Shenzhen Stock Exchange, the board made a statement on the Company’s internal control self-evaluation report as follows: According to the enterprise internal control regulations, it is the responsibility of the Board of Directors to formulate, improve and effectively execute internal control; appraise its effectiveness; and disclose internal control appraisal reports in compliance with the actual situation. The Supervisory Committee supervises the internal control formulation and execution by the board and the management organizes the daily operation of the internal control. The Board of Directors, the Supervisory Committee, directors, supervisors and senior management staff of the Company ensure that the internal control appraisal reports do not carry any false record, misleading statement or material omission. And they are jointly and severally liable for the factuality, accuracy and completeness of the contents carried in the reports. The goal of internal control is to rationally ensure compliance of the Company’s operation with laws and regulations, asset safety, and factuality and completeness of financial statements and the relevant information; improve the operating efficiency and effects; and promote the materialization of the development strategies. Due to the inherent limitations in internal control, it can only provide rational guarantee for the aforesaid objectives. Meanwhile, internal control may become inappropriate or be in less compliance with the internal control policy and procedures due to change of the circumstances, so it is of certain risk to deduce the effectiveness of internal control in the future according to internal control appraisal results. III. Basis for the financial reporting internal control Based on the Company Law, the Accounting Law, the Accounting Standards for Business Enterprises, the Basic Norms for Internal Control of Enterprises & its mating guideline and the Stock Listing Rules of Shenzhen Stock Exchange, as well as applicable laws, regulations, standards and guidelines, and considering its actual situation, the Company has formulated a comparatively sound financial reporting internal control system upon years of improvement. The system is based on the financial management system, with relevant management rules as the control means and the daily management system as the control guarantee. The financial reporting internal control system includes: the Accounting Management Rules as the basis; the Internal Control Rules for Monetary Funds, the Internal Audit Rules, the Approval Power and Process for Significant Matters, the Management Rules for Fixed Assets, the Management Rules for Outward Investments, the Bidding and Bidding Invitation Management Rules, the Overall Budget Management Rules, the Decision-making Rules for Related-party Transactions, the Management Rules for Raised Funds, the Accountability Mechanism for Material Errors in Annual Report Disclosure, the Special Rules for Engaging a CPAs Firm, the Management Methods for Financial Instruments, the Management Rules for Financial Chief and Accounting Chief, the Information Disclosure Management Rules for the Inter-bank Debt Financing Instrument and other rules, which have been executed to effectively control the financial reporting internal control system; and the ISO9001 Quality Management System, the ISO14001 Environmental Management System,

55 2013 Annual Report the ISO28000 Supply Chain Safety Management System, the safety management rules and other daily management rules, which have formed a solid guarantee for the financial reporting internal control system. IV. Internal control self-evaluation report No major defect of internal control was found during the reporting period. For the whole contents of the self-evaluation report prepared by the Company, see the “2013 Annual Self-evaluation Report on Internal Control of the Company” disclosed on www.cninfo.com.cn.

V. Internal control audit report

Auditors’ Report on Internal Control De Shi Bao (Shen) Zi (14) No. S0055 To the Shareholders of Shenzhen Chiwan Wharf Holdings Limited: We have audited Shenzhen Chiwan Wharf Holdings Limited’s (the "Company") internal control over financial reporting as of December 31, 2013, based on the requirements of the Enterprise Internal Control Assurance Guidance, and the professional standards of Chinese Certified Public Accountants. 1.Company responsibilities over internal controls According to the Basic Standard for Enterprise Internal Control, Enterprise Internal Control Practical Guidance and Enterprise Internal Control Assessment Guidance, the Company's Board of Directors is responsible for establishing and maintaining effective internal controls and for its assessment of the effectiveness of internal controls. 2．Auditors 'responsibilities Our responsibilities are to express opinion on the effectiveness of the Company's internal control over financial reporting base on our audit and to disclose any material weakness we noted in relation to internal control over the non-financial reporting area. 3．Inherent Limitation of Internal control Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 4．Opinion on the effectiveness of internal control over financial reporting In our opinion, the Company, based on the Basic Standard for Enterprise Internal Control and the related requirements, maintained, in all material respects, effective internal control over financial reporting as at December 31, 2013. Deloitte Touche Tohmatsu Certified Public Accountants LLP Chinese Certified Public Accountant: Li Weihua Chinese Certified Public Accountant: Su Min 27 March 2014

56 2013 Annual Report VI. Formulation and execution of the accountability system for material mistakes in annual report preparation

Pursuant to the Securities Law, the Administrative Methods for Information Disclosure of Listed Companies and other laws and regulations, as well as the Company’s Articles of Association, the Company has formulated the Accountability Mechanism for Material Errors in Annual Report Disclosure, which was reviewed and approved at the Fifth Session of the Sixth Board of Directors on 8 Apr. 2010. During the reporting period, the Company strictly executed the Accountability Mechanism for Material Errors in Annual Report Disclosure, with no such cases as correction of material accounting errors, supplementation due to material omissions or correction of performance forecasts.

57 2013 Annual Report

Section X. Auditor's Report (See attached)

Type of audit opinion Standard unqualified Date of signing audit report 27 Mar. 2014 Audit agency Deloitte Touche Tohmatsu Certified Public Accountants LLP No. of audit report De Shi Bao (Shen) Zi (14) No. P0546 Certified public accountant Li Weihua, Su Min

58 2013 Annual Report

Section XI. Documents for Reference

I. Financial Statements carrying the signatures and stamps of the Company Principal, the Chief Financial Officer and the person in charge of accounting firm;

II. Original copy of the Auditor's Report stamped by the accounting firm and signed and stamped by registered accountants;

III. Original copies of all documents and the announcements thereof disclosed in the reporting period on “Securities Times” and “Ta Kung Pao”; and

IV. Original copy of the Annual Report signed by the Chairman.

For and on behalf of the Board Zheng Shaoping Chairman Shenzhen Chiwan Wharf Holdings Limited Dated 29 March 2014

59

SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

FINANCIAL STATEMENTS AND AUDITORS' REPORT FOR THE YEAR ENDED 31 DECEMBER 2013

SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

FINANCIAL STATEMENTS AND AUDITOR'S REPORT FOR THE YEAR ENDED 31 DECEMBER 2013

Contents Pages

Auditor's Report 1 - 2

The Company and Consolidated balance sheets 3 - 4

The Company and Consolidated income statements 5 - 6

The Company and Consolidated cash flow statements 7 - 8

The Company and Consolidated statements of changes in shareholders' equity 9 - 10

Notes to the financial statements 11 - 109

AUDITOR'S REPORT

De Shi Bao (Shen) Zi (14) No. P0546

To the Shareholders of Shenzhen Chiwan Wharf Holdings Limited

We have audited the accompanying financial statements of Shenzhen Chiwan Wharf Holdings Limited (hereinafter "Chiwan Wharf"), which comprise the company and consolidated balance sheets as at 31 December 2013, and the company and consolidated income statements, the company and consolidated statements of changes in shareholders' equity and the company and consolidated cash flow statements for the year then ended, and the notes to the financial statements.

1. Management's responsibility for the financial statements

Management of Chiwan Wharf is responsible for the preparation and fair presentation of these financial statements. This responsibility includes: (1) preparing the financial statements in accordance with Accounting Standards for Business Enterprises to achieve fair presentation of the financial statements; (2) designing, implementing and maintaining internal control which is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

2. Auditor's responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with China Standards on Auditing. Those standards require that we comply with the Code of Ethics for Chinese Public Accountants and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider the internal control relevant to the preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

- 1 -

3. Opinion

In our opinion, the financial statements of Chiwan Wharf present fairly, in all material respects, the company's and consolidated financial position as of 31 December 2013, and the company's and consolidated results of operations and cash flows for the year then ended in accordance with Accounting Standards for Business Enterprises.

Deloitte Touche Tohmatsu Chinese Certified Public Accountant: Certified Public Accountants LLP

Shanghai, China Li Weihua

Chinese Certified Public Accountant:

Su Min

27 March 2014

The auditor's report and the accompanying financial statements are English translations of the Chinese auditor's report and financial statements prepared in accordance with Accounting Standards for Business Enterprises. These financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles and practices generally accepted in other countries and jurisdictions. Where the English version does not conform to the Chinese version, the Chinese version prevails.

- 2 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

AT 31 DECEMBER 2013

Consolidated Balance Sheet Unit: RMB LIABILITIES AND ASSETS Notes Closing balance Opening balance SHAREHOLDERS' EQUITY Notes Closing balance Opening balance Current Assets: Current Liabilities: Currency funds (V)1 715,539,516.48 314,855,567.54 Short-term borrowings (V)20 550,340,000.00 1,180,929,700.00 Notes receivable 200,000.00 1,680,000.00 Notes payable (V)21 - 826,000.00 Accounts receivable (V)2 223,441,476.99 251,420,961.37 Accounts payable (V)22 139,534,522.12 145,987,940.68 Prepayments (V)3 1,692,011.86 1,623,036.67 Advances (V)23 793,291.30 299,452.73 Interest receivable 984,200.00 - Employee benefits payable (V)24 72,523,316.28 65,535,789.75 Dividends receivable (V)4 3,334,985.50 - Taxes payable (V)25 61,282,690.48 40,854,859.42 Other receivables (V)5 12,579,679.85 15,984,053.14 Interest payable (V)26 36,813,185.09 18,541,172.99 Inventories (V)6 21,253,356.18 21,325,571.29 Dividends payable (V)27 77,208,156.09 - Other current assets (V)7 15,672,486.73 8,956,589.43 Other payables (V)28 59,144,474.30 41,574,838.40 Non-current liabilities due Total current assets 994,697,713.59 615,845,779.44 (V)29 4,676,624.27 39,727,206.52 within one year Non-current Assets: Other current liabilities (V)30 500,000,000.00 - Available-for-sale financial (V)8 5,580,000.00 5,210,000.00 Total current liabilities 1,502,316,259.93 1,534,276,960.49 assets Long-term equity (V)9,10 1,574,597,485.03 1,544,951,108.34 Non-current Liabilities: investments Investment property (V)11 32,247,721.85 33,463,475.57 Long-term borrowings (V)31 - 150,000,000.00 Fixed assets (V)12 2,828,481,942.32 2,701,093,453.30 Bonds payable (V)32 993,510,137.00 496,545,753.43 Construction in progress (V)13 615,064,297.08 609,932,608.74 Special payables (V)33 72,917,084.77 80,622,976.12 Intangible assets (V)14 986,041,335.51 1,007,534,028.15 Deferred tax liabilities (V)17 1,115,000.00 1,022,500.00 Goodwill (V)15 10,858,898.17 10,858,898.17 Other non-current liabilities (V)34 48,594,551.13 53,652,355.62 Long-term prepaid expenses (V)16 56,030,458.79 60,962,668.38 Total non-current liabilities 1,116,136,772.90 781,843,585.17 Deferred tax assets (V)17 68,259,696.74 67,969,034.03 TOTAL LIABILITIES 2,618,453,032.83 2,316,120,545.66 SHAREHOLDERS' Other non-current assets (V)18 174,669,665.62 123,309,396.98 EQUITY: Total non-current assets 6,351,831,501.11 6,165,284,671.66 Share capital (V)35 644,763,730.00 644,763,730.00 Capital reserve (V)36 166,143,555.65 165,866,055.65 Special reserve (V)37 2,194,178.40 1,394,831.60 Surplus reserve (V)38 483,685,708.52 464,704,268.52 Unappropriated profit (V)39 2,664,771,789.70 2,414,907,916.91 Translation differences arising on translation of financial (13,712,569.50) (13,604,717.50) statements denominated in foreign currencies Total shareholders' equity attributable to equity holders of 3,947,846,392.77 3,678,032,085.18 the parent Minority interests 780,229,789.10 786,977,820.26 TOTAL SHAREHOLDERS' 4,728,076,181.87 4,465,009,905.44 EQUITY: TOTAL LIABILITIES AND TOTAL ASSETS 7,346,529,214.70 6,781,130,451.10 7,346,529,214.70 6,781,130,451.10 SHAREHOLDERS' EQUITY

The accompanying notes form an integral part of the financial statements.

The financial statements on pages 3 to 109 were signed by the following:

Legal Representative：Zheng Shaoping Chief Financial Officer：Zhang Fang Head of Accounting Department：Li Li

- 3 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

AT 31 DECEMBER 2013

Balance Sheet of the Company Unit: RMB LIABILITIES AND ASSETS Notes Closing balance Opening balance SHAREHOLDERS' EQUITY Notes Closing balance Opening balance Current Assets: Current Liabilities: Currency funds 465,329,241.75 149,792,424.85 Short-term borrowings - 334,901,700.00 Notes receivable 200,000.00 200,000.00 Accounts payable 13,891,494.19 13,264,802.83 Accounts receivable (XII)1 18,217,533.28 17,754,008.55 Advances 5,338.70 246,980.00 Prepayments - 93,006.00 Employee benefits payable 38,264,601.11 42,214,994.74 Interest receivable 908,584.00 218,084.00 Taxes payable 503,982.43 2,213,147.95 Dividends receivable 86,760,083.07 145,359,111.21 Interest payable 40,521,068.16 21,204,529.70 Other receivables (XII)2 825,316,780.47 358,588,905.71 Other payables 391,049,559.49 369,642,044.13 Inventories 979,620.41 860,701.73 Other current liabilities 500,000,000.00 - Other current assets - 323,405.83 Total current liabilities 984,236,044.08 783,688,199.35 Total current assets 1,397,711,842.98 673,189,647.88 Non-current Liabilities: Non-currentAssets: Bonds payable 993,510,137.00 496,545,753.43 Available-for-sale financial assets 5,580,000.00 5,210,000.00 Deferred tax liabilities 1,115,000.00 1,022,500.00 Long-term receivables 11,004,284.75 11,004,284.75 Total non-current liabilities 994,625,137.00 497,568,253.43 Long-term equity investments (XII)3 2,249,775,991.91 2,131,519,861.87 TOTAL LIABILITIES 1,978,861,181.08 1,281,256,452.78 Investment property 24,628,337.91 25,587,743.55 SHAREHOLDERS' EQUITY Fixed assets 133,867,730.53 144,059,819.87 Share capital 644,763,730.00 644,763,730.00 Construction in progress 3,007,894.20 687,894.20 Capital reserve 153,355,827.18 153,078,327.18 Intangible assets 58,638,559.13 62,376,910.85 Special reserve 120,437.30 240,348.59 Long-term prepaid expenses 5,750,647.61 7,488,719.06 Surplus reserve 483,685,708.52 464,704,268.52 Deferred tax assets 38,820,787.38 40,060,851.97 Unappropriated profit 667,999,192.32 557,142,606.93 TOTAL SHAREHOLDERS' Total non-current assets 2,531,074,233.42 2,427,996,086.12 1,949,924,895.32 1,819,929,281.22 EQUITY TOTAL LIABILITIES AND TOTAL ASSETS 3,928,786,076.40 3,101,185,734.00 3,928,786,076.40 3,101,185,734.00 SHAREHOLDERS' EQUITY

The accompanying notes form an integral part of the financial statements.

- 4 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

FOR THE YEAR ENDED 31 DECEMBER 2013

Consolidated Income Statement Unit: RMB ITEM Notes 2013 2012 I. Revenue 1,780,774,836.30 1,783,846,134.76 Including: Operating income (V)40 1,780,774,836.30 1,783,846,134.76 less:Total operating costs 910,134,739.90 844,601,418.52 Including: Operating costs (V)40 910,134,739.90 844,601,418.52 Business taxes and surcharges (V)41 6,761,096.81 61,151,246.32 General and administrative expenses 165,246,053.81 153,432,971.72 Financial expenses (V)42 40,956,491.50 70,763,164.30 Impairment losses of assets (V)43 448,204.74 331,339.05 Add: Investment income (V)44 102,054,621.30 83,518,912.23 Including: Income from investments in associates (V)44 97,910,121.30 83,158,912.23 and joint ventures II. Operating profit 759,282,870.84 737,084,907.08 Add: Non-operating income (V)45 2,848,306.47 7,638,387.73 Less: Non-operating expenses (V)46 2,142,654.06 3,828,736.12 Including: Losses from disposal of non-current assets (V)46 1,721,447.10 2,940,282.82 III. Gross profit 759,988,523.25 740,894,558.69 Less: Income tax expenses (V)47 117,508,608.50 125,125,048.22 IV. Net profit 642,479,914.75 615,769,510.47 Net profit attributable to shareholders of the parent 502,894,547.79 467,103,270.43 Profit or loss attributable to minority shareholders 139,585,366.96 148,666,240.04 V. Earnings per share: (V)50 (I) Basic earnings per share 0.780 0.724 (II) Diluted earnings per share 0.780 0.724 VI. Other comprehensive income (V)51 169,648.00 (357,277.42) VII. Total comprehensive income attributable to: 642,649,562.75 615,412,233.05 Shareholders of the parent 503,064,195.79 466,745,993.01 Minority shareholders 139,585,366.96 148,666,240.04

The accompanying notes form an integral part of the financial statements.

- 5 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

FOR THE YEAR ENDED 31 DECEMBER 2013

Income Statement of the Company Unit: RMB ITEM Notes 2013 2012 I. Revenue (XII)4 155,089,767.54 204,419,906.94 Less: Operating costs (XII)4 145,436,954.76 144,778,845.90 Business taxes and surcharges 3,695,843.70 8,091,481.32 General and administrative expenses 58,199,111.70 58,189,832.26 Financial expenses 20,545,208.95 37,920,456.99 Impairment loss of assets 161,950.98 79,777.32 Add: Investment income (XII)5 438,076,114.97 225,487,155.21 Including: Income from investments in associates (XII)5 and joint ventures 39,646,172.10 29,403,289.36 II. Operating profit 365,126,812.42 180,846,668.36 Add: Non-operating income 815,606.53 1,038,992.97 Less: Non-operating expenses 815,093.97 2,422,655.45 Including: Losses from disposal of non-current assets 815,073.97 2,416,755.45 III. Gross profit 365,127,324.98 179,463,005.88 Less: Income tax expenses 1,240,064.59 (10,351,390.47) IV. Net profit 363,887,260.39 189,814,396.35 V. Earnings per share: (I) Basic earnings per share N/A N/A (II) Diluted earnings per share N/A N/A VI. Other comprehensive income 277,500.00 (360,000) VII. Total comprehensive income 364,164,760.39 189,454,396.35

The accompanying notes form an integral part of the financial statements.

- 6 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

FOR THE YEAR ENDED 31 DECEMBER 2013

Consolidated Cash Flow Statement Unit: RMB ITEM Notes 2013 2012 I. Cash Flows from Operating Activities: Cash receipts from sales of goods and rendering of services 1,859,560,512.28 1,740,376,273.96 Receipts of tax refunds - 1,003,912.60 Other cash receipts relating to operating activities (V)52(1) 8,286,664.30 13,442,676.27 Sub-total of cash inflows 1,867,847,176.58 1,754,822,862.83 Cash payments for goods purchased and services received 502,448,395.54 472,056,723.83 Cash payments to and on behalf of employees 273,626,675.84 234,641,704.00 Payments of all types of taxes 126,936,297.18 282,874,706.61 Other cash payments relating to operating activities (V)52(2) 67,657,510.79 66,777,275.68 Sub-total of cash outflows 970,668,879.35 1,056,350,410.12 Net Cash Flows from Operating Activities (V)53(1) 897,178,297.23 698,472,452.71 II. Cash Flows from Investing Activities: Cash receipts from investments income 67,052,532.55 72,263,700.00 Net cash receipts from disposal of fixed assets, intangible assets 2,866,775.11 5,366,442.00 and other long-term assets Sub-total of cash inflows 69,919,307.66 77,630,142.00 Cash payments to acquire or construct fixed assets, intangible 405,953,935.88 492,432,594.36 assets and other long-term assets Net cash payments for acquisition of subsidiaries and other business - 100,000,000.00 units Sub-total of cash outflows 405,953,935.88 592,432,594.36 Net Cash Flows from Investing Activities (336,034,628.22) (514,802,452.36) III. Cash Flows from Financing Activities: Cash receipts from borrowings 927,597,800.00 1,720,960,000.00 Cash receipts from issue of bonds 994,500,000.00 496,000,000.00 Sub-total of cash inflows 1,922,097,800.00 2,216,960,000.00 Cash repayments of borrowings 1,715,978,100.00 1,875,060,000.00 Cash payments for distribution of dividends or profit or interest 362,918,289.45 689,142,356.70 Including: Payments for distribution of dividends or profit to 66,317,742.55 365,161,451.00 minorities Other cash payments relating to financing activities (V)52(3) 339,392.00 400,000.00 Sub-total of cash outflows 2,079,235,781.45 2,564,602,356.70 Net Cash Flows from Financing Activities (157,137,981.45) (347,642,356.70) IV. Effect of Foreign Exchange Rate Changes on Cash and Cash (3,321,738.62) 38,981.13 Equivalents V. Net Increase in Cash and Cash Equivalents 400,683,948.94 (163,933,375.22) Add: Opening balance of Cash and Cash Equivalents (V)53(2) 314,855,567.54 478,788,942.76 VI. Closing Balance of Cash and Cash Equivalents (V)53(2) 715,539,516.48 314,855,567.54

The accompanying notes form an integral part of the financial statements.

- 7 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

FOR THE YEAR ENDED 31 DECEMBER 2013

Cash Flow Statement of the Company Unit: RMB ITEM Notes 2013 2012 I. Cash Flows from Operating Activities: Cash receipts from sales of goods and rendering of 160,730,884.14 196,415,023.46 services Other cash receipts relating to operating activities 546,048,324.98 483,754,807.00 Sub-total of cash inflows 706,779,209.12 680,169,830.46 Cash payments for goods purchased and services received 95,241,672.66 98,019,837.98 Cash payments to and on behalf of employees 80,840,818.97 64,026,116.00 Payments of all types of taxes 7,005,330.73 9,956,452.82 Other cash payments relating to operating activities 977,070,461.40 980,803,386.02 Sub-total of cash outflows 1,160,158,283.76 1,152,805,792.82 Net Cash Flows from Operating Activities (XII)7 (453,379,074.64) (472,635,962.36) II. Cash Flows from Investing Activities: Cash receipts from investments income 478,419,013.06 580,014,636.64 Net cash receipts from disposal of fixed assets, 161,756.90 208,360.00 intangible assets and other long-term assets Sub-total of cash inflows 478,580,769.96 580,222,996.64 Cash payments to acquire or construct fixed assets, 6,281,545.75 10,669,757.85 intangible assets and other long-term assets Cash payments to acquire investments 100,000,000.00 100,000,000.00 Sub-total of cash outflows 106,281,545.75 110,669,757.85 Net Cash Flows from Investing Activities 372,299,224.21 469,553,238.79 III. Cash Flows from Financing Activities: Cash receipts from borrowings 249,335,800.00 719,060,000.00 Cash receipts from issue of bonds 994,500,000.00 496,000,000.00 Sub-total of cash inflows 1,243,835,800.00 1,215,060,000.00 Cash repayments of borrowings 576,886,100.00 969,060,000.00 Cash payments for distribution of dividends or profit or 269,840,793.57 279,799,308.00 interest Other cash payments relating to financing activities 339,392.00 400,000.00 Sub-total of cash outflows 847,066,285.57 1,249,259,308.00 Net Cash Flows from Financing Activities 396,769,514.43 (34,199,308.00) IV. Effect of Foreign Exchange Rate Changes on Cash (152,847.10) (16,238.00) and Cash Equivalents V. Net Increase in Cash and Cash Equivalents 315,536,816.90 (37,298,269.57) Add: Opening balance of Cash and Cash Equivalents (XII)7 149,792,424.85 187,090,694.42 VI. Closing Balance of Cash and Cash Equivalents (XII)7 465,329,241.75 149,792,424.85

The accompanying notes form an integral part of the financial statements.

- 8 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

FOR THE YEAR ENDED 31 DECEMBER 2013

Consolidated Statement of Changes in Shareholders’ Equity Unit: RMB

2013 2012

Attributable to shareholders of the parent Attributable to shareholders of the parent Total Total Special Surplus Unappropriated Minority shareholders' Special Surplus Unappropriated Minority shareholders' ITEM Share capital Capital reserve reserve reserve profit Others interests equity Share capital Capital reserve reserve reserve profit Others interests equity I. Closing balance of the preceding 644,763,730.00 165,866,055.65 1,394,831.60 464,704,268.52 2,414,907,916.91 (13,604,717.50) 786,977,820.26 4,465,009,905.44 644,763,730.00 166,226,055.65 - 421,692,405.52 2,248,722,001.48 (13,607,440.08) 638,267,320.92 4,106,064,073.49 year

Add: Changes in accounting policies ------

Corrections of prior period errors ------

Others ------

II. Opening balance of the year 644,763,730.00 165,866,055.65 1,394,831.60 464,704,268.52 2,414,907,916.91 (13,604,717.50) 786,977,820.26 4,465,009,905.44 644,763,730.00 166,226,055.65 - 421,692,405.52 2,248,722,001.48 (13,607,440.08) 638,267,320.92 4,106,064,073.49

III. Changes for the year - 277,500.00 799,346.80 18,981,440.00 249,863,872.79 (107,852.00) -6,748,031.16 263,066,276.43 - (360,000.00) 1,394,831.60 43,011,863.00 166,185,915.43 2,722.58 148,710,499.34 358,945,831.95

(I) Net profit - - - - 502,894,547.79 - 139,585,366.96 642,479,914.75 - - - - 467,103,270.43 - 148,666,240.04 615,769,510.47

(II) Other comprehensive income - 277,500.00 - - - (107,852.00) - 169,648.00 - (360,000.00) - - - 2,722.58 - (357,277.42)

Subtotal of (I) and (II) - 277,500.00 - - 502,894,547.79 (107,852.00) 139,585,366.96 642,649,562.75 - (360,000.00) - - 467,103,270.43 2,722.58 148,666,240.04 615,412,233.05

(III) contributions and reduction in ------capital

1. Capital contribution from ------shareholders 2. Share-based payment recognised in ------shareholders' equity

3. Others ------

(IV) Profit distribution - - - 18,981,440.00 (253,030,675.00) - (146,289,137.91) (380,338,372.91) - - - 43,011,863.00 (300,917,355.00) - - (257,905,492.00)

1. Transfer to surplus reserve - - - 18,981,440.00 (18,981,440.00) ------43,011,863.00 (43,011,863.00) - - -

2. Transfer to general reserve ------

3. Distributions to shareholders - - - - (234,049,235.00) - (146,289,137.91) (380,338,372.91) - - - - (257,905,492.00) - - (257,905,492.00)

4. Others ------(V) Transfers within shareholders' ------equity 1. Capitalisation of capital reserve ------

2. Capitalisation of surplus reserve ------

3. Loss made up by surplus reserve ------

4. Others ------

(VI) Special reserve - - 799,346.80 - - - (44,260.21) 755,086.59 - - 1,394,831.60 - - - 44,259.30 1,439,090.90

1. Withdrawn in the period - - 14,841,719.02 - - - 4,847,619.51 19,689,338.53 - - 10,853,323.95 - - - 3,953,633.13 14,806,957.08

2. Utilized in the period - - (14,042,372.22) - - - (4,891,879.72) (18,934,251.94) - - (9,458,492.35) - - - (3,909,373.83) (13,367,866.18)

(VII) Others ------

IV. Closing balance of the year 644,763,730.00 166,143,555.65 2,194,178.40 483,685,708.52 2,664,771,789.70 (13,712,569.50) 780,229,789.10 4,728,076,181.87 644,763,730.00 165,866,055.65 1,394,831.60 464,704,268.52 2,414,907,916.91 (13,604,717.50) 786,977,820.26 4,465,009,905.44

The accompanying notes form an integral part of the financial statements. - 9 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

FOR THE YEAR ENDED 31 DECEMBER 2013

Statement of Changes in Shareholders' Equity of the Company Unit: RMB

2013 2012 Special Unappropriated Total shareholders' Special Unappropriated Total shareholders' Share capital Capital reserve reserve Surplus reserve profit equity Share capital Capital reserve reserve Surplus reserve profit equity I. Closing balance of the preceding year 644,763,730.00 153,078,327.18 240,348.59 464,704,268.52 557,142,606.93 1,819,929,281.22 644,763,730.00 153,438,327.18 - 421,692,405.52 668,245,565.58 1,888,140,028.28 Add: Changes in accounting policies ------Corrections of prior period errors ------Others ------II. Opening balance of the year 644,763,730.00 153,078,327.18 240,348.59 464,704,268.52 557,142,606.93 1,819,929,281.22 644,763,730.00 153,438,327.18 - 421,692,405.52 668,245,565.58 1,888,140,028.28 III. Changes for the year - 277,500.00 (119,911.29) 18,981,440.00 110,856,585.39 129,995,614.10 - (360,000.00) 240,348.59 43,011,863.00 (111,102,958.65) (68,210,747.06) (I) Net profit - - - - 363,887,260.39 363,887,260.39 - - - - 189,814,396.35 189,814,396.35 (II) Other comprehensive income - 277,500.00 - - - 277,500.00 - (360,000.00) - - - (360,000.00) Subtotal of (I) and (II) - 277,500.00 - - 363,887,260.39 364,164,760.39 - (360,000.00) - - 189,814,396.35 189,454,396.35 (III) Shareholders' contributions and ------reduction in capital 1. Capital contribution from shareholders ------2. Share-based payment recognised in ------shareholders' equity 3. Others ------(IV) Profit distribution - - - 18,981,440.00 (253,030,675.00) (234,049,235.00) - - - 43,011,863.00 (300,917,355.00) (257,905,492.00) 1. Transfer to surplus reserve - - - 18,981,440.00 (18,981,440.00) - - - - 43,011,863.00 (43,011,863.00) - 2. Transfer to general reserve ------3. Distributions to shareholders - - - - (234,049,235.00) (234,049,235.00) - - - - (257,905,492.00) (257,905,492.00) 4. Others ------(V) Transfers within shareholders' equity ------1. Capitalisation of capital reserve ------2. Capitalisation of surplus reserve ------3. Loss made up by surplus reserve ------4. Others ------(VI) Special reserve - - (119,911.29) - - (119,911.29) - - 240,348.59 - - 240,348.59 1. Withdrawn in the period - - 2,044,199.16 - - 2,044,199.16 - - 1,431,300.75 - - 1,431,300.75 2. Utilized in the period - - (2,164,110.45) - - (2,164,110.45) - - (1,190,952.16) - - (1,190,952.16) (VII) Others ------IV. Closing balance of the year 644,763,730.00 153,355,827.18 120,437.30 483,685,708.52 667,999,192.32 1,949,924,895.32 644,763,730.00 153,078,327.18 240,348.59 464,704,268.52 557,142,606.93 1,819,929,281.22

The accompanying notes form an integral part of the financial statements.

- 10 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(I) GENERAL

Shenzhen Chiwan Wharf Holdings Limited (the "Company") was a joint stock limited company reorganized from Shenzhen Chiwan Wharf Co., Ltd on 16 January 1993 as approved by General Office of Shenzhen Municipal People's Government (filed as Shen Fu Ban Fu [1993] No. 357). On 18 February 1993, under the approval released by People's Bank of China Shenzhen Branch (filed as Shen Ren Yin Fu Zi [1993] No.038), the Company issued, by public offering, the ordinary shares of 310,470,000 shares, including the domestic shares ("A shares") of 46,000,000 shares, and domestically listed foreign shares ("B shares") of 40,000,000 shares. Both shares were listed on Shenzhen Stock Exchange on 5 May 1993.

As of 31 December 2005, the total shares of the Company amounted to 644,763,730, after several times of capitalization of capital reserves and additional issuances during the period between 1993 and 2005.

On 26 May 2006, the stockholders' meeting of the Company approved the spilt-share reform under which a consideration comprising of every 1 A-share, cash of RMB11.5 and 8 put warrants was granted by China Nanshan Development (Group) Incorporation ("Nanshan Group"), the non- circulating shareholder of the Company, to each circulating shareholder holding 10 A-shares of the Company. After implementation of the split-share reform, the total number of A-shares remained unchanged with 370,802,900 shares held by Nanshan Group, occupying 57.51% of the total shares.

On 13 July 2011, Nanshan Group obtained 75,100 shares of A shares in the secondary market; as a result, the number of A-shares held by Nanshan Group arrived at 370,878,000, occupying 57.52% of the total shares.

On 17 September 2012, China Merchants Holdings International Company Limited (the "CMHI") signed a shareholding entrustment agreement with Nanshan Group, subject to which Nanshan Group entrusted CMHI with its holding in Shenzhen Chiwan Wharf of A-shares of 370,878,000 shares (57.52% of the total shares). Additionally, 55,314,200 B-shares indirectly held by CMHI via Jing Feng Co., Ltd, a subsidiary of CMHI, plus the voting rights obtained via entrustment, make up of 66.10% of the voting right of the Company.

On 1 November 2012, the China Securities Regulatory Commission ("CSRC") approved the Announcement of China Merchants Holdings International Company Limited Concerning the Purchase Report of Shenzhen Chiwan Wharf Holding Limited and the Exemption of the Offer Obligation (filed as Zhen Jian Xu Ke [2012] No.1428), exempting CMHI from the offer obligation resulted from the fact of controlling Shenzhen Chiwan Wharf's 370,878,000 shares through stock custody.

On 27 December 2012, Nanshan Group signed an equity transfer agreement with Shenzhen Malai Warehouse Co., Ltd, a subsidiary of CMHI, subject to which Nanshan Group would transfer 161,190,933 A-shares of the Company to Shenzhen Malai Warehouse Co., Ltd.

- 11 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(I) GENERAL - continued

On 6 March 2013, the Company received the Reply on Certain Issues Regarding Agreed Transfer of State-owned Shares of Shenzhen Chiwan Wharf Holdings Ltd. released by the State-owned Assets Supervision and Administration Commission (filed as Guo Zi Chan Quan [2013] No. 94), which approved Nanshan Group to transfer 161,190,933 A-shares of the Company to Shenzhen Malai Warehouse Co., Ltd. The transfer procedures of registration of the above shares have been completed on April 25th, 2013.

Therefore, the parent of the Company has been changed from Nanshan Group to CMHI since 1 November 2012, with the ultimate actual controller of the Company having always been China Merchants Group ("CMG").

The headquarters of the Company is located in Shenzhen Guangdong Province. The Company and its subsidiaries (collectively the "Group") are principally engaged in the provision of cargo handling, warehousing, land and sea transportation services, cargo packing, agency business and the other services.

(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES

1. Basis of preparation of financial statements

The Group has adopted the Accounting Standards for Business Enterprises issued by the Ministry of Finance (MoF) on 15 February 2006. In addition, the Group has disclosed relevant financial information in accordance with Information Disclosure and Presentation Rules for Companies Offering Securities to the Public No. 15-General Provisions on Financial Reporting (Revised in 2010).

Basis of accounting and principle of measurement

The Group has adopted the accrual basis of accounting. Except for certain financial instruments which are measured at fair value, the Group adopts the historical cost as the principle of measurement of the financial statements. Upon being restructured into a stock company, the fixed assets and intangible assets initially contributed by the state-owned shareholders are recognized based on the valuation amounts confirmed by the state-owned assets administration department. Where assets are impaired, provisions for asset impairment are made in accordance with the relevant requirements.

2. Statement of compliance with the Accounting Standards for Business Enterprises

The financial statements of the Company have been prepared in accordance with the Accounting Standards for Business Enterprises, and present truly and completely, the Company's and consolidated financial position as of 31 December 2013, and the Company's and consolidated results of operations and cash flows for the year then ended.

3. Accounting period

The Group has adopted the calendar year as its accounting year, e.g. from 1 January to 31 December.

- 12 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES – continued

4. Functional currency

Renminbi ("RMB") is the currency of the primary economic environment in which the Company and its domestic subsidiaries operate. Therefore, the Company and its domestic subsidiaries choose RMB as their functional currency. The Company's foreign subsidiary chooses RMB or Hong Kong dollars ("HKD") as its functional currency on the basis of the primary economic environment in which it operates. The Group adopts RMB to prepare its financial statements.

5. The accounting treatment of business combinations involving or not involving enterprises under common control

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

5.1 Business combinations involving enterprises under common control

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

Assets and liabilities obtained shall be measured at their respective carrying amounts as recorded by the combining entities at the date of the combination. The difference between the carrying amount of the net assets obtained and the carrying amount of the consideration paid for the combination is adjusted to the share premium in capital reserve. If the share premium is not sufficient to absorb the difference, any excess shall be adjusted against retained earnings.

Costs that are directly attributable to the combination are charged to profit or loss in the period in which they are incurred.

5.2 Business combinations not involving enterprises under common control and goodwill

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

The cost of combination is the aggregate of the fair values, at the acquisition date, of the assets given, liabilities incurred or assumed, and equity securities issued by the acquirer, in exchange for control of the acquiree, the intermediary expenses (fees in respect of auditing, legal services, valuation and consultancy services, etc.) and other administrative expenses attributable to the business combination are recognized in profit or loss in the periods when they are incurred. Where a business combination not involving enterprises under common control is achieved in stages that involve multiple transactions, the cost of combination is the sum of the consideration paid at the acquisition date and the fair value of the equity in the acquiree held before the acquisition. The equity held in the acquiree before the acquisition date is remeasured at its fair value at the acquisition date, with any difference between its fair value and its carrying amount being recognized as investment income, and the other comprehensive income relating to the equity held in the acquiree before the acquisition date being transferred to investment income.

- 13 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

5. The accounting treatment of business combinations involving or not involving enterprises under common control - continued

The acquiree's identifiable assets, liabilities and contingent liabilities acquired by the acquirer in a business combination that meet the recognition criteria shall be measured at fair value at the acquisition date. Where the cost of combination exceeds the acquirer's interest in the fair value of the acquiree's identifiable net assets, the difference is treated as an asset and recognized as goodwill, which is measured at cost on initial recognition. Where the cost of combination is less than the acquirer's interest in the fair value of the acquiree's identifiable net assets, the acquirer reassesses the measurement of the fair values of the acquiree's identifiable assets, liabilities and contingent liabilities and measurement of the cost of combination. If after that reassessment, the cost of combination is still less than the acquirer's interest in the fair value of the acquiree's identifiable net assets, the acquirer recognizes the remaining difference immediately in profit or loss for the current period.

Goodwill arising on a business combination is measured at cost less accumulated impairment losses, and is presented separately in the consolidated financial statements. It is tested for impairment at least at the end of each year.

For the purpose of impairment testing, goodwill is considered together with the related assets groups, i.e., goodwill is reasonably allocated to the related assets groups or each of assets groups expected to benefit from the synergies of the combination. In testing an assets group with goodwill for impairment, an impairment loss is recognized if the recoverable amount of the assets group or sets of assets groups (including goodwill) is less than its carrying amount. The impairment loss is firstly allocated to reduce the carrying amount of any goodwill allocated to such assets group or sets of assets groups, and then to the other assets of the group pro-rata basis on the basis of the carrying amount of each asset (other than goodwill) in the group.

The recoverable amount of an asset is the higher of its fair value less costs of disposal and the present value of the future cash flows expected to be derived from the asset. An asset's fair value is the price in a sale agreement in an arm's length transaction. If there is no sale agreement but an asset is traded in an active market, fair value is the current bid price. If there is no sale agreement or active market for an asset, fair value is assessed based on the best information available. Costs of disposal include legal costs related to the disposal of the asset, related taxes, costs of removing the asset and direct costs to bring the asset into condition for its sale. The present value of expected future cash flows of an asset shall be determined by estimating the future cash flows to be derived from continuing use of the asset and from its ultimate disposal and applying the appropriate discount rate to those future cash flows.

The impairment of goodwill is recognized in profit or loss for the period in which it is incurred and will not be reversed in any subsequent period.

- 14 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

6. Preparation of consolidated financial statements

The scope of consolidation in the consolidated financial statements is determined on the basis of control. Control is the power to govern the financial and operating policies of an enterprise so as to obtain benefits from its operating activities.

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

For subsidiaries acquired through a business combination involving enterprises not under common control, the operating results and cash flows from the acquisition date (the date when control is obtained) are included in the consolidated income statement and consolidated statement of cash flows, as appropriate, and no adjustment is made to the opening balances and comparative figures in the consolidated financial statements.

No matter when the business combination occurs in the reporting period, subsidiaries acquired through a business combination involving enterprises under common control are included in the Group's scope of consolidation as if they had been included in the scope of consolidation from the date when they first came under the common control of the ultimate controlling party. Their operating results and cash flows from the date when they first came under the common control of the ultimate controlling party are included in the consolidated income statement and consolidated statement of cash flows, as appropriate.

The significant accounting policies and accounting periods adopted by the subsidiaries are determined based on the uniform accounting policies and accounting periods set out by the Company.

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

The portion of subsidiaries' equity that is not attributable to the parent is treated as minority interests and presented as "minority interests" in the consolidated balance sheet under shareholders' equity. The portion of net profits or losses of subsidiaries for the period attributable to minority interests is presented as "minority interests" in the consolidated income statement under the "net profit" line item.

When the amount of loss for the period attributable to the minority shareholders of a subsidiary exceeds the minority shareholders' portion of the opening balance of shareholders' equity of the subsidiary, the excess amount is still allocated against minority interests.

Acquisition of minority interests or disposals of interests in a subsidiary that do not result in the loss of control over the subsidiary are accounted for as equity transactions. The carrying amounts of the parent's interests and minority interests are adjusted to reflect the changes in their relative interests in the subsidiary. The difference between the amount by which the minority interests are adjusted and the fair value of the consideration paid or received is adjusted to shareholders' equity (capital reserve). If the capital reserve is not sufficient to absorb the difference, the excess are adjusted against retained earnings. - 15 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

6. Preparation of consolidated financial statements - continued

When the group loses control over a subsidiary due to disposal of equity investment or other reason, any retained interest is re-measured at its fair value at the date when control is lost. The difference between (i) the aggregate of the consideration received on disposal and the fair value of any retained interest and (ii) the share of the former subsidiary's net assets cumulatively calculated from the acquisition date according to the original proportion of ownership interests is recognized as investment income in the period in which control is lost. Other comprehensive income associated with investment in the former subsidiary is reclassified to investment income in the period in which control is lost.

7. Cash and cash equivalents

Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash equivalents are the Group's short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

8. Translation of transactions and financial statements denominated in foreign currencies

8.1 Transactions denominated in foreign currencies

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

At the balance sheet date, foreign currency monetary items are translated into RMB using the spot exchange rates at the balance sheet date. Exchange differences arising from the differences between the spot exchange rates prevailing at the balance sheet date and those on initial recognition or at the previous balance sheet date are recognized in profit or loss for the period, except that (1) exchange differences related to a specific-purpose borrowing denominated in foreign currency that qualify for capitalization are capitalized as part of the cost of the qualifying asset during the capitalization period; (2) exchange differences related to hedging instruments for the purpose of hedging against foreign currency risks are accounted for using hedge accounting; (3) exchange differences arising from change in the carrying amounts other than the amortized cost of available-for-sale monetary items are recognized as other comprehensive income and included in capital reserve.

Foreign currency non-monetary items measured at historical cost are translated to the amounts in functional currency at the spot exchange rates on the dates of the transactions; the amounts in functional currency remain unchanged. Foreign currency non-monetary items measured at fair value are re-translated at the spot exchange rate on the date the fair value is determined. Difference between the re-translated functional currency amount and the original functional currency amount is treated as changes in fair value including changes of exchange rate and is recognized in profit and loss or as other comprehensive income included in capital reserve.

- 16 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

8. Translation of transactions and financial statements denominated in foreign currencies - continued

8.2 Translation of financial statements denominated in foreign currencies

For the purpose of preparing the consolidated financial statements, financial statements of a foreign operation are translated from the foreign currency into RMB using the following method: assets and liabilities on the balance sheet are translated at the spot exchange rate prevailing at the balance sheet date; shareholders' equity items except for retained earnings are translated at the spot exchange rates at the dates on which such items arose; all items in the income statement as well as items reflecting the amount of profit distributed are translated at the spot exchange rates on the dates of the transactions; the opening balance of retained earnings is the translated closing balance of the previous year's retained earnings; the closing balance of retained earnings is calculated and presented on the basis of each translated income statement and profit distribution item. The difference between the translated assets and the aggregate of liabilities and shareholders' equity items is separately presented, as the translation difference of financial statements denominated in foreign currencies, under the shareholders' equity in the balance sheet.

Cash flows arising from transaction in a foreign currency and the cash flows of a foreign subsidiary are translated at the spot exchange rate on the date of the cash flows. The effect of exchange rate changes on cash and cash equivalents is regarded as a reconciling item and presented separately in the cash flow statement as "effect of exchange rate changes on cash and cash equivalents".

The opening balances and the comparative figures of previous year are presented at the translated amounts of previous year's financial statements.

On disposal of the Group's entire interest in a foreign operation, or disposal of certain interest or due to other reasons resulting in a loss of control over a foreign operation, the Group transfers the accumulated translation differences attributable to the shareholders' equity of the parent that relating to translation of the financial statements of that foreign operation, presented under shareholders' equity, to profit or loss in the period in which the disposal occurs.

In case of a disposal or other reason that does not result in the Group losing control over a foreign operation, the proportionate share of accumulated translation differences are re-attributed to non- controlling interests and are not recognized in profit and loss. For partial disposals of associates or joint ventures, the proportionate share of the accumulated translation differences is reclassified to profit or loss.

- 17 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

9. Financial instruments

Financial assets and financial liabilities are recognized when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. For financial assets and financial liabilities at fair value through profit or loss, transaction costs are immediately recognized in profit or loss. For other financial assets and financial liabilities, transaction costs are included in their initial recognized amounts.

9.1 Determination of fair value

Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction. For a financial instrument which has an active market, the Group uses the quoted price in the active market to establish its fair value. For a financial instrument which has no active market, the Group establishes fair value by using a valuation technique. Valuation techniques include using recent arm's length market transactions between knowledgeable, willing parties, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models.

9.2 Effective interest method

The effective interest method is a method of calculating the amortized cost of a financial asset or a financial liability (or a group of financial assets or financial liabilities) and of allocating the interest income or interest expense over the relevant period, using the effective interest rate. The effective interest rate is the rate that exactly discounts estimated future cash flows through the expected life of the financial asset or financial liability or, where appropriate, a shorter period to the net carrying amount of the financial asset or financial liability.

When calculating the effective interest rate, the Group estimates future cash flows considering all contractual terms of the financial asset or financial liability (without considering future credit losses), and also considers all fees paid or received between the parties to the contract giving rise to the financial asset and financial liability that are an integral part of the effective interest rate, transaction costs, and premiums or discounts etc.

9.3 Classification, recognition and measurement of financial assets

On initial recognition, the Group’s financial assets are classified into one of the four categories, including financial assets at fair value through profit or loss ("FVTPL"), held-to-maturity investments, loans and receivables, and available-for-sale financial assets. All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

- 18 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

9. Financial instruments - continued

9.3 Classification, recognition and measurement of financial assets - continued

9.3.1 Financial Assets at Fair Value through Profit or Loss ("FVTPL")

Financial assets at fair value through profit or loss ("FVTPL") include financial assets held for trading and those designated as at fair value through profit or loss.

A financial asset is classified as held for trading if one of the following conditions is satisfied: (1) it has been acquired principally for the purpose of selling in the near term; or (2) on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and there is objective evidence that the Group has a recent actual pattern of short-term profit-taking; or (3) it is a derivative that is not designated and effective as a hedging instrument, or a financial guarantee contract, or a derivative that is linked to and must be settled by delivery of an unquoted equity instrument (without a quoted price in an active market) whose fair value cannot be reliably measured.

A financial asset may be designated as at FVTPL upon initial recognition only when one of the following conditions is satisfied: (1) such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise result from measuring assets or recognizing the gains or losses on them on different bases; or (2) the financial asset forms part of a group of financial assets or a group of financial assets and financial liabilities, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group's documented risk management or investment strategy, and information about the grouping is reported to key management personnel on that basis.

Financial assets at FVTPL are subsequently measured at fair value. Any gains or losses arising from changes in the fair value and any dividend or interest income earned on the financial assets are recognized in profit or loss.

9.3.2 Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity dates that the Group's management has the positive intention and ability to hold to maturity.

Held-to-maturity investments are subsequently measured at amortized cost using the effective interest method. Gain or loss arising from derecognition, impairment or amortization is recognized in profit or loss.

9.3.3 Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Financial assets classified as loans and receivables by the Group include notes receivable, accounts receivable, interest receivable, dividends receivable, and other receivables.

Loans and receivables are subsequently measured at amortized cost using the effective interest method. Gain or loss arising from derecognition, impairment or amortization is recognized in profit or loss. - 19 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

9. Financial instruments - continued

9.3 Classification, recognition and measurement of financial assets - continued

9.3.4 Available-for-sale financial assets

Available-for-sale financial assets include non-derivative financial assets that are designated on initial recognition as available for sale, and financial assets that are not classified as financial assets at fair value through profit or loss, loans and receivables or held-to-maturity investments.

Available-for-sale financial assets are subsequently measured at fair value, and gains or losses arising from changes in the fair value are recognized as other comprehensive income and included in the capital reserve, except that impairment losses and exchange differences related to amortized cost of financial assets are recognized in profit or loss, until the financial assets are derecognized, at which time the gains or losses are released and recognized in profit or loss.

Interests obtained and the dividends declared by the investee during the period in which the available-for-sale financial assets are held, are recognized in investment gains.

Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured, and derivative financial assets that are linked to and must be settled by delivery of such unquoted equity instruments are measured at cost.

9.4 Impairment of financial assets

The Group assesses at each balance sheet date the carrying amounts of financial assets other than those at fair value through profit or loss. If there is objective evidence that a financial asset is impaired, the Group determines the amount of any impairment loss. Objective evidence that a financial asset is impaired is evidence that, arising from one or more events that occurred after the initial recognition of the asset, the estimated future cash flows of the financial asset, which can be reliably measured, have been affected.

Objective evidence that a financial asset is impaired includes the following observable events:

(1) Significant financial difficulty of the issuer or obligor; (2) A breach of contract by the borrower, such as a default or delinquency in interest or principal payments; (3) The Group, for economic or legal reasons relating to the borrower's financial difficulty, granting a concession to the borrower; (4) It becoming probable that the borrower will enter bankruptcy or other financial reorganizations; (5) The disappearance of an active market for that financial asset because of financial difficulties of the issuer;

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

9. Financial instruments - continued

9.4 Impairment of financial assets - continued

(6) Upon an overall assessment of a group of financial assets, observable data indicates that there is a measurable decrease in the estimated future cash flows from the group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the group. Such observable data includes: - Adverse changes in the payment status of borrower in the group of assets; - Economic conditions in the country or region of the borrower which may lead to a failure to pay the group of assets; (7) Significant adverse changes in the technological, market, economic or legal environment in which the issuer of equity instruments operates, indicating that the cost of the investment in the equity instrument may not be recovered by the investor; (8) A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost; (9) Other objective evidence indicating there is an impairment of a financial asset.

- Impairment of financial assets measured at amortized cost

If financial assets carried at cost or amortized cost are impaired, the carrying amounts of the financial assets are reduced to the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate. The amount of reduction is recognized as an impairment loss in profit or loss. If, subsequent to the recognition of an impairment loss on financial assets carried at amortized cost, there is objective evidence of a recovery in value of the financial assets which can be related objectively to an event occurring after the impairment is recognized, the previously recognized impairment loss is reversed. However, the reversal does not result in a carrying amount of the financial asset that exceeds what the amortized cost would have been had the impairment not been recognized at the date the impairment is reversed.

For a financial asset that is individually significant, the Group assesses the asset individually for impairment. For a financial asset that is not individually significant, the Group assesses the asset individually for impairment or includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset (whether significant or not), it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets for which an impairment loss is individually recognized are not included in a collective assessment of impairment.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

9. Financial instruments - continued

9.4 Impairment of financial assets - continued

- Impairment of available-for-sale financial assets

When an available-for-sale financial asset is impaired, the cumulative loss arising from decline in fair value previously recognized directly in capital reserve is reclassified from the capital reserve to profit or loss. The amount of the cumulative loss that is reclassified from capital reserve to profit or loss is the difference between the acquisition cost (net of any principal repayment and amortization) and the current fair value, less any impairment loss on that financial asset previously recognized in profit or loss.

If, subsequent to the recognition of an impairment loss on available-for-sale financial assets, there is objective evidence of a recovery in value of the financial assets which can be related objectively to an event occurring after the impairment is recognized, the previously recognized impairment loss is reversed. The amount of reversal of impairment loss on available-for-sale equity instruments is recognized as other comprehensive income and included in the capital reserve, while the amount of reversal of impairment loss on available-for-sale debt instruments is recognized in profit or loss.

- Impairment of financial assets measured at cost

If an impairment loss has been incurred on an investment in unquoted equity instrument (without a quoted price in an active market) whose fair value cannot be reliably measured, or on a derivative financial asset that is linked to and must be settled by delivery of such an unquoted equity instrument, the carrying amount of the financial asset is reduced to the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. The amount of reduction is recognized as an impairment loss in profit or loss. The impairment loss on such financial asset is not reversed once it is recognized.

9.5 Transfer of financial assets

The Group derecognizes a financial asset if one of the following conditions is satisfied: (1) the contractual rights to the cash flows from the financial asset expire; or (2) the financial asset has been transferred and substantially all the risks and rewards of ownership of the financial asset is transferred to the transferee; or (3) although the financial asset has been transferred, the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset but has not retained control of the financial asset.

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(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

9. Financial instruments - continued

9.5 Transfer of financial assets - continued

If the Group neither transfers nor retains substantially all the risks and rewards of ownership of a financial asset, and it retains control of the financial asset, it recognizes the financial asset to the extent of its continuing involvement in the transferred financial asset and recognizes an associated liability. The extent of the Group's continuing involvement in the transferred asset is the extent to which it is exposed to changes in the value of the transferred asset.

For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, the difference between (1) the carrying amount of the financial asset transferred; and (2) the sum of the consideration received from the transfer and any cumulative gain or loss that has been recognized in other comprehensive income, is recognized in profit or loss.

If a part of the transferred financial asset qualifies for derecognition, the carrying amount of the transferred financial asset is allocated between the part that continues to be recognized and the part that is derecognized, based on the respective fair values of those parts. The difference between (1) the carrying amount allocated to the part derecognized; and (2) the sum of the consideration received for the part derecognized and any cumulative gain or loss allocated to the part derecognized which has been previously recognized in other comprehensive income, is recognized in profit or loss.

9.6 Classification and recognition of financial liabilities

Debt and equity instruments issued by the Group are classified into financial liabilities or equity on the basis of the substance of the contractual arrangements and definitions of financial liability and equity instrument.

On initial recognition, financial liabilities are classified into financial liabilities at fair value through profit or loss and other financial liabilities.

9.6.1 Financial liabilities at fair value through profit or loss

Financial liabilities at FVTPL consist of financial liabilities held for trading and those designated as at FVTPL on initial recognition.

A financial liability is classified as held for trading if one of the following conditions is satisfied: (1) It has been acquired principally for the purpose of repurchasing in the near term; or (2) On initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and there is objective evidence that the Group has a recent actual pattern of short-term profit-taking; or (3) It is a derivative, except for a derivative that is a designated and effective hedging instrument, or a financial guarantee contract, or a derivative that is linked to and must be settled by delivery of an unquoted equity instrument (without a quoted price in an active market) whose fair value cannot be reliably measured.

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(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

9. Financial instruments - continued

9.6 Classification and recognition of financial liabilities - continued

9.6.1 Financial liabilities at fair value through profit or loss - continued

A financial liability may be designated as at FVTPL upon initial recognition only when one of the following conditions is satisfied: (1) such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise result from measuring liabilities or recognizing the gains or losses on them on different bases; or (2) the financial liability forms part of a group of financial liabilities or a group of financial assets and financial liabilities, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group's documented risk management or investment strategy, and information about the grouping is reported to key management personnel on that basis.

Financial liabilities at FVTPL are subsequently measured at fair value, and any gains or losses arising from changes in the fair value or any dividend or interest expense related with the financial liabilities are recognized in profit or loss.

9.6.2 Other financial liabilities

For a derivative liability that is linked to and must be settled by delivery of an unquoted equity instrument (without a quoted price in an active market) whose fair value cannot be reliably measured, it is subsequently measured at cost. Other financial liabilities are subsequently measured at amortized cost using the effective interest method, with gains or losses arising from derecognition or amortization recognized in profit or loss.

9.6.3 Financial guarantee contracts

A financial guarantee contract is a contract by which the guarantor and the lender agree that the guarantor would settle the debts or bear obligations in accordance with terms of the contract in case the borrower fails to settle the debts. Financial guarantee contracts that are not designated as financial liabilities at fair value through profit or loss, are initially measured at their fair values less the directly attributable transaction costs. Subsequent to initial recognition, they are measured at the higher of: (i) the amount determined in accordance with Accounting Standard for Business Enterprises No. 13 - Contingencies; and (ii) the amount initially recognized less cumulative amortization recognized in accordance with the principles set out in Accounting Standard for Business Enterprises No. 14 - Revenue.

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9. Financial instruments - continued

9.7 Derecognition of Financial Liabilities

The Group derecognizes a financial liability (or part of it) only when the underlying present obligation (or part of it) is discharged. An agreement between the Group (an existing borrower) and an existing lender to replace the original financial liability with a new financial liability with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability.

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

9.8 Derivatives and embedded derivatives

Derivative financial instruments include forward exchange contracts, currency swaps, interest rate swaps and foreign exchange options, etc. Derivatives are initially measured at fair value at the date when the derivative contracts are entered into and are subsequently re-measured to fair value. The resulting gain or loss is recognized in profit or loss unless the derivative is designated and highly effective as a hedging instrument, in which case the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

An embedded derivative is separated from the hybrid instrument, where the hybrid instrument is not designated as a financial asset or financial liability at fair value through profit or loss, and treated as a standalone derivative if 1) the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract; and 2) a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative. If the Group is unable to measure the embedded derivative separately either at acquisition or at a subsequent balance sheet date, it designates the entire hybrid instrument as a financial asset or financial liability at fair value through profit or loss.

9.9 Offsetting financial assets and financial liabilities

Where the Group has a legal right that is currently enforceable to set off the recognized amounts, and intends either to settle on a net basis, or to realize the financial asset and settle the financial liability simultaneously, a financial asset and a financial liability shall be offset with the net amount presented in the balance sheet. Except for the circumstances above, financial assets and financial liabilities shall be presented separately in the balance sheet and shall not be offset.

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(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

9. Financial instruments - continued

9.10 Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. The consideration received from issuing equity instruments, net of transaction costs, is added to shareholders' equity.

All types of distributions (excluding stock dividends) made by the Group to holders of equity instruments are deducted from shareholders' equity. The Group does not recognize any changes in the fair value of equity instruments.

10. Receivables

10.1 Receivables that are individually significant and for which bad debt provision is individually assessed

Basis or monetary criteria for Top five balances of receivables are deemed as determining individually individually significant receivables by the Group. significant receivables For receivables that are individually significant, the Group assesses the receivables individually for impairment; for a Provision methods for receivables financial asset that is not impaired individually, the Group that are individually significant includes the asset in a group of financial assets with and for which bad debt provision similar credit risk characteristics and collectively assesses is individually assessed them for impairment. Receivables for which an impairment loss is individually recognized are not included in a collective assessment of impairment.

10.2 Receivables for which bad debt provision is collectively assessed

Basis for determining a portfolio Portfolio 1 The portfolio primarily includes amounts due from related parties of the Group, deposits and petty cash etc. The risk characteristics of such receivables are different from those of portfolio 2. The Group individually assesses receivables in this portfolio and determines the bad debt provision. Portfolio 2 This portfolio excludes amounts due from related parties of the Group, deposits and petty cash etc. The Group collectively assesses receivables in this portfolio with aging analysis method, by taking historical experience into consideration. Bad debt provision methods for a portfolio Portfolio 1 Specific Identification Method Portfolio 2 Aging Analysis Method

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

10. Receivables - continued

10.2.1 Portfolios that use aging analysis for bad debt provision:

Aging analysis Provision proportion for Provision proportion for Aging accounts receivable (%) other receivables (%) Within 90 days (inclusive) 0 0 More than 91 days but not exceeding 183 0-3 0-3 days More than 184 days but not exceeding 5 5 year More than 1 year but not exceeding 2 20 20 years More than 2 years but not exceeding 3 50 50 years More than 3 years 100 100

10.3 Accounts receivable that are not individually significant but for which individual bad debt provision is individually assessed:

Reasons for making individual As objective evidence indicates the Group is unable to bad debt provision collect the receivables under original terms, the company makes individual bad debt provision. Bad debt provision methods Under bad debt provision method, the provision is recognized by the differences between the expected present value of future cash flows and carrying value.

11. Inventories

11.1 Categories of inventories

Inventories include spare parts, fuel, and low value consumables. Inventories are initially measured at cost. Cost of inventories comprises all costs of purchase, costs of conversion and other expenditures incurred in bringing the inventories to their present location and condition.

11.2 Valuation method of inventories upon delivery

The actual cost of inventories upon delivery is calculated using the weighted average method.

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11. Inventories - continued

11.3 Basis for determining net realizable value of inventories and provision methods for decline in value of inventories

At the balance sheet date, inventories are measured at the lower of cost and net realizable value. If the cost of inventories is higher than the net realizable value, a provision for decline in value of inventories is made. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion, the estimated costs necessary to make the sale and relevant taxes. Net realizable value is determined on the basis of clear evidence obtained, after taking into consideration the purposes of inventories being held and effect of post balance sheet events.

Provision for decline in value of other inventories is made based on the excess of cost of inventory over its net realizable value on an item-by-item basis.

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

11.4 Inventory count system

The perpetual inventory system is maintained for stock system.

11.5 Amortization methods for low cost and short-lived consumable items and packaging materials

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

12. Long-term equity investments

12.1 Determination of investment cost

For a long-term equity investment acquired through a business combination involving enterprises under common control, the investment cost of the long-term equity investment is the attributable share of the carrying amount of the shareholders' equity of the acquiree at the date of combination. For a long-term equity investment acquired through business combination not involving enterprises under common control, the investment cost of the long-term equity investment acquired is the cost of acquisition. The long-term equity investment acquired otherwise than through a business combination is initially measured at its cost.

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12. Long-term equity investments - continued

12.2 Subsequent measurement and recognition of profit or loss

12.2.1 A long-term equity investment accounted for using the cost method

For long-term equity investments over which the Group does not exercise joint control or significant influence and those without quoted prices in an active market and the fair values cannot be reliably measured, the Group accounts for such long-term equity investments using the cost method. Besides, long-term equity investments in subsidiaries are accounted for using the cost method in the Company's separate financial statements. A subsidiary is an investee that is controlled by the Group.

Under the cost method, a long-term equity investment is measured at initial investment cost. Except for cash dividends or profits already declared but not yet paid that are included in the price or consideration actually paid upon acquisition of the long-term equity investment, investment income is recognized in the period in accordance with the attributable share of cash dividends or profit distributions declared by the investee.

12.2.2 A long-term equity investment accounted for using the equity method

The Group accounts for investment in associates and joint ventures using the equity method. An associate is an entity over which the Group has significant influence and a joint venture is an entity over which the Group exercises joint control along with other investors.

Under the equity method, where the initial investment cost of a long-term equity investment exceeds the Group's share of the fair value of the investee's identifiable net assets at the time of acquisition, no adjustment is made to the initial investment cost. Where the initial investment cost is less than the Group's share of the fair value of the investee's identifiable net assets at the time of acquisition, the difference is recognized in profit or loss for the period, and the cost of the long- term equity investment is adjusted accordingly.

Under the equity method, the Group recognizes its share of the net profit or loss of the investee for the period as investment income or loss for the period. The Group recognizes its share of the investee's net profit or loss based on the fair value of the investee's individually identifiable assets at the acquisition date after making appropriate adjustments to conform to the Group's accounting policies and accounting period. Unrealized profits or losses resulting from the Group's transactions with its associates and joint ventures are recognized as investment income or loss to the extent that those attributable to the Group's, equity interest are eliminated. However, unrealized losses resulting from the Group's transactions with its associates and joint ventures which represent impairment losses on the transferred assets are not eliminated. Changes in shareholder's equity of the investee other than net profit or loss are correspondingly adjusted to the carrying amount of the long-term equity investment, and recognized as other comprehensive income which is included in the capital reserve.

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12. Long-term equity investments - continued

12.2 Subsequent measurement and recognition of profit or loss - continued

12.2.2 A long-term equity investment accounted for using the equity method - continued

The Group discontinues recognizing its share of net losses of the investee after the carrying amount of the long-term equity investment together with any long-term interests that in substance form part of its net investment in the investee are reduced to zero. Except that if the Group has incurred obligations to assume additional losses, a provision is recognized according to the obligation expected, and recorded in the investment loss for the period. Where net profits are subsequently made by the investee, the Group resumes recognizing its share of those profits only after its share of the profits exceeds the share of losses previously not recognized.

12.2.3 Disposal of long-term equity investments

On disposal of a long-term equity investment, the difference between the proceeds actually received and receivable and the carrying amount is recognized in profit or loss for the period. For a long-term equity investment accounted for using the equity method, the amount initially included in the shareholders' equity upon disposal is transferred to profit or loss for the period on a pro-rata basis.

12.3 Basis for determining joint control and significant influence over investee

Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Joint control is the contractually agreed sharing of control over an economic activity, and exists only when the strategic financial and operating policy decisions relating to the activity require the unanimous consent of the parties sharing control. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. When determining whether an investing enterprise is able to exercise control or significant influence over an investee, the effect of potential voting rights of the investee (for example, warrants and convertible debts) held by the investing enterprises or other parties that are currently exercisable or convertible shall be considered.

12.4 Impairment assessment and provision method for impairment loss

The Group reviews the long-term equity investments at each balance sheet date to determine whether there is any indication that they have suffered an impairment loss. If an impairment indication exists, the recoverable amounts are estimated. If such recoverable amount is less than its carrying amount, a provision for impairment losses in respect of the deficit is recognized in profit or loss for the period.

Once an impairment loss is recognized for a long-term equity investment, it will not be reversed in any subsequent period.

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13. Investment properties

Investment property is property held to earn rentals or for capital appreciation or both. It includes a land use right that is leased out; a land use right held for transfer upon capital appreciation; and a building that is leased out.

An investment property is measured initially at cost. Subsequent expenditures incurred for such investment property are included in the cost of the investment property if it is probable that economic benefits associated with an investment property will flow to the Group and the subsequent expenditures can be measured reliably, other subsequent expenditures are recognized in profit or loss in the period in which they are incurred.

The Group uses the cost model for subsequent measurement of investment property, and adopts a depreciation or amortization policy for the investment property which is consistent with that for buildings or land use rights.

The Group reviews the investment properties at each balance sheet date to determine whether there is any indication that they have suffered an impairment loss. If an impairment indication exists, the recoverable amounts are estimated. Recoverable amount is estimated on an item-by- item basis. If it is not practical to estimate the recoverable amount of an individual asset, the recoverable amount of the asset group to which the asset belongs will be estimated. If such recoverable amount is less than its carrying amount, a provision for impairment losses in respect of the deficit is recognized in profit or loss for the period.

Once an impairment loss is recognized for an investment property, it will not be reversed in any subsequent period.

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

14. Fixed assets

14.1 Recognition criteria for fixed assets

Fixed assets are tangible assets that are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes, and have useful lives of more than one accounting year. A fixed asset is recognized only when it is probable that economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. Fixed assets are initially measured at cost. Upon being restructured into a stock company, the fixed assets initially contributed by the state-owned shareholders are recognized based on the valuation amounts confirmed by the state-owned assets administration department.

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14. Fixed assets - continued

14.1 Recognition criteria for fixed assets - continued

Subsequent expenditures incurred for the fixed asset are included in the cost of the fixed asset and if it is probable that economic benefits associated with the asset will flow to the Group and the subsequent expenditures can be measured reliably. Meanwhile the carrying amount of the replaced part is derecognized. Other subsequent expenditures are recognized in profit or loss in the period in which they are incurred.

14.2 Depreciation of each category of fixed assets

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

Estimated Estimated Annual Category useful lives residual value depreciation rate Harbor facilities 5 - 50 years 10% 1.8%-18% Warehouses, container 5 - 40 years 10% 2.25%-18% yards and buildings Machinery and 5 - 15 years 10% 6%-18% equipments Motor vehicles, cargo 5 - 20 years 10% 4.5%-18% ships and tugboats Other equipments 5 years 10% 18%

Estimated net residual value of a fixed asset is the estimated amount that the Group would currently obtain from disposal of the asset, after deducting the estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life.

14.3 The method of impairment test and provision for impairment losses of fixed assets

The Group assesses at the balance sheet date whether there is any indication that the fixed assets may be impaired. If there is any indication that such assets may be impaired, recoverable amounts are estimated for such assets. Recoverable amount is estimated on an item-by-item basis. If it is not practical to estimate the recoverable amount of an individual asset, the recoverable amount of the asset group to which the asset belongs will be estimated. If the recoverable amount of an asset or an asset group is less than its carrying amount, the deficit is accounted for as an impairment loss and is recognized in profit or loss.

Once the impairment loss of such assets is recognized, it shall not be reversed in any subsequent period.

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14. Fixed assets - continued

14.4 Other explanations

The Group reviews the useful life and estimated net residual value of a fixed asset and the depreciation method applied at least once at each financial year-end, and account for any change as a change in an accounting estimate.

If a fixed asset is upon disposal or no future economic benefits are expected to be generated from its use or disposal, the fixed asset is derecognized. When a fixed asset is sold, transferred, retired or damaged, the amount of any proceeds on disposal of the asset net of the carrying amount and related taxes is recognized in profit or loss for the period.

15. Construction in progress

Construction in progress is measured at its actual costs. The actual costs include various construction expenditures during the construction period, borrowing costs capitalized before it is ready for intended use and other relevant costs. Construction in progress is not depreciated. Construction in progress is transferred to a fixed asset when it is ready for intended use.

The Group assesses at the balance sheet date whether there is any indication that construction in progress may be impaired. If there is any indication that such assets may be impaired, recoverable amounts are estimated for such assets. Recoverable amount is estimated on an item-by-item basis. If it is not practical to estimate the recoverable amount of an individual asset, the recoverable amount of the asset group to which the asset belongs will be estimated. If the recoverable amount of an asset or an asset group is less than its carrying amount, the deficit is accounted for as an impairment loss and is recognized in profit or loss.

Once the impairment loss of construction in progress is recognized, it shall not be reversed in any subsequent period.

16. Borrowing Costs

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

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Where funds are borrowed under a specific-purpose borrowing, the amount of interest to be capitalized is the actual interest expense incurred on that borrowing for the period less any bank interest earned from depositing the borrowed funds before being used on the asset or any investment income on the temporary investment of those funds. Where funds are borrowed under general-purpose borrowings, the Group determines the amount of interest to be capitalized on such borrowings by applying a capitalization rate to the weighted average of the excess of cumulative expenditures on the asset over the amounts of specific-purpose borrowings. The capitalization rate is the weighted average of the interest rates applicable to the general-purpose borrowings.

During the capitalization period, exchange differences related to a specific-purpose borrowing denominated in foreign currency are all capitalized. Exchange differences in connection with general-purpose borrowings are recognized in profit or loss in the period in which they are incurred.

17. Intangible assets

17.1 Intangible assets

Intangible assets include land use rights, coastal line use rights and computer software.

An intangible asset is measured initially at cost. Upon being restructured into a stock company, the intangible assets initial contributed by the state-owned shareholders are recognized based on the valuation amounts confirmed by the state-owned assets administration department. When an intangible asset with a finite useful life is available for use, its original cost is amortized over its estimated useful life.

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

17.2 The method of impairment test and provision for impairment losses of intangible assets

The Group assesses at the balance sheet date whether there is any indication that the intangible assets with a finite useful life may be impaired. If there is any indication that such assets may be impaired, recoverable amounts are estimated for such assets. Recoverable amount is estimated on individual basis. If it is not practical to estimate the recoverable amount of an individual asset, the recoverable amount of the asset group to which the asset belongs will be estimated. If the recoverable amount of an asset or an asset group is less than its carrying amount, the deficit is accounted for as an impairment loss and is recognized in profit or loss.

Intangible assets with indefinite useful life and intangible assets not yet available for use are tested for impairment annually, irrespective of whether there is any indication that the assets may be impaired.

Once the impairment loss of such asset is recognized, it shall not be reversed in any subsequent period. - 34 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

18. Long-term prepaid expenses

Long-term prepaid expenses represent expenses incurred that should be borne and amortized over the current and subsequent periods (together of more than one year). Long-term prepaid expenses are amortized using the straight-line method over the expected periods in which benefits are derived.

19. Revenue

19.1 Revenue from rendering of services

The Group provides load and unload services, tugboat and trailer services, logistics agency and other related harbor services to customers. Revenue from rendering of services is recognized when (1) the amount of revenue can be measured reliably; (2) it is probable that the associated economic benefits will flow to the enterprise; and (3) the associated costs incurred or to be incurred can be measured reliably.

19.2 Rental income

The operating lease income of investment property should be recognized in the lease term at the price stated in contract or agreements using the straight-line method.

19.3 Interest income

Interest income is calculated based on the length of time for which the Group's cash is used by others and the applicable interest rate.

20. Government grants

Government grants are transfer of monetary assets or non-monetary assets from the government to the Group at no consideration. A government grant is recognized only when the Group can comply with the conditions attached to the grant and the Group will receive the grant.

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

A government grant related to an asset is recognized as deferred income, and evenly amortized to profit or loss over the useful life of the related asset.

A government grant relating to income, if used to compensate the related expenses or losses to be incurred in subsequent periods, is determined as deferred income and recognised in profit or loss over the periods in which the related costs are recognized; if used to compensate the related expenses or losses already incurred, is recognised immediately in profit or loss for the period.

- 35 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

20. Government grants - continued

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

21. Deferred tax assets/ deferred tax liabilities

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

21.1 Current income tax

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

21.2 Deferred tax assets and deferred tax liabilities

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

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets for deductible temporary differences are recognized to the extent that it is probable that taxable profits will be available against which the deductible temporary differences can be utilized. However, for temporary differences associated with the initial recognition of goodwill and the initial recognition of an asset or liability arising from a transaction (not a business combination) that affects neither the accounting profit nor taxable profits (or deductible losses) at the time of transaction, no deferred tax asset or liability is recognized.

For deductible losses and tax credits that can be carried forward, deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which the deductible losses and tax credits can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

- 36 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

21. Deferred tax assets/ deferred tax liabilities - continued

21.2 Deferred tax assets and deferred tax liabilities - continued

At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates applicable in the period in which the asset is realized or the liability is settled according to tax laws.

Current and deferred tax expenses or income are recognized in profit or loss for the period, except when they arise from transactions or events that are directly recognized in other comprehensive income or in equity, in which case they are recognized in other comprehensive income or in equity, and when they arise from business combinations, in which case they adjust the carrying amount of goodwill.

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

When the Group has a legal right to settle on a net basis and intends either to settle on a net basis or to realize the assets and settle the liabilities simultaneously, current tax assets and current tax liabilities are offset and presented on a net basis.

When the Group has a legal right to settle current tax assets and liabilities on a net basis, and deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax assets and liabilities on a net basis or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be reversed, deferred tax assets and deferred tax liabilities are offset and presented on a net basis.

22. Operating leases and finance leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

22.1 The Group as lessee under operating leases

Operating lease payments are recognized on a straight-line basis over the term of the relevant lease, and are either included in the cost of related asset or charged to profit or loss for the period. Initial direct costs incurred are charged to profit or loss for the period. Contingent rents are charged to profit or loss in the period in which they are actually incurred.

- 37 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

22. Operating leases and finance leases - continued

22.2 The Group as lessor under operating leases

Rental income from operating leases is recognized in profit or loss on a straight-line basis over the term of the relevant lease. Initial direct costs with more than an insignificant amount are capitalized when incurred, and are recognized in profit or loss on the same basis as rental income over the lease term. Other initial direct costs with an insignificant amount are charged in profit or loss in the period in which they are incurred. Contingent rents are charged to profit or loss in the period in which they actually arise.

23. Safety Production Cost

According to the Administrative Rules on Provision and Use of Enterprise Safety Production Cost jointly issued by the Ministry of Finance and the State Administration of Work Safety on 14 February 2012 (filed as Cai Qi [2012] No. 16), safety production cost set aside by the Group is directly included in the cost of relevant products or recognized in profit or loss for the period, as well as the special reserve. When safety production cost set aside is utilized, if the costs incurred can be categorized as expenditure, the costs incurred should be charged against the special reserve. If the costs set aside are used to build up fixed assets, the costs should be charged to construction in progress, and reclassified to fixed assets when the safety projects are ready for intended use. Meantime, expenditures in building up fixed assets are directly charged against the special reserve with the accumulated depreciation recognized at the same amount. Depreciation will not be made in the future period on such fixed assets.

24. Other significant accounting policies, accounting estimates, and preparation of financial statements

24.1 Employee benefits

In an accounting period in which an employee has rendered service to the Group, the Group recognizes the employee benefits for that service as a liability, except for compensation for termination of employment relationship with the employees.

The Group participates in the employee social security programmes, such as basic pensions, medical insurance, housing funds and other social securities established by the government in accordance with relevant requirements. The related expenditures are either included in cost of related assets or charged to profit or loss for the period when they occur.

When the Group terminates the employment relationship with employees before the expiry of the employment contracts or provides compensation as an offer to encourage employees to accept voluntary redundancy, if the Group has a formal plan for termination of employment relationship or has made an offer for voluntary redundancy which will be implemented immediately, and the Group cannot unilaterally withdraw from the termination plan or the redundancy offer, a provision for the compensation payable arising from the termination of employment relationship with employees is recognized in profit or loss for the period.

- 38 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

25. Critical judgments in applying accounting policies and key assumptions and uncertainties in accounting estimates

In the application of accounting policies as set out above, the Company is required to make judgments, estimates and assumptions about the carrying amounts of items in the financial statements that cannot be measured accurately, due to the internal uncertainty of the operating activities. These judgments, estimates and assumptions are based on historical experiences of the Company's management as well as other factors that are considered to be relevant. Actual results may differ from these estimates.

The Company regularly reviews the judgments, estimates and assumptions on a going concern basis. Changes in accounting estimates which only affect the current period should be recognized in current period; changes which not only affect the current but the future periods should be recognized in current and future periods. At the balance sheet date, key assumptions and uncertainties that are likely to lead to significant adjustments to the book values of assets and liabilities in the future are:

25.1 Goodwill impairment

On 31 December 2013, the book value of goodwill is RMB10,858,898.17. For the purpose of impairment testing, the present value of the expected future cash flows of the assets group or portfolio including goodwill shall be calculated, and such expected future cash flows shall be estimated. Meantime, a pre-tax rate shall be determined that should reflect the time value of money on the current market and the specific asset risks.

25.2 Recognition of deferred tax

The Group calculates and makes provision for deferred income tax liabilities according to the profit distribution plan of subsidiaries, associates and the joint ventures subject to the related law. For retained earnings which are not allocated by the investment company, since the profits will be used to invest the company's daily operation and future development, no deferred income tax liabilities are recognized. If the actually distributed profits in the future are more or less than those expected, corresponding deferred tax liabilities will be recognized or reversed at the earlier of profits distribution date and the declaration date, in the profit and loss of the current period.

Deferred tax assets are recognized based on the deductible temporary difference and the corresponding tax rate, to the extent that it has become probable that future taxable profit will be available for the deductible temporary difference. If in the future the actual taxable income does not coincide with the amount currently expected, the deferred tax assets resulting will be recognized or reversed in the period when actually incurred, in profit or loss.

- 39 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

26. Changes in accounting estimates

According to Motion to Change the Provision Method and Proportion of Accounts Receivables considered and approved at the fourth extraordinary session of the seventh board of Directors on March 8th 2013 held by the Company, the Group changes the provision method and proportions of accounts receivables since January 1st, 2013, in order to keep consistent with the ultimate actual controllers’ provision method and proportion of accounts receivables of the Company. Details are as follows：

Provision rate of accounts receivable and other receivables (%) Aging Before the change After the change Within 90 days 0 0 (inclusive) More than 91 0-3 days 0 but not exceeding 183 days More than 184 5 days 0 but not exceeding 1 year More than 1 year 20 but not exceeding 0-10 2 years More than 2year 50 but not exceeding 0-30 3 years More than 3 years 0-100 100

With regard to the above changes in accounting estimates, the Group adopts such changes prospectively. The changes in accounting estimates reduced the consolidated net profit for the year 2013 by RMB 295,850.01, of which RMB 216,791.16 is attributable to shareholders of the parent company.

- 40 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(III) TAXES

1. Major taxes and tax rates

Taxes Tax basis Tax rate Enterprise income Taxable income Note1 tax Value-add Tax Load and unload income, tugboat income, trailer income, 6% (Note 2) warehousing income and agency income Taxable income from vehicle maintenance and utilities 13% and17% supplies on ships in shore Taxable income from sales of scraps 3% Business tax Taxable load and unload income, tugboat income and trailer 3 % (Note 2) income Taxable warehousing and agency income 5 % (Note 2) Rental income 5 % Urban maintenance VAT and Business tax paid 5% and 7 % (Note 3) and construction tax Education surplus VAT and Business tax paid 3% Regional education VAT and Business tax paid 2% surplus

Note 1: The income tax rate applicable to the subsidiaries in mainland China for 2013 is 25% (2012:25%).

The profit tax rate applicable to Chiwan Wharf Holdings (HK) Limited and Chiwan Shipping (HK) Company Limited, subsidiaries located in Hong Kong, is 16.5%.

On 21 February 2012, Machong Branch of National Taxation Bureau in Dongguan City approved that Dongguan Chiwan Wharf Co., Ltd (DGW), a subsidiary of the Group, was subjected to tax preference of "3-year exemption followed by 3-year half reduction" commencing from its first profit-making year. 2013 is its fourth profit-making year; hence, DGW has calculated its income tax at a rate of 12.5% (2012: 0%).

According to Doc. [2004] No.538 issued by the Third Branch of Local Taxation Bureau in Shenzhen, the profit derived from berth #12 of Chiwan Container Terminal Company Limited which has been under construction and put into operation by stages, is entitled to full exemption from income tax for five years commencing from its first profit making year and a 50% exemption for the following five years when certain requirements are met. 2013 is the tenth profit-making year of berth #12; hence, Chiwan Container Terminal Company Limited has calculated its income tax at a rate of 12.5% (2012: 12.5%).

- 41 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued

1. Major taxes and tax rates - continued

According to Doc. [2007] No.40 issued by Shekou Local Taxation Bureau in Shenzhen, the profit derived from berth #13 of Chiwan Container Terminal Company Limited which has been under construction and put into operation by stages, is entitled to full exemption from income tax for five years commencing from its first profit making year and a 50% exemption for the following five years when certain requirements are met. 2013 is the ninth profit-making year of berth #13; hence, Chiwan Container Terminal Company Limited has calculated its income tax at a rate of 12.5% (2012: 12.5%).

According to Doc. [2013] No.3 issued by Shekou Local Taxation Bureau In Shenzhen, the profits derived from berth #13A of Shenzhen Chiwan Harbour Container Company Limited, is entitled to full exemption from income tax for three years commencing from its first profit making year and 50% exemption for the following three year when certain requirements are met. 2013 is the second profit-making year of berth #13A; hence, it has been exempted from enterprise income tax.

Note 2: The load and unload income, tugboat income and trailer income derived from 1 January to 31 October 2012 were subject to business tax rate of 3%, and warehousing income, agency income and rental income were subject to business tax rate of 5%. According to the Notice on Pilot Transforming Business Tax to Value Added Tax in Transportation and Certain Modern Service Sectors in 8 Provinces/Municipalities issued by the Ministry of Finance and State Administration of Taxation (filed as Cai Shui [2012] No.71), the above- mentioned income of the Group is subject to VAT rate of 6% applicable in modern service industry instead of business tax, since the date of November 1st 2012.

According to the Notice on Taxable Services Subject to "VAT" Tax Rate of Zero and Exemption issued by the Ministry of Finance and State Administration of Taxation (filed as Cai Shui [2011] No.131), and approvals released by Shekou National Taxation Bureau in Shenzhen (filed as Jian Mian Bei [2012] No.0686, No.0693, No.0834 and .Jian Mian Bei [2013] No.0136 respectively), Container Terminal Company Limited, Shenzhen Chiwan Harbor Container Company Limited and Shenzhen Chiwan Shipping and Transportation Company Limited, the subsidiaries of the Company, are exempt from "VAT" when providing logistics support service (except for warehousing service).

Note 3: The subsidiaries set up in Shenzhen are subject to an urban maintenance and construction tax rate of 7%, and those set up in Dongguan are subject to an urban maintenance and construction tax rate of 5%.

- 42 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(IV) BUSINESS COMBINATIONS AND CONSOLIDATED FINANCIAL STATEMENTS

1. Information of subsidiaries

(1) Subsidiaries established or acquired through investments Unit: RMB Registered Balance of other Amount of the minority Capital(in ten items substantively Proportion interest used to absorb thousand Yuan Actual capital constituting net of Proportion profit or loss Type of the Place of Nature of unless otherwise Business contribution at the investments in the ownership of voting Consolida Minority attributable to minority Full name of the subsidiary subsidiary incorporation business stated) scope end of the period subsidiary Interest (%) power (%) ted or not interests interest Logistics Shenzhen Chiwan International Limited liability Shenzhen, PRC support 550.00 Shipping agency service 5,500,000.00 - 100.00 100.00 Yes N/A N/A Freight Agency Company Limited Company services Logistics Shenzhen Chiwan Terminal Company Limited liability Shenzhen, PRC support 5,000.00 Port services 50,000,000.00 - 100.00 100.00 Yes N/A N/A Limited Company services Logistics Shenzhen Chiwan Trains-Grains Limited liability Shenzhen, PRC support 4,500.00 Warehousing of grains 45,000,000.00 - 100.00 100.00 Yes N/A N/A Terminal Company Limited Company services Limited liability Hong Kong SAR, Chiwan Wharf Holdings (H.K.) Limited Investments HKD1,000,000.00 Investment holding 1,070,000.00 11,004,285.00 100.00 100.00 Yes N/A N/A Company PRC Logistics Dongguan Chiwan Wharf Company Limited liability Port services, warehousing Dongguan, PRC support 45,000.00 382,500,000.00 - 85.00 85.00 Yes 79,462,894.69 - Limited Company and supporting services services Logistics Dongguan Chiwan Terminal Limited liability Port services, warehousing Dongguan, PRC support 40,000.00 400,000,000.00 - 100.00 100.00 Yes N/A N/A Company Limited(Note 1) Company and supporting services services Limited liability British Virgin Grossalan Investments Limited Investments USD 1.00Investment holding 8.00 - 100.00 100.00 Yes N/A N/A Company Islands Hinwin Development Company Limited liability Hong Kong SAR, Investments HKD10,000.00 Investment holding 6,278,500.00 94,014,181.00 100.00 100.00 Yes N/A N/A Limited Company PRC

- 43 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(IV) BUSINESS COMBINATIONS AND CONSOLIDATED FINANCIAL STATEMENTS - continued

1. Information of subsidiaries - continued

(2) Subsidiaries acquired through a business combination involving enterprises under common control Unit: RMB Registered Balance of other Proportion Amount of the minority Capital(in ten items substantively of interest used to absorb thousand Yuan Actual capital constituting net ownership Proportion profit or loss Type of the Place of Nature of unless otherwise Business contribution at the investments in the interest of voting Consolidated attributable to minority Full name of the subsidiary subsidiary incorporation business stated) scope end of the period subsidiary (%) power (%) or not Minority interests interest Logistics Shenzhen Chiwan Harbour Container Limited liability Container handling and other Shenzhen, PRC support 28,820.00 250,920,000.00 - 100.00 100.00 Yes N/A N/A Company Limited Company port services services Logistics Container transportation, Shenzhen Chiwan Transportation Limited liability Shenzhen, PRC support 1,500.00 vehicle and port machinery 7,000,000.00 - 100.00 100.00 Yes N/A N/A Company Limited Company services maintenance Logistics Chiwan Container Terminal Limited liability USD Container handling and other Shenzhen, PRC support 485,990,004.00 - 55.00 55.00 Yes 700,766,894.41 - Company Limited Company 95,300,000.00 port services services Logistics Shenzhen Chiwan Shipping and Limited liability Shenzhen, PRC support 2,400.00 Cargo shipping 24,000,000.00 - 100.00 100.00 Yes N/A N/A Transportation Company Limited Company services Logistics Chiwan Shipping (H.K.) Company Limited liability Hong Kong SAR, support HKD 800,000.00 Shipping agency service 856,000.00 - 100.00 100.00 Yes N/A N/A Limited Company PRC services

Note1: Dongguan Chiwan Wharf Co., Ltd (DGW) is a subsidiary jointly owned by the Company holding 25% of the equity capital and Chiwan Wharf Holdings (H.K.) Limited (a subsidiary of the Company) holding 75% of the equity capital respectively. On March 20th, 2013, the Company added capital of RMB100, 000,000.00 to DGW. After the capital increase, the registered capital of DGW is changed to RMB 400,000,000.00 and the Company and Chiwan Wharf Holdings (H.K.) Limited hold DGW’s 43.75% and 56.25% equity capital respectively.

- 44 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(IV) BUSINESS COMBINATIONS AND CONSOLIDATED FINANCIAL STATEMENTS - continued

2. No new entities that have been consolidated in the current period or entities that are excluded from consolidation in the current period

3. Number of subsidiaries is not decreased in the current period due to sales of equity interest resulting in loss of control

4. Exchange rate for translating major financial statement items of foreign operations

Unit: RMB Currency Balance Sheet Income statement HKD 0.7862 0.7926

(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS

1. Currency Funds Unit: RMB Closing balance Opening balance Exchange Exchange Item Original currency rate Amount in RMB Original currency rate Amount in RMB Cash: RMB 9,699.39 1.0000 9,699.39 12,057.67 1.0000 12,057.67 USD 71.00 6.0969 432.88 71.00 6.2855 446.27 HKD 703.79 0.7862 553.32 2,326.17 0.8109 1,886.29 Subtotal 10,685.59 14,390.23 Bank deposit: RMB 607,052,542.23 1.0000 607,052,542.23 182,788,276.23 1.0000 182,788,276.23 USD 12,027,862.01 6.0969 73,332,671.91 4,459,141.14 6.2855 28,027,931.64 HKD 42,130,496.98 0.7862 33,122,996.73 126,184,466.86 0.8109 102,322,985.17 Subtotal 713,508,210.87 313,139,193.04 Other currency funds:

(Note) RMB 2,020,462.78 1.0000 2,020,462.78 1,688,161.07 1.0000 1,688,161.07 USD - 6.0969 - - 6.2855 - HKD 200.00 0.7862 157.24 17,046.74 0.8109 13,823.20 Subtotal 2,020,620.02 1,701,984.27 Total 715,539,516.48 314,855,567.54

Note: The balance of other currency funds is mainly the amount deposited in the securities settlement account of China Merchants Securities Co., Ltd.

- 45 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

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

2. Accounts receivable

(1) Disclosure of accounts receivable by categories: Unit: RMB Closing balance Opening balance Carrying amount Bad debt provision Carrying amount Bad debt provision Proportion Proportion Proportion Proportion Item Amount (%) Amount (%) Amount (%) Amount (%) Accounts receivable that are individually significant and for which bad debt provision ------has been assessed individually(Note) Accounts receivable for which bad debt provision has been assessed by portfolios Portfolio 1 4,114,310.45 1.84 - - 4,854,248.63 1.93 - - Portfolio 2 219,641,091.44 98.16 313,924.90 0.14 246,890,645.82 98.07 323,933.08 0.13 Subtotal of portfolios 223,755,401.89 100.00 313,924.90 0.14 251,744,894.45 100.00 323,933.08 0.13 Total 223,755,401.89 100.00 313,924.90 0.14 251,744,894.45 100.00 323,933.08 0.13

Note: Top five balances of accounts receivable are deemed as individually significant accounts receivable by the Group.

Aging analysis of accounts receivable is as follows: Unit: RMB Closing balance Opening balance Carrying Proportion Bad debt Carrying Proportion Bad debt Aging amount (%) provision Book value amount (%) provision Book value Within 1 year 222,734,678.59 99.54 99,249.04 222,635,429.55 251,172,094.05 99.77 147,781.00 251,024,313.05 More than 1 year 985,619.30 0.44 197,123.86 788,495.44 495,810.40 0.20 99,162.08 396,648.32 but not exceeding 2 years More than 2 years 35,104.00 0.02 17,552.00 17,552.00 - - - - but not exceeding 3 years More than 3 years - - - - 76,990.00 0.03 76,990.00 - Total 223,755,401.89 100.00313,924.90 223,441,476.99 251,744,894.45 100.00 323,933.08251,420,961.37

Accounts receivable portfolios for which bad debt provision has been assessed using the aging analysis approach: Unit: RMB Closing balance Opening balance Carrying Proportion Bad debt Carrying Proportion Bad debt Aging amount (%) provision Book value amount (%) provision Book value Within 1 year 218,620,368.14 99.54 99,249.04 218,521,119.10 246,317,845.42 99.77 147,781.00 246,170,064.42 More than 1 year 985,619.30 0.45 197,123.86 788,495.44 495,810.40 0.20 99,162.08 396,648.32 but not exceeding 2 years More than 2 years 35,104.00 0.01 17,552.00 17,552.00 - - - - but not exceeding 3 years More than 3 years - - - - 76,990.00 0.03 76,990.00 - Total 219,641,091.44 100.00313,924.90 219,327,166.54 246,890,645.82 100.00 323,933.08246,566,712.74

- 46 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

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

2. Accounts receivable - continued

(2) Top five companies with the largest balances of accounts receivable: Unit: RMB Proportion of the amount to the total Relationship with accounts receivable Name of customer the Company Amount Aging (%) Customer A Customer 74,328,976.29 Within 1 year 33.27 Customer B Customer 29,322,698.24 Within 1 year 13.12 Customer C Customer 11,928,034.74 Within 1 year 5.34 Customer D Customer 11,746,881.43 Within 1 year 5.26 Customer E Customer 6,739,226.23 Within 1 year 3.02 Total 134,065,816.93 60.01

(3) As at 31 December 2013, no balances included in above accounts receivable are due from the shareholders of the Company who hold over 5% voting right. Please see Note (VI) 6 for receivables from related parties.

3. Prepayments

(1) Aging analysis of prepayments is as follows: Unit: RMB Closing balance Opening balance Item Amount Proportion (%) Amount Proportion (%) Within 1 year 1,662,772.86 98.27 1,623,036.67 100.00 More than 1 year 29,239.00 1.73 - - but not exceeding 2 years Total 1,692,011.86 100.00 1,623,036.67 100.00

(2) Disclosure of prepayments by categories: Unit: RMB Item Closing balance Opening balance Insurance 1,356,653.64 1,375,091.67 Equipment 318,858.22 138,439.00 Consultancy and advisory 16,500.00 16,500.00 Decoration - 93,006 Total 1,692,011.86 1,623,036.67

(3) As at 31 December 2013, no balances included in above prepayments are due from the shareholders of the Company who hold over 5% voting right.

- 47 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT – continued

4、Dividends receivable Unit: RMB

Opening Impairment Item balance Increase Decrease Closing balance appeared or not Dividends receivable of aging within one - 70,387,518.27 67,052,532.77 3,334,985.50 No year Including: China Overseas Harbor Affairs - 19,734,686.52 19,734,686.52 - No (Laizhou) Co., Ltd. China Merchants Holdings (International) Information - 1,655,355.54 1,655,355.54 - No Technology Company Ltd MediaPortInvestmentsLimited - 44,852,976.21 41,517,990.71 3,334,985.50 No China Ocean Shipping Agency - 3,784,500.00 3,784,500.00 - No (Shenzhen) Company Limited Jiang Su Ninghu Expressway - 360,000.00 360,000.00 - No Company Limited Total - 70,387,518.27 67,052,532.77 3,334,985.50

5. Other receivables

(1) Disclosure of other receivables by categories: Unit: RMB Closing balance Opening balance Carrying amount Bad debt provision Carrying amount Bad debt provision Proportion Proportion Proportion Proportion Category Amount (%) Amount (%) Amount (%) Amount (%) Other receivables that are individually significant and for which bad debt provision ------has been assessed individually Other receivables for which bad debt provision has been assessed by portfolios Portfolio 1 9,126,793.25 69.67 125,160.67 1.37 9,923,060.13 60.91 89,568.91 0.90 Portfolio 2 3,972,386.17 30.33 394,338.90 9.93 6,368,240.36 39.09 217,678.44 3.42 Subtotal of portfolios 13,099,179.42 100.00 519,499.57 3.97 16,291,300.49 100.00 307,247.35 1.89 Total 13,099,179.42 100.00 519,499.57 3.97 16,291,300.49 100.00 307,247.35 1.89

Note: Top five balances of other receivables are deemed as individually significant other receivables by the Group.

Aging analysis of other receivables is as follows: Unit: RMB Closing balance Opening balance Carrying Proportion Bad debt Carrying Proportion Bad debt Aging amount (%) provision Book value amount (%) provision Book value Within 1 year 6,296,028.40 48.06 10,508.79 6,285,519.61 9,629,102.99 59.10 26,070.69 9,603,032.30 More than 1 year 1,107,449.23 8.45 373.51 1,107,075.72 3,743,930.94 22.98 55,669.36 3,688,261.58 but not exceeding 2 years More than 2 years 2,914,884.39 22.25 - 2,914,884.39 1,439,452.42 8.84 195,728.30 1,243,724.12 but not exceeding 3 years More than 3 years 2,780,817.40 21.24 508,617.27 2,272,200.13 1,478,814.14 9.08 29,779.00 1,449,035.14 Total 13,099,179.42 100.00 519,499.57 12,579,679.85 16,291,300.49 100.00 307,247.35 15,984,053.14

- 48 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

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

5. Other receivables - continued

(1) Disclosure of other receivables by categories - continued:

Other receivables portfolios for which bad debt provision has been assessed using the aging analysis Unit: RMB Closing balance Opening balance Carrying Bad debt Carrying Bad debt Aging amount Proportion (%) provision Book value amount Proportion (%) provision Book value Within 1 year 3,587,062.01 90.30 10,508.79 3,576,553.22 5,984,783.38 93.98 25,950.14 5,958,833.24 More than 1 year 1,867.56 0.05 373.51 1,494.05 - - - - but not exceeding 2 years More than 2 years - - - - 383,456.98 6.02 191,728.30 191,728.68 but not exceeding 3 years More than 3 years 383,456.60 9.65 383,456.60 - - - - - Total 3,972,386.17 100.00 394,338.90 3,578,047.27 6,368,240.36 100.00 217,678.44 6,150,561.92

(2) Top five companies with the largest balances of other receivables: Unit: RMB Proportion of the amount Relationship with to the total accounts Name of company the Company Amount Aging receivable (%) More than 2 years Government but not exceeding Sector 1,600,000.00 12.21 Financial Secretary of Transport Ministry 3 years Wan Feng Shipping Co., Ltd. Customer 1,287,147.13 Within 1 year 9.83 CMBL Related party 1,000,000.00 Within 1 year 7.63 Guangzhou Taihe Ocean International Freight Customer 870,325.76 Within 1 year 6.64 Forwarding Co., Ltd. Shenzhen Pingnan Railway Co., Ltd. Customer 540,000.00 Within 1 year 4.12 Total More than 2 years 5,297,472.89 but not exceeding 40.43 3 years

(3) As at 31 December 2013, no balances included in above other receivables are due from the shareholders of the Company who hold over 5% voting right. Please see Note (VI) 6 for receivables from related parties.

6. Inventories

(1) Categories of inventories Unit: RMB Closing Balance Opening Balance Provision for Provision for Carrying decline in value Carrying decline in value Item amount of inventories Book value amount of inventories Book value Spare parts 20,755,196.60 974,871.14 19,780,325.46 20,457,424.80 792,118.39 19,665,306.41 Fuel 1,417,014.73 -1,417,014.73 1,635,457.45 - 1,635,457.45 Low value consumables 56,015.99 - 56,015.99 24,807.43 - 24,807.43 Total 22,228,227.32 974,871.1421,253,356.18 22,117,689.68 792,118.39 21,325,571.29

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued

6. Inventories - continued

(2) Movement of inventories is analyzed as follows: Unit: RMB Item Opening balance Increase Decrease Closing balance Spare parts 20,457,424.80 36,842,238.54 36,544,466.74 20,755,196.60 Fuel 1,635,457.45 42,813,998.61 43,032,441.33 1,417,014.73 Low value consumables 24,807.43 630,871.48 599,662.92 56,015.99 Total 22,117,689.68 80,287,108.63 80,176,570.99 22,228,227.32

(3) Provision for decline in value of inventories Unit: RMB Decrease Item Opening balance Increase Reversal Write-off Closing balance Spare parts 792,118.39 182,752.75 - - 974,871.14

7、Other current assets Unit: RMB Item Closing balance Opening balance Added-value tax to be certified 15,672,486.73 8,956,589.43

8. Available-for-sale financial assets Unit: RMB Item Closing balance Opening balance Available-for-sale financial assets (Note) 5,580,000.00 5,210,000.00

Note: The available-for-sale financial assets held by the Company represent the fair value of the circulating shares of Jiang Su Ninghu Expressway Company Ltd at the end of the year.

Available-for-sale financial assets: Unit: RMB Available-for- Available-for- sale equity sale debt Classification of available-for-sale financial assets instruments instruments Others Total Cost of equity instruments/ Closing amortized cost of debt 1,120,000.00 - - 1,120,000.00 instruments Closing fair value 5,580,000.00 - - 5,580,000.00 Accumulated amount of changes in fair value included in the 4,460,000.00 - - 4,460,000.00 other comprehensive income Provision amount for impairment - - - -

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

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

9. Investments in joint ventures and associates Unit: RMB Proportion Proportion of of voting ownership power in the interests investee Investee's total held by the held by the Investee's total assets at liabilities at the end of Total net assets at the Total operating income Investee Group (%) Group (%) the end of the period the period end of the period for the period Net profit for the period I. Joint ventures China Overseas Harbor Affairs 40.00 40.00 2,157,527,582.53 265,540,406.40 1,891,987,176.13 300,487,702.31 70,268,048.80 (Laizhou) Co., Ltd.(Note 1)

II. Associates China Merchants Holdings (International) Information 23.16 23.16 77,894,322.16 17,052,169.42 60,842,152.74 73,453,927.69 6,285,283.60 Technology Company Ltd. CMBL 40.00 40.00 2,105,335,486.99 1,427,727,957.53 677,607,529.46 189,827,039.85 19,374,791.08 Media Port Investments 50.00 50.00 HKD2,948,618,767.86HKD1,932,480,966.50 HKD1,016,137,801.36 HKD693,772,270.29 HKD224,293,057.34 Limited("MPIL")(Note 2) China Development Finance Co., 20.00 20.00 1,908,559,441.61 1,403,033,745.86 505,525,695.75 19,442,819.95 5,525,695.75 Ltd.

Note 1: The Company holds 40% equity interests in China Overseas Harbor Affairs (Laizhou) Co., Ltd. (hereinafter "COHA (Laizhou)"). According to the investment agreement with shareholders of COHA (Laizhou) and its constitutions, significant matters such as operating decisions can be passed only when approved by directors of the Company and the other venturers. Therefore, COHA (Laizhou) is deemed to be under common control of Chiwan Wharf and the other shareholders; accordingly COHA (Laizhou) is accounted for as a joint venture.

Note 2: On 30 September 2002, China Merchants Holdings (International) Company Limited (the "CMHI", a listed company in Hong Kong) and Shenzhen South Oil (Group) Company Limited (the "SSOG") entered into an agreement called "Agreement on Cooperation and Development of Mawan Port" (the "Development Agreement") to incorporate three joint ventures, namely SMW, SMP and Shenzhen Mawan Terminals Co., Ltd. ("SMT") (together referred to as "Mawan Companies"), to construct and operate the berth 0#, 5#, 6#, 7# and 8# in Mawan Port. According to the Development Agreement, CMHI and the Group will jointly set up Media Port Investments Limited (the "MPIL") with equal percentage of equity held respectively. MPIL then incorporates the abovementioned three joint ventures together with SSOG, and MPIL has 60% equity in each of the three joint ventures.

The Company has 50% equity of MPIL which is the investment holding company. Thus, MPIL is accounted for as an associate and the share of equity in its consolidated financial statements is based on proportion of shareholding since the Company holds 30% voting rights in Mawan Company despite no director being sent to MPIL.

- 51 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

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

10. Long-term equity investments

(1) Categories of Long-term equity investments Unit: RMB Item Opening Balance Increase Decrease Closing Balance Joint ventures 820,062,280.52 33,210,403.04 19,734,686.52 833,537,997.04 Associates 710,979,627.82 64,699,718.26 48,529,058.09 727,150,287.99 Other long-term equity investments 17,037,500.00 - - 17,037,500.00 Subtotal 1,548,079,408.34 97,910,121.30 68,263,744.61 1,577,725,785.03 Less: Provision for impairment of 3,128,300.00 - - 3,128,300.00 long-term equity investments Net amount 1,544,951,108.34 97,910,121.30 68,263,744.61 1,574,597,485.03

As at 31 December 2013, the long-term equity investments of the Group were not subject to restriction on disposal or remittance of return on investments.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

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

10. Long-term equity investments - continued

(2) Details of long-term equity investments are as follows: Unit: RMB Explanation of the proportion of Proportion of Proportion ownership Provision ownership of voting interests being not for Changes interests in power in consistent with Provision for impairmen Accounting (increase/ the investee the investee the proportion of impairment t losses for Cash dividends Investee method Investment cost Opening balance decrease) Closing balance (%) (%) voting power losses the period for the period China Overseas Harbor Affairs Equity method 749,655,300.00 820,062,280.52 13,475,716.52 833,537,997.04 40.00 40.00 N/A - - 19,734,686.52 (Laizhou) Co., Ltd China Merchants Holdings (International) Information Equity method 1,875,000.00 13,682,516.01 (199,683.86) 13,482,832.15 23.16 23.16 N/A - - 1,655,355.54 Technology Company Ltd CMBL Equity method 280,000,000.00 299,116,307.80 7,749,916.44 306,866,224.24 40.00 40.00 N/A - - - MPIL Equity method 139,932.00 298,180,804.01 7,515,288.44 305,696,092.45 50.00 50.00 N/A - - 46,873,702.55 China Development Finance Co., Ltd Equity method 100,000,000.00 100,000,000.00 1,105,139.15 101,105,139.15 20.00 20.00 N/A - - - China Ocean Shipping Agency Cost method 13,510,000.00 13,510,000.00 - 13,510,000.00 15.00 15.00 N/A - - 3,784,500.00 (Shenzhen) Company Limited Shenzhen Petro-chemical Industry Cost method 3,500,000.00 3,500,000.00 - 3,500,000.00 0.26 0.26 N/A 3,117,800.00 - - (Group) Company Limited. Guangdong Guang Jian Group Cost method 27,500.00 27,500.00 - 27,500.00 0.02 0.02 N/A 10,500.00 - - Company Limited Total 1,148,707,732.00 1,548,079,408.34 29,646,376.69 1,577,725,785.03 3,128,300.00 - 72,048,244.61

- 53 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

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

(3) Long-term equity investments under equity method Unit: RMB

Changes in Income adjustment Other Investment investment Accrued profit Dividends in equity Investee cost Opening balance cost and loss the year changes Closing balance Joint ventures China Overseas Harbor 749,655,300.00 820,062,280.52 - 33,210,403.04 (19,734,686.52) - 833,537,997.04 Affairs (Laizhou) Co., Ltd Associates China Merchants Holdings (International) Information 1,875,000.00 13,682,516.01 - 1,455,671.68 (1,655,355.54) - 13,482,832.15 Technology Company Ltd CMBL 280,000,000.00 299,116,307.80 - 7,749,916.44 - - 306,866,224.24

MPIL 139,932.00 298,180,804.01 - 54,388,990.99 (46,873,702.55) -305,696,092.45 China Development 100,000,000.00 100,000,000.00 - 1,105,139.15 - - 101,105,139.15 Finance Co., Ltd Total 1,131,670,232.00 1,531,041,908.34 - 97,910,121.30 (68,263,744.61) -1,560,688,285.03

(4) Long-term equity investments under cost method Unit: RMB Item Accounting method Investment cost Opening balance Increase Decrease Closing balance China Ocean Shipping Agency (Shenzhen) Cost method 13,510,000.00 13,510,000.00 - - 13,510,000.00 Company Limited Shenzhen Petro-chemical Industry (Group) Cost method 3,500,000.00 3,500,000.00 - - 3,500,000.00 Company Limited. Guangdong Guang Jian Group Company Cost method 27,500.00 27,500.00 - - 27,500.00 Limited Total 17,037,500.00 17,037,500.00 - -17,037,500.00

(5) Provision for impairment loss of long-term equity investments Unit: RMB Item Opening balance Increase Decrease Closing balance Shenzhen Petro-chemical Industry (Group) 3,117,800.00 - - 3,117,800.00 Company Limited. Guangdong Guang Jian Group Company 10,500.00 - - 10,500.00 Limited Total 3,128,300.00 - - 3,128,300.00

- 54 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

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

11. Investment properties Unit: RMB Opening Closing carrying carrying Item amount Increase Decrease amount I. Total original carrying amount 65,028,138.00 - - 65,028,138.00 1. Buildings 33,519,173.00 - - 33,519,173.00 2. Land use right 31,508,965.00 - - 31,508,965.00 II. Total accumulated depreciation and 31,564,662.43 1,215,753.72 - 32,780,416.15 amortization 1. Buildings 17,292,090.11 601,988.40 - 17,894,078.51 2. Land use right 14,272,572.32 613,765.32 - 14,886,337.64 III. Total net book value of investment 33,463,475.57 32,247,721.85 property 1. Buildings 16,227,082.89 15,625,094.49 2. Land use right 17,236,392.68 16,622,627.36 IV. Total accumulated amount of provision for impairment losses of --- - investment property 1. Buildings - - - - 2. Land use right - - - - V. Total carrying value of investment 33,463,475.57 32,247,721.85 property 1. Buildings 16,227,082.89 15,625,094.49 2. Land use right 17,236,392.68 16,622,627.36

Note 1: Depreciation and amortization for the current period is RMB1,215,753.72.

Note 2: For the year ended 31 December 2013, the Group has no investment property used as collateral.

Note 3: For the year ended 31 December 2013, the Group has not obtained any ownership certificates of investment properties. Please see the Note (V) 14 for the reasons and management countermeasures.

- 55 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued

12. Fixed assets

(1) Fixed assets Unit: RMB Opening carrying Closing carrying Item amount Increase Decrease amount I. Total original carrying amount 4,539,939,385.74 313,431,706.39 53,307,066.57 4,800,064,025.56 Including: Harbor facilities 1,384,171,755.93 21,540,039.80 170,000.00 1,405,541,795.73 Warehouses, container yards 730,414,586.50 168,098,218.64 1,060,615.00 897,452,190.14 and buildings Machinery and equipments 2,019,829,746.21 107,334,785.78 42,164,947.26 2,084,999,584.73 Motor vehicles, cargo ships 297,261,097.16 9,016,707.00 8,352,686.50 297,925,117.66 and tugboats Other equipments 108,262,199.94 7,441,955.17 1,558,817.81 114,145,337.30 II. Total accumulated depreciation 1,778,150,551.03 180,212,504.89 47,476,354.09 1,910,886,701.83 Including: Harbor facilities 262,152,794.65 26,474,961.90 58,650.00 288,569,106.55 Warehouses, container yards 227,850,148.03 18,575,302.69 545,789.34 245,879,661.38 and buildings Machinery and equipments 1,071,021,821.57 114,842,765.05 37,945,212.55 1,147,919,374.07 Motor vehicles, cargo ships 140,891,604.32 12,713,034.75 7,517,417.85 146,087,221.22 and tugboats Other equipments 76,234,182.46 7,606,440.50 1,409,284.35 82,431,338.61 III. Total net book value of fixed assets 2,761,788,834.71 2,889,177,323.73 Including: Harbor facilities 1,122,018,961.28 1,116,972,689.18 Warehouses, container yards 502,564,438.47 651,572,528.76 and buildings Machinery and equipments 948,807,924.64 937,080,210.66 Motor vehicles, cargo ships 156,369,492.84 151,837,896.44 and tugboats Other equipments 32,028,017.48 31,713,998.69 IV. Total provision for impairment 60,695,381.41 - - 60,695,381.41 losses Including: Harbor facilities - - - - Warehouses, container yards 60,695,381.41 - - 60,695,381.41 and buildings Machinery and equipments - - - - Motor vehicles, cargo ships --- - and tugboats Other equipments - - - - V. Total carrying value of fixed assets 2,701,093,453.30 2,828,481,942.32 Including: Harbor facilities 1,122,018,961.28 1,116,972,689.18 Warehouses, container yards 441,869,057.06 590,877,147.35 and buildings Machinery and equipments 948,807,924.64 937,080,210.66 Motor vehicles, cargo ships 156,369,492.84 151,837,896.44 and tugboats Other equipments 32,028,017.48 31,713,998.69

Note 1: New acquisition of fixed assets during the period amounted to RMB28,107,137.17 and construction in progress transferred to fixed assets during the period was RMB285,324,569.22, which composed the total increase in original carrying amount. Disposal of fixed assets during the period amounted to RMB53,307,066.57, which composed the total decrease in original carrying amount.

- 56 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

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

12. Fixed assets - continued

(1) Fixed assets - continued

Note 2: Of the increase in accumulated depreciation, depreciation of RMB180,212,504.89 was made during the period. And decrease in accumulated depreciation during the period was composed of RMB47,476,354.09, resulted from disposal of fixed assets .

Note 3: As of 31 December 2013, there are no fixed assets that are used as collateral.

Note 4: As of 31 December 2013, ownership certificates for certain buildings of the Group with net book value of RMB296,600,737.69 (cost: RMB408,161,114.70) have not yet been obtained. Among them, fixed assets with net book value of RMB33,495,838.74 (cost: RMB132,972,216.85) are located within the scope of Chiwan watershed. Please refer to Note (V) 14 for the reasons and management countermeasures; the ownership certificate for the remainder is under the process of application.

(2) Other issues Unit: RMB Item Amount Note The original amounts of fixed assets fully depreciated but still 696,467,664.62 in use at 31 December 2013 Closing original amount of temporary idle fixed assets - Fixed assets disposed or scrapped in the current year (1)Original amount of fixed assets disposed or scrapped in the 53,307,066.57 current year (2)Net book value of fixed assets disposed or scrapped in the 5,830,712.48 current year (3)Gain or loss on disposal or scrap of fixed assets 1,697,013.72

13. Construction in progress

(1) Details of construction in progress are as follows: Unit: RMB Closing Balance Opening Balance Provision for Provision for Item Carrying amount impairment Book value Carrying amount impairment Book value Berth 4#-5#, Machong Port 585,124,261.30 - 585,124,261.30 383,523,257.34 - 383,523,257.34 Berth 2#-3#, Machong Port - - - 219,033,380.73 - 219,033,380.73 Equipment for berth 2#-3#, 25,397,336.78 - 25,397,336.78 - - - Machong Port Others 4,542,699.00 - 4,542,699.00 7,375,970.67 - 7,375,970.67 Total 615,064,297.08 - 615,064,297.08 609,932,608.74 - 609,932,608.74

- 57 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2012

(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued

13. Construction in progress - continued

(2) Changes in significant construction in progress Unit: RMB Proportion of Amount of Including: Interest construction accumulated capitalised capitalisation Budget Transfer to fixed Transfer to investment in Construction capitalised interest for the rate for the Item amount Opening balance Increase assets intangible assets budget progress interest period period (%) Capital source Closing balance Self-Funding Berth 4#-5#, Machong Port 624,225,151.07 383,523,257.34 227,598,435.52 25,997,431.56 - 94% 94% 19,817,409.75 14,916,339.53 5.97% 585,124,261.30 and loan Self-Funding Berth 2#-3#, Machong Port 240,652,126.61 219,033,380.73 21,618,745.88 240,652,126.61 - 100% 100% 7,893,869.32 1,394,361.32 6.41% - and loan Equipment for berth 2#-3#, Machong Self-Funding 37,711,959.46 - 25,397,336.78 - - 67% 67% 638,487.97 638,487.97 5.86% 25,397,336.78 Port and loan Others 12,727,173.00 7,375,970.67 16,071,739.38 18,675,011.05 230,000.00 36% 36% - - - Self-Funding 4,542,699.00 Total 609,932,608.74 290,686,257.56 285,324,569.22 230,000.00 28,349,767.04 16,949,188.82 615,064,297.08

- 58 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

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

14. Intangible assets Unit: RMB Opening carrying Closing carrying Item amount Increase Decrease amount I. Total original carrying amount 1,541,937,875.22 21,335,622.43 - 1,563,273,497.65 Land use rights - prepaid under 1,296,536,073.00 - - 1,296,536,073.00 lease (Note 2) Land use rights - prepaid under 122,623,476.00 - - 122,623,476.00 investment (Note 2) Land use rights - purchased 19,343,189.00 21,335,622.43 - 40,678,811.43 Computer software 30,549,000.22 - - 30,549,000.22 Coastal line use rights 72,886,137.00 - - 72,886,137.00 II. Total accumulated amortization 534,403,847.07 42,828,315.07 - 577,232,162.14 Land use rights - prepaid under 457,734,969.82 36,513,967.70 - 494,248,937.52 lease (Note 2) Land use rights - prepaid under 50,071,252.70 2,452,469.52 - 52,523,722.22 investment (Note 2) Land use rights - purchased 2,229,802.80 706,951.32 - 2,936,754.12 Computer software 19,604,005.35 1,526,926.13 - 21,130,931.48 Coastal line use rights 4,763,816.40 1,628,000.40 - 6,391,816.80 III. Total net book value of 1,007,534,028.15 986,041,335.51 intangible assets Land use rights - prepaid under 838,801,103.18 802,287,135.48 lease (Note 2) Land use rights - prepaid under 72,552,223.30 70,099,753.78 investment (Note 2) Land use rights - purchased 17,113,386.20 37,742,057.31 Computer software 10,944,994.87 9,418,068.74 Coastal line use rights 68,122,320.60 66,494,320.20 IV. Total provision for impairment --- - Land use rights - prepaid under --- - lease Land use rights - prepaid under --- - investment Land use rights - purchased --- - Computer software --- - Coastal line use rights --- - V. Total carrying value of 1,007,534,028.15 986,041,335.51 intangible assets Land use rights - prepaid under 838,801,103.18 802,287,135.48 lease (Note 2) Land use rights - prepaid under 72,552,223.30 70,099,753.78 investment (Note 2) Land use rights - purchased 17,113,386.20 37,742,057.31 Computer software 10,944,994.87 9,418,068.74 Coastal line use rights 68,122,320.60 66,494,320.20

Note 1: Amortization for the current period is RMB42,828,315.07.

- 59 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued

14. Intangible assets - continued

Note 2: The Group has obtained the land use right from Nanshan Group in connection with several plots of land with a total area of 1,049,946.00 square meters within Chiwan port for a use term ranging between 20 - 50 years with original amount of RMB1,400,288,984.00. The lands are located within the scope of Chiwan watershed, comprising of a land of 2.2 square kilometers injected by Shenzhen Investment Holding Corporation, the parent of Nanshan Group, and a land arising from marine reclamation by Nanshan Group.

An area of 270,692 sq. meters (RMB122,623,476.00) was injected by Nanshan Group as capital contribution at the moment of corporate restructuring. The rest land use right was obtained from Nanshan Group by long-term leasing.

Until now, no official certificates for above lands were obtained by Nanshan Group. Correspondingly, the buildings located on such lands have not obtained relevant real estate certificates.

On 20 March 2001, 18 June 2003 and 29 September 2004, Nanshan Group committed on all the land use right obtained by the Group from it. Per the commitment, Nanshan Group has no right to withdraw and will agree in any condition that, when the Group suffers loss, bears expense and liability, is claimed for compensation or runs into lawsuit, caused by any actually or potentially illegal and unconductable issues generated by land use right agreements and their relevant documents, signed or will be signed by Nanshan Group, Nanshan group will guarantee that the acquiring party and its inheritor of those land use right will be fully exempted from above issues mentioned. Based on the situations above, directors of the Company believe there is no significant impairment risk to be caused by the absence of land use right certificate and no significant contingency exists.

The management is aware that Nanshan Group is active in process of resolving the historical problem with relevant government department; however, it cannot predict the exact time of obtaining legal certificates of land and relevant real estate certificates.

15. Goodwill Unit: RMB Investee Opening balance Increase Decrease Closing balance Chiwan Container Terminal 10,858,898.17 - - 10,858,898.17 Company Limited

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

Note: The goodwill arose from the acquisition of the minority interests in Chiwan Container Terminal Company Limited, being the difference of the additional cost of investment and the Group's share of the fair value of the identifiable net assets in Chiwan Container Terminal Company Limited. Based on past years operation relating to these assets groups and the forecast of the Company, the management holds the opinion that these is no need to allocate impairment to goodwill arising from Chiwan Container Terminal Company Limited investment.

16. Long-term prepaid expenses Unit: RMB Residual Opening Other Closing useful Item balance Increase Amortization reductions balance Original Cost period Construction expenditure of 55,337,143.20 - 1,844,571.46 - 53,492,571.74 64,560,000.00 29 years Tonggu sea-route (Note 1) Foresea packing ground 1,208,183.95 - 1,208,183.95 - - 5,537,510.00 - Golf membership 1,668,203.58 - 215,473.65 - 1,452,729.93 2,443,549.00 1-8years Building decoration 1,899,137.65 5,116.36 819,096.89 - 1,085,157.12 2,214,040.47 1-4 years Others 850,000.00 -850,000.00 - - 850,000.00 - Total 60,962,668.38 5,116.36 4,937,325.95 - 56,030,458.79 75,605,099.47

Note 1: In 2007, Shenzhen municipal government commenced the construction work of the public sea route connecting Tonggu sea route, Shekou port area, Chiwan port area, Mawan port area, Qianhaiwan port area and Dachanwan port area ("Tonggu Sea Route"). As required by a decision by the government, 60% of construction expenditure would be allocated to the port operators while the remaining 40% born by the government. The port operators in Western Shenzhen port areas were allocated 35% of the total expenditure, and subsequently agreed the portion to each operator, taking into account the factors including the function, waterfront length, berthing ship of each porter etc. The total expenditure of RMB64,560,000 was allocated to the Group and accounted for as long-term prepaid expenses, being amortized on a straight-line basis over 35 years which is the expected useful live of Tonggu Sea Route starting from 2008 when the Tonggu Sea Route is ready for use.

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

17. Deferred tax assets and deferred tax liabilities

(1) Deferred tax assets or deferred tax liabilities that are presented at the net amount after offset and correspondingly deductible or taxable temporary differences Unit: RMB Closing balance Closing balance Opening balance Opening balance of deferred tax of deductible or of deferred tax of deductible or assets or deferred taxable temporary assets or deferred taxable temporary tax liabilities differences after tax liabilities differences after Item after offsetting offsetting after offsetting offsetting Deferred tax assets: Provision for impairment losses 15,398,018.41 62,469,584.34 15,155,785.33 62,012,606.93 of assets Depreciation of fixed assets and amortization of intangible 8,271,984.79 33,145,080.33 9,479,405.98 37,974,765.08 assets Deductible losses 25,606,725.99 102,426,903.95 25,606,725.99 102,426,903.95 Accrued expenses 13,886,672.61 61,791,958.82 13,382,166.95 58,360,663.99 Pre-operational expenses 1,263,893.50 6,066,688.80 1,390,282.85 7,077,803.60 Others 3,832,401.44 15,717,641.10 2,954,666.93 13,009,018.53 Subtotal 68,259,696.74 281,617,857.34 67,969,034.03 280,861,762.08 Deferred tax liabilities: Change in fair value of available-for-sale financial 1,115,000.00 4,460,000.00 1,022,500.00 4,090,000.00 assets recorded in capital surplus Subtotal 1,115,000.00 4,460,000.00 1,022,500.00 4,090,000.00

(2) Details of offsetting deferred tax assets and deferred tax liabilities Unit: RMB Item The amount of offset Current period: Depreciation of fixed assets and amortization of intangible assets 2,462,830.43

Prior period: Depreciation of fixed assets and amortization of intangible assets 1,794,112.66

(3) Details of unrecognized deferred tax assets Unit: RMB Item Closing balance Opening balance Deductible temporary differences 3,162,393.02 3,234,372.64 Deductible losses 94,303,813.38 12,406,662.00 Total 97,466,206.40 15,641,034.64

Note: Deferred tax assets are not recognized for the above-mentioned deductible temporary differences and deductible losses due to uncertainty on whether sufficient taxable profits will be available in the future.

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

17. Deferred tax assets and deferred tax liabilities - continued

(4) Deductible losses for which no deferred tax assets are recognized will expire in the following years Unit: RMB Year Closing balance Opening balance Note 2013 - 83,654.00 2014 379,817.00 379,817.00 2015 4,707,158.00 4,707,158.00 2016 3,403,289.00 3,403,289.00 2017 3,832,744.00 3,832,744.00 2018 81,980,805.38 - Total 94,303,813.38 12,406,662.00

18. Other non-current assets Unit: RMB Item Closing balance Opening balance Coast Line Use Right (Note) 36,375,000.00 36,375,000.00 Land Use Right (Note) 138,294,665.62 86,934,396.98 Total 174,669,665.62 123,309,396.98

Note : The Company entered into Frame Contract for Cooperation on Usage of Quay and Land for Berth 2#- 5# at Machong Port in Dongguan and its supplements with Dongguan Humen Port Administration Commission to purchase a land with an area of 800,000 square meters and area of water with depth of 700 meters from the front of terminal, together with the use right of 1,200 meters coast line, for berth 2# to berth 5# in Dongguan Machong Port at a consideration of RMB260,000,000, respectively in March 2006, October 2006 and November 2007. As the Group has not obtained the land use right certificate and coast line use right certificate, the relevant payments were therefore recognized as other non-current assets.

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

19. Details of provision for impairment losses of assets Unit: RMB Decrease Foreign Opening exchange Closing carrying translation carrying Item amount Increase Reversals Others differences amount I. Bad debts provision 631,181.43 593,877.29 328,425.30 60,119.24 (3,089.71) 833,424.47 Including: Provision for accounts 323,933.08 271,317.26 218,909.02 60,119.24 (2,297.18) 313,924.90 receivable Including: Provision for other 307,248.35 322,560.03 109,516.28 - (792.53) 519,499.57 receivables II.Provision for decline in value of 792,118.39 182,752.75 - - - 974,871.14 inventories III.Provision for impairment losses ------of available-for-sale financial assets IV.Provision for impairment losses ------of held-to-maturity investments V. Provision for impairment losses 3,128,300.00 - - - - 3,128,300.00 of long-term equity investments VI. Provision for impairment losses ------of investment properties VII. Provision for impairment losses 60,695,381.41 - - - - 60,695,381.41 of fixed assets Total 65,246,981.23 776,630.04 328,425.30 60,119.24 (3,089.71) 65,631,977.02

20. Short-term borrowings Unit:RMB Item Closing balance Opening balance Credit loans 550,340,000.00(Note) 1,080,929,700.00 Guarantee loans - 100,000,000.00 Total 550,340,000.00 1,180,929,700.00

Note : The credit loans consisting of 700,000,000.00 denominated in HKD (equal to RMB550,340,000.00) were borrowed by Chiwan Container Terminal Company Limited from bank.

21. Notes payable Unit: RMB Item Closing balance Opening balance Bank acceptance notes - 826,000.00

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

22. Accounts payable

(1) Details of accounts payable are as follows: Unit: RMB Item Closing balance Opening balance Construction 40,539,479.56 83,690,612.51 Service 46,368,137.05 29,011,735.66 Material purchase 19,660,274.12 20,316,662.82 Rental 18,576,812.78 12,288,707.13 Equipment 14,389,818.61 661,118.56 Quality margin - 19,104.00 Total 139,534,522.12 145,987,940.68

(2) As at 31 December 2013, the Group did not have any accounts payable balances which were due to parties having 5% or above voting rights in the Company except for the amount due to Nanshan Group. Payables to Nanshan Group or other related parties are specified in (VI) 6.

(3) Details of significant accounts payable aged more than one year as follows: Unit: RMB Closing Reasons for Subsequent Name of entity balance Aging unpayment Payment China Communications Second 4,304,703.20 1-2 year Project reserve - Construction Co.,Ltd China Communications Third 3,002,320.76 1-2 year Project reserve - Harbor Engineering Co.,Ltd Tonggu sea-route Construction Remaining 2,560,000.00 Over 3 years - Office construction costs Shenzhen IB Technologies Remaining 1,641,000.00 1-2 year - Development CO.,Ltd construction costs Total 11,508,023.96

23. Advances

(1) Details of advances are as follows: Unit: RMB Item Closing balance Opening balance Service fee receipt in advance 793,291.30 299,452.73

(2) As at 31 December 2013, the Group did not have any advance from shareholders or related parties having 5% or above voting rights in the Company.

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

24. Employee benefits payable Unit:RMB Opening Closing carrying carrying Item amount Increase Decrease amount I. Wages and salaries, bonuses, allowances 56,065,181.59 204,936,436.04 201,006,816.81 59,994,800.82 and subsidies II. Staff welfare - 11,547,936.24 11,547,936.24 - III. Social security contributions 3,243.60 33,827,004.74 33,829,785.28 463.06 Including: Medical insurance - 6,150,562.15 6,150,562.15 - Basic pension 3,243.60 17,944,550.91 17,947,794.51 - Supplementary pension (Note1 ) - 7,878,702.58 7,878,702.58 - Unemployment insurance - 528,568.34 528,105.28 463.06 Employment injury insurance - 833,832.33 833,832.33 - Generational insurance - 490,788.43 490,788.43 - IV. Housing funds 810.9 10,771,807.42 10,772,618.32 - V. Labor union and employee education 9,466,553.66 9,660,256.93 7,135,696.69 11,991,113.90 funds VI. Non-monetary benefits - 21,364.23 21,364.23 - VII. Termination benefits --- - VIII. Others - 9,849,396.77 9,312,458.27 536,938.50 Total 65,535,789.75 280,614,202.37 273,626,675.84 72,523,316.28

Note 1: On 3 June 2008, the Group participated in a group defined contribution plan of Nanshan Group approved by Shenzhen government. The above supplementary pension contributions were paid into the plan through Nanshan Group.

Note 2: There are no amounts in arrears under the employee benefits payable.

Note3: Pursuant to the resolution of 2010 general meeting of shareholders on 27 May 2011, the management team will be granted a performance reward scheme based on the current year net profit attributable to the parent and yearly net asset return ratio. The Company has provided RMB9,334,547.00 of management reward in 2013 (2012: RMB10,112,903.00).

25. Taxes payable Unit: RMB Opening carrying Closing carrying Item amount Increase Decrease amount Enterprise income tax 26,849,100.79 112,424,355.65 96,247,436.82 43,026,019.62 Withholding tax (Note) 9,104,556.60 17,240,590.07 13,177,002.91 13,168,143.76 Business tax 226,308.29 3,848,934.78 3,774,607.75 300,635.32 Value-added-tax 919,596.79 17,655,971.61 17,616,601.99 958,966.41 Others 3,755,296.95 28,374,176.42 28,300,548.00 3,828,925.37 Total 40,854,859.42 179,544,028.53 159,116,197.47 61,282,690.48

Note: The amount represents the withholding tax provided by the Group at the rate of 5% or 10% when paying out dividends to foreign shareholders and Chiwan Wharf Holdings (H.K.) Limited located in HongKong.

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

26. Interest payable Unit: RMB Item Closing balance Opening balance Interest on debentures 35,950,684.93 18,009,863.00 Interest on short-term borrowings 862,500.16 531,309.99 Total 36,813,185.09 18,541,172.99

27. Dividends payable Unit: RMB Reasons for not paying dividends for more Name of entity Closing balance Opening balance than one year Payable to International Enterprise Co., Ltd. 77,208,156.09 - N/A

28. Other payables

(1) Details of other payables are as follows: Unit: RMB Item Closing balance Opening balance Temporary receipts 24,068,273.34 23,025,327.45 Quality margin 23,400,915.81 - Deposits received 2,170,768.36 2,746,129.94 Security expense payable 1,794,492.18 3,620,546.26 Others 7,710,024.61 12,182,834.75 Total 59,144,474.30 41,574,838.40

(2) The aging of other payables based on their recording dates is analyzed as follows:

Unit: RMB Closing balance Opening balance Proportion Proportion Aging Amount (%) Amount (%) Within 1 year 45,045,096.38 76.15 36,254,316.43 87.20 More than 1 year 9,789,914.42 16.56 1,353,934.00 3.26 but not exceeding 2 years More than 2 years 626,757.86 1.06 1,300,464.17 3.13 but not exceeding 3 years More than 3 years 3,682,705.64 6.23 2,666,123.80 6.41 Total 59,144,474.30 100.00 41,574,838.40 100.00

(3) As at 31 December 2013, the Group did not have any other payables to shareholders having 5% or above voting rights in the Company. For payables to related parties, please refer to (VI) 6.

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(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued

29. Current portion of non-current liabilities

(1) Details of current portion of non-current liabilities are as follows: Unit: RMB Item Closing balance Opening balance Current portion of long-term borrowings - 35,000,000.00 Current portion of deferred income 4,676,624.27(Note) 4,727,206.52 Total 4,676,624.27 39,727,206.52

Note: Please refer to (V) 34.

(2) Long-term borrowings due within one year

(a) Long-term borrowings due within one year Unit: RMB Item Closing balance Opening balance Guarantee loans - 35,000,000.00

(b) Long-term borrowings due within one year Unit: RMB Closing balance Opening Balance Annual Amount of Amount of Amount of Amount of interest foreign domestic foreign domestic Creditor Inception date Maturity date Currency rate (%) currency currency currency currency Financial institution I 2011.10.21 2013.10.20 RMB 6.4 - 20,000,000.00 Financial institution II 2012.02.09 2013.08.09 RMB 6.4 - 15,000,000.00 Total - 35,000,000.00

30、Other current liabilities 人民币元 Interest payable at Interest paid Interest payable Amount at Date of beginning of Interest accrued during the at closing of the closing of the Name of bond Par value issue Bond period Amount of issue the year during the year year year year 13 Chiwan port 100.00 14/06/2013 365 days 500,000,000.00 - 12,476,712.34 - 12,476,712.34 500,000,000.00 CP001

Note: According to Notice of Registration Acceptance (Zhong Shi Xie Zhu [2013] No. CP171) issued by China's Interbank Market Dealers Association received by the Company on May 7th, 2013, Market Dealers Association agrees with the Company’s RMB 1.6 billion yuan of short-term financing registration and the valid period of registration limit is two years from the acceptance of Notice of Registration Acceptance. On June 14th, 2013, the Company issued the first phase of short-term financing bills with RMB 500 million at the interest rate of 4.60%. The period was one year and the capital and interest should be repaid at maturity.

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

31. Long-term borrowings

(1) Categories of long-term borrowings Unit: RMB Item Closing balance Opening balance Guarantee loans( Note) - 150,000,000.00

(2) Details of long-term borrowings are as follows: Unit: RMB Closing balance Opening Balance Amount of Amount of Amount of Amount of Interest rate foreign domestic foreign domestic Creditor Inception date Maturity date Currency (%) currency currency currency currency Financial 2011.10.21 2016.10.20 RMB 6.4 - 70,000,000.00 institution I Financial 2012.02.09 2017.02.09 RMB 6.4 - 80,000,000.00 institution II Total - 150,000,000.00

32. Bonds payable Unit: RMB Interest paid Closing Term of the Opening Accrued interest during the interest Name of bonds Par value Issue date bond Issue amount interest payable for the period period payable Closing balance 11 ChiWan 01 100 2012.4.26 Five years 500,000,000.00 18,009,863.00 26,110,684.93 26,400,000.00 17,720,547.93 497,345,753.43

13 ChiWan 01 100 2013.10.18 Five years 500,000,000.00 - 5,753,424.66 - 5,753,424.66 496,164,383.57

Total 1,000,000,000.00 18,009,863.00 31,864,109.59 26,400,000.00 23,473,972.59 993,510,137.00

Note: On 25 November 2011, the Company received the Approval from CSRC (filed as Zhen Jian Xu Ke [2011] No.1889) agreeing the Company to issue corporate bonds with no more than 100 million in par value. On 26 April 2012, the Company's actual issue amounted to RMB500,000,000 with the term of five years. The bond interests should be calculated on simple interest basis at a nominal fixed interest rate of 5.28% on a yearly basis.

On 18 October 2013, the Company's actual issue amounted to RMB500,000,000 with the term of five years. The bond interests should be calculated on simple interest basis at a nominal fixed interest rate of 5.60% on a yearly basis.

According to the bond prospectus, the Company should make an announcement on whether to exercise the redemption option on the information disclosure media designated by CSRC at the 30th trading date before the interest payment date in the third interest-bearing year. If the decision of exercising the redemption option is made, the bond would be regarded as to be matured in the third year and the payment mode of redemption would be the same as that

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

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

32. Bonds payable - continued

of principal and interests of bonds due in the period. If the decision of not exercising the redemption of option is made, the Company should make an announcement on whether to raise the interest rate and the extent of variation, which ranges from zero to 100 base points. If the company chooses to exercise the option of raising the stated interest rate, the stated interest rate of the portion of non-put-back bond due in two years after the remaining period equals to the stated interest rate due in three years prior to the remaining period plus the increased base point. And the stated interest rate of the bond due in two years after the remaining period would be fixed. If the company chooses not to exercise the option of raising the stated interest rate, the original stated interest rate remains the same for the portion of non-put-back bond due in two years after the remaining period.

Investors have the option to sell bonds back to the Company at the interest payment date in the third interest-bearing year at the par value wholly or in partially, after the Company makes the announcement on whether to raise the stated interest rate and the extent of variation.

If the Company abandons the redemption option and the bondholder s abandon the put back option wholly or partially, the rest of the principal would be paid back in advance. Namely, 30% proportion of the principal should be paid back at the end of the fourth year since the bond issued and the rest should be paid back at the end of the fifth year.

33. Special payables Unit: RMB Item Opening balance Increase Decrease Closing Balance Note Refunds of Harbor 80,622,976.12 - 7,705,891.35 72,917,084.77 Note Construction Fee

Note: The item is refunds of harbor construction fee to the Company and its subsidiary Chiwan Container Terminal Company Limited from Shenzhen Traffic Bureau. According to Measures of Harbor Construction Fee Management released by Ministry of Finance, the funds should be managed in separate account and can be only used on fundamental facilities' construction of marine transportation.

34. Other non-current liabilities

(1) Details of other non-current liabilities are as follows: Unit: RMB Closing carrying Opening carrying Item amount amount Deferred income 53,271,175.40 58,379,562.14 Including: Berth priority right (Note 1) 44,582,959.88 50,518,692.14 Including: Government grant related to asset (Note 2) 8,688,215.52 7,860,870.00 Total 53,271,175.40 58,379,562.14 Less: Non-current liabilities due within one year 4,676,624.27 4,727,206.52 Including: Berth priority right 4,509,667.75 4,560,250.00 Including: Government grant related to asset 166,956.52 166,956.52 Non-current liabilities due beyond one year 48,594,551.13 53,652,355.62

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

34. Other non-current liabilities- continued

Note 1: Berth priority right represents that agreed in the contract signed in 2003, which amounts to USD14,000,000. The Group should satisfy the berthing requirement of contracted customers in priority during the contract period. According to the contract, the berth priority right should be amortized over twenty years on the straight-line basis.

Note 2: The item is government grants received which is based on the Announcement Released by National Development and Reform Commission about 2010 Investment Plans within Budget of Grains and Modern Logistics Program (NDRC[2010] No.1263) and the Announcement Released by Guangdong Provincial Department of Finance about 2012 Provincial Special Funds to Guide the Development of Modern Service Project (Guangdong Production Letter [2012] No. 621). The asset relating to the government grants has arrived the status for its intended use. Therefore, it shall be amortized on the straight-line basis over the useful life of the related asset.

Government grants programs: Unit: RMB The amount included in Balance at the operating Related to beginning of New subsidy of income of the Balance at the assets/Related to Liability Program the year the year year Other changes end of the year income Modern logistics project 7,860,870.00 - 166,956.52 - 7,693,913.48 Related to assets special subsidies Special subsidies for the development of modern - 1,000,000.00 5,697.96 - 994,302.04 Related to assets service guide Total 7,860,870.00 1,000,000.00 172,654.48 - 8,688,215.52

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

35. Share capital Unit: RMB Changes for the period Capitalisation New issue of Bonus of surplus Opening balance share issue reserve Others Subtotal Closing balance 2013: I. Restricted tradable shares 1. State-owned shares ------2. State-owned legal person ------shares 3. Other domestic shares 735,466.00 - - - (347,957.00) (347,957.00) 387,509.00 4. Other foreign shares ------Total restricted tradable shares 735,466.00 - - - (347,957.00) (347,957.00) 387,509.00 II. Tradable shares 1. Ordinary shares 464,789,805.00 - - - 77,519.00 77,519.00 464,867,324.00 denominated in RMB 2. Foreign capital shares 179,238,459.00 - - - 270,438.00 270,438.00 179,508,897.00 listed domestically 3. Foreign capital shares ------listed overseas 4. Others ------Total tradable shares 644,028,264.00 - - - 347,957.00 347,957.00 644,376,221.00 III. Total shares 644,763,730.00 - - - - - 644,763,730.00 2012: I. Restricted tradable shares 1. State-owned shares ------2. State-owned legal person ------shares 3. Other domestic shares 790,929.00 - - - (55,463.00) (55,463.00) 735,466.00 4. Other foreign shares ------Total restricted tradable shares 790,929.00 - - - (55,463.00) (55,463.00) 735,466.00 II. Tradable shares 1. Ordinary shares 464,789,805.00 - - - - - 464,789,805.00 denominated in RMB 2. Foreign capital shares 179,182,996.00 - - - 55,463.00 55,463.00 179,238,459.00 listed domestically 3. Foreign capital shares ------listed overseas 4. Others ------Total tradable shares 643,972,801.00 - - - 55,463.00 55,463.00 644,028,264.00 III. Total shares 644,763,730.00 - - - - - 644,763,730.00

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

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

36. Capital reserve Unit: RMB Opening balance Increase Decrease Closing balance 2013: Capital premium 163,560,083.00 - - 163,560,083.00 Including: Capital contributed by investors 163,560,083.00 - - 163,560,083.00 Conversion option of convertible corporate --- - bonds is exercised Debt converted into capital - - - - Differences arising from business combination --- - involving enterprises under common control Equity acquisition from minority shareholders --- - of subsidiaries Capital reserve converted into capital - - - - Other comprehensive income 3,167,500.00 277,500.00 - 3,445,000.00 Other capital reserve (861,527.35) - - (861,527.35) Including: Equity component split from convertible --- - corporate bonds Fair value of equity-settled share-based equity --- - instrument Surplus of compensation granted by --- - government for relocation in the public interests Transfer from capital reserve under the previous (2,781,133.00) - - (2,781,133.00) accounting system Others 1,919,605.65 - - 1,919,605.65 Total 165,866,055.65 277,500.00 - 166,143,555.65 2012: Capital premium 163,560,083.00 - - 163,560,083.00 Including: Capital contributed by investors 163,560,083.00 - - 163,560,083.00 Conversion option of convertible corporate --- - bonds is exercised Debt converted into capital - - - - Differences arising from business combination --- - involving enterprises under common control Equity acquisition from minority shareholders --- - of subsidiaries Capital reserve converted into capital - - - - Other comprehensive income 3,527,500.00 - 360,000.00 3,167,500.00 Other capital reserve (861,527.35) - - (861,527.35) Including: Equity component split from convertible --- - corporate bonds Fair value of equity-settled share-based equity --- - instrument Surplus of compensation granted by --- - government for relocation in the public interests Transfer from capital reserve under the previous (2,781,133.00) - - (2,781,133.00) accounting system Others 1,919,605.65 - - 1,919,605.65 Total 166,226,055.65 - 360,000.00 165,866,055.65

37. Special reserve Unit: RMB Item Opening balance Increase Decrease Closing balance 2013: Production safety fee 1,394,831.60 14,841,719.02 14,042,372.22 2,194,178.40 2012: Production safety fee - 10,853,323.95 9,458,492.35 1,394,831.60

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

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

38. Surplus reserve Unit: RMB Item Opening balance Increase Decrease Closing balance 2013: Statutory surplus reserve 464,704,268.52 18,981,440.00 - 483,685,708.52 2012: Statutory surplus reserve 421,692,405.52 43,011,863.00 - 464,704,268.52

Note: In accordance with the Company Law and the Company's Articles of Association, the Company should appropriate 10% of net profit for the year to the statutory surplus reserve, and the Company can cease appropriation when the statutory surplus reserve accumulated to more than 50% of the paid in capital. The statutory surplus reserve can be used to make up for the loss or increase the paid in capital after approval.

39. Unappropriated profit Unit: RMB Proportion of appropriation or Item Amount allocation 2013: Before adjustment: Unappropriated profit at the end of prior year 2,414,907,916.91 Adjustment: Total unappropriated profit at the beginning of year - After adjustment: Unappropriated profit at the beginning of year 2,414,907,916.91 Add: Net profit attributable to shareholders of the parent company for 502,894,547.79 the period Less: Appropriation to statutory surplus reserve 18,981,440.00 Note 1 Appropriation to discretionary surplus reserve - Appropriation to general risk reserve - Ordinary shares' dividends payable 234,049,235.00 Note 2 Ordinary shares' dividends converted into share capital - Unappropriated profit at the end of the period 2,664,771,789.70 2012: Before adjustment: Unappropriated profit at the end of prior year 2,248,722,001.48 Adjustment: Total unappropriated profit at the beginning of year - After adjustment: Unappropriated profit at the beginning of year 2,248,722,001.48 Add: Net profit attributable to shareholders of the parent company for 467,103,270.43 the period Less: Appropriation to statutory surplus reserve 43,011,863.00 Appropriation to discretionary surplus reserve - Appropriation to general risk reserve - Ordinary shares' dividends payable 257,905,492.00 Ordinary shares' dividends converted into share capital - Unappropriated profit at the end of the period 2,414,907,916.91

Note 1: Withdraw statutory surplus reserve

According to the Articles of Association, the Company is required to transfer 10% of its net profit to the statutory surplus reserve.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

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

39. Unappropriated profit - continued

Note 2: Cash dividends approved by shareholders' meeting during the year

Pursuant to the board resolution on 28 May 2013, on the basis of 644,763,730 issued shares for the year ended 31 December 2012, dividends of RMB3.63 for every 10 shares were distributed to all the shareholders, which amounted to RMB234,049,235.00.

Note 3: Profit distribution decided after the balance sheet date

According to a proposal made at the seventh session of the seventh Board of Directors held at 27 March 2014, on the basis of 644,763,730 issued shares as at 31 December 2013, cash dividends of RMB251,457,854.70will be distributed to all the shareholders. The above proposal regarding dividends distribution is yet to be approved at the shareholders' meeting.

Note 4: Appropriation to surplus reserve that has been made by subsidiaries

As at 31 December 2013, the balance of the Group's unappropriated profit included appropriation to surplus reserve that has been made by subsidiaries amounting to RMB522,067,616.93 (31 December 2012: RMB497,496,804.00).

40. Operating income and operating costs

(1) Operating income and operating costs Unit: RMB Item 2013 2012 Principal operating income 1,705,818,574.07 1,710,327,274.38 Other operating income 74,956,262.23 73,518,860.38 Total 1,780,774,836.30 1,783,846,134.76 Principal operating costs 900,138,084.80 834,345,295.33 Other operating costs 9,996,655.10 10,256,123.19 Total 910,134,739.90 844,601,418.52

(2) Principal operating activities (classified by business) Unit: RMB 2013 2012 Item Operating income Operating costs Operating income Operating costs Load and unload services 1,605,650,252.96 786,939,147.60 1,600,968,079.24 743,507,147.27 Port ancillary services 88,769,243.40 113,198,937.20 97,455,819.85 90,838,148.06 Agency and others services 11,399,077.71 - 11,903,375.29 - Total 1,705,818,574.07 900,138,084.80 1,710,327,274.38 834,345,295.33

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

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

40. Operating income and operating costs - continued

(3) Principal operating activities (classified by geographical areas) Unit: RMB 2013 2012 Item Operating income Operating costs Operating income Operating costs Mainland China 1,699,914,732.06 900,138,084.80 1,703,981,350.08 834,345,295.33 Hong Kong 5,903,842.01 - 6,345,924.30 - Total 1,705,818,574.07 900,138,084.80 1,710,327,274.38 834,345,295.33

(4) Other services Unit: RMB 2013 2012 Other operating Other operating Other operating Other operating Item income cost income cost Lease income 35,117,724.98 4,174,650.96 29,801,818.95 3,271,518.59 Security fee 11,117,771.40 - 10,456,055.27 - Port ancillary services 15,926,858.54 4,402,367.57 17,308,127.31 5,045,888.27 Agency fee 3,507,269.40 1,419,636.57 3,555,772.45 1,938,716.33 Sales of material 2,109,256.02 - 2,908,705.11 - Documentation fee 1,057,710.80 - 938,488.36 - Others 6,119,671.09 - 8,549,892.93 - Total 74,956,262.23 9,996,655.10 73,518,860.38 10,256,123.19

(5) Operating income from the Group's top five customers Unit: RMB Proportion to total operating Name of customer Operating income income of the Group (%) Customer A 453,539,386.05 25.47 Customer D 327,250,983.57 18.38 Customer B 112,291,688.74 6.31 Customer C 40,055,029.73 2.25 Customer F 30,998,707.60 1.74 Total 964,135,795.69 54.15

41. Business taxes and surcharges Unit: RMB Item 2013 2012 Basis of calculation Business tax 3,848,934.78 53,812,383.37 Note Urban maintenance and construction tax 1,444,519.09 3,996,559.48 Note Education surcharges 814,298.78 2,866,407.34 Note Others 653,344.16 475,896.13 Total 6,761,096.81 61,151,246.32

Note: Please refer to Note (III).

- 76 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

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

42. Financial expenses Unit: RMB Item 2013 2012 Interest expense 80,835,143.78 84,667,523.37 Less: Capitalized interest expenses 16,949,188.82 11,116,984.36 Less: Interest income 3,995,137.70 6,906,511.07 Exchange differences (22,816,441.78) 1,430,738.00 Less: Capitalized exchange differences - - Others 3,882,116.02 2,688,398.36 Total 40,956,491.50 70,763,164.30

43. Impairment losses of assets Unit: RMB Item 2013 2012 I. Bad debt losses 265,451.99 331,339.05 II. Write-down of inventories 182,752.75 - III. Impairment on available-for-sale financial assets - - IV. Impairment on held-to-maturity investments - - V. Impairment on long-term equity investments - - VI. Impairment on investment properties - - VII. Impairment on fixed assets - - VIII. Impairment on construction materials - - IX. Impairment on construction in progress - - X. Impairment on bearer biological assets - - XI. Impairment on oil and gas assets - - XII. Impairment on intangible assets - - XIII. Impairment on goodwill - - XIV. Others - - Total 448,204.74 331,339.05

44. Investment income

(1) Details of investment income Unit: RMB 2013 2012 Long-term equity investments income under cost method 3,784,500.00 - Long-term equity investments income under equity method 97,910,121.30 83,158,912.23 Investment income on disposal of long-term equity investment - - Investment income on available-for-sale financial assets, etc. 360,000.00 360,000.00 Total 102,054,621.30 83,518,912.23

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued

44. Investment income - continued

(2) Long-term equity investments income under cost method Unit: RMB Reasons for increases or decreases in the current period Investee 2013 2012 compared to the prior period China Ocean Shipping Agency The investee distributed profit to 3,784,500.00 - (Shenzhen) Company Limited shareholders this year

(3) Long-term equity investments income under equity method Unit: RMB Reasons for increases or decreases in the current Investee 2013 2012 compared to the prior period MPIL 54,388,990.99 50,656,653.57 Net profit of investee fluctuates. China Overseas Harbor Affairs 33,210,403.04 24,286,065.14 (Laizhou) Co.,Ltd Net profit of investee fluctuates. CMBL 7,749,916.44 6,197,940.60 Net profit of investee fluctuates. China Merchants Holdings (international ) Information 1,455,671.68 2,018,252.92 Net profit of investee fluctuates. Technology Co.,Ltd China Development Finance Co., Ltd 1,105,139.15 - Net profit of investee fluctuates. Total 97,910,121.30 83,158,912.23

45. Non-operating income

(1) Details of non-operating income are as follows: Unit: RMB Amount recognized as non-recurring gain and loss in the Item 2013 2012 current period Total gains on disposal of non-current assets 24,433.38 1,190,772.35 24,433.38 Including: Gains on disposal of intangible assets -- - Gains on disposal of fixed assets 24,433.38 1,190,772.35 24,433.38 Government grants 460,819.18 494,730.40 460,819.18 Insurance compensation income 525,096.31 1,800,200.00 525,096.31 Income derived from settlement of the payables - 2,288,281.60 - that cannot be paid Others 1,837,957.60 1,864,403.38 1,837,957.60 Total 2,848,306.47 7,638,387.73 2,848,306.47

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

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

45. Non-operating income - continued

(2) Details of government grants are as follows: Unit: RMB Related to assets/Related to Item 2013 2012 income Circulation business development project funds - 355,600.00 Related to income Financial support funds of business tax converted to VAT 288,164.70 - Related to income Modern logistics project special subsidies 166,956.52 139,130.40 Related to assets Special subsidies for the development of modern service 5,697.96 - Related to assets guide Total 460,819.18 494,730.40

46. Non-operating expenses Unit: RMB Amount recognized as non-recurring gain and loss in the current Item 2013 2012 period Total losses on disposal of non-current assets 1,721,447.10 2,940,282.82 1,721,447.10 Including: Losses on disposal of fixed assets 1,721,447.10 2,940,282.82 1,721,447.10 Donations contributed 32,000.00 20,000.00 32,000.00 Amercement outlay 145,020.00 933.54 145,020.00 Others 244,186.96 867,519.76 244,186.96 Total 2,142,654.06 3,828,736.12 2,142,654.06

47. Income tax expenses Unit: RMB Item 2013 2012 Current tax expense calculated according to tax laws and relevant 117,799,271.21 133,843,163.12 requirements Deferred income tax (290,662.71) (8,718,114.90) Total 117,508,608.50 125,125,048.22

Reconciliation of income tax expenses to the accounting profit is as follows: Unit: RMB Item 2013 2012 Accounting profit 759,988,523.25 740,894,558.69 Income tax expenses calculated at 25% (the prior year: 25 %) 189,997,130.81 185,223,639.67 Effect of expenses that are not deductible for tax purposes 1,712,681.85 3,715,115.22 Effect of tax-free income (25,513,655.33) (20,879,728.00) Effect of unrecognized deductible losses and deductible temporary 20,477,206.44 957,341.33 differences for tax purposes Changes in opening balances of deferred tax assets/liabilities due to the - - adjustment in tax rate Effect of different tax rates of subsidiaries operating in other jurisdictions (176,804.61) (302,040.32) Effect of tax preference policy (74,362,866.22) (50,664,660.13) Withholding tax (Note) 5,374,915.56 7,075,380.45 Income tax expense 117,508,608.50 125,125,048.22

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

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

47. Income tax expense - continued

Note: Withholding income tax was accrued at the rate of 5% or 10% for dividend payable to Chiwan Wharf Holdings (H.K.) Limited for the year ended 31 December 2013, declared by those Group's PRC subsidiaries of which Chiwan Wharf Holdings (H.K.) Limited is a shareholder.

48. Government grants Unit: RMB Item 2013 2012 Government grants related to assets: Modern logistics project special subsidies 1,000,000.00 - Government grants related to income: Financial support funds of business tax converted to VAT 288,164.70 - Circulation business development project funds - 355,600.00 Sub-total 288,164.70 355,600.00 Total 1,288,164.70 355,600.00 Less: government grants credited in deferred income 1,000,000.00 - Add: Government grants in current year profit debited deferred income 172,654.48 139,130.40 Government grants credited in current year profit 460,819.18 494,730.40

49. Borrowing cost Unit: RMB Amount of borrowing costs capitalised during Capitalisation Name of Project the year rate Construction in progress 16,949,188.82 6.10% Sub-total of borrowing costs capitalised during the year 16,949,188.82 Borrowing costs recognised in profit or loss during the year 63,885,954.96 Total of borrowing costs during the year 80,835,143.78

50. Earnings per share

For the purpose of calculating earnings per share, net profit for the current period attributable to ordinary shareholders is: Unit: RMB Item 2013 2012 Net profit for the current period attributable to ordinary shareholders 502,894,547.79 467,103,270.43 Including: Net profit from continued operations 502,894,547.79 467,103,270.43 Net profit from discontinued operations - -

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

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

50. Earnings per share - continued

For the purpose of calculating basic earnings per share, the denominator is the weighted average number of outstanding ordinary shares and its calculation process is as follows: Unit: RMB Item 2013 2012 Number of ordinary shares outstanding at the beginning of year 644,763,730.00 644,763,730.00 Add: Weighted average number of ordinary shares issued during the - - period Less: Weighted average number of ordinary shares repurchased - - during the period Number of ordinary shares outstanding at the end of year 644,763,730.00 644,763,730.00

Unit: RMB Item 2013 2012 Calculated based on net profit attributable to shareholders of the

parent: Basic earnings per share 0.780 0.724 Diluted earnings per share 0.780 0.724 Calculated based on net profit from continued operations attributable

to shareholders of the parent: Basic earnings per share 0.780 0.724 Diluted earnings per share 0.780 0.724 Calculated based on net profit from discontinued operations

attributable to shareholders of the parent: Basic earnings per share - - Diluted earnings per share - -

Since there are no dilutive potential ordinary shares, the diluted earnings per share equals to the basic earnings per share.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued

51. Other comprehensive income Unit: RMB Item 2013 2012 1. Gains (losses) arising from available-for-sale financial assets 370,000.00 (480,000.00) Less: Tax effects arising from available-for-sale financial assets 92,500.00 (120,000.00) Net amounts included in other comprehensive income in the prior - - period that are transferred to profit or loss for the period Subtotal 277,500.00 (360,000.00) 2. Share of other comprehensive income of the investee accounted - - for using the equity method Less: Tax effects arising from the share of other comprehensive - - income of the investee accounted for using the equity method Net amounts included in other comprehensive income in the prior - - period that are transferred to profit or loss for the period Subtotal - - 3. Gains (losses) arising from cash flow hedging instruments - - Less: Tax effects arising from cash flow hedging instruments - - Net amounts included in other comprehensive income in the prior - - period that are transferred to profit or loss for the period Adjustments to the initial recognition amount of hedged items - - Subtotal - - 4. Translation differences of financial statements denominated in (107,852.00) 2,722.58 foreign currencies Less: Net amounts transferred to profit or loss for the period on - - disposal of foreign operations Subtotal (107,852.00) 2,722.58 5. Others - - Less: Tax effects arising from other items recognized in other - - comprehensive income Net amounts included in other comprehensive income in the prior - - period that are transferred to profit or loss for the period Subtotal - - Total 169,648.00 (357,277.42)

52. Notes to items in the cash flow statement

(1) Other cash receipts relating to operating activities Unit: RMB Item 2013 2012 Interest income 3,009,070.68 6,906,511.07 Refunds of Harbor Construction Fee received 1,651,232.18 5,048,835.00 Government grants 1,288,164.70 355,600.00 Others 2,338,196.74 1,131,730.20 Total 8,286,664.30 13,442,676.27

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

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

52. Notes to items in the cash flow statement - continued

(2) Other cash payments relating to operating activities Unit: RMB Item 2013 2012 Office expenses & utilities 6,388,525.52 8,748,558.16 Port expenses 14,105,498.72 7,699,962.59 Entertainment 6,157,884.55 7,575,397.13 Car expenses 4,540,709.81 5,294,284.85 Asset insurance 3,652,170.99 4,480,077.83 Consulting & auditing 3,491,886.00 4,423,778.96 Travel & accommodation 2,545,358.02 2,559,818.29 Advertisements & exhibition 273,812.31 189,179.23 Others 26,501,664.87 25,806,218.64 Total 67,657,510.79 66,777,275.68

(3) Other cash payments relating to financing activities Unit: RMB Item 2013 2012 Debt issue costs 175,000.00 400,000.00 Others 164,392.00 - Total 339,392.00 400,000.00

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

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

53. Supplementary information to the cash flow statement

(1) Supplementary information to the cash flow statement Unit: RMB Supplementary 2013 2012 1. Reconciliation of net profit to cash flows from operating activities: Net profit 642,479,914.75 615,769,510.47 Add: Provision for impairment losses of assets 448,204.74 331,339.05 Depreciation of fixed assets 180,212,504.89 166,466,467.06 Depreciation and amortization of investment property 1,215,753.72 1,215,753.72 Amortization of intangible assets 42,828,315.07 38,868,236.07 Amortization of long-term prepaid expenses 4,937,325.85 3,424,158.13 Losses on disposal of fixed assets , intangible assets and 1,697,013.72 1,749,510.47 other long-term assets Financial expenses 36,934,435.66 74,942,295.87 Gains arising from investments (102,054,621.30) (83,518,912.23) Decrease(Increase) in deferred tax assets (290,662.71) (8,718,114.90) Decrease in inventories (110,537.64) 2,174,786.58 Decrease(Increase) in operating receivables 34,080,563.77 (32,480,512.53) Increase(Decrease) in operating payables 54,800,086.71 (81,752,065.05) Net cash flows from operating activities 897,178,297.23 698,472,452.71 2. Significant investing and financing activities that do not involve

cash receipts and payments: Conversion of debt into capital - - Convertible bonds due within one year - - Fixed assets acquired under finance leases - - 3. Net changes in cash and cash equivalents: Closing balance of cash 715,539,516.48 314,855,567.54 Less: Opening balance of cash 314,855,567.54 478,788,942.76 Add: Closing balance of cash equivalents - - Less: Opening balance of cash equivalents - - Net increase(Decrease) in cash and cash equivalents 400,683,948.94 (163,933,375.22)

(2) Composition of cash and cash equivalents Unit: RMB Item Closing balance Opening balance I. Cash 715,539,516.48 314,855,567.54 Including: Cash on hand 10,685.59 14,390.23 Bank deposits 713,508,210.87 313,139,193.04 Other monetary funds 2,020,620.02 1,701,984.27 II. Cash equivalents - - III. Closing balance of cash and cash equivalents 715,539,516.48 314,855,567.54

- 84 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(VI) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS

1. Parent of the Company Unit: RMB Proportion of the entity's Proportion of ownership the entity's Ultimate interests held voting power controllin Name of the Related party Type of the Place of Legal by the parent held by the g party of Organization parent relationship entity incorporation representative Nature of business Registered capital (%) parent (%) the entity code Controlling Listed in Hong CMHI Hong Kong Fu Yuning Port shipping HKD5,000,000,000.00 - 66.10(Note) CMG N/A shareholders Kong The state owned assets Land development, supervisi port service and on and Nanshan Controlling Sino-foreign transportation, Shenzhen Fu Yuning RMB900,000,000.00 32.52 - (Note) Administ 61883297-6 Group shareholders joint venture industry and ration commerce, tour, real Commiss estate and others ion of the State Council The ultimate controller of the Group is CMG, whose financial statements are not required to be made public.

Note: As mentioned in Note (I), Nanshan Group had 57.52% equity in the Company before 1 Novermber 2012. Since 1 November 2012, CMHI obtained 8.58% equity via its subsidiary Jing Feng Company, and obtained another 57.52% equity by entrustment of Nanshan Group's stock, accordingly holding totally 66.10% of the voting shares. Please refer to Note (I) for details.

On March 6th, 2013, the State-owned Assets Supervision and Administration Commission of the State Council agreed that Nanshan Group transferred its holding 161,190,933 A-shares to Warehousing (Shenzhen) Co., Ltd, subsidiary of China Merchants Holdings International. The transfer procedures of registration of the above shares have been completed on April 25th, 2013.

2. Subsidiaries of the Company

The general background and other related information of the subsidiaries are set out in Note (IV).

3. Associates and joint ventures of the Company

The general background and other related information of the associates and joint ventures are set out in Note (V) 9.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(VI) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued

4. Other related parties of the Company

Relationships between other related Name of other related parties parties and the Company Organization code Haiqin Engineering Controlled by the same controlling shareholder 61888000-1 Shenzhen Mawan Port Co., Ltd. ("SMP") Controlled by the same controlling shareholder 74322579-6 Shenzhen Mawan Wharf Co., Ltd. ("SMW") Controlled by the same controlling shareholder 74322582-5 China Merchants Port Services (Shenzhen) Co., Ltd ("CMPS") Controlled by the same controlling shareholder 19244179-0 Shekou Container Terminals Limited ("SCT") Controlled by the same controlling shareholder 61883279-X An Xunjie Container Terminals Limited Controlled by the same controlling shareholder 75048172-0 Shenzhen Lian Yunjie Container Terminals Limited Controlled by the same controlling shareholder 71093674-3 China Merchants International Cold Chain (Shenzhen) Company Controlled by the same controlling shareholder 61889222-3 Limited ("CMCCL") Shenzhen Haixing Harbor Development Co.,Ltd("Haixing") Controlled by the same controlling shareholder 61884362-4 Shenzhen Huxing Tug Service Co., Ltd. Controlled by the same controlling shareholder 19233962-2 Shenzhen Lianda Tug Service Co., Ltd. Controlled by the same controlling shareholder 61880378-8 China Ocean Shipping Agency (Shenzhen) Company Limited Controlled by the same controlling shareholder 19244404-3 Hongkong International Enterprise Co., Ltd. Controlled by the same controlling shareholder N/A Shenzhen Malai Warehouse Co., Ltd. Controlled by the same controlling shareholder 79255372-9 Laizhou Hairun of Port Management Co. Ltd. A subsidiary of the associate 763687373 Shenzhen China Merchants Shangzhi Investment Co., Ltd. Controlled by the same ultimate actual controller 57637705-4 Shenzhen China Merchants Qianhaiwan Property Co., Ltd. Controlled by the same ultimate actual controller 79386851-1 Shenzhen China Merchants International Shipping Agency Co., Ltd. Controlled by the same ultimate actual controller 70840200-5 Youlian shipyard Shekou Co. Ltd. Controlled by the same ultimate actual controller 61880825-5 Shenzhen City Venture Investment Co. Ltd. Controlled by the same ultimate actual controller 70844223 Shenzhen China Merchants Property Management Co., Ltd. Controlled by the same ultimate actual controller 19244307-3 Associated company controlled by the controlling China Petroleum Supply Base Co., Ltd. ("CPSB") 61883389-9 shareholder Shenzhen Nanshan Real Estate development Ltd.(Nanshan Associated company controlled by the controlling 75046859-3 Development) shareholder Associated company controlled by the controlling Zengcheng Xinkang property Co., Ltd. 70820542-3 shareholder Associated company controlled by the controlling Shenzhen Baowan Holding Co., Ltd. 61885906-0 shareholder Associated company controlled by the controlling Shenzhen Chiwan Property Management Co., Ltd. 70846415-0 shareholder Shenzhen Chixiao Construction Technology Co., Ltd. (Chixiao Associated company controlled by the controlling 61881595-7 Construction) shareholder Associated company controlled by the controlling Shenzhen Xuqin Industrial Development Co., Ltd.(“Xuqin”) 70845749-5 shareholder Associated company controlled by the same ultimate China Merchant Bank Co., Ltd.("CMB") 10001686-X actual controller Nantian Oilmills(Note) Ex-common key management personnel 61881614-0 Shenzhen Southsea Grains Industries Limited ("Southsea Ex-common key management personnel 61883769-7 Grains")(Note)

Note: Since 7th January 2013, Nantian Oilmills and Southsea Grains have no common key management personnel with the Company; hence, they are no longer the related parties during this year.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(VI) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued

5. Related party transactions

(1) Sales and purchase of goods, provision and receipt of services Unit: RMB 2013 2012 Proportion of the Proportion of the Pricing and amount of related amount of related decision-making party transactions to party transactions to procedures of that of similar that of similar Type of related party Content of related related party transactions transactions Related parties transaction party transaction transactions Amount (%) Amount (%) Purchase of goods and receiving of services: China Merchants Holdings Technical service (International) Information Receipt of service Negotiation 6,054,584.25 0.67 13,471,885.50 1.6 fee Technology Company Ltd Load and unload Haixing Receipt of service Negotiation 5,551,215.00 0.61 3,997,020.00 0.47 service Xuqin Receipt of service Construction Negotiation 5,145,932.00 0.57 2,197,526.40 0.26 Load and unload SCT Receipt of service Negotiation 5,127,662.33 0.56 4,259,648.91 0.5 service Project Haiqin Engineering Receipt of service Negotiation 3,735,710.81 0.41 9,111,950.00 1.08 management Shenzhen Chiwan Property Property Receipt of service Negotiation 1,646,853.90 0.18 2,094,793.27 0.25 Management Co., Ltd management fee An Xunjie Container Terminals Load and unload Receipt of service Negotiation 1,203,967.80 0.13 13,691,728.64 1.62 Limited service Zengcheng Xinkang property Co., Property Receipt of service Negotiation 695,282.50 0.08 509,668.00 0.06 Ltd. management fee Shenzhen China Merchants International Shipping Agency Co., Receipt of service Agency service Negotiation 558,033.65 0.07 - - Ltd. Shenzhen Lian Yunjie Container Load and unload Receipt of service Negotiation 403,304.44 0.05 4,586,447.37 0.54 Terminals Limited service Property CPSB Receipt of service Negotiation 135,911.18 0.01 137,267.71 0.02 management fee Load and unload SMP Receipt of service Negotiation 53,678.40 0.006 75,998.40 0.01 service Load and unload SMW Receipt of service Negotiation 23,040.00 0.003 153,326.50 0.02 service Load and unload Nantian Oilmills Receipt of service Negotiation N/A N/A 519,863.96 0.06 service Total 30,335,176.26 54,807,124.66 Rendering of services: SMP Provision of service Trailer service etc. Negotiation 10,810,885.66 11.28 9,384,717.81 16.25 Laizhou Hairun of Port Provision of service Trailer service Negotiation 6,600,000.00 7.44 0.03 Management Co. Ltd. 2,750,000.00 CMBL Provision of service Trailer service etc. Negotiation 4,620,706.25 5.21 7,792,336.58 13.49 SMW Provision of service Trailer service etc. Negotiation 4,252,942.34 4.48 3,159,122.71 5.47 China Ocean Shipping Agency Provision of service Tugboat service Negotiation 4,771,884.34 4.49 7,272,911.38 9.02 (Shenzhen) Company Limited Shenzhen China Merchants International Shipping Agency Co., Provision of service Tugboat service Negotiation 2,572,233.96 2.90 2,700,256.00 3.35 Ltd. SCT Provision of service Trailer service etc. Negotiation 2,015,570.01 1.54 2,387,496.22 4.13 China Overseas Harbour Affairs Provision of service Dispatch income Negotiation 941,581.20 8.26 2,930,997.09 0.18 (Laizhou) Co., Ltd Load and unload CMCCL Provision of service Negotiation 781,333.00 0.15 526,056.00 0.03 service Shenzhen Lianda Tug Service Co., Provision of service Tugboat service Negotiation 550,105.88 0.62 2,034,716.73 2.52 Ltd. Youlian shipyard Shekou Co. Ltd. Provision of service Shipping service Negotiation 384,457.36 0.43 1,386,369.60 2.40 Shenzhen Huxing Tug Service Co., Provision of service Tugboat service Negotiation 196,056.23 0.22 168,368.25 0.21 Ltd. Zengcheng Xinkang property Co., Provision of service Others Negotiation 6,666.72 0.06 7,173.12 0.001 Ltd. Load and unload Southsea Grains Provision of service Negotiation N/A N/A 909,166.94 0.05 service Load and unload Nantian Oilmills Provision of service Negotiation N/A N/A 14,695,584.99 0.88 service Total 38,504,422.95 58,105,273.42

- 87 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(VI) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued

5. Related party transactions - continued

(2) Leases with related parties

The Group as the lessor: Unit: RMB Basis of Lease income Type of leased Inception date Expiration date determining the recognised in the Name of lessor Name of lessee assets of leases of leases lease income current year Coastal line, The Company CPSB packing yards and January 2013 December 2013 Negotiation 12,873,750.00 road lighting Chiwan Container Terminal Company CMBL Crane January 2013 December 2013 Negotiation 1,920,000.00 Limited Total 14,793,750.00

The Group as the lessee: Unit: RMB

Basis of Lease payment Type of Inception Expiration determining the recognised in the Name of lessor Name of lessee leased assets date of leases date of leases lease payment current year Land, Office Companies within Automatic Nanshan Group and packing January 2013 Negotiation 65,266,429.79 the Group renewal yard The Company and Shenzhen Malai Chiwan Container December Warehouse January 2013 Negotiation 7,037,155.55 Warehouse Co., Ltd. Terminal 2013 Company Limited Chiwan Container Former Bay December CMPS Terminal January 2013 Negotiation 3,000,000.00 port lands 2013 Company Limited Packing yard December CPSB The Company January 2013 Negotiation 1,252,919.70 and crane 2013 Shenzhen China Chiwan Container December Merchants Shangzhi Terminal Buildings January 2013 Negotiation 706,971.00 2013 Investment Co., Ltd. Company Limited December SCT The Company Crane January 2013 Negotiation 720,000.00 2013 Shenzhen Chiwan Property December The Company Building January 2013 Negotiation 255,272.30 Management Co., 2013 Ltd. Shenzhen Chiwan Shenzhen Baowan Shipping and December Warehouse January 2013 Negotiation 100,494.13 Holding Co., Ltd. Transportation 2013 Company Limited Total 78,339,242.47

(3) Compensation for key management personnel Unit: RMB Item 2013 2012 Compensation for key management personnel 8,108,000.00 8,630,000.00       

- 88 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(VI) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued

6. Amounts due from/to related parties Unit: RMB Item Related parties Closing balance Opening balance Cash and bank China Merchants Bank 152,851,220.46 50,688,701.00 Accounts SMP 1,397,911.61 649,861.31 receivable China Ocean Shipping Agency (Shenzhen) 880,489.90 - Company Limited SCT 768,650.00 665,100.28 SMW 460,432.07 193,574.85 CMBL 334,800.00 432,460.00 Shenzhen China Merchants International 151,120.00 - Shipping Agency Co., Ltd. CPSB 113,503.83 - Nantian Oilmills N/A 1,616,308.03 Southsea Grains N/A 1,285,840.60 Others 7,403.04 11,103.56 Total 4,114,310.45 4,854,248.63 Advances Xuqin - 93,006.00 Other receivables CMBL 1,000,000.00 1,427,200.08 Shenzhen CM Qianhaiwan Property Co., 448,820.00 435,884.00 Ltd. CMCCL 435,542.50 108,040.00 SMP 334,438.26 38,609.78 SMW 207,921.81 1,327,947.36 Xuqin 320,000.00 320,000.00 CPSB 135,621.91 135,621.91 Shenzhen China Merchants Shangzhi 85,684.00 198,008.00 Investment Co., Ltd. SCT - 187,101.86 Shenzhen China Merchants Property 5,294.00 80,423.20 Management Co., Ltd. Shenzhen City Venture Investment Co. - 20,052.00 Ltd. Others 120,572.70 19,150.00 Total 3,093,895.18 4,298,038.19 Dividends MPIL 3,334,985.50 - receivable Accounts payable Nanshan Group 21,210,268.59 4,256,802.86 Haiqin Engineering 4,225,367.81 4,355,107.45 China Merchants Holdings (International) 3,069,805.00 802,290.00 Information Technology Company Ltd. Xuqin 2,483,784.77 239,976.51 Zengcheng Xinkang property Co., Ltd. 138,310.50 123,540.75 Nantian Oilmills N/A 291,764.02 Chixiao Construction - 113,000.00 Others 120,000.00 2,857.65 Total 31,247,536.67 10,185,339.24 Dividends Hongkong International Enterprise Co., 77,208,156.09 - payable Ltd.

- 89 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(VI) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued

6. Amounts due from/to related parties - continued Unit: RMB Item Related parties Closing balance Opening balance Other Laizhou Hairun of Port Management Co. 550,000.00 550,000.00 payables Ltd. SMW 336,428.00 44,702.66 China Merchants Holdings (International) 298,403.00 163,300.00 Information Technology Company Ltd. CMBL 112,928.51 12,000.00 SCT 13,872.00 2,801,555.00 Others 10,385.10 108,028.30 Total 1,322,016.61 3,679,585.96

(VII) COMMITMENTS

1. Capital commitments Unit: RMB Item Closing balance Opening balance Capital commitments that have been entered into but have not been recognised in the financial statements: Commitment for acquisition of long-term assets 117,323,839.67 353,109,299.31

2. Operating lease commitments

As of the balance sheet date, the Group had the following commitments in respect of non- cancellable operating leases: Unit: RMB Item Closing balance Opening balance Minimum lease payments under non-cancellable operating leases: 1st year subsequent to the balance sheet date 21,549,029.24 10,136,023.61 2nd year subsequent to the balance sheet date 10,149,611.12 8,718,378.00 3rd year subsequent to the balance sheet date 280,341.36 8,340,011.00 More than 3 years 1,327,099.83 1,588,601.04 Total 33,306,081.55 28,783,013.65

(VIII) EVENTS AFTER THE BALANCE SHEET

1. Profit appropriation after the balance sheet date Unit: RMB Item Amount Proposed distribution of profits or dividends (Note) 251,457,854.70 Profits or dividends declared to be distributed To be approved by General meeting of shareholders

Note: Please refer to Note (V) 39.

- 90 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(IX) OTHER SIGNIFICANT EVENTS

According to a proposal considered and passed at the fifth session of the seventh Board of Directors held on 23 April 2013 and 2012 Annual Shareholders' General Meeting held on 21 May 2013, the Company is approved to merge Shenzhen Chiwan Trains-Grains Terminal Company Limited and Shenzhen Chiwan Terminal Company Limited by absorption.

On 25 January 2014, Economy, Trade and Information Commission of Shenzhen Municipality released Reply to the Company's Proposed Merge of Shenzhen Chiwan Trains-Grains Terminal Company Limited and Shenzhen Chiwan Terminal Company Limited (filed as Shen Jing Mao Xin xi[2014]No.109), agreeing the merger of the Company and Shenzhen Chiwan Terminal Company Limited by absorption.

On 29 February 2014, Shenzhen Chiwan Terminal Company Limited completed the procedure of cancellation of registration.

(X) SEGMENT REPORTING

Subject to the Group's in-house infrastructure, management requirements and internal reporting system, the operation businesses of the Group are classified into three reporting segments determined based on the nature of business. The Group's management periodically evaluates the operating results of these reporting segments to make decisions about resources to be allocated to the segments and assess their performance. Major products and services delivered or provided by each of the reporting segments are load and unload services, trailer and tugboat business, agency services and other segments.

Segment information is disclosed in accordance with the accounting policies and measurement standards adopted by each segment when reporting to management. The measurement basis is consistent with the accounting and measurement basis in the preparation of the financial statements.

- 91 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(X) SEGMENT REPORTING - continued

(1) Segment information Unit: RMB Load and unload services Trailer and tugboat business Agency services Unappropriated items Inter-segment deduction Total

2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 Operating income Revenue arising from external 1,668,049,422.40 1,664,268,714.06 95,225,068.70 100,205,819.85 17,500,345.20 19,371,600.85 - - - - 1,780,774,836.30 1,783,846,134.76 transactions Revenue arising from inter-segment - - 65,764,188.32 40,915,355.72 117,822.50 - - - (65,882,010.82) (40,915,355.72) - - transactions Total operating income 1,668,049,422.40 1,664,268,714.06 160,989,257.02 141,121,175.57 17,618,167.70 19,371,600.85 - - (65,882,010.82) (40,915,355.72) 1,780,774,836.30 1,783,846,134.76

Reconciling items:

Operating Income in the financial statements 1,780,774,836.30 1,783,846,134.76

Operating cost 858,643,893.87 792,177,702.37 114,799,318.52 91,504,973.61 2,573,538.33 1,834,098.26 - - (65,882,010.82) (40,915,355.72) 910,134,739.90 844,601,418.52

Segment operating profits 809,405,528.53 872,091,011.69 46,189,938.50 49,616,201.96 15,044,629.37 17,537,502.59 - - - - 870,640,096.40 939,244,716.24

Reconciling items:

Business taxes and surcharges 4,174,275.23 55,297,994.29 225,959.09 4,315,273.27 2,360,862.49 1,537,978.76 - - - - 6,761,096.81 61,151,246.32

General and administrative expenses 118,025,118.92 106,539,704.88 9,749,695.93 8,684,709.66 7,952,977.08 6,663,054.70 29,518,261.88 31,545,502.48 - - 165,246,053.81 153,432,971.72

Financial expenses 19,982,454.31 25,905,412.79 (837,522.00) (130,253.59) (63,586.23) (530,953.89) 21,875,145.42 45,518,958.99 - - 40,956,491.50 70,763,164.30

Impairment losses of assets 303,958.75 230,238.86 - - 144,245.99 21,322.87 - 79,777.32 - - 448,204.74 331,339.05

Investment Income ------672,315,614.56 616,036,203.10 (570,260,993.26) (532,517,290.87) 102,054,621.30 83,518,912.23

Operating profit 666,919,721.32 684,117,660.87 37,051,805.48 36,746,472.62 4,650,130.04 9,846,100.15 620,922,207.26 538,891,964.31 (570,260,993.26) (532,517,290.87) 759,282,870.84 737,084,907.08

Non-operating income 2,693,856.46 6,638,505.65 20,702.99 26,018.69 133,747.02 973,863.39 - - - - 2,848,306.47 7,638,387.73

Non-operating expenses 2,022,361.73 1,395,073.09 94,394.63 116,520.95 25,897.70 2,317,142.08 - - - - 2,142,654.06 3,828,736.12

Gross profit 667,591,216.05 689,361,093.43 36,978,113.84 36,655,970.36 4,757,979.36 8,502,821.46 620,922,207.26 538,891,964.31 (570,260,993.26) (532,517,290.87) 759,988,523.25 740,894,558.69

Income tax expenses 100,546,310.01 122,545,872.35 9,483,730.55 9,155,955.61 830,159.26 1,141,826.93 6,648,408.68 (7,718,606.67) - - 117,508,608.50 125,125,048.22

Net profit 567,044,906.04 566,815,221.08 27,494,383.29 27,500,014.75 3,927,820.10 7,360,994.53 614,273,798.58 546,610,570.98 (570,260,993.26) (532,517,290.87) 642,479,914.75 615,769,510.47

- 92 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(X) SEGMENT REPORTING - continued

(1) Segment information - continued Unit: RMB Load and unload services Trailer and tugboat business Agency services Unappropriated items Inter-segment deduction Total

2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 Total segment assets 5,443,487,886.90 5,132,632,282.84 215,576,142.44 223,004,419.04 48,802,059.00 47,280,807.56 8,299,414,360.00 6,955,570,183.05 (6,660,751,233.64) (5,577,357,241.39) 7,346,529,214.70 6,781,130,451.10 Total assets in the financial 5,443,487,886.90 5,132,632,282.84 215,576,142.44 223,004,419.04 48,802,059.00 47,280,807.56 8,299,414,360.00 6,955,570,183.05 (6,660,751,233.64) (5,577,357,241.39) 7,346,529,214.70 6,781,130,451.10 statements Total segment liabilities 2,083,487,247.53 2,066,069,370.81 130,774,956.80 138,347,617.03 37,526,123.00 34,985,424.15 3,110,213,353.00 2,121,151,606.77 (2,743,548,647.50) (2,044,433,473.10) 2,618,453,032.83 2,316,120,545.66 Total liabilities in the financial 2,083,487,247.53 2,066,069,370.81 130,774,956.80 138,347,617.03 37,526,123.00 34,985,424.15 3,110,213,353.00 2,121,151,606.77 (2,743,548,647.50) (2,044,433,473.10) 2,618,453,032.83 2,316,120,545.66 statements

Supplementary information

Depreciation 169,715,743.20 155,682,380.31 10,813,144.42 10,842,546.79 752,016.68 750,021.61 147,354.31 407,272.07 - - 181,428,258.61 167,682,220.78

Amortization 45,911,207.77 41,900,772.8417,496.54 122,913.00 - - 1,836,936.51268,708.36 - - 47,765,640.92 42,292,394.20

Interest income 1,173,513.16 2,439,077.55 13,734.16 4,020.26 7855.57 7,783.29 2,800,034.81 4,455,629.97 - - 3,995,137.70 6,906,511.07

Interest expense 8,445,130.01 37,520,346.84 - - - - 55,440,824.95 36,030,192.17 - - 63,885,954.96 73,550,539.01 Investment income from long- term equity investment under ------97,910,121.3083,158,912.23 - - 97,910,121.30 83,158,912.23 equity method Long-term equity investment ------1,560,688,285.03 1,531,041,908.34 - - 1,560,688,285.03 1,531,041,908.34

Non-current assets other than 4,565,523,487.02 4,393,365,740.13 141,720,090.93 147,881,496.71 18,031,913.46 18,760,310.63 209,868,092.65 218,235,583.83 (157,909,567.98) (157,909,567.98) 4,777,234,016.08 4,620,333,563.32 long-term equity investment

- 93 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(X) SEGMENT REPORTING - continued

(2) Segment revenue from external transactions by source and non-current assets by geographical location Unit: RMB Item 2013 2012 Revenue from external transactions with domestic 1,774,690,281.49 1,777,315,427.86 customers Revenue from external transactions with Hong Kong 6,084,554.81 6,530,706.90 customers Sub-total 1,780,774,836.30 1,783,846,134.76

Unit: RMB Item 2013 2012 Non-current assets located in local country 4,703,349,975.80 4,547,110,307.68 Non-current assets located in Hong Kong 44,343.54 44,221.61 Sub-total 4,703,394,319.34 4,547,154,529.29

(3) Degree of reliance on major customers

The revenue derived from the top two clients of the Group in load and unload services is RMB780,790,369.62, occupying 43.85% of the Group's total revenue.

(XI) FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The Group's major financial instruments include currency funds, equity and debt investments, borrowings, account receivables, account payables etc. Details of these financial instruments are disclosed in Note (V). The risks associated with these financial instruments and the policies on how to mitigate these risks are set out below. Management manages and monitors these exposures to ensure the risks are monitored at a certain level.

1. Risk management objectives and policies

The Group's risk management objectives are to achieve proper balance between risks and yield, minimize the adverse impacts of risks on the Group's operation performance, and maximize the benefits of the shareholders and other equity investors. Based on these risk management objectives, the Group's basic risk management strategy is to identify and analyze the industry's exposure to various risks, establish appropriate bottom line for risk tolerance, implement risk management, and monitors these exposures to ensure the risks are monitored at a certain level.

- 94 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(XI) FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - continued

1. Risk management objectives and policies - continued

1.1 Market risk

1.1.1. Currency risk

Currency risk is the risk that losses will occur because of changes in foreign exchange rates. The Group's exposure to the currency risk is primarily associated with USD and HKD. Several of the Group's subsidiaries have purchases and sales denominated in HKD while the Group's other principal activities are denominated and settled in RMB. As at 31 December 2013, the balance of the Group's assets and liabilities are both denominated in RMB, except that balance of assets set out below is in HKD and USD. Currency risk arising from the foreign currency balance of assets and liabilities may have impact on the Group's performance. Unit: RMB Item Closing balance Opening balance Cash and cash equivalents 103,935,039.66 122,142,181.87 - HKD 31,017,228.58 94,523,749.66 - USD 72,916,292.09 27,617,945.32 - RMB 1,518.99 486.89 Accounts receivable 22,875,401.14 40,939,777.49 - HKD 4,985,052.96 2,321,769.81 - USD 9,937,095.08 34,303,954.48 - RMB 7,953,253.10 4,314,053.20 Short-term borrowings 550,340,000.00 1,080,929,700.00 - HKD 550,340,000.00 1,080,929,700.00 Accounts payable 1,953,953.35 3,852,312.54 - HKD 873,982.40 566,028.47 - USD - 5,619.24 - RMB 1,079,970.95 3,280,664.83

The Group closely monitors the effects of changes in the foreign exchange rates on the Group's currency risk exposures, to minimize the company's currency risk. According to the current risk exposure and judgment of the exchange rate movements, management considers the probable loss resulted from foreign exchange rate fluctuation to be fairly low.

1.1.2. Interest rate risk

The Group's interest rate risk arises from debt with interests, such as bank loan. The floating interest rate of financial liability makes the Group confronted with interest rate risk of cash flows. And the fixed interest rate of financial liability makes the Group confronted with interest rate risk of fair value. The Group determines the relative proportion of fixed interest rate and floating interest rate according to the prevailing market conditions.

The financial department of the Group has been responsible for monitoring the interest rate. The increase of interest rate could enhance the cost of new interest-bearing debts and that of outstanding floating interest-bearing debts, which has material adverse effect on the financial performance of the Group. The management would make prompt responses to the latest market conditions, including obtaining fixed rate loan or adjusting financial leverage ratio, etc.

- 95 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(XI) FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - continued

1. Risk management objectives and policies - continued

1.2. Credit risk

As at 31 December 2013, the Group's maximum exposure to credit risk which will cause a financial loss to the Group due to failure to discharge an obligation by the counterparties and financial guarantees issued by the Group is arising from the carrying amount of the respective recognized financial assets as stated in the consolidated balance sheet. For financial instruments measured at fair value, the carrying amount reflects the exposure to risks but not the maximum exposure to risks; the maximum exposure to risks would vary according to the future changes in fair value.

In order to minimize the credit risk, the Group has delegated a team responsible for determination of credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual trade debt at each balance sheet date to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, the management of the Group considers that the Group's credit risk is significantly reduced.

The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings.

The Company adopted necessary policies to make sure that all clients and customers are attributed with merit credit records.

1.3. Liquidity risk

In the management of the liquidity risk, the Group monitors and maintains a level of cash and cash equivalents deemed adequate by the management to finance the Group's operations and mitigate the effects of fluctuations in cash flows. The management monitors the utilization of bank borrowings and ensures compliance with loan covenants.

Most of the Group's bank borrowings are short-term borrowings. As at 31 December 2013, the Group has net current liabilities of RMB507,618,546.34 (2012: RMB918,431,181.05). The Group's management is confident that short-term borrowings will be rolled over or replaced by a new financing channel when due. In addition, the Group has available unutilized bank loan facilities of approximately RMB4,094,903,500.00 (2012: RMB3,999,925,800.00). Consequently, the management believes that the Group is not exposed to significant liquidity risks. In addition, other factors that have been taken into account in the disclosure of how to mitigate liquidity risk should also be disclosed.

- 96 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(XI) FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - continued

1. Risk management objectives and policies - continued

1.3. Liquidity risk - continued

The following is the maturity analysis for financial assets and financial liabilities held by the Group which is based on undiscounted remaining contractual obligations: Unit: RMB More than 5 Item Book value Total amount Within one year 1-5 years years Cash at bank and on hand 715,539,516.48 715,539,516.48 715,539,516.48 - - Notes receivable 200,000.00 200,000.00 200,000.00 - - Accounts receivable 223,441,476.99 223,441,476.99 223,441,476.99 - - Interest receivable 984,200.00 984,200.00 984,200.00 - - Dividends receivable 3,334,985.50 3,334,985.50 3,334,985.50 - - Other receivables 12,579,679.85 12,579,679.85 12,579,679.85 - - Short-term borrowings 550,340,000.00 558,797,286.53 558,797,286.53 - - Available-for-sale financial 5,580,000.00 5,580,000.00 5,580,000.00 - - assets Accounts payable 139,534,522.12 139,534,522.12 139,534,522.12 - - Interest payable 36,813,185.09 36,813,185.09 36,813,185.09 - - Dividends payable 77,208,156.09 77,208,156.09 77,208,156.09 - - Other payable 35,743,558.49 35,743,558.49 35,743,558.49 - - Other current liabilities 500,000,000.00 510,605,555.56 510,605,555.56 - - Bonds payable 993,510,137.00 1,214,036,067.75 54,044,535.23 1,159,991,532.52 -

2. Fair value

Fair values of the financial assets and financial liabilities are determined as follows:

• The fair value of financial assets and financial liabilities with standard terms and conditions traded on active markets are determined with reference to quoted market bid prices and ask prices respectively;

• The fair value of other financial assets and financial liabilities (excluding derivative instruments) are determined in accordance with generally accepted pricing models based on discounted cash flow analysis or using prices from observable current market transactions;

• The fair value of derivative instruments are determined with reference to quoted market prices.

The management considers that the book value of financial assets and liabilities measured at amortized cost is approximately equal to the fair value of financial assets and liabilities.

- 97 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(XI) FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - continued

2. Fair value - continued

Fair value hierarchy

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs). Unit: RMB Closing Balance Item Level 1 Level 2 Level 3 Total Held-for-trading financial assets: - Derivative financial assets - - - - Available-for-sale financial assets: - Equity instruments 5,580,000.00 - - 5,580,000.00 Total 5,580,000.00 - - 5,580,000.00

Held-for-trading financial liabilities: - Derivative financial liabilities - - - - Total - - - -

Unit: RMB Opening Balance Item Level 1 Level 2 Level 3 Total Held-for-trading financial assets: － Derivative financial assets -- - - Available-for-sale financial assets: － Equity instruments 5,210,000.00 - - 5,210,000.00 Total 5,210,000.00 - - 5,210,000.00

Held-for-trading financial liabilities: － Derivative financial liabilities -- - - Total - - - -

There are no transfers between Level 1 and Level 2 for the fair value measurements of the Group's financial assets and financial liabilities in the current year and in the prior year.

- 98 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(XI) FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - continued

3. Sensitivity analysis

The Group adopts sensitivity analysis techniques to analyze how the entity's profit and loss for the period and shareholders 'equity would have been affected by changes in the relevant risk variables that were reasonably possible. As it is unlikely that risk variables will change in an isolated manner, and the interdependence between risk variables will have significant effect on the amount ultimately influenced by the changes in a single risk variable, the following items are based on the assumption that each risk variable has changes on a stand-alone basis.

3.1. Currency risk

3.1.1 The assumption for the sensitivity analysis on currency risk is that all the cash flow hedges and hedges of a net investment in a foreign operation are highly effective.

3.1.2 The Group does not conduct sensitivity analysis of the subsidiary with HKD as its functional currency, as it is exposed to minimal foreign exchange risk. The table below is a sensitivity analysis of RMB functional currency of the Company and its subsidiaries to foreign exchange risk. On the basis of the above assumption, where all other variables are held constant, the reasonably possible changes in the foreign exchange rate may have the following pre-tax effect on the profit or loss for the period or equity: Unit: RMB 2013 2012 Effect on Effect on Changes in shareholders' shareholders' Item exchange rate Effect on profits equity Effect on profits equity All foreign 5% appreciation (21,617,915.68) (21,617,915.68) (46,136,696.42) (46,136,696.42) currencies against RMB All foreign 5% depreciation 21,617,915.68 21,617,915.68 46,136,696.42 46,136,696.42 currencies against RMB

3.2. Sensitivity analysis on interest rate risk:

3.2.1 The sensitivity analysis on interest rate risk is based on the following assumptions:

• For fixed rate financial instruments measured at fair value, changes in the market interest rate may influence the interest income or expense of the variable rate financial instruments;

• For derivative financial instruments designated as hedging instruments, changes in the market interest rate influence their fair values, and all the hedges of interest rate risk are expected to be highly effective;

• Changes in the fair value of derivative financial instruments and other financial assets and liabilities are calculated at the market interest rate as at the balance sheet date, using the method of discounted cash flow analysis.

- 99 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(XI) FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - continued

3. Sensitivity analysis - continued

3.2. Sensitivity analysis on interest rate risk: - continued

3.2.2 On the basis of the above assumptions, where all other variables are held constant, the reasonably possible changes in the interest rate may have the following pre-tax effect on the profit or loss for the period or equity: Unit: RMB 2013 2012 Effect on Effect on shareholders' shareholders' Item Changes in interest rate Effect on profits equity Effect on profits equity Floating rate loan Increase by 1% (84,572.87) (84,572.87) (223,643.06) (223,643.06) Floating rate loan Decrease by 1% 84,572.87 84,572.87 223,643.06 223,643.06

(XII) NOTES TO THE FINANCIAL STATEMENTS

1. Accounts receivable

(1) Disclosure of accounts receivable by categories: Unit: RMB Closing balance Opening balance Carrying amount Bad debt provision Carrying amount Bad debt provision Proportion Proportion Proportion Proportion Item Amount (%) Amount (%) Amount (%) Amount (%) Accounts receivable that are individually significant and for ------which bad debt provision has been assessed individually(Note) Accounts receivable for which bad debt provision has been assessed by portfolios Portfolio 1 340,769.83 1.87 - - 75,000.00 0.42 - - Portfolio 2 17,876,763.45 98.13 - - 17,679,008.55 99.58 - - Subtotal of portfolios 18,217,533.28 100.00 - - 17,754,008.55 100.00 - - Total 18,217,533.28 100.00 - - 17,754,008.55 100.00 --

Note: Top five balances of accounts receivable are deemed as individually significant accounts receivable by the Group.

Aging analysis of accounts receivable is as follows: Unit: RMB Closing balance Opening balance Carrying Proportion Bad debt Carrying Proportion Bad debt Aging amount (%) provision Book value amount (%) provision Book value Within 1 year 18,217,533.28 100.00 - 18,217,533.28 17,754,008.55 100.00 - 17,754,008.55

Accounts receivable portfolios for which bad debt provision has been assessed using the aging analysis approach: Unit: RMB Closing balance Opening balance Carrying Proportion Bad debt Carrying Proportion Bad debt Aging amount (%) provision Book value amount (%) provision Book value Within 1 year 17,876,763.45 100.00 - 17,876,763.45 17,679,008.55 100.00 - 17,679,008.55

- 100 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(XII) NOTES TO THE FINANCIAL STATEMENTS - continued

1. Accounts receivable - continued

(2) Top five companies with the largest balances of accounts receivable: Unit: RMB Proportion of the amount to the total Relationship with accounts Name of entity the Company Amount Aging receivable (%) Customer G Customer 4,541,298.40 Within 1 year 24.93 Customer H Customer 3,333,484.15 Within 1 year 18.30 Customer I Customer 1,791,495.50 Within 1 year 9.83 Customer J Customer 1,455,589.30 Within 1 year 7.99 Customer K Customer 1,336,102.08 Within 1 year 7.33 Total 12,457,969.43 68.38

(3) As at 31 December 2013, no balances included in above accounts receivable are due from the shareholders of the Company who hold over 5% voting right. Please refer to Note (XII) 6(1) for receivables from related parties.

2. Other receivables

(1) Disclosure of other receivables by categories: Unit: RMB Closing balance Opening balance Carrying amount Bad debt provision Carrying amount Bad debt provision Proportion Proportion Proportion Proportion Category Amount (%) Amount (%) Amount (%) Amount (%) Other receivables that are individually significant and for which bad debt provision ------has been assessed individually Other receivables for which bad debt provision has been assessed by portfolios Portfolio 1 825,316,780.47 99.95 - - 358,333,721.97 99.87 29,779.00 0.01 Portfolio 2 383,456.60 0.05 383,456.60 100.00 476,691.04 0.13 191,728.30 40.22 Subtotal of portfolios 825,700,237.07 100.00 383,456.60 0.04 358,810,413.01 100.00 221,507.30 0.06 Total 825,700,237.07 100.00 383,456.60 0.04 358,810,413.01 100.00 221,507.30 0.06

Note: Top five balances of other receivables are deemed as individually significant other receivables by the Group.

Aging analysis of other receivables is as follows: Unit: RMB Closing balance Opening balance Proportion Bad debt Proportion Bad debt Aging Carrying amount (%) provision Book value Carrying amount (%) provision Book value Within 1 year 821,613,575.43 99.50 - 821,613,575.43 355,219,377.43 99.00 - 355,219,377.43 More than 1 year 884,236.88 0.10 - 884,236.88 1,311,073.95 0.36 - 1,311,073.95 More than 2 years but not 839,166.12 0.10 - 839,166.12 1,641,199.67 0.46 191,728.30 1,449,471.37 exceeding 3 years More than 3 years 2,363,258.64 0.30 383,456.60 1,979,802.04 638,761.96 0.18 29,779.00 608,982.96 Total 825,700,237.07 100.00 383,456.60 825,316,780.47 358,810,413.01 100.00 221,507.30 358,588,905.71

- 101 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(XII) NOTES TO THE FINANCIAL STATEMENTS - continued

2. Other receivables - continued

Disclosure of other receivables by categories: - continued

Other receivables portfolios for which bad debt provision has been assessed using the aging analysis: Unit: RMB Closing balance Opening balance Proportion Bad debt Proportion Bad debt Aging Carrying amount (%) provision Book value Carrying amount (%) provision Book value Within 1 year - - - - 93,234.44 19.56 - 93,234.44 More than 1 year ------More than 2 years but not - - - - 383,456.60 80.44 191,728.30 191,728.30 exceeding 3 years More than 3 years 383,456.60 100.00 383,456.60 - - - - - Total 383,456.60 100.00 383,456.60 - 476,691.04 100.00 191,728.30 284,962.74

(2) Top five companies with the largest balances of other receivables: Unit: RMB Proportion of the amount to the total Relationship with the accounts Name of entity Company Amount Aging receivable (%) Dongguan Chiwan Terminal Company Subsidiary of the 417,000,000.00 Within one year 50.53 Limited Company Subsidiary of the Dongguan Chiwan Wharf Co., Ltd. 393,700,000.00 Within one year 47.70 Company Shenzhen Chiwan Shipping and Subsidiary of the 10,000,000.00 Within one year 1.21 Transportation Company Limited Company Subsidiary of the Chiwan Wharf Holdings (H.K.) Limited 2,835,771.65 Within one year 0.34 Company Shenzhen International West Logistics More than 1 year but The third party 481,920.00 0.06 Co., Ltd not exceeding 2 years Total 824,017,691.65 99.84

(3) As at 31 December 2013, no balances included in above other receivables are due from the shareholders of the Company who hold over 5% voting right. Please refer to Note (XII) 6(1) for receivables from related parties.

- 102 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(XII) NOTES TO THE FINANCIAL STATEMENTS - continued

3. Long-term equity investments

(1) Categories of long-term equity investments Unit: RMB Item Opening balance Increase Decrease Closing balance Investment in subsidiaries 1,052,288,200.00 100,000,000.00 - 1,152,288,200.00 Investment in joint ventures 820,062,280.52 33,210,403.04 19,734,686.52 833,537,997.04 Investment in associates 245,260,181.35 6,435,769.06 1,655,355.54 250,040,594.87 Other long-term equity investments 17,037,500.00 - - 17,037,500.00 Subtotal 2,134,648,161.87 139,646,172.10 21,390,042.06 2,252,904,291.91 Less: Provision for impairment of 3,128,300.00 - - 3,128,300.00 long-term equity investments Net amount 2,131,519,861.87 139,646,172.10 21,390,042.06 2,249,775,991.91

As at 31 December 2013, the long-term equity investments of the Company were not subject to restriction on disposal or remittance of return on investments.

- 103 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(XII) NOTES TO THE FINANCIAL STATEMENTS - continued

3. Long-term equity investments - continued

(2) Details of long-term equity investments are as follows: Unit: RMB Explanation of the Proportion proportion of ownership Proportion of of voting interests being not Provision for ownership power in the consistent with the Provision for impairment Changes interests in the investee proportion of voting impairment losses for the Cash dividends Investee Accounting method Investment cost Opening balance (increase/decrease) Closing balance investee (%) (%) power losses period for the period Shenzhen Chiwan Terminal Company Cost method 47,500,000.00 47,500,000.00 - 47,500,000.00 95.00 95.00 N/A - - 50,231,186.70 Limited Shenzhen Chiwan International Cost method 5,500,000.00 5,500,000.00 - 5,500,000.00 100.00 100.00 N/A - - 1,095,391.12 Freight Agency Company Limited Shenzhen Chiwan Harbor Container Cost method 250,920,000.00 250,920,000.00 - 250,920,000.00 84.98 84.98 N/A - - 134,968,108.50 Company Limited Shenzhen Chiwan Transportation Cost method 7,000,000.00 7,000,000.00 - 7,000,000.00 75.00 75.00 N/A - - 4,677,410.56 Company Limited Chiwan Wharf Holdings (H.K.) Cost method 1,070,000.00 1,070,000.00 - 1,070,000.00 100.00 100.00 N/A -- - Limited Shenzhen Chiwan Shipping and Cost method 24,000,000.00 24,000,000.00 - 24,000,000.00 90.00 90.00 N/A - - 19,132,052.29 Transportation Company Limited Shenzhen Chiwan Trains-Grains Cost method 33,750,000.00 33,750,000.00 - 33,750,000.00 75.00 75.00 N/A - - 18,386,937.33 Terminal Company Limited Chiwan Container Terminal Company Cost method 421,023,200.00 421,023,200.00 - 421,023,200.00 51.00 51.00 N/A - - 165,794,356.37 Limited Dongguan Chiwan Wharf Company Cost method 186,525,000.00 186,525,000.00 - 186,525,000.00 41.45 41.45 N/A -- - Limited Dongguan Chiwan Terminal Cost method 75,000,000.00 75,000,000.00 100,000,000.00 175,000,000.00 43.75 43.75 N/A -- - Company Limited China Ocean Shipping Agency Cost method 13,510,000.00 13,510,000.00 - 13,510,000.00 15.00 15.00 N/A - - 3,784,500.00 (Shenzhen) Company Limited Shenzhen Petro-chemical Industry Cost method 3,500,000.00 3,500,000.00 - 3,500,000.00 0.26 0.26 N/A 3,117,800.00 - - (Group) Company Limited. Guangdong Guang Jian Group Cost method 27,500.00 27,500.00 - 27,500.00 0.02 0.02 N/A 10,500.00 - - Company Limited China Merchants Holdings (international) information technology Equity method 1,875,000.00 13,682,516.01 (199,683.86) 13,482,832.15 23.16 23.16 N/A - - 1,655,355.54 company Ltd CMBL Equity method 140,000,000.00 131,577,665.34 3,874,958.23 135,452,623.57 20.00 20.00 N/A -- - China Development Finance Co., Ltd. Equity method 100,000,000.00 100,000,000.00 1,105,139.15 101,105,139.15 20.00 20.00 N/A -- - China Overseas Harbor Affairs Equity method 749,655,300.00 820,062,280.52 13,475,716.52 833,537,997.04 40.00 40.00 N/A - - 19,734,686.52 (Laizhou) Co., Ltd. Total 2,134,648,161.87 118,256,130.04 2,252,904,291.91 3,128,300.00 - 419,459,984.93

- 104 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(XII) NOTES TO THE FINANCIAL STATEMENTS - continued

3. Long-term equity investments - continued

(3) Investments in joint ventures and associates Unit: RMB Proportion of Proportion of ownership voting power in Investee's total Investee's total Total net assets at Total operating interests in the the investee assets at the end of liabilities at the end the end of the income for the Net profit for the Investee investee (%) (%) the period of the period period period period I. Joint ventures China Overseas Harbor 40.00 40.00 2,157,527,582.53 265,540,406.40 1,891,987,176.13 300,487,702.31 70,268,048.80 Affairs (Laizhou) Co., Ltd. II. Associates China Merchants Holdings (international) information 23.16 23.16 77,894,322.16 17,052,169.42 60,842,152.74 73,453,927.69 6,285,283.60 technology company Ltd CMBL 20.00 20.00 2,105,335,486.99 1,427,727,957.53 677,607,529.46 189,827,039.85 19,374,791.08 China Development Finance 20.00 20.00 1,908,559,441.61 1,403,033,745.86 505,525,695.75 19,442,819.95 5,525,695.75 Co., Ltd.

(4) Provision for long-term equity investments Unit: RMB Opening Closing Investee balance Increase Decrease balance Shenzhen Petro-chemical Industry (Group) 3,117,800.00 - - 3,117,800.00 Company Limited Guangdong Guang Jian Group Company 10,500.00 - - 10,500.00 Limited Total 3,128,300.00 - - 3,128,300.00

4. Operating income and operating costs

(1) Operating income and operating costs Unit: RMB Item 2013 2012 Principal operating income 127,084,165.21 177,348,589.13 Other operating income 28,005,602.33 27,071,317.81 Total 155,089,767.54 204,419,906.94 Principal operating costs 142,627,601.31 142,687,625.42 Other operating costs 2,809,353.45 2,091,220.48 Total 145,436,954.76 144,778,845.90

(2) Principal operating activities (classified by business) Unit: RMB 2013 2012 Item Operating income Operating costs Operating income Operating costs Load and unload services 127,084,165.21 142,627,601.31 177,348,589.13 142,687,625.42

- 105 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(XII) NOTES TO THE FINANCIAL STATEMENTS - continued

4. Operating income and operating costs - continued

(3) Other activities Unit: RMB 2013 2012 Other operating Other operating Other operating Other operating Item income costs income costs Lease 18,628,185.18 2,809,353.45 16,908,609.84 2,091,220.48 Port ancillary services 8,506,654.91 - 9,296,352.26 - Documentation fee 427,999.04 - 578,442.12 - Sales of material 399,842.47 - 215,544.46 - Security fee 42,920.73 - 72,369.13 - Total 28,005,602.33 2,809,353.45 27,071,317.81 2,091,220.48

(4) Operating income from the Company's top five customers Unit: RMB Proportion to total operating income of the Name of customer Operating income Company (%) Customer M 23,832,048.44 15.37 Customer N 19,543,607.59 12.60 Customer H 10,738,586.32 6.92 Customer O 8,663,961.37 5.59 Customer P 8,639,356.29 5.57 Total 71,417,560.01 46.05

5. Investment income

(1) Details of investment income Unit: RMB Item 2013 2012 Income of long-term equity investments under cost method 398,069,942.87 195,723,865.85 Income of long-term equity investments under equity method 39,646,172.10 29,403,289.36 Income from disposal of long-term equity investment - - Investment income on available-for-sale financial assets, etc. 360,000.00 360,000.00 Total 438,076,114.97 225,487,155.21

- 106 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(XII) NOTES TO THE FINANCIAL STATEMENTS - continued

5. Investment income - continued

(2) Income of long-term equity investments under cost method Unit: RMB Reasons for increases or decreases in the current Investee 2013 2012 compared to the prior period Chiwan Container Terminal Company The dividends distributed by 165,794,356.37 - Limited investee fluctuate. Shenzhen Chiwan Harbour Container The dividends distributed by 134,968,108.50 102,428,275.40 Company Limited investee fluctuate. Shenzhen Chiwan Terminal Company The dividends distributed by 50,231,186.70 45,605,008.67 Limited investee fluctuate. Shenzhen Chiwan Shipping and The dividends distributed by 19,132,052.29 18,801,575.10 Transportation Company Limited investee fluctuate. Shenzhen Chiwan Trains-Grains Terminal The dividends distributed by 18,386,937.33 22,545,382.10 Company Limited investee fluctuate. Shenzhen Chiwan Transportation The dividends distributed by 4,677,410.56 4,957,030.98 Company Limited investee fluctuate. Chiwan Container Terminal Company The dividends distributed by 3,784,500.00 - Limited investee fluctuate. Shenzhen Chiwan International Freight The dividends distributed by 1,095,391.12 1,386,593.60 Agency Company Limited investee fluctuate. Total 398,069,942.87 195,723,865.85

(3) Income of long-term equity investments under equity method Unit: RMB Reasons for increases or decreases in the current Investee 2013 2012 compared to the prior period China Overseas Harbour Affairs (Laizhou) Net income of investee 33,210,403.04 24,286,065.14 Co., Ltd fluctuates. Net income of investee CMBL 3,874,958.22 3,098,970.44 fluctuates. China Merchants Holdings (international) Net income of investee 1,455,671.69 2,018,253.78 information technology company Ltd fluctuates. Net income of investee China Development Finance Co., Ltd 1,105,139.15 - fluctuates. Total 39,646,172.10 29,403,289.36

- 107 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(XII) NOTES TO THE FINANCIAL STATEMENTS - continued

6. Related party transactions

(1) Amounts due from/to related parties Unit: RMB Item Related parties Closing balance Opening balance Interests receivable Shenzhen Chiwan International Freight Agency Company Limited 218,084.00 218,084.00 Shekou Container Terminals Limited 107,750.00 75,000.00 CPSB 110,353.83 - Accounts receivable China Ocean Shipping Agency (Shenzhen) Company Limited 122,666.00 - Total 340,769.83 75,000.00 Other receivables Dongguan Chiwan Terminal Company Limited 393,700,000.00 186,200,000.00 Dongguan Chiwan Wharf Company Limited 417,000,000.00 145,400,000.00 Shenzhen Chiwan Shipping and Transportation Company Limited 10,000,000.00 22,000,000.00 Chiwan Wharf Holdings (H.K.) Limited 2,835,771.65 2,640,282.80 CPSB 135,621.91 135,621.91 Hinwin Development Company Limited 24,536.15 151,528.71 Total 823,695,929.71 356,527,433.42 Long-term Chiwan Wharf Holdings (H.K.) Limited 11,004,284.75 11,004,284.75 receivables Advances Xuqin - 93,006.00 Accounts payable Xuqin 1,841,926.00 772,544.00 Nanshan Group 1,764,168.70 628,077.56 Shenzhen Chiwan Transportation Company Limited - 381,118.59 Shekou Container Terminals Limited 120,000.00 60,000.00 Shenzhen Chiwan Shipping and Transportation Company Limited 335,665.00 - Total 4,061,759.70 1,841,740.15 Other payables Chiwan Container Terminal Company Limited 145,868,442.09 159,102,834.35 Shenzhen Chiwan Trains-Grains Terminal Company Limited 79,646,554.60 71,634,252.49 Shenzhen Chiwan Transportation Company Limited 45,365,261.99 48,126,285.99 Shenzhen Chiwan Harbor Container Company Limited 50,853,300.94 37,322,399.41 Shenzhen Chiwan Terminal Company Limited 43,211,371.33 30,344,683.32 Dongguan Chiwan Wharf Company Limited 13,241,025.98 10,579,341.78 Shenzhen Chiwan International Freight Agency Company Limited 4,447,292.32 2,564,560.28 Shenzhen Chiwan Shipping and Transportation Company Limited 1,426,865.36 1,527,693.18 Dongguan Chiwan Terminal Company Limited 280,246.26 600,130.39 Chiwan Wharf Holdings (H.K.) Limited 596,348.85 470,423.34 China Merchants Holdings (International) Information Technology 6,400.00 - Company Ltd. Total 384,943,109.72 362,272,604.53 Interests payable Shenzhen Chiwan Trains-Grains Terminal Company Limited 1,462,499.93 1,425,624.99 Shenzhen Chiwan Shipping and Transportation Company Limited 1,839,083.26 1,247,375.05 Shenzhen Chiwan Terminal Company Limited 774,550.04 307,916.66 Chiwan Container Terminal Company Limited 494,250.00 213,750.00 Total 4,570,383.23 3,194,666.70

Note: The Company collectively manages and coordinates the use of the capital within the Group. Various subsidiaries save their money with the Company, or apply for fund when needed. The Company collects fund usage expenses based on the actual financing costs incurred.

- 108 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

(XII) NOTES TO THE FINANCIAL STATEMENTS - continued

6. Related party transactions - continued

(2) Guarantee with related parties Unit: RMB Inception date of Expiration date of Whether guarantee The guarantor The principal Guaranteed amount guarantee guarantee has been fulfilled Dongguan Chiwan Terminal 100,000,000.00 26/04/2012 07/02/2015 No Company Limited Shenzhen Chiwan Harbor 100,000,000.00 26/04/2012 07/02/2015 No Container Company Limited Total 200,000,000.00

Note: By December 31st, 2013, the loans under the above guarantees have all been repaid.

7. Supplementary information to the cash flow statement Unit: RMB Supplementary information 2013 2012 1. Reconciliation of net profit to cash flows from operating activities: Net profits 363,887,260.39 189,814,396.35 Add: Provision for impairment losses of assets 161,950.98 79,777.32 Depreciation of fixed assets 12,828,393.10 13,388,345.68 Depreciation and amortization of investment property 959,405.64 959,405.64 Amortization of intangible assets 3,738,351.72 3,175,445.41 Amortization of long-term prepaid expenses 1,865,829.22 587,328.34 Losses on disposal of fixed assets, intangible assets and 796,360.49 2,416,755.45 other long-term assets Financial expenses 47,728,134.93 58,517,937.59 Loss (Gains) arising from investments (438,076,114.97) (225,487,155.21) Decrease (Increase) in deferred tax assets 1,240,064.59 (10,351,390.47) Decrease in inventories (118,918.68) 62,219.45 Decrease (Increase) in operating receivables (468,525,575.41) (127,708,552.99) Increase (Decrease) in operating payables 20,135,783.36 (378,090,474.92) Net cash flows from operating activities (453,379,074.64) (472,635,962.36) 2. Net changes in cash and cash equivalents: Closing balance of cash 465,329,241.75 149,792,424.85 Less: Opening balance of cash 149,792,424.85 187,090,694.42 Net increase in cash and cash equivalents 315,536,816.90 (37,298,269.57)

- 109 - SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

SUPPLEMENTARY INFORMATION TO THE CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2013

1. BREAKDOWN OF EXTRAORDINARY GAINS AND LOSSES Unit: RMB Item Amounts Description Profit or loss on disposal of non-current assets (1,697,013.72) Tax refunds or reductions with ultra vires approval or without official approval - documents Government grants recognized in profit or loss (except for grants that are closely related to the Company's business and are in amounts and quantities fixed in 460,819.18 accordance with the national standard) Money lending income earned from non-financial institutions in profit or loss - The excess of attributable fair value of identifiable net assets over the consideration - paid for subsidiaries, associates and joint ventures Profit or loss on exchange of non-monetary assets - Profit or loss on entrusted investments or assets management - Impairment losses provided for each asset due to force majeure, e.g. acts of God - Profit or loss on debt restructuring - Business restructuring expenses, e.g., expenditure for layoff of employees, integration - expenses, etc. Profit or loss relating to the unfair portion in transactions with unfair transaction price - Net profit or loss of subsidiaries recognized as a result of business combination of enterprises under common control from the beginning of the period up to the business - combination date Profit or loss arising from contingencies other than those related to normal operating - business Profit or loss on changes in the fair value of financial assets and financial liabilities held for trading and investment income on disposal of held-for-trading financial - assets, held-for-trading financial liabilities and available-for-sale financial assets, other than the effective hedging activities relating to normal operating business Reversal of provision for accounts receivable that are tested for impairment losses - individually Profit or loss on entrusted loans - Profit or loss on changes in the fair value of investment properties that are - subsequently measured using the fair value model Effects on profit or loss of one-off adjustment to profit or loss for the period according - to the requirements by tax laws and accounting laws and regulations Custodian fees earned from entrusted operation - Other non-operating income or expenses other than above 1,941,846.95 Other profit or loss that meets the definition of non-recurring profit or loss - Tax effects (127,755.31) Effects of minority interest (after tax) (152,508.15) Total 425,388.95

2. RETURN ON NET ASSETS AND EARNINGS PER SHARE ("EPS")

The return on net assets and EPS have been prepared by Shenzhen Chiwan Wharf Co., Ltd (hereinafter "the Company") in accordance with Information Disclosure and Presentation Rules for Companies Making Public Offering No. 9 - Calculation and Disclosure of Return on Net Assets and Earnings per Share (Revised 2010) issued by China Securities Regulatory Commission. Unit: RMB EPS Weighted average return on net Profits incurred in the current period assets (%) Basic EPS Diluted EPS Net profit for the current period attributable to ordinary shareholders 13.257 0.780 0.780 Net profit attributable to ordinary shareholders after extraordinary gains and losses 13.246 0.780 0.780

SHENZHEN CHIWAN WHARF HOLDINGS LIMITED

SUPPLEMENTARY INFORMATION TO THE CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2013

3. ABNORMAL FINANCIAL STATEMENTS ITEMS ("F/S ITEMS") AND EXPLANATION OF REASONS Unit: RMB F/S items 2013 2012 Change by Cause for the changes Additional bond financing and increase in payments for 1 Currency funds 715,539,516.48 314,855,567.54 127.26% construction in progress 2 Notes receivable 200,000.00 1,680,000.00 (88.10%) Receipt of payment when notes are due Dividends receivable from MPIL, an associate, not yet 3 Dividends receivable 3,334,985.50 - - received 4 Other receivables 12,579,679.85 15,984,053.14 (21.30%) Timely settlement 5 Other current assets 15,672,486.73 8,956,589.43 74.98% Increase in input VAT pending for deduction 6 Long-term equity investments 1,574,597,485.03 1,544,951,108.34 1.92% Increase in investment in associates and joint ventures Transfer of bulk barn and facilities attached to 2#-3# berth 7 Fixed assets 2,828,481,942.32 2,701,093,453.30 4.72% Machong Port after completion of construction Increase in construction expenditure and transfer after 8 Construction in progress 615,064,297.08 609,932,608.74 0.84% completion of construction 9 Other non-current assets 174,669,665.62 123,309,396.98 41.65% Increase in land funds prepaid 10 Short-term borrowings 550,340,000.00 1,180,929,700.00 (53.40%) Repayment 11 Taxes payable 61,282,690.48 40,854,859.42 50.00% Increase in enterprise income tax payable 12 Interest payable 36,813,185.09 18,541,172.99 98.55% Increase in interest expenses on bonds Dividends payable to minority shareholders not yet paid 13 Dividends payable 77,208,156.09 - - by subsidiaries 14 Other payables 59,144,474.30 41,574,838.40 42.26% Increased quality margin Non-current liabilities due 15 4,676,624.27 39,727,206.52 (88.23%) Repayment of borrowings due within one year within one year 16 Other current liabilities 500,000,000.00 - - Issuance of short-term bonds during the year 17 Long-term borrowings - 150,000,000.00 - Repayment of long-term bank borrowing 18 Bonds payable 993,510,137.00 496,545,753.43 100.08% Issuance of new bonds during the year Decrease in volume of bulk businesses and agency 19 Operating income 1,780,774,836.30 1,783,846,134.76 (0.17%) businesses 20 Operating costs 910,134,739.90 844,601,418.52 7.76% Rising labor cost and depreciation Business taxes and 21 6,761,096.81 61,151,246.32 (88.94%) Decrease in business tax due to VAT conversion surcharges Decrease in interest payments and increase in exchange 22 Financial expenses 40,956,491.50 70,763,164.30 (42.12%) gains Decrease in write-off of payables that cannot be paid and 23 Non-operating income 2,848,306.47 7,638,387.73 (62.71%) in gains on disposal of fixed assets 24 Non-operating expenses 2,142,654.06 3,828,736.12 (44.04%) Decrease in loss on disposal of fixed assets