Annual Report 2021

CHINA MERCHANTS PORT HOLDINGS COMPANY LIMITED 192 Notes to the Consolidated Financial Statements For the year ended 31 December 2021 40. COMMITMENTS AND CONTINGENT LIABILITIES (CONTINUED) (c) Future operating lease receivables where the Group as lessor The Group has future aggregate lease receivables under non-cancellable operating leases for investment properties and property, plant and equipment as follows: 2021 2020 HK$’million HK$’million Within one year 278 316 In the second year 129 146 In the third year 91 99 In the fourth year 70 81 In the fifth year 68 73 After the fifth year 114 184 750 899 (d) Contingent liabilities (i) As at 31 December 2021, TCP Group has significant contingent liabilities arising from pending legal proceedings in Brazil in respect of disputes with local tax authorities, employees or former employees of TCP Group and other parties, amounting to HK$255 million (2020: HK$253 million), which, based on the latest estimates of the management of the Group, is not probable that outflows of resources embodying economic benefits will be required to settle these obligations. Accordingly, no provision for litigation claims in respect of the above cases has been made in the consolidated financial statements. A counter indemnity in favour of the Group is executed by the Selling Shareholders pursuant to which the latter indemnify to the Group for the above contingent liabilities for and up to predetermined amounts and specified length of time. (ii) As at 31 December 2021 and 2020, the other shareholder of an associate of which the Group held as to 49% of its issued share capital provided corporate guarantees to the full amount for certain loan facilities granted by banks to and other obligations borne by the relevant associate. A counter indemnity in favour of the other shareholder of the associate is executed pursuant to which the Group undertakes to indemnify the other shareholder 49% of the liabilities in the aggregate amount of HK$80 million (2020: HK$84 million) arising from the above loan facilities and other obligations. In addition to above, the Group also provides guarantees for banking facilities granted to and other obligations borne by an associate of CMG. The total amount guaranteed by the Group is HK$225 million (2020: HK$223 million) and the aggregate amount utilised by the relevant related party amounted to HK$135 million (2020: HK$134 million). The directors of the Company assessed the risk of default of the associate and the related party in serving the aforesaid loan facilities and other obligations at the end of the reporting period and considered the risk to be insignificant and it is not likely that any guaranteed amount will be claimed. (iii) As at 31 December 2021 and 2020, the Company has been involved in a legal action involving dispute over the Group’s overseas investment. Based on advice of legal counsel and information available to the Group, the directors of the Company are of the opinion that it is pre-mature to assess the possible outcome of the case and the Company is unable to ascertain the likelihood of the claim at the current stage and management of the Group considered that it is not probable that outflow of resources will be required.