Annual Report 2023

Notes to the Consolidated Financial Statements For the year ended 31 December 2023 120 CHINA MERCHANTS PORT HOLDINGS COMPANY LIMITED 2. MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED) 2.19 Employee benefits (continued) (i) Pension obligations (continued) The Group contributes to defined contribution provident funds, including the scheme set up under the Hong Kong Mandatory Provident Fund Schemes Ordinance (“MPF Scheme”), which are available to all employees in Hong Kong. In accordance with the terms of the provident funds, contributions to the schemes by the Group and the employees are calculated as a percentage of the employees’ basic salaries. For the MPF Scheme, both the employees and the employer are required to contribute 5% of the employees’ monthly salaries up to a specified maximum amount (“mandatory contribution”) and employees can choose to make additional contributions. The employees are entitled to 100% of the employer’s mandatory contributions upon their retirement age of 65 years old, death or total incapacity. For the schemes other than the MPF Scheme, the unvested benefits of employees forfeited upon termination of employment can be utilised by the Group to reduce future levels of contributions. For defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. In determining the present value of the Group’s defined benefit obligations and the related current service cost and, where applicable, past service cost, the Group attributes benefit to periods of service under the plan’s benefit formula. However, if an employee’s service in later years will lead to a materially higher level of benefit than earlier years, the Group attributes the benefit on a straight-line basis from: ‧ the date when service by the employee first leads to benefits under the plan (whether or not the benefits are conditional on further service), until ‧ the date when further service by the employee will lead to no material amount of further benefits under the plan, other than from further salary increases. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the consolidated statement of financial position with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.