Annual Report 2023

Notes to the Consolidated Financial Statements For the year ended 31 December 2023 192 CHINA MERCHANTS PORT HOLDINGS COMPANY LIMITED 38. COMMITMENTS AND CONTINGENT LIABILITIES (CONTINUED) (d) Contingent liabilities (i) As at 31 December 2023, 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$1,044 million (2022: HK$313 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 sellers 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 2023 and 2022, 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$211 million (2022: HK$74 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 (2022: HK$225 million) and the aggregate amount utilised by the relevant related party amounted to HK$172 million (2022: HK$135 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 2023 and 2022, 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.