Interim Report 2023

56 CHINA MERCHANTS PORT HOLDINGS COMPANY LIMITED Notes to the Condensed Consolidated Interim Financial Information For the six months ended 30 June 2023 20. RELATED PARTY TRANSACTIONS (CONTINUED) (a) Balances and transactions with associates and joint ventures of the Group and with CMG, its subsidiaries, associates and joint ventures (collectively referred to as the “CMG Group”) (continued) Notes: (i) The Group rented certain vessels and properties from and leased office premises and residential units to fellow subsidiaries, and also leased warehouses to joint ventures. Lease payments were received or charged at a fixed amount per month in accordance with respective tenancy agreements. During the current period, the Group has recognised an addition of right-of-use assets of HK$19 million (2022: HK$102 million) and lease liabilities of HK$19 million (2022: HK$102 million) in relation to these leases. (ii) The ports, logistics and information technology service fees were charged with reference to market rates. (iii) These related parties provided barges to bring cargos into terminals operated by the Group and provided cargo management and information technology services to the Group. The service fees were charged with reference to market rates. (iv) As at 30 June 2023, the Group placed deposits of HK$376 million (31 December 2022: HK$1,681 million) with China Merchants Group Finance Co., Ltd., a subsidiary of CMG which is a financial institution approved and regulated by the People’s Bank of China and the China Banking Regulatory Commission. The amounts are included in cash and bank balances. Interest income was charged at interest rates ranging from 1.61% to 2.10% (2022: from 1.61% to 2.10%) per annum. (v) Interest income was charged at interest rates ranging from 3.65% to 6.15% (2022: 4.75% to 6.00%) per annum on the outstanding loan to associates and 0.50% plus the weighted average of the interest rates applicable under certain facilities provided to the joint venture per annum on the outstanding loan to a joint venture. (vi) As at 30 June 2023, the Group placed deposits of HK$884 million (31 December 2022: HK$2,334 million) with China Merchants Bank Co., Ltd., an associate of CMG. (vii) Interest expenses were charged at interest rates as specified in note 16 on the outstanding loans from immediate holding company and fellow subsidiaries. (viii) In previous years, a subsidiary of the Company entered into a transaction with a related party for leasing a parcel of land located in Djibouti. At inception of the lease, the Group had recognised a right-of-use asset amounting to HK$217 million. Lease payment of HK$217 million had been made by the Group during the previous years. As at 30 June 2023, the corresponding carrying amount of the right-of-use asset was HK$208 million (31 December 2022: HK$208 million). (ix) During the current period, the Group acquired property, plant and equipment of HK$2 million (2022: HK$2 million) from an associate (2022: an associate). The balances with entities within CMG Group as at 30 June 2023 and 31 December 2022 are disclosed in notes 14, 16 and 17. Included in these transactions are certain connected transactions or continuing connected transactions entered into by the Group. Other than these transactions, the other transactions as set out in this note 20(a) were not regarded as connected transactions or continuing connected transactions under the Listing Rules or were exempt from reporting, announcement and shareholders’ approval requirements under the Listing Rules.