Annual Report 2019

228 CHINA MERCHANTS PORT HOLDINGS COMPANY LIMITED Notes to the Consolidated Financial Statements For the year ended 31 December 2019 43. 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: (Continued) (xi) During the year ended 31 December 2018, the Company acquired 50% of the total equity interests in the Port of Newcastle from CMU and its subsidiary, including the interest-bearing shareholder’s loan from CMU to the Port of Newcastle, for a total cash consideration of HK$3,488 million. Further details are set out in note 23. (xii) During the year ended 31 December 2013, a wholly-owned subsidiary of the Company entered into a transaction with a fellow subsidiary for acquisition of a land use right located in Shenzhen, the PRC, at a consideration of HK$17 million. The transaction has not yet completed as at 31 December 2018 and the amount paid by the Group amounting to HK$17 million was accounted for as a prepayment for purchase of non-current assets set out in note 25. The above transaction has been completed during the current year together with the resumption of the land parcels at Qianhai as set out in note (ix) above. (xiii) As at 31 December 2019, the Group placed deposits of HK$886 million (2018: HK$963 million) with China Merchants Bank Co., Ltd. (“CMB”), an associate of CMG. During the year, interest income from CMB amounted to HK$18 million (2018: HK$40 million). During the year ended 31 December 2018, interest expense paid and payable to CMB amounted to HK$1 million. The balances with entities within CMG Group as at 31 December 2019 and 31 December 2018 are disclosed in notes 24, 27, 33 and 37. Save and except for those connected transactions or continuing connected transactions under the Listing Rules set out under “Connected Transactions” in the section “Report of the Directors” in this annual report, the other transactions as set out in this note 43(a) were not regarded as connected transactions or continuing connected transactions under the Listing Rules or were exempt from reporting, announcement and shareholders’ approval requirements under the Listing Rules. (b) Transactions with other PRC state-controlled entities A number of subsidiaries of the Company operate in Mainland China, an economic environment currently predominated by entities controlled, jointly controlled or significantly influenced by the PRC government. These PRC subsidiaries therefore have substantial volumes of transactions with other PRC state-controlled entities during their ordinary course of businesses including but not limited to the purchases of assets, construction of ports and related facilities, bank deposits and borrowings, among others. (c) Balance and transaction with a non-controlling equity holder of a subsidiary: 2019 2018 HK$’million HK$’million Interest expense paid (Note) 20 20 Note: Interest expense was charged at interest rate as set out in note 33 on the outstanding loans from a non-controlling equity holder of a subsidiary. The balance with a non-controlling equity holder of a subsidiary as at 31 December 2019 and 2018 are disclosed in note 33. (d) Key management compensation 2019 2018 HK$’million HK$’million Salaries and other short-term employee benefits 35 20