Annual Report 2021

CHINA MERCHANTS PORT HOLDINGS COMPANY LIMITED 194 Notes to the Consolidated Financial Statements For the year ended 31 December 2021 41. 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) Note 2021 2020 HK$’million HK$’million Interest income from – a fellow subsidiary (iv) 19 15 – associates (v) 200 149 – a joint venture (v) 77 69 – a related party (vi) 18 16 Interest expenses and upfront fees paid to (vii) – immediate holding company 47 22 – fellow subsidiaries 16 23 Notes: (i) The Group rented certain vessels and properties from and leased office premises and residential units to fellow subsidiaries, an associate and a related party, and also leased warehouse to joint ventures. Lease payments were received or charged at a fixed amount per month in accordance with respective tenancy agreements. During the year ended 31 December 2021, the Group has recognised an addition of right-of-use-assets of HK$25 million (2020: HK$90 million) and lease liabilities of HK$25 million (2020: HK$90 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 31 December 2021, the Group placed deposits of HK$595 million (2020: HK$1,365 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% (2020: 1.61% to 1.76%) per annum. (v) Interest income was charged at interest rates as specified in note 22 on the outstanding advances to associates and a joint venture. (vi) As at 31 December 2021, the Group placed deposits of HK$1,306 million (2020: HK$1,200 million) with China Merchants Bank Co., Ltd. (“CMB”), an associate of CMG. (vii) Interest expenses were charged at interest rates as specified in note 32 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 of 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 31 December 2021, the corresponding carrying amount of the right-of-use asset was HK$210 million (2020: HK$211 million). (ix) During the year ended 31 December 2021, the Group acquire property, plant and equipment of HK$2 million (2020: HK$2 million) from fellow subsidiaries.