Annual Report 2021

China Merchants China Direct Investments Limited Annual Report 2021 53 DIRECTORS’ REPORT (CONTINUED) CONTINUING CONNECTED TRANSACTION (CONTINUED) Investment Management Agreement (continued) For the year ended 31 December 2021, the management fees which were calculated based on a fixed percentage on the value of the Group’s adjusted assets on a quarterly basis as stipulated in the Existing Management Agreement totaling US$13,971,923 (2020: US$11,511,019) were paid or payable to the Investment Manager. A performance fee of US$4,906,543 (2020: US$9,587,735) was accrued by the Company under the Existing Management Agreement. It was calculated based on a fixed percentage on the agreed increment of the Group’s net asset value after certain adjustments as stipulated in the Existing Management Agreement. The Independent Non-executive Directors have reviewed the above continuing connected transaction and have confirmed that the transaction has been entered into: 1. in the ordinary and usual course of the business of the Company and its subsidiaries; 2. on normal commercial terms or better; and 3. in accordance with the agreement governing them on terms that are fair and reasonable and in the interests of the shareholders of the Company as a whole. Pursuant to Rule 14A.56 of the Listing Rules, the Company engaged its external auditor to report on the Group’s continuing connected transaction in accordance with Hong Kong Standard on Assurance Engagements 3000 “Assurance Engagements Other Than Audits or Reviews of Historical Financial Information” and with reference to Practice Note 740 “Auditor’s Letter on Continuing Connected Transactions under the Hong Kong Listing Rules” issued by the Hong Kong Institute of Certified Public Accountants. The auditor has issued an unqualified letter containing their findings and conclusions in respect of the continuing connected transaction set out above in accordance with Rule 14A.56 of the Listing Rules. Save as disclosed above, details of significant related party transactions are disclosed in note 28 to the consolidated financial statements. The Company has complied with the disclosure requirements in accordance with chapter 14A of the Listing Rules. AUDITOR A resolution will be submitted to the annual general meeting to re-appoint Messrs. Deloitte Touche Tohmatsu as auditor of the Company. On behalf of the Board Mr. ZHOU Xing Chairman Hong Kong, 28 March 2022