Annual Report 2019

95 ANNUAL REPORT 2019 (v) The Company expects that CMG Group and its associates will continue to lease properties from the Group and its associates. As these transactions under the CMPG Tenancy Agreement and the other tenancy agreements entered between the Group and the CMG Group are of similar nature or otherwise connected, these transactions will need to be aggregated as if they were one transaction. On 17 December 2018, the Directors resolved to set an aggregate annual cap in respect of the annual aggregate maximum amount of rental income receivable by members of the Group from the CMG Group and its associates (including members of the CMPG Group) at RMB60,000,000 (equivalent to approximately HK$68,200,000) for the year ended 31 December 2019. The total rental income received and receivable by members of the Group from the CMG Group and its associates (including members of the CMPG Group) in connection with the lease period in the year ended 31 December 2019 was approximately RMB45,900,000 (equivalent to approximately HK$52,000,000). (vi) On 17 December 2018, the Directors approved a ship berthing services agreement entered into between CMCS and Yiu Lian, pursuant to which Yiu Lian agreed to continue to provide barges for bringing ships into and from the Tsing Yi Terminal for a term of one year commencing on 1 January 2019 and ending on 31 December 2019 at a rate of HK$3,050 per barge (which was subsequently amended to HK$3,250 per barge), and CMCS shall be responsible for the payment of fuel oil surcharge of HK$300 per barge for each time the barge has brought ships into and from the Tsing Yi Terminal (the “ 2019 Ship Berthing Services Agreement ”). The Directors resolved to set the annual cap in respect of the aggregate ship berthing fees payable by CMCS under the 2019 Ship Berthing Services Agreement for the year ended 31 December 2019 at HK$14,500,000. The aggregate ship berthing fees paid and payable by CMCS to Yiu Lian under the ship berthing services agreement in connection with the service period in the year ended 31 December 2019 was HK$11,200,000. On 19 December 2019, in view of the expiry of the 2019 Ship Berthing Services Agreement on 31 December 2019, CMCS and Yiu Lian entered into a new ship berthing services agreement for a term of one year commencing on 1 January 2020 and ending on 31 December 2020 (the “ 2020 Ship Berthing Services Agreement ”). The Directors resolved to set the annual cap in respect of the aggregate ship berthing fees payable under the 2020 Ship Berthing Services Agreement for the year ending 31 December 2020 at HK$14,500,000. Yiu Lian is an indirect wholly-owned subsidiary of CMG, the ultimate holding company of the Company, and accordingly, a connected person of the Company. (vii) On 17 December 2018, the Company and Sinotrans & CSC entered into a comprehensive services framework agreement (the “ 2019 Comprehensive Services Framework Agreement ”) which sets out a framework for (a) the provision of port-related services by members of the Group to members of the Sinotrans & CSC Group, and (b) the provision of agency services by members of the Sinotrans & CSC Group to members of the Group. The 2019 Comprehensive Services Framework Agreement is for a term of three years commencing on 1 January 2019 and ending on 31 December 2021 and provides that the provision of port-related services by members of the Group to members of the Sinotrans & CSC Group, and the provision of agency services by members of the Sinotrans & CSC Group to members of the Group shall be at prices that are fair and reasonable and shall be at terms not less favourable than those provided to independent third parties. Further specific agreements shall be entered into between the relevant members of the Group and relevant members of the Sinotrans & CSC Group in respect of each transaction within the scope of the 2019 Comprehensive Services Framework Agreement and the Company and Sinotrans & CSC shall procure their respective subsidiaries to ensure that the terms of the specific agreements are entered into in accordance with the principles set out in the 2019 Comprehensive Services Framework Agreement. The specific price for each transaction shall be negotiated at arm’s length by the relevant member of the Group and the relevant member of the Sinotrans & CSC Group at the time when the transaction is entered into. With respect to the provision of port-related services, the price to be charged will be based on the then prevailing standard fee schedule applicable to the relevant port and calculated with reference to the type of vessel and the weight of cargo to be handled. With respect to the receipt of agency services, the relevant member of the Group will, prior to the entering into of the specific agreement, solicit at least two other offers from independent third parties to ensure that the price quoted by the relevant member of the Sinotrans & CSC Group complies with the relevant provisions under the 2019 Comprehensive Services Framework Agreement. On the same day, the Directors resolved to set the following annual caps: (i) in respect of the service fees for port-related services receivable by the Group from Sinotrans & CSC and its associates for each of the three years ending 31 December 2019, 2020 and 2021 as RMB50,000,000 (equivalent to approximately HK$56,800,000), RMB65,000,000 (equivalent to approximately HK$73,900,000) and RMB84,500,000 (equivalent to approximately HK$96,000,000), respectively; and (ii) in respect of the service fees for agency services payable by the Group to Sinotrans & CSC and its associates for each of the three years ending 31 December 2019, 2020 and 2021 as RMB8,000,000 (equivalent to approximately HK$9,100,000), RMB10,400,000 (equivalent to approximately HK$11,900,000) and RMB13,500,000 (equivalent to approximately HK$15,400,000), respectively. The aggregate service fee received and receivable by the Group for port-related services and the service fee paid and payable by the Group for agency services in connection with the service period in the year ended 31 December 2019 was RMB25,200,000 (equivalent to approximately HK$28,600,000) and RMB800,000 (equivalent to approximately HK$900,000), respectively. Sinotrans & CSC is a wholly-owned subsidiary of CMG, the ultimate holding company of the Company, and accordingly, a connected person of the Company. (viii) On 17 December 2018, CMPG and the Company entered into a service framework agreement (the “ 2019 CMPG Services Framework Agreement ”) for a term of one year commencing on 1 January 2019 and ending on 31 December 2019. Pursuant to the 2019 CMPG Services Framework Agreement, the prices for the provision of port and port-related services by members of the Group to members of the CMPG Group and the provision of port and freight forwarding services by members of the CMPG Group to members of the Group should be fair and reasonable and shall be at terms not less than those provided to independent third parties and that the terms and conditions for these services shall be determined with reference to the prevailing market conditions. The specific price for each transaction shall be negotiated at arm’s length by the relevant member of the Group and the relevant member of the CMPG Group at the time when the transaction is entered into. On the same day, the Directors resolved to set the annual cap in respect of the service fees for the provision of port and port-related services receivable by the Group from CMPG Group for the year ended 31 December 2019 as RMB25,000,000 (equivalent to approximately HK$28,400,000) and the annual cap in respect of the service fees for port and freight forwarding services payable by the Group to CMPG Group for the year ended 31 December 2019 as RMB30,000,000 (equivalent to approximately HK$34,100,000). The aggregate service fee received and receivable by the Group for the provision of port and port-related services and the service fee paid and payable by the Group for port and freight forwarding services in connection with the service period in the year ended 31 December 2019 was RMB16,300,000 (equivalent to approximately HK$18,500,000) and RMB16,400,000 (equivalent to approximately HK$18,600,000), respectively. On 19 December 2019, in view of the expiry of the 2019