Annual Report 2021

65 ANNUAL REPORT 2021 Notes: (i) On 17 December 2020, the Directors approved a ship berthing services agreement entered into between China Merchants Container Services Limited (“ 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 commenced on 1 January 2021 and ended on 31 December 2021 at a rate of 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 “ 2021 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 2021 Ship Berthing Services Agreement for the year ended 31 December 2021 at HK$14.5 million. 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 2021 was HK$8.8 million. On 24 December 2021, in view of the expiry of the 2021 Ship Berthing Services Agreement on 31 December 2021, CMCS and Yiu Lian entered into a new ship berthing services agreement for a term of one year commenced on 1 January 2022 and ending on 31 December 2022 (the “ 2022 Ship Berthing Services Agreement ”). The Directors resolved to set the annual cap in respect of the aggregate ship berthing fees payable under the 2022 Ship Berthing Services Agreement for the year ending 31 December 2022 at HK$11 million. 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. (ii) On 17 December 2018, the Company and Sinotrans & CSC entered into a comprehensive services framework agreement (the “ 2019 Sinotrans 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 Sinotrans Services Framework Agreement is for a term of three years commenced on 1 January 2019 and ended 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 Sinotrans 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 Sinotrans 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 ended 31 December 2019, 2020 and 2021 as RMB50 million (equivalent to approximately HK$56.8 million), RMB65 million (equivalent to approximately HK$73.9 million) and RMB84.5 million (equivalent to approximately HK$96 million), 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 ended 31 December 2019, 2020 and 2021 as RMB8 million (equivalent to approximately HK$9.1 million), RMB10.4 million (equivalent to approximately HK$11.8 million) and RMB13.52 million (equivalent to approximately HK$15.4 million), 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 2021 was RMB56.4 million (equivalent to approximately HK$68 million) and RMB5.7 million (equivalent to approximately HK$6.8 million), respectively. On 24 December 2021, in view of the expiry of the 2019 Sinotrans Services Framework Agreement on 31 December 2021, Sinotrans & CSC and the Company entered into a new comprehensive services framework agreement (the “ 2022 Sinotrans Services Framework Agreement ”) for a term of three years commencing on 1 January 2022 and ending on 31 December 2024. The Directors resolved to set the annual caps 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 2022, 2023 and 2024 under the 2022 Sinotrans Services Framework Agreement as RMB26 million (equivalent to approximately HK$31.71 million), RMB34 million (equivalent to approximately HK$41.46 million) and RMB45 million (equivalent to approximately HK$54.88 million). Sinotrans & CSC is a wholly- owned subsidiary of CMG, the ultimate holding company of the Company, and accordingly, a connected person of the Company. (iii) On 17 December 2020, CMPG and the Company entered into a service framework agreement (the “ 2021 CMPG Services Framework Agreement ”) for a term of one year commenced on 1 January 2021 and ended on 31 December 2021. Pursuant to the 2021 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 2021 as RMB27 million (equivalent to approximately HK$32.14 million) 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 2021 as RMB22 million (equivalent to approximately HK$26.19 million). The aggregate service fees for the provision of port and port-related services received and receivable by the Group from CMPG Group and the service fees for port and freight forwarding services paid and payable by the Group to CMPG Group for the year ended 31 December 2021 was RMB17.6 million (equivalent to approximately HK$21.2 million) and RMB18 million (equivalent to approximately HK$21.7