Annual Report 2023

Report of the Directors CHINA MERCHANTS PORT HOLDINGS COMPANY LIMITED 68 Company), and therefore a connected person of the Company. Accordingly, the transaction contemplated under the Land Lease Agreement constituted a connected transaction of the Company under Chapter 14A of the Listing Rules. As the rental fees under the Land Lease Agreement would be accounted as land use rights in the Company’s financial statements in accordance with HKFRS 16, the transaction under the Land Lease Agreement would be regarded as an acquisition of the Leased Land and constituted a connected transaction of the Company under Chapter 14A of the Listing Rules. (v) Reference is made to the announcement of the Company dated 28 September 2023. On 28 September 2023, the board of Directors of the Company approved the entering into of a research and development agreement (the “ Research and Development Agreement ”) between Shenzhen Malai Storage Company Limited ( 碼來倉儲 ( 深圳 ) 有限公司 ) (“ Malai ”) (an indirect wholly-owned subsidiary of the Company) and China Merchants International Technology Company Limited ( 招商局國際 科技有限公司 ) (“ CMIT ”) for a term from 1 December 2023 to 31 December 2024. Pursuant to the Research and Development Agreement, Malai will cooperate with CMIT to jointly carry out research on automated container terminal management system. CMIT will utilize its research and development capabilities to coordinate and implement the project. The consideration for the services under the Research and Development Agreement is RMB30.00 million (equivalent to approximately HK$33.33 million). CMIT is an indirect subsidiary of CMG, the ultimate holding company of the Company. Accordingly, CMIT is a connected person of the Company and the transactions contemplated under the Research and Development Agreement constituted connected transactions of the Company under Chapter 14A of the Listing Rules. (vi) Reference is made to the announcement of the Company dated 18 December 2023. On 18 December 2023, China Merchants Port Services (Shenzhen) Company Limited ( 招商港務 ( 深圳 ) 有限公司 ) (“ CMPS ”) (an indirect wholly-owned subsidiary of the Company) as lessee entered into collectively, seven new separate lease agreements (the “ 2024 CMSIZ Lease Agreements ”) with CMSIZ as lessor to continue to lease certain parcels of land in the Shekou Industrial Park from CMSIZ for a term of three years commencing on 1 January 2024 and ending on 31 December 2026. The total rental fees payable by CMPS to CMSIZ over the three-year term under the 2024 CMSIZ Lease Agreements (as aggregated) is approximately RMB83.76 million (equivalent to approximately HK$93.07 million). Pursuant to HKFRS 16, the leased lands which are the subjects of the 2024 CMSIZ Lease Agreements will be recognised by the Group as a right-of-use asset, in which the aggregate value is approximately RMB76.11 million (equivalent to approximately HK$84.57 million), amortised over the lease term on a straight line basis. CMSIZ is a subsidiary of CMG, the ultimate holding company of the Company. Accordingly, CMSIZ is a connected person of the Company and the transactions contemplated under the 2024 CMSIZ Lease Agreements constituted connected transactions of the Company under Chapter 14A of the Listing Rules.