Annual Report 2019

Report of the Directors 94 CHINA MERCHANTS PORT HOLDINGS COMPANY LIMITED * The transactions and respective annual caps are denominated in other currencies and are converted to HK$ using the exchange rates prevailing on the dates of the announcements on which the annual caps were disclosed. ** This figure represents the cap in respect of the aggregate amount of deposit that may be placed by the Group at any point of time during the year ended 31 December 2019. Notes: (i) On 28 December 2017, CMCS, an indirect wholly-owned subsidiary of the Company, entered into a cooperation agreement with Euroasia (the “ Existing Euroasia Cooperation Agreement ”) in relation to the renewal of the lease of Tsing Yi Leased Land for a term of two years commencing on 1 January 2018 and ending on 31 December 2019. The annual rental fees payable by CMCS to Euroasia under the Existing Euroasia Cooperation Agreement is HK$15,500,000 for each of the years ended 31 December 2018 and 2019. On 17 December 2018, the Directors resolved to set the annual cap in respect of the rental fees to be paid by CMCS to Euroasia under the Existing Euroasia Cooperation Agreement as HK$15,500,000 for the year ended 31 December 2019. The annual rent paid and payable by CMCS to Euroasia under the Existing Euroasia Cooperation Agreement in connection with the lease period in the year ended 31 December 2019 was HK$15,500,000. Euroasia 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 13 June 2017, China Merchants Port Services (Shenzhen) Company Limited (“ SCMPS ”) and CMSIZ entered into a lease agreement (the “ 2017-2019 CMSIZ Lease Agreement ”) to renew the lease for 14 out of the 16 parcels of land in Shekou Industrial Park that were leased to SCMPS for a term of 30 months commencing on 1 July 2017 and ending on 31 December 2019. On 13 June 2017, the Directors resolved that the annual caps for the annual rental fees payable by SCMPS to CMSIZ under the 2017-2019 CMSIZ Lease Agreement are RMB21,700,000 (equivalent to approximately HK$25,000,000) and RMB21,700,000 (equivalent to approximately HK$25,000,000) for the years ended 31 December 2018 and 2019, respectively. The total rental fees paid and payable by SCMPS to CMSIZ under the 2017-2019 CMSIZ Lease Agreement in connection with the lease period in the year ended 31 December 2019 was approximately RMB20,600,000 (equivalent to approximately HK$23,400,000). CMSIZ is an indirect subsidiary of CMG, the ultimate holding company of the Company, and accordingly, a connected person of the Company. (iii) The Group has also been leasing certain other properties and receiving management services from CMG Group and its associates pursuant to the other lease and management service agreements. As the Existing Euroasia Cooperation Agreement, the 2017-2019 CMSIZ Lease Agreement and the other lease and management services agreements are of similar nature or otherwise connected, the other lease and management service agreements will be aggregated with the Existing Euroasia Cooperation Agreement and the 2017-2019 CMSIZ Lease Agreement and treated 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 and management service fees payable by the Group and its associates to the CMG Group and its associates for the year ended 31 December 2019 at RMB130,000,000 (equivalent to approximately HK$147,700,000). The annual rental and management service fees paid and payable by the Group and its associates to the CMG Group and its associates in connection with the lease period in the year ended 31 December 2019 was RMB100,000,000 (equivalent to approximately HK$113,000,000). (iv) The CMPG Group has been leasing certain properties and receiving management services from the Group, including the leasing of an office space in Qianhai, Shenzhen under a tenancy agreement entered into between Malai Storage (Shenzhen) Company Limited ( 碼來倉 儲 ( 深圳 ) 有限公司 ) (“ Malai Storage ”) (an indirect wholly-owned subsidiary of the Company) and Chiwan Container Terminal Co., Ltd ( 赤灣集裝箱碼頭有限公司 ) (“ Chiwan Container Terminal ”), Mawan Port Company Limited ( 深圳媽灣港務有限公司 ) (“ Mawan Port ”), Mawan Storage Company Limited ( 深圳媽港倉碼有限公 司 ) (“ Mawan Storage ”) and Chiwan Port Container Co., Ltd ( 深圳 赤灣港集裝箱有限公司 ) (“ Chiwan Port Container ”) (members of CMPG Group) for a term of three years commencing on 1 January 2018 and ending on 31 December 2020 (the “ CMPG Tenancy Agreement ”). On 17 December 2018, the Directors resolved to set an aggregate annual cap in respect of the rental income receivable by Malai Storage from members of the CMPG Group at RMB9,500,000 (equivalent to approximately HK$10,800,000) for each of the two years ending 31 December 2019 and 2020. The total rental income received and receivable by Malai Storage from CMPG Group under the CMPG Tenancy Agreement in connection with the lease period in the year ended 31 December 2019 was approximately RMB6,100,000 (equivalent to approximately HK$6,900,000). Each of Chiwan Container Terminal, Mawan Port, Mawan Storage and Chiwan Port Container is a subsidiary of CMPG, a substantial shareholder of the Company. Accordingly, each of Chiwan Container Terminal, Mawan Port, Mawan Storage and Chiwan Port Container is a connected person of the Company. Name of party Nature of transaction Note Annual cap HK$’ million China Merchants Group Finance Company Limited ( 招商局集團財務有限公司 ) (“ China Merchants Finance ”) Placing of deposits (xi) 3,500** Sinotrans Air Transportation GmbH (“ Sinotrans Air ”) Provision of proxy services charged to the Group (xii) (35.4)* CMHIT Provision of technology consulting services charged to other members of the Group (xiii) (102.3)* China Merchants Commercial Property Investment Shenzhen Co., Ltd (“ SCMPI ”) Provision of property management services charged to the Group (xiv) (5)*