Proposed Annual. Caps for referral fees payable/paid to the Midland Group:
(i) the historical transaction amounts of 2018 which had seen an active level of industrial and commercial property and shops referrals; (ii) the expected level of referral fees payable/paid to the Midland Group in respect of industrial and commercial properties and shops for the relevant periods; and (iii) the Group’s potential business growth based on the scale, operations of the businesses and capability of the Group and capacity to take on referrals.
Proposed Annual. Cap Amounts
Proposed Annual. Caps and the Basis of Determination For the year ending 31 December 2019 2020 2021
(i) Based on the Group’s current installed capacity in operation and tariff structure, it is expected that the tariff premium receivable by the Group for each year during 2019 to 2021 will amount to approximately RMB3,500 million to RMB4,000 million;
(ii) with reference to the previous conditions of the recovery of the account receivables of the tariff premium, it is expected that the Group will receive tariff premium of approximately RMB2,000 million for each year during 2019 to 2021;
(iii) calculated based on the above conditions, the Group’s account receivables of tariff premium will increase by approximately RMB1,500 million to RMB2,000 million in each year during 2019 to 2021;
(iv) the Group intends to carry out factoring business for the increase in account receivables of tariff premium for each year during 2019 to 2021, so as to timely reduce the balance of the account receivables of tariff premium;
(v) given that the balance of the account receivables of tariff premium as at 31 December 2018 is approximately RMB6,171 million, even if the increase in the account receivable of tariff premium for each year during 2019 to 2021 was less than RMB2,000 million, the Group still could carry out factoring business for the balance of the account receivables of tariff premium as at 31 December 2018; and
(vi) the business scale of Datang Factoring Company can meet the factoring demands of the Group.
Proposed Annual. Caps for referral fees payable/paid to the IC&I Group:
(i) the historical transaction amounts of 2018; (ii) expected level of referral fees payable/paid to the IC&I Group in respect of residential properties for the relevant periods; (iii) the possible increase in market transactions in Hong Kong residential market following the COVID-19 pandemic; and (iv) the Group’s potential business growth based on the scale, operations of the businesses and capability of the Group and capacity to take on referrals.
Proposed Annual caps and basis of determination
(i) the historical amounts of the leasing agreements entered into between the Group and Poly Developments and Holdings Group;
(ii) the specific leasing agreements already entered into, and the expected rent to be paid to Poly Developments and Holdings Group pursuant to the relevant leasing agreements; and
(iii) taking into account the needs of the Group’s business expansion, the demand of the Group for leased office spaces and other properties for the coming three years is expected to increase continuously.
Proposed Annual caps for the Master Logistics Service Supply (2017 Renewal) Agreement
Proposed Annual caps for the Master Sale and Purchase (2019) Agreement
(i) the historical amounts of the relevant transactions under the Master Sale and Purchase (2018 Renewal) Agreement;
(ii) in respect of Sourcing of Goods, the possible requirement of raw materials, semi- finished materials and finished goods with respect to the projected business volumes and the estimated growth rates of the relevant business lines of the Group (which in turn are estimated by reference to, among other things, the relevant industry demand and the target market share of the Group), together with the prevailing market rate for similar raw materials, semi-finished materials and finished goods; and
(iii) in respect of Sale of Goods, the relevant TCL Associates’ projected requirement of raw materials, semi-finished materials and finished goods for its operations, which is expected to increase substantially, together with the prevailing market rate for similar raw materials, semi-finished materials and finished goods. In respect of all continuing connected transactions of the Group, the Group has adopted the following internal control procedures (which are similar to those adopted by the Group for Master Sale and Purchase (2018 Renewal) Agreement and Master Lease (Tenant) (2018 Renewal) Agreement):
1. Before conducting any transactions contemplated under, or enter into any sub-contract pursuant to, an agreement for continuing connected transactions, the internal control department, legal department and finance department of the Group would review the terms of the proposed transactions and the draft sub-contract to ensure that the transactions would be conducted in accordance with the terms of the agreement and in accordance with the Company’s pricing policy.
2. For purchase of goods from the connected persons, to ensure that the transactions with connected persons are on normal commercial terms and terms no less favourable than those available from Independent Third Parties, where comparable goods are available on the market from Independent Third Parties, before requesting the connected persons to provide the goods, the purchasing department of the Group would obtain a quotation from at least two Independent Third Parties for the comparable goods and conduct an overall assessment on the terms of supply of goods. The relevant members of the Group would only engage the connected persons for the provision of the goods when, according to the results of the overall assessment by the purchasing de...
Proposed Annual. Cap and Basis of Determination
