Tianjin Port Development Holdings Limited - Proxy Solicitation & Information Statement 2021

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Tianjin Port Development Holdings Limited , you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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(Incorporated in the Cayman Islands with limited liability) (Stock Code: 03382)

MAJOR AND CONTINUING CONNECTED TRANSACTIONS RENEWAL OF THE EXISTING FINANCIAL SERVICES FRAMEWORK AGREEMENT AND NOTICE OF EXTRAORDINARY GENERAL MEETING

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

A letter from the Board is set out on pages 6 to 24 of this circular. A letter from the Independent Board Committee is set out on pages 25 to 26 of this circular. A letter from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders is set out on pages 27 to 49 of this circular.

A notice convening the EGM to be held at 24th Floor, Admiralty Centre, Tower I, 18 Harcourt Road, Hong Kong on Monday, 20 December 2021 at 3:00 p.m. is set out on pages 59 to 60 of this circular. A form of proxy for use at the EGM (or any adjournment thereof) is also enclosed.

Whether or not you are able to attend the EGM, please complete the enclosed form of proxy in accordance with the instructions printed thereon and return it to the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible and in any event not less than 48 hours before the time scheduled for holding the EGM (or any adjournment thereof). Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM (or any adjournment thereof) should you so wish.

PRECAUTIONARY MEASURES FOR THE EGM

Please refer to page 1 of this circular for precautionary measures to be implemented at the EGM to prevent the spreading of Novel Coronavirus (COVID-19), including:

Compulsory body temperature checks 2. Submission of health declaration form 3. Compulsory wearing of surgical face mask 4. No provision of refreshments or drinks and no distribution of corporate gifts or coupons

Any person who does not comply with the precautionary measures may be denied entry into the EGM venue, at the absolute discretion of the Company as permitted by the laws of Hong Kong. The Company also encourages Shareholders to consider appointing the chairman of the EGM as their proxy to vote on the relevant resolution at the EGM as an alternative to attending the EGM in person.

Hong Kong, 23 November 2021

	Page
PRECAUTIONARY MEASURES FOR THE EXTRAORDINARY
GENERAL MEETING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
LETTER FROM THE INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . . . . .	25
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER . . . . . . . . . . . . . . . . .	27
APPENDIX I — FINANCIAL INFORMATION OF THE GROUP. . . . . . . . . . . . . .	50
APPENDIX II — GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	52
NOTICE OF EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . .	59

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PRECAUTIONARY MEASURES FOR THE EXTRAORDINARY GENERAL MEETING

In view of the present Novel Coronavirus (COVID-19) pandemic and recent requirements (if any) for prevention and control of its spreading, to safeguard the health and safety of Shareholders who might be attending the EGM in person, the Company will implement the following precautionary measures at the EGM:

(i) Compulsory body temperature checks will be conducted on every attendee at the entrance of the EGM venue. Any person with a body temperature of over 37.3 degrees Celsius, or has flu-like symptoms or is otherwise unwell will be denied entry into the EGM venue.
(ii) Submission of health declaration form by all attendees at the entrance of the EGM venue.
(iii) Compulsory wearing of surgical face masks by all attendees prior to admission to the EGM venue and throughout the EGM.
(iv) Maintenance of a safe distance between seats. The Company may limit the number of attendees at the EGM as may be necessary to avoid over-crowding.
(v) No provision of refreshments or drinks and no distribution of corporate gifts or coupons.

To the extent permitted by the laws of Hong Kong, the Company reserves the right to deny entry into the EGM venue or require any person to leave the EGM venue so as to ensure the health and safety of the attendees at the EGM.

Subject to the development of the COVID-19 situation, the Company may implement additional precautionary measures as and when appropriate.

In the interest of all stakeholders’ health and safety and consistent with recent COVID-19 guidelines for prevention and control, the Company reminds all Shareholders that physical attendance at the EGM is not necessary for the purpose of exercising voting rights. As an alternative to attending the EGM in person, Shareholders are encouraged to consider appointing the chairman of the EGM as their proxy to vote on the relevant resolution at the EGM by submitting the form of proxy with voting instructions inserted.

The form of proxy for the EGM is enclosed with this circular. Alternatively, the form of proxy can be downloaded from the website of the Company at www.tianjinportdev.com and the website of the Stock Exchange at www.hkexnews.hk.

If you are not a registered Shareholder (if your Shares are held via banks, brokers, custodians or the Hong Kong Securities Clearing Company Limited), you should consult directly with your banks, brokers or custodians (as the case may be) to assist you in the appointment of proxy.

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DEFINITIONS

In this circular, unless the context requires otherwise, the following expressions shall have the following meanings:

“associate(s)”	has the meaning ascribed to it under the Listing Rules;
“Board”	the board of Directors;
“CBIRC”	China Banking and Insurance Regulatory Commission;
“Company”	Tianjin Port Development Holdings Limited, a company
	incorporated in the Cayman Islands with limited liability
	and the shares of which are listed on the Main Board of the
	Stock Exchange (Stock Code: 03382);
“connected person(s)”	has the meaning ascribed to it under the Listing Rules;
“controlling shareholder”	has the meaning ascribed to it under the Listing Rules;
“Director(s)”	the director(s) of the Company;
“EGM” or “Extraordinary General	the extraordinary general meeting of the Company to be
Meeting”	convened and held to consider and, if thought fit, to
	approve, inter alia, the New Financial Services Framework
	Agreement, the Non-exempt Continuing Connected
	Transactions and the Proposed Annual Caps;
“Existing Financial Services	a framework agreement dated 21 September 2018 entered
Framework Agreement”	into between the Company, Tianjin Port Finance and
	Tianjin Port Group in relation to the provision of financial
	services by Tianjin Port Finance to members of the Group;

“Group” the Company and its subsidiaries; “HK$” Hong Kong dollars, the lawful currency of Hong Kong; “Hong Kong” the Hong Kong Special Administrative Region of the PRC; “Independent Board Committee” the independent board committee comprising all of the independent non-executive Directors;

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DEFINITIONS

“Independent Financial Adviser” or “Opus Capital”
Opus Capital Limited, a corporation licensed to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO, being the independent financial adviser to the Independent Board Committee and the Independent Shareholders in relation to the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps;

“Independent Shareholders” Shareholders, other than Tianjin Port Group and its associates;

“Latest Practicable Date”
18 November 2021, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein;
“Listing Rules”
the Rules Governing the Listing of Securities on the Stock Exchange;

“New Financial Services a framework agreement dated 28 September 2021 entered Framework Agreement” into between the Company, Tianjin Port Finance and Tianjin Port Group in relation to the provision of financial services by Tianjin Port Finance to members of the Group; “Non-exempt Continuing Connected the transactions in relation to deposit services (category (1) of Transactions” the financial services referred to in the section “ Nature of services ” of paragraph (b) “ Principal terms ” headed “ NEW FINANCIAL SERVICES FRAMEWORK AGREEMENT ” in this circular) contemplated under the New Financial Services Framework Agreement; “PBOC” People’s Bank of China; “PRC” the People’s Republic of China, which for the purpose of this circular, excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan;

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DEFINITIONS

“Proposed Annual Cap(s)”

the proposed annual cap(s) for the Non-exempt Continuing Connected Transactions on the maximum daily outstanding balance of deposits (including accrued interest) to be placed by the Group with Tianjin Port Finance (which does not include deposits for the purpose of extending entrustment loans referred to in the section “ Nature of services ” of paragraph (b) “ Principal terms ” headed “ NEW FINANCIAL SERVICES FRAMEWORK AGREEMENT ” in this circular) for the three years ending 31 December 2024;

“RMB” Renminbi, the lawful currency of the PRC;

“SFO” Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong); “Share(s)” ordinary share(s) of HK$0.10 each in the share capital of the Company; “Shareholder(s)” the shareholder(s) of the Company; “Stock Exchange” The Stock Exchange of Hong Kong Limited;

“Tianjin Port Co” 天津港股份有限公司 (Tianjin Port Holdings Co., Ltd.*), a limited liability company incorporated in the PRC and the shares of which are listed on the Shanghai Stock Exchange (Stock Code: 600717). As at the Latest Practicable Date, approximately 56.81% of its equity interest is indirectly held by the Company;

“Tianjin Port Finance” 天津港財務有限公司 (Tianjin Port Finance Co., Ltd.*), a limited liability company incorporated in the PRC, a 45.826% owned associate of the Group and a 54.174% owned non wholly-owned subsidiary of Tianjin Port Group as at the Latest Practicable Date;

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DEFINITIONS

“Tianjin Port Group” 天津港(集團)有限公司 (Tianjin Port (Group) Co., Ltd.*), an entity reorganised as a wholly state-owned enterprise in the PRC on 29 July 2004 and holding the businesses owned and operated by the former government regulatory body of the port of Tianjin; and the indirect holder of 53.5% of the issued share capital of the Company as at the Latest Practicable Date; “Transactions” the transactions contemplated under the New Financial Services Framework Agreement; and “%” per cent.

For identification purposes only

Unless otherwise stated, in the event of any inconsistency, the English language text of this circular shall prevail over the Chinese language text.

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LETTER FROM THE BOARD

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(Incorporated in the Cayman Islands with limited liability) (Stock Code: 03382)

Executive Directors: CHU Bin (Chairman) LUO Xunjie (Managing Director) SUN Bin XUE Xiaoli SHI Jing

Independent Non-executive Directors: Japhet Sebastian LAW CHENG Chi Pang, Leslie ZHANG Weidong

Registered Office: Windward 3, Regatta Office Park PO Box 1350 Grand Cayman KY1-1108 Cayman Islands

Principal Place of Business in Hong Kong: Suite 3904-3907, 39/F. Tower Two, Times Square 1 Matheson Street Causeway Bay, Hong Kong

23 November 2021

To the Shareholders

Dear Sir or Madam,

MAJOR AND CONTINUING CONNECTED TRANSACTIONS RENEWAL OF THE EXISTING FINANCIAL SERVICES FRAMEWORK AGREEMENT

AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to the announcement of the Company dated 28 September 2021 in relation to the renewal of the Existing Financial Services Framework Agreement. Pursuant to the requirements under the Listing Rules, the Company will seek the Independent Shareholders’ approval in relation to the New Financial Services Framework Agreement, the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps at the EGM.

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LETTER FROM THE BOARD

The purpose of this circular is to provide you with:

(a) details of the terms of the New Financial Services Framework Agreement, the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps;
(b) a letter from the Independent Board Committee to the Independent Shareholders in respect of the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps;
(c) a letter of advice from Opus Capital to the Independent Board Committee and the Independent Shareholders in respect of the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps; and
(d) a notice of the EGM.

NEW FINANCIAL SERVICES FRAMEWORK AGREEMENT

(a) Background

Reference is made to the announcement of the Company dated 21 September 2018 where it was announced, among other things, that the Company entered into the Existing Financial Services Framework Agreement with Tianjin Port Finance and Tianjin Port Group.

As the Existing Financial Services Framework Agreement will expire on 31 December 2021, on 28 September 2021, the Company entered into the New Financial Services Framework Agreement with Tianjin Port Finance and Tianjin Port Group to continue the Transactions.

(b) Principal terms

Date : 28 September 2021

Parties : (1) the Company (as services user) (2) Tianjin Port Finance (as services provider) (3) Tianjin Port Group (as guarantor)

Term : 1 January 2022 to 31 December 2024

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LETTER FROM THE BOARD

Condition:

The New Financial Services Framework Agreement, including the Proposed Annual Caps, is conditional upon obtaining the approval from the Independent Shareholders in accordance with the provisions of the Listing Rules.

Nature of services:

Provision of financial services by Tianjin Port Finance to members of the Group, including:

(1) deposit services;
(2) provision of loans (excluding entrustment loans referred to in category (5) below);
(3) commercial notes acceptance and discounting services;
(4) settlement services;
(5) arrangement of entrustment loans between members of the Group, whereby Tianjin Port Finance serves as a financial agency through which funds of any member of the Group may be channeled for use by other members of the Group; and
(6) certification of financial position, insurance agency services, financial advisory services and other advisory services (together with the services referred to in categories (3) to (5) above, the “ Other Financial Services ”).

Pursuant to the New Financial Services Framework Agreement, the Group is not under any obligation to utilise the financial services provided by Tianjin Port Finance, and has the right to decide whether to maintain its collaboration with Tianjin Port Finance with respect to financial services.

Fees and charges:

Fees and charges payable by the Group to Tianjin Port Finance under the New Financial Services Framework Agreement will be on terms no less favourable than the benchmark rates set by PBOC (if applicable) and/or those available to the Group from other major state-owned commercial banks in the PRC and are determined on the following bases:

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LETTER FROM THE BOARD

(1) deposit services:

Interest rates for deposits placed by members of the Group must not be lower than (i) the relevant benchmark interest rates for deposits (存款基準利率) set by PBOC; and (ii) the interest rates provided by other major state-owned commercial banks in the PRC for deposits of similar nature and under similar terms;

(2) provision of loans:

Interest rates for borrowings by members of the Group must not be higher than the interest rates charged by other major state-owned commercial banks in the PRC for borrowings of similar nature and under similar terms;

(3) commercial notes acceptance and discounting services:

Fees charged for commercial notes acceptance and discounting services and the interest rates for discounting services must not be higher than the fees for commercial notes acceptance and discounting services and interest rates for discounting services charged by other major state-owned commercial banks in the PRC for providing services of similar nature and under similar terms;

(4) settlement services:

Fees charged for settlement services must not be higher than (i) the relevant benchmark charging rates to be set by PBOC (if applicable); and (ii) the fees charged by other major state-owned commercial banks in the PRC for providing services of similar nature and under similar terms;

(5) arrangement of entrustment loans:

Fees charged for the services for entrustment loans must not be higher than the fees charged by other major state-owned commercial banks in the PRC for providing services of similar nature and under similar terms; and

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LETTER FROM THE BOARD

(6) certification of financial position, insurance agency services, financial advisory services and other advisory services:

Fees charged for these services must not be higher than (i) the relevant benchmark charging rates to be set by PBOC (if applicable); and (ii) the fees charged by other major state-owned commercial banks in the PRC for providing services of similar nature and under similar terms.

Other provisions:

The average daily amount of outstanding loans extended by Tianjin Port Finance to the Group must exceed the average daily amount of deposits placed by the Group with Tianjin Port Finance, both amounts being calculated on a monthly basis.

In the event that Tianjin Port Finance misuses or defaults on the deposits placed by the Group with Tianjin Port Finance, which renders the Group unable to withdraw such deposits (including accrued interest), the Group will have the right to lawfully set off such deposits (including accrued interest) against the outstanding loans (including accrued interest) extended by Tianjin Port Finance to the Group. However, if the Group fails to punctually repay the loans extended by Tianjin Port Finance, Tianjin Port Finance does not have the right to set off such outstanding loans due from the Group with the deposits placed by the Group.

Termination:

The Company may unilaterally terminate the New Financial Services Framework Agreement if:

(1) any of the following events occur which exposes or potentially exposes the Group to substantial risks or losses:
breach or potential breach of PRC laws and regulations by Tianjin Port Finance;
Tianjin Port Finance experiences or foresees to experience any major operational problems or liquidity difficulties;
non-performance of any terms or default of the New Financial Services Framework Agreement by Tianjin Port Finance; or
(2) the performance of its obligations by the Company and/or the Group under the New Financial Services Framework Agreement will result in a breach or possible breach of laws and regulations (including the Listing Rules).

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LETTER FROM THE BOARD

Undertakings by Tianjin Port Group:

As part of the New Financial Services Framework Agreement, Tianjin Port Group undertakes to the Company, among other things, that:

(1) Tianjin Port Group has undertaken and warranted to both the Company and the CBIRC that if Tianjin Port Finance experiences or foresees to experience any liquidity difficulties, it will inject capital to Tianjin Port Finance based on the latter’s needs in order to ensure the latter’s normal operation; and
(2) Tianjin Port Group undertakes and warrants jointly and severally with Tianjin Port Finance to indemnify the Group for all the substantial risks or losses (including but not limited to the Group’s deposits, interests and related expenses incurred) caused or potentially caused by (i) Tianjin Port Finance’s breaches or potential breaches of PRC laws and regulations, or by (ii) its having or potentially having any major operational problems or liquidity difficulties, or by (iii) its non-performance of any terms or default of the New Financial Services Framework Agreement.

Internal control and risk management measures:

In order to safeguard the interests of the Company and the Shareholders, the New Financial Services Framework Agreement provides the following internal control and risk management measures:

(1) Tianjin Port Finance shall ensure the secure operation of its fund management information system. The system has passed all the security tests for the bank-enterprise direct connection with other commercial banks, and that the system adopts the digital certificates for security certification in order to ensure the security of the Group’s funds;
(2) Tianjin Port Finance guarantees that it will strictly comply with and operate under the finance company risk management specifications issued by the CBIRC. The gearing, liquidity and other ratios should comply with the requirements specified by CBIRC and other PRC laws and regulations as amended from time to time;
(3) Tianjin Port Finance shall at all times monitor its credit risks. If (i) any specific situation arises which may adversely affect the security of the deposits placed by the Group with Tianjin Port Finance, or (ii) any other circumstances occur, which may cause serious concern to such deposits, Tianjin Port Finance shall give written notice to the Company and the Group within two business days after the occurrence of such situations or circumstances, and to take measures to avoid or contain any losses. Once being notified, the Group has the right

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LETTER FROM THE BOARD

to withdraw its deposits (including the accrued interest) forthwith, or if it is unable to do so, it may lawfully set off the deposits (including accrued interest) placed by the Group with Tianjin Port Finance against the outstanding loans (including accrued interest) extended by Tianjin Port Finance to the Group;
(4) during the term of the New Financial Services Framework Agreement, Tianjin Port Finance shall provide the Company with a report before 10:00 a.m. on every business day on the amount of deposits placed and loans owing by the Group (the “ Report ”). The Report will be reviewed, on a daily basis, by the Company to monitor and ensure that (i) the average daily amount of deposits (including accrued interest) placed by the Group does not exceed the Proposed Annual Caps and (ii) the average daily amount of outstanding loans extended by Tianjin Port Finance to the Group must be more than the average daily balance amount of deposits placed by the Group with Tianjin Port Finance, both amounts being calculated on a monthly basis;
(5) during the term of the New Financial Services Framework Agreement, Tianjin Port Finance shall provide the Company on the fifth business day of every month with its financial statements and other returns submitted by Tianjin Port Finance to the CBIRC in the immediately preceding month;
(6) during the term of the New Financial Services Framework Agreement, Tianjin Port Finance shall provide the Company within three business days after submission with a copy of every regulatory report submitted by Tianjin Port Finance to the CBIRC; and
(7) during the term of the New Financial Services Framework Agreement, Tianjin Port Finance shall implement all measures in relation to risk control.

In addition, the fund management information system of Tianjin Port Finance allows real-time monitoring of the actual balance of the deposits (including accrued interest) placed by the Group with Tianjin Port Finance, therefore Tianjin Port Finance can assist the Company to ensure that the actual daily balance of such deposits does not exceed the Proposed Annual Caps. If the deposits placed by the Group with Tianjin Port Finance are close to exceeding the Proposed Annual Caps, Tianjin Port Finance will inform the Company in a timely manner.

The audit committee of the Company, which comprises all the independent non-executive Directors, will monitor and review the continuing connected transactions under the relevant agreements of the Group every year to ensure that such transactions are entered into on normal commercial terms, are fair and reasonable, and are carried out pursuant to the terms of such agreements. The auditors of the Company will conduct annual review on the continuing connected transactions under such agreements pursuant to the requirements under the Listing Rules.

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LETTER FROM THE BOARD

(c) Non-exempted Continuing Connected Transactions

Historical figures and the Proposed Annual Caps

Set out below are (i) the historical maximum daily outstanding balance of the deposits (including accrued interest) placed by the Group with Tianjin Port Finance (deposit services: category (1) of the financial services referred to above) for the years ended 31 December 2019 and 2020 and the six months ended 30 June 2021 and (ii) the Proposed Annual Caps:

Historical figures and historical	Historical figures and historical	annual caps	Proposed Annual Caps	Proposed Annual Caps	Proposed Annual Caps
	(RMB in million)			(RMB in million)
For the year	For the year	For the six	For the year	For the year	For the year
ended	ended	months ended	ending	ending	ending
31 December	31 December	30 June	31 December	31 December	31 December
2019	2020	2021	2022	2023	2024
3,859	3,672	3,472	8,000	8,000	8,000
(2019 cap:	(2020 cap:	(2021 cap:
8,000)	8,000)	8,000)

During the period between 1 July 2021 and the Latest Practicable Date, the maximum daily outstanding balance of deposits (including accrued interest) placed by the Group with Tianjin Port Finance was approximately RMB3.25 billion.

Basis of the Proposed Annual Caps

The Proposed Annual Caps are determined after considering the following factors:

(1) cash and deposits of the Group (excluding restricted bank deposits) as at 31 December 2020 and 31 December 2019 of HK$8.49 billion and HK$8.64 billion respectively;
(2) the Proposed Annual Caps represent approximately 121.8% and 111.9% of the cash and deposits (excluding restricted bank deposits) of the Group as at 30 June 2021 and 31 December 2020 respectively;
(3) the anticipated growth of business of the Group, with reference to the growth rates of 4.3% and 13.2% in total cargo throughput at ports in the PRC for 2020 and the first half of 2021 respectively; the scale of operation of the Group is expected to remain stable

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LETTER FROM THE BOARD

for the next three years with a steady operating cash inflow. Net cash inflow from operating activities of the Group for the years ended 31 December 2020 and 2019 amounted to approximately HK$2.79 billion and HK$2.53 billion respectively;

(4) the Group uses the settlement platform provided by Tianjin Port Finance for the settlement of income and expenditure (including drawdown and repayment of borrowings from Tianjin Port Finance) from the ordinary course of business between the members of Tianjin Port Group, which can shorten the time for transit and turnaround, reduce fund transfer frequency and increase fund management efficiency. The same amount of maximum daily outstanding balances of deposits can meet the daily requirements for receipts and payments, enhance flexibility and ensure smooth settlement. When less funds are required for settlement, the outstanding balances of deposits will also change accordingly;
(5) the average daily amount of outstanding loans extended by Tianjin Port Finance to the Group must exceed the average daily amount of deposits placed by the Group with Tianjin Port Finance, both amounts being calculated on a monthly basis. The average amount of loans extended by Tianjin Port Finance to the Group in 2020 and 2019 were approximately RMB3.51 billion and RMB3.62 billion respectively. As at 31 December 2020 and 31 December 2019, borrowings from Tianjin Port Finance were approximately 39.8% and 39.2% of RMB borrowings of the Group. The Proposed Annual Caps represent approximately 104.3% and 94.8% of RMB borrowings of the Group as at 30 June 2021 and 31 December 2020 respectively;
(6) the treasury requirements of the Group as a whole (including management of surplus cash, funding requirements for capital expenditures and repayment of borrowings) taking into account the settlement trend of its business partners to ensure the Group’s financial stability and maintain stable gearing ratios, with reference to the Group’s gearing ratio (ratio of total borrowings to total equity) of approximately 42.5% and net gearing ratio (ratio of total borrowings net of cash and deposits (excluding restricted bank deposits) to total equity) of approximately 13.3% as at 31 December 2020; and
(7) Tianjin Port Finance is under the supervision of the CBIRC with stringent internal control and risk management measures.

(d) Reasons for and benefits of entering into the Transactions

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LETTER FROM THE BOARD

Tianjin Port Finance and other commercial banks in the PRC, while at the same time retaining sufficient working capital flexibility; (ii) enhancing cost savings by reducing the amount of finance fees and charges payable to other commercial banks in the PRC when the terms offered by Tianjin Port Finance to the Group are no less favorable than those offered by other commercial banks in the PRC; and (iii) sharing profits of Tianjin Port Finance attributable to the Group in accordance with shareholding interests in Tianjin Port Finance. It is expected that Tianjin Port Finance, being an affiliate company of the Group, will be placed in a better position to serve the financial needs of the Group as it has a better understanding of the operation and development needs of the Group. Accordingly, it is envisaged that Tianjin Port Finance will be more efficient in terms of processing transactions for the Group than other commercial banks in the PRC.

As a financial services provider to the Group, the risk profile of Tianjin Port Finance is no greater than that of other commercial banks in the PRC, whilst there are numerous advantages of utilising the financial services provided by Tianjin Port Finance over similar services provided by other commercial banks in the PRC (as disclosed below):

similar to other commercial banks in the PRC, Tianjin Port Finance is regulated by the PBOC and the CBIRC, and it is required to provide services pursuant to the relevant rules, regulations and requirements including capital risk guidelines and requisite capital adequacy ratios as stipulated or promulgated by such regulatory authorities from time to time. In particular, Tianjin Port Finance follows a more stringent capital adequacy ratio policy than that is required of finance companies by the CBIRC;
Tianjin Port Finance has implemented stringent internal control and risk management measures, the efficiency and effectiveness of which are regularly reviewed by the CBIRC. Furthermore, Tianjin Port Finance will provide the Company access to its books and accounts for inspection upon the Company’s request;
pursuant to its articles of association, Tianjin Port Finance operates independently and is responsible for its own financial performance. When Tianjin Port Finance provides financial services to members of Tianjin Port Group, it will exercise its own judgment and prudent approval process in determining whether to provide particular financial services to these members. With the implementation of stringent credit control measures, Tianjin Port Finance has never experienced any bad debt since its establishment in 2006 and has not defaulted on any of its credit obligations;

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LETTER FROM THE BOARD

pursuant to the articles of association of Tianjin Port Finance, in the contingent circumstances where Tianjin Port Finance encounters liquidity difficulties, Tianjin Port Group undertakes to inject capital based on the actual needs for resolving the liquidity difficulties; and
the risk of the Group is minimised by: (i) Tianjin Port Group’s undertakings to the Group; (ii) the Group’s right of set-off; and (iii) that the average daily amount of outstanding loans of the Group shall exceed the average daily amount of deposits placed by the Group, both amounts being calculated on a monthly basis.

The advantages of utilising the financial services provided by Tianjin Port Finance over similar services provided by other commercial banks in the PRC are as follows:

PRC laws do not permit companies, including affiliates, to extend intra-group loans directly without going through a financial intermediary. Tianjin Port Finance serves as the financial intermediary through which the funds of the members of the Group may be deposited with Tianjin Port Finance and channeled efficiently to be used by one another;
as an intra-group service provider, Tianjin Port Finance generally has better and more efficient communication and understanding with the Group compared with other commercial banks in the PRC. For example, by coordinating the members of the Group with surplus deposits with members who are borrowers, the costs and efficiency of the services provided will be improved;
Tianjin Port Finance offers interest rates that are no less favourable than the relevant benchmark rates set by the PBOC (if applicable) and/or those available to the Group from other major state-owned commercial banks in the PRC;
Tianjin Port Finance can assist the Group to formulate a beneficial deposit mix comprising different types of deposits such as current deposits, call deposits and fixed deposits, which allows the Group to increase its return on funds and retain sufficient working capital flexibility;
fees and charges generated from utilisation of Tianjin Port Finance’s services will be credited to Tianjin Port Finance instead of other commercial banks in the PRC, which allows the Group to benefit financially. The Group holds 45.826% equity interest in Tianjin Port Finance and will share the profits of Tianjin Port Finance accordingly;

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LETTER FROM THE BOARD

as Tianjin Port Finance is familiar with the business and transaction patterns of the Group, settlement services provided by Tianjin Port Finance tend to provide a more efficient and orderly platform than those platforms that could be provided by other commercial banks in the PRC. This also helps to reduce the transaction costs of the Group such as handling fees for transfer of funds and other administrative expenses;
discounting of commercial notes by Tianjin Port Finance provides the Group’s customers with flexibility in payment terms and accelerates the Group’s collection of sale proceeds. Upon discounting of the commercial notes, the Group may receive the sale proceeds as if the sale was effected as a cash sale. This arrangement helps to efficiently reduce the receivables balance of the Group and accelerate its fund flows; and
when there is credit squeeze in the PRC, it is generally more difficult or costly to obtain loans from other commercial banks in the PRC, Tianjin Port Finance can provide an additional financing platform to the Group which can reduce the impact of the credit squeeze to the Group.

FINANCIAL EFFECTS OF THE NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS

The Company anticipates that interest income to be earned from Tianjin Port Finance will be affected by the level of deposits and interest rates. As the interest rates for the deposit services offered by Tianjin Port Finance are no less favourable than the relevant benchmark rates set by PBOC and those offered by other major state-owned commercial banks in the PRC for deposits of similar nature and similar terms, the Non-exempt Continuing Connected Transactions are not expected to have material impact on the Group’s earnings, assets and liabilities.

INFORMATION ON THE TIANJIN PORT FINANCE

(a) Business Scope

Tianjin Port Finance is a non-bank financial institution with limited liability established under PRC law on 9 December 2006 with the approval of the CBIRC and is subject to the supervision of the CBIRC. Its total registered and paid-up capital is RMB1,150 million. The principal business of Tianjin Port Finance is the provision of financial services to the members of Tianjin Port Group but not to other parties. The business activities of Tianjin Port Finance are regulated and supervised by the PBOC and the CBIRC and its approved major business scope comprises deposit taking, loan and finance lease services, notes acceptance and discounting services, settlement services, arrangement of entrustment loans, provision of

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LETTER FROM THE BOARD

guarantees as well as the provision of finance services and financial advisory services, credit verification and related consultancy services, agency services, insurance agency services and investing activities.

(b) Financial Information

According to the audited financial statements of Tianjin Port Finance prepared under the China Accounting Standards for Business Enterprises, a summary of the financial information of Tianjin Port Finance for the two years ended 31 December 2019 and 2020 are set out below:

Profit after taxation Total assets Total liabilities	For the year ended 31 December 2020 2019 RMB million RMB million (audited) (audited) 163 217 As at 31 December 2020 2019 RMB million RMB million (audited) (audited) 9,874 9,521 7,337 7,033	For the year ended 31 December 2020 2019 RMB million RMB million (audited) (audited) 163 217 As at 31 December 2020 2019 RMB million RMB million (audited) (audited) 9,874 9,521 7,337 7,033

		7,033

(c) Internal Control and Risk Management Measures

Tianjin Port Finance has implemented stringent internal control and risk management measures through its various committees and departments with clearly defined roles and responsibilities. The management and staff of Tianjin Port Finance have a balance of skills, knowledge and experience appropriate for the requirements of the business of Tianjin Port Finance to ensure the effective and efficient execution of these control functions.

The following is a summary of the various committees and departments and their respective key roles and responsibilities in the internal control and risk management functions of Tianjin Port Finance:

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LETTER FROM THE BOARD

(1) Supervisory Board

inspecting books and records of Tianjin Port Finance and raising enquiries;
supervising the directors, management and staff in their compliance with laws and internal policies and requesting any non-compliance be rectified;
examining financial reports; and
supervising, inspecting and auditing the major policy initiatives when required.
(2) Board Committees
monitoring long-term development strategies/policies of Tianjin Port Finance;
monitoring the effectiveness of Tianjin Port Finance’s risk management strategies and policies; and
monitoring the quality of investments made as well as their risks and benefits, and examining investment proposals.
(3) Credit Review Committee
setting credit limits to be extended to customers, being members of Tianjin Port Group;
considering/reviewing applications of various types of loans and guarantees and providing credit ratings on the loans extended; and
providing comments if there are any major problem areas such as doubtful loans, high risk credit business and asset protection issues.
(4) Business and Operations Department
carrying out inspection, approval and other procedures necessary in extending loans, entrustment loans and secured loans, and carrying out statistical and other related work; and
performing evaluation of credit risks and assignment of credit ratings to the loans extended, in order to control the credit risk and ensure the recoverability of the loans.

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LETTER FROM THE BOARD

(5) Settlement and Finance Department
monitoring financial performance and budgetary control of Tianjin Port Finance;
drafting and implementing various accounting guidelines and policies; and
preparing and submitting relevant financial returns to various regulatory authorities.
(6) Compliance Department
developing necessary risk management policies and procedures in light of the development of Tianjin Port Finance, and checking whether they are complete and able to cover all aspects of the business processes;
checking whether the risk management policies and procedures are designed reasonably, and whether they can effectively control the risks of various businesses and departments;
establishing effective assessment and monitoring measures for the risk management policies and procedures;
checking whether the risk management/internal control policies and procedures can be strictly implemented and complied with by various businesses and departments;
reporting the status of the risk management and compliance work report (on regular and irregular basis) to senior management and risk management committee; and
carrying out training programs on risk management and compliance.
(7) Information Technology Department
implementing risk management strategies appropriate for all aspects of the information system; and
drafting and implementing rules and usage guidelines in relation to information technology.

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LETTER FROM THE BOARD

(8) Internal Audit Department
assessing the accuracy and reliability of financial reports and accounting records;
reviewing Tianjin Port Finance’s internal control procedures for their existence and effectiveness; and
monitoring the approval procedures for approving and extending loans.

INFORMATION ON THE PARTIES

The Group is principally engaged in containerised and non-containerised cargo handling services, sales and other port ancillary services at the port of Tianjin in the PRC, primarily through its subsidiaries and associated companies.

The principal business of Tianjin Port Finance is the provision of financial services to the members of Tianjin Port Group but not to other parties.

Tianjin Port Group is the controlling shareholder of the Company. Its principal businesses include port handling and stevedoring services, warehousing, logistics, and port area land development at the port of Tianjin in the PRC through its group companies.

LISTING RULES IMPLICATIONS

Tianjin Port Group is the controlling shareholder indirectly interested in 53.5% of the issued share capital of the Company. Tianjin Port Finance is a subsidiary of Tianjin Port Group. Hence, Tianjin Port Group and Tianjin Port Finance are connected persons of the Company. Accordingly, the Transactions constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

As the applicable percentage ratios (as defined in the Listing Rules) in respect of the Proposed Annual Caps are 25% or more, in addition to constituting continuing connected transactions of the Company, the Non-exempt Continuing Connected Transactions also constitute major transactions of the Company under Chapter 14 of the Listing Rules. Accordingly, the Non-exempt Continuing Connected Transactions are subject to the reporting, announcement, annual review, circular (including independent financial advice) and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules, and the relevant major transaction requirements under Chapter 14 of the Listing Rules.

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LETTER FROM THE BOARD

As provision of loans to the Group by Tianjin Port Finance (category (2) of the financial services referred to above) constitutes financial assistance received by the Group from a connected person and the transactions in relation to the provision of loans contemplated under the New Financial Services Framework Agreement are not secured by the assets of the Group and are on normal commercial terms, hence the relevant transactions are exempt from the reporting, announcement, annual review, circular (including independent financial advice) and independent shareholders’ approval requirements under Rule 14A.90 of the Listing Rules.

As all the applicable percentage ratios (as defined in the Listing Rules) in respect of the proposed annual caps for the Other Financial Services (categories (3) to (6) of the financial services referred to above) are less than 0.1%, hence the relevant transactions are exempt from the reporting, announcement, annual review, circular (including independent financial advice) and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules. An Independent Board Committee has been established to advise the Independent Shareholders on the terms of the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps. Opus Capital has been appointed to advise the Independent Board Committee and the Independent Shareholders in this connection.

None of the Directors had a material interest in the Transactions. In view of good corporate governance practices, Chu Bin, Luo Xunjie and Xue Xiaoli, the Directors, had all abstained from voting in the relevant Board resolutions in relation to the transactions with Tianjin Port Group and/or its associates.

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LETTER FROM THE BOARD

EXTRAORDINARY GENERAL MEETING

A notice convening the EGM to be held at 24th Floor, Admiralty Centre, Tower I, 18 Harcourt Road, Hong Kong on Monday, 20 December 2021 at 3:00 p.m. at which an ordinary resolution will be proposed for the approval by the Independent Shareholders of the New Financial Services Framework Agreement, the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps, is set out on pages 59 to 60 of this circular

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of shareholders at a general meeting must be taken by poll except where the chairman of the meeting, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. The chairman of the EGM will, therefore, exercise his power under Article 72 of the articles of association of the Company to put the resolution to be proposed at the EGM (as set out in the notice of EGM) to be voted by way of a poll. An announcement on the results of the poll will be made by the Company after the EGM in the manner prescribed under Rule 13.39(5) of the Listing Rules.

The register of members of the Company will be closed from Wednesday, 15 December 2021 to Monday, 20 December 2021 (both days inclusive), during which period no transfer of Shares will be registered. In order to be eligible to attend and vote at the EGM, all properly completed transfer forms accompanied by the relevant share certificates must be lodged with the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong not later than 4:30 p.m. on Tuesday, 14 December 2021.

RECOMMENDATIONS

In the section headed “Letter from the Independent Board Committee” of this circular, the Independent Board Committee stated that having considered the terms and conditions of the New Financial Services Framework Agreement and the Non-exempt Continuing Connected Transactions and the advice of the Independent Financial Adviser, the Independent Board Committee considers that the Non-exempt Continuing Connected Transactions are in the ordinary and usual course of business of the Group, and on normal commercial terms, and the terms are fair and reasonable and

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LETTER FROM THE BOARD

in the interests of the Company and the Shareholders as a whole, and the Proposed Annual Caps are fair and reasonable so far as the Independent Shareholders are concerned. Accordingly, the Independent Board Committee recommends the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the New Financial Services Framework Agreement, the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps.

The Directors are of the view that the New Financial Services Framework Agreement and the Transactions are in the ordinary and usual course of business of the Group, and on normal commercial terms, and the terms are fair and reasonable and in the interests of the Company and the Shareholders as a whole, and the Proposed Annual Caps are fair and reasonable. Accordingly, the Directors recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the New Financial Services Framework Agreement, the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps.

ADDITIONAL INFORMATION

Your attention is also drawn to the additional information set out in Appendices I and II of this circular.

Yours faithfully, By Order of the Board Tianjin Port Development Holdings Limited Chu Bin Chairman

For identification purposes only

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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(Incorporated in the Cayman Islands with limited liability) (Stock Code: 03382)

23 November 2021

To the Independent Shareholders

Dear Sir or Madam,

MAJOR AND CONTINUING CONNECTED TRANSACTIONS RENEWAL OF THE EXISTING FINANCIAL SERVICES FRAMEWORK AGREEMENT

We refer to the circular of the Company dated 23 November 2021 (the “ Circular ”) to the Shareholders, of which this letter forms part. Terms defined in the Circular shall have the same meaning herein unless the context requires otherwise.

We have been appointed by the Board as the members of the Independent Board Committee to consider and to advice the Independent Shareholders as to whether the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Opus Capital has been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in relation to the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps. The text of the letter of advice from Opus Capital to the Independent Board Committee and the Independent Shareholders is set out on pages 27 to 49 of the Circular.

We wish to draw your attention to the letter from the Board as set out on pages 6 to 24 of the Circular.

Having considered the terms and conditions of the New Financial Service Framework Agreement and the Non-exempt Continuing Connected Transactions and the advice of Opus Capital, we consider that the Non-exempt Continuing Connected Transactions are in the ordinary and usual course of business of the Group and on normal commercial terms, and the terms are fair and reasonable and in the interests of the Company and the Shareholders as a whole, and the Proposed Annual Caps are fair and reasonable so far as the Independent Shareholders are concerned.

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Accordingly, we recommend the Independent Shareholders to vote in favor of the ordinary resolution to be proposed at the EGM to approve the New Financial Services Framework Agreement, the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps.

Yours faithfully,

For and on behalf of the Independent Board Committee

Japhet Sebastian Law Cheng Chi Pang, Leslie Zhang Weidong Independent Non-executive Independent Non-executive Independent Non-executive Director Director Director

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the text of the letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in relation to the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps for the purpose of incorporation into this circular.

==> picture [81 x 42] intentionally omitted <==

18th Floor, Fung House 19-20 Connaught Road Central Central, Hong Kong

23 November 2021

To: The Independent Board Committee and the Independent Shareholders Tianjin Port Development Holdings Limited

Dear Sir or Madam,

MAJOR AND CONTINUING CONNECTED TRANSACTIONS RENEWAL OF THE EXISTING FINANCIAL SERVICES FRAMEWORK AGREEMENT

INTRODUCTION

We refer to our appointment by the Company to advise the Independent Board Committee and the Independent Shareholders in respect of the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps, details of which are set out in the letter from the Board (the “ Letter from the Board ”) contained in the circular of the Company dated 23 November 2021 (the “ Circular ”), of which this letter forms part. Capitalised terms used in this letter shall have the same meanings as defined in the Circular unless the context requires otherwise.

NEW FINANCIAL SERVICES FRAMEWORK AGREEMENT

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As at the Latest Practicable Date, Tianjin Port Group is the controlling shareholder indirectly interested in 53.5% of the issued share capital of the Company. Tianjin Port Finance is a subsidiary of Tianjin Port Group. Hence, Tianjin Port Group and Tianjin Port Finance are connected persons of the Company. Accordingly, the Transactions constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

The EGM will be convened and held for the Independent Shareholders to consider and, if thought fit, to approve, among other things, the New Financial Services Framework Agreement, the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps. As Tianjin Port Group is the controlling shareholder of the Company and is materially interested in the Non-exempt Continuing Connected Transactions, Tianjin Port Group and its associates, together holding 3,294,530,000 Shares which represent 53.5% of the issued share capital of the Company as at the Latest Practicable Date, will abstain from voting in respect of such resolution. None of the Directors had a material interest in the Transactions. In view of good corporate governance practices, Chu Bin, Luo Xunjie and Xue Xiaoli, the Directors, had all abstained from voting in the relevant Board resolutions in relation to the transactions with Tianjin Port Group and/or its associates.

THE INDEPENDENT BOARD COMMITTEE

The Independent Board Committee, comprising Professor Japhet Sebastian Law, Mr. Cheng Chi Pang, Leslie and Mr. Zhang Weidong, all of whom are independent non-executive Directors, has been established to advise the Independent Shareholders as to (i) whether the terms of the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps are fair and reasonable; (ii) whether the entering into the Non-exempt Continuing Connected Transactions are conducted in the ordinary and usual course of business of the Group, on normal commercial terms, and in the interests of the Company and the Shareholders as a whole; and (iii) how the Independent Shareholders should vote on the ordinary resolution to be proposed at the EGM to

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

approve the New Financial Services Framework Agreement, the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps. We have been appointed by the Company to advise the Independent Board Committee and the Independent Shareholders in the same regard.

OUR INDEPENDENCE

During the past two years immediately prior to the Latest Practicable Date, we were appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of: (i) certain non-exempt continuing connected transactions (the “ Past Appointment 1 ”); and (ii) a discloseable and connected transaction in relation to the disposal of 53% equity interest in a non wholly-owned subsidiary of the Group (the “ Past Appointment 2 ”). Details of Past Appointment 1 and Past Appointment 2 were set out in the circulars of the Company dated 25 November 2020 and 1 April 2021 respectively. Both the Past Appointment 1 and the Past Appointment 2 were completed and independent to our current appointment in relation to the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps.

As at the Latest Practicable Date, save for the aforementioned Past Appointment 1 and Past Appointment 2, we did not have any relationship with, or interest in, the Group or other parties that could reasonably be regarded as relevant to our independence. During the past two years immediately prior to the Latest Practicable Date, save for the aforementioned Past Appointment 1 and Past Appointment 2, we have not acted as an independent financial adviser to the Company. Apart from the normal professional fees paid or payable to us in connection with the Past Appointment 1, the Past Appointment 2 and the current appointment in relation to the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps, no arrangements exist whereby we had received or will receive any fees or benefits from the Group or any other parties that could reasonably be regarded as relevant to our independence. Accordingly, we consider that we are independent pursuant to Rule 13.84 of the Listing Rules.

BASIS OF OUR OPINION

In formulating our advice and recommendation to the Independent Board Committee and the Independent Shareholders, we have reviewed, among other things:

(i) the New Financial Services Framework Agreement;
(ii) the Existing Financial Services Framework Agreement;
(iii) the Company’s annual reports for the years ended 31 December (“ FY ”) 2020 (the “ 2020 Annual Report ”) and 2019 (the “ 2019 Annual Report ”);

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(iv) the Company’s interim report for the six months ended 30 June (“ HY ”) 2021 (the “ 2021 Interim Report ”);
(v) the announcement of the Company dated 28 September 2021 in relation to the New Financial Services Framework Agreement; and
(vi) other information as set out in the Circular.

We have relied on the statements, information, opinions and representations contained or referred to in the Circular and the information and representations made to us by the Company, the Directors and the management of the Group (collectively, the “ Management ”). We have assumed that all information and representations contained or referred to in the Circular and provided to us by the Management, for which they are solely and wholly responsible, are true, accurate and complete in all material respects and not misleading or deceptive at the time when they were provided or made and continued to be so up to the Latest Practicable Date.

We have also assumed that all statements of belief, opinion, expectation and intention made by the Management in the Circular were reasonably made after due enquiries and careful consideration and there are no other facts not contained in the Circular, the omission of which make any such statement contained in the Circular misleading. We have no reason to suspect that any relevant information has been withheld, or to doubt the truth, accuracy and completeness of the information and facts contained in the Circular, or the reasonableness of the opinions expressed by the Management, which have been provided to us.

We consider that we have been provided with sufficient information to reach an informed view and to provide a reasonable basis for our opinion. However, we have not carried out any independent verification of the information provided to us by the Management, nor have we conducted any independent investigation into the business, financial conditions and affairs of the Group or its future prospects. We also have not considered the taxation implications on the Group as a result of the New Financial Services Framework Agreement and the transactions contemplated thereunder.

The Directors jointly and severally accept full responsibility for the Circular and confirm, having made all reasonable enquiries that to the best of their knowledge and belief, the information contained in the Circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement in the Circular misleading.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

This letter is issued to the Independent Board Committee and the Independent Shareholders solely for their consideration of the New Financial Services Framework Agreement, the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps, and except for its inclusion in the Circular, is not to be quoted or referred to, in whole or in part, nor shall this letter be used for any other purpose without our prior written consent.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In formulating and giving our independent financial advice to the Independent Board Committee and the Independent Shareholders, we have taken into account the following principal factors:

1. Background of the Non-exempt Continuing Connected Transactions

2. Information on the parties

The Group

Tianjin Port Group

Tianjin Port Finance

The principal business of Tianjin Port Finance is the provision of financial services to the members of Tianjin Port Group but not to other parties.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Tianjin Port Finance is a non-bank financial institution with limited liability established under PRC law on 9 December 2006 with the approval of the CBIRC and is subject to the supervision of the CBIRC. Its total registered and paid-up capital is RMB1,150 million. The business activities of Tianjin Port Finance are regulated and supervised by the PBOC and the CBIRC and its approved major business scope comprises deposit taking, loan and finance lease services, notes acceptance and discounting services, settlement services, arrangement of entrustment loans, provision of guarantees as well as the provision of finance services and financial advisory services, credit verification and related consultancy services, agency services, insurance agency services and investing activities.

		FY2020	FY2019	FY2019
		RMB million	_RMB _	million
		audited	audited
Profit	after taxation	163		217
		As at 31	December
		2020		2019
		RMB million	_RMB _	million
		audited	audited
Total	assets	9,874		9,521
Total	liabilities	7,337		7,033

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

3. The New Financial Services Framework Agreement

Principal terms

Date: 28 September 2021

Parties: (1) the Company (as services user)

(2) Tianjin Port Finance (as services provider)
(3) Tianjin Port Group (as guarantor)

Term: 1 January 2022 to 31 December 2024

Condition:

Nature of services:

Provision of financial services by Tianjin Port Finance to members of the Group, including:

(1) deposit services;
(2) provision of loans (excluding entrustment loans referred to in category (5) below);
(3) commercial notes acceptance and discounting services;
(4) settlement services;
(5) arrangement of entrustment loans between members of the Group, whereby Tianjin Port Finance serves as a financial agency through which funds of any member of the Group may be channeled for use by other members of the Group; and
(6) certification of financial position, insurance agency services, financial advisory services and other advisory services (together with the services referred to in categories (3) to (5) above, the “ Other Financial Services ”).

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Fees and charges:

(1) deposit services:

(2) provision of loans:

(3) commercial notes acceptance and discounting services:

(4) settlement services:

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(5) arrangement of entrustment loans:

(6) certification of financial position, insurance agency services, financial advisory services and other advisory services:

Other provisions:

Termination:

The Company may unilaterally terminate the New Financial Services Framework Agreement if:

(1) any of the following events occur which exposes or potentially exposes the Group to substantial risks or losses:
breach or potential breach of PRC laws and regulations by Tianjin Port Finance;

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Tianjin Port Finance experiences or foresees to experience any major operational problems or liquidity difficulties;
non-performance of any terms or default of the New Financial Services Framework Agreement by Tianjin Port Finance; or
(2) the performance of its obligations by the Company and/or the Group under the New Financial Services Framework Agreement will result in a breach or possible breach of laws and regulations (including the Listing Rules).

Undertakings by Tianjin Port Group:

As part of the New Financial Services Framework Agreement, Tianjin Port Group undertakes to the Company, among other things, that:

(1) Tianjin Port Group has undertaken and warranted to both the Company and the CBIRC that if Tianjin Port Finance experiences or foresees to experience any liquidity difficulties, it will inject capital to Tianjin Port Finance based on the latter’s needs in order to ensure the latter’s normal operation; and
(2) Tianjin Port Group undertakes and warrants jointly and severally with Tianjin Port Finance to indemnify the Group for all the substantial risks or losses (including but not limited to the Group’s deposits, interests and related expenses incurred) caused or potentially caused by (i) Tianjin Port Finance’s breaches or potential breaches of PRC laws and regulations, or by (ii) its having or potentially having any major operational problems or liquidity difficulties, or by (iii) its non-performance of any terms or default of the New Financial Services Framework Agreement.

As confirmed by the Company, the principal terms in the Existing Financial Services Framework Agreement remain unchanged in the New Financial Services Framework Agreement.

Historical amounts and the Proposed Annual Caps

As set out in the Letter from the Board, for FY2019, FY2020 and HY2021, the historical transaction amounts in respect of the maximum daily outstanding balance of deposits (including accrued interest) placed by the Group with Tianjin Port Finance amounted to approximately RMB3,859 million, RMB3,672 million and RMB3,472 million respectively. In

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

terms of the respective percentage ratio to the annual caps for FY2019, FY2020 and FY2021, all of which are RMB8,000 million, the historical transaction amounts represented approximately 48.2%, 45.9% and 43.4% respectively.

Set out below are (i) the historical maximum daily outstanding balance of the deposits (including accrued interest) placed by the Group with Tianjin Port Finance (deposit services: category (1) of the financial services referred to above) for FY2019, FY2020 and HY2021 and (ii) the Proposed Annual Caps:

Historical figures and

Historical figures and	Historical figures and
historical annual caps			Proposed Annual Caps
	(RMB in million)			(RMB in million)
FY2019	FY2020	HY2021	FY2022	FY2023	FY2024
3,859	3,672	3,472	8,000	8,000	8,000
(2019 cap:	(2020 cap:	(2021 cap:
8,000)	8,000)	8,000)

Basis of the Proposed Annual Caps

As set out in the Letter from the Board, the Proposed Annual Caps set by the Group were determined after considering, among other things, the following factors:

(i) cash and deposits of the Group (excluding restricted bank deposits) as at 31 December 2020 and 31 December 2019 of HK$8.49 billion and HK$8.64 billion respectively;
(ii) the Proposed Annual Caps represent approximately 121.8% and 111.9% of the cash and deposits (excluding restricted bank deposits) of the Group as at 30 June 2021 and 31 December 2020 respectively;
(iii) the anticipated growth of business of the Group, with reference to the growth rates of 4.3% and 13.2% in total cargo throughput at ports in the PRC for 2020 and the first half of 2021 respectively; the scale of operation of the Group is expected to remain stable for the next three years with a steady operating cash inflow. Net cash inflow from operating activities of the Group for the years ended 31 December 2020 and 2019 amounted to approximately HK$2.79 billion and HK$2.53 billion respectively;

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(iv) the Group uses the settlement platform provided by Tianjin Port Finance for the settlement of income and expenditure (including drawdown and repayment of borrowings from Tianjin Port Finance) from the ordinary course of business between the members of Tianjin Port Group, which can shorten the time for transit and turnaround, reduce fund transfer frequency and increase fund management efficiency. The same amount of maximum daily outstanding balances of deposits can meet the daily requirements for receipts and payments, enhance flexibility and ensure smooth settlement. When less funds are required for settlement, the outstanding balances of deposits will also change accordingly;
(v) the average daily amount of outstanding loans extended by Tianjin Port Finance to the Group must exceed the average daily amount of deposits placed by the Group with Tianjin Port Finance, both amounts being calculated on a monthly basis (the “ Average Daily Amount Requirement ”). The average amount of loans extended by Tianjin Port Finance to the Group in 2020 and 2019 were approximately RMB3.51 billion and RMB3.62 billion respectively. As at 31 December 2020 and 31 December 2019, borrowings from Tianjin Port Finance were approximately 39.8% and 39.2% of RMB borrowings of the Group. The Proposed Annual Caps represent approximately 104.3% and 94.8% of RMB borrowings of the Group as at 30 June 2021 and 31 December 2020 respectively.
(vi) the treasury requirements of the Group as a whole (including management of surplus cash, funding requirements for capital expenditures and repayment of borrowings) taking into account the settlement trend of its business partners to ensure the Group’s financial stability and maintain stable gearing ratios, with reference to the Group’s gearing ratio (ratio of total borrowings to total equity) of approximately 42.5% and net gearing ratio (ratio of total borrowings net of cash and deposits (excluding restricted bank deposits) to total equity) of approximately 13.3% at 31 December 2020; and
(vii) Tianjin Port Finance is under the supervision of the CBIRC with stringent internal control and risk management measures.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Assessment on the Proposed Annual Caps

In assessing the fairness and reasonableness of the Proposed Annual Caps, we have considered the following:

Recovery of the PRC economy and the imports and exports of the PRC

The PRC economy has been adversely affected by the outbreak of COVID-19 since 2020. With the effective control of COVID-19 in the PRC, the economy has been recovering steadily. Set out below is the gross domestic product (“ GDP ”) of the PRC since FY2018 as extracted from the information published by the National Bureau of Statistics of the PRC:

Table 1: Historical change of GDP and total value of imports and exports of the PRC

			First half of
	2019	2020	2021
Year-on-year (“YoY”)/period-to-period
change of GDP	6.1%	2.3%	12.7%
YoY/period-to-period change of total
value of imports and exports	-1.0%	1.5%	37.4%

Source: The National Bureau of Statistics of the PRC

As noted from the above table, the GDP of the PRC recorded a YoY increase of more than 6.0% in 2019 before the outbreak of COVID-19 in early 2020 while the increase slowed down to approximately 2.3% in 2020. In the first half of 2021, the GDP of the PRC recorded a significant growth of approximately 12.7% compared with the corresponding period in 2020.

The total value of imports and exports of the PRC recorded a slight YoY decrease of approximately 1.0% in 2019 before the outbreak of COVID-19 in early 2020 and a slight YoY increase of approximately 1.5% in 2020. In the first half of 2021, the total value of imports and exports of the PRC recorded a significant growth of approximately 37.4% compared with the corresponding period in 2020.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

In addition, as stated in the 2021 Interim Report which made reference to the data from the Ministry of Transport of the PRC, in the first half of 2021, Chinese ports completed a cargo throughput of 7.64 billion tonnes, a YoY increase of approximately 13.2%, of which container throughput was 138.18 million twenty-foot equivalent units (“ TEU(s) ”), a YoY increase of approximately 15.0%.

Stable growth of the Group’s operations

(i) Non-containerised Cargo Handling Business

As stated in the 2021 Interim Report, during HY2021, the Group achieved a total non-containerised cargo throughput of approximately 119.71 million tonnes, representing an increase of approximately 10.9% over the same period last year, of which throughput of the subsidiary terminals and the jointly controlled and affiliated terminals grew by approximately 11.9% and 8.0% respectively.

In terms of total throughput on a YoY basis, metal ore handling grew by approximately 5.9% to approximately 56.01 million tonnes in HY2021 while it was approximately 52.90 million tonnes in HY2020, coal handling grew by approximately 14.3% to approximately 32.34 million tonnes in HY2021 while it was approximately 28.30 million tonnes in HY2020, crude oil handling increased by approximately 3.4% to approximately 13.63 million tonnes in HY2021 while it was approximately 13.19 million tonnes in HY2020, and steel handling was up by approximately 35.2% to approximately 6.95 million tonnes in HY2021 while it was approximately 5.14 million tonnes in HY2020.

(ii) Container Handling Business

As stated in the 2021 Interim Report, during HY2021, there was a stable growth in the container handling business. The Group achieved a total container throughput of approximately 10.297 million TEUs in HY2021, representing an increase of approximately 20.1% over the same period last year, of which throughput of the subsidiary terminals and the jointly controlled and affiliated terminals increased by approximately 18.9% and 22.6% respectively.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(iii) Sales Business

The Group’s sales business is mainly engaged in the supply of fuel to the inbound vessels, sales of supplies and other materials. As stated in the 2021 Interim Report, during HY2021, the Group recorded revenue of approximately HK$3,552 million from the sales business, representing an increase of approximately 66.9% as compared with the same period last year, which was mainly due to the increase in sales volume.

Supportive government policies for Tianjin

As stated in the 2020 Annual Report, the PRC government has carried out strategies such as “Ensure Stability on Six Key Fronts and Security in Six Key Areas”, expanding domestic demand and new infrastructure construction, accelerating the establishment of a new development pattern in which domestic economic cycle plays a leading role while international economic cycle remains its extension and supplement and therefore created a huge opportunity for port development. Besides, National Development and Reform Commission of the PRC and Ministry of Transport of the PRC released “Opinions on Accelerating the development of Tianjin Northern International Shipping Hub” which indicates that the government supports Tianjin to develop as an international shipping hub in Northern China and will support its high-quality development on a national basis.

Flexibility to the Group

It is noted from the historical figures that the historical maximum daily outstanding balance of the deposits (including accrued interest) placed by the Group with Tianjin Port Finance did not exceed RMB4 billion during FY2019, FY2020 and HY2021. As the annual caps under the Existing Financial Services Framework Agreement were not fully utilised, we have made enquiry to the Company and understand that it was mainly due to the Average Daily Amount Requirement. While the maximum daily amount of outstanding loans extended by Tianjin Port Finance to the Group during FY2019, FY2020 and HY2021 did not exceed RMB4 billion, the annual caps under the Existing Financial Services Framework Agreement were not fully utilised.

As noted in the 2021 Interim Report, the Group will continue to promote the development of the cargo handling business, continue to expand the market, develop more routes, and improve efficiency in the second half of 2021. As further noted in the 2021 Interim Report, the port of Tianjin was the seventh largest port in terms of total cargo throughput and ranked the sixth in terms of total container throughput in the PRC. Moreover, the Group has the right but not the obligation to utilise the deposit services under the New Financial Services

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Framework Agreement. Given the future development of the Group and the size of its operations, we considered that the Proposed Annual Caps remain at RMB8,000 million provides flexibility to the Group.

Increasing net cash generated from operating activities of the Group

It is noted from the 2020 Annual Report and the 2021 Interim Report that the net cash generated from operating activities of the Group: (i) increased from approximately HK$2,532.2 million in FY2019 to approximately HK$2,789.3 million in FY2020; and (ii) increased from approximately HK$1,277.0 million in HY2020 to approximately HK$1,401.9 million in HY2021. As the operations of the Group continue to grow as mentioned above, the Group may have increasing need for deposit services.

After considering the above factors, in particular, the PRC economy and the imports and exports of the PRC continue to recover from the damages caused by COVID-19, the stable growth of the operations of the Group and the Proposed Annual Caps remain unchanged at RMB8,000 million compared with the annual caps under the Existing Financial Services Framework Agreement, we are of the view that the Proposed Annual Caps are fair and reasonable.

Reasons for and benefits of entering into the Transactions

Given that the Group on an aggregate basis holds 45.826% of the shareholding interest in Tianjin Port Finance, the reasons and benefits for the Group to use the services of Tianjin Port Finance include, but are not limited to: (i) the formulation of a deposit mix between Tianjin Port Finance and other commercial banks in the PRC, while at the same time retaining sufficient working capital flexibility; (ii) enhancing cost savings by reducing the amount of finance fees and charges payable to other commercial banks in the PRC when the terms offered by Tianjin Port Finance to the Group are no less favorable than those offered by other commercial banks in the PRC; and (iii) sharing profits of Tianjin Port Finance attributable to the Group in accordance with shareholding interests in Tianjin Port Finance. It is expected that Tianjin Port Finance, being an affiliate company of the Group, will be placed in a better position to serve the financial needs of the Group as it has a better understanding of the operation and development needs of the Group. Accordingly, it is envisaged that Tianjin Port Finance will be more efficient in terms of processing transactions for the Group than other commercial banks in the PRC.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(i) similar to other commercial banks in the PRC, Tianjin Port Finance is regulated by the PBOC and the CBIRC, and it is required to provide services pursuant to the relevant rules, regulations and requirements including capital risk guidelines and requisite capital adequacy ratios as stipulated or promulgated by such regulatory authorities from time to time. In particular, Tianjin Port Finance follows a more stringent capital adequacy ratio policy than that is required of finance companies by the CBIRC;
(ii) Tianjin Port Finance has implemented stringent internal control and risk management measures, the efficiency and effectiveness of which are regularly reviewed by the CBIRC. Furthermore, Tianjin Port Finance will provide the Company access to its books and accounts for inspection upon the Company’s request;
(iii) pursuant to its articles of association, Tianjin Port Finance operates independently and is responsible for its own financial performance. When Tianjin Port Finance provides financial services to members of Tianjin Port Group, it will exercise its own judgment and prudent approval process in determining whether to provide particular financial services to these members. With the implementation of stringent credit control measures, Tianjin Port Finance has never experienced any bad debt since its establishment in 2006 and has not defaulted on any of its credit obligations;
(iv) pursuant to the articles of association of Tianjin Port Finance, in the contingent circumstances where Tianjin Port Finance encounters liquidity difficulties, Tianjin Port Group undertakes to inject capital based on the actual needs for resolving the liquidity difficulties; and
(v) the risk of the Group is minimised by: (a) Tianjin Port Group’s undertakings to the Group; (b) the Group’s right of set-off; and (c) the Average Daily Amount Requirement.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Furthermore, as set out in the Letter from the Board, the advantages of utilising the financial services provided by Tianjin Port Finance over similar services provided by other commercial banks in the PRC are as follows:

(i) PRC laws do not permit companies, including affiliates, to extend intra-group loans directly without going through a financial intermediary. Tianjin Port Finance serves as the financial intermediary through which the funds of the members of the Group may be deposited with Tianjin Port Finance and channeled efficiently to be used by one another;
(ii) as an intra-group service provider, Tianjin Port Finance generally has better and more efficient communication and understanding with the Group compared with other commercial banks in the PRC. For example, by coordinating the members of the Group with surplus deposits with members who are borrowers, the costs and efficiency of the services provided will be improved;
(iii) Tianjin Port Finance offers interest rates that are no less favourable than the relevant benchmark rates set by the PBOC (if applicable) and/or those available to the Group from other major state-owned commercial banks in the PRC;
(iv) Tianjin Port Finance can assist the Group to formulate a beneficial deposit mix comprising different types of deposits such as current deposits, call deposits and fixed deposits, which allows the Group to increase its return on funds and retain sufficient working capital flexibility;
(v) fees and charges generated from utilisation of Tianjin Port Finance’s services will be credited to Tianjin Port Finance instead of other commercial banks in the PRC, which allows the Group to benefit financially. The Group holds 45.826% equity interest in Tianjin Port Finance and will share the profits of Tianjin Port Finance accordingly;
(vi) as Tianjin Port Finance is familiar with the business and transaction patterns of the Group, settlement services provided by Tianjin Port Finance tend to provide a more efficient and orderly platform than those platforms that could be provided by other commercial banks in the PRC. This also helps to reduce the transaction costs of the Group such as handling fees for transfer of funds and other administrative expenses;

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(vii) discounting of commercial notes by Tianjin Port Finance provides the Group’s customers with flexibility in payment terms and accelerates the Group’s collection of sale proceeds. Upon discounting of the commercial notes, the Group may receive the sale proceeds as if the sale was effected as a cash sale. This arrangement helps to efficiently reduce the receivables balance of the Group and accelerate its fund flows; and
(viii) when there is credit squeeze in the PRC, it is generally more difficult or costly to obtain loans from other commercial banks in the PRC, Tianjin Port Finance can provide an additional financing platform to the Group which can reduce the impact of the credit squeeze to the Group.

After considering, in particular, the following factors:

(i) there will be a need for financial services such as placing deposits and obtaining financing for the Group during its operations. If the Group does not obtain the financial services from Tianjin Port Finance, it has to obtain such financial services from other commercial banks in the PRC;
(ii) Tianjin Port Finance has been providing financial services to the Group in the past. As such, Tianjin Port Finance is familiar with the business and transaction patterns of the Group and has better and more efficient communication and understanding with the Group compared with other commercial banks in the PRC;
(iii) we obtained and reviewed sample records of the utilisation of financial services by the Company provided by Tianjin Port Finance under the Existing Financial Services Framework Agreement and noted that Tianjin Port Finance offered interest rates that were no less favourable than the relevant benchmark rates set by the PBOC and those available to the Group from other major state-owned commercial banks in the PRC. As such, the Group was not subject to less favourable terms from obtaining financial services from Tianjin Port Finance; and
(iv) the Group holds 45.826% equity interest in Tianjin Port Finance and the fees and charges generated from utilisation of Tianjin Port Finance’s services will be credited to Tianjin Port Finance instead of other commercial banks in the PRC which, in turn, allows the Group to benefit financially by sharing the profits of Tianjin Port Finance.

We concur with the advantages of utilising the financial services provided by Tianjin Port Finance over similar services provided by other commercial banks in the PRC.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

4. Internal control and risk management measures

As set out in the Letter from the Board, in order to safeguard the interests of the Company and the Shareholders, the New Financial Services Framework Agreement provides for the following internal control and risk management measures:

(i) Tianjin Port Finance shall ensure the secure operation of its fund management information system. The system has passed all the security tests for the bank-enterprise direct connection with other commercial banks, and that the system adopts the digital certificates for security certification in order to ensure the security of the Group’s funds;
(ii) Tianjin Port Finance guarantees that it will strictly comply with and operate under the finance company risk management specifications issued by the CBIRC. The gearing, liquidity and other ratios should comply with the requirements specified by CBIRC and other PRC laws and regulations as amended from time to time;
(iii) Tianjin Port Finance shall at all times monitor its credit risks. If (a) any specific situation arises which may adversely affect the security of the deposits placed by the Group with Tianjin Port Finance, or (b) any other circumstances occur, which may cause serious concern to such deposits, Tianjin Port Finance shall give written notice to the Company and the Group within two business days after the occurrence of such situations or circumstances, and to take measures to avoid or contain any losses. Once being notified, the Group has the right to withdraw its deposits (including the accrued interest) forthwith, or if it is unable to do so, it may lawfully set off the deposits (including accrued interest) placed by the Group with Tianjin Port Finance against the outstanding loans (including accrued interest) extended by Tianjin Port Finance to the Group;
(iv) during the term of the New Financial Services Framework Agreement, Tianjin Port Finance shall provide the Company with a report before 10:00 a.m. on every business day on the amount of deposits placed and loans owing by the Group (the “ Report ”). The Report will be reviewed, on a daily basis, by the Company to monitor and ensure that (a) the average daily amount of deposits (including accrued interest) placed by the Group does not exceed the Proposed Annual Caps; and (b) the Average Daily Amount Requirement is complied with;
(v) during the term of the New Financial Services Framework Agreement, Tianjin Port Finance shall provide the Company on the fifth business day of every month with its financial statements and other returns submitted by Tianjin Port Finance to the CBIRC in the immediately preceding month;

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(vi) during the term of the New Financial Services Framework Agreement, Tianjin Port Finance shall provide the Company within three business days after submission with a copy of every regulatory report submitted by Tianjin Port Finance to the CBIRC; and
(vii) during the term of the New Financial Services Framework Agreement, Tianjin Port Finance shall implement all measures in relation to risk control.

Assessment

To assess the effectiveness of the internal control and risk management measures, we have conducted the following:

(i) we confirmed with the Company that during the period covered by the Existing Financial Services Framework Agreement and up to and including the Latest Practicable Date, no material breach to the aforesaid internal control and risk management measures by Tianjin Port Finance was noted;
(ii) we obtained and reviewed the record of the average daily amount of deposits (including accrued interest) placed by the Group (calculated on a monthly basis) and the average daily amount of outstanding loans (including accrued interest) extended by Tianjin Port Finance to the Group (calculated on a monthly basis) for each month during FY2019, FY2020 and HY2021 and we noted that the Average Daily Amount Requirement was strictly followed during FY2019, FY2020 and HY2021;

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(iii) we obtained and reviewed the record of the actual daily amount of deposits (including accrued interest) placed by the Group for each day during FY2019, FY2020 and HY2021 and we noted that such balances did not exceed the historical annual caps;
(iv) we confirmed with the Company that there was no written notice given by Tianjin Port Finance to the Company in relation to the occurrence of any situations or circumstances of Tianjin Port Finance’s credit risks during FY2019, FY2020 and HY2021;
(v) we confirmed with the Company that Tianjin Port Finance conducted security tests on fund management information system in August 2021 and the system passed the security tests for the bank-enterprise direct connection with other commercial banks; and
(vi) we obtained and reviewed the unqualified letters issued by the independent auditor of the Company to report on the continuing connected transactions of the Group (including those under the Existing Financial Services Framework Agreement) for FY2019 and FY2020. Further details were set out in the 2019 Annual Report and the 2020 Annual Report.

In view of the above, we are of the view that there are effective internal control and risk management measures in place. In addition, we are of the view that the entering into of the Non-exempt Continuing Connected Transactions falls within the ordinary and usual course of business of the Group and is in the interests of the Company and the Shareholders as a whole.

RECOMMENDATION

In relation to the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps, we have considered the above principal factors and reasons and, in particular, having taken into account the following in arriving at our opinion:

(a) the entering into of the Non-exempt Continuing Connected Transactions falls within the ordinary and usual course of business of the Group and is in the interests of the Group and the Shareholders as a whole;
(b) the terms of the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps are fair and reasonable and on normal commercial terms;
(c) the Group has adequate internal control system in place to monitor the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Having considered the above, we are of the view that the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps are entered into in the ordinary and usual course of business of the Group and on normal commercial terms, and the terms of the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Accordingly, we advise the Independent Board Committee to recommend, and we ourselves recommend, the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the New Financial Services Framework Agreement, the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps.

Yours faithfully, For and on behalf of Opus Capital Limited Li Lan

Executive Director

Mr. Li Lan is an Executive Director of Opus Capital Limited and is licensed under the SFO as a responsible officer to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities. Mr. Li Lan has over 15 years of experience in the corporate finance industry.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. THREE-YEAR FINANCIAL INFORMATION OF THE GROUP

The Company is required to set out in this circular the information for the last three financial years with respect to the profits and losses, financial record and position, set out as a comparative table and the latest published audited balance sheet together with the notes to the annual accounts for the last financial year for the Group.

The unaudited consolidated financial statements of the Group for the six months ended 30 June 2021 and the audited consolidated financial statements of the Group for the years ended 31 December 2018, 2019 and 2020 have been disclosed in the following documents published on the HKEXnews website (www.hkexnews.hk) and the Company’s website (www.tianjinportdev.com):

Interim report of the Company for the six months ended 30 June 2021 published on 20 September 2021 ( http://www1.hkexnews.hk/listedco/listconews/sehk/2021/0920/2021092000430.pdf );
Annual report of the Company for the year ended 31 December 2020 published on 27 April 2021 ( http://www1.hkexnews.hk/listedco/listconews/sehk/2021/0427/2021042700665.pdf );
Annual report of the Company for the year ended 31 December 2019 published on 31 May 2020 ( http://www1.hkexnews.hk/listedco/listconews/sehk/2020/0531/2020053100011.pdf ); and
Annual report of the Company for the year ended 31 December 2018 published on 24 April 2019 ( http://www1.hkexnews.hk/listedco/listconews/sehk/2019/0424/ltn20190424734.pdf ).

2. FINANCIAL AND TRADING PROSPECTS

The global economy has been recovering and China’s economy also continues to recover. The International Monetary Fund predicts that global economic growth is expected to reach 6% in 2021 and China’s GDP will achieve a growth of 8.1% in 2021. The positive international and domestic economic environment has created opportunities for port development.

The Group will continue to promote the development of the cargo handling business, continue to expand the market, develop more routes, and improve efficiency. On the other hand, the Group will continue to focus on safety and epidemic prevention and regard the safety and health of employees as first priority. In terms of green port development, the Group plans to upgrade traditional equipment to achieve energy-conservation and emission reduction in order to minimise carbon emissions in all aspects and move towards a zero-carbon terminal. Going

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

forward, the Group will strive for its high-quality development, push forward the use of 5G technology, focus on automation in operation, foster port intellectualisation to the highest international standard, and aim at constructing a world-class smart and green port.

3. FURTHER INFORMATION

(a) Indebtedness

As at the close of business on 30 September 2021, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this circular, the Group had outstanding borrowings of approximately HK$11,830 million. All borrowings of the Group are unsecured. Except for borrowings of HK$2,200 million which are guaranteed by the Company, all remaining borrowings of the Group are unguaranteed.

As at the close of business on 30 September 2021, the Group had lease liabilities recognised on the application of Hong Kong Financial Reporting Standard 16 “Leases” of approximately HK$737 million. Except for lease liabilities of approximately HK$4 million which are secured by rental deposits paid in advance, all remaining lease liabilities of the Group are unsecured. All lease liabilities of the Group are unguaranteed.

Save as disclosed above and apart from intra-group liabilities, the Group did not have any outstanding borrowings, debt securities issued and outstanding, and authorised or otherwise created but unissued, bank overdrafts, other borrowings or other similar indebtedness, liabilities under acceptance (other than normal trade bills) or acceptance credits, debentures, mortgages, charges, lease liabilities, hire purchases commitments, guarantees or contingent liabilities at the close of business on 30 September 2021.

(b) Working capital

The Directors are of the opinion that, after taking into account the present available financial resources, the internally generated funds, the available banking facilities and other borrowings, the Group will have sufficient working capital to satisfy its present requirements for at least 12 months from the date of this circular.

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GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTERESTS OF DIRECTORS AND CHIEF EXECUTIVE

As at the Latest Practicable Date, the interests and short positions of the Directors and chief executive of the Company in the Shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (b) pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules, were as follows:

(a) Long position in the Shares

					Approximate
					percentage of
					issued share
				Number of	capital of the
Name	of Director	Capacity	Nature of interest	Shares held	Company
Japhet	Sebastian Law	Beneficial	Interest held jointly	2,700,000	0.04%
		owner	with another person

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GENERAL INFORMATION

APPENDIX II

(b) Long position in underlying shares of unlisted equity derivatives of the Company

The share option scheme of the Company was adopted pursuant to the written resolutions of the sole shareholder of the Company passed on 26 April 2006 under which the Directors may, at their discretion, invite any employees of the Group or Directors to take up options to subscribe for Shares subject to the terms and conditions stipulated in the share option scheme. The details of share options granted to the Directors which were outstanding as at the Latest Practicable Date were as follows:

Number of

	Number of
	share options	Exercise		Exercisable	Exercisable
Name of Director	held	price	Grant date	from	until
		HK$
Shi Jing	1,100,000	1.514	16/09/2014	16/03/2015	15/09/2024
Japhet Sebastian
Law	150,000	0.896	28/06/2012	28/12/2012	27/06/2022
Cheng Chi Pang,
Leslie	150,000	0.896	28/06/2012	28/12/2012	27/06/2022
Zhang Weidong	450,000	0.896	28/06/2012	28/12/2012	27/06/2022

Save as disclosed above, as at the Latest Practicable Date, so far as was known to the Directors, none of the Directors and chief executive of the Company or their respective associates (as defined in the Listing Rules) had any interests or short positions in any Shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have under such provisions of the SFO), or which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules, to be notified to the Company and the Stock Exchange.

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GENERAL INFORMATION

APPENDIX II

As at the Latest Practicable Date, so far as was known to the Directors, the following Directors were also directors or employees of a company which has an interest or short position in the Shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO:

Name of

Director Name of company Position Chu Bin Tianjin Port Group director and chairman Luo Xunjie Tianjin Port Group director and vice president Xue Xiaoli Tianjin Port Group general manager of investment and development department Shi Jing 天津津聯投資控股有限公司 assistant to general manager and (Tianjin Tsinlien Investment supervisor Holdings Co., Ltd.*) Tsinlien Group Company Limited director Tianjin Development Holdings assistant to general manager Limited Leadport Holdings Limited director

3. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contracts with any member of the Group which do not expire or are not terminable within one year without payment of compensation (other than statutory compensation).

4. COMPETING INTEREST

Chu Bin, an executive Director and chairman of the Board, and Luo Xunjie, an executive Director and the managing Director, are directors of Tianjin Port Group. As the Board is independent of the board of directors of Tianjin Port Group (save for Chu Bin and Luo Xunjie who are the common directors in both companies) and Chu Bin and Luo Xunjie have no control over the Board, the Group is capable of carrying on its businesses independently of the businesses of Tianjin Port Group.

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GENERAL INFORMATION

APPENDIX II

Save as disclosed above, as at the Latest Practicable Date, so far as the Directors were aware, none of the Directors or their respective close associates (as defined in the Listing Rules) had any interest in a business which competes or is likely to compete, either directly or indirectly, with the business of the Group.

5. INTERESTS IN ASSETS AND/OR CONTRACTS AND OTHER INTERESTS

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which had been, since 31 December 2020, being the date to which the latest published audited consolidated financial statements of the Company were made up, acquired or disposed of by or leased to, or are proposed to be acquired or disposed of by or leased to any member of the Group.

As at the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement which was significant in relation to the business of the Group.

6. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2020, being the date to which the latest published audited financial statements of the Company were made up.

7. MATERIAL CONTRACTS

In the two years immediately preceding the date of this circular and up to the Latest Practicable Date, the following contracts, not being contracts entered into in the ordinary course of business, were entered into by the Company or any of its subsidiaries which are or may be material:

(a) the agreement dated 31 August 2021 entered into between 上海中谷物流股份有限公司 (Shanghai Zhonggu Logistics Co., Ltd) (“ Shanghai Zhonggu* ”) and Tianjin Port Co, pursuant to which Tianjin Port Co agreed to subscribe for, and Shanghai Zhonggu agreed to issue 6,702,412 shares of Shanghai Zhonggu, at the subscription price of RMB29.84 per share of Shanghai Zhonggu, with the total subscription amount being RMB199,999,974.08.
(b) the agreement dated 28 April 2021 entered into between COSCO SHIPPING Ports Limited (“ COSCO SHIPPING Ports ”) (as transferor) and Tianjin Port Co in relation to the acquisition of all the issued shares of COSCO SHIPPING Ports (Tianjin Euroasia)

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GENERAL INFORMATION

APPENDIX II

Limited by an offshore subsidiary to be designated by Tianjin Port Co from COSCO SHIPPING Ports for an initial consideration of RMB269,619,801.39, subject to adjustment as described in the circular of the Company dated 28 June 2021;

(c) the agreement dated 26 February 2021 entered into between Tianjin Port Co (as transferor), COSCO SHIPPING Ports (Tianjin) Limited (“ COSCO SHIPPING Ports Tianjin ”) (as transferee) and COSCO SHIPPING Ports in relation to the disposal of 34.99% of the equity interest in 天津港集裝箱碼頭有限公司 (Tianjin Port Container Terminal Co., Ltd.*) by Tianjin Port Co to COSCO SHIPPING Ports Tianjin for a consideration of RMB1,247,710,223.53 as disclosed in the announcement of the Company dated 28 July 2021;
(d) the agreement dated 26 February 2021 entered into between Tianjin Port Co (as transferor) and 天津港經濟技術合作有限公司 (Tianjin Port Economic-Technological Cooperation Co., Ltd.) (“ Economic-Technological Co ”), a wholly-owned subsidiary of Tianjin Port Group (as transferee), pursuant to which Tianjin Port Co agreed to dispose of, and Economic-Technological Co agreed to acquire, 53% of the equity interest in 天津中燃船舶燃料有限公司 (CHIMBUSCO Marine Bunker (Tianjin) Co., Ltd.) for a consideration of RMB14,900,285.28; and
(e) the agreement dated 15 December 2020 entered into between Mapletree Tianjin Free Port Development (HKSAR) Limited (“ Mapletree Tianjin ”) (as transferor) and Tianjin Port Co (as transferee), pursuant to which Mapletree Tianjin agreed to dispose of, and Tianjin Port Co agreed to acquire, 49% of the equity interest in 天津港海豐保稅物流有限公司 (Tianjin Port Haifeng Bonded Logistics Co., Ltd.*) for a consideration of RMB234,630,522.

8. LITIGATION

As at the Latest Practicable Date, no member of the Group was engaged in any litigation or arbitration of material importance and no litigation or claim of material importance was known to the Directors to be pending or threatened against any member of the Group.

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GENERAL INFORMATION

APPENDIX II

9. EXPERTS

The following is the qualification of the expert who has given opinion or advice which is contained in this circular:

Name Qualification

Opus Capital a corporation licensed to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO

As at the Latest Practicable Date, Opus Capital did not have any shareholding, direct or indirect, in any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

As at the Latest Practicable Date, Opus Capital did not have any direct or indirect interest in any assets which had been, since 31 December 2020, being the date to which the latest published audited consolidated financial statements of the Company were made up, acquired or disposed of by or leased to, or are proposed to be acquired or disposed of by or leased to any member of the Group.

Opus Capital has given and has not withdrawn its written consent to the issue of this circular with the inclusion herein of its letter and reference to its name in the form and context in which they appear.

The letter given by Opus Capital is given as of the date of this circular for incorporation herein.

10. GENERAL

(a) The registered office of the Company is at Windward 3, Regatta Office Park, PO Box 1350, Grand Cayman KY1-1108, Cayman Islands, and the principal place of business of the Company in Hong Kong is at Suite 3904-3907, 39/F., Tower Two, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong.
(b) The Hong Kong branch share registrar and transfer office of the Company is Tricor Investor Services Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

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GENERAL INFORMATION

APPENDIX II

(c) The company secretary of the Company is Cheung Wah Lung, Warren who holds a bachelor’s degree in business administration and is a member of the American Institute of Certified Public Accountants and an associate member of the Hong Kong Institute of Chartered Secretaries.

11. DOCUMENTS ON DISPLAY

The following documents will be available on the HKEXnews website (www.hkexnews.hk) and the Company’s website (www.tianjinportdev.com) during the period of 14 days from the date of this circular:

(a) the Existing Financial Services Framework Agreement;
(b) the New Financial Services Framework Agreement;
(c) the material contracts referred to in the paragraph headed “Material Contracts” in this Appendix II;
(d) the letter from the Company’s Independent Board Committee, the text of which is set out in this circular;
(e) the letter from Opus Capital, the text of which is set out in this circular; and
(f) the consent letter of Opus Capital referred to in the paragraph headed “Expert” in this Appendix II.
For identification purposes only

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NOTICE OF EXTRAORDINARY GENERAL MEETING

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(Incorporated in the Cayman Islands with limited liability) (Stock Code: 03382)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “ EGM ”) of Tianjin Port Development Holdings Limited (the “ Company ”) will be held at 24th Floor, Admiralty Centre, Tower I, 18 Harcourt Road, Hong Kong on Monday, 20 December 2021 at 3:00 p.m. for the purposes of considering and, if thought fit, passing, with or without modification, the following resolution as ordinary resolution of the Company:

ORDINARY RESOLUTION

“THAT

the New Financial Services Framework Agreement, the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps, all as defined and described in the circular of the Company dated 23 November 2021, and all other transactions contemplated thereunder and in connection therewith and any other ancillary documents, be and are hereby approved, confirmed and/or ratified; and THAT the directors of the Company be and are hereby authorised for and on behalf of the Company to sign, seal, execute, perfect, perform, deliver all such agreements, instruments, documents and deeds, and do all such acts, matters and things and take all such steps as they may in their discretion consider necessary, desirable or expedient to implement and/or to give effect to the New Financial Services Framework Agreement, the Non-exempt Continuing Connected Transactions and the Proposed Annual Caps and all other transactions thereby contemplated as they may in their discretion consider to be desirable and in the interests of the Company.”

By Order of the Board Tianjin Port Development Holdings Limited Chu Bin Chairman

Hong Kong, 23 November 2021

Notes:

An eligible shareholder of the Company is entitled to appoint one or more proxies to attend and vote in his/her stead. A proxy does not need to be a shareholder of the Company.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

In the case of joint registered holders of any share of the Company, any one of such persons may vote at the EGM (or any adjournment thereof), either in person or by proxy, in respect of such share as if he/she were solely entitled thereto, but the vote of the senior holder who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the vote(s) of the other joint holders and, for this purpose, seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of the relevant joint holding.
In order to be valid, the form of proxy, together with any power of attorney or other authority (if any) under which it is signed or a notarially certified copy thereof, must be deposited at the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time scheduled for holding the EGM (or any adjournment thereof).
Completion and return of the form of proxy will not preclude a shareholder of the Company from attending and voting in person at the EGM (or any adjournment thereof) should he/she so wish, and in such event, the form of proxy shall be deemed to be revoked.
The register of members of the Company will be closed from Wednesday, 15 December 2021 to Monday, 20 December 2021 (both days inclusive), during which period no transfer of shares of the Company will be registered. In order to be eligible to attend and vote at the EGM, all properly completed transfer forms accompanied by the relevant share certificates must be lodged with the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong not later than 4:30 p.m. on Tuesday, 14 December 2021.
The resolution set out in this notice will be decided by poll at the EGM.
In order to facilitate the prevention and control of the spreading of the Novel Coronavirus (COVID-19) pandemic and to safeguard the health and safety of the shareholders of the Company, the Company encourages its shareholders to consider appointing the chairman of the EGM as his/her proxy to vote on the relevant resolution at the EGM as an alternative to attending in person.

As at the date of this notice, the board of directors of the Company comprises Mr. Chu Bin, Mr. Luo Xunjie, Mr. Sun Bin, Ms. Xue Xiaoli and Ms. Shi Jing as executive directors; and Professor Japhet Sebastian Law, Mr. Cheng Chi Pang, Leslie and Mr. Zhang Weidong as independent non-executive directors.

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AI assistant

Tianjin Port Development Holdings Limited — Proxy Solicitation & Information Statement 2021

50831_rns_2021-11-22_65934b60-7f74-49bb-a134-b0c596cbd8ac.pdf

MAJOR AND CONTINUING CONNECTED TRANSACTIONS RENEWAL OF THE EXISTING FINANCIAL SERVICES FRAMEWORK AGREEMENT AND NOTICE OF EXTRAORDINARY GENERAL MEETING

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

PRECAUTIONARY MEASURES FOR THE EGM

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

MAJOR AND CONTINUING CONNECTED TRANSACTIONS RENEWAL OF THE EXISTING FINANCIAL SERVICES FRAMEWORK AGREEMENT

AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

LETTER FROM THE BOARD

NEW FINANCIAL SERVICES FRAMEWORK AGREEMENT

(a) Background

(b) Principal terms

Condition:

Nature of services:

Fees and charges:

LETTER FROM THE BOARD

Other provisions:

Termination:

Undertakings by Tianjin Port Group:

Internal control and risk management measures:

LETTER FROM THE BOARD

Historical figures and the Proposed Annual Caps

Basis of the Proposed Annual Caps

LETTER FROM THE BOARD

(d) Reasons for and benefits of entering into the Transactions

LETTER FROM THE BOARD

LETTER FROM THE BOARD

LETTER FROM THE BOARD

FINANCIAL EFFECTS OF THE NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS

INFORMATION ON THE TIANJIN PORT FINANCE

(a) Business Scope

(b) Financial Information

(c) Internal Control and Risk Management Measures

(1) Supervisory Board

LETTER FROM THE BOARD

INFORMATION ON THE PARTIES

LISTING RULES IMPLICATIONS

LETTER FROM THE BOARD

EXTRAORDINARY GENERAL MEETING

RECOMMENDATIONS

LETTER FROM THE BOARD

ADDITIONAL INFORMATION

MAJOR AND CONTINUING CONNECTED TRANSACTIONS RENEWAL OF THE EXISTING FINANCIAL SERVICES FRAMEWORK AGREEMENT

MAJOR AND CONTINUING CONNECTED TRANSACTIONS RENEWAL OF THE EXISTING FINANCIAL SERVICES FRAMEWORK AGREEMENT

INTRODUCTION

NEW FINANCIAL SERVICES FRAMEWORK AGREEMENT

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

THE INDEPENDENT BOARD COMMITTEE

OUR INDEPENDENCE

BASIS OF OUR OPINION

PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Background of the Non-exempt Continuing Connected Transactions

2. Information on the parties

The Group

Tianjin Port Group

Tianjin Port Finance

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

3. The New Financial Services Framework Agreement

Principal terms

Condition:

Nature of services:

Fees and charges:

Other provisions:

Termination:

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Undertakings by Tianjin Port Group:

Historical amounts and the Proposed Annual Caps

Historical figures and

Basis of the Proposed Annual Caps

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Assessment on the Proposed Annual Caps

Recovery of the PRC economy and the imports and exports of the PRC

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Tianjin Port Development Holdings Limited Proxy Solicitation & Information Statement 2021