CONTINUING CONNECTED TRANSACTIONS · joint ventures, further continuing connected transactions relating to the core business of the Group have arisen. The connected transactions identified

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited

take no responsibility for the contents of this announcement, make no representation as to its

accuracy or completeness and expressly disclaim any liabilities whatsoever for any loss howsoever

arising from or in reliance upon the whole or any part of the contents of this announcement.

(incorporated in the People’s Republic of China with limited liability)

(Stock code: 598)

CONTINUING CONNECTED TRANSACTIONS

The Group has certain business relationships with (a) Sinotrans Group Company, its

subsidiaries and its associates; and (b) certain joint venture partners of the Group; and (c)

certain non wholly-owned companies of the Company, which constitute Continuing

Connected Transactions of the Company. Such business relationships have been taking

place since the Company was listed on the Stock Exchange in the year 2003. The Directors

expect such business relationships to continue and the Company has entered into agreements

for the Continuing Connected Transactions. Set out in this announcement is further

information in relation to the Continuing Connected Transactions.

As some of the Continuing Connected Transactions are Non-exempt Continuing Connected

Transactions, the Company proposes to seek Independent Shareholders’ approval of the

Non-exempt Continuing Connected Transactions subject to the New Caps in relation to the

Non-Exempt Continuing Connected Transactions.

As Sinotrans Group Company, the Connected Joint Venture Partners and the Connected

Non Wholly-Owned Companies are parties to different Continuing Connected Transactions,

further particulars of which are set out below, they are required under the Listing Rules to

abstain from voting on the single resolution to be proposed to approve all of the Non-

Exempt Continuing Connected Transactions subject to the New Caps at the EGM of the

Company to be convened for this purpose. The votes of the Independent Shareholders in the

EGM will be taken by poll.

A circular containing, among other things, details of the Continuing Connected

Transactions, the advice of the IFA and the recommendations of the Independent Board

Committee, together with a notice convening the EGM of the Company to approve the Non-

Exempt Continuing Connected Transactions subject to the New Caps will be despatched to

the Shareholders as soon as practicable.

– 1 –

I. BACKGROUND

The Group is principally engaged in the businesses of freight forwarding, express services,

shipping agency services, storage and terminal services, marine transportation and

trucking services. The Group has certain business relationships with (a) Sinotrans Group

Company, its subsidiaries and its associates; and (b) joint venture partners of the Group;

and (c) certain non wholly-owned companies of the Company, which constitute

continuing connected transactions of the Company.

Certain continuing connected transactions have been taking place since the Company was

listed on the Stock Exchange in the year 2003. Over the years as the business of the Group

grew, both organically and as a result of acquisitions of companies or formation of new

joint ventures, further continuing connected transactions relating to the core business of

the Group have arisen. The connected transactions identified by the Company were

disclosed or made subject to shareholders’ approval, as required under the Listing Rules.

Continuing Connected Transactions for the three years ended 31 December 2008 were the

subject of the Company’s announcements dated 26th January, 2006, 13th June, 2006, 19th

January, 2007, 27th March, 2007 and 18th August, 2008, and shareholders’ circulars dated

3rd March, 2006 and 13th April, 2007. The Directors intend that such business

relationships will continue and the Company has entered into the fixed term agreements

required under Rule 14A.35 of the Listing Rules for such the Continuing Connected

Transactions. To the extent that the relevant Continuing Connected Transactions

constitute Non-exempt Continuing Connected Transactions, the Company will seek

Independent Shareholders’ approval of them at the EGM subject to the relevant New

Caps.

– 2 –

II. NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS WHICH REQUIRE

REPORTING, ANNOUNCEMENT AND INDEPENDENT SHAREHOLDERS’

APPROVAL

Set out below is a summary of the Non-Exempt Continuing Connected Transactions

which require Independent Shareholders’ approval:

A. Transactions with the Sinotrans Group Company, its subsidiaries and their associates

under the Master Business Services Agreement (Note)

Types of Non-Exempt

Continuing Connected

Transaction Nature of transaction

Transactions involving the provision of services to members of the Sinotrans Group andtheir associates

Provision oftransportation andlogistic services

The Group may from time to time provide such services tomembers of the Sinotrans Group and their associates whichoperates transportations and logistics business (includingfreight forwarding, express services, shipping agency, storageand terminal services) in the PRC outside those areas inwhich the Group has its core operations and also to provideservices to those members of the Sinotrans Group and theirassociates who are not in the same line of business (such astrading companies) who may require the Group’stransportation and logistics services.

Transactions involving the receipt of services from members of the Sinotrans Group andtheir associates

Receipt oftransportation andlogistics services

The Group may require from time to time transportation andlogistics services from members of the Sinotrans Group andtheir associates so as to enable the Group to provide end-to-end transportation and logistics services (including freightforwarding, express services, shipping agency, storage andterminal services) to customers covering locations in whichthe Group does not have operations. For example, theservices of Sinotrans Group and their associates are mainlyfor the purposes of effecting local or overseas delivery,distribution and storage of cargo at destinations where theGroup does not have such operations; vessels owned oroperated by the Group may require shipping agency servicesof overseas companies within the Sinotrans Group and theirassociates. The Group will continue to charter vessels fromthe Sinotrans Group. The Group will also from time to timeleases containers of varying specifications from associates ofSinotrans Group Company. In line with market practice, thecontainers are leased on a as needed basis and are subject toan agreed daily rental (which varies by reference to the size,type and number of containers leased and the term of thelease).

– 3 –

Note: The price under the Master Business Services Agreement dated 4 February 2009, in respect of

the provision and receipt of transportation and logistic services, chartering of vessels and

leasing of containers, was determined at the market price charged by independent third parties

under normal commercial terms. The Master Business Services Agreement is conditional upon

the approval of the Independent Shareholders at the EGM. The term of the Master Business

Services Agreement is for 3 years, commencing on 1st January, 2009 and ending on 31st

December, 2011.

The Directors (excluding the independent non-executive Directors whose views are to

be included in the shareholders’ circular to be issued by the Company as mentioned in

this announcement) are of the view that the terms of the Master Business Services

Agreement are fair and reasonable so far as the Shareholders are concerned and in the

interest of the Company and its shareholders as a whole.

During 2006, 2007 and the six months ended 30 June 2008, the turnover/expenses of

the Group attributable to each of the above transactions to Sinotrans Group were as

follows:

Amount (RMB)

2006 2007

Six months

ended 30 June

2008

Provision of transportation and

logistic services 415,480,000 424,480,000 109,320,000

Annual cap in respect of

provision of transportation

services 699,000,000 1,012,000,000 1,489,000,000

Receipt of transportation and

logistics services 312,480,000 355,330,000 156,770,000

Annual cap in respect of receipt

of transportation services 511,058,000 659,250,000 1,003,000,000

The Company proposes that the maximum cap of each the above types of

transactions (in respect of which Independent Shareholders’ approval is proposed

to be sought at the EGM) for 2009, 2010 and 2011 be capped as follows:

Amount (RMB)

2009 Cap

(Note 1)

2010 Cap

(Note 1)

2011 Cap

(Note 1)

Provision of transportation and

logistic services

(Notes 2 & 3) 771,000,000 1,002,000,000 1,303,000,000

Receipt of transportation and

logistics services

(Notes 2 & 3) 888,000,000 1,154,000,000 1,500,000,000

– 4 –

Notes:

1. These figures represent the estimated maximum cap in respect of transactions of the relevant type

which the Group may undertake during the relevant financial years. The actual amount of

transaction may be different. Taking into account the bases for the determination of the caps as

detailed below, the Board (other than members of the Independent Board Committee whose

views will be included in the shareholders’ circular to be issued by the Company as mentioned in

this announcement) considers that the New Caps set out above are fair and reasonable.

2. The relevant caps have been determined by reference to:

(i) the historical value of the transactions in respect of the provision of transportation and

logistic services by the Group to the Sinotrans Group and its associates;

(ii) the historical value of the transactions in respect of the receipt of transportation and logistic

services by the Group from the Sinotrans Group and its associate;

(iii) the historical and current time charter rates and the increase in the number of vessels being

chartered;

(iv) to allow a buffer for the inherent volatility of vessel chartering rates;

(v) the historical value of the amount paid by the Group in respect of the leasing of containers

from the Sinotrans Group;

(vi) the historical growth of the Group’s turnover; and

(vii) to allow a buffer for the inherent volatility of business in the transportation and logistics

services industry (which is affected by the volatility in oil price, the increase in demand for

transportation and logistics services with the increase in export and import volume in the

PRC) and perceived increase in demand for the Group’s services with continued economic

growth of the PRC and on the implementation of the Group’s strategy to expand its

domestic operations, overseas network, scope of services and newly-developed services and

products.

3. Payment for the provision and receipt of the above transportation and logistic services will be

made by cash in accordance with the standard terms of sale or provision of services of the

provider from time to time.

B. Transactions with Connected Joint Venture Partners

The Group has business relationships with certain joint venture partners of the Group

and its associates which constitute continuing connected transactions. The Group

intends to continue its business relationships with 大連日通外運物流有限公司 (Nittsu

Sinotrans Logistic Dalian Co., Ltd.*) and 大新華輪船(烟台)有限公司 (Grand China

Shipping (Yantai) Co. Ltd*). Each of the above Connected Joint Venture Partners are

connected persons of the Company solely by reason that each of them is a substantial

shareholder or an associate of a substantial shareholder of certain non-wholly owned

subsidiaries of the Company, further particulars relating to which are included in the

notes to the table below. To the best of the Directors’ knowledge, information and

belief having made all reasonable enquiries, none of the Connected Joint Venture

Partners are connected with each other.

– 5 –

Provision and receipt of transportation and logistics services

To comply with the requirements of the Listing Rules, the Company has on 4

February 2009 entered into a master services agreement with each of the following

Connected Joint Venture Partners, namely, (i) 大連日通外運物流有限公司 (Nittsu

Sinotrans Logistic Dalian Co., Ltd.*); and (ii) 大新華輪船(烟台)有限公司 (Grand

China Shipping (Yantai) Co. Ltd*), for the provision and receipt of transportation

and logistics services (including freight forwarding services, shipping agency, storage

and terminal services). The term of the master services agreement with each of the

above Connected Joint Venture Partners is for a term of 3 years commencing on 1st

January, 2009 and ending on 31st December, 2011. The master services agreements

provide that services must be charged at the market price charged by independent

third parties on normal commercial terms.



this announcement) are of the view that the terms of the master services agreements

signed by the relevant Connected Joint Venture Partners are fair and reasonable so

far as the Shareholders are concerned and in the interest of the Company and its

shareholders as a whole.

The table below sets out the turnover/expenses of the Group attributable to the

transactions with each of the following Connected Joint Venture Partners and its

associates during 2006, 2007 and the six months ended 30 June, 2008 and the

maximum cap for the value of transportation and logistic services to be provided and

received by the Group respectively (in respect of which Independent Shareholders’

approval is proposed to be sought at the EGM) with each of the following Connected

Joint Venture Partners and its associates for the years 2009, 2010 and 2011 :

Amount (RMB)

2006 2007

Six months

ended

30 June

2008 2009 Cap 2010 Cap 2011 Cap

(Note 1) (Note 1) (Note 1)

大連日通外運物流有限公司

(Nittsu Sinotrans Logistic

Dalian Co., Ltd.*)

(Notes 2, 3 & 5)

Provision of

transportation and

logistics services

19,780,000 16,630,000 27,810,000 167,000,000 251,000,000 376,000,000

Receipt of

transportation and

logistics services

3,170,000 7,290,000 2,550,000 16,000,000 23,000,000 35,000,000

Total 22,950,000 23,920,000 30,360,000 183,000,000 274,000,000 411,000,000

大新華輪船(烟台)有限公司

(Grand China Shipping

(Yantai) Co. Ltd*)

(Notes 2, 4 & 5)

Provision of

transportation and

logistics services

— — — 9,000,000 13,000,000 20,000,000

Receipt of

transportation and

logistics services

— — — 200,000,000 300,000,000 450,000,000

Total — — — 209,000,000 313,000,000 470,000,000

– 6 –

Notes:


which the Group will undertake during the relevant financial years in respect of which

independent shareholders’ approval is proposed to be sought at the EGM. The actual amount of





2. The relevant estimates have been determined by reference to (i) the historical value of the

transactions with the Connected Joint Venture Partners and their associates for the years 2006,

2007 and the six months ended 30 June, 2008; and (ii) the plans and requirements of the Group,

after allowing a buffer for the inherent volatility of business in the transportation and logistics

services industry and perceived increase in demand for the Group’s services generally with the

continued economic growth of the PRC and the implementation of the Group’s strategy to

expand its domestic operations and overseas network and, as customers seek the services of the

more established and financially sound transportation and logistics services providers such as the

Group to manage perceived risks associated with the current global economic downturn.

3. 大連日通外運物流有限公司 (Nittsu Sinotrans Logistic Dalian Co., Ltd.*) is an associate of a

substantial shareholder (i.e. 日本通運株式會社 (Nippon Express Co., Ltd.*)) of another non-

wholly owned subsidiary of the Company. Based on the information provided to the Company by

大連日通外運物流有限公司 (Nittsu Sinotrans Logistic Dalian Co., Ltd.*), it is engaged in the

business of provision of transportation and logistic services.

4. 大新華輪船(烟台)有限公司 (Grand China Shipping (Yantai) Co. Ltd*) is a substantial

shareholder of a subsidiary of the Company, owning 49% interest in such subsidiary. Based on

the information provided to the Company by 大新華輪船(烟台)有限公司 (Grand China Shipping

(Yantai) Co. Ltd*), it is engaged in the business of provision of transportation and logistic

services. 大新華輪船(烟台)有限公司 (Grand China Shipping (Yantai) Co. Ltd*), which was

previously not a connected person of the Company, became a connected person of the Company

as a result of the acquisition of substantial equity interest in a joint venture subsidiary of the

Company from a joint venture partner of the Group 烟台烟源國際貨運代理有限公司 (Yantai

Yanyuan International Freight Forwarding Co. Ltd*) and thereby becoming a substantial

shareholder of such joint venture (which is a subsidiary of the Company).

5. Payment for the provision and receipt of the above services will be made by cash in accordance

with the standard terms of sale or provision of services of the provider from time to time.

– 7 –

C. Transactions with Connected Non Wholly-Owned Companies

The Group has also received and provided transportation and logistics services with

the following Connected Non Wholly-Owned Companies: 江門中外運倉碼有限公司

(Sinotrans Grangdong Jiangmen Warehousing & Terminal Co., Ltd.*) and 江門外海

運輸實業有限公司 (Jiangmen Foreign Transportation & Enterprises Co., Ltd.*), 青島

金運航空貨運代理有限公司 (Qingdao Jinyun Air Cargo Freight Forwarding Co.

Ltd.*), and 山東中外運弘志物流有限公司 (Sinotrans Shandong Hongzhi Logistics

Co. Ltd*) (formerly known as 山東外運弘志國際集裝箱運輸有限公司 (Sinotrans

Shandong Hongzhi International Container Transportation Co., Ltd.*)). 江門中外運

倉碼有限公司 (Sinotrans Grangdong Jiangmen Warehousing & Terminal Co., Ltd.*)

and 江門外海運輸實業有限公司 (Jiangmen Foreign Transportation & Enterprises

Co., Ltd.*), are both subsidiaries of the Company and associates of substantial

shareholders of other subsidiaries of the Company and each of 青島金運航空貨運代理

有限公司 (Qingdao Jinyun Air Cargo Freight Forwarding Co. Ltd.*) and 山東中外運

弘志物流有限公司 (Sinotrans Shandong Hongzhi Logistics Co. Ltd*) (formerly

known as 山東外運弘志國際集裝箱運輸有限公司 (Sinotrans Shandong Hongzhi

International Container Transportation Co., Ltd.*)) is a non-wholly owned

subsidiary of the Company and in respect of which Sinotrans Group Company, a

connected person at the listed company level, holds more than 10% of each of their

total equity interest, further details relating to which are included in the notes to the

table below.

The Group intends to continue such business relationships with the Connected Non

Wholly-Owned Companies. To comply with the requirements of the Listing Rules,

the Company has on 4 February 2009 entered into master services agreements with

each of the following Connected Non Wholly-Owned Companies, namely, (i) 江門中

外運倉碼有限公司 (Sinotrans Grangdong Jiangmen Warehousing & Terminal Co.,

Ltd.*) and 江門外海運輸實業有限公司 (Jiangmen Foreign Transportation &

Enterprises Co., Ltd.*); (ii) 青島金運航空貨運代理有限公司 (Qingdao Jinyun Air

Cargo Freight Forwarding Co. Ltd.*); and (iii) 山東中外運弘志物流有限公司

(Sinotrans Shandong Hongzhi Logistics Co. Ltd *) (formerly known as 山東外運弘

志國際集裝箱運輸有限公司 (Sinotrans Shandong Hongzhi International Container

Transportation Co., Ltd.*)), for the provision and receipt of the respective

transportation and logistics services (including freight forwarding services, express

services, shipping agency, storage and terminal services) with the respective

Connected Non Wholly-Owned Companies. The term of the master services

agreement is for a period of three years commencing on 1st January, 2009 and

ending on 31st December, 2011. The master services agreements provide that services

must be charged at the market price charged by independent third parties on normal

commercial terms.



this announcement) are of the view that the terms of the master services agreements

signed by the relevant Connected Non Wholly-Owned Companies are fair and

reasonable so far as the Shareholders are concerned and in the interest of the

Company and its shareholders as a whole.

– 8 –

The table below sets out the turnover/expenses of the Group attributable to the

transactions with each of the following Connected Non Wholly-Owned Companies

and its associates during 2006, 2007 and the six months ended 30 June, 2008 and the

maximum cap for the value of transportation and logistic services to be provided and

received by the Group respectively (in respect of which Independent Shareholders’

approval is proposed to be sought at the EGM) with each of the following Connected

Non Wholly-Owned Companies and its associates for the years 2009, 2010 and 2011 :

Amount (RMB)

2006 2007

Six months

ended

30 June

2008 2009 Cap 2010 Cap 2011 Cap


江門中外運倉碼有限公司

(Sinotrans Guangdong

Jiangmen Warehousing &

Terminal Co., Ltd.*) and

江門外海運輸實業有限公司

(Jiangmen Foreign

Transportation & Enterprises

Co., Ltd.*)

(Notes 2, 3, 6 & 7)

Provision of

transportation and

logistics services

94,220,000 89,960,000 38,700,000 233,000,000 349,000,000 523,000,000

Receipt of

transportation and

logistics services

35,860,000 31,840,000 16,490,000 100,000,000 149,000,000 223,000,000

Total 130,080,000 121,800,000 55,190,000 333,000,000 498,000,000 746,000,000

青島金運航空貨運代理有限公司

(Qingdao Jinyun Air Cargo

Freight Forwarding Co.

Ltd.*)

(Notes 2, 4, 6 & 7)

Provision of

transportation and

logistics services

2,730,000 3,830,000 11,970,000 71,820,000 107,730,000 161,600,000

Receipt of

transportation and

logistics services

1,200,000 3,690,000 1,370,000 8,220,000 12,330,000 18,500,000

Total 3,930,000 7,520,000 13,340,000 80,040,000 120,060,000 180,100,000

山東中外運弘志物流有限公司

(Sinotrans Shandong

Hongzhi Logistics Co. Ltd*)

(formerly known as 山東外運

弘志國際集裝箱運輸有限公司

(Sinotrans Shandong

Hongzhi International

Container Transportation

Co., Ltd.*))

(Notes 2, 5, 6 & 7)

Provision of

transportation and

logistics services

35,110,000 72,530,000 72,750,000 437,000,000 655,000,000 983,000,000

Receipt of

transportation and

logistics services

860,000 1,160,000 610,000 4,000,000 5,500,000 9,000,000

Total 35,970,000 73,690,000 73,360,000 441,000,000 660,500,000 992,000,000

Notes:

1. These figures represent the estimated maximum cap in respect of the transactions of the relevant

type which the Group will undertake during the relevant financial years in respect of which

Independent Shareholders’ approval is proposed to be sought at the EGM. The actual amount of





2. As the above companies are also subsidiaries of the Company, the relevant estimated maximum

transaction value have been determined with reference to (i) the historical value of the

transactions with the Connected Non Wholly-Owned Companies and their associates for the

years 2006, 2007 and the six months ended 30 June, 2008; and (ii) the plans and requirements of

the Group, after allowing a buffer for the inherent volatility of business in the transportation and

logistics services industry and perceived increase in demand for the Group’s services generally

with the continued economic growth of the PRC and the implementation of the Group’s strategy

– 9 –

to expand its domestic operations and overseas network and, as customers seek the services of the



3. 江門外海運輸實業有限公司 (Jiangmen Foreign Transportation & Enterprises Co., Ltd.*) is an

associate of a substantial shareholder of another subsidiary of the Company (i.e. 江門中外運倉碼

有限公司 (Sinotrans Guangdong Jiangmen Warehousing & Terminal Co., Ltd.*) and is an

indirect non-wholly owned subsidiary which is owned as to 60% by the Company. 江門中外運倉

碼有限公司 (Sinotrans Guangdong Jiangmen Warehousing & Terminal Co., Ltd.*) is an associate

of the same substantial shareholder of 江門外海運輸實業有限公司 (Jiangmen Foreign

Transportation & Enterprises Co., Ltd.*) and is an indirect non-wholly owned subsidiary

which is owned as to 60% by the Company. Accordingly, the transactions by the Group with

these two non-wholly owned subsidiaries are aggregated in accordance with the Listing Rules.

4. 青島金運航空貨運代理有限公司 (Qingdao Jinyun Air Cargo Freight Forwarding Co. Ltd.*) is a

non-wholly owned subsidiary of the Company and in respect of which Sinotrans Group

Company, a connected person at the listed company level, holds more than 10% of each of their

total equity interest. Given the recent economic downturn and stock market decline, the market

capitalization of the Company has decreased significantly thereby causing the continuing

connected transaction with 青島金運航空貨運代理有限公司 (Qingdao Jinyun Air Cargo Freight

Forwarding Co. Ltd.*), which were previously exempted from announcement, reporting and

Independent Shareholders’ approval requirements, to become subject to announcement,

reporting and Independent Shareholders’ approval requirements.

5. 山東中外運弘志物流有限公司 (Sinotrans Shandong Hongzhi Logistics Co. Ltd*) (formerly

known as 山東外運弘志國際集裝箱運輸有限公司 (Sinotrans Shandong Hongzhi International

Container Transportation Co., Ltd.*)) is a non-wholly owned subsidiary of the Company and in

respect of which Sinotrans Group Company, a connected person at the listed company level,

holds more than 10% of each of their total equity interest.

6. Save as disclosed in the notes above and as far as the Company is aware, the other shareholders

(other than a member of the Group) of the non-wholly owned subsidiaries set out in the table

above, are independent of the other shareholders (other than a member of the Group) of the

other non-wholly owned subsidiaries set out in the table above.



– 10 –

III. LISTING RULES COMPLIANCE IN RESPECT OF THE NON-EXEMPT

CONTINUING CONNECTED TRANSACTIONS

As certain of the percentage ratios of the New Caps in respect of the above Non-exempt

Continuing Connected Transactions on an annual basis exceeds 2.5%, the above Non-

exempt Continuing Connected Transactions and the relevant New Caps are in accordance

with Chapter 14A of the Listing Rules, subject to the reporting, announcement and

Independent Shareholders’ approval requirements under the Listing Rules. Independent

Shareholders’ approvals are proposed to be sought in respect of the above Non-exempt

Continuing Connected Transactions set out in the section headed ‘‘II. Non-exempt

Continuing Connected Transactions which require Reporting, Announcement and

Independent Shareholders’ approval’’.

IV. NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS WHICH ARE

SUBJECT TO ANNOUNCEMENT AND REPORTING REQUIREMENTS ONLY

Apart from the transactions under the Master Business Services Agreement, the Group

also has other transactions with Sinotrans Group, its subsidiaries and its associates in

relation to the leasing of properties from the Sinotrans Group, which taking into account

of the estimated annual size of such transactions, does not require Independent

Shareholders’ approval of such transactions, but are subject to announcement and

reporting requirements under the Listing Rules. In addition, the Group also has business

relationships with (a) certain of its joint venture partners; and (b) certain non wholly-

owned subsidiaries of the Company (other than those who are associates of Sinotrans

Group Company) which are connected persons of the Company under the Listing Rules.

The Group anticipates that the percentage ratios in respect of the following connected

transactions on an annual basis will exceed 0.1% but will be less than 2.5%. Accordingly,

under the Listing Rules, they are subject to announcement and reporting requirements

only.

A. Transactions with Sinotrans Group, its subsidiaries and its associates

Properties Leasing

The Group currently leases from Sinotrans Group a number of properties in the

various locations at which the Group operates including Zhejiang, Tianjin, Shanghai,

Shandong, Liaoning, Guangdong, Lianyungang, Jiangsu, Hubei, Fujian, Beijing.

Rental of the premises have been determined based on market rental and are subject

to adjustment annually by reference to the then prevailing market rental of the

relevant premises. To comply with the requirements of the Listing Rules, the

Company has on 4 February 2009 entered into the Master Lease Agreement with

Sinotrans Group Company, for the leasing of properties from the Sinotrans Group.

The Master Lease Agreement dated 4 February 2009 sets out the rental for each of the

properties leased by the Group. The parties to the Master Lease Agreement may

make yearly adjustments to the original rental amount for each property provided

that after such adjustments, the rental amount for that particular property shall not

exceed the market rent. The Group also has a right under the Master Lease

Agreement to lease other properties from the Sinotrans Group instead of the existing

properties set out in the Master Lease Agreement. The term of the Master Lease

Agreement is for a term of three years commencing on 1 January 2009. Rental

payment will be paid by cash by the Group. The Directors (including the independent

– 11 –

non-executive Directors) are of the view that the terms of the Master Lease

Agreement are fair and reasonable so far as the Shareholders are concerned and in the

interest of the Company and its shareholders as a whole.

The Group anticipates that the percentage ratios in respect of its rental to be paid to

Sinotrans Group under the Master Lease Agreement on an annual basis will exceed

0.1% but will be less than 2.5%. Accordingly, such transactions will be subject to the

announcement and reporting requirements set out in Rules 14A.45 to 14A.47. The

table below sets out the expenses of the Group attributable to the leasing of

properties from Sinotrans Group during 2006, 2007 and the six months ended 30 June

2008 and the maximum cap in respect of the leasing of properties from Sinotrans

Group for the years 2009, 2010 and 2011 :

Amount (RMB)

2006 2007 2008 2009 Cap 2010 Cap 2011 Cap

Expenses in respect of

Leasing of

Properties

52,591,000 45,835,000 14,933,000

(for 6 months

ended

30 June 2008)

69,000,000

(Note 1)

69,000,000

(Note 1)

69,000,000

(Note 1)

Annual Cap in respect

of Leasing of

Properties

55,110,000 55,110,000 55,110,000 — — —

Note 1 : The relevant caps have been determined by reference to (i) the historical rentals paid by the

Group to the Sinotrans Group; (ii) the expected requirements of the Group to lease properties

from the Sinotrans Group in the following years; (iii) the market rates for properties of similar

quality properties in similar locations to be leased by the Group. Taking into account the

bases for the determination of the caps as detailed above, the Board (including the

independent non-executive Directors) considers that the New Caps set out above are fair and

reasonable.

B. Transactions with Connected Joint Venture Partners

The Group has business relationships with certain joint venture partners of the Group

and its associates which constitute continuing connected transactions. The Group

intends to continue its business relationships with the following Connected Joint

Venture Partners, 日本山九株式會社 (Sankyu Inc.*), 怡和船務代理(中國)有限公司

(Jardine Shipping Agencies (China) Ltd*), 上海華發國際貨運有限公司 (Shanghai

Huafa International Freight Transportation Co. Ltd.*) and 華發騰飛國際貨運有限公

司 (Huafa Tengfei International Freight Transportation Co. Ltd.*) and 香港金發船務

有限公司 (Hong Kong Golden Fortune Shipping Co. Ltd.*). Each of the above

Connected Joint Venture Partners are connected persons of the Company solely by

reason that each of them is a substantial shareholder of certain non-wholly owned

subsidiaries of the Company, further particulars relating to which are included in the

notes to the table below. To the best of the Directors’ knowledge, information and

belief having made all reasonable enquiries, none of the Connected Joint Venture

Partners are connected with each other.

To comply with the requirements of the Listing Rules, the Company has on 4

February 2009 entered into a master services agreement with each of the following

Connected Joint Venture Partners, namely, (i) 日本山九株式會社 (Sankyu Inc.*); (ii)

怡和船務代理(中國)有限公司 (Jardine Shipping Agencies (China) Ltd*); (iii) 上海華發

– 12 –

國際貨運有限公司 (Shanghai Huafa International Freight Transportation Co. Ltd.*)

and 華發騰飛國際貨運有限公司 (Huafa Tengfei International Freight Transportation

Co. Ltd.*); and (iv) 香港金發船務有限公司 (Hong Kong Golden Fortune Shipping

Co. Ltd.*), for the provision and receipt of transportation and logistics services

(including freight forwarding services, shipping agency, storage and terminal

services). The term of the master services agreement with each of the above

Connected Joint Venture Partners is for a term of 3 years commencing on 1st

January, 2009 and ending on 31st December, 2011. The master services agreements

provide that services must be charged at the market price charged by independent

third parties on normal commercial terms.

The Directors (including the independent non-executive Directors) are of the view

that the terms of the master services agreements signed by the relevant Connected

Joint Venture Partners are fair and reasonable so far as the Shareholders are

concerned and in the interest of the Company and its shareholders as a whole.

The Group anticipates that the percentage ratios in respect of its continuing

connected transactions with each of the following Connected Joint Venture Partners

and its associates on an annual basis will exceed 0.1% but will be less than 2.5%.

Accordingly, such transactions will be subject to announcement and reporting

requirements set out in Rules 14A.45 to 14A.47. The table below sets out the

turnover/expenses of the Group attributable to the transactions with each of the

following Connected Joint Venture Partners and its associates during 2006, 2007 and

the six months ended 30 June, 2008 and the maximum cap for the value of

transportation and logistic services to be provided and received by the Group

respectively with each of the following Connected Joint Venture Partners and its

associates for the years 2009, 2010 and 2011 :

Amount (RMB)

2006 2007

Six months

ended

30 June

2008 2009 Cap 2010 Cap 2011 Cap


日本山九株式會社

(Sankyu Inc.*)

(Notes 2, 3 & 7)

Provision of

transportation and

logistics services

17,820,000 14,220,000 7,830,000 47,000,000 71,000,000 106,000,000

Receipt of

transportation and

logistics services

3,120,000 1,260,000 2,600,000 16,000,000 24,000,000 36,000,000

Total 20,940,000 15,480,000 10,430,000 63,000,000 95,000,000 142,000,000

怡和船務代理(中國)有限公司

(Jardine Shipping Agencies

(China) Ltd*)

(Notes 2, 4 & 7)

Provision of

transportation and

logistics services

14,180,000 11,830,000 7,760,000 47,000,000 70,000,000 105,000,000

Receipt of

transportation and

logistics services

13,290,000 4,280,000 5,150,000 31,000,000 47,000,000 70,000,000

Total 27,470,000 16,110,000 12,910,000 78,000,000 117,000,000 175,000,000

– 13 –

Amount (RMB)

2006 2007

Six months

ended

30 June

2008 2009 Cap 2010 Cap 2011 Cap


上海華發國際貨運有限公司

(Shanghai Huafa

International Freight

Transportation Co. Ltd.*)

and 華發騰飛國際貨運

有限公司 (Huafa Tengfei

International Freight

Transportation Co. Ltd.*)

(Notes 2, 5 & 7)

Provision of

transportation and

logistics services

4,880,000 1,710,000 200,000 1,300,000 1,900,000 2,800,000

Receipt of

transportation and

logistics services

13,780,000 12,910,000 5,520,000 34,000,000 50,000,000 75,000,000

Total 18,660,000 14,620,000 5,720,000 35,300,000 519,000,000 77,800,000

香港金發船務有限公司 (Hong

Kong Golden Fortune

Shipping Co. Ltd.*)

(Notes 2, 6 & 7)

Provision of

transportation and

logistics services

2,310,000 3,880,000 280,000 1,800,000 2,600,000 3,900,000

Receipt of

transportation and

logistics services

1,780,000 1,630,000 910,000 5,500,000 8,200,000 12,300,000

Total 4,090,000 5,510,000 1,190,000 7,300,000 10,800,000 16,200,000

Notes:


which the Group will undertake during the relevant financial years. The actual amount of


detailed below, the Board (including the independent non-executive Directors) considers that the

New Caps set out above are fair and reasonable.

2. The relevant estimates have been determined by reference to (i) the historical value of the

transactions with the Connected Joint Venture Partners and their associates for the years 2006,

2007 and the six months ended 30 June, 2008; and (ii) the plans and requirements of the Group,

after allowing a buffer for the inherent volatility of business in the transportation and logistics

services industry and perceived increase in demand for the Group’s services generally with the

continued economic growth of the PRC and the implementation of the Group’s strategy to

expand its domestic operations and overseas network and, as customers seek the services of the



3. 日本山九株式會社 (Sankyu Inc.*) is a substantial shareholder of a subsidiary of the Company,

owning 40% interest in such subsidiary. Based on the information provided to the Company by

日本山九株式會社 (Sankyu Inc.*), it is engaged in the business of provision of transportation and

logistic services.

4. 怡和船務代理(中國)有限公司 (Jardine Shipping Agencies (China) Ltd*) is a substantial


the information provided to the Company by 怡和船務代理(中國)有限公司 (Jardine Shipping

Agencies (China) Ltd*), it is engaged in the business of provision of transportation and logistic

services. 怡和船務代理(中國)有限公司 (Jardine Shipping Agencies (China) Ltd*), which was

previously not a connected person of the Company, became a connected person of the Company

as a result of forming joint venture with subsidiaries of the Company and thereby becoming a

substantial shareholder of such joint venture (which is a subsidiary of the Company). Before

becoming a connected person of the Company, 怡和船務代理(中國)有限公司 (Jardine Shipping

Agencies (China) Ltd*) has been conducting ordinary and usual course of business transactions

– 14 –

with members of the Group. As a result of becoming a connected person of the Company, such

transactions have become continuing connected transactions which are subject to announcement

and reporting requirements.

5. 上海華發國際貨運有限公司 (Shanghai Huafa International Freight Transportation Co. Ltd.*) is

an associate of 香港金發船務有限公司 (Hong Kong Golden Fortune Shipping Co. Ltd.*) a

substantial shareholder of another subsidiary of the Company (i.e. 上海中外運化工國際物流有限

公司 (Sinotrans Shanghai Chemical International Logistics Co. Ltd.*)) and is an indirect non-

wholly owned subsidiary which is owned as to 67% by the Company. 華發騰飛國際貨運有限公司

(Huafa Tengfei International Freight Transportation Co. Ltd.*) is an indirect non-wholly owned

subsidiary of 上海華發國際貨運有限公司 (Shanghai Huafa International Freight Transportation

Co. Ltd.*) and is 10% owned by a substantial shareholder of a subsidiary of the Company.

Accordingly, the transactions by the Group with these two non-wholly owned subsidiaries are

aggregated in accordance with the Listing Rules. Given the recent economic downturn and stock

market decline, the market capitalization of the Company has decreased significantly thereby

causing the continuing connected transactions with 上海華發國際貨運有限公司 (Shanghai Huafa

International Freight Transportation Co. Ltd.*) and 華發騰飛國際貨運有限公司 (Huafa Tengfei

International Freight Transportation Co. Ltd.*), which were previously exempted from

announcement, reporting and Independent Shareholders’ approval requirements, to become

subject to announcement and reporting requirements.

6. 香港金發船務有限公司 (Hong Kong Golden Fortune Shipping Co. Ltd.*) is a substantial


the information provided to the Company by 香港金發船務有限公司 (Hong Kong Golden

Fortune Shipping Co. Ltd.*), it is engaged in the business of provision of transportation and

logistic services. Given the recent economic downturn and stock market decline, the market

capitalization of the Company has decreased significantly thereby causing the continuing

connected transactions with 香港金發船務有限公司 (Hong Kong Golden Fortune Shipping Co.

Ltd.*), which were previously exempted from announcement, reporting and Independent

Shareholders’ approval requirements, to become subject to announcement and reporting

requirements.



C. Transactions with Non Wholly-Owned Subsidiaries of the Company

The Group has also received and provided transportation and logistics services with

the following Connected Non Wholly-Owned Companies of the Company 寧波太平國

際貿易聯運有限公司 (Ningbo Taiping International Trade Transportation Co.,

Ltd.*) and 上海華星國際集裝箱貨運有限公司 (Shanghai Huasing International

Container Freight Transportation Co., Ltd.*) and 青島聯通報關有限公司 (Qingdao

Liantong Customs Co. Ltd.*). 寧波太平國際貿易聯運有限公司 (Ningbo Taiping

International Trade Transportation Co., Ltd.*) and 上海華星國際集裝箱貨運有限公

司 (Shanghai Huasing International Container Freight Transportation Co., Ltd.*)

are both subsidiaries of the Company and associates of substantial shareholders of

other subsidiaries of the Company and 青島聯通報關有限公司 (Qingdao Liantong

Customs Co. Ltd.*) is a non-wholly owned subsidiary of the Company and in respect

of which Sinotrans Group Company, a connected person at the listed company level,

holds more than 10% of each of their total equity interest, further details relating to

which are included in the notes to the table below.

The Group intends to continue such business relationships with the Connected Non

Wholly-Owned Companies. To comply with the requirements of the Listing Rules,

the Company has on 4 February 2009 entered into master services agreements with

each of the following Connected Non Wholly-Owned Companies, namely, (i) 寧波太

– 15 –

平國際貿易聯運有限公司 (Ningbo Taiping International Trade Transportation Co.,

Ltd.*) and 上海華星國際集裝箱貨運有限公司 (Shanghai Huasing International

Container Freight Transportation Co., Ltd.*); and (ii) 青島聯通報關有限公司

(Qingdao Liantong Customs Co. Ltd.*) for the provision and receipt of the

respective transportation and logistics services (including freight forwarding

services, express services, shipping agency, storage and terminal services) with the

respective Connected Non Wholly-Owned Companies. The term of the master

services agreement is for a period of three years commencing on 1st January, 2009

and ending on 31st December, 2011. The master services agreements provide that

services must be charged at the market price charged by independent third parties on

normal commercial terms. The Directors (including the independent non-executive

Directors) are of the view that the terms of the master services agreements with each

of the above Connected Non Wholly-Owned Companies are fair and reasonable so

far as the Shareholders are concerned and in the interest of the Company and its

shareholders as a whole.

The Group anticipates that the percentage ratios in respect of its continuing

connected transactions with each of the following Connected Non Wholly-Owned

Companies and its associates on an annual basis will exceed 0.1% but will be less than

2.5%. Accordingly, such transactions will be subject to announcement and reporting

requirements set out in Rules 14A.45 to 14A.47. The table below sets out the

turnover/expenses of the Group attributable to the transactions with each of the

following Connected Non Wholly-Owned Companies and its associates during 2006,

2007 and the six months ended 30 June, 2008 and the maximum cap for the value of

transportation and logistics services provided and received by the Group respectively

with each of the following Connected Non Wholly-Owned Companies and its

associates for the years 2009, 2010 and 2011 :

Amount (RMB)

2006 2007

Six months

ended

30 June

2008 2009 Cap 2010 Cap 2011 Cap


寧波太平國際貿易聯運有限公司

(Ningbo Taiping

International Trade

Transportation Co., Ltd.*)

and 上海華星國際集裝箱貨運

有限公司 (Shanghai Huasing

International Container

Freight Transportation Co.,

Ltd.*)

(Notes 2, 3, 5 & 6)

Provision of

transportation and

logistics services

7,620,000 7,140,000 2,590,000 15,600,000 24,000,000 36,000,000

Receipt of

transportation and

logistics services

7,000,000 8,030,000 3,160,000 19,100,000 29,000,000 43,000,000

Total 14,620,000 15,170,000 5,750,000 34,700,000 53,000,000 79,000,000

青島聯通報關有限公司

(Qingdao Liantong Customs

Co. Ltd.*)

(Notes 2, 4, 5 & 6)

Provision of

transportation and

logistics services

12,500,000 17,760,000 5,820,000 34,920,000 52,380,000 78,570,000

Receipt of

transportation and

logistics services

1,560,000 1,850,000 2,090,000 12,540,000 18,810,000 28,220,000

Total 14,060,000 19,610,000 7,910,000 47,460,000 71,190,000 106,790,000

– 16 –

Notes:

1. These figures represent the estimated maximum cap in respect of the transactions of the relevant

type which the Group will undertake during the relevant financial years. The actual amount of


detailed below, the Board (including the independent non-executive Directors) considers that the

New Caps set out above are fair and reasonable.

2. As the above companies are also subsidiaries of the Company, the relevant estimated maximum

transaction value have been determined with reference to (i) the historical value of the

transactions with the Connected Non Wholly-Owned Companies and their associates for the

years 2006, 2007 and the six months ended 30 June, 2008; and (ii) the plans and requirements of

the Group, after allowing a buffer for the inherent volatility of business in the transportation and

logistics services industry and perceived increase in demand for the Group’s services generally

with the continued economic growth of the PRC and the implementation of the Group’s strategy

to expand its domestic operations and overseas network and, as customers seek the services of the



3. 上海華星國際集裝箱貨運有限公司 (Shanghai Huasing International Container Freight

Transportation Co., Ltd.*) is an associate of a substantial shareholder of another subsidiary

of the Company (i.e. 寧波太平國際貿易聯運有限公司 (Ningbo Taiping International Trade

Transportation Co., Ltd.*) and is a non-wholly owned subsidiary which is 60% owned by the

Company. 寧波太平國際貿易聯運有限公司 (Ningbo Taiping International Trade Transportation

Co., Ltd.*) is an associate of the same substantial shareholder of 上海華星國際集裝箱貨運有限公

司 (Shanghai Huasing International Container Freight Transportation Co., Ltd.*) and is a non-

wholly owned subsidiary which is 55% owned by the Company. Accordingly, the transactions by

the Group with these two non-wholly owned subsidiaries are aggregated in accordance with the

Listing Rules.

4. 青島聯通報關有限公司 (Qingdao Liantong Customs Co. Ltd.*) is a non-wholly owned subsidiary

of the Company and in respect of which Sinotrans Group Company, a connected person at the

listed company level, holds more than 10% of each of their total equity interest. Given the recent

economic downturn and stock market decline, the market capitalization of the Company has

decreased significantly thereby causing the continuing connected transaction with 青島聯通報關

有限公司 (Qingdao Liantong Customs Co. Ltd.*), which were previously exempted from

announcement, reporting and Independent Shareholders’ approval requirements, to become

subject to announcement and reporting requirements.

5. Save as disclosed in the notes above and as far as the Company is aware, the other shareholders

(other than a member of the Group) of the non-wholly owned subsidiaries set out in the table

above, are independent of the other shareholders (other than a member of the Group) of the

other non-wholly owned subsidiaries set out in the table above.



V. REASONS AND BENEFITS FOR THE CONTINUING CONNECTED

TRANSACTIONS

The Group is principally engaged in the provision of freight forwarding services, logistics,

transportation and supply chain management services and solutions, including freight

forwarding, express services, shipping agency, storage and terminal services, trucking and

marine transportation services.

Certain Continuing Connected Transactions have been taking place since the Company

became listed on the Stock Exchange in the year 2003 and are essential for the continued

operation and growth of the business of the Group. Some of the transportation and

– 17 –

logistic services required by the Group will enable the Group to provide end-to-end

transportation and logistics services to customers covering locations in which the Group

does not have operations. In addition, the Group is also able to provide services to

members of the Sinotrans Group and their associates, the Connected Joint Venture

Partners who are not in the same line of business or who do not operate in the areas in

which the Group has its core operations. The leasing of properties under the Master Lease

Agreement allows continuous and stable use by the Group of operating premises at

market rate without expending the resources and the disruption that relocation inevitably

entails. Accordingly, the Directors consider that Continuing Connected Transactions are

in the interest of and are beneficial to the Group.

VI. GENERAL

An Independent Board Committee comprising Sun Shuyi, Lu Zhengfei and Miao Yuexin,

being all independent non-executive Directors, has been constituted to advise the

Independent Shareholders as to whether the terms of the Non-exempt Continuing

Connected Transactions and the New Caps are fair and reasonable so far as the

Independent Shareholders are concerned and in the interests of the Company and its

shareholders as a whole. The Independent Board Committee will also advise the

Independent Shareholders on how to vote at the EGM on the resolution in respect of

the Non-exempt Continuing Connected Transactions and New Caps, after taking into

account the recommendations of the IFA.

The IFA will be appointed by the Company to advise the Independent Board Committee

as to whether each of the Non-exempt Continuing Connected Transactions and the New

Caps are on normal commercial terms, in the ordinary and usual course of business of the

Group, fair and reasonable and in the interests of the Company and its shareholders of the

Company as a whole.

A circular containing, among other things, details of the Non-exempt Continuing

Connected Transactions and the New Caps, the advice of the IFA and the

recommendations of the Independent Board Committee, together with a notice

convening the extraordinary general meeting of the Company to approve the Non-

exempt Continuing Connected Transactions subject to the New Caps will be despatched

to the Shareholders as soon as practicable. As Sinotrans Group Company, the Connected

Joint Venture Partners and the Connected Non Wholly-Owned Companies are parties to

different Continuing Connected Transactions, they are required under the Listing Rules

to abstain from voting on the single resolution to be proposed to approve all of the Non-

Exempt Continuing Connected Transactions subject to the New Caps at the EGM to be

convened for this purpose. The votes of Independent Shareholders in the EGM will be

taken by poll.

– 18 –

VII.DEFINITIONS

The following defined terms are used in this announcement:

‘‘associates’’ has the meaning ascribed thereto in the Listing Rules

‘‘Board’’ the board of Directors

‘‘Company’’ Sinotrans Limited, a company incorporated in the People’s

Republic of China with limited liability, the shares of which are

listed on the Stock Exchange

‘‘Connected Joint

Venture Partner(s)’’

大連日通外運物流有限公司 (Nittsu Sinotrans Logistic Dalian

Co., Ltd.*), 日本山九株式會社 (Sankyu Inc.*), 怡和船務代理(中國)有限公司 (Jardine Shipping Agencies (China) Ltd*), 大新華輪

船(烟台)有限公司 (Grand China Shipping (Yantai) Co. Ltd*), 香

港金發船務有限公司 (Hong Kong Golden Fortune Shipping Co.

Ltd.*) and 上海華發國際貨運有限公司 (Shanghai Huafa

International Freight Transportation Co. Ltd.*) and 華發騰飛

國際貨運有限公司 (Huafa Tengfei International Freight

Transportation Co. Ltd.*), each being a joint venture partner

of the Group or an associate of a joint venture partner of the

Group and a connected person of the Company

‘‘Connected Non

Wholly-Owned

Companies’’

寧波太平國際貿易聯運有限公司 (Ningbo Taiping International

Trade Transportation Co., Ltd.*) and 上海華星國際集裝箱貨運

有限公司 (Shanghai Huasing International Container Freight

Transportation Co., Ltd.*), 江門中外運倉碼有限公司 (Sinotrans

Grangdong Jiangmen Warehousing & Terminal Co., Ltd.*) and

江門外海運輸實業有限公司 (Jiangmen Foreign Transportation &

Enterprises Co., Ltd.*), 青島金運航空貨運代理有限公司

(Qingdao Jinyun Air Cargo Freight Forwarding Co. Ltd.*), 青

島聯通報關有限公司 (Qingdao Liantong Customs Co. Ltd.*) and

山東中外運弘志物流有限公司 (Sinotrans Shandong Hongzhi

Logistics Co. Ltd*) (formerly known as 山東外運弘志國際集裝

箱運輸有限公司 (Sinotrans Shandong Hongzhi International

Container Transportation Co., Ltd.*)), each being a non

wholly-owned subsidiary or joint venture of the Company and

a connected person of the Company

‘‘Continuing

Connected

Transactions’’

the continuing connected transactions between the Group and (a)

Sinotrans Group and its associates; (b) the Connected Joint

Venture Partners; and (c) the Connected Non Wholly-Owned

Companies, which constitute continuing connected transactions

of the Company

‘‘Director(s)’’ the director(s) of the Company

– 19 –

‘‘EGM’’ the extraordinary general meeting of the Company to be

convened to approve the Non-exempt Continuing Connected

Transactions

‘‘Group’’ the Company and its subsidiaries

‘‘IFA’’ the independent financial advisers of the Company

‘‘Independent Board

Committee’’

a board committee comprising of the independent non-executive

Directors of the Company to be constituted to make

recommendations to the Independent Shareholders in respect of

the New Caps

‘‘Independent

Shareholders’’

Shareholders other than Sinotrans Group Company, the

Connected Joint Venture Partners and their respective associates

‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock

Exchange

‘‘Master Business

Services

Agreement’’

the master business services agreement dated 4 February 2009

between the Company and Sinotrans Group Company in relation

to the provision and receipt of services between the Group and

Sinotrans Group and its associates

‘‘Master Lease

Agreement’’

the master lease agreement dated 4 February 2009 between the

Company and Sinotrans Group Company in relation to the

leasing of various properties by the Group from Sinotrans Group

‘‘New Cap(s)’’ the maximum value of Non-exempt Continuing Connected

Transactions for each of the three years ending 31 December

2011 as set out in this announcement

‘‘Non-exempt

Continuing

Connected

Transactions’’

the continuing connected transactions between the Group and (a)

Sinotrans Group and its associates; (b) certain Connected Joint

Venture Partners; and (c) certain Connected Non Wholly-Owned

Companies, which are subject to Independent Shareholders’

approval, further details of which are set out in the section

headed ‘‘Non-exempt Continuing Connected Transaction which

Require Reporting, Announcement and Independent

Shareholders’ Approval’’

‘‘percentage ratio(s)’’ has the meaning ascribed thereto in Chapter 14 of the Listing

Rules

‘‘PRC’’ the People’s Republic of China

‘‘RMB’’ Renminbi, the lawful currency of the PRC

‘‘Sinotrans Group’’ Sinotrans Group Company and its subsidiaries, excluding the

Group

– 20 –

‘‘Sinotrans Group

Company’’

China National Foreign Trade Transportation (Group)

Corporation (中國對外貿易運輸集團總公司), the controlling

shareholder of the Company owning approximately 57.93%

interest in the Company

‘‘Shareholder(s)’’ holder(s) of shares of the Company

‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

By order of the Board

Sinotrans Limited

Gao Wei

Company Secretary

Beijing, 4 February 2009

As at the date of this announcement, the executive Directors of the Company are Zhao Huxiang,

Zhang Jianwei, Tao Suyun, Li Jianzhang; and non-executive Directors of the Company are Yang

Yuntao, Liu Jinghua, Jerry Hsu, Peter Landsiedel; and independent non-executive Directors of

the Company are Sun Shuyi, Lu Zhengfei, Miao Yuexin.

* For identification purposes only

– 21 –

Documents

CONTINUING CONNECTED TRANSACTIONS · joint ventures, further continuing connected transactions relating to the core business of the Group have arisen. The connected transactions identified