09:41 SINGAMAS CONT<00716> - Announcement (2) Company by the Stock Exchange on 23 June 1993 for an indefinite period. The Company, however, has not taken appropriate steps to ensure timely compliance with the new Listing Rules that have been in effect from 31 March 2004. The delayed disclosure of the above continuing connected transactions by the Company has breached the Listing Rules. The Stock Exchange reserves its rights to take action against the Company and its Directors regarding any non-compliance of the Listing Rules as it may consider appropriate. The terms and conditions of the Terminal Agreement as described below are substantially the same as those of the 2004 Agreement. THE TERMINAL AGREEMENT Date: 12 January 2005, to take effect retrospectively from 1 January 2005 Parties: (a) STHK (b) PILHK Scope/Consideration Pursuant to the Terminal Agreement, STHK will enter into transactions with PILHK, a shipping agent, for the provision of Mid-stream Services in Hong Kong and the PRC. In consideration for receiving the Mid-stream Services, PILHK will pay STHK the Tariffs, which are determined at arm's length negotiations between STHK and PILHK with reference to prevalent market price and on terms no less favourable to the Group than terms available to or from independent third party customers. Term The Terminal Agreement will be in force for an initial period of three years commencing on 1 January 2005. The parties may thereafter enter into further agreement or renew this agreement for further period to be agreed, unless terminated by either party giving a specified period of notice to the other party. The Company will comply with the relevant requirements of the Listing Rules upon expiry of the term on 31 December 2007. Estimated Annual Caps It is estimated that the amount of Tariffs payable by PILHK to STHK and which is settled on a monthly basis during the three financial years ending 31 December 2005, 2006 and 2007 will not exceed HK$58 million, HK$60 million and HK$62 million, respectively. Such caps are determined after taking into account (i) the historical Tariffs paid by PILHK to STHK for the three years ended 31 December 2001, 2002 and 2003 of approximately HK$58 million, HK$79 million and HK$76 million, respectively, (ii) the estimated amount of Tariffs paid by PILHK to STHK for the year ended 31 December 2004 of approximately HK$56 million; and (iii) estimated projection of Tariffs receivable from PILHK for the years ending 31 December 2005, 2006 and 2007 in view of the anticipated business growth of PILHK. Prior to 2004, STHK was PILHK's sole provider of Mid-stream Services. Starting in 2004, PILHK has appointed other mid-stream service providers; accordingly, the amount of STHK's transactions with PILHK has decreased in 2004 from the previous years. The Board is of the view that these annual caps are fair and reasonable. REASONS FOR THE TERMINAL AGREEMENT The principal activities of the Group are engaged in the businesses of container manufacturing, container depot/terminal and mid-stream operations. STHK is engaged in the business of provision of Mid-stream Services in Hong Kong and the PRC. The Terminal Agreement will provide the Group an additional source of revenue. The Directors consider that it is in the interests of the Company and the Shareholders (including the independent Shareholders) for STHK to enter into the Terminal Agreement, which will enable the Group to generate steady revenue from the provision of Mid-stream Services. The Board (including the independent non-executive Directors) considers the terms and conditions of the Terminal Agreement are fair and reasonable and are on normal commercial terms. CONNECTED TRANSACTION None of the Directors or the substantial shareholders of the Company is