TS Lines Limited has finalised the financial parameters and oversight framework for its new master vessel charter agreement with the TEH Group, effective 1 May 2026 to 31 December 2028.

The shipping operator set annual caps on charter fees—recognised as right-of-use assets under HKFRS 16—at US$18.00 million (HK$140.40 million) for 2026 and US$19.00 million (HK$148.20 million) for each of 2027 and 2028. The 2026 ceiling includes commitments already made under a short-term January 2026 charter.

Management determined the caps by: • Benchmarking daily hire rates for comparable vessel sizes against weekly industry indices—Braemar’s Monday Morning Container Briefing and Martini Chartering’s Container Market Report—while factoring in expected market movements. • Aligning projected fleet needs with anticipated trade-lane volumes over the three-year period.

To safeguard pricing discipline and adherence to Hong Kong Listing Rules, TS Lines has implemented multi-layered controls: 1. Quarterly reviews by the finance team of cumulative charter spending versus caps. 2. Cross-departmental monitoring to flag any potential cap overruns and, if needed, seek Board approval for revisions. 3. Market checks against at least two independent third-party charter quotes whenever contract extensions or renewals arise, with reference to the latest industry indices. 4. Annual verification by independent auditors confirming Board approval, pricing compliance and cap observance. 5. Yearly assessments by independent non-executive directors to reconfirm commercial fairness and shareholder interests.

The Board, including independent non-executive directors, considers these measures sufficient to ensure that related-party charter transactions remain on normal commercial terms and within the approved limits.