A pannier rack is mounted to four individual points which are two pairs on opposite sides of the frame. The first pair are located at the bottom of the seat stay, just above the axle. There are two holes here, so you should fit the pannier rack to the higher of the two as highlighted with the red circle on the right (the second hole is for mudguards). When fitting the screw into this hole, just make sure that the screw fits flush from behind and doesn't interfere with the casette. The second pair are on the seat stay, either side of where the mudguard or rear V-brake calipers are mounted, highlighted with red circles on the left. Two thin brackets come out from the bottom of the pannier rack to prevent the rack from falling backwards away from the bike when it is loaded. The screws come out of the frame, and the screws are inserted into the loops on the pannier rack brackets, then screwed back into the frame. Once fitted correctly, this will leave enough room for a rear mudguard underneath the pannier rack, but this is dependent on the bike, rack and mudguard.