Annual Report 2023

126 2023 Annual Report Transport International Holdings Limited FINANCIAL REVIEW Connected Transaction and Continuing Connected Transactions Particulars of the following connected transaction and continuing connected transactions of the Group are set out below in compliance with the reporting requirements of Chapter 14A of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”): 1. Connected Transaction THE KOWLOON MOTOR BUS COMPANY (1933) LIMITED (“KMB”) Transaction with SmarTone Mobile Communications Limited (“SmarTone Mobile”) On 25 May 2023, KMB, a wholly-owned subsidiary of the Company, as purchaser and SmarTone Mobile, a subsidiary of Sun Hung Kai Properties Limited (“ SHKP ”), as vendor entered into a purchase contract (the “ Purchase Contract ”), pursuant to which KMB agreed to purchase and SmarTone Mobile agreed to supply the hardware, software and documentation for 2,500 units of people counting system (“ PCS ”) and 2,300 units of the Wi-Fi system by 31 December 2023 and provide a suite of one-stop solutions for the design, management, implementation, installation, maintenance, training and after-sales support associated with the PCS. The total consideration under the Purchase Contract amounted to HK$46,316,210, comprising the initial purchase price for all PCS units and Wi-Fi system units and the subsequent maintenance fees for periods up to 31 October 2025. Particulars of the connected transaction were disclosed in the announcement of the Company dated 25 May 2023. 2. Continuing Connected Transactions (a) THE GROUP Transactions with Sun Hung Kai Properties Insurance Limited (“SHKPI”) As described in note 35(a) to the financial statements on pages 270 to 272 of this Annual Report, on 3 November 2020, the Group entered into various insurance policies with SHKPI, a wholly-owned subsidiary of SHKP, which is a substantial shareholder of the Company, pursuant to which SHKPI agreed to provide to the Group insurance coverage, including a motor vehicle third party and passengers’ liability insurance and an employees’ compensation insurance from 1 January 2021 to 31 December 2022 (the “ 2021/22 Insurance Arrangements ”). On 5 November 2021, the Group entered into certain supplemental insurance policies with SHKPI, pursuant to which the type of insurance covered is motor vehicle third party and passengers’ liability insurance for a period of 12 months from 1 January 2022 to 31 December 2022 (the “ 2022 Supplemental Motor Insurance Arrangements ”). On 29 December 2022, the Group entered into various insurance policies with SHKPI, pursuant to which SHKPI agreed to provide to the Group insurance coverage, including a motor vehicle third party and passengers’ liability insurance and an employees’ compensation insurance coverage from 1 January 2023 to 31 December 2024 (the “ 2023/24 Insurance Arrangements ”). The transactions contemplated under the 2021/22 Insurance Arrangements, 2022 Supplemental Motor Insurance Arrangements and 2023/24 Insurance Arrangements constitute continuing connected transactions of the Company, particulars of which were disclosed in the announcements of the Company dated 3 November 2020, 5 November 2021 and 29 December 2022, respectively. The cap amount of the insurance premium payable by the Group to SHKPI under the 2021/22 Insurance Arrangements for the year ended 31 December 2022, as disclosed in the announcement dated 3 November 2020, was HK$99,500,000. Such annual cap amount was determined mainly with reference to the historical transaction amounts, the estimated business requirements of the Group, including the estimated vehicles, staffing and fixed assets requirements, and the insurance premium rates as specified under the 2021/22 Insurance Arrangements. For the year ended 31 December 2023, the insurance premium paid and payable to SHKPI under the 2021/22 Insurance Arrangements was HK$Nil (2022: HK$79,617,000). The cap amount of the insurance premium payable by the Group to SHKPI under the 2022 Supplemental Motor Insurance Arrangements for the year ended 31 December 2022, as disclosed in the announcement dated 5 November 2021, was HK$36,500,000. For the year ended 31 December 2023, the insurance premium paid and payable to SHKPI under the 2022 Supplemental Motor Insurance Arrangements was HK$Nil (2022: HK$35,500,000).