Annual Report 2023

271 2023 Annual Report Transport International Holdings Limited NOTES TO THE FINANCIAL STATEMENTS (Expressed in Hong Kong dollars unless otherwise indicated) 35 Material related party transactions (continued) (a) Transactions with related companies (continued) Notes: (continued) (iii) In 2020, the Group entered into contracts with a subsidiary of SHKP, Sun Hung Kai Properties Insurance Limited (“SHKPI”), for the provision of various kind of insurance services to the Group for the period from 1 January 2021 to 31 December 2022 (the “2021/22 Insurance Arrangements”). In 2021, the Group entered into certain supplemental insurance policies with SHKPI for the provision of motor vehicle third party and passengers’ liability insurance for the period from 1 January 2022 to 31 December 2022 (the “2022 Supplemental Motor Insurance Arrangements”). In 2022, the Group entered into contracts with SHKPI for the provision of various kind of insurance services to the Group for the period from 1 January 2023 to 31 December 2024 (the “2023/24 Insurance Arrangements”). The amount paid and payable under the 2021/22 Insurance Arrangements, 2022 Supplemental Motor Insurance Arrangements and 2023/24 Insurance Arrangements during the year amounted to $93,279,000 (2022: $115,117,000). There was no outstanding balance payable for these contracts at 31 December 2023 (2022: $Nil). (iv) On 26 April 2010, KT Real Estate Limited (“KTRE”), a wholly-owned subsidiary of the Company, and Turbo Result Limited (“TRL”), a subsidiary of SHKP, entered into an agreement with Sun Hung Kai Real Estate Agency Limited (“SHKRE”), a subsidiary of SHKP, pursuant to which KTRE and TRL agreed to appoint SHKRE as the project manager for the management, supervision and control of the application for planning permission, the surrender and regrant of an industrial site at Kwun Tong Inland No.240, No. 98 How Ming Street, Kwun Tong, Kowloon, Hong Kong and its construction. The amount payable for project management services shall be a sum equivalent to whichever is the higher of (1) $20,000,000; and (2) the lower of (a) 1% of the project cost and (b) $25,000,000. The amount payable for lease modification services shall be in the sum of the lower of (1) $3.2 for each square foot of the permitted maximum gross floor area as approved under the lease modification; and (2) $3,840,000. There was no outstanding balance payable for these contracts at 31 December 2023 (2022: $2,000,000). (v) On 20 December 2018, KTRE, TRL and Yee Fai Construction Company Limited (“Yee Fai”) (a subsidiary of SHKP) entered into a building contract (the “Building Contract”) in which KTRE and TRL have engaged Yee Fai to carry out and complete the building works involving the construction of commercial properties in Kwun Tong (“The Millennity”). KTRE and TRL shall pay Yee Fai, in equal shares, the contract sum of HK$4,436,057,000 (i.e. HK$2,218,028,500 each), subject to adjustments in accordance with the Building Contract. Outstanding balance payable for this contract as at 31 December 2023 amounted to $174,283,000 (2022: $73,735,000). (vi) On 25 May 2023, The Kowloon Motor Bus Company (1933) Limited (“KMB”), a wholly-owned subsidiary of the Company, as purchaser and SmarTone Mobile Communications Limited (“SmarTone Mobile”), a subsidiary of SHKP, as vendor entered into a purchase contract, pursuant to which KMB agreed to purchase and SmarTone Mobile agreed to supply the hardware, software and documentation for people counting system (“PCS”) and Wi-Fi system and provide a suite of one-stop solutions for the design, management, implementation, installation, maintenance, training and after-sale support associated with 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 systems units and the subsequent maintenance fees for periods up to 31 October 2025. Outstanding balance payable for this contract at 31 December 2023 amounted to $11,889,000 (2022: $Nil). (vii) On 3 July 2007, Lai Chi Kok Properties Investment Limited, Royal Elite Service Company Limited (“Royal Elite”), a subsidiary of SHKP, and the first assignee of a residential unit of Manhattan Hill entered into a deed of mutual covenant (the “Deed”) pursuant to which the parties agreed that Royal Elite would act as the manager of Manhattan Hill. The amount paid and payable under the Deed during the year amounted to $887,000 (2022: $851,000). Outstanding balance payable for this contract at 31 December 2023 amounted to $93,000 (2022: $159,000). (viii) On 29 December 2022, KTRE and TRL entered into the Property Management Agreement (the “Property Management Agreement”) with Kai Shing Management Services Limited (“KSMS”), a subsidiary of SHKP, pursuant to which KSMS was appointed as the property manager for the units in the office/retail premises in The Millennity. The amount paid and payable under the Property Management Agreement for the property manager’s remuneration and other expenses during the year amounted to $4,396,000 (2022: $Nil). Outstanding balance payable for this contract at 31 December 2023 amounted to $4,396,000 (2022: $Nil). (ix) KSMS also incurred other fees on behalf of KTRE and TRL in relation to The Millennity, where KSMS acts as an agent for the collection of fees and payments (“Management Arrangements”) on behalf of other independent vendors/contractors for their work. The amounts paid and payable for these Management Arrangements amounted to $10,786,000 (2022: $Nil). Outstanding balances payable at 31 December 2023 amounted to $10,786,000 (2022: $Nil).