Annual Report 2024

218 2024 Annual Report Transport International Holdings Limited NOTES TO THE FINANCIAL STATEMENTS (Expressed in Hong Kong dollars unless otherwise indicated) 5 Profit before taxation (continued) 2024 2023 $’000 $’000 (c) Rentals received and receivable from investment properties Gross rentals (note) (104,319) (88,263) Less: direct outgoings 31,657 29,740 (72,662) (58,523) Note: Included contingent rental income of $40,000 (2023: $47,000). 2024 2023 $’000 $’000 (d) Other items Depreciation # – owned property, plant and equipment 1,191,090 1,127,539 – right-of-use assets 5,586 5,564 Write-down of spare parts 1,534 545 Provision for passenger reward (note a) – – Provision for toll exemption fund (note b) 129,749 149,723 Insurance expenses (including the contingency provision for insurance) 198,117 181,506 Auditors’ remuneration – audit services 4,694 4,773 – other services 1,013 1,215 Note a: Under the revised Modified Basket of Factors (“MBOF”) approach, which is the existing basis for the assessment of bus fare adjustment applications, 50% of any return on a franchised bus operator in a given year in excess of a prescribed triggering point of return on its average net interest in leasehold land and other property, plant and equipment is required to be set aside and accumulated in a balance of passenger reward, which would be available to relieve the pressure for future fare increases and to facilitate the offer of bus fare concessions. The prescribed triggering point of return for 2024 and 2023 was 8.7% per annum. The balance of passenger reward of the Group as at 31 December 2024, included in accounts payable and accruals (note 26), was $Nil (2023: $Nil). Note b: The HKSAR Government announced that with effect from 17 February 2019, all franchised buses are exempted from paying toll when using Government tunnels and roads. However, each franchised bus operator is required to spend an equivalent amount of the toll saved to set up its own dedicated account known as the “Toll Exemption Fund” which will normally be used to lower the magnitude of future fare increases. In addition, any additional fare revenue resulting from the increase of the bus fare on the jointly operated routes with other franchised bus operators arising from a fare adjustment is required to be paid into the Toll Exemption Fund. The balance of the Toll Exemption Fund of the Group as at 31 December 2024, included in accounts payable and accruals (note 26), was $353,784,000 (2023: $420,764,000). #: Cost of mask production includes depreciation of $416,000 (2023: $416,000), which amount is not included in the total amount disclosed in note 5(d) for depreciation.