Annual Report 2019

093 Transport International Holdings Limited 2019 Annual Report Financial Review to be receivable by Sun Bus and Eagle Win under the Shuttle Bus Service Agreements for the year ended 31 December 2019 and the year ending 31 December 2020 as disclosed in the announcement dated 28 June 2019 were HK$11,431,000 and HK$1,691,000 respectively. Such cap amounts were determined with reference to (i) the rates specified in the relevant contracts; and (ii) the expected demand for the services. For the year ended 31 December 2019, the service fees received or receivable by Sun Bus and Eagle Win (inclusive of the fees for basic services, overtime services, on-demand additional services, and toll charges) under the Shuttle Bus Service Agreements amounted to HK$10,979,000. The transactions contemplated under the Shuttle Bus Service Agreements are only subject to the reporting, announcement and annual review requirements of the Listing Rules and are exempt from the independent shareholders’ approval requirement. (c) KT REAL ESTATE LIMITED (“KTRE”) Building Contract As described in note 33(a) to the financial statements on pages 231 and 232 of this Annual Report, on 20 December 2018, KTRE (a wholly-owned subsidiary of the Company), Turbo Result Limited (“TRL”) (a wholly-owned subsidiary of SHKP) and Yee Fai Construction Company Limited (“Yee Fai”)(a wholly- owned subsidiary of SHKP) entered into the building contract in which KTRE and TRL engaged Yee Fai to carry out and complete the building works involving the construction of a commercial building at Kwun Tong Inland Lot No. 240, No. 98 How Ming Street, Kwun Tong, Kowloon, Hong Kong (the “Building Contract”). KTRE and TRL shall pay to Yee Fai, in equal shares, the contract sum of HK$4,436,056,954.36 (i.e. HK$2,218,028,477.18 each), subject to adjustments in accordance with the Building Contract. The transactions contemplated under the Building Contract constitute both a major transaction and connected transaction of the Company under the Listing Rules which are subject to reporting, announcement and independent shareholders’ approval requirements. Particulars of the transactions contemplated under the Building Contract were disclosed in the announcement and circular of the Company dated 20 December 2018 and 15 January 2019 respectively and such transactions were approved by independent shareholders at the special general meeting of the Company held on 1 February 2019. In compliance with the Listing Rules, the Directors, including the Independent Non-executive Directors, have reviewed and confirmed the following: 1. The foregoing continuing connected transactions conducted during the year ended 31 December 2019 with SHKPI and certain subsidiaries of SHKP were entered into: (i) in the ordinary and usual course of the business of the Group; (ii) either on normal commercial terms or better; and (iii) in accordance with the relevant agreements governing them on terms that are fair and reasonable and in the interests of the Group and the shareholders of the Company as a whole; 2. the annual insurance premium paid and payable by the Group to SHKPI under the 2018/19 Medical and Dental Insurance Arrangement and 2019/20 Insurance Arrangements for the year ended 31 December 2019 did not exceed the cap amounts of HK$22,944,545 and HK$90,000,000 respectively as disclosed in the announcement dated 1 November 2017 and 1 November 2018 respectively; and 3. the service fees received and receivable by Sun Bus and Eagle Win (inclusive of the fees for basic services, overtime services, on-demand additional services, and toll charges) from certain subsidiaries of SHKP under the Shuttle Bus Services Agreements for the year ended 31 December 2019 did not exceed the cap amount of HK$11,431,000 as disclosed in the announcement dated 28 June 2019. The Company’s auditor was engaged to report on the Group’s continuing connected transactions in accordance with Hong Kong Standard on Assurance Engagements 3000 (Revised) “Assurance Engagements Other Than Audits or Reviews of Historical Financial Information” and with reference to Practice Note 740 “Auditor’s Letter on Continuing Connected Transactions under the Hong Kong Listing Rules” issued by the Hong Kong Institute of Certified Public Accountants. The auditor has issued an unqualified letter containing its findings and conclusions in respect of the continuing connected transactions conducted during the year ended 31 December 2019 as set out above in accordance with Rule 14A.56 of the Listing Rules. A copy of the auditor’s letter has been provided by the Company to The Stock Exchange of Hong Kong Limited.