Annual Report 2020

108 Transport International Holdings Limited 2020 Annual Report Financial Review (b) SUN BUS LIMITED, HOI TAI TOURS LIMITED, KING YIP TRAVEL COMPANY LIMITED, CAG LIMITED, BUN TANG BUS SERVICE COMPANY LIMITED, FRONTIER TRANSPORTATION LIMITED and SAU LUEN P.L.B. COMPANY LIMITED (collectively “Sun Bus Group”) Shuttle Bus Services Agreements with certain subsidiaries of Sun Hung Kai Properties Limited (“SHKP”) As described in note 34(a) to the financial statements on pages 235 and 236 of this Annual Report, Sun Bus Group (a series of indirect wholly-owned subsidiaries of the Company) has entered into various shuttle bus service contracts (“Shuttle Bus Services Agreements”) with certain subsidiaries of SHKP, pursuant to which Sun Bus Group agreed to provide and operate various shuttle bus services for the period from 1 March 2019 to 20 March 2022. The service fees for the provision of the shuttle bus services were charged in accordance with the rates specified in the relevant contracts, ranging from approximately HK$350 to HK$530 per hour per bus, which were determined after taking into account factors such as the number and model of buses requested, the days and hours of services requested, the relevant costs and expected loads and routes, using the prevailing market rates as a price indicator, namely, the service fees charged for similar bus operations in the market. The transactions contemplated under the Shuttle Bus Services Agreements constitute continuing connected transactions of the Company, particulars of which were disclosed in the announcement of the Company dated 20 August 2020. The cap amounts estimated to be receivable by Sun Bus Group under the Shuttle Bus Services Agreements for the year ended 31 December 2020 and two years ending 31 December 2021 and 2022 as disclosed in the announcement dated 20 August 2020 were HK$6,850,114, HK$4,206,232 and HK$244,413 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 2020, the service fees received or receivable by Sun Bus Group (inclusive of the fees for basic services, overtime services, on-demand additional services, and toll charges) under the Shuttle Bus Services Agreements amounted to HK$6,299,000 (2019: HK$10,979,000). The transactions contemplated under the Shuttle Bus Services 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) TM PROPERTIES INVESTMENT LIMITED (“TMPI”) Disposal of 50% equity interest in TMPI As described in note 35 to the financial statements on page 237 of this Annual Report, on 9 November 2020, TM Properties Holdings Limited (“TMPH”) (an indirect wholly-owned subsidiary of the Company), Mega Odyssey Limited (“Mega Odyssey”) (an indirect wholly-owned subsidiary of SHKP), the Company and SHKP entered into the sale and purchase agreement (the “Sale and Purchase Agreement”) pursuant to which (i) TMPH agreed to sell and Mega Odyssey agreed to purchase one issued ordinary share of TMPI (representing 50% of the entire issued share capital of TMPI); and (ii) TMPH agreed to assign and Mega Odyssey agreed to take the assignment of 50% of the loan owing by TMPI to TMPH (which is unsecured, interest-free and repayable on demand) for a total consideration of HK$750,512,189, subject to adjustment. On 29 December 2020, TMPH, Mega Odyssey, the Company, SHKP and TMPI entered into a shareholders agreement (the “Shareholders Agreement”) in respect of the management of TMPI and the development of a property located at Tuen Mun Town Lot No. 80, No. 1 Kin Fung Circuit, Tuen Mun for office, shop and services uses (subject to obtaining the relevant approvals from HKSAR Government). The project costs are currently estimated by an independent quantity surveyor to be approximately HK$5,800,000,000 and shall be borne by TMPH and Mega Odyssey in equal shares. The transactions contemplated under the Sale and Purchase Agreement 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 Sale and Purchase Agreement were disclosed in the announcement and circular of the Company dated 9 November 2020 and 27 November 2020 respectively and such transactions were approved by independent shareholders at the special general meeting of the Company held on 17 December 2020.