Annual Report 2020

236 Transport International Holdings Limited 2020 Annual Report Notes to the Financial Statements (Expressed in Hong Kong dollars unless otherwise indicated) 34 Material related party transactions (continued) (a) Transactions with related companies (continued) Notes: (continued) (iv) 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 $886,000 (2019: $898,000). Outstanding balance payable for this contract at 31 December 2020 amounted to $209,000 (2019: $150,000). (v) 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”), 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 Lot No. 240, No. 98 How Ming Street, Kwun Tong, Kowloon, Hong Kong (the “Kwun Tong Site”) and the construction of the Kwun Tong Site. 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. Outstanding balance payable for this contract as at 31 December 2020 amounted to $2,000,000 (2019: $2,000,000). (vi) On 20 December 2018, KTRE, TRL and Yee Fai Construction Company Limited (“Yee Fai”) (a wholly-owned subsidiary of SHKP) entered into a building contract in which KTRE and TRL have engaged Yee Fai to carry out and complete the building works involving the construction of a commercial building at the Kwun Tong Site (the “Building Contract”). 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 2020 amounted to $82,567,000 (2019: $16,108,000). (vii) During the year, the Group provided advertising services to certain subsidiaries of SHKP, a substantial shareholder of the Company. The amounts received and receivable for these advertising services amounted to $572,000 (2019: $2,054,000). Outstanding balances due from these companies at 31 December 2020 amounted to $32,000 (2019: $673,000). (b) Key management personnel remuneration Remuneration for key management personnel represents amounts paid to the Company’s Directors as disclosed in note 7. (c) Applicability of the Listing Rules relating to connected transactions The related party transactions as described in notes 34(a)(i) and 34(a)(iii) above constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules. The Company has complied with the reporting requirements under Chapter 14A of the Listing Rules by including the relevant disclosures in the section headed “Connected Transactions and Continuing Connected Transactions” under “Financial Review” on pages 106 to 109 of this Annual Report. The related party transactions as described in note 34(a)(ii) above, in which the relevant SHKP Group companies acted as agents for collection of the coach service fees, did not fall within the definition of connected transactions of the Company under Chapter 14A of the Listing Rules. The related party transactions as described in notes 34(a)(iv) and 34(a)(vii) above constitute continuing connected transactions of the Company as defined in Chapter 14A of the Listing Rules. However, they are exempt from the disclosure requirements in Chapter 14A of the Listing Rules pursuant to Rule 14A.76.