Annual Report 2021

189 2021 Annual Report Transport International Holdings Limited NOTES TO THE FINANCIAL STATEMENTS (Expressed in Hong Kong dollars unless otherwise indicated) 5 Profit before taxation (continued) 2021 2020 $’000 $’000 (d) Other items Depreciation # – owned property, plant and equipment 1,011,898 986,659 – right-of-use assets 6,678 6,554 Write-down/(write-back) of spare parts 2,531 (17) Provision for passenger reward (note a) – – Provision for toll exemption fund (note b) 149,559 193,730 Auditors’ remuneration – audit services 4,103 4,170 – other services 985 1,090 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 2021 and 2020 was 8.7% per annum. The balance of passenger reward of the Group as at 31 December 2021, included in accounts payable and accruals (note 25), was $Nil (2020: $7,154,000). Note b: The HKSAR Government announced that with effect from 17 February 2019, all franchised buses are exempted from paying toll when using the 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 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 2021, included in accounts payable and accruals (note 25), was $417,258,000 (2020: $392,863,000). The drawdown from the Toll Exemption Fund was recognised in the consolidated statement of profit or loss for the year. #: Cost of mask production includes depreciation of $415,000 (2020: $194,000), which amount is included in the total amount disclosed in note 5(d) for depreciation.