Common use of ANNUAL CAPS Clause in Contracts

ANNUAL CAPS. The low utilization rate of the annual caps for the transactions in respect of lease of computer systems and maintenance services under the 2019 Master Lease Agreement was due to, amongst others, the unexpected outbreak of the COVID-19 pandemic and the consequential travel restrictions introduced in the PRC and Hong Kong, which had brought unforeseeable and unprecedented impact to businesses, in particular the travelling industry, thereby resulted in the substantial reduction in demand for lease of and/or maintenance services for computer systems for processing tourism management information from the CTG Group. The annual caps for the Lease and Maintenance of Tourism Management System under the 2023 Tourism Management System Master Lease Agreement are as follows: Transaction amount in respect of the lease of and/or maintenance services for tourism management system to be made available by the Group to the CTG Group The above annual caps are determined after taking into account, amongst others, (i) the actual transaction amounts for the year ended 31 December 2022 of approximately HK$4,007,000, which in the view of the Company may serve as an indication for the estimation of demand for Lease and Maintenance of Tourism Management System as the tourism industry is regaining momentum in getting back to normalcy; (ii) a subsidiary of the Company incorporated in the PRC is expected to be closed in the second half of 2023, resulting in an expected reduction of the Group’s capacity in the lease of and/or provision of maintenance services for tourism management systems for the CTG Group’s travel businesses in the PRC during the term of the 2023 Tourism Management System Master Lease Agreement; (iii) the gradual recovery of the tourism industry following the relaxation of travel restrictions between Hong Kong and Mainland China from 6 February 2023, resulting in an expected increase in demand for Lease and Maintenance of Tourism Management System during the term of the 2023 Tourism Management System Master Lease Agreement; and (iv) provision of a buffer of approximately 15% to cover a possible unexpected increase in demand for Lease and Maintenance of Tourism Management System and the possible fluctuation in market prices or fees for the Lease and Maintenance of Tourism Management System. The above is merely assumed for the purpose of determining the annual caps and shall not be regarded as any indication directly or indirectly as to the Group’s revenue, profitability or trading prospects. Pursuant to the 2023 Tourism Management System Master Lease Agreement, the Company and CTG would allow the auditors with sufficient access and inspection right to the books and records for the purpose of reporting on the transactions contemplated thereunder the 2023 Tourism Management System Master Lease Agreement. In view of past operational convenience and benefits brought to the Group and extended business relationships established between the Group and the CTG Group, such continuing relationships are expected to bring synergies to the parties. The Group will also generate reasonable return with its tourism management systems, which will benefit the Group’s cash flow position. Thus, the Directors (including the independent non-executive Directors) consider that the terms of the 2023 Tourism Management System Master Lease Agreement have been negotiated on an arm’s length basis and entered into in the ordinary and usual course of business of the Group and on normal commercial terms, and the transactions contemplated thereunder and the annual caps are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

ANNUAL CAPS. The low utilization rate of the historical annual caps for the lease transactions in respect of lease of computer systems and maintenance services under the 2019 Master Lease Agreement was mainly due to, amongst others, to the unexpected outbreak of the COVID-19 pandemic and the consequential travel restrictions introduced in the PRC and Hong Kongpandemic, which had brought unforeseeable and unprecedented impact to businesses, in particular the travelling industry. While the China CTS Group has become more prudent to lease additional properties for business development purposes, thereby resulted the number of properties leased and the rental received by the Group were less than the planned capacity in the substantial reduction in demand for lease of and/or maintenance services for computer systems for processing tourism management information from the CTG Group2019. The annual caps for the Lease and Maintenance of Tourism Management System lease transactions under the 2023 Tourism Management System 2022 Master Lease Agreement are as follows: Transaction amount in respect Lease of the lease of office premises and/or maintenance services for tourism management system to be made available by the Group other properties to the CTG China CTS Group as lessee 14,600 16,000 17,600 The above annual caps are determined after taking into account, amongst others, (i) the actual estimated total transaction amounts amount for the year ended ending 31 December 2022 of approximately HK$4,007,000HK$13,207,000, which in representing the view actual transaction amount of HK$8,407,000 for the nine months ended 30 September 2022 plus and the estimated transaction amount of approximately HK$4,800,000 for the three months ending 31 December 2022 principally based on the terms of the Company may serve as an indication for the estimation of demand for Lease and Maintenance of Tourism Management System as the tourism industry is regaining momentum in getting back to normalcyexisting lease agreements; (ii) a subsidiary the expected gradual recovery from the outbreak of the Company incorporated COVID-19 pandemic based on the recent pandemic related policies and relaxation of relevant pandemic related restrictions in the PRC is and Hong Kong and correspondingly the expected properties to be closed in leased and the second half of 2023, resulting in an expected reduction of rental receivable from the Group’s capacity in the lease of and/or provision of maintenance services for tourism management systems for the CTG Group’s travel businesses in the PRC China CTS Group during the term of the 2023 Tourism Management System 2022 Master Lease Agreement; (iii) the gradual recovery expected market rental level of the tourism industry following office premises and/or other properties in the relaxation of travel restrictions between PRC and Hong Kong and Mainland China from 6 February 2023, resulting in an expected increase in demand for Lease and Maintenance of Tourism Management System during the term of the 2023 Tourism Management System Master Lease AgreementKong; and (iv) provision of a year-on-year buffer of approximately 1510% to cover a possible unexpected increase in demand for Lease the leasing of properties from the China CTS Group and Maintenance of Tourism Management System and the possible fluctuation in market prices or fees for rental of office premises and/or other properties in the Lease PRC and Maintenance of Tourism Management SystemHong Kong. The above is merely assumed for the purpose of determining the annual caps and shall not be regarded as any indication directly or indirectly as to the Group’s revenue, profitability or trading prospects. Pursuant to the 2023 Tourism Management System 2022 Master Lease Agreement, the Company and CTG China CTS would allow the auditors with sufficient access and inspection right to the books and records for the purpose of reporting disclosure on the transactions contemplated thereunder under the 2023 Tourism Management System 2022 Master Lease Agreement. In view of past operational convenience and benefits brought to the Group and extended business relationships established between the Group and the CTG Group, such continuing relationships are expected to bring synergies to the parties. The Group will also generate reasonable return with its tourism management systems, which will benefit the Group’s cash flow position. Thus, the Directors (including the independent non-executive Directors) consider that the terms of the 2023 Tourism Management System Master Lease Agreement have been negotiated on an arm’s length basis and entered into in the ordinary and usual course of business of the Group and on normal commercial terms, and the transactions contemplated thereunder and the annual caps are fair and reasonable and in the interests of the Company and the Shareholders as a whole.