2013 — Page 14

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Hong Kong Ferry (Holdings) Company Limited Annual Report 2013

Chairman's Statement (Continued)

BUSINESS REVIEW

During the year under review, profit for the Group was mainly derived from the sale of the residential units of

Shining Heights and The Spectacle, rental income, surplus from revaluation of investment properties and gain from sale of securities investment. As disclosed by the Company in an

announcement published on 2 January 2014, the occupation permit of Green Code at No.1 Ma Sik Road, Fanling was

not obtained by 31 December 2013 due to delay in the

progress of construction, and needed to be postponed to 2014. Accordingly, the relevant sale revenue has not been

recognised in the consolidated profit and loss account of the

Group for the financial year of 2013.

Property Development and Investment Operations

During the year under review, the Group's rental and other income from commercial arcades and sale proceeds of properties amounted to a total of approximately HK$121

million. The commercial arcades of Metro Harbour View and

Shining Heights were fully let whereas the occupancy rate of the commercial portion of The Spectacle at the year end was about 60%.

Despite the imposition by the Hong Kong government of Double Stamp Duty during the year, the sale of the

Group's Green Code project proceeded satisfactorily with

firm prices. A total of 691 units was sold up to the year end date, representing 95% of the saleable units, demonstrating that there is good demand on residential units which meet market needs and are well designed.

The structure of Hung Hom Inland Lot No. 555 at the junction of Gillies Avenue South and Bulkeley Street,

Hung Hom has been built up to the sixth floor. The sale

of the project is expected to be launched this year. The residential-cum-commercial tower will provide a total gross floor area of approximately 56,000 sq. ft. and comprise 95

residential units.

Foundation works of the property at 208 Tung Chau Street has been completed. As disclosed by the Company in an announcement published on 16 May 2013, the progress of the project may be delayed due to a ruling in favour of The Secretary of Justice on appeal against Fully Profit (Asia) Limited (an independent third party to the Company and its directors) in a case of the Court of Final Appeal of Hong Kong regarding the meaning of the word "house" under the Government lease. The Company is still liaising with the relevant government authorities on clarification of the term and will make further announcements and keep shareholders informed of further developments as and when

necessary.

Harbour Cruise - Bauhinia

香港船廠有限公司

LTD

Hong Kong Shipyard