2014 — Page 109

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

28 MATERIAL RELATED PARTY AND CONNECTED TRANSACTIONS (Continued)

Other material related party and connected transactions (Continued)

(b)

(vi)

(vii)

In March 2011, the Group appointed a wholly-owned subsidiary of HLD ("HLD Sub A”) as the project manager of the development of Green Code at No. 1 Ma Sik Road, Fanling, New Territories, Hong Kong (formerly known as Fanling Sheung Shui Town Lot No. 177) (the "Fanling Property") for a term of three years commencing from 1 April 2011 in consideration for a fee equivalent to the aggregate of 0.7% of the construction costs of the Fanling Property and other lump sum fees for supplementary services subject to a ceiling of HK$7,000,000; and 0.5% of the gross proceeds of sales (but excluding those sale and purchase agreements which were effected by a third party sales agent) subject to the total annual ceilings of the respective years. A total fee of HK$1,395,000 (2013: HK$6,763,000) was charged to the Group for the year. At 31 December 2013, an amount of HK$17,095,000 remained unpaid and was included in trade and other payables. The balance has been repaid during the year.

In January 2013, the Group revised the annual cap of the Fanling Project Management Fee as set out in the Fanling Project Management Agreement of the respective years. The Group entered into the Supplemental Fanling Project Management Agreement with HLD Sub A and another wholly-owned subsidiary of HLD ("HLD Sub B"), pursuant to which the parties thereto have agreed to revise the maximum annual aggregate amounts of the Fanling Project Management Fee, the rights and obligations of HLD Sub A regarding the project sales and marketing services were transferred and novated to HLD Sub B.

In March 2011, the Group appointed another wholly-owned subsidiary of HLD as the main contractor for a fee of 5% on all works relating to the development of the Fanling Property. The aggregate of the cost of works carried out by the main contractor or any connected persons (as defined in the Listing Rules) of the Company together with the 5% fee shall be subject to the total ceilings of the respective years.

In October 2014, the Group entered into a Fanling Prime Cost Contract Extension Letter with the wholly- owned subsidiary of HLD to extend the period of payment of fees for the respective ceilings of HK$6,800,000 and HK$19,000,000 for the period from 1 June 2014 to 31 December 2014 and year ending 31 December 2015 respectively. In accordance with the contract entered into with the Group, an amount of HK$576,763,000 (2013: HK$384,973,000), of which HK$12,639,000 (2013: HK$27,440,000) being cost of work carried out by the main contractor or the connected persons (as defined in the Listing Rules) of the Company and the 5% fee, was charged by the main contractor for the superstructure work of the development of the Fanling Property. At 31 December 2014, an amount of HK$507,721,000 (2013: HK$275,538,000), which included amounts payable to other subcontractors through this main contractor, remained unpaid and was included in trade and other payables.

Hong Kong Ferry (Holdings) Company Limited Annual Report 2014

107