2015 — Page 131

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

MATERIAL RELATED PARTY AND CONNECTED TRANSACTIONS (Continued)

28

(b)

Other material related party and connected transactions (Continued)

(viii)

(ix)

In March 2011, the Group appointed HLD Sub A as the project manager of the development of 208 Tung Chau Street, Sham Shui Po, Kowloon, Hong Kong (the "TCS Property") for a term of three years commencing from 1 April 2011 in consideration for a fee equivalent to the aggregate of 1% of the construction costs of the TCS Property, subject to a ceiling of HK$1,490,000; and 0.5% of the gross proceeds of sale (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$138,000 was charged to the Group for the year ended 31 December 2014. At 31 December 2014, an amount of HK$4,348,000 remained unpaid and was included in trade and other payables. The balance has been repaid during the year. The TCS Project Management Agreement expired in March 2014.

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

In October 2015, the Group appointed HLD Sub A as the project manager of the comprehensively planned development consisting of residential component together with ancillary supporting facilities on the TCS Property (the "Proposed TCS Development”) for a term of three years commencing from 2 November 2015 in consideration for a fee equivalent to the aggregate of 1% of the construction costs of the Proposed TCS Development, subject to the annual ceilings for the year ended 31 December 2015 of HK$1,500,000, and for the years ending 31 December 2016, 31 December 2017 and 31 December 2018 of HK$4,100,000, HK$1,600,000 and HK$1,500,000 respectively. A total fee of HK$843,000 was charged to the Group for the year. The balance has been repaid during the year.

In March 2011, the Group appointed HLD Sub C as the main contractor for a fee of 5% on all works relating to the development of the TCS 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. The TCS Prime Cost Contract expired in July 2014.

In January 2013, the Group revised the annual cap of the TCS Prime Cost Contract as set out in the TCS Prime Cost Contract of the respective years. The Group entered into the Supplemental TCS Prime Cost Contract with HLD Sub C to revise the maximum annual aggregate amounts of the TCS Prime Costs and Fees.

Hong Kong Ferry (Holdings) Company Limited

129

Annual Report 2015