2015 — Page 132

130

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

28 MATERIAL RELATED PARTY AND CONNECTED TRANSACTIONS (Continued)

(b)

Other material related party and connected transactions (Continued)

(ix)

(Continued)

(x)

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In October 2015, the Group appointed HLD Sub C as the main contractor of the Proposed TCS Development for a fee of 5% on all works of the Proposed TCS Development. 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 subject to the annual ceilings for the year ended 31 December 2015 of HK$1,260,000, and for the years ending 31 December 2016, 31 December 2017 and 31 December 2018 of HK$19,990,000, HK$16,740,000 and HK$970,000 respectively. In accordance with the contract entered into the Group, an amount of HK$2,606,000, of which HK$124,000 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 TCS Property. At 31 December 2015, an amount of HK$2,606,000 remained unpaid and was included in trade and other payables.

In July 2011, the Group as landlord and an indirectly non-wholly owned subsidiary of HLD as tenant agreed to renew their tenancy agreements in respect of certain shops and spaces of MHP. Pursuant to the Tenancy Renewal Agreement, the tenant agreed to take the lease for a term of three years commencing from 1 July 2011 at a monthly rental of HK$350,000 and other ancillary expenses and a turnover rent of 7% (if any) of annual gross turnover of the tenant's business conducted over HK$120,000,000 which shall be payable monthly in arrears. The Group also entered into (i) a Wall Signage Licence Agreement for fourteen external wall signages at MHP; and (ii) an Entrance Signage Licence Agreement for one signage at the entrance of MHP for term of three years commencing from 1 July 2011. Total annual licence fees payable under the Wall Signage Licence Agreement and the Entrance Signage Licence Agreement were HK$60,000 and HK$6,600 respectively and expired on 30 June 2014.

In March 2014, the Group and the indirectly non-wholly owned subsidiary of HLD agreed to renew the tenancy and licence agreements for a term of three years commencing from 1 July 2014. Pursuant to the Tenancy Renewal Agreement, the tenant agreed to take the lease for a term of three years commencing from 1 July 2014 at a monthly rental of HK$470,000 and other ancillary expenses and a turnover rent of 7% (if any) of annual gross turnover of the tenant's business conducted over HK$120,000,000 which shall be payable monthly in arrears. The Group also entered into (i) an External Wall Signage Licence Agreement for three external wall signages at MHP; and (ii) an Entrance Signage Licence Agreement for one signage at the entrance of MHP for a term of three years commencing from 1 July 2014. Total annual licence fees payable under the External Wall Signage Licence Agreement and the Entrance Signage Licence Agreement are HK$22,000 and HK$8,000 respectively. The Tenancy Renewal Agreement and two Licence Agreements are subject to annual caps of respective years.

During the year, an amount of HK$11,464,000 (2014: HK$9,650,000), being aggregate rental and fees receivable under the aforementioned lease and licences, was credited to the Group.

Hong Kong Ferry (Holdings) Company Limited

Annual Report 2015