2016 — Page 140

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

30

MATERIAL RELATED PARTY AND CONNECTED TRANSACTIONS (Continued)

(b)

Other material related party and connected transactions (Continued)

(vii)

(viii)

(ix)

In December 2013, the Group appointed another wholly-owned subsidiary of HLD ("HLD Sub B") as the sales manager of the development of the Hung Hom Property for a term of three years commencing from 1 January 2014 in consideration for a fee of 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 annual ceilings for the years ended 31 December 2014, 31 December 2015 and 31 December 2016 of HK$2,500,000, HK$1,000,000 and HK$1,500,000 respectively. A total fee of HK$38,000 (2015: HK$67,000) was charged to the Group during the year. At 31 December 2016, no amount remained unpaid (2015: HK$Nil). Pursuant to the terms of the Hung Hom Project Sales Management Agreement, the appointment of HLD Sub B as sales manager expired in December 2016.

In January 2017, the Group entered into a letter agreement with HLD Sub B and HLD Sub B continued to act as the sales manager of the Group in respect of the sale and purchase of the remaining residential units of the Hung Hom Property for a further period of one year commencing from 1 January 2017 and ending on 31 December 2017. The aggregate amount of fees receivable by HLD Sub B as remuneration under the appointment shall be subject to a ceiling of HK$1,000,000 for the year ending 31 December 2017.

In March 2014, the Group as landlord and an indirectly non-wholly owned subsidiary of HLD as tenant agreed to renew their tenancy agreement 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 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$11,635,000 (2015: HK$11,464,000), being aggregate rental and fees receivable under the aforementioned lease and licences, was credited to the Group.

In August 2014, the Group entered into a letter agreement with HLD Sub B and appointed HLD Sub B as the agent of the Group to lease certain shops and spaces of Miramar Shopping Centre (the "Premises") for the marketing services of the Hung Hom Property for the period from 5 August 2014 to the earlier of 4 April 2015 and the date on which the last residential unit in the Hung Hom Property is sold, subject to the respective ceilings of HK$3,000,000 for the period from 5 August 2014 to 31 December 2014 and HK$1,100,000 for the period from 1 January 2015 to 4 April 2015. The letter agreement expired in April 2015.

In March 2015, the Group entered into a second letter agreement with HLD Sub B and HLD Sub B continued to act as the agent of the Group to lease the Premises for the continuation of the marketing services of the Hung Hom Property for the period from 5 April 2015 to the earlier of 4 July 2015 and the date on which the last residential unit in the Hung Hom Property is sold, subject to the ceiling of HK$1,000,000. The second letter agreement expired in July 2015.

Hong Kong Ferry (Holdings) Company Limited

138 Annual Report 2016

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