2017E — Page 149

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

30

MATERIAL RELATED PARTY AND CONNECTED TRANSACTIONS

(a)

Key management personnel remuneration

Remuneration for key management personnel of the Group, including amounts paid to certain of the Company's directors, chief executive and the highest paid employees as disclosed in notes 8 and 9 respectively, is as follows:

Short-term employee benefits Post-employment benefits

Total remuneration is included in "staff costs" (see note 6(a)).

(b)

Other material related party and connected transactions

(i)

2017

HK$'000

2016

HK$'000

5,857

5,617

115

107

5,972

5,724

(ii)

In 1999, the Group entered into a development agreement (the "Agreement") with Henderson Land Development Company Limited ("HLD") and two wholly-owned subsidiaries of HLD ("HLD Sub 1" and "HLD Sub 2"), whereby HLD Sub 1 and HLD Sub 2 acquired the right to 50% of any proceeds from the future sale of the residential portion of the redevelopment of Metro Harbour View, Kowloon Inland Lot No. 11127 (the "MHV Property") for a consideration of HK$1,500,000,000.

As part of the Agreement, HLD Sub 1 and HLD Sub 2 agreed to reimburse the Group 50% of its development expenditures relating to the residential portion of the MHV Property. At 31 December 2017, an amount of HK$276,000 (2016: HK$268,000) remained unpaid and was included in trade and other receivables.

In February 2017, the Group entered into a deed of novation (the "Deed of Novation") with HLD, HLD Sub 1 and HLD Sub 2 pursuant to which HLD Sub 1 transferred and assigned unto HLD Sub 2, and HLD Sub 2 took and assumed all of the rights and obligations of the HLD Sub 1 under the Agreement subject to the terms and conditions as stated in the Deed of Novation. The Deed of Novation was supplemental to the Agreement.

In December 2001, a wholly-owned subsidiary of the Company acquired 50% equity interest in 20K Company Limited ("20K") which was set up to provide mortgage loans to the residential unit buyers of the MHV Property. HLD through its subsidiaries beneficially owned the remaining 50% equity interest in 20K at 31 December 2017. During the year, the Group received management and administrative fees in the total of HK$100,000 (2016: HK$125,000) from 20K. The Group and HLD Sub have made advances to 20K to finance the latter's mortgage operation and interest was charged on amounts advanced. During the year, the Group received interest amounting to HK$91,000 (2016: HK$62,000) from 20K. At 31 December 2017, the amount advanced by the Group totalling HK$4,031,000 (2016: HK$5,236,000) is in proportion to the Group's equity interest in 20K and is unsecured and has no fixed repayment terms.

Hong Kong Ferry (Holdings) Company Limited Annual Report 2017

147