2018E — Page 117

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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

SIGNIFICANT ACCOUNTING POLICIES (Continued)

(u) Related parties

(i)

A person, or a close member of that person's family, is related to the Group if that person:

(A)

has control or joint control over the Group;

(B)

has significant influence over the Group; or

(C)

is a member of the key management personnel of the Group.

(ii)

An entity is related to the Group if any of the following conditions applies:

(A)

The entity and the Group are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).

(B)

One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).

(C)

Both entities are joint ventures of the same third party.

(D)

One entity is a joint venture of a third entity and the other entity is an associate of the third

entity.

(E)

The entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group.

(F)

The entity is controlled or jointly controlled by a person identified in note (u)(i).

(G)

(H)

A person identified in note (u)(i)(A) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

The entity, or any member of a group of which it is a part, provides key management personnel services to the Group or to the Group's parent.

Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity.

Hong Kong Ferry (Holdings) Company Limited

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Annual Report 2018