2018E — Page 27

CONNECTED TRANSACTIONS (Continued)

Continuing Connected Transactions (Continued)

Date

Connected Persons

22 June 2018

Citistore and HREAL

REPORT OF THE DIRECTORS (CONTINUED)

Transactions

The Group (by HREAL as agent) as landlord entered into a 2018 renewal offer letter A (the "2018 Renewal Offer Letter A") with Citistore as tenant in respect of the leasing of Shop Nos. G01, Portion of G31, G37-G50, Portion of G51, Portion of G52, G63- G74 and corridors and atrium on Ground Floor, MHP ("Premises 1") and Premises 2 for a term of two years commencing from 1 July 2018 to 30 June 2020.

The aggregate rentals, management fees, air-conditioning charges, promotional levy and other miscellaneous charges (exclusive of Government rates) under the 2018 Renewal Offer Letter A and the Renewal Offer Letter B, subject to the revised annual ceiling of HK$15,000,000 (inclusive of the relevant cap applicable to the Renewal Offer Letter A) for the year ended 31 December 2018.

Details of the 2018 Renewal Offer Letter A and the revision of

annual caps were set out in the announcement of the Company dated 22 June 2018.

Details of the above continuing connected transactions are set out in note 28 to the financial statements.

The Independent Non-executive Directors of the Company have reviewed and confirmed that the above continuing connected transactions for the year ended 31 December 2018 have been entered into (i) in the ordinary and usual course of business of the Group; (ii) on normal commercial terms; and (iii) in accordance with the relevant agreements governing such transactions on terms that are fair and reasonable and in the interests of the shareholders of the Company as a whole.

The Company's auditor was engaged to report on the Group's continuing connected transactions in accordance with Hong Kong Standard on Assurance Engagements 3000 (Revised) "Assurance Engagements Other than Audits or Reviews of Historical Financial Information" and with reference to Practice Note 740 "Auditor's Letter on Continuing Connected Transactions under the Hong Kong Listing Rules" issued by the Hong Kong Institute of Certified Public Accountants. The auditor has issued their unqualified letter containing the auditor's findings and conclusions in respect of the continuing connected transactions disclosed by the Group on pages 23 to 25 of this Annual Report in accordance with Rule 14A.56 of the Listing Rules. A copy of the auditor's letter has been provided by the Company to The Stock Exchange of Hong Kong Limited.

The auditor of the Company have also confirmed to the Board in writing that the above continuing connected transactions for the year ended 31 December 2018 (i) have received the approval of the Board or Connected Transaction Committee which was set up by the Board; (ii) have been entered into in accordance with the relevant agreements governing the transactions; and (iii) have not exceeded the cap disclosed in the previous announcements.

Hong Kong Ferry (Holdings) Company Limited Annual Report 2018

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