# 35. OPERATING LEASE ARRANGEMENTS

# (a) As lessor

The Group leases its investment properties (note 14 to the financial statements) under operating lease arrangements, with leases negotiated for terms mainly ranging from five to ten years. The terms of the leases generally also require the tenants to pay security deposits and provide for periodic rent adjustments according to the then prevailing market conditions.

As at 31 December 2018, the Group had total future minimum lease receivables under non-cancellable operating leases with its tenants falling due as follows:

<table><tr><td rowspan="2"></td><td>2018</td><td>2017</td></tr><tr><td>HK$’000</td><td>HK$’000</td></tr><tr><td>Within one year</td><td>20,491</td><td>17,079</td></tr><tr><td>In the second to fifth years, inclusive</td><td>88,342</td><td>74,662</td></tr><tr><td>After five years</td><td>65,456</td><td>99,347</td></tr><tr><td></td><td>174,289</td><td>191,088</td></tr></table>

# (b) As lessee

The Group leases certain of its office buildings, retail shops and warehouses under operating lease arrangements. Leases for the properties are negotiated for terms ranging from one to ten years.

At 31 December 2018, the Group had total future minimum lease payments under non-cancellable operating leases falling due as follows:

<table><tr><td rowspan="2"></td><td>2018</td><td>2017</td></tr><tr><td>HK$’000</td><td>HK$’000</td></tr><tr><td>Within one year</td><td>2,765</td><td>4,240</td></tr><tr><td>In the second to fifth years, inclusive</td><td>4,426</td><td>7,339</td></tr><tr><td>After five years</td><td>8,966</td><td>–</td></tr><tr><td></td><td>16,157</td><td>11,579</td></tr></table>

# 36. COMMITMENTS

In addition to the operating lease commitments detailed in note 35 above, the Group had the following capital commitments at the end of the reporting period:

<table><tr><td rowspan="2"></td><td>2018</td><td>2017</td></tr><tr><td>HK$’000</td><td>HK$’000</td></tr><tr><td>Contracted, but not provided for:</td><td></td><td></td></tr><tr><td>Plant and machinery</td><td>7,796</td><td>–</td></tr><tr><td>Acquisition of equity investment</td><td>1,138</td><td>–</td></tr><tr><td></td><td>8,934</td><td>–</td></tr></table>

# 37. RELATED PARTY TRANSACTIONS

# (a) Compensation of key management personnel of the Group

<table><tr><td rowspan="2"></td><td>2018</td><td>2017</td></tr><tr><td>HK$’000</td><td>HK$’000</td></tr><tr><td>Short term employee benefits</td><td>14,017</td><td>11,092</td></tr><tr><td>Equity-settled share option benefits</td><td>5,625</td><td>5,081</td></tr><tr><td>Total compensation paid to key management personnel</td><td>19,642</td><td>16,173</td></tr></table>

Further details of directors’ emoluments are included in note 8 to the financial statements.

# (b) Loans from a director

<table><tr><td rowspan="2"></td><td>2018</td><td>2017</td></tr><tr><td>HK$’000</td><td>HK$’000</td></tr><tr><td>Mr. Tse Kam Pang</td><td>12,000</td><td>12,000</td></tr></table>

Mr. Tse Kam Pang is one of the directors and also the Chairman of the Company. As at 31 December 2018, loans with an aggregate amount of HK\$12,000,000 are unsecured, interest-free and not repayable within the next twelve months.

# (c) Other transactions with related parties:

The Chairman of the Company has unconditional guaranteed certain bank loans and other loans made to the Group of up to HK\$90,000,000 (2017: HK\$40,000,000) as at the end of the reporting period, as further detailed in note 26(ii) to the financial statements.

# (d) Outstanding balances with related parties:

(i) The Group had an outstanding balance due to its non-controlling interests of HK\$41,102,000 (2017: HK\$42,438,000) as at the end of the reporting period, as further detailed in note 31 to the financial statements.

(ii) Details of the Group’s other receivable balances with its associate as at the end of the reporting period are disclosed in note 21 to the financial statements.