Annual Report 2019

FAR EAST CONSORTIUM INTERNATIONAL LIMITED 224 For the year ended 31 March 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 20. INTERESTS IN JOINT VENTURES (continued) (b) Joint operation (i) During the year ended 31 March 2015, a subsidiary of the Group as developer (the “Developer”) has entered into development agreement (“Agreement”) with Urban Renewal Authority (“URA”) in form of joint operation to engage in residential/commercial property development and sales in Hong Kong. Under the Agreement, the Developer is mainly responsible for the development of the project. Units in the development will be sold or disposed of by URA in accordance with the terms and conditions of the Agreement and sales proceeds arising therefrom will be distributed between URA and the Developer pursuant to the terms and conditions of the Agreement. Assets with a carrying value of HK$258,667,000 (2018: HK$198,129,000) recognised in the consolidated financial statements as at 31 March 2019 in relation to the joint operation, mainly representing the property development costs and upfront payment to URA, and included in properties for development under current assets. Income and expenses of the joint operation for the year are insignificant. (ii) During the year ended 31 March 2012, the Group entered into an agreement with a related company to jointly develop certain portion of the Group’s freehold land with fair value, as agreed between the parties, of Malaysian Ringgit (“MYR”) 65,000,000 (equivalent to HK$124,800,000). The related company is responsible for the provision of technical, commercial and financial management of the development on the land and marketing the properties on completion of their development and bears all the related cost and expenses of the development. The development activities and the sales of the completed properties are directed by the related company’s board of directors, of which the Group and the related company have equal number of representatives throughout the joint operation period. The Group and the related company will share the profit or loss (representing revenue from sale less the fair value of the land, development costs and marketing expenses of the completed properties) from the development on a 50:50 basis. Assets with a carrying amount of MYR8,800,000, equivalent to HK$16,965,000 (2018: MYR8,800,000, equivalent to HK$17,864,000) are recognised in the consolidated financial statements as at 31 March 2019 in relation to the joint operations, representing the cost of the freehold land and included in properties for development under current assets. Income and expenses of the joint operation for the year are insignificant.