39.Related party transactions (continued)
On 19 August 2010, the Group completed an acquisition of one-third of the entire issued share capital of MGIL, a wholly owned subsidiary of Shui On, at a consideration of approximately US$24,118,000 (equivalent to approximately HK$188,120,000) pursuant to a sale and purchase agreement entered into on 1 April 2010 among an indirectly wholly owned subsidiary of the Company, the chairman and managing director of the Group and Shui On, a related company in which a director, who is also a shareholder, of the Company has controlling interest. MGIL indirectly holds a hotel under development in the Luwan District, Shanghai. Details of the sales and purchase agreement were disclosed in an announcement issued on 1 April 2010 and a circular dated 21 April 2010 pursuant to the Listing Rules.
In addition to the above transactions and balances at the end of reporting period, and as announced by the Company on 23 February 2009, The Great Eagle Company, Limited, a wholly owned subsidiary, and Sun Fook Kong Holdings Limited (“SFK”), a related company in which some shareholders and directors of the Company have beneficial interests, entered into a supplemental agreement (“Supplemental Agreement”) pursuant to which, among other things, that the final contract sum for the main contract made as of 12 November 2001 between Renaissance City Development Company Limited, a former wholly owned subsidiary of the Company, and SFK for the composite development project in Mongkok (now known as “Langham Place”) had been agreed at approximately HK$3,302 million. The Supplemental Agreement was approved by shareholders of the Company on 19 April 2009 and construction fee payable, retention money payable and accrued interest as from 1 January 2009 up to the date of payment at the rate of 3% per annum of HK$217,974,000 in aggregate were settled to SFK for the year ended 31 December 2009. Upon finalisation of the final contract sum, a release of provision of construction fee payable amounting to HK$105,256,000 was credited to and disclosed as other income in the consolidated income statement for the year ended 31 December 2009.
The remuneration of the Directors and other members of key management during the year were disclosed in note 13. The remuneration of the Directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends.
Annual Report 2010