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The Acquisition was approved by ordinary resolutions at the special general meeting of the Company held on 7 May 2010. The completion of the Acquisition took place on 19 August 2010. The Acquisition represented an attractive opportunity to the Group to own an interest in a luxurious hotel in Shanghai, a prime business and tourist city in the Peoples Republic of China.

The Hotel 108 has commenced operation in October 2010. The Directors believe that the applicable percentage ratios as defined under the Listing Rules in relation to the annual fees payable under the Hotel Management Agreement and the Licence Agreement in aggregate would be less than 2.5%. To comply with the requirements of the Listing Rules in setting a monetary cap and to give maximum room to the Group to maximize its earning potentials under the two agreements, the annual cap in relation to the annual fees payable under the Hotel Management Agreement and Licence Agreement for each of the financial years ending 31 December 2011, 2012 and 2013 was set at the maximum sum where the applicable percentage ratios as defined under the Listing Rules would remain below 2.5% i.e. HK$98,959,000. The Hotel Management Agreement and Licence Agreement are subject to announcement and reporting requirements but exempt from independent shareholdersapproval requirements under the Listing Rules.

No fee will be charged under the Technical Assistance Services Agreement. None of the applicable percentage ratios as defined under the Listing Rules in respect of the transactions contemplated under the Supply Procurement and Consultancy Services Agreement exceeds 0.1%. Both the Technical Assistance Services Agreement and the Supply Procurement and Consultancy Services Agreement for the Company are exempt from announcement, reporting and independent shareholdersapproval requirements under the Listing Rules.

DirectorsInterest in Contracts of Significance

No contracts of significance to which the Company or any of its subsidiaries was a party and in which a Director of the Company had a material interest, whether directly or indirectly, subsisted at the end of the year or at any time during the year.

Share Option Schemes

In accordance with the 2009 Share Option Scheme of the Company, which was adopted pursuant to an ordinary resolution passed on 27 May 2009, the Board of Directors of the Company may grant options to eligible employees, including Executive Directors of the Company and its subsidiaries, to subscribe for shares in the Company.

The 2009 Share Option Scheme of the Company was to replace the former Executive Share Option Scheme of the Company adopted by an ordinary resolution passed on 10 June 1999 (the 1999 Share Option Scheme) and amended by an ordinary resolution passed on 20 December 2001. Upon the adoption of the 2009 Share Option Scheme on 27 May 2009, the 1999 Share Option Scheme was terminated. Options granted during the life of the 1999 Share Option Scheme and remain unexpired prior to the termination of the 1999 Share Option Scheme continue to be exercisable in accordance with their terms of issue after termination of the 1999 Share Option Scheme.

Further details of the 1999 Share Option Scheme and 2009 Share Option Scheme are set out in note 33 to the consolidated financial statements.

Annual Report 2010

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