Common use of ANNUAL CAP Clause in Contracts

ANNUAL CAP. The yearly total fees (the “Total Fees”), being the sum of the Monthly Fee, the Annual Fee and the total amounts of any fees paid or payable by the LSHK Group to any Hong ▇▇▇▇▇ Group company for services of a similar nature as the Services, are subject to an annual cap of HK$28 million (the “Annual Cap”) for each of the three financial years ending 30 June 2023. The Annual Cap is determined having regard to (i) the average absolute annual rate of change of 24.6% of the total fees actually paid for the existing services for the five financial years from 2014/15 to 2018/19; and (ii) macro adjustment factor of 1.0298 taken into account of the estimated annual inflation rate in Hong Kong, the estimated annual food inflation rate in China and the estimated annual rate of depreciation of Renminbi against Hong Kong dollars. As the Annual Fee is calculated on the annual profit before tax which will be subject to possible fluctuation due to various factors, the Annual Fee may not be in a consistent growth trend. Having regard to this issue, it is considered appropriate to apply the Annual Cap amount to each of the relevant three financial years from 1 July 2020 to 30 June 2023. The annual cap in respect of the 2017 Services Agreements was HK$25 million. The total fees paid by the LSHK Group in respect of the 2017 Services Agreements for each of the financial years ended 30 June 2018 and 30 June 2019 were approximately HK$12,332,000 and HK$12,844,000 respectively. The Company has established internal control procedures to ensure that the continuing connected transactions contemplated under the Master Services Agreement are in accordance with the terms and conditions contained therein, and that the terms and conditions of the Master Services Agreement are on normal or better commercial terms and no less favourable than those from independent third parties for similar services and that the relevant annual cap is not exceeded:

ANNUAL CAP. The yearly total fees (the “Total Fees”), being the sum of the Monthly Fee, the Annual Fee and the total amounts of any fees paid or payable by the LSHK Guoco Group to any Hong ▇▇▇▇▇ Group company for services of a similar nature as the Services, are subject to an annual cap of HK$28 HK$410 million (the “Annual Cap”) for each of the three financial years ending 30 June 20232026. The basis of the Annual Cap is determined having regard to (i) the highest Total Fees paid during the five financial years ended 30 June 2022 of approximately HK$163 million, allowing for the possibility that such Total Fees may increase in the four financial years ending 30 June 2026 at a rate of approximately 38% which is similar to the average absolute annual rate of change of 24.6% of the total fees actually Total Fees paid for the existing services for during the five financial years from 2014/15 to 2018/19; and (ii) macro adjustment factor of 1.0298 taken into account of the estimated annual inflation rate in Hong Kong, the estimated annual food inflation rate in China and the estimated annual rate of depreciation of Renminbi against Hong Kong dollarsended 30 June 2022. As the Annual Fee is calculated on the annual profit before tax which will be subject to possible fluctuation due to various factors, the Annual Fee may not be in a consistent growth trend. Having regard to this issue, it is considered appropriate to apply the Annual Cap amount to each of the relevant three financial years from 1 July 2020 2023 to 30 June 20232026. The annual cap in respect of the 2017 2020 Services Agreements was HK$25 HK$413 million. The total fees paid by the LSHK Guoco Group in respect of the 2017 2020 Services Agreements for each of the financial years ended 30 June 2018 2021 and 30 June 2019 2022 were approximately HK$12,332,000 HK$45 million and HK$12,844,000 HK$70 million respectively. The Company has established the following internal control procedures to ensure that the continuing connected transactions contemplated under the Master Services Agreement are in accordance with the terms and conditions contained therein, and that the terms and conditions of the Master Services Agreement are on normal or better commercial terms and no less favourable than those from independent third parties for similar services and that the relevant annual cap is not exceeded:

ANNUAL CAP. The yearly total fees (the “Total Fees”), being the sum of the Monthly Fee, the Annual Fee and the total amounts of any fees paid or payable by the LSHK Group to any Hong ▇▇▇▇▇ Group company for services of a similar nature as the Services, are subject to an annual cap of HK$28 million (the “Annual Cap”) for each of the three financial years ending 30 June 20232026. The Annual Cap is determined having regard to (i) the average absolute annual rate of change of 24.610.3% of the total fees actually paid for the existing services for the five financial years from 2014/15 2017/18 to 2018/192021/22; and (ii) the macro adjustment factor of 1.0298 1.1359 taken into account of the estimated annual food inflation rate rates in Hong Kong, the estimated annual food inflation rate in Kong and Mainland China and the estimated annual rate of depreciation appreciation of Renminbi against Hong Kong dollars. As the Annual Fee is calculated on the annual profit before tax which will be subject to possible fluctuation due to various factors, the Annual Fee may not be in a consistent growth trend. Having regard to this issue, it is considered appropriate to apply the Annual Cap amount to each of the relevant three financial years from 1 July 2020 2023 to 30 June 20232026. The annual cap in respect of the 2017 2020 Services Agreements Agreement was HK$25 HK$28 million. The total fees paid by the LSHK Group in respect of the 2017 2020 Services Agreements Agreement for each of the financial years ended 30 June 2018 2021 and 30 June 2019 2022 were approximately HK$12,332,000 HK$13,823,000 and HK$12,844,000 HK$9,763,000 respectively. The Company has established the following internal control procedures to ensure that the continuing connected transactions contemplated under the Master Services Agreement are in accordance with the terms and conditions contained therein, and that the terms and conditions of the Master Services Agreement are on normal or better commercial terms and no less favourable than those from independent third parties for similar services and that the relevant annual cap is not exceeded:

ANNUAL CAP. The yearly total fees (the “Total Fees”), being the sum of the Monthly Fee, the Annual Fee and the total amounts of any fees paid or payable by the LSHK Guoco Group to any Hong ▇▇▇▇▇ Group company for services of a similar nature as the Services, are subject to an annual cap of HK$28 HK$413 million (the “Annual Cap”) for each of the three financial years ending 30 June 2023. The basis of the Annual Cap is determined having regard to (i) the highest Total Fees paid during the ten financial years ended 30 June 2019 of approximately HK$173 million, allowing for the possibility that such Total Fees may increase in the four financial years ending 30 June 2023 at a rate of approximately 34.8% which is similar to the average absolute annual rate of change of 24.6% of the total fees actually Total Fees paid for during the existing services for the five ten financial years from 2014/15 to 2018/19; and (ii) macro adjustment factor of 1.0298 taken into account of the estimated annual inflation rate in Hong Kong, the estimated annual food inflation rate in China and the estimated annual rate of depreciation of Renminbi against Hong Kong dollarsended 30 June 2019. As the Annual Fee is calculated on the annual profit before tax which will be subject to possible fluctuation due to various factors, the Annual Fee may not be in a consistent growth trend. Having regard to this issue, it is considered appropriate to apply the Annual Cap amount to each of the relevant three financial years from 1 July 2020 to 30 June 2023. The annual cap in respect of the 2017 Services Agreements was HK$25 HK$503 million. The total fees paid by the LSHK Guoco Group in respect of the 2017 Services Agreements for each of the financial years ended 30 June 2018 and 30 June 2019 were approximately HK$12,332,000 HK$163 million and HK$12,844,000 HK$78 million respectively. The Company has established internal control procedures to ensure that the continuing connected transactions contemplated under the Master Services Agreement Agreements are in accordance with the terms and conditions contained therein, and that the terms and conditions of the Master Services Agreement Agreements are on normal or better commercial terms and no less favourable than those from independent third parties for similar services and that the relevant annual cap is not exceeded: