Fees and Annual Caps. In consideration of construction management and operation management service provided by, as well as the licensing of certain intellectual property rights granted by the Group, the Group will receive fees of 30% of the net property income generated by the Project Companies each year after the relevant Xxxxx Plaza opens for business. For the purpose of determining such fees, the net property income refers to the gross property income generated from the operation of the Project Companies minus reasonable costs and expenses. Notwithstanding the above, if in any year the 70% of the net property income generated by the Project Companies and attributable to Xxxxx Xxxxxxxx is less than the relevant investment return for that specific year as prescribed in the Light Asset Cooperation Framework Agreement, the net property income attributable to Xxxxx Wensheng shall be increased to the extent of the net property income received by the Group. Such adjustment shall terminate after seven years from the effective date of the Light Asset Cooperation Framework Agreement. After that, if 70% of the net property income generated by the Project Companies received by Xxxxx Xxxxxxxx in any year is more than the annualized return of 7.5% on the investment of Xxxxx Wensheng, Xxxxx Xxxxxxxx will increase the allocation of the net property income to the Company to the extent of the excess of the net property income over the annualized return of 7.5% on the investment of Xxxxx Wensheng. The fees above are determined after arm’s length negotiations with reference to (i) the Company’s business and project management experiences obtained from previous practices; and (ii) profit margin of the similar properties on the market as known to the Company. The proposed annual caps under the Light Asset Cooperation Framework Agreement for each of the seven years ending 31 December 2021 are set out below: Annual Caps (RMB million) As at 31 December 2015 2016 2017 2018 2019 2020 2021 Construction management and operation management service and the licensing of certain intellectual property rights 0 30.19 148.78 150.90 158.73 176.21 185.61 In determining the annual caps listed above, the Directors have taken into account, among other things, (i) the expected timetable of construction, operation and generation of income by the Project Companies, and (ii) the estimated net property income generated by the Project Companies after they open for business; and (iii) the distribution arrangement of the i...
Fees and Annual Caps. In consideration of construction management and operation management services provided by, as well as the licensing of certain intellectual property rights granted by the Group, the Group will receive fees of 30% of the net property income generated by the Project Companies each year after the relevant Xxxxx xxxxxx commence operation. For the purpose of determining such fees, the “net property income” refers to the gross property income generated from the operation of the Project Companies minus reasonable costs and expenses. Notwithstanding the above, if in any year the 70% of the net property income generated by the Project Companies and attributable to Xxxxx Wenpu is less than the relevant investment return for that specific year as prescribed in the Light Asset Cooperation Framework Agreement, the net property income attributable to Xxxxx Wenpu shall be increased to the extent of the net property income received by the Group. If the 70% of the net property income generated by the Project Company attributable to Xxxxx Wenpu in any subsequent year within the investment period is more than the annualized return of 7.5% of the investment of Xxxxx Wenpu, the exceeding part shall be refunded to the Group to the extent of the additional net property income received by Xxxxx Wenpu as a result of the above increases in the preceding years. Such adjustment shall terminate after four years from the date of the Light Asset Cooperation Framework Agreement. The fees above are determined after arm’s length negotiations with reference to (i) the Company’s business and project management experiences obtained from previous practices; and (ii) profit margin of the similar properties on the market as known to the Company. The proposed annual caps under the Light Asset Cooperation Framework Agreement for the five years ending 31 December 2019 are set out below: Annual Caps (RMB million) For the year 2015 2016 2017 2018 2019 0 10.29 236.48 251.21 261.71 ending 31 December Construction management and operation management service and licensing of certain intellectual property rights In determining the annual caps listed above, the Directors have taken into account, among other things, (i) the expected timetable of construction, operation and generation of income by the Project Companies, and (ii) the estimated net property income generated by the Project Companies after they commence operations; and (iii) the allocation of the income as agreed under the Light Asset Cooperatio...
