Directors’ Report ESR Group Limited Annual Report 2023 115 Fees for Development Consultancy Services will be 1.5% of the total construction costs (excluding any land cost but including pre-construction costs and capitalised expenses, but exclusive of VAT) incurred in the development of the projects, and fees for JV Leasing Services will be determined based on the following pricing policy: (i) 1.5% of the headline gross rent or 0.5 month’s to 1.5 months’ headline gross rent (depending on length of the lease) for tenants referred by the Group and (ii) 50% of 3% of the headline gross rent, or 50% of 1 month’s to 2 months’ headline gross rent (depending on length of the lease) for tenants jointly referred by the Group and BW (or its subsidiaries). Any additional services to be provided by ESR Vietnam as agreed between the parties will not exceed the fees that would be reasonably charged by a comparable third party service provider (as determined by ESR Vietnam acting in good faith). The annual caps under the Management Agreements are as follows: Period from effective date to 31 Dec 2023 Each of FY2024 and FY2025 Period from 1 Jan 2026 to the end of the 3-year term ESR-NDV Management Agreement US$212,500 US$850,000 US$850,000 ESR-NSHL Management Agreement US$247,500 US$990,000 US$990,000 ESR-YP Management Agreement US$380,000 US$1,520,000 US$1,520,000 For details, please refer to the announcement made by the Company on 20 October 2023. No transaction occurred under the Management Agreements from their effective date to 31 December 2023. BW is indirectly controlled by entities managed or advised by Warburg Pincus LLC or its affiliates and thus it was a connected person of the Company. As SHTQ and BW NSHL Investor are, and BW NDV Investor (upon the purchase by SHTQ of all shares in BW NDV Investor from its existing individual shareholders under the NDV JV Deed) and BW YP Investor (upon the purchase by SHTQ of all shares in BW YP Investor from ESR YP 1 under the YP JV Deed) became, each a wholly-owned subsidiary of BW, SHTQ and the BW Investors are connected persons of the Company. The JV Deeds constitute connected transactions of the Company under Chapter 14A of the Listing Rules. As NDV JV (upon NDV Completion), NSHL Project Company (upon NSHL Completion) and YP JV (upon YP Initial Completion) will be more than 30% controlled by BW (through the relevant BW Investors), NDV JV, NSHL Project Company and YP JV will be connected persons of the Company. Accordingly, each of (i) the Subscription and the Additional Subscription, (ii) the Land Services and the Development Services under the Framework Agreement, and (iii) the Disposals under the Share Purchase Deed constitute one-off connected transactions of the Company under Chapter 14A of the Listing Rules and each of (i) the Leasing Services under the Framework Agreement and (ii) the services under the Management Agreements constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules. CORPORATE GOVERNANCE FINANCIAL STATEMENTS STRATEGIC REPORTS
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