EasyJet 2015 Annual Report Download - page 121

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Strategic report Governance Accounts
117
www.easyJet.com
26. Related party transactions
The Company licenses the easyJet brand from easyGroup Limited (‘easyGroup’), a wholly owned subsidiary of easyGroup Holdings Limited,
an entity in which easyJet’s founder, Sir Stelios Haji-Ioannou, holds a beneficial controlling interest. The Haji-Ioannou family concert party
shareholding (being easyGroup Holdings Limited and Polys Holding Limited) holds, in total, 33.73% of the issued share capital of easyJet plc
as at 30 September 2015.
Under the Amended Brand Licence signed in October 2010 and approved by the shareholders of easyJet plc in December 2010, an
annual royalty of 0.25% of total revenue is payable by easyJet to easyGroup for a minimum term of 10 years. The full term of agreement
is 50 years.
easyJet and easyGroup established a fund to meet the annual costs of protecting the ‘easy’ (and related marks) and the ‘easyJet’ brands.
easyJet contributes up to £1 million per annum to this fund and easyGroup contributes up to £100,000 per annum. Beyond the first £1.1
million of costs, easyJet can commit up to an aggregate £5.5 million annually to meet brand protection costs, with easyGroup continuing
to meet its share of costs on a 10:1 ratio. easyJet must meet 100% of any brand protection costs it wishes to incur above this limit.
A separate agreement was entered with Sir Stelios (‘the Comfort Letter’), dated 9 October 2010, under which, in return for certain non-
compete obligations, easyJet made payment of a fee of £300,000, adjusted annually per the UK Retail Price index, each year for five years
(or until the expiry of the longest subsisting restriction, whichever is later). All of the obligations in the Comfort Letter have now expired and
no further payments will be made under it.
The amounts included in the income statement for these items were as follows:
2015
£ million 2014
£ million
Annual royalty 11.7 11.3
Brand protection (legal fees paid through easyGroup to third parties) 0.9 1.0
Comfort Letter agreement with Sir Stelios Haji-Ioannou 0.3 0.3
12.9 12.6
At 30 September 2015, £1.0 million (2014: £0.8 million) of the above aggregate amount was included in trade and other payables.