Lenovo 2016 Annual Report Download - page 156

154 Lenovo Group Limited 2015/16 Annual Report
DIRECTORS’ REPORT
CONTINUING CONNECTED TRANSACTIONS (continued)
(i) Continuing connected transactions with NEC and its associates (continued)
NEC Patent Licence Agreement
Date: The Closing Date
Parties: NEC and NECPC (a member of the JVCo Group on and following the Closing Date)
Services provided/received: NEC agreed to grant a licence of certain patents used in connection with the
operation of NEC’s personal computer business in Japan to NECPC at a royalty of
0.03% of gross sales of certain products and/or services of NEC’s personal computer
business in Japan bearing the “NEC”.
Term: For a period of five years commencing from Closing Date expiring upon the earlier
of (i) the fifth anniversary of the Closing Date, and (ii) expiration of the last to expire
of the patents licensed under the NEC Patent License Agreement. The NEC Patent
License Agreement will automatically renew for a further period not terminating
after the expiration of the last to expire of the patents licensed under the NEC
Patent License Agreement.
Annual cap(Note 1):1/7/2011 – 31/3/2012: JPY50 million (US$605,000)
1/4/2012 – 31/3/2013: JPY66 million (US$798,600)
Revised annual cap(Note 2):1/4/2013 – 31/3/2014: JPY79 million (US$774,200)
1/4/2014 – 31/3/2015: JPY79 million (US$774,200)
1/4/2015 – 31/3/2016: JPY79 million (US$774,200)
1/4/2016 – 1/7/2016: JPY20 million (US$196,000)
NEC Newco Brand Licence Agreement
Date: The Closing Date
Parties: NEC and NECPC (a member of the JVCo Group on and following the Closing Date)
Services provided/received: NEC agreed to grant NECPC a licence to use certain rights in connection with the
letters and the mark “NEC” at royalty payable to NEC by NECPC.
Revised Term: Commence on the Closing Date to June 30, 2018 and shall automatically extend for
an additional term of one year to a date no later than June 30, 2026 pursuant to the
amendment agreement dated October 7, 2014.
Annual cap(Note 1):1/7/2011 – 31/3/2012: JPY512 million (US$6,195,200)
1/4/2012 – 31/3/2013: JPY682 million (US$8,252,200)
1/4/2013 – 31/3/2014: JPY682 million (US$8,252,200)
1/4/2014 – 31/3/2015: JPY682 million (US$8,252,200)
1/4/2015 – 31/3/2016: JPY682 million (US$8,252,200)
1/4/2016 – 1/7/2016: JPY170 million (US$2,057,000)
Pursuant to the relevant rules in Chapter 14A of the Listing Rules, since JVCo has satisfied the exception as an
“insignificant subsidiary” (i.e. the total assets, profits and revenue of JVCo accounted for less than 5% under the
percentage ratios of that of the Group for the financial year ended March 31, 2016) of the Company under Rule
14A.09 of the Listing Rules, NEC, a substantial shareholder of JVCo, has no longer been the connected person of
the Company since April 1, 2016. The Company will comply with the reporting, annual review and announcements
requirements under Chapter 14A of the Listing Rules when JVCo ceases to be an “insignificant subsidiary” of the
Company.