Lam Soon (Hong Kong) Limited (LSHK) has entered into a new Master Services Agreement with GuoLine Group Management Company Pte. Ltd. (GGMC) covering the three financial years from 1 July 2026 to 30 June 2029. The arrangement replaces the 2023 agreement that expires on 30 June 2026 and will govern the provision of strategic, financial, legal, secretarial and tax advisory services to the LSHK Group.
The fee structure remains two-tiered: 1) A Monthly Fee based on allocated departmental costs plus a 5% mark-up, currently estimated at about HK$0.10 million; and 2) An Annual Fee equivalent to 3% of the Adjusted Annual Profit Before Tax of each service recipient, calculated on a consolidated basis for the Group’s food and home-care segments.
To accommodate potential profit volatility, LSHK has retained an unchanged annual cap of HK$28.00 million for each of the three covered years. The cap was derived from a historical six-year average fee growth rate of 21.9% and a macro adjustment factor of 1.0334.
Under the outgoing 2023 framework, total fees paid were approximately HK$8.63 million for FY2024 and HK$12.22 million for FY2025, well below the existing cap of HK$28.00 million.
Because GGMC is a wholly-owned subsidiary of GuoLine Capital Assets Limited—the ultimate holding company and substantial shareholder of LSHK—the transactions are classified as continuing connected transactions under Chapter 14A of the Hong Kong Listing Rules. With the relevant percentage ratios exceeding 0.1% but below 5%, the deal is subject to announcement, reporting and annual review requirements, but does not require independent shareholders’ approval.
LSHK cites enhanced strategic, financial and operational efficiencies from leveraging Hong Leong Group’s resources as the principal rationale for renewing the arrangement. Internal controls include periodic monitoring of fee accruals against the cap, quarterly review by the Board Audit and Risk Management Committee, and annual reviews by both independent non-executive directors and external auditors.