The Board announced that on 24 April 2024, Multiplex Cinema Limited (the Tenant) (an indirect 95%-owned subsidiary of the Company) entered the Renewal Offer Letter with the MTR Corporation Limited (Landlord) (an independent third party) in respect of the renewal of tenancy of the Premises for a term of two years commencing from 1 October 2024 and expiring on 30 September 2026. The Premises are currently used for the cinema operation and related business of the Group and the existing tenancy of the Premises is due to expire on 30 September 2024. Pursuant to the Renewal Offer Letter, the Landlord and the Tenant shall enter into the formal Tenancy Agreement in due course.

The principal terms of the Renewal Offer Letter and the Tenancy Agreement are set out below: Premises: Portion of the Upper and Lower Levels of Telford Plaza Term: Two years commencing from 1 October 2024 and expiring on 30 September 2026 (both days inclusive) Use: For cinema operation and other ancillary uses in accordance with the provisions of the Tenancy Agreement. Rent and other amounts the aggregate amount of basic rent, management expenses and payable by the air-conditioning charge payable by the Tenant to the Landlord Tenant: during the term of the tenancy is approximately HKD 24.9 million (exclusive of rates, government rent, promotion fee and other outgoings), and additional turnover rent may be imposed by the Landlord in accordance with the provisions of the Tenancy Agreement. Payment terms: The monthly basic rent, management expenses and air-conditioning charge are payable by the Tenant to the Landlord monthly in advance on the first day of each calendar month.

The additional turnover rent (if any) shall be payable annually in arrears in accordance with the provisions of the Tenancy Agreement. In accordance with HKFRS 16, the renewal of a tenancy agreement by extending the lease term would constitute a lease modification. Upon entering the Renewal Offer Letter, the Group would recognize a right-of-use asset which is measured at the present value of the total basic rent payable during the term of the tenancy contemplated thereunder, discounted using an incremental borrowing rate.

The value of the right-of-use asset recognized by the Group upon entering the Renewal Offer Letter is approximately HKD 19 million.