The Board announced that on 1 June 2023 (after trading hours), Tam Jai International Co. Limited entered into the Management Services Agreement with Marugame (HK) Limited (MGHK) (a direct wholly-owned subsidiary of Toridoll HK, a controlling shareholder of the Company), pursuant to which the Group will provide the Management Services to the MGHK Group for a term commencing from 1 June 2023 to 31 May 2024 (both days inclusive). On 1 June 2023 (after trading hours), the company entered into the Management Services agreement with MGHK.

The principal terms of the Management Services Agreement are set out below: Date. 1 June 2023. Parties.

The Company; and (b) MGHK. The Group shall provide the MGHK Group with management services including (i) assistance in stabilizing the Business' operations; (ii) assistance in the procurement process of the Business; (iii) provision of expertise and knowledge sharing on improving frontline store operations; (iv) assistance in marketing activities and provision of marketing plans for the Business; (v) provision of general support services (including but not limited to negotiation with landlords in the case of site development, project management and maintenance, information technology support, accounting and finance services, and legal support services); and (vi) assistance in strengthening the enforcement of reporting system (collectively, the ``Management Services''). Pursuant to the Management Services Agreement, the services fee payable by MGHK to the Group for the Management Services shall be determined on a cost-plus basis taking into account the actual cost (including labour costs based on the actual number of man hours and the applicable hourly rate) incurred by the Group plus a mark-up at a rate of not more than 3%.

Such pricing term was determined by the parties after arm's length negotiation. In determining the mark-up rate, the Company has taken into account the scope of the Management Services to be provided by the Group to the MGHK Group, and the analysis performed by the Company in respect of the market margin by making comparisons with comparable organizations providing similar services under similar terms. The Group shall issue invoice to MGHK on a monthly basis for the Management Services rendered during the preceding month, and MGHK shall settle such invoice by the end of the next month. Pursuant to the management services agreement between the Company and Toridoll HK dated 31 May 2022, the total service fees received or receivable by the Group for provision of management services to Toridoll HK and its subsidiaries (including the MGHK Group but excluding the Group) for the period from 1 June 2022 to 31 March 2023 and the period from 1 April 2023 to 30 April 2023 were HKD 2,025,500 and HKD 216,000, respectively.