MS Concept Limited — Capital/Financing Update 2023

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

MS CONCEPT LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8447)

DISCLOSEABLE TRANSACTION IN RELATION TO THE LEASE RENEWAL OF THE PREMISES IN RESPECT OF AN EXISTING RESTAURANT

THE LEASE RENEWAL OF THE PREMISES IN RESPECT OF AN EXISTING RESTAURANT

The Board announces that Lord Restaurant (a wholly-owned subsidiary of the Company) as tenant, has signed and returned the Tenancy Agreement to MGCL (an Independent Third Party) as landlord, on 5 July 2023 for renewal of the lease in respect of the Premises for a term of two years commencing from 1 December 2023 to 30 November 2025 (both days inclusive).

LISTING RULES IMPLICATIONS

Pursuant to HKFRS 16 Leases , the Company if entering into lease transaction as lessee will recognise a right-of-use asset in its consolidated financial statements. Such transaction will be regarded as acquisition of capital asset for the purpose of the GEM Listing Rules.

As one or more than one of the applicable percentage ratios (as defined in the GEM Listing Rules) in respect of the Lease based on the value of the right-of-use asset recognised by the Group is more than 5% but below 25%, the Lease constitutes a discloseable transaction of the Company, and is therefore subject to notification and announcement requirements but exempt from Shareholders’ approval requirements pursuant to Chapter 19 of the GEM Listing Rules.

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T H E L E A S E O F T H E P R E M I S E S I N R E S P E C T O F A N E X I S T I N G RESTAURANT

The Board announces that Lord Restaurant (a wholly-owned subsidiary of the Company) as tenant, has signed and returned the Tenancy Agreement to MGCL (an Independent Third Party) as landlord, on 5 July 2023 for renewal of the lease in respect of the Premises for a term of two years commencing from 1 December 2023 to 30 November 2025 (both days inclusive).

Details of the principal terms of the Tenancy Agreement are set out below:

• Parties : (1) Market Century Global Limited, an Independent Third Party, as landlord; and

• (2) Lord Restaurant Limited, a wholly-owned subsidiary of the Company, as tenant

• Premises : The whole of 6th floor of the World Trade Centre, 280 Gloucester Road, Causeway Bay, Hong Kong

• Term : 1 December 2023 to 30 November 2025 (both days inclusive) Total amount : The aggregate amount payable under the Lease is approximately payable HK$19.7 million (inclusive of promotion levy, air-conditioning and service and management charges) subject to additional turnover rent representing the amount by which 12% of the monthly gross sales turnover exceeds the monthly basic rent of each calendar month in accordance with the Lease, which will be satisfied by internal resources of the Group.

The rent is determined after arm’s length negotiations between MGCL and Lord Restaurant after taking into consideration the prevailing market price of comparable premises in the vicinity of the Premises.

THE RIGHT-OF-USE ASSET

The value of the right-of-use asset recognised by the Company under the Lease amounted to approximately HK$13.7 million, which is calculated with reference to the present value of the aggregated lease payments to be made under the Lease in accordance with HKFRS 16 Leases .

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Since the turnover rent under the Lease can only be reliably estimated according to the gross sales turnover generated from the operation of the Restaurant, such amount constitutes variable lease payments and were not included in the measurement of the lease liability at initial recognition under HKFRS 16 Leases . Therefore, no right-of-use asset related to the turnover rent is recognised, and the turnover rent will be charged to the profit or loss of the Group in accordance with HKFRS 16 Leases.

REASON FOR AND THE BENEFITS OF ENTERING THE LEASE

The Group is principally engaged in the provision of catering services in Hong Kong.

The Group leased the Premises under a tenancy agreement for the operation of its Restaurant under the brand “Mr. Steak – Buffet à la minute”, which will expire on 30 November 2023. In evaluating the renewal of the Tenancy Agreement, the Directors consider that (i) the Restaurant has been operated in the Premises for approximately nine years; (ii) the monthly rental per square feet of gross floor area of the Premises is fair and reasonable; and (iii) the entering of new Tenancy Agreement will enable the Group to continue its operation of the Restaurant at the Premises.

The Directors, including the independent non-executive Directors, considered that the transactions contemplated under the Lease was entered into in the ordinary and usual course of business of the Group, and the Lease was entered into on normal commercial terms after arm’s length negotiations between the parties, and the terms of the transactions contemplated under the Lease were fair and reasonable and in the interests of the Company and the Shareholders as a whole.

INFORMATION OF THE PARTIES

Information on the Group and Lord Restaurant

The Group is principally engaged in the provision of catering services in Hong Kong.

Lord Restaurant is a company incorporated in Hong Kong with limited liability and is a wholly-owned subsidiary of the Company. Lord Restaurant is principally engaged in the business of providing catering services.

Information on MCGL

MCGL is a company incorporated in the British Virgin Islands with limited liability. To the best knowledge, information and belief of the Directors having made all reasonable enquiries and the publicly available information, (i) MCGL is a wholly-owned subsidiary of SHKP; (ii) MCGL is principally engaged in property investment; and (iii) each of MCGL, SHKP and the ultimate beneficial owners of MCGL and SHKP are Independent Third Parties.

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LISTING RULES IMPLICATION

Pursuant to HKFRS 16 Leases , the Company if entering into lease transaction as lessee will recognise a right-of-use asset in its consolidated financial statements. Such transaction will be regarded as acquisition of capital asset for the purpose of the GEM Listing Rules.

As one or more than one of the applicable percentage ratios (as defined in the GEM Listing Rules) in respect of the Lease is more than 5% but below 25%, the Lease constitutes a discloseable transaction for the Company, and is therefore subject to the notification and announcement requirements but exempt from Shareholders’ approval requirements pursuant to Chapter 19 of the GEM Listing Rules.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions shall have the following meaning:

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• “Lord Restaurant” Lord Restaurant Limited, a limited liability company incorporated in Hong Kong on 26 March 2020 and being a wholly-owned subsidiary of the Company

• “MCGL” Market Century Global Limited, a company which was incorporated in the British Virgin Islands with limited liability and is a wholly-owned subsidiary of SHKP

• “Premises” the whole of 6th floor of the World Trade Centre, 280 Gloucester Road, Causeway Bay, Hong Kong

• “Restaurant” the restaurant operated by the Group at the Premises under the brand “Mr. Steak - Buffet à la minute”

• “Shares” ordinary share(s) with a nominal value of HK$0.01 each in the share capital of the Company

• “Shareholder(s)” holder(s) of the Share(s)

• “SHKP” Sun Hung Kai Properties Limited, a company incorporated in Hong Kong with limited liability and is listed on the Main Board of the Stock Exchange (stock code: 16)

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

• “Tenancy Agreement” the Tenancy Agreement signed by Lord Restaurant and returned to MCGL on 5 July 2023 in respect of the Premises

• “HK$” or cents Hong Kong dollars and cents respectively, the lawful currency of Hong Kong

• “%” per cent

By Order of the Board MS Concept Limited Kwong Tai Wah Chairman and Executive Director

Hong Kong, 5 July 2023

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As at the date of this announcement, the executive Directors are Mr. Kwong Tai Wah (Chairman and Chief Executive Officer), Ms. Kwong Man Yui (Vice Chairlady) and Mr. Lam On Fai; and the independent non-executive Directors are Mr. Lai Ming Fai Desmond, Dr. Cheng Lee Lung and Mr. Kwok Yiu Chung.

This announcement, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this announcement is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this announcement misleading.

This announcement will remain on the “Listed Company Information” page of the website of the Stock Exchange (www.hkexnews.hk) for at least seven days from the date of its publication. This announcement will also be published on the website of the Company (www.mrsteak.com.hk).

In the case of inconsistency, the English text of this announcement shall prevail over the Chinese text.

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