MS Concept Limited

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.

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8447)

MAJOR TRANSACTION IN RELATION TO RENEWAL OF LEASE AGREEMENT FOR AN EXISTING PREMISES

THE NEW TENANCY AGREEMENT

The Board announces that the Group has renewed the lease agreement of the Premises and the New Tenancy Agreement dated 18 June 2020 (but signed and returned by MCGL in late July 2020) was entered into between Lord Restaurant (a wholly-owned subsidiary of the Company) as tenant, and MCGL (an Independent Third Party) as landlord, for renewal of the lease agreement in respect of the Premises for a term of three years commencing from 1 December 2020 to 30 November 2023 (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 New Tenancy Agreement based on the value of the rightof-use asset recognised by the Group is more than 25% but below 100%, the New Tenancy Agreement constitutes a major transaction of the Company, and is therefore subject to the reporting, announcement and Shareholders’ approval requirements pursuant to Chapter 19 of the GEM Listing Rules.

Under Rule 19.44 of the GEM Listing Rules, Shareholders’ approval for a major transaction may be obtained by way of written Shareholders’ approval in lieu of holding a general meeting if (a) no Shareholder is required to abstain from voting if the Company were to convene a general meeting for the approval of the transaction; and (b) the written Shareholders’ approval has been obtained from a Shareholder or a closely allied group of Shareholders who together hold more than 50% of the voting rights at that general meeting to approve the transaction.

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The Directors confirm that, to the best of their knowledge, information and belief after having made all reasonable enquiries, the landlord is an Independent Third Party and therefore no Shareholder is required to abstain from voting if the Company were to convene a general meeting for the approval of the New Tenancy Agreement. Future More, being a Controlling Shareholder, is beneficially interested in 750,000,000 Shares, representing 75% of the total number of issued Shares of the Company as at the date of this announcement, has given written approval to the Company to approve the New Tenancy Agreement in lieu of a general meeting pursuant to Rule 19.44 of the GEM Listing Rules. Therefore, no general meeting of the Company for the approval of the New Tenancy Agreement will be held. Future More has also confirmed that neither it nor any of its associates have any material interest in the New Tenancy Agreement.

A circular containing, among other things, details of the New Tenancy Agreement will be despatched to the Shareholders in accordance with the GEM Listing Rules and the articles of association of the Company in due course. The Company currently expects to despatch the circular on or before 8 September 2020.

BACKGROUND

THE NEW TENANCY AGREEMENT

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

Date : 18 June 2020 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 2020 to 30 November 2023 (both days inclusive)

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Total rental payable : The aggregate rental payable under the New Tenancy Agreement is approximately HK$28.0 million (inclusive of promotion levy, air-conditioning 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 New Tenancy Agreement, which will be satisfied by internal resources of the Group.
The rent is determined after arm’s length negotiations between MCGL 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

Currently, the Group operates the Restaurant under a licence agreement entered into between Lord Restaurant and MCGL for the period from 1 May 2020 to 30 November 2020 (both days inclusive) where a variable turnover rent is charged. This turnover rent can only be reliably estimated according to the turnover earned under the operation of the Restaurant and constitutes variable lease payments which were not included in the measurement of the lease liability at initial recognition. Therefore, no right-of-use asset is recognized and the turnover rent will be charged to the profit or loss of the Group in accordance with HKFRS 16 Leases.

The value of the right-of-use asset recognised by the Company under the New Tenancy Agreement amounted to approximately HK$19.4 million, which is calculated with reference to the present value of the aggregated lease payments to be made under the New Tenancy Agreement in accordance with HKFRS 16 Leases.

REASON FOR AND THE BENEFITS OF ENTERING THE NEW TENANCY AGREEMENT

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

The Group leased the Premises under the lease agreement for the operation of its Restaurant under the brand ‘‘Mr. Steak — Buffet à la minute’’, which expired on 30 April 2020. In evaluating the renewal of the lease agreement, the Directors consider that (i) the Restaurant has been operated in the Premises for approximately six 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 New Tenancy Agreement was entered into in the ordinary and usual course of business of the Group, and the New Tenancy Agreement was entered into on normal commercial terms after arm’s length negotiations between the parties, and the terms of the transactions contemplated under the New Tenancy Agreement were fair and reasonable and in the interests of the Company and the Shareholders as a whole.

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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 on 26 March 2020 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 on 28 February 2014. To the best knowledge, information and belief of the Directors, the principal activities of MCGL include property investment and handling the leasing of the premises of the World Trade Centre in Causeway Bay, Hong Kong.

To the best knowledge, information and belief of the Directors having made all reasonable enquiries, MCGL and its ultimate beneficial owners are Independent Third Parties.

LISTING RULES IMPLICATION

As one or more than one of the applicable percentage ratios (as defined in the GEM Listing Rules) in respect of the New Tenancy Agreement based on the value of the right-of-use asset recognised by the Group is more than 25% but below 100%, the New Tenancy Agreement constitutes a major transaction of the Company, and is therefore subject to the reporting, announcement and Shareholders’ approval requirements pursuant to Chapter 19 of the GEM Listing Rules.

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general meeting of the Company for the approval of the New Tenancy Agreement will be held. Future More has also confirmed that neither it nor any of its associates have any material interest in the New Tenancy Agreement.

DEFINITIONS

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

‘‘Board’’ the Board of Directors of the Company ‘‘Controlling Shareholder(s)’’ has the meaning ascribed to it under the GEM Listing Rules and unless the context requires otherwise, refers to Mr. John Kwong, Ms. Ingrid Ip, Ms. Kwong, Mr. Joseph Kwong, Ms. Melanie Kwong and Future More ‘‘Director(s)’’ director(s) of the Company ‘‘Future More’’ Future More Company Limited, a company incorporated with limited liability in the British Virgin Islands on 7 November 2017 and owned as to 14%, 18%, 18%, 25% and 25% by Mr. John Kwong, Ms. Ingrid Ip, Ms. Kwong, Mr. Joseph Kwong and Ms. Melanie Kwong and being a Controlling Shareholder ‘‘GEM’’ GEM of the Stock Exchange ‘‘GEM Listing Rules’’ Rules Governing the Listing of Securities on GEM, as amended, modified, and supplemented from time to time ‘‘Group’’ the Company and its subsidiaries ‘‘HKFRS(s)’’ Hong Kong Financial Reporting Standard(s) issued by the Hong Kong Institute of Certified Public Accountants ‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the People’s Republic of China ‘‘Independent Third any person(s) or company(ies) and their respective ultimate Party(ies)’’ beneficial owner(s), to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, is/are not connected persons of the Company and is/are third party(ies) independent of the Company and its connected person(s) in accordance with the GEM Listing Rules

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‘‘Lord Restaurant’’
Lord Restaurant Limited, a company incorporated in Hong Kong with limited liability on 26 March 2020 and a whollyowned subsidiary of the Company
‘‘MCGL’’
Market Century Global Limited, a company which was incorporated in the British Virgin Islands with limited liability on 28 February 2014
‘‘Mr. John Kwong’’
Mr. Kwong Tai Wah, being the chairman of the Board, the chief executive officer of the Company, one of the executive Directors, one of the Controlling Shareholders, the spouse of Ms. Ingrid Ip, the father of Ms. Kwong, and the brother of Mr. Joseph Kwong and Ms. Melanie Kwong
‘‘Mr. Joseph Kwong’’
Mr. Kwong Tai Wing Joseph, being one of the Controlling Shareholders, the brother of Mr. John Kwong and Ms. Melanie Kwong, the uncle of Ms. Kwong, and the brotherin-law of Ms. Ingrid Ip
‘‘Ms. Ingrid Ip’’
Ms. Ip Yin King Ingrid, being one of the Controlling Shareholders, the spouse of Mr. John Kwong, the mother of Ms. Kwong, and the sister-in-law of Mr. Joseph Kwong and Ms. Melanie Kwong
‘‘Ms. Kwong’’
Ms. Kwong Man Yui, being the vice-chairlady of the Board, one of the executive Directors, one of the Controlling Shareholders, the daughter of Mr. John Kwong and Ms. Ingrid Ip, and the niece of Mr. Joseph Kwong and Ms. Melanie Kwong
‘‘Ms. Melanie Kwong’’
Ms. Kwong Ching Yee Melanie, being one of the Controlling Shareholders, the sister of Mr. John Kwong and Mr. Joseph Kwong, the aunt of Ms. Kwong, and the sisterin-law of Ms. Ingrid Ip
‘‘New Tenancy Agreement’’ the new tenancy agreement dated 18 June 2020 (but signed and returned by MCGL in late July 2020) and entered into between Lord Restaurant and MCGL for the renewal of the lease agreement in respect of the Premises
‘‘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’’
‘‘Share(s)’’
ordinary share(s) with a nominal value of HK$0.01 each in the share capital of the Company

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‘‘Shareholder(s)’’ holder(s) of the Share(s)

‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited ‘‘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

Hong Kong, 18 August 2020

As at the date of this announcement, the Directors of the Company are:

Executive Directors:

Mr. Kwong Tai Wah (Chairman and Chief Executive Officer)

Ms. Kwong Man Yui (Vice Chairlady)

Mr. Lam On Fai

Independent Non-executive Directors:

Mr. Lai Ming Fai Desmond Dr. Cheng Lee Lung 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 ‘‘Latest Listed Company Information’’ page of the GEM website (www.hkgem.com) 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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AI assistant

MS Concept Limited Capital/Financing Update 2020

51451_rns_2020-08-18_62227659-b68b-45ec-ba90-ccb77cdf0467.pdf