AUX International : DISCLOSEABLE TRANSACTION IN RELATION TO THE TENANCY AGREEMENT OF ZENTRAL

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: 2080)

DISCLOSEABLE TRANSACTION

IN RELATION TO THE TENANCY AGREEMENT OF ZENTRAL

THE TENANCY AGREEMENT

On 12 September 2019, Top Smarties as landlord and Ocean Ample as tenant entered into the Tenancy Agreement in respect of the Premises for the purpose of renewal of the tenancy of the Premises, where Zentral operates.

IMPLICATIONS UNDER THE LISTING RULES

In accordance with HKFRS 16 "Leases", the Company will recognise an asset representing its rights to use the Premises as the lessee under the Tenancy Agreement. Accordingly, the entering into of the Tenancy Agreement will be regarded as an acquisition of asset by the Company under Chapter 14 of the Listing Rules.

As one or more of the applicable percentage ratios (as defined in Chapter 14 of the Listing Rules) calculated based on the value of the right-of-use asset recognised by the Company according to HKFRS 16 exceeds 5% but all such ratios fall below 25%, the transaction contemplated under the Tenancy Agreement constitutes a discloseable transaction of the Company and is subject to the notification and announcement requirements under Chapter 14 of the Listing Rules.

INTRODUCTION

The Board announces that on 12 September 2019, Top Smarties as landlord and Ocean Ample as tenant entered into the Tenancy Agreement in respect of the Premises for the purpose of renewal of the tenancy of the Premises, where Zentral operates.

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THE TENANCY AGREEMENT

Set forth below are the principal terms of the Tenancy Agreement:

Date:	12 September 2019
Landlord:	Top Smarties Limited
Tenant:	Ocean Ample Investment Limited (洋溢投資有限公司), an
	indirect wholly-owned subsidiary of the Company
The Premises:	The whole of the 4th Floor and the 5th Floor together with
	the Flat Roof on the 4th Floor of California Tower
Term:	Fourteen months commencing on 1st November 2019 and
	expiring on 31st December 2020 (both days inclusive)
	Ocean Ample has an option to take a tenancy of the Premises
	for a further term of fourteen months on the same terms and
	conditions as contained in the Tenancy Agreement but at a
	new rent as agreed between the Landlord and Ocean Ample
	or as otherwise determined in accordance with the provisions
	in the Tenancy Agreement. In this connection, Ocean Ample
	shall upon the request of the Landlord execute a new tenancy
	agreement for setting out the new rent and all other terms and
	conditions of the tenancy of the Premises for the renewed term.
Consideration payable:	The aggregate amount of rent payable by Ocean Ample under
	the Tenancy Agreement is HK$14,400,000, which will be
	met with the internal resources of the Group. Ocean Ample
	shall pay the monthly rent in advance on the first day of
	each calendar month. In addition, Ocean Ample is required
	to pay service charges for the provision by the Landlord of
	the air-conditioning to the Premises during normal hours
	and the maintenance and management of the Premises and
	the building, additional air-conditioning charges, charges for
	water, charges for electricity and gas, and rates.
User:	The Premises shall only be used for the purpose of operating
	a music restaurant, bar, lounge and dancing club by Ocean
	Ample.

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INFORMATION OF THE PARTIES

The Group and Ocean Ample

The Group is principally engaged in the operation of clubbing business in Hong Kong and property management services in the PRC.

Ocean Ample is an indirect wholly-owned subsidiary of the Company principally engaged in the provision of administrative services in Hong Kong.

Landlord

The Landlord is principally engaged in property development and investment.

To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, the Landlord and its ultimate beneficial owner are third parties independent of the Company and its connected persons.

REASONS FOR AND BENEFITS OF THE TENANCY AGREEMENT

Zentral, a club run by the Group, currently operates on the Premises. The Premises is held by the Group on lease and the existing tenancy agreement in respect of the Premises is due to expire in 31 October 2019. The Group aims to maintain its status as a leading entertainment service and venue provider in Hong Kong. The renewal of the tenancy of the Premises by way of the entering into of the Tenancy Agreement will allow the Group to provide services of high quality to the target customers through Zentral on an uninterrupted basis and continue developing its relationships with event organisers.

The terms of the Tenancy Agreement, including the rent payable by Ocean Ample thereunder, were determined after arm's length negotiations between the Landlord and Ocean Ample, taking into consideration the prevailing market price for comparable premises in the vicinity of the Premises. The conclusion of the Tenancy Agreement is necessary for securing the continued operation of the clubbing business segment of the Group. As such, the Board considers that the terms of the Tenancy Agreement are fair and reasonable and in the interests of the Group and the Shareholders as a whole.

IMPLICATIONS UNDER THE LISTING RULES

In accordance with HKFRS 16 "Leases" as adopted by the Company, the Company will recognise an asset representing its rights to use the Premises as the lessee under the Tenancy Agreement. Accordingly, the entering into of the Tenancy Agreement will be regarded as an acquisition of asset by the Company under Chapter 14 of the Listing Rules. The value of the right-of-use asset recognised by the Company amounts to approximately HK$13,906,000. The discount rate of 6.5% per annum, which is equivalent to the Company's incremental borrowing rate during the term of the Tenancy Agreement, has been applied in computing the present value of the lease payments under the Tenancy Agreement.

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As one or more of the applicable percentage ratios (as defined in Chapter 14 of the Listing Rules) calculated based on the value of the right-of-use asset recognised by the Company according to HKFRS 16 exceeds 5% but all such ratios fall below 25%, the transaction contemplated under the Tenancy Agreement constitutes a discloseable transaction of the Company and is subject to the notification and announcement requirements under Chapter 14 of the Listing Rules.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms shall have the following meanings:

"Board"	the board of Directors
"Company"	AUX International Holdings Limited (奧克斯國際控股有限公
	司), a company incorporated under the laws of the Cayman
	Islands with limited liability and the issued Shares of which
	are listed on the Main Board of the Stock Exchange
"connected person(s)"	has the meaning ascribed to it under the Listing Rules
"Director(s)"	the director(s) of the Company
"Group"	collectively, the Company and its subsidiaries for the time
	being
"HK$"	Hong Kong Dollars, the lawful currency of Hong Kong
"Hong Kong"	Hong Kong Special Administrative Region of the People's
	Republic of China
"Landlord" or "Top	Top Smarties Limited, a company limited by shares incorporated
Smarties"	in Hong Kong
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
	Exchange
"Ocean Ample"	Ocean Ample Investment Limited (洋溢投資有限公司), a
	company limited by shares incorporated in Hong Kong and
	an indirect wholly-owned subsidiary of the Company
"PRC"	the People's Republic of China, which, for the purpose of this
	announcement, shall exclude Hong Kong, the Macao Special
	Administrative Region of the People's Republic of China and
	Taiwan

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"Premises"	the premises as more particularly set out in the section
	headed "The Tenancy agreement - The Premises" in this
	announcement
"Share(s)"	the ordinary share(s) of HK$0.01 each in the capital of the
	Company
"Shareholder(s)"	the holder(s) of the Shares
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Tenancy Agreement"	the tenancy agreement dated 29 August 2019 in respect of the
	Premises entered into between Top Smarties as landlord and
	Ocean Ample as tenant
"%"	per cent.
	By order of the Board
	AUX International Holdings Limited
	Zhang Jingguo
	Chairman

Hong Kong, 12 September 2019

As at the date of this announcement, the executive Directors are Mr. Zhang Jingguo, Mr. Zheng Jiang, Mr. Chan Hon Ki and Ms. Shen Guoying, and the independent non-executive Directors are Mr. Poon Chiu Kwok, Mr. Bau Siu Fung and Ms. Lou Aidong.

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