Telecom Service One : Continuing Connected Transactions - Tenancy Agreements

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Hong Kong Exchanges and Clearing Limited and the Stock Exchange 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.

Telecom Service One Holdings Limited

電訊首科控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8145)

CONTINUING CONNECTED TRANSACTIONS - TENANCY AGREEMENTS

On 31 December 2015, TDSL as sub-lessor entered into the Sub-tenancy Agreement with TSO (a wholly-owned subsidiary of the Company) as sub-lessee in relation to the sub-tenancy of the Property.

TDSL is a wholly-owned subsidiary of TDHL. TDHL is indirectly 55%-owned by the Cheung Family Trust which indirectly holds 55% of the shares of the Company in issue. As such, TDSL is a connected person of the Company under the GEM Listing Rules. Accordingly, the Sub-tenancy Agreement constitutes continuing connected transaction for the Company.

Pursuant to Rule 20.79 of the GEM Listing Rules, the transaction contemplated under the Sub-tenancy Agreement is required to be aggregated with the transactions under the Existing Tenancy Agreements (which are also continuing connected transactions of the Company). As all applicable percentage ratios in respect of the total annual rentals under the Sub-tenancy Agreement and the Existing Tenancy Agreements are less than 25% and such total annual rentals are less than HK$10,000,000, such tenancy agreements are exempt from the circular (including independent financial advice) and shareholders' approval requirements, but are subject to requirements regarding announcement, annual reporting and annual review under Chapter 20 of the GEM Listing Rules.

The Board announces that on 31 December 2015, TDSL as sub-lessor entered into the Sub-tenancy Agreement with TSO (a wholly-owned subsidiary of the Company) as sub-lessee in relation to the sub-tenancy of the Property.

SUB-TENANCY AGREEMENT DATED 31 DECEMBER 2015

The principal terms of the Sub-tenancy Agreement are set out below. Sub-lessor : TDSL

Sub-lessee : TSO

Property : Portion of shop on G/F, Dah Sing Life Building,

Nos.99-105 Des Voeux Road Central, Central, Hong Kong

Usage : repair centre Gross floor area: 769 sq. ft.

Term : from 1 January 2016 to 31 December 2016 (both dates inclusive)

Rent : HK$41,800 per month (inclusive of government rates and management fee)

AGGREGATE ANNUAL CAPS OF SUB-TENANCY AGREEMENT AND EXISTING TENANCY AGREEMENTS

The aggregate annual caps for the Sub-tenancy Agreement and the Existing Tenancy Agreements based on the total annual rentals payable thereunder during their respective terms of tenancy or sub-tenancy for each of the years ending 31 March 2016 and 2017 will be as follows:

For the year ending 31 March
2016 HK$'000	2017 HK$'000
Sub-tenancy Agreement	125	376
First Existing Tenancy Agreement	866	866
Second Existing Tenancy Agreement	462	462
Third Existing Tenancy Agreement	1,318	1,318
Fourth Existing Tenancy Agreement	222	222
Fifth Existing Tenancy Agreement	452	462
Sixth Existing Tenancy Agreement	609	254
Seventh Existing Tenancy Agreement	154	51
Eighth Existing Tenancy Agreement	352	352
Ninth Existing Tenancy Agreement	466	466
Tenth Existing Tenancy Agreement	1,987	1,987
Eleventh Existing Tenancy Agreement	110	22
Twelfth Existing Tenancy Agreement	115	158
7,238	6,996

Further details of the Existing Tenancy Agreements are as follows:

Address	Landlord	Date of tenancy agreement	Term	Monthly rent	Usage and area
First Existing Tenancy Agreement
Unit 1807, 18/F., Riley House, No.88 Lei Muk Road, Kwai Chung, New Territories, Hong Kong	ORL	31 March 2015	from 1 April 2015 to 31 March 2017	HK$72,200 per month (exclusive of government rates, government rent and building management fee)	head office, repair centre and warehouse saleable area: 5,511 sq. ft.
Second Existing Tenancy Agreement
Unit B, 23/F., Kyoto Plaza, No.491-499 Lockhart Road, Causeway Bay, Hong Kong	ORL	30 June 2014	from 1 July 2014 to 31 March 2017	HK$38,520 per month (exclusive of management fee, air-conditioning charges, government rates and government rent)	repair centre saleable area: 1,284 sq. ft.
Third Existing Tenancy Agreement
Unit 1805 & Portion B of Unit 1806, 18/F., Riley House, No.88 Lei Muk Road, Kwai Chung, New Territories, Hong Kong	GIL	31 March 2015	from 1 April 2015 to 31 March 2017	HK$109,840 per month (exclusive of government rates, government rent and management fee)	head office, repair centre and warehouse saleable area: 8,380 sq. ft.
Fourth Existing Tenancy Agreement
Portion of Unit A, 23/F., Kyoto Plaza, Nos.491-499 Lockhart Road, Causeway Bay, Hong Kong	GEL	30 June 2014	from 1 July 2014 to 31 March 2017	HK$18,480 per month (exclusive of management fee, air-conditioning charges, government rates and government rent)	repair centre saleable area: 616 sq. ft.
Fifth Existing Tenancy Agreement
Unit B, 15/F., Kyota Plaza, Nos.491-499 Lockhart Road, Causeway Bay, Hong Kong	ORL	31 March 2015	from 1 August 2015 to 31 March 2017	HK$38,520 per month (exclusive of government rates, government rent and management fee)	repair centre saleable area: 1,284 sq. ft.
Sixth Existing Tenancy Agreement
Unit 1808, 18/F., Riley House, No.88 Lei Muk Road, Kwai Chung, New Territories, Hong Kong	GIL	31 July 2014	from 1 September 2014 to 31 August 2016	HK$50,760 per month (exclusive of government rates, government rent and building management fee)	head office, repair centre and warehouse saleable area: 3,875 sq. ft.

Address	Landlord	Date of tenancy agreement	Term	Monthly rent	Usage and area
Seventh Existing Tenancy Agreement
Rua de Pequim, n°s 170-174, Edificio Centro Commercial Kong Fat, 16° andar portion of D1 and E1, em Macau	HKMag	31 July 2014	from 1 August 2014 to 31 July 2016	HK$12,810 per month (exclusive of building management fee)	repair centre saleable area: 915 sq. ft.
Eighth Existing Tenancy Agreement
Unit 1005, 10/F., Ginza Plaza, No.2A Sai Yeung Choi Street South, Mongkok, Kowloon, Hong Kong	GEL	31 March 2015	from 1 April 2015 to 31 March 2017	HK$29,336 per month (exclusive of government rates, government rent and building management fee)	repair centre saleable area: 772 sq. ft.
Ninth Existing Tenancy Agreement
Unit 1006, 10/F., Ginza Plaza, No.2A Sai Yeung Choi Street South, Mongkok, Kowloon, Hong Kong	GIL	31 March 2015	from 1 April 2015 to 31 March 2017	HK$38,798 per month (exclusive of government rates, government rent and building management fee)	repair centre saleable area: 1,021 sq. ft.
Tenth Existing Tenancy Agreement
12/F., Ginza Plaza, No.2A Sai Yeung Choi Street South, Mongkok, Kowloon, Hong Kong	ORL	31 March 2015	from 1 April 2015 to 31 March 2017	HK$165,566 per month (exclusive of building management fee and air-conditioning charges but inclusive of government rates and government rent)	repair centre saleable area: 4,357 sq. ft.
Eleventh Existing Tenancy Agreement
Rotunda De S. Joao Bosco, No.63 Andar, J29 EDIF. Hoi Fu Garden, Macau	Mr. Cheung King Shek	29 May 2015	from 1 June 2015 to 31 May 2016	HK$11,000 per month (exclusive of building management fee but inclusive of government rent)	staff quarter saleable area: 850 sq. ft.

Twelfth Existing Tenancy Agreement
Unit 1802 and Portion of Unit 1803, Shen Rong Building, No.1045 Fuqiang Road, Futian District, Shenzhen City, PRC	Marina	10 July 2015	from 10 July 2015 to 31 March 2017	HK$13,152 per month	repair centre saleable area: 1,475 sq. ft.