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 Hong Kong with limited liability) Stock Code: 00511 CONTINUING CONNECTED TRANSACTIONS TENANCY AGREEMENTS AND AGREEMENTS FOR PROVISION OF FACILITIES SERVICES On 24 February 2016, a series of continuing connected transactions has been entered into between and the Company, and between and, in the form of tenancy agreements and agreements for provision of Facilities Services. These Agreements renewed the leases under a previous set of agreements entered into in 2013 for a further period of three years. As is an associate of a Director of the Company, the entering into the Agreements constitutes continuing connected transactions for the Company under the Listing Rules. These transactions are subject to the annual review, and reporting and announcement requirements, but are exempt from independent shareholders approval requirement under Chapter 14A of the Listing Rules. Reference is made to the Company s announcement dated 21 February 2013 in connection with a series of continuing connected transactions between and the Company, and between and in the form of tenancy agreements and agreements for provision of Facilities Services. The Board of the Company wishes to announce that this series of continuing connected transactions has been renewed for a further period of three years, ending on 31 January 2019, under the following key terms as stipulated in the Agreements:- 1
TENANCY AGREEMENTS ALL DATED 24 FEBRUARY 2016 ( Tenancy Agreements ) Tenancy 1 Landlord: Tenant: Property : Term: Rent: the Company Office at Ground Floor, Administration Building, Moviecity, with a total gross floor area of approximately 14,150 square feet ( Property 1 ) HK$212,250 per month (equivalent to HK$15.00 per square foot per month) for the first and the second years, i.e., from 1 February 2016 to 31 January 2018; HK$222,863 per month (equivalent to HK$15.75 per square foot per month) for the third year, i.e., from 1 February 2018 to 31 January 2019; (exclusive of management fee, government rent and rates and other outgoings, payable on the first day of each and every calendar month in advance) Management Fee: Rates: Government Rent: HK$82,070 per month (equivalent to HK$5.80 per square foot per month) HK$10,613 per month (estimated) HK$6,368 per month (estimated) 2
Tenancy 2 Landlord: Tenant: Property: Term: Rent: Office at Level 4, Production Building, Moviecity, with a total gross floor area of approximately 18,000 square feet ( Property 2 ) HK$252,000 per month (equivalent to HK$14.00 per square foot per month) for the first and the second years, i.e., from 1 February 2016 to 31 January 2018; HK$264,600 per month (equivalent to HK$14.70 per square foot per month) for the third year, i.e., from 1 February 2018 to 31 January 2019; (exclusive of management fee, government rent and rates and other outgoings, payable on the first day of each and every calendar month in advance) Management Fee: Rates: Government Rent: HK$104,400 per month (equivalent to HK$5.80 per square foot per month) HK$12,600 per month (estimated) HK$7,560 per month (estimated) 3
Tenancy 3 Landlord: Tenant: Property: Term: Rent: Part of Level 5, Production Building, Moviecity, with a total gross floor area of approximately 10,200 square feet ( Property 3 ) HK$142,800 per month (equivalent to HK$14.00 per square foot per month) for the first and the second years, i.e., from 1 February 2016 to 31 January 2018; HK$149,940 per month (equivalent to HK$14.70 per square foot per month) for the third year, i.e., from 1 February 2018 to 31 January 2019; (exclusive of management fee, government rent and rates and other outgoings, payable on the first day of each and every calendar month in advance.) Management Fee: Rates: Government Rent: HK$59,160 per month (equivalent to HK$5.80 per square foot per month) HK$7,140 per month (estimated) HK$4,284 per month (estimated) 4
COLOCATION AGREEMENT DATED 24 FEBRUARY 2016 ( Colocation Services Agreement ) Service Provider: Customer: Colocation Service: Service Period: Service Fee: For a total of 35 racks for storage of server equipment at Moviecity, with an option of to reduce the number of racks to a minimum of 28 racks or increase the number of racks to a maximum of 45 racks HK$420,000 per month, payable monthly on the first day of each month (equivalent to HK$12,000 per month per rack) INTERNET PROTOCOL TELEPHONE LICENCE DATED 24 FEBRUARY 2016 ( IP Telephone Licence ) Licensor: Licensee: Telephone Services: Licence Period: Licence Fee: Provision of an Internet protocol telephony communication system installed by the licensor at offices at Level 4 and part of Level 5, Production Building of Moviecity, occupied by the licensee as tenant HK$33,227 per month, inclusive of all service fees and maintenance costs. A total licence fee of HK$1,196,172 for the whole Licence Period is payable in advance on signing of agreement. 5
PARKING LICENCES DATED 24 FEBRUARY 2016 ( Parking Licences ) Parking Licence 1 Licensor: Licensee: Car Parking Space: Licence Period: Licence Fee: the Company Five designated car parking spaces at Moviecity HK$7,500 per month for the first and the second years, i.e., from 1 February 2016 to 31 January 2018 HK$7,875 per month for the third year, i.e., from 1 February 2018 to 31 January 2019 (inclusive of management fee, government rent and rates, payable monthly on the 1st day of each month) Parking Licence 2 Licensor: Licensee: Car Parking Spaces: Licence Period: Licence Fee: Ten designated car parking spaces at Moviecity HK$15,000 per month for the first and the second years, i.e., from 1 February 2016 to 31 January 2018 HK$15,750 per month for the third year, i.e., from 1 February 2018 to 31 January 2019 (inclusive of management fee, government rent and rates, payable monthly on the 1st day of each month) 6
THE ANNUAL AGGREGATE TRANSACTION AMOUNTS PAYABLE FOR THE AGREEMENTS Based on the terms of the Agreements and assuming that the options are exercised to take up the maximum number of racks under the Colocation Services Agreement, the annual aggregate transaction amount payable by the Company and to under the Agreements, for each of the financial years ending 31 December 2016, 2017, 2018 and 2019 would be as follows:- Annual aggregate transaction amount Year ending HK$ 31 December 2016 (from 1 February to 31 December 2016) 17,931,000 31 December 2017 19,623,000 31 December 2018 20,092,000 31 December 2019 (from 1 January to 31 January 2019) 1,613,000 REASON FOR THE TRANSACTIONS The Company has decided to renew the existing leases of office space and service agreements for supporting services at Moviecity for a further period of three years, as Moviecity remains a convenient location, within close proximity to TVB City in Tseung Kwan O Industrial Estate, for the Company s electronic archive for television programmes and for the digital new media business under www.tvb.com. The terms of the respective Agreements had been negotiated on an arm s length basis between the Company and, and between and, and are on normal commercial terms. The rent payable for Property 1, 2, and 3, and the fees payable for the Facilities Services, have been arrived at by reference to the prevailing market data and conditions relating to similar premises in the nearby districts. The Board (including the Independent Non-executive Directors) is of the view that the Agreements are entered into in the ordinary and usual course of the respective businesses of the Company and, on normal commercial terms which are fair and reasonable and in the interest of the Company and its shareholders as a whole. INFORMATION RELATING TO THE COMPANY, AND SHAW The Company is principally engaged in television broadcasting, programme productions and other broadcasting related activities. is an indirect wholly-owned subsidiary of the Company and is principally engaged in Internet web portal business. 7
is a private company and is principally engaged in the operation of film studio and ancillary facilities in Hong Kong. It is controlled by Ms. Mona Fong, a Nonexecutive Director of the Company. CONNECTION BETWEEN THE PARTIES is an indirect wholly-owned subsidiary of Holdings Inc. Ms. Mona Fong, a Non-executive Director of the Company, exerts 100% control over Holdings Inc. through The Sir Run Run Charitable Trust. Therefore, is an associate of a Director of the Company and is, in turn, a connected person. The entering into the Agreements constitutes continuing connected transactions for the Company under the Listing Rules. Ms. Fong has abstained from voting on the Board resolutions in relation to the relevant transactions. Given that the aggregate transaction amount payable by the Company and to under the Agreements, on an annual basis, would be less than 5% of each of the applicable percentage ratios (as defined in Chapter 14 of the Listing Rules) and fall within the threshold prescribed in Chapter 14A of the Listing Rules, the entering into the Agreements is subject to the annual review, and reporting and announcement requirements, but is exempt from independent shareholders approval requirement under Chapter 14A of the Listing Rules. Details of the Agreements will be included in the annual reports of the Company for the relevant financial years in accordance with the Listing Rules. TERMS USED IN THIS ANNOUNCEMENT Unless the context otherwise requires, capitalised terms used in this announcement shall have the following meanings: Agreements Board Company Facilities Services the Tenancy Agreements, Colocation Services Agreement, IP Telephone Licence and Parking Licences, as more particularly described above the board of directors of the Company Television Broadcasts Limited, a company incorporated in Hong Kong, the shares of which are listed on the main board of The Stock Exchange of Hong Kong Limited (stock code: 00511) The provision of colocation services for storage of server equipment, the provision of internet protocol telephone communication services and the provision of car parking spaces 8
Listing Rules Moviecity the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited Movie City Hong Kong Limited, a company incorporated in Hong Kong a property located at 201 Wan Po Road, Tseung Kwan O, Kowloon, Hong Kong, which is wholly-owned by Limited, a company incorporated in Hong Kong and an indirect wholly-owned subsidiary of the Company By Order of the Board Adrian MAK Yau Kee Company Secretary Hong Kong, 24 February 2016 As at the date of this announcement, the Board of the Company comprises: Chairman and Non-executive Director Dr. Charles CHAN Kwok Keung Executive Directors Mark LEE Po On Group Chief Executive Officer CHEONG Shin Keong General Manager Non-executive Directors Mona FONG Jonathan Milton NELSON Anthony LEE Hsien Pin CHEN Wen Chi Thomas HUI To Independent Non-executive Directors Dr. Raymond OR Ching Fai SBS, JP Dr. William LO Wing Yan JP Professor Caroline WANG Chia-Ling Dr. Allan ZEMAN GBM, GBS, JP Alternate Directors Harvey CHANG Hsiao Wei Alternate Director to CHEN Wen Chi Jessica Huang POULEUR Alternate Director to Jonathan Milton NELSON 9