LISTING RULES IMPLICATION Pursuant to HKFRS 16 “Leases”, effective from 1 January 2019, the lease payments payable by the Group under the Supplemental Shanghai Tenancy Agreement and the Beijing Tenancy Agreements are recognised as right-of-use assets acquired by the Group in its consolidated statement of financial position. Accordingly, the transactions contemplated under the Supplemental Shanghai Tenancy Agreement and the extension of the Beijing Tenancy Agreements are regarded as acquisitions of assets under the definition of “transaction” as set out in Rule 14.04(1)(a) of the Listing Rules. As one of the applicable percentage ratios calculated based on the value of the right-of-use asset recognised by the Group under the Supplemental Shanghai Tenancy Agreement is more than 5% and all of them are less than 25%, the transactions contemplated under the Supplemental Shanghai Tenancy Agreement constitute discloseable transactions of the Company and are subject to the notification and announcement requirements under Chapter 14 of the Listing Rules. As one of the applicable percentage ratios calculated based on the values of the right-of-use assets recognised by the Group under the extension of the Beijing Tenancy Agreements is more than 5% and all of them are less than 25%, the transactions contemplated under the extension of the Beijing Tenancy Agreements constitute discloseable transactions of the Company and are subject to the notification and announcement requirements under Chapter 14 of the Listing Rules. Due to inadvertent oversight, the Company had not complied with the disclosure requirements by way of publishing an announcement under Rule 14.34(2) of the Listing Rules in respect of the Supplemental Shanghai Tenancy Agreement and the Beijing Tenancy Agreements at the material time. Going forward, the Company will closely monitor the effectiveness and efficiency of its compliance system and the relevant corporate governance measures so as to prevent the future occurrence of any similar incidents. Further remedial actions are detailed in the section headed “Remedial Actions” of this announcement.