Hongkong and Shanghai Hotels : 28 Mar 2022 - Renewal of Tenancy Agreement

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THE HONGKONG AND SHANGHAI HOTELS, LIMITED

(Incorporated in Hong Kong with limited liability)

(Stock Code: 00045)

Connected Transaction Renewal of Tenancy Agreement

The Board announces that on 28 March 2022, HMS, an indirect wholly owned subsidiary of the Company, entered into a New Tenancy Agreement with Kadoorie Estates to renew the existing lease of Office Premises.

Kadoorie Estates acts as the agent of Cobalt (the registered owner of the Office Premises) to manage the Office Premises. Cobalt is a trustee of a unit trust, the units of which are ultimately held by discretionary trusts of which members of the Kadoorie family are discretionary objects. Kadoorie Estates is wholly owned by Harneys Trustees which is a substantial shareholder of the Company by virtue of the SFO. As such, Kadoorie Estates is a connected person of the Company under the Listing Rules. Accordingly, the entering into the New Tenancy Agreement constitutes a connected transaction of the Company under rule 14A of the Listing Rules.

In accordance with HKFRS 16 "Leases", the Group is required to recognise the value of the right-of-use asset in connection with the New Tenancy Agreement and this transaction will be regarded as an acquisition of an asset by the Group pursuant to the Listing Rules. The estimated value of the right-of-use asset to be recognised by the Group under the New Tenancy Agreement is approximately HK$41 million. Shareholders should note that the above figure is unaudited and may be subject to adjustment in the future.

New Tenancy Agreement

Reasons for entering into the New Tenancy Agreement

The Company has been leasing the Office Premises from Kadoorie Estates as office space and the existing lease will expire on 31 March 2022. The Company considers it beneficial to enter into new lease of the Office Premises as the office space of the Company in view of the prime location of the Office Premises and the saving of relocation costs.

The monthly rent of the New Tenancy Agreement was determined after arm's length negotiations between parties with reference to the recent and past rent chargeable by Kadoorie Estates in the same building and prevailing market rates for comparable office buildings in Central.

The Board, including the independent non-executive directors, considers that the entering into the New Tenancy Agreement is in the ordinary and usual course of business of the Group and that the New Tenancy Agreement are on normal commercial terms with reference to the prevailing market conditions and on arm's length basis, and the terms of the New Tenancy Agreement are fair and reasonable and in the interests of the Shareholders as a whole. The Hon. Sir Michael Kadoorie, Messrs. William Mocatta, John Leigh and Nicholas Colfer, being directors of Kadoorie Estates, are considered to have an interest or potential conflict of interest in the New Tenancy Agreement by virtue of their direct or indirect interests or directorship in Kadoorie Estates, have abstained from voting on the Board resolution of the Company to approve the New Tenancy Agreement.

Compliance with Listing Rules

Kadoorie Estates acts as the agent of Cobalt (the registered owner of the Office Premises) to manage the Office Premises. Cobalt is a trustee of a unit trust, the units of which are ultimately held by discretionary trusts of which members of the Kadoorie family are discretionary objects. Kadoorie Estates is wholly owned by Harneys Trustees which is a substantial shareholder of the Company by virtue of the SFO. As such, Kadoorie Estates is a connected person of the Company under the Listing Rules. Accordingly, the entering into the New Tenancy Agreement constitutes a connected transaction of the Company under rule 14A of the Listing Rules.

In accordance with HKFRS 16 "Leases", the Group is required to recognise the value of the right-of-use asset in connection with the New Tenancy Agreement and this transaction will be regarded as an acquisition of an asset by the Group pursuant to the Listing Rules. The estimated value of the right-of-use asset to be recognised by the Group under the New Tenancy Agreement is approximately HK$41 million. Shareholders should note that the above figure is unaudited and may be subject to adjustment in the future.

As the highest of relevant percentage ratios as defined under rule 14.07 of the Listing Rules applicable to the estimated value of the right-of-use asset to be recognised by the Group under the New Tenancy Agreement is more than 0.1% but less than 5%, the entering into the New Tenancy Agreement is subject to reporting and announcement requirements but is exempt from independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

Information relating to Kadoorie Estates and HMS

The principal business activity of Kadoorie Estates is the provision of management services.

HMS is an indirect wholly owned subsidiary of the Company and its principal activities are the provision of management, marketing, rooms reservation, design advisory, consultancy and advertising services.

Information relating to the Group

The Company, through its subsidiaries, joint ventures and associates, is principally engaged in the ownership, development and management of prestigious hotels and commercial and residential properties in key locations in Asia, the United States and Europe, as well as the provision of tourism and leisure, club management and other services.

Definitions

In this announcement, the following expressions have the meanings as set out below unless the context requires otherwise:-

"Board"

the board of Directors

"Cobalt"

New Cobalt Holding (PTC) Corporation (formerly known as New Cobalt Holding Corporation), a company incorporated in the Republic of Nauru with limited liability and re-domiciled to British Virgin Islands and registered under Part XI of the former Hong Kong Companies Ordinance and the registered owner of the Office Premises

"Company"

The Hongkong and Shanghai Hotels, Limited, a company incorporated in Hong Kong with limited liability and the shares of which are listed on the main board of The Stock Exchange of Hong Kong Limited

"connected person"

"Directors"

has the meaning ascribed to it under the Listing Rules directors of the Company

"Group"

the Company and its subsidiaries

"Harneys Trustees"

Harneys Trustees Limited, a company incorporated in the British Virgin Islands with limited liability and a substantial shareholder of the Company by virtue of the SFO

Christobelle Liao Company Secretary

As at the date of this announcement, the Board of Directors of the Company comprises the following Directors:

Non-Executive Chairman The Hon. Sir Michael KadoorieNon-Executive Deputy Chairman Andrew Clifford Winawer Brandler

Executive Directors

Managing Director and Chief Executive Officer Clement King Man Kwok

Chief Operating Officer Peter Camille Borer

Chief Financial Officer Christopher Shih Ming IpNon-Executive Directors William Elkin Mocatta John Andrew Harry Leigh Nicholas Timothy James Colfer James Lindsay Lewis

Philip Lawrence Kadoorie

Independent Non-Executive Directors Dr the Hon. Sir David Kwok Po Li Patrick Blackwell Paul

Pierre Roger Boppe

• Dr William Kwok Lun Fung

• Dr Rosanna Yick Ming Wong

• Dr Kim Lesley Winser

Ada Koon Hang Tse