Best Practice of Extending Another's Theme?
This is partly up to developer preference and specific use case but generally, if it is a custom theme, as in this case, you would add templates and modify css/template.php/etc. in the custom theme you already have.

If it is a theme from drupal.org or some other theme source, where updates for that theme may come in future, then it is best to create a sub theme of that theme (which you can do even if that theme is already a sub theme of another theme).