eprint Group Limited — Capital/Financing Update 2015

Mar 30, 2015

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.

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eprint GROUP LIMITED eprint 集團有限公司

(Incorporated in the Cayman Islands with limited liability) (Stock code: 1884)

CONNECTED TRANSACTION – FORMATION OF PROJECT COMPANY WITH SHANTOU DONGFENG PRINTING CO. LTD.

AND

DISCLOSEABLE TRANSACTION – ACQUISITION OF 11% ISSUED SHARE CAPITAL OF e-banner LIMITED

CONNECTED TRANSACTION – FORMATION OF THE PROJECT COMPANY

On 30 March 2015 (after trading hours), the Company and Shantou Dongfeng; whose shares are listed on the Shanghai Stock Exchange (stock code: 601515); entered into the Framework Agreement for the formation of the Project Company for the internet design and printing business in the PRC excluding the existing business of the Group and Shantou Dongfeng. The Company and Shantou Dongfeng will invest a total of RMB25 million (equivalent to approximately HK$31.25 million) in the Project Company and their equity interests in the Project Company will be 30% and 70% respectively. The Company and Shantou Dongfeng agreed to pay RMB7.5 million (equivalent to approximately HK$9.375 million) and RMB17.5 million (equivalent to approximately HK$21.875 million) respectively for the business of the Project Company.

As Shantou Dongfeng is interested in approximately 12.38% of the issued shares of the Company and is therefore regarded as a connected person of the Company under the Listing Rules. As the relevant applicable percentage ratios (as defined under the Listing Rules) in respect of the Framework Agreement is less than 5%, the Framework Agreement constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules and is exempt from the circular (including independent financial advice) and shareholders’ approval requirements pursuant to Rule 14A.76(2) of the Listing Rules.

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DISCLOSEABLE TRANSACTION - THE SALE AND PURCHASE AGREEMENT

On 30 March 2015 (after trading hours), eprint Holdings, a wholly owned subsidiary of the Company, and the Vendor entered into the Sale and Purchase Agreement pursuant to which eprint Holdings has agreed to acquire and the Vendor has agreed to sell the Sale Shares, representing 11% of the issued shares of e-banner at the Purchase Price of HK$1.1 million.

Completion of the Acquisition will take place on 1 April 2015. Upon Completion, e-banner will become a 51% owned subsidiary of eprint Holdings, the financial results of e-banner will be consolidated into the consolidated financial statements of the Group.

e-banner is principally engaged in developing, producing, marketing and sale of banners, display stands, posters and display partitions and other related products in Hong Kong. Further information on e-banner has been disclosed under the paragraph headed “INFORMATION OF e-banner” below.

As relevant applicable percentage ratios (as defined under the Listing Rules) in respect of the Acquisition is more than 5% but less than 25%, the Acquisition constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules and is subject to the notification and announcement requirements under the Listing Rules.

CONNECTED TRANSACTION – FORMATION OF THE PROJECT COMPANY

On 30 March 2015 (after trading hours), the Company and Shantou Dongfeng entered into the Framework Agreement for the formation of the Project Company for the internet design and printing business excluding the business of the Group and Shantou Dongfeng. The Company and Shantou Dongfeng will invest a total of RMB25 million (equivalent to approximately HK$31.25 million) in the Project Company and their equity interests in the Project Company will be 30% and 70% respectively. The Company and Shantou Dongfeng agreed to pay RMB7.5 million (equivalent to approximately HK$9.375 million) and RMB17.5 million (equivalent to approximately HK$21.875 million) respectively for the business of the Project Company.

THE FRAMEWORK AGREEMENT

Date: 30 March 2015

Parties: (1) The Company

(2) Shantou Dongfeng

According to the record of the Company, Shantou Dongfeng is interested in 61,875,000 shares representing approximately 12.38% in the issued share capital of the Company and is therefore a connected person of the Company as defined in the Listing Rules.

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CAPITAL PAYMENT

The Group’s interests in the Project Company would be 30% and the agreed investment amount of RMB7.5 million would be payable by way of the PRC operating rights of the existing operating websites of the Group, namely www.eprint.com.hk, www.e-invoice.com.hk, www.design-easy.com, and www.photobook1010.com (the “ Websites ”) or by cash. The payment will be funded by internal resources of the Company if payment by cash. The parties agreed that a qualified independent firm of professional valuer approved by the Company will be appointed to assess the value of the PRC operating rights of the Websites.

Shantou Dongfeng’s interests in the Project Company would be 70% and the agreed investment amount of RMB17.5 million would be payable by cash.

REASONS FOR AND BENEFITS OF THE FRAMEWORK AGREEMENT

Shantou Dongfeng value very much the established internet printing platform and internet cloud printing information technology system of the Group, the parties will utilize their respective advantages (the Group’s mature internet cloud printing information technology system and the strong and wide customer network and resources in PRC possessed by Shantou Dongfeng) to develop the potential of this cooperation. The signing of the Framework Agreement enables the expansion of the Group’s business into the PRC in an effective way.

The Directors believe that by combining the business operation experience and technical systems of the Websites and the business network of Shantou Dongfeng in the PRC, the Project Company would contribute to the growth of the business performance of the Group and hence improve the return to the Company and its shareholders.

OTHER TERMS

The parties targeted to complete the setting up of the Project Company before 30 June 2015 in the PRC and to launch the internet platform and relevant products within the year 2015.

The parties targeted to set up the first operation of the Project Company in Shenzhen to provide service to cities in Pearl River Delta area including Shenzhen, Guangdong, Dong Guan and Huizhou.

In the course of the business development of the Project Company, the Company agreed to provide supporting services (the “ Services ”) to the Project Company by utilizing the Group’s technical supporting system and personnel in the PRC subject to a fair charge. The Services include but not limited to orders management system, typesetting system, after sales telephone services center and data maintenance center.

The provision of the Services by the Group to the Project Company shall constitute connected transaction of the Company under the Listing Rules. The Company may need to comply with the relevant requirements under the Listing Rules and announcement will be issued where appropriate.

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GENERAL

No Director of the Company has any interests in the Framework Agreement. The Directors, including the independent non-executive Directors, opine that the terms of the Framework Agreement are fair and reasonable and on normal commercial terms and are for the interests of the Company and its shareholders as a whole.

As Shantou Dongfeng is interested in approximately 12.38% of the issued shares of the Company and the relevant applicable percentage ratios (as defined under the Listing Rules) in respect of the Framework Agreement is less than 5%, the Framework Agreement constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules and is exempt from the circular (including independent financial advice) and shareholders’ approval requirements pursuant to Rule 14A.76(2) of the Listing Rules.

DISCLOSEABLE TRANSACTION - THE SALE AND PURCHASE AGREEMENT

On 30 March 2015 (after trading hours), eprint Holdings and the Vendor entered into the Sale and Purchase Agreement pursuant to which eprint Holdings has agreed to acquire and the Vendor has agreed to sell the Sale Shares, representing 11% of the issued shares of e-banner at the Purchase Price of HK$1.1 million.

THE SALE AND PURCHASE AGREEMENT

Date: 30 March 2015

Parties: (1) Purchaser: eprint Holdings (2) Vendor: TBC Group Limited

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Vendor is an Independent Third Party.

Assets to be acquired

Pursuant to the Sale and Purchase Agreement, eprint Holdings has agreed to acquire and the Vendor has agreed to sell the Sale Shares free from all liens, claims, equities, charges, encumbrances or third-party rights of whatsoever nature.

The Sale Shares represent 11% of the entire issued share capital of e-banner.

The Purchase Price

The Purchase Price for the Sale Shares is HK$1.1 million which shall be paid in cash upon Completion. The Purchase Price was agreed between eprint Holdings and the Vendor after arm’s length negotiations and by reference to the original investment costs of the Sale Shares at HK$1.1 million and the growth and development prospects of e-banner. For the details of financial information of e-banner, please refer to the paragraph headed “INFORMATION OF e-banner” below.

The Purchase Price will be funded by internal resources of the Company.

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Conditions

The Sale and Purchase Agreement is unconditional.

Completion

The Acquisition will be completed on 1 April 2015. Upon Completion, e-banner will become a 51% owned subsidiary of eprint Holdings, the financial results of e-banner will be consolidated into the consolidated financial statements of the Group.

INFORMATION OF e-banner

e-banner is a Hong Kong limited liabilities company incorporated on 1 April 2014. e-banner is principally engaged in developing, producing, marketing and sale of banners, display stands, posters and display partitions and other related products in Hong Kong.

In May 2014, eprint Holdings established e-banner with the Vendor with 40% and 60% held by eprint Holdings and the Vendor respectively. The formation of e-banner can diversify the Group’s business and product portfolio and create synergy effect with the printing business of the Group. Upon Completion, e-banner will become a subsidiary of the Group and will increase its production capacity. The Board believes that e-banner will bring positive contribution to the growth of the Group.

In July 2014, e-banner received a writ of summons issued against it and other twelve defendants for, inter alia, the relief of an injunction restraining e-banner competing the business of and soliciting customers of the plaintiffs, and claim for, inter alia, the damages for conspiracy and interference with the plaintiffs’ trade or business. The Company has been informed by e-banner on 7 January 2015 that the court issued the judgment (the “ Judgment ”) on 31 December 2014 that injunctions have been granted against four out of the thirteen defendants. e-banner is one of the four defendants which are subject to the injunctions. Details were set out in the Company’s announcement dated 9 January 2015. The Board considers that the Judgment would not have material adverse impact on the operation of the Group.

Below is the financial information of e-banner for the period from 1 April 2014, the date of its incorporation, up to 31 January 2015

	For the period ended 31 January
	2015
	(Unaudited)
	HK$
Revenue for continuing operations	19,742,138
Net loss before / after taxation	-5,009,374

As at 31 January 2015, e-banner had unaudited total assets of HK$18,093,256 and unaudited net assets of HK$4,990,626.

REASONS FOR AND BENEFITS OF THE ACQUISITION

Upon Completion, e-banner will become a subsidiary of eprint Holdings and the Company expects the established systems of the Group including information technology system, business management and established retail outlets could further enhance the business

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performance of e-banner. The Group plans to expand the business of e-banner to overseas market start from Malaysia and Australia.

eprint Holdings will appoint majority directors to the board of e-banner upon Completion.

The principal business of the Group is the provision of printing services and solutions on advertisement, bound books and stationeries, to a diversified customer base in Hong Kong.

The Directors believe that the operation of e-banner would create synergies effect with the Group in terms of customers and technologies and consider that the Acquisition represented an opportunity for the Group to further widen its earning base and enhance its capital utilization efficiency, and therefore are of the view that the terms of the Sale and Purchase Agreement (including the Purchase Price) are fair and reasonable and the Acquisition is in the interests of the Company and its shareholders as a whole.

GENERAL

As relevant applicable percentage ratios (as defined under the Listing Rules) in respect of the Acquisition is more than 5% but less than 25%, the Acquisition constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules and is subject to the notification and announcement requirements under the Listing Rules.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions shall have the following meanings when used therein:

“Acquisition”	the acquisition of the Sale Shares by eprint Holdings from the
	Vendor pursuant to the terms of the Sale and Purchase
	Agreement
“Board”	the board of the Directors
“Company”	eprint Group Limited, a company incorporated in the Cayman
	Islands with limited liability whose issued Shares are listed on
	the main board of the Stock Exchange (Stock code: 1884)
“Completion”	completion of the Sale and Purchase Agreement
“Director(s)”	the director(s) of the Company
“e-banner”	e-banner Limited, a Hong Kong limited liabilities company
	incorporated on 1 April 2014
“eprint Holdings”	eprint Holdings Limited, a limited liabilities company
	incorporated under the laws of the British Virgin Islands and a
	wholly owned subsidiary of the Company
“Framework Agreement”	the strategic cooperation framework agreement dated 30
	March 2015 entered into between the Company and Shantou
	Dongfeng for the formation of the Project Company.

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• “Group”

the Company and its subsidiaries from time to time

• “HK$” the lawful currency of Hong Kong

• “Hong Kong” the Hong Kong Special Administrative Region of the People Republic of China

• “Independent Third Party(ies)” any person(s) or company(ies) and their respective ultimate beneficial owner(s), to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, are third parties independent of the Company and its connected person(s) (as defined under the Listing Rules)

• “Listing Rules”

• the Rules Governing the Listing of Securities on the Stock Exchange

• “PRC”

• People’s Republic of China, excluding Hong Kong, the Macau Special Administrative Region of China and Taiwan

• “Project Company” the new company to be incorporated pursuant to the Framework Agreement to engage in the business of internet design and printing.

• “Purchase Price” HK$1.1 million, being the aggregate consideration for the Sale Shares payable by eprint Holdings to the Vendor pursuant to the Sale and Purchase Agreement

• “RMB”

the lawful currency of the PRC

• “Sale and Purchase Agreement” the unconditional sale and purchase agreement dated 30 March 2015 and entered into between eprint Holdings as purchaser and the Vendor as vendor in relation to the Acquisition

• “Sale Shares”

• 1,100,000 shares in the share capital of e-banner in the name of and beneficially owned by the Vendor, representing 11% of the entire issued shares of e-banner.

• “Shantou Dongfeng”

• Shantou Dongfeng Printing Co., Ltd., a limited liabilities company incorporated under the laws of the PRC with its shares listed on the Shanghai Stock Exchange (stock code: 601515). Its business is in the printing of paper packaging for tobacco, wine, and cosmetics.

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

• “Vendor” TBC Group Limited, a limited liabilities company incorporated under the laws of the British Virgin Islands whose business activity is investments holding

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On behalf of the Board eprint Group Limited She Siu Kee William Chairman

Hong Kong, 30 March 2015

As at the date of this announcement, the executive Directors are Mr. She Siu Kee William, Mr. Tsui Pak Wai and Mr. Fung Hong Keung; the non-executive Directors are Mr. Lam Shing Kai, Mr. Leung Wai Ming, Mr. Leung Yat Pang, Mr. Chong Cheuk Ki and Mr. Deng Xiaen; and the independent non-executive Directors are Dr. Lung Cheuk Wah, Mr. Chan Chi Yu, Mr. Chi Man Shing Stephen and Ms. Luk Mei Yan.

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