hmvod Limited — Capital/Financing Update 2018

Jul 27, 2018

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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Trillion Grand Corporate Company Limited 萬 泰 企 業 股 份 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8103)

DISCLOSEABLE TRANSACTION IN RELATION TO DISPOSAL OF 100% OF THE ISSUED SHARE CAPITAL OF THE TARGET COMPANY

THE DISPOSAL

The Board is pleased to announce that on 27 July 2018 (after trading hours), the Company and the Purchaser entered into the SPA, pursuant to which, the Company has agreed to sell and the Purchaser has agreed to purchase the Sale Shares, representing 100% of the issued share capital of the Target Company, at a consideration of HK$100,000, which has been paid by the Purchaser to the Company in cash upon Completion.

Completion has taken place simultaneously upon the signing of the SPA on 27 July 2018, upon Completion, the Target Company has ceased to be subsidiary of the Company and the financial results of the Target Group will no longer be consolidated into the Group’s financial statements.

GEM LISTING RULES IMPLICATIONS

As one of the applicable percentage ratios (as defined under the GEM Listing Rules) in respect of the Disposal exceeds 5% but all applicable percentage ratios are less than 25%, the Disposal constitutes a discloseable transaction for the Company and is therefore subject to the reporting and announcement requirements, but is exempt from shareholders’ approval requirements under Chapter 19 of the GEM Listing Rules.

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The Board is pleased to announce that on 27 July 2018 (after trading hours), the Company and the Purchaser entered into the SPA, pursuant to which, the Company has agreed to sell and the Purchaser has agreed to purchase the Sale Shares, representing 100% of the issued share capital of the Target Company, at a consideration of HK$100,000, which has been paid by the Purchaser to the Company in cash upon Completion.

THE SPA

The principal terms of the SPA are set out below:

Date

27 July 2018 (after trading hours)

Parties

• (i) the Company (as vendor); and

• (ii) the Purchaser (as purchaser)

The Purchaser is an investment holding company incorporated in the BVI. To the best knowledge, information and belief of the Directors after having made all reasonable enquiries, the Purchaser and its ultimate beneficial owner(s) are Independent Third Parties.

Assets to be disposed

The Sale Shares, representing 100% of the issued share capital of the Target Company.

Consideration

Pursuant to the SPA, the Consideration is HK$100,000, which has been paid by the Purchaser to the Company in cash upon Completion.

The Consideration was arrived at based on normal commercial terms after arm’s length negotiations between the Company and the Purchaser and was determined with reference to among others, (i) the unaudited net liabilities of the Target Group as at 31 March 2018 of approximately HK$38.6 million; (ii) the loss-making business performance of the Target Group for the past 2 years; and (iii) the reasons for and benefits of the Disposal described in the section headed ‘‘Reasons for and benefits of the Disposal’’ below.

In view of the above, the Directors consider that the Consideration is fair and reasonable.

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Completion

Completion has taken place simultaneously upon signing of the SPA.

Upon Completion, the Target Company has ceased to be subsidiary of the Company and the financial results of the Target Group will no longer be consolidated into the Group’s financial statements.

INFORMATION ON THE TARGET GROUP

The Target Company is an investment holding company incorporated in the BVI with limited liability and has not engaged in any other business since its incorporation save for acting as an investment holding company, holding 100% of the issued share capital of the Target Subsidiaries.

The Target Subsidiaries are principally engaged in research, development and provision of integrated management information system for power plants and for banks in the PRC. The business of the Target Subsidiaries can be principally divided into system development and professional services, of which include consultancy, information technology engineering and technical support services in relation to the development of new system products that is tailor made in accordance with clients’ specification.

FINANCIAL INFORMATION ON THE TARGET GROUP

Set out below is a summary of the key financial data of the Target Group extracted from its unaudited consolidated management accounts for the two years ended 31 March 2018:

	For the year	For the year
	ended	ended
	31 March 2018	31 March 2017
	(unaudited)	(unaudited)
	HK$’000	HK$’000
Turnover	11,868	23,578
Net loss before taxation	(1,025)	(3,293)
Net loss after taxation	(1,025)	(3,293)

According to the unaudited consolidated management accounts of the Target Group, the Target Group recorded an unaudited consolidated net liabilities of approximately HK$38,645,000 as at 31 March 2018.

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FINANCIAL EFFECT OF THE DISPOSAL AND USE OF PROCEEDS

Upon Completion, the Company has ceased to hold any interest in the Target Company and the results of the Target Group will no longer be consolidated into the consolidated financial statements of the Group.

For illustrative purpose, upon Completion, it is estimated that the Company will realise an unaudited gain on the Disposal of approximately HK$38,595,000, being the difference between the Consideration of HK$100,000 and the unaudited net liabilities of the Target Group of approximately HK$38,645,000 as at 31 March 2018 and deducting the expenses attributable to the Disposal of approximately HK$150,000. The estimated gain to be derived from the Disposal has not taken into account the potential tax impact upon Completion. However, Shareholders should note that the actual financial effect as a result of the Disposal to be recorded by the Group is subject to final audit to be performed by the auditors of the Company.

The Company intends to use the net proceeds from the Disposal as general working capital of the Group.

REASONS FOR AND BENEFITS OF THE DISPOSAL

The Group is principally engaged in system development, professional services, proprietary trading business, money lending business and over the top (‘‘OTT’’) services. The Group has been continuously reviewing its business operations and intends to restructure or downsize those loss-making business and/or non-core business and seek new business opportunities with positive prospect so as to improve overall performances and prospects of the Group.

System development and professional services are principal businesses of the Target Group. The main customer base of the Target Group is the thermal power plants in the PRC.

As stated in the annual report of the Company for the year ended 31 March 2018, the system development business of the Group in thermal powered electricity supply industry in the PRC experienced fierce competition as a result of the PRC government’s promotion of the use of renewable and/or clean energy with direct subsidies and implementation of the benchmark for reduction of omission of carbon dioxide in various cities in the PRC. As disclosed above in the section headed ‘‘Financial information of the Target Group’’, the Target Group recorded decrease in revenue for year ended 31 March 2018 and recorded net loss for the two years ended 31 March 2017 and 2018. As such, the financial results of the Target Group are no longer satisfactory for the Company, together with the uncertainty of the system development in thermal powered electricity supply industry, the Board considers the Disposal provides an opportunity to the Group to dispose the loss-making business of the Group.

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In addition, the investment strategy of the Group is to identify new projects with positive prospects and to maximize the value of Shares. As such, the Directors consider that the Disposal represents a good opportunity for the Company to realise its investment in the Target Group and can also increase the cash position of the Group for the Group’s core business and/or other prospective profitable projects.

Taking into consideration of the aforesaid, the Directors believe that the terms of the Disposal are fair and reasonable and are on normal commercial terms and are in the interest of the Company and the Shareholders as a whole.

GEM LISTING RULES IMPLICATIONS

As one of the applicable percentage ratios (as defined under the GEM Listing Rules) in respect of the Disposal exceeds 5% but all applicable percentage ratios are less than 25%, the Disposal constitutes a discloseable transaction for the Company and is therefore subject to the reporting and announcement requirements, but is exempt from shareholders’ approval requirements under Chapter 19 of the GEM Listing Rules.

DEFINITIONS

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

• ‘‘Board’’ the board of Directors

• ‘‘BVI’’ the British Virgin Islands

• ‘‘Company’’ Trillion Grand Corporate Company Limited (Stock Code: 8103), a company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on the GEM

• ‘‘Completion’’ completion of the sale and purchase of the Sale Shares in accordance with the terms and conditions of the SPA

• ‘‘Completion Date’’ the date of the SPA, 27 July 2018

• ‘‘connected persons’’ has the meaning ascribed to it under the GEM Listing Rules

• ‘‘Consideration’’ the consideration for the Disposal, being HK$100,000 which has been satisfied by cash

• ‘‘Director(s)’’ the director(s) of the Company

• ‘‘Disposal’’ the proposed disposal of the Sale Shares pursuant to the SPA ‘‘GEM’’ GEM of the Stock Exchange

• ‘‘GEM Listing Rules’’ the Rules Governing the Listing of Securities on GEM

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• ‘‘Group’’ the Company and its subsidiaries ‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong ‘‘HK Subsidiary’’ Tongfang Electronic (Hong Kong) Company Limited, a company incorporated in Hong Kong with limited liability and is indirect wholly-owned subsidiary of the Company immediately prior to Completion

• ‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC

• ‘‘Independent Third third party(ies) who is/are independent of, and not connected Party(ies)’’ with, the Company and/or its connected persons

• ‘‘PRC’’ the People’s Republic of China

• ‘‘PRC Subsidiary’’ 北京同方電子科技有限公司 (Beijing Tongfang Electronic Science & Technology Co., Ltd.*), a limited liability company established under the laws of the PRC and is indirect whollyowned subsidiary of the Company immediately prior to Completion

• ‘‘Purchaser’’ Jian Kun International Investment Limited, a company incorporated in the BVI with limited liability

• ‘‘Sale Shares’’ 66 ordinary shares in the Target Company, representing 100% of the issued share capital of the Target Company

• ‘‘Share(s)’’ ordinary share(s) of HK$0.001 each in the share capital of the Company

• ‘‘Shareholder(s)’’ holder(s) of the Share(s)

• ‘‘SPA’’ the sale and purchase agreement dated 27 July 2018 entered into between the Company and the Purchaser in relation to the Disposal

• ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

• ‘‘Target Company’’ Tongfang Electronic Company Limited, a company incorporated in the BVI with limited liability and a direct wholly-owned subsidiary of the Company immediately prior to Completion

• ‘‘Target Subsidiaries’’ collectively, HK Subsidiary and PRC Subsidiary, being indirect wholly-owned subsidiaries of the Company immediately prior to Completion

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‘‘Target Group’’

the Target Company and Target Subsidiaries

‘‘%’’

per cent.

By order of the Board Trillion Grand Corporate Company Limited Lau Kelly Executive Director

Hong Kong, 27 July 2018

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

Executive Directors: Independent non-executive Directors: Mr. Lau Kelly (Chief Executive Officer) Dr. Wan Ho Yuen, Terence Ms. Ho Chi Na Mr. Hau Chi Kit Mr. Yuen Koon Tung Mr. Ho Siu King, Stanley Mr. Ma Stephen Tsz On

This announcement, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this announcement is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this announcement misleading.

This announcement will remain on the ‘‘Latest Company Announcements’’ page of the GEM website at www.hkgem.com for at least seven days from the date of its posting and on the Company’s website at www.trilliongrand.com

• For identification purpose only

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