AUX International : DISCLOSEABLE TRANSACTION IN RELATION TO THE ACQUISITION OF 100% INTEREST IN THE TARGET COMPAN

AUX

File: e_191103 (AUX)

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SIZE: 210(W)x280(H)

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30th April 2019 21 : 59

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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.

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2080)

LR14.88

LR14.58(1)

Note 5 to

LR13.52

LR13.51A

DISCLOSEABLE TRANSACTION IN RELATION TO

THE ACQUISITION OF 100% INTEREST

IN THE TARGET COMPANY

THE ACQUISITION

The Board is pleased to announce that on 30 April 2019 (after trading hours), the Purchaser, the Vendor and the Guarantor entered into the Agreement, pursuant to which the Purchaser acquired the Sale Shares for a total consideration of HK$6,500,000 which was funded by the Net Proceeds. As a result of the Acquisition, which was completed on the same day, the Target Company and its subsidiaries became indirect wholly-owned subsidiaries of the Company and the financial results of which are consolidated into the financial statements of the Group. The principal business of the Target Group is the operation of three restaurant and bar outlets under the brand of ''Mini Club'' in Causeway Bay, Tsim Sha Tsui and Mong Kok respectively.

IMPLICATIONS OF THE LISTING RULES

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

THE ACQUISITION

The Board is pleased to announce that on 30 April 2019 (after trading hours), the Purchaser, the Vendor and the Guarantor entered into the Agreement, pursuant to which the Purchaser acquired the Sale Shares for a total consideration of HK$6,500,000.

LR14.60(1)

LR14.60(1)

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AUX

File: e_191103 (AUX)

1st Proof

SIZE: 210(W)x280(H)

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30th April 2019 21 : 59

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The details of the Agreement are as follows:

The Agreement
Date	30 April 2019 (after trading hours)	LR14.58(3)
Parties
The Purchaser:	Po Tai Holdings Limited, an indirect wholly-owned subsidiary
	of the Company.
The Vendor:	Supreme Park Limited, an investment holding company LR14.58(2)
	wholly-owned by the Guarantor, which held 100% of the
	total issued share capital of the Target Company immediately
	before Completion.
The Guarantor:	An individual and the ultimate beneficial owner of the Vendor. LR14.58(9)
	Pursuant to the Agreement, the Guarantor unconditionally
	and irrevocably guarantees to the Purchaser the due and
	punctual performance by the Vendor of all its obligations
	under the Agreement (whether directly or indirectly),
	including but not limited to the Vendor's warranties under
	the Agreement. The Guarantor also undertakes to indemnify
	the Purchaser and keep the Purchaser fully indemnified
	against all liabilities, losses, costs, expenses and damage by
	reason of or in connection with any failure of the Vendor to
	perform any of its obligations under the Agreement. Until the
	Vendor's obligations under the Agreement have been fully
	discharged and/or waived, the Guarantor's obligations under
	the Agreement will remain in effect.

To the best of the Directors' knowledge, information and belief having made all LR14.58(3) reasonable enquiries, as at the date of this announcement, the Vendor and the Guarantor

are Independent Third Parties. Subject matter

Pursuant to the Agreement, the Purchaser has purchased and the Vendor has sold the Sale Shares, representing 100% of the total issued share capital of the Target Company as at the date of this announcement.

Upon Completion, the Target Company and its subsidiaries became wholly-owned subsidiaries of the Company. The Target Group is principally engaged in the operation of three restaurant and bar outlets under the brand of ''Mini Club'' in Causeway Bay, Tsim Sha Tsui and Mong Kok respectively. Detailed information on the Target Group is set out in the paragraph headed ''Information on the Target Group'' of this announcement.

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AUX

File: e_191103 (AUX)

1st Proof

SIZE: 210(W)x280(H)

(SC)

30th April 2019 21 : 59

BL:(0)/(23)

(Translation)

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Consideration

The total consideration in the amount of HK$6,500,000 was funded by the Net Proceeds, HK$100,000 of which has been paid to the Vendor in cash as a security deposit under the Memorandum of Understanding and the remaining HK$6,400,000 of which shall be paid to the Vendor by the Purchaser in the following manner:

(1)HK$5,550,000 via banker's cashier order drawn on a licensed bank in Hong Kong upon the signing of the Agreement; and

(2)HK$850,000 via banker's cashier order drawn on a licensed bank in Hong Kong or bank transfer to the Vendor's designated bank account in Hong Kong within seven Business Days from the date of successful transfer of the Light Refreshment Restaurant Licence of Mini Club Mong Kok outlet.

The consideration was arrived at based on normal commercial terms and after arm's length negotiations between the Purchaser and the Vendor with reference to the net asset value based on the unaudited management accounts of the Target Group as at 31 January 2019, the geographic locations of the Target Business, the prospects of the Target Business and the set-up cost of like business of similar size.

Taking into consideration of the above factors, the Directors are of the view that the consideration paid for the Acquisition is fair and reasonable.

LR14.58(4)

LR14.58(5)

Completion

Completion of the Acquisition took place on the same day as the Agreement.

INFORMATION ON THE PARTIES

LR14.58(2)

The Purchaser

The Purchaser is an investment holding company incorporated in Hong Kong and indirectly wholly-owned by the Company.

The Company is the holding company of its subsidiaries whose principal business activities include the operation of clubbing business in Hong Kong and the provision of property management services in the PRC.

The Vendor

The Vendor is an investment holding company incorporated in the BVI with limited liability and wholly-owned by the Guarantor, an individual who, to the best of the Directors' knowledge, information and belief and having made all reasonable enquiries, is an Independent Third Party.

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AUX File: e_191103 (AUX) 1st Proof SIZE: 210(W)x280(H) (SC) 30th April 2019 21 : 59 BL:(0)/(23) (Translation) (C>E)

INFORMATION ON THE TARGET GROUP

LR14.60(2)

The Target Company is an investment holding company incorporated in Hong Kong with limited liability on 19 January 2018. As at the date of this announcement and upon Completion, the Target Company and its subsidiaries became indirect wholly-owned subsidiaries of the Company.

The Target Group is principally engaged in the operation of three restaurant and bar outlets under the brand of ''Mini Club'' in Causeway Bay, Tsim Sha Tsui and Mong Kok respectively.

As at the date of this announcement, the Target Group has obtained all the necessary licenses material to its operations including but not limited to business registration licenses, restaurant licenses and liquor licenses.

Financial information of the Target Group

Set out below is the financial information of each of Smart Leader and Legend Management, the two operating subsidiaries of the Target Group, based on their audited financial statements prepared in accordance with the Hong Kong Financial Reporting Standards and their unaudited management accounts:

Smart Leader

			For the ten LR14.58(7)
	For the years ended	months ended
	31 March		31 January
	2017	2018	2019
	(audited)	(audited)	(unaudited)
	HK$	HK$	HK$
Turnover	1,740,000	1,740,000	0
Net profit/(loss) before taxation	10,273	(17,768)	(1)
Net profit/(loss) after taxation	10,273	(17,768)	(1)
			As at
	As at 31 March	31 January
	2017	2018	2019
	(audited)	(audited)	(unaudited)
	HK$	HK$	HK$
Net assets/(liabilities)	(832,127)	(849,895)	(849,900)

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AUX File: e_191103 (AUX) 1st Proof SIZE: 210(W)x280(H) (SC) 30th April 2019 21 : 59 BL:(0)/(23) (Translation) (C>E)

Legend Management

			For the ten LR14.58(7)
	For the years ended	months ended
	31 March	31 January
	2017	2018	2019
	(audited)	(audited)	(unaudited)
	HK$	HK$	HK$
Turnover	2,040,000	20,480,166	14,257,732
Net profit/(loss) before taxation	(48,315)	149,434	1,144,701
Net profit/(loss) after taxation	(48,315)	149,434	955,825
			As at
	As at 31 March	31 January
	2017	2018	2019
	(audited)	(audited)	(unaudited)
	HK$	HK$	HK$
Net assets/(liabilities)	(188,388)	(38,954)	916,871

Set out below is the unaudited management accounts as at 31 January 2019 of each of MCHK and MCMK, the two investment holding companies of the Target Group:

MCHK (Note)
	From the date of	LR14.58(7)
	incorporation to 31 January
	2018	2019
	(unaudited)	(unaudited)
	HK$	HK$
Turnover	-	-
Net profit/(loss) before taxation	-	-
Net profit/(loss) after taxation	-	(3,245)
	As at 31 January
	2018	2019
	(unaudited)	(unaudited)
	HK$	HK$
Net assets/(liabilities)	-	(3,244)

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