Accelerates the Expansion of ASL’s IT Software Solution Business Mainly in Greater China

News Release – November 14, 2012

(Hong Kong, 12 November 2012) – Automated Systems Holdings Limited (“ASL” or “the Group”) (SEHK stock code: 771), a leading IT services provider in region, announced that ELM Technologies Holdings Limited, a wholly owned subsidiary of ASL, has conditionally acquired Mocha Software through the purchase of the entire issued share capital of MDCL-Frontline Solutions Limited (“MDCL”) at a consideration of HK$220,000,000 from Teamsun Technology (HK) Limited (“Hong Kong Teamsun”) on 12 November 2012¹. Hong Kong Teamsun is the controlling shareholder of ASL. Upon completion of the acquisition, Mocha Software will become a wholly-owned subsidiary of the Group.

The consideration will be settled by cash of HK$150,000,000, all or part of which will be used by Hong Kong Teamsun to procure the repayment in full of the Shareholder’s Loan, and by an issuance of interest bearing promissory notes of an aggregate principal amount of HK$70,000,000. Hong Kong Teamsun has guaranteed that the net profits (after tax) of Mocha Software and its subsidiary (“Mocha Software Group”) for the years ending 31 December 2012 and 31 December 2013 shall at least be RMB12,000,000 (equivalent to approximately HK$14,760,000) and RMB15,000,000 (equivalent to approximately HK$18,450,000) respectively. In the event that the net profits (after tax) of Mocha Software Group for any of the above years are below the relevant guaranteed amount, Hong Kong Teamsun agrees to indemnify us for the shortfall.

Mr. Henry Hui, Chief Executive Officer of Automated Systems Holdings Limited said, “We believe that the acquisition of Mocha Software Group will create synergies and competitive advantages for ASL. Mocha Software Group’s broad clientele, its brand and software products are expected to enable us to expand our existing business into the mainland China market. Similarly, our established customer network could help expand the Mocha Software business into the Hong Kong and overseas market.”

Established in the mainland China, Mocha Software Group is primarily engaged in the provision of IT software solutions for corporations in the mainland China. Its IT services included business process management, business service management, collaboration, ITIL-based IT operation and maintenance management, project management, security, infrastructure and integration, addressing the related IT needs in the market. It has built up a broad client base in the mainland China, ranging from telecommunication operators, government bodies, financial institutions to media corporations.

For the year ended 31 December 2011, MDCL’s unaudited consolidated net profit after taxation and extraordinary items was approximately HK$22,230,000 under the Hong Kong Financial Reporting Standards.

Completion of the Acquisition shall take place on the third Business Day after the fulfillment or waiver of all conditions or such other date as the parties to the Acquisition Agreement may agree in writing, but shall in no event be later than 31 December 2012. Upon completion, Mocha Software’s results will be consolidated into the accounts of the Group.

Looking ahead, Mocha Software Group’s diversified range of self-developed and enterprise software products and research and development capabilities are expected to complement and contribute to the future expansion of the Group’s IT software business. In addition, the Acquisition is expected to diversify the activities of the Group, bringing in higher value to our shareholders.

For further details, please refer to the ASL’s announcement dated 12 November 2012.

¹As defined in the Group’s announcement dated 12 November 2012

 
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