The Board of Directors of Kingsmen Creatives Ltd. ("the Company") wishes to announce that the Company has on 10 May 2004, entered into an Agreement with Ascend Computer Rental Pte Ltd ("Ascend") and Ng Meng Huat Albert, Ling Kok Wai and Tan Peng Kiat Derrick ("the Vendors"), to acquire a 40% stake in the entire issued and paid up capital of Ascend. The said 40% stake comprises 31,500 shares to be issued and allotted to the Company by Ascend ("the New Shares") and 18,500 shares to be purchased by the Company from the Vendors ("the Existing Shares").
The consideration for the New Shares and the Existing Shares will be payable by the Company in the following four stages:
(a) the first payment of $283,500 for the New Shares and $83,250 for the Existing Shares will be made on the date of the Agreement;
(b) the second payment of $83,250 for the Existing Shares will be made upon confirmation that the audited group net profit before tax achieved by Ascend for FY2004 is at least $450,000;
(c) the third payment of $126,000 for the New Shares and $74,000 for the Existing Shares will be made upon confirmation that the aggregate audited group net profit before tax achieved by Ascend for FY2004 and FY2005 is at least $1.6 million; and
(d) the fourth payment of $126,000 for the New Shares and $74,000 for the Existing Shares will be made upon confirmation that the aggregate audited group net profit before tax achieved by Ascend for FY2004, FY2005 and FY2006 is at least $2.4 million.
The aforesaid investment will be funded by internal resources.
Ascend has an authorised share capital of S$100,000 divided into 100,000 ordinary shares of S$1 each of which 93,500 ordinary shares of S$1 each have been issued and are fully paid. The principal activities of Ascend are the rental and sale of audio-visual, computer and peripheral equipment and providing hardware and systems consultancy.
The above transaction is not expected to have any material impact on the earnings per share and the net tangible assets per share of the Company for the financial year ending 31 December 2004. None of the directors and substantial shareholders of the Company has any interest, direct or indirect, in the transaction.