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GRAND-FLO SOLUTION BERHAD (“GRAND-FLO” OR THE “COMPANY”) PROPOSED ACQUISITION OF CL SOLUTIONS (CHINA) LIMITED (“CLS CHINA”), A COMPANY INCORPORATED IN HONG KONG, FOR AN AGGREGATE CONSIDERATION OF HKD25,000,000 (EQUIVALENT TO APPROXIMATELY RM10,638,298) TO BE SATISFIED BY A COMBINATION OF CASH AND THE ISSUANCE OF NEW ORDINARY SHARES OF RM0.10 EACH IN GRAND-FLO (“PROPOSED ACQUISITION”)

GRAND-FLO SOLUTION BERHAD

TypeAnnouncement
SubjectGRAND-FLO SOLUTION BERHAD (“GRAND-FLO” OR THE “COMPANY”)

PROPOSED ACQUISITION OF CL SOLUTIONS (CHINA) LIMITED (“CLS CHINA”), A COMPANY INCORPORATED IN HONG KONG, FOR AN AGGREGATE CONSIDERATION OF HKD25,000,000 (EQUIVALENT TO APPROXIMATELY RM10,638,298) TO BE SATISFIED BY A COMBINATION OF CASH AND THE ISSUANCE OF NEW ORDINARY SHARES OF RM0.10 EACH IN GRAND-FLO (“PROPOSED ACQUISITION”)
ContentsWe refer to the article “Grand-Flo expects 25% earnings growth in FY09”, that appeared in the The Edge, Financial Daily on Thursday, 11 September 2008, page 4 and in particular the following sentence reproduced as follows:-

“Grand-Flo Solution Berhad, an information technology solutions provider, expects revenue and net income to increase 25% each for its fiscal year ending Dec 31, 2009 (FY09) on the back of a profit guarantee from its newly acquired CL Solutions (China) Ltd, said its group president and managing director Derrick Tan.”

As stated in the Company’s announcement dated 10 September 2008 in relation to the Proposed Acquisition, pursuant to the terms of the agreement, the vendor irrevocably covenants, warrants and guarantees to Grand-Flo that the CLS China group shall, after eliminating all inter-company transactions entered into between the CLS China group as well as the Grand-Flo group, have a consolidated audited profit after tax (“PAT”) of at least HKD9,000,000 (equivalent to approximately RM3,829,787) as follows:-

(i) HKD4,000,000 (equivalent to approximately RM1,702,128) for the financial year ending (“FYE”) 31 December 2008; and

(ii) HKD5,000,000 (equivalent to approximately RM2,127,660) for the FYE 31 December 2009 (“FYE 2009 Profit Guarantee”);

which form part of the basis of the purchase consideration for the Proposed Acquisition.

In accordance with the Corporate Disclosure Policy of the Listing Requirements of Bursa Malaysia Securities Berhad for the MESDAQ Market, the Board of Directors of Grand-Flo wishes to highlight that the increase in revenue and net income by 25% each for the FYE 31 December 2009 is based on the historical consolidated audited revenue and PAT of Grand-Flo and assuming the achievement of the FYE 2009 Profit Guarantee as set out above.

This announcement is dated 11 September 2008.



Announcement Info

Company NameGRAND-FLO SOLUTION BERHAD (MESDAQ Market) 
Stock Name GRANFLO    
Date Announced11 Sept 2008  
CategoryGeneral Announcement
Reference NoCM-080911-58836



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