PDF《SCUD GROUP LIMITED 飞毛腿集团有限公司*》

2 - REASONS FOR AND BENEFITS OF ENTERING INTO THE TRADEMARK TRANSFER AGREEMENT As disclosed in the Group'

s

2013 annual report, the Group had disposed of its entire shareholding interest in Chaolitong Technology Co., Ltd in December 2013. The Chaolitong Trademarks were kept by the Group and continued to be used for a small portion of the Group'

s own-brand products. In view of the Group'

s intention to focus its resources on the market for domestic mid to high-end phone manufacturers, the Company considers that transferring the Chaolitong Trademarks will allow the Group to focus its management and financial resources on the development of its more profitable ODM business, our SCUD飞毛腿 own brand business and minimize related administrative expenses accordingly. Based on the net carrying amount of the Chaolitong Trademarks as at

30 June 2014, it is estimated that the Group may record a net loss of approximately RMB2.27 million (equivalent to approximately HK$2.87 million) as a result of the disposal of the Chaolitong Trademarks. The Company intends to use the sale proceeds from the disposal of the Chaolitong Trademarks to contribute to its ODM business expansion and for general working capital purposes. The terms of the Trademark Transfer Agreement were arrived at after arm'

s length negotiations between the parties. The Directors are of the view that the terms of the Trademark Transfer Agreement are fair and reasonable and in the interests of the Shareholders as a whole. LISTING RULES IMPLICATIONS As the relevant applicable percentage ratio in respect of the transfer of the Chaolitong Trademarks under the Trademark Transfer Agreement exceeds 5% but does not exceed 25%, the transfer under the Trademark Transfer Agreement constitutes a discloseable transaction for the Company and is subject to the notification and announcement requirements under Chapter

14 of the Listing Rules. In the event that the disposal of the Group'

s interest in Chaolitong Technology Co., Ltd. in December

2013 be aggregated with the transfer of Chaolitong Trademarks contemplated under the Tra........