GHL System Berhad Annual Report 2017

GHL SYSTEMS BERHAD 128 NOTES TO THE FINANCIAL STATEMENTS 31 December 2017 CONT’D 31. SIGNIFICANT EVENT DURING THE FINANCIAL YEAR Proposed acquisitions of equity interests in MPOS Global Limited (a) On 7 November 2017, the Group had entered into the following agreements for the proposed acquisition of up to 31.16% equity interest in MPOS Global Limited (“MPOS Global”) for a total consideration of USD3,317,226 (equivalent to approximately RM14.05 million) (“Consideration”): (i) a share subscription agreement (“SSA”) between the Group with Nguyen Huu Tuat (“Tuat”), Nguyen Hoa Binh (“Binh”) and MPOS Global to subscribe for 1,962,025 shares in MPOS Global (“MPOS Global Shares”) representing approximately 28.18% of the total issued share capital of MPOS Global for a total cash consideration of USD3,000,000 (equivalent to approximately RM12.71 million) (“Subscription Price”) (“Proposed Share Subscription”); (ii) a share purchase agreement (“SPA”) between the Group and Tuat for the acquisition of additional 207,468 MPOS Global Shares representing approximately 2.98% of the total issued share capital of MPOS for a total cash consideration of USD317,266 (equivalent to approximately RM1.34 million) (“Shares Purchase Price”) (“Proposed Share Purchase”); and (iii) a shareholders’ agreement (“Shareholders Agreement”) between the Group with Tuat, Binh, Nexttech Group Of Techropreneurs Limited (“NextTech”), Inspirasia Accelerators Pte. Ltd (“Life.Sreda”) and MPOS Global regulating the management of the Company and their relationship with each other as shareholders of MPOS Global. (b) On 7 November 2017, MPOS Global had entered into a share subscription agreement (“MPOS Vietnam SSA”) with Vietnam MPOS Technology Joint Stock Company (“MPOS Vietnam”) for the subscription of 5,200,000 ordinary shares in MPOS Vietnam (“MPOS Vietnam Shares”) for an aggregate subscription price of VND52,000,000,000 (equivalent to approximately RM9.67 million) accounting for approximately 95.69% of MPOS Vietnam (“Proposed MPOS Vietnam Acquisition”). Upon completion of the Proposed Share Subscription, Proposed Share Purchase and Proposed MPOS Vietnam Acquisition, the Group will directly own 31.16% of the equity interest in MPOS Global and an effective equity interest of 29.8% in MPOS Vietnam. As at 31 December 2017, the condition precedents of SSA, SPA, Shareholders Agreement and MPOS Vietnam SSA have yet to be fulfilled. 32. SIGNIFICANT EVENTS SUBSEQUENT TO THE END OF THE REPORTING PERIOD (a) Deemed disposal of Mruncit Commerce Sdn. Bhd. (“MRC”) On 4 January 2018, a joint venture, MRC has increased its issued and paid-up share capital from RM1,290,000 to RM4,090,000 by way of allotment and issuance of 700,000 new ordinary shares for a cash consideration of RM2,800,000 for working capital purposes. As a result of the allotment, the equity interest of the Group in MRC had been diluted from 49.0% to 31.76%. Consequently, MRC became an associate of the Group. (b) Acquisition of Digital Salute Sdn. Bhd. (“DSSB”) On 2 February 2018, the Group acquired 100% equity interest in DSSB comprising one (1) ordinary share for a total consideration of RM1, rendering DSSB to be a wholly owned subsidiary of the Group. On 2 February 2018, the issued and paid-up share capital of DSSB was increased from RM1 to RM10,000 by way of allotment and issuance of 9,999 new ordinary shares. As a result, the shareholding of the Group in DSSB decreased from 100% to 85%.