Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. This announcement appears for information purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities of the Company. (Incorporated in the Cayman Islands with limited liability) (Stock Code: 444) (I) PLACING OF NEW SHARES UNDER GENERAL MANDATE; (II) PLACING OF NEW SHARES UNDER SPECIFIC MANDATE; (III) ADOPTION OF SHARE OPTION SCHEME; AND (IV) CLARIFICATION ON THE ANNOUNCEMENT OF THE COMPANY DATED 27 MARCH 2015 Placing Agent THE PLACING AGREEMENTS On 29 March 2015, the Company and the Placing Agent entered into the following Placing Agreements: (1) pursuant to the GM Placing Agreement, the Company has conditionally agreed to place through the Placing Agent, on a best efforts basis, up to 692,000,000 GM Placing Shares, to not fewer than six Placees who and whose beneficial owners are Independent Third Parties and not acting in concert with the connected persons of the Company at a price of HK$0.61 per GM Placing Share. The GM Placing Shares will be allotted and issued pursuant to the General Mandate; and –1– (2) pursuant to the SM Placing Agreement, the Company has conditionally agreed to place through the Placing Agent, on a best efforts basis, up to 692,000,000 SM Placing Shares, to not fewer than six Placees who and whose beneficial owners are Independent Third Parties and not acting in concert with the connected persons of the Company at a price of HK$0.61 per SM Placing Share. The SM Placing Shares will be allotted and issued pursuant to the Specific Mandate. The GM Placing and the SM Placing are not inter-conditional. Completion of the GM Placing and the SM Placing are subject to the satisfaction or waiver of all the conditions precedent as set out in the paragraphs headed ‘‘Conditions of the GM Placing Agreement’’ and ‘‘Conditions of the SM Placing Agreement’’ respectively. The Placing Shares The maximum number of 692,000,000 GM Placing Shares and 692,000,000 SM Placing Shares represent 20% and 20% of the existing issued share capital of the Company as at the date of this announcement respectively. The maximum number of 1,384,000,000 Placing Shares represents 28.58% of the existing issued share capital of the Company as enlarged by the Placings (assuming both the GM Placing and the SM Placing are completed in full). Use of proceeds from the Placings The maximum gross and net proceeds from the GM Placing are estimated to be approximately HK$422.12 million and approximately HK$413.50 million respectively (representing a net issue of price of approximately HK$0.60 per GM Placing Share) and the maximum gross and net proceeds from the SM Placing are estimated to be approximately HK$422.12 million and approximately HK$413.50 million respectively (representing a net issue price of approximately HK$0.60 per SM Placing Share). It is expected that the entire net proceeds from the Placings will be used for (i) the Subscription and (ii) the development of and general working capital for the Boao Xiaoledao Project. EGM The SM Placing will be subject to Shareholders’ approval. The EGM will be convened and held for the Shareholders to consider, and if thought fit, to approve, among other matters, the SM Placing Agreement and the transactions contemplated thereunder, including the grant of a specific mandate for the allotment and issue of the SM Placing Shares. The votes of the Shareholders regarding the resolution for approval of the SM Placing Agreement and the transactions contemplated thereunder will be taken by way of poll at the EGM. To the best of the Directors’ knowledge, information and belief, no Shareholder is required to abstain from voting at the EGM in respect of the resolution(s) relating to the SM Placing. A circular containing, among other matters, further details of the SM Placing, the notice convening the EGM and a related form of proxy, is expected to be despatched to the Shareholders as soon as practicable. –2– General Kingston Securities, being the Placing Agent, is an indirect wholly-owned subsidiary of Kingston. (i) Mrs. Chu, being the common controlling shareholder and executive director of the Company and Kingston; and (ii) Mr. Chu, who is an executive director, the vice chairman and managing director of the Company, being the son of Mrs. Chu, are considered to be interested in the resolution in respect of Kingston Securities acting as the Placing Agent. Both of them have abstained from voting on the resolution at the Board meeting in respect of the appointment of Kingston Securities acting as the Placing Agent for the Placings (‘‘Placing Agent Resolution’’). Given Mrs. Chu is a common controlling shareholder and executive director of the Company and Kingston, Kingston Securities is a connected person of the Company under the Listing Rules and the services provided by Kingston Securities constitute continuing connected transactions of the Company and Kingston. The maximum placing commission payable of HK$16,884,800 to Kingston Securities by the Company in respect of the Placings is on normal commercial terms and is within the annual cap for provision of the financial services by the Kingston Group to the Group of HK$20,000,000 for the period up to 31 March 2016 as stated in the Company’s announcement dated 13 August 2013. Since completion of each of the GM Placing and the SM Placing is subject to the fulfilment or waiver of the conditions as set out in the GM Placing Agreement and the SM Placing Agreement respectively, each of the GM Placing and the SM Placing may or may not proceed. Shareholders and potential investors are reminded to exercise caution when dealing in the Shares. ADOPTION OF SHARE OPTION SCHEME In order to provide the Company with flexibility of granting share options to the eligible participants as incentives and rewards for their contribution or potential contribution of the eligible participants to the Company and/or its subsidiaries, the Board proposes to adopt a share option scheme in accordance with Chapter 17 of the Listing Rules. An ordinary resolution will be proposed at the EGM to seek the approval of the Shareholders for the adoption of the share option scheme. CLARIFICATION ON THE ANNOUNCEMENT OF THE COMPANY DATED 27 MARCH 2015 Reference is made to the Announcement. Clarification is made in respect of certain contexts in the Chinese translation of the Announcement and a typo on the English version of the Announcement. –3– THE PLACING AGREEMENTS On 29 March 2015, the Company entered into the GM Placing Agreement and the SM Placing Agreement with the Placing Agent for the placing of a maximum of 692,000,000 GM Placing Shares and 692,000,000 SM Placing Shares respectively at the Placing Price of HK$0.61 per GM Placing Share and SM Placing Share. The principal terms and conditions of the GM Placing Agreement and the SM Placing Agreement are set out below. THE GM PLACING AGREEMENT Date 29 March 2015 Issuer The Company Placing Agent Kingston Securities Limited, a licensed corporation to carry out Type 1 (dealing in securities) regulated activity under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). The Placing Agent has conditionally agreed to place up to 692,000,000 GM Placing Shares on a best efforts basis. The Placing Agent will be entitled to receive a commission of 2.00% of the amount equal to the Placing Price multiplied by the actual number of the GM Placing Shares successfully placed by the Placing Agent. The placing commission was arrived at after arm’s length negotiations between the Company and the Placing Agent under normal commercial terms and with reference to the prevailing market conditions. The Placing Agent is an indirectly wholly-owned subsidiary of Kingston. Mrs. Chu is a common controlling shareholder and executive director of the Company and Kingston. Therefore, the Placing Agent is a connected person of the Company under the Listing Rules. Placees The Placing Agent will place the GM Placing Shares to currently expected not fewer than six Placees (who are independent professional, institutional or other investors), who and whose ultimate beneficial owner(s) are Independent Third Parties. If any of the Placees becomes a substantial Shareholder (as defined under the Listing Rules) after completion of the GM Placing, a further announcement will be made by the Company. –4– Number of GM Placing Shares Assuming that there will be no change in the issued share capital of the Company between the date of this announcement and the completion of the GM Placing, the 692,000,000 GM Placing Shares under the GM Placing represent (i) 20.00% of the existing issued share capital of the Company of 3,460,000,000 Shares as at the date of this announcement; (ii) approximately 16.67% of the issued share capital of the Company as enlarged by the allotment and issue of the GM Placing Shares (assuming only the GM Placing is completed in full); and (iii) approximately 14.29% of the issued share capital of the Company as enlarged by the allotment and issue of the GM Placing Shares and the SM Placing Shares (assuming both of the GM Placing and SM Placing are completed in full). The aggregate nominal value of the GM Placing Shares under the GM Placing will be HK$13,840,000. Ranking of GM Placing Shares The GM Placing Shares under the GM Placing will rank, upon issue, pari passu in all respects with the Shares in issue on the date of allotment and issue of the GM Placing Shares. Placing Price The Placing Price of HK$0.61 per GM Placing Share represents: (i) a discount of approximately 19.74% to the closing price of HK$0.76 per Share as quoted on the Stock Exchange on 25 March 2015, being the last trading day immediately prior to the date of the GM Placing Agreement; and (ii) a discount of approximately 6.15% to the average closing price of HK$0.65 per Share as quoted on the Stock Exchange for the five consecutive trading days of the Shares immediately prior to the date of the GM Placing Agreement. The Placing Price was determined after arm’s length negotiation between the Company and the Placing Agent with reference to the prevailing market prices of the Shares and the capital requirement for the Subscription and the future business development of the Boao Xiaoledao Project. The Directors consider that the terms of the GM Placing Agreement (including the Placing Price and the placing commission) are fair and reasonable based on the current market conditions and in the interests of the Company and the Shareholders as a whole. Proceeds from the GM Placing Assuming all the GM Placing Shares to be placed under the GM Placing Agreement have been placed, the gross proceeds from the GM Placing will be approximately HK$422.12 million and the net proceeds will be approximately HK$413.50 million (after deduction of commission and other expenses of the GM Placing). On such basis, the net issue price will be approximately HK$0.60 per GM Placing Share. –5– General Mandate to Allot and Issue the GM Placing Shares The GM Placing Shares will be issued under the General Mandate to allot, issue and deal with Shares granted to the Directors by resolution of the Shareholders passed at the AGM subject to the limit up to 20% of the then issued share capital of the Company of 692,000,000 Old Shares as at the date of the AGM. Upon the Share Subdivision became effective on 2 September 2014, under the General Mandate, the Company is authorised to issue up to 692,000,000 Shares. Up to the date of this announcement, no Share has been issued under the General Mandate. Accordingly, the issue of the GM Placing Shares is not subject to the approval of the Shareholders. Conditions of the GM Placing Agreement Completion of the GM Placing Agreement is conditional upon: (i) the Listing Committee of the Stock Exchange granting or agreeing to grant the listing of, and permission to deal in, the GM Placing Shares under the GM Placing; and (ii) the obligations of the Placing Agent under the GM Placing Agreement not being terminated in accordance with the terms of the GM Placing Agreement, including provisions regarding force majeure events. Completion of the GM Placing Completion of the GM Placing, in any event, will take place within four business days after the fulfillment of the conditions as set out in paragraph headed ‘‘Conditions of the GM Placing Agreement’’ above or such other date to be agreed between the Company and the Placing Agent in writing (the ‘‘GM Completion Date’’). If the above conditions are not satisfied and/or waived (other than condition (i) above, which cannot be waived) in whole or in part by the Placing Agent on or before 5:00 p.m. on 15 April 2015 or such later date to be agreed between the Company and the Placing Agent in writing, the GM Placing will be terminated and the GM Placing will not proceed and all obligations and liabilities of the parties hereunder will forthwith cease and determine and no party will have any claim against the others (save for any antecedent breaches hereof). Termination and force majeure The Placing Agent may terminate the GM Placing Agreement by notice in writing prior to 9:00 a.m. on the GM Completion Date, if in the absolute opinion of the Placing Agent, the success of the GM Placing would be materially and adversely affected by any force majeure events: (a) the introduction of any new laws or regulations or any change in existing laws or regulations (or the judicial interpretation thereof) or other occurrence of any nature whatsoever which may, in the absolute opinion of the Placing Agent, materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole; or –6– (b) the occurrence of any local, national or international event or change (whether or not forming part of a series of events or changes occurring or continuing before and/or after the date of the GM Placing Agreement) of a political, military, financial, economic, currency (including a change in the system under which the value of the Hong Kong currency is linked to the currency of the United States of America) or other nature (whether or not sui generis with any of the foregoing), or in the nature of any local, national, international outbreak or escalation of hostilities or armed conflict, or affecting local securities market or the occurrence of any combination of circumstances which may, in the absolute opinion of the Placing Agent, materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole or adversely prejudices the success of the placing of the GM Placing Shares by potential investor(s) or otherwise makes it inexpedient or inadvisable for the Company or the Placing Agent to proceed with the GM Placing; or (c) any change in market conditions or combination of circumstances in Hong Kong (including without limitation suspension or material restriction on trading in securities) occurs which affect the success of the GM Placing (such success being the placing of the Shares to potential investor(s)) or otherwise in the absolute opinion of the Placing Agent make it inexpedient or inadvisable or inappropriate for the Company or the Placing Agent to proceed with the GM Placing. If, at or prior to 9:00 a.m. on the GM Completion Date: (a) the Company commits any material breach of or omits to observe any of the obligations or undertakings expressed or assumed under the GM Placing Agreement; or (b) the trading of the Shares on the Stock Exchange has been suspended for more than ten consecutive trading days save for the purposes of clearing of the announcement relating to the GM Placing Agreement or any announcements or circulars relating to the GM Placing; or (c) the Placing Agent shall become aware of the fact that any of the representations or warranties contained in the GM Placing Agreement was, when given, untrue or inaccurate or would in any respect be untrue or inaccurate if repeated the Placing Agent shall determine that any such untrue representation or warranty represents or is likely to represent a material adverse change in the financial or trading position or prospects of the Group taken as a whole or will otherwise likely to have a material prejudicial effect on the GM Placing. The Placing Agent shall be entitled (but not bound) by notice in writing to the Company to elect to treat such matter or event as releasing and discharging the Placing Agent from its obligations under the GM Placing Agreement. Upon giving of notice pursuant to the paragraph above, all obligations of the Placing Agent hereunder shall cease and determine and no party shall have any claim against any other parties in respect of any matter or thing arising out of or in connection with the GM Placing Agreement, save for any antecedent breaches. The Directors are not aware of the occurrence of any of such events as at the date of this announcement. –7– THE SM PLACING AGREEMENT Date 29 March 2015 Issuer The Company Placing Agent Kingston Securities Limited The Placing Agent has conditionally agreed to place up to 692,000,000 SM Placing Shares on a best efforts basis. The Placing Agent will be entitled to receive a commission of 2.00% of the amount equal to the Placing Price multiplied by the actual number of the SM Placing Shares successfully placed by the Placing Agent. The placing commission was arrived at after arm’s length negotiations between the Company and the Placing Agent under normal commercial terms and with reference to the prevailing market conditions. Placees The Placing Agent will place the SM Placing Shares to currently expected not fewer than six Placees (who are independent professional, institutional or other investors), who and whose ultimate beneficial owner(s) are Independent Third Parties. If any of the Placees becomes a substantial Shareholder (as defined under the Listing Rules) after the completion of the SM Placing, a further announcement will be made by the Company. Number of SM Placing Shares Assuming that there will be no change in the issued share capital of the Company between the date of this announcement and the completion of the GM Placing and SM Placing, the 692,000,000 SM Placing Shares under the SM Placing represent (i) 20.00% of the existing issued share capital of the Company of 3,460,000,000 Shares as at the date of this announcement; and (ii) approximately 14.29% of the issued share capital of the Company as enlarged by the allotment and issue of the GM Placing Shares and the SM Placing Shares. The aggregate nominal value of the SM Placing Shares under the SM Placing will be HK$13,840,000. Ranking of SM Placing Shares The SM Placing Shares under the SM Placing will rank, upon issue, pari passu in all respects with the Shares in issue on the date of allotment and issue of the SM Placing Shares. Placing Price The Placing Price per SM Placing Share is the same as the Placing Price per GM Placing Share. Please refer to the paragraph headed ‘‘Placing Price’’ under the section headed ‘‘The GM Placing Agreement’’ above for an analysis of the Placing Price. –8– The Directors consider that the terms of the SM Placing Agreement (including the Placing Price and the placing commission) are fair and reasonable based on the current market conditions and in the interests of the Company and the Shareholders as a whole. Proceeds from the SM Placing Assuming all the SM Placing Shares have been placed, the gross proceeds from the SM Placing will be approximately HK$422.12 million and the net proceeds will be approximately HK$413.50 million (after deduction of commission and other expenses of the SM Placing). On such basis, the net issue price will be approximately HK$0.60 per SM Placing Share. The Specific Mandate The Company proposes to seek the grant of the Specific Mandate from the Shareholders at the EGM for the allotment and issue of the SM Placing Shares. Conditions of the SM Placing Agreement Completion of the SM Placing Agreement is conditional upon: (i) the Listing Committee of the Stock Exchange granting or agreeing to grant the listing of, and permission to deal in, the SM Placing Shares; (ii) the passing of the resolution(s) by the Shareholders to approve the SM Placing Agreement and the transactions contemplated thereunder, including the grant of the Specific Mandate for the allotment and issue of the SM Placing Shares at the EGM; and (iii) the obligations of the Placing Agent under the SM Placing Agreement becoming unconditional and not being terminated in accordance with the terms thereof, including provision regarding the force majeure events. If the above conditions are not satisfied and/or waived (in respect of condition (iii) above) in whole or in part by the Placing Agent prior to 5:00 p.m. on the date falling on the 30th day after the date of the EGM, the SM Placing Agreement will be terminated and the SM Placing will not proceed and all obligations and liabilities of the Company and the Placing Agent under the SM Placing Agreement will forthwith cease and determine and no party will have any claim against the other (save for any antecedent breaches of the SM Placing Agreement). Completion of the SM Placing Completion of the SM Placing will take place within four business days after the fulfillment and/or waiver (in respect of condition (iii) above) of all the above conditions or on such other date to be agreed between the Company and the Placing Agent in writing (the ‘‘SM Completion Date’’). –9– Termination and force majeure The Placing Agent may terminate the SM Placing Agreement by notice in writing prior to 9:00 a.m. on the SM Completion Date, if in the absolute opinion of the Placing Agent, the success of the SM Placing would be materially and adversely affected by any force majeure events: (a) the introduction of any new laws or regulations or any change in existing laws or regulations (or the judicial interpretation thereof) or other occurrence of any nature whatsoever which may, in the absolute opinion of the Placing Agent, materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole; or (b) the occurrence of any local, national or international event or change (whether or not forming part of a series of events or changes occurring or continuing before and/or after the date of the SM Placing Agreement) of a political, military, financial, economic, currency (including a change in the system under which the value of the Hong Kong currency is linked to the currency of the United States of America) or other nature (whether or not sui generis with any of the foregoing), or in the nature of any local, national, international outbreak or escalation of hostilities or armed conflict, or affecting local securities market or the occurrence of any combination of circumstances which may, in the absolute opinion of the Placing Agent, materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole or adversely prejudices the success of the placing of the SM Placing Shares by potential investor(s) or otherwise makes it inexpedient or inadvisable for the Company or the Placing Agent to proceed with the SM Placing; or (c) any change in market conditions or combination of circumstances in Hong Kong (including without limitation suspension or material restriction on trading in securities) occurs which affect the success of the SM Placing (such success being the placing of the Shares to potential investor(s)) or otherwise in the absolute opinion of the Placing Agent make it inexpedient or inadvisable or inappropriate for the Company or the Placing Agent to proceed with the SM Placing. If, at or prior to 9:00 a.m. on the SM Completion Date: (a) the Company commits any material breach of or omits to observe any of the obligations or undertakings expressed or assumed under the SM Placing Agreement; or (b) the trading of the Shares on the Stock Exchange has been suspended for more than ten consecutive trading days save for the purposes of clearing of the announcement relating to the SM Placing Agreement or any announcements or circulars relating to the SM Placing; or (c) the Placing Agent shall become aware of the fact that any of the representations or warranties contained in the SM Placing Agreement was, when given, untrue or inaccurate or would in any respect be untrue or inaccurate if repeated the Placing Agent shall determine that any such untrue representation or warranty represents or is likely to – 10 – represent a material adverse change in the financial or trading position or prospects of the Group taken as a whole or will otherwise likely to have a material prejudicial effect on the SM Placing. The Placing Agent shall be entitled (but not bound) by notice in writing to the Company to elect to treat such matter or event as releasing and discharging the Placing Agent from its obligations under the SM Placing Agreement. Upon giving of notice pursuant to the paragraph above, all obligations of the Placing Agent hereunder shall cease and determine and no party shall have any claim against any other parties in respect of any matter or thing arising out of or in connection with the SM Placing Agreement, save for any antecedent breaches. The Directors are not aware of the occurrence of any of such events as at the date of this announcement. APPLICATION FOR LISTING OF GM PLACING SHARES AND SM PLACING SHARES Applications will be made to the Stock Exchange for the listing of, and permission to deal in, the GM Placing Shares and the SM Placing Shares respectively. REASONS FOR THE PLACINGS AND USE OF PROCEEDS The Group is principally engaged in the distribution of branded luxury watches, timepieces and accessories in Hong Kong, Macau, Taiwan and the PRC. As disclosed in the Announcement, the Company entered into the Subscription Agreement regarding the subscription of the registered capital and contribution to the capital reserve of the Target Company. Pursuant to the Subscription Agreement, Giant Bright has conditionally agreed to subscribe for the registered capital and contribute to the capital reserve of the Target Company in an aggregate principal amount of RMB380,000,000 (equivalent to approximately HK$474,430,000). The Target Group is principally engaged in the construction and development an international medical, tourism and commercial project carried out in Xiaoledao (小樂島) located at Hainan Boao Xiaoledao International Medical & Tourism Pilot Zone* (海南博鰲 樂城國際醫療旅遊先行區項目), which is located in Boao Township, Qionghai City, Hainan Province, the PRC* (中國海南省瓊海市博鰲鎮). In view of the funding needs to finance the Subscription and the future development of the Boao Xiaoledao Project, the Company intends to apply the maximum net proceeds of approximately HK$827.00 million from the Placings for the (i) the Subscription and (ii) the development of and general working capital for the Boao Xiaoledao Project. After taking in consideration of the financial position of the Group and the immense business and earning potentials of the Boao Xiaoledao Project, the Directors consider that the Placings are in the interest of the Company and its Shareholders as a whole. Details of the Subscription, the reasons for and benefits of the Subscription and the Boao Xiaoledao Project are set out in the Announcement. – 11 – FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS The Company has conducted the following equity fund raising activities in the past twelve months immediately before the date of this announcement. Date of initial announcement Event 4 March 2014 Rights Issue 6 August 2014 Placing under general mandate 27 March 2015 Grant of the Options under specific mandate Net proceeds (Approximately) HK$118.2 million HK$104.9 million HK$210.00 million Intended use of proceeds Actual use of proceeds as at the date of this announcement (i) Approximately HK$29.6 (i) million for the development of its existing business Approximately HK$9.3 million was applied for business development and the balance of approximately HK$20.3 million is currently placed as time deposits at bank for intended use in future (ii) Approximately HK$88.6 (ii) million for investment opportunities as may be identified from time to time and/or general working capital of the Group Approximately HK$88.6 million was applied for general working capital For general working capital of the Group for supporting the continuous expansion of the Group’s distribution network and marketing and branding activities As to approximately HK$86.3 million has been used for general working capital and the balance of approximately HK$18.6 million is currently placed as time deposits at bank for intended use in future For general working capital of Not applicable, the grant of the Boao Xiaoledao Project the Options are subject to the Shareholders’ approval at an extraordinary general meeting to be held by the Company and other conditions Save as disclosed above, as at the date of this announcement, the Company has not conducted any equity fund raising exercise in the past twelve months immediately preceding the date of this announcement. EFFECTS ON SHAREHOLDING STRUCTURE OF THE COMPANY To the best of the Directors’ knowledge, information and belief after having made all reasonable enquiries, set out below are the existing shareholding structure of the Company and the effect on the shareholder structure of the Company: (i) upon completion of the GM Placing (assuming all the GM Placing Shares are placed in full and there is no other change in the shareholding structure of the Company before the allotment and issue of the GM Placing Shares); (ii) upon completion of the SM Placing (assuming all the SM Placing Shares are placed in full and there is no other change in the shareholding structure of the Company before the allotment and issue of the SM Placing Shares); and – 12 – (iii) upon completion of the Placings (assuming all the GM Placing Shares and SM Placing Shares are placed in full and there is no other change in the shareholding structure of the Company before the allotment and issue of those Placing Shares). Shareholders Sincere Watch Limited (Note 1) Mrs. Chu Yuet Wah (Note 2) Sub-total As at the date of this announcement Number of Approximate Shares % Immediately upon completion of the GM Placing Number of Approximate Shares % Immediately upon completion of the SM Immediately upon Placing completion of the Placings Number of Approximate Number of Approximate Shares % Shares % 1,530,000,000 44.22 1,530,000,000 36.85 1,530,000,000 36.85 1,530,000,000 31.58 265,000,000 7.66 265,000,000 6.38 265,000,000 6.38 265,000,000 5.47 1,795,000,000 51.88 1,795,000,000 43.23 1,795,000,000 43.23 1,795,000,000 37.05 Public Shareholders Placees of the GM Placing Placees of the SM Placing Other public Shareholders — — 692,000,000 16.67 — — 692,000,000 14.29 — 1,665,000,000 — 48.12 — 1,665,000,000 — 40.10 692,000,000 1,665,000,000 16.67 40.10 692,000,000 1,665,000,000 14.29 34.37 Sub-total 1,665,000,000 48.12 2,357,000,000 56.77 2,357,000,000 56.77 3,049,000,000 62.95 Total 3,460,000,000 100.00 4,152,000,000 100.00 4,152,000,000 100.00 4,844,000,000 100.00 Notes: 1. These Shares are held by Sincere Watch Limited, the entire issued share capital of which is whollyowned by Be Bright Limited, which is wholly and beneficially owned by Mrs. Chu. 2. Mrs. Chu, chairman and executive director of the Company. 3. The Placing Shares will be placed by the Placing Agent to currently expected not fewer than six Placees who are Independent Third Parties under each of the GM Placing and the SM Placing. Upon completion of the Placings, it is expected that none of the Placees will become a substantial Shareholder. Accordingly, the shareholding held by the Placees is regarded as held by the public. 4. On 27 March 2015, the Company has conditionally agreed to grant to the Grantees an aggregate of 346,000,000 Options which entitle the Grantees to subscribe for an aggregate of 346,000,000 Shares, representing (i) approximately 10.00% of the issued share capital of the Company as at the date of this announcement; (ii) approximately 9.09% of the issued share capital of the Company as enlarged by the Option Shares upon exercise of the Options in full and (iii) approximately 6.67% of the issued share capital of the Company as enlarged by the Option Shares upon exercise of the Options in full and all the GM Placing Shares and SM Placing Shares are placed in full. As two of the Grantees are executive Directors, namely, Mr. Wu and Mr. Chu and thus connected persons of the Company under the Listing Rules, the proposed grant of the Options to them constitutes a connected transaction of the Company under the Listing Rules and subject to the Shareholder’s approval. The Grantees are Mr. Wu, Mr. Chu, Ms. Gao Xin (高昕女士) and Mr. Sie, Winston (薛煒森先生), who owns 138,400,000 Options, 103,800,000 Options, 51,900,000 Options and 51,900,000 Options, respectively. 5. The percentages are subject to rounding difference, if any. – 13 – EGM The SM Placing will be subject to Shareholders’ approval. The EGM will be convened and held for the Shareholders to consider, and if thought fit, to approve, among other matters, the SM Placing Agreement and the transactions contemplated thereunder, including the grant of a specific mandate for the allotment and issue of the SM Placing Shares. The votes of the Shareholders regarding the resolution for approval of the SM Placing Agreement and the transactions contemplated thereunder will be taken by way of poll at the EGM. To the best of the Directors’ knowledge, information and belief, no Shareholder is required to abstain from voting at the EGM in respect of the resolution(s) relating to the SM Placing. A circular containing, among other matters, further details of the SM Placing, the notice convening the EGM and a related form of proxy, is expected to be despatched to the Shareholders as soon as practicable. Since completion of each of the GM Placing and the SM Placing is subject to the fulfilment or waiver of the conditions as set out in the GM Placing Agreement and the SM Placing Agreement respectively, each of the GM Placing and the SM Placing may or may not proceed. Shareholders and potential investors are reminded to exercise caution when dealing in the Shares. GENERAL The GM Placing and the SM Placing are not inter-conditional. Kingston Securities, being the Placing Agent, is an indirect wholly-owned subsidiary of Kingston. (i) Mrs. Chu, being the common controlling shareholder and executive director of the Company and Kingston; and (ii) Mr. Chu, who is an executive director, the vice chairman and managing director of the Company, being the son of Mrs. Chu, are considered to be interested in the resolution in respect of Kingston Securities acting as the Placing Agent. Both of them have abstained from voting on the resolution at the Board meeting in respect of the appointment of Kingston Securities acting as the Placing Agent for the Placings. Given Mrs. Chu is a common controlling shareholder and executive director of the Company and Kingston, Kingston Securities is a connected person of the Company under the Listing Rules and the services provided by Kingston Securities constitute continuing connected transactions of the Company and Kingston. The maximum placing commission payable of HK$16,884,800 to Kingston Securities by the Company in respect of the Placings is on normal commercial terms and is within the annual cap for provision of the financial services by the Kingston Group to the Group of HK$20,000,000 for the period up to 31 March 2016 as stated in the Company’s announcement dated 13 August 2013. ADOPTION OF SHARE OPTION SCHEME In order to provide the Company with flexibility of granting share options to the eligible participants as incentives and rewards for their contribution or potential contribution of the eligible participants to the Company and/or its subsidiaries, the Board proposes to adopt a share option scheme in accordance with Chapter 17 of the Listing Rules. An ordinary resolution will be proposed at the EGM to seek the approval from the Shareholders for the – 14 – adoption of the share option scheme. The adoption of the share option scheme is conditional upon (i) the approval of the adoption of the new share option scheme by the Shareholders at the EGM; and (ii) the Stock Exchange granting approval for the listing of, and permission to deal in, the Shares which may be issued upon the exercise of the options which may be granted under the share option scheme. The Directors consider that the share option scheme will provide its participants with the opportunity to acquire proprietary interests in the Company and will encourage such participants to work towards enhancing the value of the Company and the Shares for the benefit of the Company and the Shareholders as a whole. An application will be made to the Stock Exchange for the listing of, and permission to deal in, the Shares which may be issued upon the exercise of the options under the new share option scheme. A circular containing, among others, the terms of the share option scheme, the notice convening the EGM and a related form of proxy, is expected to be despatched to the Shareholders as soon as practicable. CLARIFICATION ON THE ANNOUNCEMENT OF THE COMPANY DATED 27 MARCH 2015 Reference is made to the Announcement. Clarification is made in respect of the following contexts in the Chinese translation of the Announcement (the ‘‘Chinese Announcement’’): (1) ‘‘Gao Xin女士’’ should be read as ‘‘高昕女士’’ throughout the Chinese Announcement. (2) ‘‘Sie Winston 先生’’ should be read as ‘‘薛煒森先生’’ throughout the Chinese Announcement. (3) The sentence stated as ‘‘倘任何授出條件於授出日期第120日或之前未達成或董事會可 能批准之較後日期,授出購股權之要約將會失效。’’ on page 14 of the Chinese Announcement should be replaced by ‘‘倘任何授出條件於授出日期第120日或之前或 董事會可能批准之較後日期未達成,授出購股權之要約將會失效。’’. (4) The figure given in the following contents on page 15 of the Chinese Announcement should not be ‘‘834,600,000’’. Instead, the figure should each be ‘‘34,600,000’’: ‘‘就朱先生獲授之103,800,000份購股權: (a) 至多34,600,000份購股權 (「朱氏首批購股權」)可於生效日期起至購股權期間屆滿 之日止期間 (首尾兩日包括在內)隨時行使; (b) 至多34,600,000份購股權 (不包括朱氏首批購股權)可於生效日期第一週年之日起 至購股權期間屆滿之日止期間 (首尾兩日包括在內)隨時行使;及 (不包括朱氏首批購股權及朱氏第二批購股權)可於生效日 (c) 至多34,600,000份購股權 期第二週年之日起至購股權期間屆滿之日止期間(首尾兩日包括在內)隨時行使。’’ – 15 – (5) The following contents should be added immediately before the section headed ‘‘訂立購 股權協議的理由及裨益’’ on page 18 of the Chinese Announcement: ‘‘承授人之資料 胡定旭先生 胡先生已獲委任為執行董事及董事會聯席主席,自二零一五年三月二十七日起生效。 胡先生的履歷詳情已載於本公告「委任執行董事及董事會聯席主席」一節。 朱俊浩先生 朱先生目 前為本公 司副主席 、董事總 經理及執行 董事。彼 自二零一 二年五月 二十 九日起出任本公司執行董事,並自二零一二年七月十三日起出任本公司副主席 兼董事總經理。朱先生自二零一二年五月二十一日起為本公司直屬控股公司 Sincere Watch Limited之 董 事 , 亦 為 本 公 司 多 家 附 屬 公 司 之 董 事 。 朱 先 生 為 中 國人民政治協商會議廣西省政協委員、香港政協青年聯會副會長、香港廣西 社團總會副會長、香港廣西青年聯會榮譽主席、香港證券業協會及香港鐘表 業總會董事。 高昕女士 高女士為目標集團之顧問。彼成立中經貿資產管理並自二零零九年七月以來於中經貿 資產管理擔任總裁。 薛煒森先生 薛先生為目標集團之顧問。彼目前為中經貿資產管理的合夥人,負責股權投 資 基 金 業 務 。 彼 為 高 級 銀 行 家 , 曾 於 J.P. Morgan多 個 部 們 任 職 , 包 括 融 資 及 衍 生 工 具 市 場 方 面 。 ’’ (6) The second paragraph in the section headed ‘‘訂 立 購 股 權 協 議 的 理 由 及 裨 益 ’’ on page 18 of the Chinese announcement should be read as ‘‘董 事( 不 包 括 獨 立 非 執 行 董事,其將於審閱獨立財務顧問的意見函後提供意見以及放棄投票之胡先生 及 朱 女 士 )認 為 , 鑒 於 承 授 人 的 豐 富 經 驗 及 彼 等 對 目 標 集 團 的 預 期 貢 獻 , 建 議授出購股權符合本公司及股東的整體利益,且購股權協議的條款對獨立股 東 公 平 合 理 。 ’’ instead of ‘‘董 事( 不 包 括 獨 立 非 執 行 董 事 , 其 將 於 審 閱 獨 立 財 務 顧 問 的 意 見 函 後 提 供 意 見 以 及 放 棄 投 票 之 胡 先 生 及 朱 女 士 )認 為 , 建 議 授 出 購股權符合本公司及股東的整體利益,且購股權協議的條款對獨立股東公平 合 理 。 ’’ (7) The date as appeared in the paragraph of the section headed ‘‘一般資料’’ on page 20 of the Chinese Announcement should be read as ‘‘二零一五年四月三十日’’ instead of ‘‘二 零一五年四月二十日’’. (8) The second to the last sentence in the fourth paragraph of the section headed ‘‘委 任 執 行 董 事 及 董 事 會 聯 席 主 席 ’’ on page 21 of the Chinese Announcement should be read as ‘‘胡 先 生 的 董 事 袍 金 金 額 為 1 0 , 0 0 0 , 0 0 0 港 元 每 年 , 每 年 可 按 年 薪 的 至 少10%遞增,並享有由目標公司可能釐定的酌情花紅,惟須上海千博及本公 司 同 意 。 ’’ instead of ‘‘胡 先 生 的 董 事 袍 金 金 額 為 1 0 , 0 0 0 , 0 0 0 港 元 每 年 , 每 年 可 按 年 薪 的 至 少 1 0 % 遞 增 , 並 享 有 由 董 事 會 可 能 釐 定 的 酌 情 花 紅 。 ’’ – 16 – (9) The following should be added as one of the definitions on page 24 of the Chinese Announcement: ‘‘「證券及期貨條例」 指 香港法例第571章證券及期貨條例,經不時修訂’’ (10) The sentence regarding the exchange rate stated on page 25 of the Chinese Announcement should be ‘‘於 本 公 告 , 除 非 另 有 指 明 , 以 人 民 幣 計 值 金 額 已 按 匯 率人民幣1元兌1.2485港元兌換作港元,且僅供說明用途,並無構成任何金 額 已 、 可 或 能 按 此 匯 率 進 行 兌 換 之 聲 明 。 ’’ instead of ‘‘於 本 公 告 , 除 非 另 有 指明,以人民幣計值金額已按匯率1港元兌人民幣1.2485元兌換作港元,且 僅 供 說 明 用 途 , 並 無 構 成 任 何 金 額 已 、 可 或 能 按 此 匯 率 進 行 兌 換 之 聲 明 。 ’’ Except as stated above, all the other information and matters as stated in the Chinese Announcement remain unchanged. In addition, the location of Xiaoledao (小樂島) as stated in the last paragraph on page 1 of the Announcement, it should be located at Hainan Boao Lecheng International Medical & Tourism Pilot Zone* (海南博鰲樂城國際醫療旅遊先行區), instead of Boao Xiaoledao International Medical & Tourism Pilot Zone* (博鰲小樂島國際醫療旅遊先行區項目). The definition of the ‘‘Grantees’’ as stated on page 23 in the Announcement should be ‘‘collectively Mr. Wu Ting Yuk, Anthony, Mr. Chu, Kingston Chun Ho, Ms. Gao Xin and Mr. Sie Winston’’ instead of ‘‘collectively Mr. Wu Ting Yuk, Anthony, Mr. Chu, Kingston Chun Ho, Mr. Gao Xin and Mr. Sie Winston’’. Except for the aforesaid, all the other information and matters as stated in the Announcement remain unchanged. TERMS AND DEFINITIONS In this announcement, unless the context otherwise requires, the following words and expressions shall have the meaning ascribed to them below: ‘‘AGM’’ the annual general meeting of the Company held on 22 August 2014 ‘‘Announcement’’ the announcement dated 27 March 2015 published by the Company in relation, among other things, the Subscription, the grant of the Options and appointment of Mr. Wu Ting Yuk, Anthony (胡定旭) as the executive Director and Cochairman of the Company ‘‘Boao Xiaoledao Project’’ an international medical, tourism and commercial related development project carried out in Xiaoledao (小樂島) located at the Hainan Boao Lecheng International Medical & Tourism Pilot Zone* (海南博鰲樂城國際醫療旅遊先行 區) ‘‘Board’’ the board of Directors – 17 – ‘‘Company’’ Sincere Watch (Hong Kong) Limited, a company incorporated under the laws of the Cayman Islands with limited liability and the issued shares of which are listed on the Main Board of the Stock Exchange (stock code: 444) ‘‘connected person(s)’’ the meaning ascribed thereto in the Listing Rules ‘‘Director(s)’’ the director(s) of the Company ‘‘EGM’’ the extraordinary general meeting of the Company to be convened to consider and, if thought fit, approve the SM Placing and the share option scheme of the Company ‘‘General Mandate’’ the mandate granted to the Directors by the Shareholders at the AGM to allot, issue and deal with up to 20% of the then issued share capital of the Company as at the date of the AGM ‘‘Giant Bright’’ Giant Bright Holdings Limited, a company incorporated in Hong Kong with limited liability and is an indirect wholly owned subsidiary of the Company as at the date of this announcement ‘‘GM Placing’’ the placing of 692,000,000 GM Placing Shares pursuant to the terms of the GM Placing Agreement ‘‘GM Placing Agreement’’ the conditional placing agreement entered into between the Company and the Placing Agent dated 29 March 2015 in relation to the GM Placing ‘‘GM Placing Share(s)’’ up to 692,000,000 new Shares to be placed pursuant to the GM Placing Agreement ‘‘Grantees’’ collectively Mr. Wu, Mr. Chu, Ms. Gao Xin (高昕女士) and Mr. Sie, Winston (薛煒森先生) ‘‘Group’’ the Company and its subsidiaries ‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC ‘‘Independent Third Party(ies)’’ third party(ies) independent of, not connected or acting in concert (as defined in the Hong Kong Code on Takeovers and Mergers) with any directors, chief executive or substantial shareholder(s) of the Company or its subsidiaries and their respective associates (as defined under the Listing Rules) – 18 – ‘‘Kingston’’ Kingston Financial Group Limited, a company incorporated under the laws of Bermuda with limited liability and the issued shares of which are listed on the Main Board of the Stock Exchange (stock code: 1031) ‘‘Kingston Group’’ Kingston and its subsidiaries ‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange ‘‘Mr. Chu’’ Mr. Chu, Kingston Chun Ho (朱俊浩先生), who is an executive director, the vice chairman and managing director of the Company, being the son of Mrs. Chu and one of the Grantees ‘‘Mr. Wu’’ Mr. Wu Ting Yuk, Anthony (胡定旭先生), the executive Director and Co-chairman of the Company and one of the Grantees ‘‘Mrs. Chu’’ Mrs. Chu Yuet Wah, chairman and executive Director of the Company and the controlling Shareholder of the Company and Kingston ‘‘Old Shares’’ ordinary share(s) of HK$0.10 each in the issued and unissued share capital of the Company prior to the Share Subdivision ‘‘Option Shares’’ an aggregate of up to 346,000,000 new Shares to be allotted and issued by the Company following the exercise of the Options ‘‘Options’’ options carrying rights to subscribe for up to a total of 346,000,000 Option Shares to be granted by the Company to the Grantees subject to certain option conditions ‘‘Placee(s)’’ any professional, institutional or other investor(s) or any of their respective subsidiaries or associates procured by the Placing Agent to subscribe for any of the GM Placing Shares or the SM Placing Shares pursuant to the Placing Agent’s obligations under the GM Placing Agreement and the SM Placing Agreement respectively ‘‘Placings’’ the GM Placing and the SM Placing ‘‘Placing Agent’’ or ‘‘Kingston Securities’’ Kingston Securities Limited, a licensed corporation to carry on business in type 1 regulated activity (dealing in securities) under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) ‘‘Placing Agreements’’ the GM Placing Agreement and the SM Placing Agreement – 19 – ‘‘Placing Price’’ HK$0.61 per GM Placing Share and SM Placing Share ‘‘Placing Share(s)’’ the new Shares to be allotted and issued under the Placings ‘‘PRC’’ the People’s Republic of China, which for the purpose of this announcement, shall exclude Hong Kong, Taiwan and the Macau Special Administrative Region of the People’s Republic of China ‘‘Shareholder(s)’’ holder(s) of the Share(s) ‘‘Share(s)’’ ordinary share(s) of HK$0.02 each in the issued share capital of the Company ‘‘Share Subdivision’’ the subdivision of each Old Share into 5 Shares became effective on 2 September 2014 ‘‘SM Placing’’ the placing of 692,000,000 SM Placing Shares pursuant to the terms of the SM Placing Agreement ‘‘SM Placing Agreement’’ the conditional placing agreement entered into between the Company and the Placing Agent dated 29 March 2015 in relation to the SM Placing ‘‘SM Placing Share(s)’’ up to 692,000,000 new Shares to be placed pursuant to the SM Placing Agreement ‘‘Specific Mandate’’ a specific mandate to allot and issue new Shares to be sought from the Shareholders at the EGM to satisfy the SM Placing Shares ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited ‘‘Subscription’’ the subscription of the registered capital and contribution to the capital reserve of the Target Company pursuant to the Subscription Agreement ‘‘Subscription Agreement’’ a subscription agreement entered into between Giant Bright, 上海千博投資管理有限公司 (Shanghai Chambow Investment Management Company Limited*), a minority shareholder, 蔣曉 松先生 (Mr. Jiang Xiaosong*) and the Target Company dated 27 March 2015 in relation to the subscription of the registered capital and contribution to the capital reserve of the Target Company ‘‘Target Company’’ 海南千博樂城開發有限公司 (Hainan Chambow Lecheng Development Limited*), a limited liability company established in the PRC ‘‘Target Group’’ the Target Company and its subsidiaries ‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong – 20 – ‘‘RMB’’ Renminbi, the lawful currency of the PRC ‘‘%’’ per cent. By order of the Board Sincere Watch (Hong Kong) Limited Chu Yuet Wah Chairman Hong Kong, 29 March 2015 In this announcement, unless otherwise indicated, amounts in RMB have been converted into HK$ at the rate of RMB1 = HK$1.2485 for purpose of illustration only and does not constitute a representation that any amount has been, could have been or may be converted. * The English name is a translation of its Chinese name and is included for identification purposes only. As at the date hereof, the Board comprises Mrs. Chu Yuet Wah (Chairman), Mr. Wu Ting Yuk, Anthony (Co-chairman) and Mr. Chu, Kingston Chun Ho (Vice Chairman and Managing Director) as executive Directors and Mr. Lau Man Tak, Ms. Lo Miu Sheung, Betty and Dr. Wong Yun Kuen as independent non-executive Directors. – 21 –
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