Art Group Holdings Limited — Proxy Solicitation & Information Statement 2015

Jul 28, 2015

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Art Textile Technology International Company Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser(s) or the transferee(s) or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or the transferee(s).

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

ART TEXTILE TECHNOLOGY INTERNATIONAL COMPANY LIMITED 錦藝紡織科技國際有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 565)

PROPOSED REFRESHMENT OF SCHEME MANDATE LIMIT FOR SHARE OPTION SCHEME AND NOTICE OF EXTRAORDINARY GENERAL MEETING

A notice convening an extraordinary general meeting of Art Textile Technology International Company Limited to be held at Fung Shui Room, 6th Floor, Marco Polo Hongkong Hotel, Harbour City, 3 Canton Road, Kowloon, Hong Kong on Thursday, 20 August 2015 at 10:15 a.m. or any adjournment thereof is set forth on pages 10 to 11 of this circular. Whether or not you are able to attend the meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon as soon as practicable and in any event not less than 48 hours before the time fixed for holding the extraordinary general meeting (or any adjournment thereof) to the office of the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong. Completion and return of the form of proxy will not preclude you from attending and voting in person at the extraordinary general meeting or any adjourned meeting if you so wish and in such event, the instrument appointing a proxy shall be deemed to be revoked.

29 July 2015

RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this circular is accurate and complete in all material aspects and not misleading or deceptive, and there are no other matters the omission of which would make any statement contained herein or this circular misleading.

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TABLE OF CONTENTS

	Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
NOTICE OF THE EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . . . .	10

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DEFINITIONS

In this circular, the following expressions shall have the following meanings unless the context indicates otherwise:

“Articles”

the articles of association adopted by the Company, and as amended from time to time by resolution of the Shareholders;

“Board”

the board of Directors;

“Chairman”

chairman of the Board;

“Company”

Art Textile Technology International Company Limited（錦 藝紡織科技國際有限公司）, a company incorporated in the Cayman Islands with limited liability whose Shares are listed on the Stock Exchange;

“Directors”

the directors of the Company;

“EGM”

the extraordinary general meeting of the Company to be convened on Thursday, 20 August 2015 at 10:15 a.m. at Fung Shui Room, 6th Floor, Marco Polo Hongkong Hotel, Harbour City, 3 Canton Road, Kowloon, Hong Kong;

“Eligible Person(s)”

means:

• (a) any employee (whether full time or part time) of the Company, any of its subsidiaries or any entity (the “ Invested Entity ”) in which the Group holds any equity interest, including any executive director of the Company, any of such subsidiaries or any Invested Entity;

• (b) any non-executive directors (including independent non-executive directors) of the Company, any subsidiaries or any Invested Entity;

• (c) any supplier of goods or services to any member of the Group or any Invested Entity;

• (d) any customer of the Group or any Invested Entity;

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DEFINITIONS

• (e) any consultants, advisers, managers, officers who provide research, development, other technological support or services to the Group or any Invested Entity; and

• (f) any shareholder of any member of the Group or any Invested Entity or any holder of any securities issued by any member of the Group or any Invested Entity;

and, for the purposes of the new Share Option Scheme, shall include any company controlled by one or more persons belonging to any of the above classes of persons;

“Group” “Hong Kong”

the Company and its subsidiaries;

“Hong Kong” The Hong Kong Special Administrative Region of the PRC; “Latest Practicable Date” 24 July 2015, being the latest practicable date prior to the printing of this circular for ascertaining certain information referred to in this circular; “Listing Rules” The Rules Governing the Listing of Securities on the Stock Exchange; “Scheme Mandate Limit” at any time, the maximum number of Shares in respect of which the Directors are authorised at that time to grant options whether under the Share Option Scheme and any other schemes of the Group; “Share(s)” the ordinary share(s) of HK$0.01 each in the share capital of the Company; “Shareholder(s)” the registered holder(s) of the Share(s); “Share Option(s)” share option(s) granted or to be granted to the entitled persons or the Eligible Person(s) to subscribe for Share(s) under the Share Option Scheme and any other share option scheme(s) of the Company;

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DEFINITIONS

“Share Option Scheme” the share option scheme adopted by the Company on 22 November 2013; “Stock Exchange” The Stock Exchange of Hong Kong Limited; “HK$” Hong Kong dollars, the lawful currency of Hong Kong; and “%” per cent.

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LETTER FROM THE BOARD

ART TEXTILE TECHNOLOGY INTERNATIONAL COMPANY LIMITED 錦藝紡織科技國際有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 565)

Executive Directors:– Registered office:– Mr. Chen Jinyan (Chairman) Cricket Square Mr. Chen Dong (Chief Executive Officer) Hutchins Drive Mr. Chen Jinqing P.O. Box 2681 Grand Cayman KY1-1111 Independent non-executive Directors:– Cayman Islands Ms. Yau Lai Ying Mr. Yang Zeqiang Head office and principal place of business Mr. Lin Ye in Hong Kong:– Unit 1407, 14th Floor China Merchants Tower Shun Tak Centre 168-200 Connaught Road Central Hong Kong 29 July 2015

To the Shareholders

Dear Sir or Madam,

PROPOSED REFRESHMENT OF SCHEME MANDATE LIMIT

FOR SHARE OPTION SCHEME AND NOTICE OF EXTRAORDINARY GENERAL MEETING

I. INTRODUCTION

The purpose of this circular is to give you information in respect of the proposed refreshment of the Scheme Mandate Limit for the Share Option Scheme.

A notice convening the EGM is set forth on pages 10 to 11 of this circular.

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LETTER FROM THE BOARD

II. REFRESHMENT OF THE SCHEME MANDATE LIMIT

The Share Option Scheme was adopted by the Company on 22 November 2013. Under the terms of the Share Option Scheme, the Directors are authorised to grant options to the Eligible Persons up to the Scheme Mandate Limit in force from time to time. Apart from the Share Option Scheme, the Company has no other share option scheme.

The existing Scheme Mandate Limit allows the Directors to grant option under the Share Option Scheme in respect of up to 104,060,258 Shares, excluding for this purpose the number of Shares there were subject to options that were granted but have since lapsed under the terms of the Share Option Scheme. The existing Scheme Mandate Limit is equivalent to 10% of the Shares in issue as at 22 November 2013, being the date of the adoption of the Share Option Scheme. With the recent grant of options of 104,000,000 Shares under the Share Option Scheme as announced by the Company on 22 May 2014, the existing Scheme Mandate Limit is close to being fully utilised. Accordingly, the Company may grant further options under the Share Option Scheme carrying the rights to subscribe for only 60,258 Shares (representing 0.06% of the existing Scheme Mandate Limit and approximately 0.005% of the total issued shares of the Company, being 1,298,602,583 Shares, as at the Latest Practicable Date).

The Scheme Mandate Limit may be refreshed by the approval of the Shareholders and under the Listing Rules, the refreshed Scheme Mandate Limit must not exceed 10% of the number of issued shares of the Company as at the date of approval. Share Options previously granted under the Share Option Scheme and other share option schemes of the Group (including options outstanding, cancelled, exercised or lapsed in accordance with the terms of the Share Option Scheme or any other share option schemes of the Group) shall not be counted for the purposes of calculating the refreshed Scheme Mandate Limit.

It is proposed that the Scheme Mandate Limit be refreshed to permit the issue of share options in respect of such number of Shares that do not exceed 10% of the number of issued shares of the Company as at the date of the EGM. Assuming that there will not be any change to the number of issued Shares between the Latest Practicable Date and the EGM, the Company will be allowed to grant further share options for the subscription of an maximum of 129,860,258 Shares under the Scheme Mandate Limit proposed to be refreshed at the EGM.

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LETTER FROM THE BOARD

Under the rules of the Share Option Scheme, the overall limit on the number of Shares which may be issued upon exercise of all Share Options which have then been granted and have yet to be exercised under the Share Option Scheme and any other schemes of the Company shall not, in absence of Shareholders’ approval, in aggregate exceed 30% of the Shares in issue from time to time. As at the Latest Practicable Date, there were outstanding in aggregate options granted under Share Option Scheme and the share option scheme of the Company adopted on 10 September 2003 and expired on 9 September 2013 in respect of 72,600,000 Shares. On the basis of 1,298,602,583 Shares in issue as at the Latest Practicable Date, the 30% overall limit allows there to be outstanding at any time Share Options relating to a maximum 389,580,774 Shares. Accordingly, assuming that none of the outstanding options to subscribe for 72,600,000 Shares (representing approximately 5.59% of the total issued shares of the Company as at the Latest Practicable Date) are exercised, even if the Scheme Mandate Limit proposed to be refreshed at the EGM were to be utilised in full in granting additional Share Options, the total number of Shares that will be subject to all such share options will be well within the 30% overall limit.

The following table sets forth the details about the Company’s Share Options outstanding as at the Latest Practicable Date:

Grantee Date of grant Exercise period Exercise price HK$ Directors Mr. Chen Jinyan 10 July 2008 1 August 2008 to 31 July 2018 0.358 Mr. Chen Jinqing (Note) 10 July 2008 1 August 2008 to 31 July 2018 0.358 Mr. Lin Ye 22 May 2014 22 May 2014 to 21 May 2024 0.331 Mr. Yang Zeqiang 22 May 2014 22 May 2014 to 21 May 2024 0.331 Ms. Yau Lai Ying 22 May 2014 22 May 2014 to 21 May 2024 0.331	Outstanding as at the Latest Practicable Date 1,900,000 2,400,000 1,040,000 1,040,000 1,040,000
	7,420,000

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LETTER FROM THE BOARD

Grantee Date of grant Exercise period Exercise price HK$ Employees 10 July 2008 1 August 2008 to 31 July 2018 0.358 22 May 2014 22 May 2014 to 21 May 2024 0.331 Granted Total	Outstanding as at the Latest Practicable Date 11,920,000 53,260,000
	65,180,000
	72,600,000

Note:

Mr. Chen Jinqing is deemed to be interested in 2,400,000 share options granted to his spouse on 10 July 2008 to subscribe for 2,400,000 shares which may be exercised between 1 August 2008 and 31 July 2018 (both days inclusive) at an exercise price of HK$0.358 per share.

The purpose of the Share Option Scheme is to recognise and acknowledge the contributions the Eligible Persons had or may have made to the Group. Given that the existing Scheme Mandate Limit is close to being fully utilised, the Directors consider that it is in the interests of the Company and its Shareholders as a whole that the Scheme Mandate Limit be refreshed at the EGM on terms set out in the notice convening the EGM so that the Company could have more flexibility in rewarding and motivating its employees and other Eligible Persons by granting share options to them under the Share Option Scheme.

The proposed refreshment of the Scheme Mandate Limit is conditional upon:–

• (a) the passing of the necessary ordinary resolution to approve the proposed refreshment of the Scheme Mandate Limit by the Shareholders at the EGM; and

• (b) the Listing Committee of the Stock Exchange granting the listing of and permission to deal in any Shares which may fall to be allotted and issued by the Company pursuant to the exercise of the Share Options to be granted under the refreshed Scheme Mandate Limit.

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LETTER FROM THE BOARD

As at the Latest Practicable Date, the Directors had no intention to grant further Share Options under the existing Scheme Mandate Limit and no present intention to grant options under the refreshed Scheme Mandate Limit upon the proposed refreshment of the Scheme Mandate Limit comes into effect.

Application will be made to the Listing Committee of the Stock Exchange for the approval of the listing of, and permission to deal in, the Shares to be issued pursuant to the exercise of the Share Options to be granted under the refreshed Scheme Mandate Limit.

A copy of the Share Option Scheme can be inspected at the principal place of business of the Company at Unit 1407, 14th Floor, China Merchants Tower, Shun Tak Centre, 168-200 Connaught Road Central, Hong Kong during normal business hours from the date hereof up to the date of the EGM.

Save as disclosed above, to the best of the Directors’ knowledge, information, belief being made all reasonable enquiries, no Shareholder is required to abstain from voting on the resolution in relation thereto at the EGM.

III. EGM

A notice convening the EGM to be held at Fung Shui Room, 6th Floor, Marco Polo Hongkong Hotel, Harbour City, 3 Canton Road, Kowloon, Hong Kong on Thursday, 20 August 2015 at 10:15 a.m. is set forth on pages 10 to 11 of this circular.

A form of proxy for use at the EGM is enclosed with this circular. Whether or not you are able to attend the EGM, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon as soon as practicable and in any event not less than 48 hours before the time fixed for holding the EGM (or any adjournment thereof) to the office of the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish and in such event, the instrument appointing a proxy shall be deemed to be revoked.

Pursuant to Rule 13.39(4) of the Listing Rules and Article 66(1) of the Articles, all the resolutions set out in the notice of the EGM will be put to vote by way of a poll.

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LETTER FROM THE BOARD

IV. RECOMMENDATION

The Directors consider that the proposed refreshment of the Scheme Mandate Limit is in the interests of the Company and the Shareholders as a whole and, accordingly, the Directors (including the independent non-executive Directors) recommend all Shareholders to vote in favour of all the resolutions to be proposed at the EGM in respect thereof.

Yours faithfully,

For and on behalf of the Board

Art Textile Technology International Company Limited Chen Jinyan

Chairman

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NOTICE OF EXTRAORDINARY GENERAL MEETING

ART TEXTILE TECHNOLOGY INTERNATIONAL COMPANY LIMITED 錦藝紡織科技國際有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 565)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT an extraordinary general meeting of Art Textile Technology International Company Limited (the “ Company ”) will be held at Fung Shui Room, 6th Floor, Marco Polo Hongkong Hotel, Harbour City, 3 Canton Road, Kowloon, Hong Kong on Thursday, 20 August 2015 at 10:15 a.m. for the purposes of considering and, if thought fit, passing the following resolution:

ORDINARY RESOLUTION

“ THAT subject to and conditional upon granting by the Listing Committee of the Stock Exchange of the listing of and permission to deal in the Shares which may be issued pursuant to the exercise of options to be granted under the share option scheme of the Company adopted on 22 November 2013 (the “ Share Option Scheme ”) pursuant to this resolution, the Scheme Mandate Limit (as defined in Rule 9.1 of the Share Option Scheme) be and is hereby renewed and the Directors be and are hereby authorised to grant pursuant to the rules of the Share Option Scheme options to subscribe for shares of the Company not exceeding 10% of the shares of the Company in issue as at the date of passing of this resolution, excluding for this purpose, options previously granted under the Share Option Scheme and any other share options of the Company and its subsidiaries (the “ Group ”) (including options outstanding, cancelled, lapsed or exercised in accordance with the terms of the Share Option Scheme or any other share option schemes of the Group), and to exercise all rights and power available to them as they may in their sole discretion consider necessary or expedient to give effect to the foregoing authority.”

By order of the Board

Art Textile Technology International Company Limited Chen Jinyan Chairman

Hong Kong, 29 July 2015

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Registered office:–

Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Principal place of business in Hong Kong:–

Unit 1407, 14th Floor China Merchants Tower Shun Tak Centre 168-200 Connaught Road Central Hong Kong

Notes:

1. Any shareholder entitled to attend and vote at the meeting is entitled to appoint one or, if he is holder of more than one share, more proxies to attend and vote instead of him. A proxy need not be a shareholder of the Company.

2. In order to be valid, a form of proxy in the prescribed form together with the power of attorney or other authority (if any) under which it is signed must be deposited at the branch share registrar of the Company, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time appointed for holding the meeting (or any adjournment thereof).

3. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under its common seal or under the hand of an officer or attorney or other person duly authorised.

4. Delivery of the form of proxy will not preclude a member from attending and voting in person at the meeting convened and in such event, the form of proxy shall be deemed to be revoked.

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