Future World Holdings Limited — Proxy Solicitation & Information Statement 2003

Aug 5, 2003

IMPORTANT

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

If you have sold all your shares in Texwinca Holdings Limited, you should at once hand this circular and the accompanying white form of proxy to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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TEXWINCA HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

Registered office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Directors:

Poon Bun Chak (Chairman and Managing Director) Clarendon House Poon Kai Chak 2 Church Street Poon Kei Chak Hamilton HM 11 Poon Kwan Chak Bermuda Ting Kit Chung Au Son Yiu Head office and principal Cheng Shu Wing place of business: 16/F Metroplaza, Tower II * Independent Non-executive Directors 223 Hing Fong Road Kwai Chung New Territories Hong Kong

23 July 2003

To Shareholders

Dear Sir or Madam,

PROPOSAL FOR GENERAL MANDATES TO REPURCHASE SHARES AND TO ISSUE NEW SHARES

INTRODUCTION

The purpose of this circular is to provide you with information relating to the proposed general mandate to repurchase shares and general mandate to issue shares.

The last general mandates to repurchase shares and issue shares were approved by shareholders at the last Annual General Meeting held on 27 August 2002.

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GENERAL MANDATES TO REPURCHASE SHARES AND ISSUE NEW SHARES

At the Special General Meeting of the Company to be held on 28 August 2003, ordinary resolutions will be proposed (i) to grant to the Directors of the Company (‘‘Directors’’) a general mandates to exercise the powers of the Company to repurchase shares up to a maximum of 10% of the existing issued share capital of the Company on the date of the Ordinary Resolutions (the ‘‘Buyback Mandate’’); (ii) to grant a general mandate to the Directors to allot, issue or deal with issue new shares up to a maximum of 20% of the issued share capital of the Company on the date of the Ordinary Resolutions (‘‘Issuance Mandate’’) and (iii) to increase the number of shares which the Directors may issue by the number of shares repurchased under the Buyback Mandate. The notice of the Special General Meeting is set out on pages 5 and 6 of this circular.

An explanatory statement as set out in the Appendix of this circular in accordance with the Listing Rules provides you with the requisite information reasonably necessary to enable you to make an informed decision as to whether to vote for or against, inter alia, Resolutions 1 to 3 in relation to the general mandates to repurchase shares and issue shares and the proposed extension of the general mandate to be proposed at the Special General Meeting.

PROXY ARRANGEMENT

A form of proxy for use at the Special General Meeting is enclosed with this circular. To be valid, the form of proxy must be completed in accordance with the instructions printed thereon and deposited, together with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of that power of attorney or authority at the Company’s Branch Registrar in Hong Kong, Tengis Limited at G/F., Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the meeting. Completion and delivery of the form of proxy will not prevent you from attending and voting at the Special General Meeting if you so wish.

RECOMMENDATION

The Directors consider that the proposed general mandates to repurchase shares and issue new shares and the proposed extension of the general mandate are in the best interest of the Company and the shareholders. They therefore recommend that shareholders should vote in favour of Resolutions 1 to 3 to be proposed in the Special General Meeting. The Directors intend to vote in favour of all such resolutions in respect of their shareholdings in the Company.

Yours faithfully, On behalf of the Board Poon Bun Chak

Chairman and Managing Director

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EXPLANATORY STATEMENT ON THE BUYBACK MANDATE

APPENDIX

This Appendix serves an explanatory statement, as required by the Listing Rules, to provide requisite information to you for consideration of the Buyback Mandate.

1. REASONS FOR REPURCHASES

Though the Directors have no present intention to issue or repurchase shares of the Company, they believe that the flexibility afforded by the Buyback Mandate would be beneficial to the Company and its shareholders. Trading conditions on the Stock Exchange have sometimes been volatile in recent years. At any time in the future when shares are trading at a discount to their underlying value, the ability of the Company to repurchase shares will be beneficial to those shareholders who retain their investment in the Company since their percentage interests in the assets of the Company would increase in proportion to the number of shares repurchased by the Company.

2. SHARE CAPITAL

As at 23 July 2003, (the latest practicable date prior to the printing of this circular), the issued share capital of the Company comprised 1,324,548,104 fully shares of HK$0.05 each. Subject to the passing of the Ordinary Resolution referred to in item 1 of the notice of the Special General Meeting, the Company would be allowed under the Buyback Mandate to repurchase a maximum of 132,454,810 fully-paid shares on the basis that no further shares will be issued or repurchased prior to the date of the Special General Meeting.

3. FUNDING OF REPURCHASES

In repurchasing shares, the Company may only apply funds legally available for such purpose in accordance with its Memorandum of Association and Bye-laws and all applicable laws.

Bermuda law provides that the purchase of shares may only be effected out of the capital paid up on the shares to be purchased or out of the funds of the Company which would otherwise be available for dividend or distribution or out of the proceeds of a new issue of shares of the Company made for the purpose of repurchase. Any amount of premium payable on the purchase over the par value of the shares of the Company to be purchased must be provided for out of the funds of the Company which would otherwise be available for dividend or distribution or out of the Company’s share premium account before the shares are repurchased.

If the Buyback Mandate was exercised in full at any time during the proposed repurchase period, there might be a material adverse effect on the working capital or gearing position of the Company (as compared with the position disclosed in the audited financial statements contained in the Annual Report of the Company for the year ended 31 March 2003). However, the Directors do not propose to exercise the Buyback Mandate to such an extent as would, in the circumstances, have a material adverse effect on the working capital requirements or the gearing levels of the Company which in the opinion of the Directors are from time to time appropriate for the Company.

4. DIRECTORS’ DEALINGS AND CONNECTED PERSONS

None of the Directors of the Company nor, to the best of their knowledge and having made all reasonable enquiries, any of their associates currently intend to sell to the Company or its subsidiaries its own shares in the event that the Company is authorised to make repurchases of its own shares.

No connected person of the Company has notified the Company that he or she currently intends to sell to the Company his/her own shares nor has he/she undertaken not to sell any of such shares held by him/her to the Company in the event that the Company is authorised to make repurchases of its own shares.

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EXPLANATORY STATEMENT ON THE BUYBACK MANDATE

APPENDIX

5. MARKET PRICES

The highest and lowest prices at which the shares of the Company were traded on the Stock Exchange during each of the previous twelve months were as follows:

	Price	per	share
	Highest		Lowest
	HK$		HK$
2002
July	6.950		5.200
August	5.750		4.175
September	5.500		4.625
October	6.000		4.675
November	5.500		4.700
December	6.000		4.775
2003
January	6.900		5.750
February	6.750		5.850
March	6.150		5.350
April	6.100		4.825
May	6.750		5.600
June	6.500		5.900

6. DISCLOSURE OF INTEREST

The Directors have undertaken to the Stock Exchange to exercise the power of the Company to make purchases under the Buyback Mandate in accordance with the Listing Rules and laws of Bermuda.

If as a result of a share repurchase by the Company, a substantial shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purpose of The Code on Takeovers and Mergers (the ‘‘Code’’). Accordingly, a shareholder, or group of shareholders acting in concert, could obtain or consolidate control of the Company or become obliged to make a mandatory offer in accordance with Rule 26 of the Code.

As at 23 July 2003, (the latest practicable date prior to the printing of this circular), Messrs. Poon Bun Chak, Poon Kei Chak, Poon Kwan Chak and Poon Kai Chak, all of them are executive directors of the Company, in aggregate were beneficially interested in 739,442,904 shares representing 55.83% of the issued capital of the Company. In the event that the Directors exercised in full the power to repurchase shares in accordance with the terms of the Ordinary Resolution to be proposed at the Special General Meeting of the Company, the shareholding of the abovesaid executive directors would be increased to approximately 62.03% of the issued share capital of the Company. Therefore, there will be no consequences under the Code which may arise as a result of any purchases to be made under the Buyback Mandate.

In exercising the repurchase mandate, the Directors will ensure that the public shareholding in the Company will not be reduced to 25% or below of the issued share capital of the Company.

7. SHARE REPURCHASES MADE BY COMPANY

No repurchase of shares have been made by the Company (whether on the Stock Exchange or otherwise) in the 6 months preceding the date of this circular.

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NOTICE OF SPECIAL GENERAL MEETING

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TEXWINCA HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

NOTICE IS HEREBY GIVEN that a Special General Meeting of the Members of Texwinca Holdings Limited (the ‘‘Company’’) will be held at Grand Royal Club, Level 6, Metroplaza, Tower II, 223 Hing Fong Road, Kwai Chung, New Territories, Hong Kong on Thursday, 28 August 2003 at 12: 00 noon for the purpose of considering and, if thought fit, passing with or without amendments, the following resolutions as ordinary resolutions:

1. ‘‘THAT

2. (a) subject to paragraph (b) of this resolution, the exercise by the Directors during the Relevant Period (as defined below) of all the powers of the Company to purchase its shares, subject to and in accordance with the applicable laws, be and is hereby generally and unconditionally approved;

3. (b) the total nominal amount of shares of the Company to be purchased pursuant to the approval in paragraph (a) above shall not exceed 10% of the total nominal amount of the share capital of the Company in issue on the date of passing of this resolution and the said approval shall be limited accordingly; and

4. (c) for the purpose of this resolution, ‘‘Relevant Period’’ means the period from the passing of this resolution until whichever is the earliest of:

   • (i) the conclusion of the next annual general meeting of the Company;

   • (ii) the revocation or variation of the authority given under this resolution by an ordinary resolution passed by the Company’s shareholders in general meeting; and

   • (iii) the expiration of the period within which the next annual general meeting of the Company is required by the bye-laws of the Company or any applicable laws to be held.’’;

5. ‘‘THAT

6. (a) the exercise by the Directors during the Relevant Period (as defined below) of all the powers of the Company to allot, issue and deal with additional shares of the Company and to make or grant offers, agreements and options which would or might require shares to be allotted, issued or dealt with during or after the end of the Relevant Period (as defined below), be and is hereby generally and unconditionally approved, provided that, otherwise than pursuant to (i) a rights issue where shares are offered to shareholders on a fixed record date in proportion to their then holdings of shares (subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of any recognised regulatory body or any stock exchange in any territory outside Hong Kong) or (ii) any option scheme or similar arrangement for the time being adopted for the grant or issue to officers and/or employees of the Company and/or any of its subsidiaries and/or any eligible grantee pursuant to the scheme of

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NOTICE OF SPECIAL GENERAL MEETING

shares or rights to acquire shares of the Company, or (iii) any scrip dividend scheme or similar arrangement providing for the allotment of shares in lieu of the whole or part of a dividend on shares of the Company in accordance with the bye-laws of the Company, the total nominal amount of additional shares to be allotted, issued, dealt with or agreed conditionally or unconditionally to be allotted, issued or dealt with shall not in total exceed 20% of the total nominal amount of the share capital of the Company in issue on the date of passing of this resolution and the said approval shall be limited accordingly; and

• (b) for the purpose of this resolution, ‘‘Relevant Period’’ means the period from the passing of this resolution until whichever is the earliest of:

  • (i) the conclusion of the next annual general meeting of the Company;

  • (ii) the revocation or variation of the authority given under this resolution by an ordinary resolution passed by the Company’s shareholders in general meeting; and

  • (iii) the expiration of the period within which the next annual general meeting of the Company is required by the bye-laws of the Company or any applicable laws to be held.’’; and

• ‘‘THAT the general mandate granted to the Directors of the Company pursuant to resolution no. 2 above and for the time being in force to exercise the powers of the Company to allot shares and to make or grant offers, agreements and options which might require the exercise of such powers be and is hereby extended by the total nominal amount of shares in the capital of the Company repurchased by the Company pursuant to the exercise by the Directors of the Company of the powers of the Company to purchase such shares since the granting of such general mandate referred to in the above resolution no. 1, provided that such amount shall not exceed 10% of the total nominal amount of the share capital of the Company in issue on the date of passing of this resolution.’’

By Order of the Board Chan Chi Hon Secretary

Hong Kong, 23 July 2003

Notes:

• (a) The Register of Members of the Company will be closed from Thursday, 21 August 2003 to Thursday, 28 August 2003 (both days inclusive), during which period no transfer of shares of the Company will be registered. In order to qualify for attending the Special General Meeting, all transfers of shares of the Company accompanied by the relevant share certificates and the appropriate transfer forms must be lodged with the Company’s Branch Registrar in Hong Kong, Tengis Limited, at G/F., Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong for registration not later than 4: 00 p.m. on Wednesday, 20 August 2003.

• (b) A shareholder of the Company entitled to attend and vote at the Special General Meeting is entitled to appoint one or more proxies to attend and vote on his or her behalf. A proxy need not be a shareholder of the Company. If more than one proxy is so appointed, the appointment shall specify the number and class of shares in respect of which each such proxy is so appointed.

• (c) To be valid, a form of proxy and the instrument appointing the power of attorney or other authority, if any, under which it is signed, or a certified copy of such power or authority, must be lodged with the Company’s Branch Registrar in Hong Kong, Tengis Limited, at G/F., Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong not less than 48 hours before the time fixed for holding the Special General Meeting or the adjournment thereof.

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