IGG Inc — AGM Information 2012

Jul 13, 2012

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 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.

==> picture [137 x 122] intentionally omitted <==

ORIENTAL WATCH HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 398)

Directors: Principal Office: Yeung Ming Biu [(Chairman)] Room 312-8 Yeung Him Kit, Dennis [(Deputy Chairman and Managing Director)] China Insurance Group Building Fung Kwong Yiu 141 Des Voeux Road Central Yeung Man Yee, Shirley Hong Kong Lam Hing Lun, Alain Choi Kwok Yum Sun Ping Hsu, Samson Li Sau Hung, Eddy Choi Man Chau, Michael*

* Independent non-executive directors

16th July, 2012

To the shareholders

Dear Sir or Madam,

PROPOSALS RELATING TO

GENERAL MANDATES TO ISSUE SHARES AND REPURCHASE SHARES AND AMENDMENT OF BYE-LAWS

NOTICE OF ANNUAL GENERAL MEETING AND RE-ELECTION OF DIRECTORS

INTRODUCTION

At the annual general meeting of Oriental Watch Holdings Limited (the “Company”) for the year ended 31st March, 2012, resolutions will be proposed to grant to the directors of the Company general mandates to issue shares and repurchase shares of the Company and to amend the Bye-laws of the Company.

— 1 —

The purpose of this circular is to give you further details of the abovementioned proposals and notice of the annual general meeting of the Company for the year ended 31st March, 2012 (the “AGM”). In compliance with the Listing Rules of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”), this circular also contains the explanatory statement and gives all the information reasonably necessary to enable shareholders to make an informed decision on whether to vote for or against the resolution to approve the purchase by the Company of its own shares, together with particulars of the directors proposed to be re-elected at the AGM.

GENERAL MANDATE TO ISSUE SHARES

At the AGM, an ordinary resolution will be proposed to grant a general mandate to the directors of the Company to allot, issue and dispose of shares of the Company not exceeding 20 per cent. of the issued share capital of the Company to provide flexibility to the Company to raise fund by issue of shares efficiently. On 9th July, 2012 (the “Latest Practicable Date”), being the latest practicable date prior to printing of this circular, there were in issue an aggregate of 570,610,224 shares of HK$0.10 each of the Company (“Shares”). On the assumption that no Share will be issued prior to the AGM, exercise in full of the mandate could result in up to 114,122,044 Shares being issued by the Company.

GENERAL MANDATE TO REPURCHASE SHARES

At the AGM, an ordinary resolution will also be proposed that the directors be given a general mandate to exercise all powers of the Company to repurchase issued and fully paid shares of the Company. Under such mandate, the number of shares that the Company may repurchase shall not exceed 10 per cent. of the share capital of the Company in issue on the date of the resolution. The Company’s authority is restricted to purchases made on the Stock Exchange in accordance with the Listing Rules of the Stock Exchange. Based on 570,610,224 Shares in issue as at the Latest Practicable Date and on the assumption that no Share will be issued prior to the AGM, exercise in full of the mandate could result in up to 57,061,022 Shares being repurchased by the Company. The mandate allows the Company to make or agree to make purchases only during the period ending on the earliest of the date of the next annual general meeting, the date by which the next annual general meeting of the Company is required to be held by law or the date upon which such authority is revoked or varied by an ordinary resolution of the shareholders in a general meeting of the Company.

The directors have no present intention to repurchase any Shares but consider that the mandate will provide the Company the flexibility to make such repurchase when appropriate and beneficial to the Company. Such repurchases may enhance the net value of the Company and/or earnings per Share. As compared with the financial position of the Company as at 31st March, 2012 (being the date of its latest audited accounts), the directors consider that there would be a material adverse impact on the working capital and

— 2 —

on the gearing position of the Company in the event that the proposed purchases were to be carried out in full during the proposed purchase period. No purchase would be made in circumstances that would have a material adverse impact on the working capital or gearing ratio of the Company.

The Company is empowered by its Memorandum of Association and Bye-laws to purchase its Shares. Bermuda law provides that the amount of capital repaid in connection with a share repurchase may only be paid out of either the capital paid up on the relevant shares, or funds of the Company that would otherwise be available for dividend or distribution or the proceeds of a new issue of shares made for such purpose. The amount of premium payable on repurchase may only be paid out of either the funds of the Company that would otherwise be available for dividend or distribution or out of the share premium or contributed surplus accounts of the Company.

The directors intend to apply the capital paid up on the relevant Shares or the profit that would otherwise be available for distribution by way of dividend for any purchase of its Shares.

Directors, their associates and connected persons

None of the directors nor, to the best of the knowledge and belief of the directors having made all reasonable enquiries, any of the associates of any of the directors has any present intention, in the event that the proposal is approved by shareholders, to sell Shares to the Company.

No connected person of the Company (as defined in the Listing Rules of the Stock Exchange) has notified the Company that he/she has a present intention to sell Shares to the Company nor has he/she undertaken not to sell any of the Shares held by him/her to the Company in the event that the Company is authorised to make purchases of Shares.

Undertaking of the directors

The directors have undertaken to the Stock Exchange to exercise the power of the Company to make purchases pursuant to the proposed resolution in accordance with the Listing Rules of the Stock Exchange and all applicable laws of Bermuda, and in accordance with the regulations set out in the Memorandum of Association and Bye-laws of the Company.

Effect of Takeovers Code

A repurchase of Shares by the Company may result in an increase in the proportionate interest of a substantial shareholder of the Company in the voting rights of the Company, which could give rise to an obligation to make a mandatory offer in accordance with Rule 26 of the Hong Kong Code on Takeovers and Mergers (the “Code”).

— 3 —

As at the Latest Practicable Date, to the best of the knowledge and belief of the Company, Mr. Yeung Ming Biu (the Chairman of the Company), together with his associates, held approximately 26.80 per cent. of the issued share capital of the Company and was the only substantial shareholder holding more than 10 per cent. of the issued share capital of the Company. In the event that the directors should exercise in full the power to repurchase Shares which is proposed to be granted pursuant to the resolution, he and his associates’ shareholding in the Company would be increased to approximately 29.78 per cent. of the issued share capital of the Company and such increase would not give rise to an obligation on him or his associates to make a mandatory offer under Rule 26 of the Code.

Stock Exchange Rules for repurchases of shares

The Listing Rules of the Stock Exchange permit companies whose primary listings are on the Stock Exchange to repurchase their shares on the Stock Exchange subject to certain restrictions, the most important of which are summarised below:

(a) Shareholders’ approval

The Listing Rules provide that all shares repurchases on the Stock Exchange by a company with its primary listing on the Stock Exchange must be approved in advance by an ordinary resolution, which may be by way of general mandate, or by special resolution in relation to specific transactions.

(b) Source of funds

Repurchases must be funded out of funds legally available for the purpose.

General

During each of the six months preceding the date of this circular, no Share had been repurchased by the Company.

— 4 —

During each of the previous 12 months, the highest and lowest traded prices for Shares on the Stock Exchange were as follows:

	Per Share
	Highest	Lowest
Month	HK$	HK$
2011
July	6.99	5.52
August	6.79	4.34
September	5.45	3.31
October	5.06	3.15
November	5.01	4.00
December	4.46	3.45
2012
January	3.76	3.31
February	3.97	3.14
March	3.82	3.19
April	3.54	3.12
May	3.27	2.33
June	2.53	2.00
July (up to the Latest Practicable Date)	2.21	2.13

AMENDMENT OF BYE-LAWS

It is proposed to amend the Bye-laws of the Company (the “Bye-laws”) as follows:

• (a) the existing provisions of Bye-law 3(3) be deleted and be replaced by the following:

“(3) Subject to compliance with the rules and regulations of the Designated Stock Exchange and any other relevant regulatory authority, the Company may give financial assistance for the purpose of or in connection with a purchase of, or subscription for, any shares in the Company made or to be made by any person.”

• (b) the words “in any manner permitted by and in accordance with the rules of the Designated Stock Exchange or” be added after the words “Subject to these Bye-laws, any Member may transfer all or any of his shares” in Bye-law 46;

• (c) (i) the words “at any special general meeting called for the purpose” be added in the third sentence of Bye-law 86(1) after the words “Bye-law 87”; and

— 5 —

• (ii) the word “special” in Bye-law 86(4) be deleted and be replaced by the word “ordinary”;

• (d) (i) the existing provisions of Bye-law 103(1)(v), (2) and (3) be deleted;

• (ii) the word “or” be added at the end of Bye-law 103(1)(iv);

• (iii) the existing Bye-law 103(1)(vi) be renumbered as Bye-law 103(1)(v);

• (iv) the existing Bye-law 103(4) be re-numbered as Bye-law 103(2);

• (v) in Bye-law 103A, the words “Bye-law 103(1)(i) to (vi)” be deleted and be replaced by the words “Bye-law 103(1)(i) to (v)”; and

• (vi) the sentence “For the purposes of Bye-law 103(2) and Bye-law 103(3), the word “Director” wherever it appears shall be construed to mean “a director of the Company and/or his associate(s)”.” in Bye-law 103A be deleted in its entirety; and

• (e) the words “the aggregate of its liabilities and its issued share capital and share premium accounts” at the end of Bye-law 138 be deleted and be replaced by the words “its liabilities”.

The effects of the proposed amendment of the Bye-laws are as follows:

• (a) the amendment of Bye-law 3(3) allows the Company to provide financial assistance for the purchase of, or subscription for, its shares following the recent amendment of the Companies Act 1981 of Bermuda (the “Companies Act”);

• (b) the amendment of Bye-law 46 allows the transfer of shares of the Company in any manner permitted under the Listing Rules as the recent amendment of the Companies Act permits paperless share transfers, subject to the Listing Rules;

• (c) (i) the amendment of Bye-law 86(1) allows shareholders to appoint directors at a special general meeting of the Company; and

• (ii) the amendment of Bye-law 86(4) allows shareholders to remove a director by an ordinary resolution instead of a special resolution;

— 6 —

• (d) the amendment of Bye-laws 103 and 103A removes the exemption which allows a Director to vote on any board resolution in respect of any contract or arrangement concerning a company in which the Director together with any of his associates are not in aggregate beneficially interested in 5 per cent or more of the issued shares or voting rights of any class of shares of the company in compliance with the new requirements of Rule 13.44 of the Listing Rules; and

• (e) the amendment of Bye-law 138 simplifies the solvency test for payment of dividend and making of distribution as permitted by the recent amendment of the Companies Act by removing any reference to the Company’s issued share capital and share premium account in the solvency test.

ANNUAL GENERAL MEETING

You will find on pages 10 to 13 of this circular a notice of the AGM to be held at 3:30 p.m. on 14th August, 2012 at Tian & Di Room, 7th Floor, The Landmark Mandarin Oriental Hotel, 15 Queen’s Road Central, The Landmark, Central, Hong Kong. Voting at the AGM will be taken by poll.

Resolution no. 5A will be proposed as an ordinary resolution to give a general mandate to the directors to allot, issue and deal with shares of the Company with an aggregate nominal value not exceeding 20 per cent. of the share capital of the Company in issue as at the date of the resolution.

Resolution no. 5B will be proposed as an ordinary resolution to give a general mandate to the directors to make on-market purchases of shares of the Company of up to 10 per cent. of the aggregate nominal amount of the share capital of the Company in issue as at the date of the resolution.

Resolution no. 5C will be proposed as an ordinary resolution to extend resolution no. 5A to include the aggregate nominal amount of the number of shares in the capital of the Company which are repurchased by the Company under the authority granted to the directors pursuant to resolution no. 5B.

Resolution no. 5D will be proposed as a special resolution to approve the proposed amendment of the Bye-laws of the Company.

There is enclosed a form of proxy for use at the AGM. You are requested to complete the form of proxy and return it to the principal office of the Company in accordance with the instructions printed thereon not less than 48 hours before the time fixed for holding the meeting, whether or not you intend to be present at the meeting. The completion and return of the form of proxy will not prevent you from attending and voting in person should you so wish.

— 7 —

RE-ELECTION OF DIRECTORS

Resolutions will be proposed at the AGM for re election of Mr. Yeung Ming Biu, Mr. Yeung Him Kit, Dennis and Mr. Choi Man Chau, Michael as directors according to the Company’s Bye laws. Their particulars are as follows:

Mr. Yeung Ming Biu , aged 76, a co-founder of the Company and its subsidiaries (the “Group”), is the Chairman and an executive director of the Company. He has over 59 years’ experience in the watch business and is a Permanent Honorary Director of The Federation of Hong Kong Watch Trades and Industries Limited. He is an Honorary Fellow of The Chinese University of Hong Kong

Mr. Yeung Him Kit, Dennis , aged 43, joined the Group in 1993 and has been the Deputy Chairman and the Managing Director of the Company since March 2003. He holds a bachelor degree in commerce from the University of Toronto, Canada. He is the son of Mr. Yeung Ming Biu.

Mr. Choi Man Chau, Michael , aged 55, is an independent non-executive director of the Company. He is a fellow member of the Institute of Chartered Accountants in England and Wales and the Hong Kong Institute of Certified Public Accountants. He is a Certified Public Accountant (practising) and has been practising public accountancy in Hong Kong for over 22 years. Mr. Choi is also an independent non-executive director of Hunan Nonferrous Metals Corporation Limited (stock code: 2626) and Simsen International Corporation Limited (stock code: 0993), both of which are listed on the Main Board of the Stock Exchange. He was formerly an independent non-executive director of Nam Tai Electronic & Electrical Products Limited (stock code: 2633) and Dynamic Energy Holdings Limited (stock code: 0578), companies listed on the Main Board of the Stock Exchange. Mr. Choi has entered into a service contract with the Company. He receives a director’s fee of HK$180,000 per annum, which is determined with reference to the prevailing range of fees for independent non-executive directors of listed companies in Hong Kong.

Mr. Yeung Ming Biu and Mr. Yeung Him Kit, Dennis receive basic monthly salaries of HK$277,290 and HK$286,313 respectively, and they are entitled to a discretionary year end bonus. Their emoluments are determined with reference to their experience and contribution to the Group. They do not have any written service contract with the Company.

— 8 —

The interests of the above named directors in Shares within the meaning of Part XV of the Securities and Futures Ordinance (the “SFO”) as at the Latest Practicable Date were as follows:

• (a) Mr. Yeung Ming Biu was interested in a total of 154,352,144 Shares (comprising personal interest in 18,267,583 Shares (including an option to subscribe for 1,440,000 Shares during the period from 6th April, 2011 to 5th April, 2021 at the price of HK$3.44 per Share), family interest in 7,920,000 Shares and corporate interest in 128,164,561 Shares);

• (b) Mr. Yeung Him Kit, Dennis was interested in 4,154,000 Shares (including an option to subscribe for 1,440,000 Shares during the period from 6th April, 2011 to 5th April, 2021 at the price of HK$3.44 per Share); and

• (c) Mr. Choi Man Chau, Michael had no interest in Shares.

The above named directors are not appointed for a specific term but are subject to retirement by rotation in annual general meetings of the Company in accordance with the Bye-laws of the Company.

Save as disclosed above, the above named directors confirm:

• (a) they have no relationships with any directors, senior management or substantial or controlling shareholders of the Company;

• (b) they have no interests in shares of the Company within the meaning of Part XV of the SFO; and

• (c) there is no information which is required to be disclosed pursuant to Rule 13.51(2) of the Listing Rules or any other matter that need to be brought to the attention of shareholders of the Company.

RECOMMENDATION

The directors consider that the proposed granting of the mandates to issue and repurchase shares of the Company and amendment of the Bye-laws are in the interest of the Company and so recommend you to vote in favour of the relevant resolutions at the AGM. The directors will vote all their shareholdings in favour of such resolutions.

Yours faithfully,

By order of the Board

Yeung Ming Biu

Chairman

— 9 —

NOTICE OF ANNUAL GENERAL MEETING

==> picture [137 x 121] intentionally omitted <==

ORIENTAL WATCH HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 398)

NOTICE IS HEREBY GIVEN that the annual general meeting of the abovenamed company (the “Company”) will be held at 3:30 p.m. on 14th August, 2012 at Tian & Di Room, 7th Floor, The Landmark Mandarin Oriental Hotel, 15 Queen’s Road Central, The Landmark, Central, Hong Kong for the following purposes:

1. To receive and consider the audited financial statements and the reports of the directors and independent auditor for the year ended 31st March, 2012.

2. To declare a final dividend of 5.0 Hong Kong cents per share for the year ended 31st March, 2012.

3. To elect directors and to authorise the board of directors to fix their remuneration.

4. To appoint auditor and to authorise the board of directors to fix its remuneration.

5. As special business, to consider and, if thought fit, pass the following resolutions, of which resolution nos. 5A, 5B and 5C will be proposed as ordinary resolutions and resolution no. 5D will be proposed as a special resolution:

ORDINARY RESOLUTIONS

• A. “ THAT :

• (a) subject to paragraph (c), the exercise by the directors of the Company during the Relevant Period of all the powers of the Company to allot, issue and deal with additional shares in the capital of the Company and to make or grant offers, agreements and options which might require the exercise of such power be and is hereby generally and unconditionally approved;

— 10 —

• (b) the approval in paragraph (a) shall authorise the directors of the Company during the Relevant Period to make or grant offers, agreements and options which might require the exercise of such power after the end of the Relevant Period;

• (c) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the directors of the Company pursuant to the approval in paragraph (a), otherwise than pursuant to a Rights Issue or scrip dividend scheme or similar arrangement of the Company or the exercise of the subscription rights under the share option scheme of the Company shall not exceed 20 per cent. of the aggregate nominal amount of the share capital of the Company in issue as at the date of this resolution and the said approval shall be limited accordingly; and

• (d) for the purposes of this resolution:

• “Relevant Period” means the period from the passing of this resolution until whichever is the earlier of:

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

• (ii) 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 law to be held; and

• (iii) the revocation or variation of this resolution by an ordinary resolution of the shareholders of the Company in general meeting; and

“Rights Issue” means an offer of shares open for a period fixed by the directors of the Company to holders of shares on the register of members of the Company on a fixed record date in proportion to their then holdings of such shares (subject to such exclusion or other arrangements as the directors of the Company 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).”

— 11 —

B. “ THAT :

• (a) the exercise by the directors of the Company during the Relevant Period of all powers of the Company to purchase its own shares, subject to and in accordance with all applicable laws, be and is hereby generally and unconditionally approved;

• (b) the aggregate nominal amount of shares of the Company purchased by the Company pursuant to the approval in paragraph (a) during the Relevant Period shall not exceed 10 per cent. of the aggregate nominal amount of the share capital of the Company in issue as at the date of this resolution and the said approval be limited accordingly; and

• (c) for the purposes of this resolution:

  • “Relevant Period” means the period from the passing of this resolution until whichever is the earlier of:

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

  • (ii) 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 law to be held; and

  • (iii) the revocation or variation of this resolution by an ordinary resolution of the shareholders of the Company in general meeting.”

• C. “ THAT conditional upon resolution no. 5B above being passed, the aggregate nominal amount of the number of shares in the capital of the Company which are repurchased by the Company under the authority granted to the directors as mentioned in resolution no. 5B above shall be added to the aggregate nominal amount of share capital that may be allotted or agreed conditionally or unconditionally to be allotted by the directors of the Company pursuant to resolution no. 5A above.”

— 12 —

SPECIAL RESOLUTION

• D. “ THAT the existing Bye-laws of the Company be and are hereby amended in the manner set out in the section headed “Amendment of Bye-laws” in the circular of the Company dated 16th July, 2012 (a copy of which section has been submitted to the meeting and signed by the Chairman of the meeting for the purpose of identification).”

By Order of the Board Lam Hing Lun, Alain Company Secretary

Hong Kong, 16th July, 2012

Principal Office:

Room 312-8 China Insurance Group Building 141 Des Voeux Road Central

Hong Kong

Notes:

• (1) A member entitled to attend and vote at the meeting convened by the above notice is entitled to appoint proxies to attend and vote in his stead. A proxy need not be a member of the Company. In order to be valid, the form of proxy must be deposited at the Company’s principal office in Hong Kong together with a power of attorney or other authority, if any, under which it is signed or a certified copy of that power or authority, not less than 48 hours before the time for holding the meeting or adjourned meeting.

• (2) The register of members of the Company will be closed from 20th August, 2012 to 22nd August, 2012, both days inclusive, during which period no transfer of shares will be effected. In order to qualify for the final dividend to be approved at the annual general meeting, all transfers accompanied by the relevant share certificates must be lodged with the Company’s branch share registrars in Hong Kong, Tricor Secretaries Limited, 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not later than 4:30 p.m. on 17th August, 2012.

As at the date of this notice, the executive directors of the Company are Mr. Yeung Ming Biu, Mr. Yeung Him Kit, Dennis, Mr. Fung Kwong Yiu, Ms. Yeung Man Yee, Shirley, Mr. Lam Hing Lun, Alain and Mr. Choi Kwok Yum; and the independent non-executive directors are Dr. Sun Ping Hsu, Samson, Dr. Li Sau Hung, Eddy and Mr. Choi Man Chau, Michael.

— 13 —

THIS PAGE IS INTENTIONALLY LEFT BLANK