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Time Watch Investments Limited

時計寶投資有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 2033) CONTINUING CONNECTED TRANSACTIONS
  1. EXTENSION OF THE 2016 INTERNATIONAL SALES AGENCY AGREEMENTS;
  2. EXTENSION OF THE 2016 ADMINISTRATIVE SERVICES AGREEMENT;
  3. EXTENSION OF THE 2016 OFF-SEASON PRODUCTS AGENCY AGREEMENT;
  4. EXCEEDING OF ANNUAL CAP AND EXTENSION OF WATCH PROCUREMENT AGREEMENT; AND
  5. EXCEEDING AND REVISION OF ANNUAL CAP FOR WATCH MOVEMENT SUPPLY AGREEMENT
(1) EXTENSION OF THE 2016 INTERNATIONAL SALES AGENCY AGREEMENTS

Each of the 2016 Asia Sales Agency Agreement and the 2016 Middle East Sales Agency Agreement has expired on 30 June 2017. To ensure continual sale of KC/TB Watches in the Asia Region and the Middle East Region after the expiry of the 2016 Asia Sales Agency Agreement and the 2016 Middle East Sales Agency Agreement respectively, on 4 July 2017, TWB entered into the 2017 Asia Sales Agency Agreement with Fortune Concept and the 2017 Middle East Sales Agency Agreement

with Swiss Watch Group in connection with the appointment of Fortune Concept and Swiss Watch Group as agent for the sales of KC/TB Watches in the Asia Region and the Middle East Region respectively. The Directors expect that the agency fee payable by TWB under each of the 2017 Asia Sales Agency Agreement and the 2017 Middle East Sales Agency Agreement for the year ending 30 June 2018 will not exceed the annual caps of HK$936,000 and HK$374,400 respectively.

  1. EXTENSION OF THE 2016 ADMINISTRATIVE SERVICES AGREEMENT

    The 2016 Administrative Services Agreement has expired on 30 June 2017. To ensure continual provision of Administrative Services by Fortune Concept to the Group after the expiry of the 2016 Administrative Services Agreement, on 4 July 2017, TWB and Fortune Concept entered into the 2017 Administrative Services Agreement in relation to obtaining Administrative Services by the Group for the Group's sales of the Multi- brand Watches in the Territory. The Directors expect that the services fee payable by TWB under the Administrative Services Agreement for the year ending 30 June 2018 will not exceed the annual cap of HK$2,376,000.

  2. EXTENSION OF THE 2016 OFF-SEASON PRODUCTS AGENCY AGREEMENT

    The 2016 Off-season Products Agency Agreement has expired on 30 June 2017. To ensure continual sale of Off-season Products by GWG as agent to the US Customers after the expiry of the 2016 Off-season Products Agency Agreement, on 4 July 2017, GWG and ILG entered into the 2017 Off-season Products Agency Agreement. The Directors expect that the aggregate transaction amount for the provision of the agency services under the 2017 Off-season Products Agency Agreement for the year ending 30 June 2018 will not exceed the annual cap of HK$19.5 million.

  3. EXCEEDING OF ANNUAL CAP AND EXTENSION OF WATCH PROCUREMENT AGREEMENT

    As the Watch Procurement Agreement has expired on 30 June 2017 and the existing purchase orders given by the Group to Good Base under the Watch Procurement Agreement was not completed by 30 June 2017, TWB and Good Base entered into Watch Procurement Supplemental Agreement on 4 July 2017 in relation to the extension of the term from 30 June 2017 to 31 August 2017. Save for the revision of date of expiry of term as disclosed above, all the existing major terms and conditions of the Watch Procurement Agreement as disclosed above remain unchanged.

    It came to the attention of the Company that, based on the statement of accounts of transaction between the Group and Good Base, the aggregate transaction amount for transaction under the Watch Procurement Agreement up to 31 May 2017 amounted to approximately HK$117.4 million, which has slightly exceeded the annual cap of HK$116.7 million for the year ending 30 June 2017. The Board expected that the transactions under the Watch Procurement Agreement for the year ending 30 June 2018 will not exceed the annual cap of HK$10 million.

  4. EXCEEDING AND REVISION OF ANNUAL CAP FOR WATCH MOVEMENT SUPPLY AGREEMENT

It came to the attention of the Company that, based on the statement of accounts of transaction between the Group and ILG Group, the aggregate transaction amount for the sale and purchase under the Watch Movement Supply Agreement up to 31 May 2017 amounted to approximately HK$12.8 million, which has exceeded the annual cap of HK$10.8 million for the year ending 30 June 2017. The Board expected that the transaction amount for the sale and purchase under the Watch Movement Supply Agreement for the year ending 30 June 2018 will not exceed the annual cap of HK$20 million.

IMPLICATION UNDER THE LISTING RULES

As (i) ILG is owned as to approximately 59.8% by Mr. Chainani and his brother; and (ii) Mr. Chainani is the sole shareholder of IWG, being a substantial shareholder of TWB, a non-wholly owned subsidiary of the Company, each of ILG and other members of the ILG Group (including Good Base, Fortune Concept and Swiss Watch Group) is a connected person of the Company at the subsidiary level. As such, the transactions under each of the Watch Movement Supply Agreement, the Watch Procurement Agreement, the Watch Procurement Supplemental Agreement, the 2017 Off-season Products Agency Agreement, the 2017 International Sales Agency Agreement and the 2017 Administrative Services Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

By virtue of Rule 14A.101 of the Listing Rules, as (i) each of ILG and other members of the ILG Group is a connected person of the Company at the subsidiary level; (ii) the respective terms of the Watch Movement Supply Agreement, the Watch Procurement Agreement, the Watch Procurement Supplemental Agreement, the 2017 Off-season Products Agency Agreement, the 2017 International Sales Agency Agreement and the 2017 Administrative Services Agreement are on normal commercial terms; (iii) the Board (including all the independent non-executive Directors) has approved the respective transactions and confirmed that each of the Watch Movement Supply Agreement, the Watch Procurement Agreement, the Watch Procurement Supplemental Agreement, the 2017 Off-season Products Agency Agreement, the 2017 International Sales Agency Agreement and the 2017 Administrative Services Agreement is on normal commercial terms, fair and reasonable and in the interests of the Company and its shareholders as a whole, the transactions under each of the Watch Movement Supply Agreement, the Watch Procurement Agreement, the Watch Procurement Supplemental Agreement, the 2017 Off-season Products Agency Agreement, the 2017 International Sales Agency Agreement and the 2017 Administrative Services Agreement are subject to the reporting and announcement requirements but are exempted from the circular, independent financial advice and shareholders' approval requirements under Chapter 14A of the Listing Rules. None of the Directors has a material interest in any of the Watch Movement Supply Agreement, the Watch Procurement Agreement, the Watch Procurement Supplemental Agreement, the 2017 Off-season Products Agency Agreement, the 2017 International Sales Agency Agreement and the 2017 Administrative Services Agreement.

Time Watch Investments Ltd. published this content on 04 July 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 05 July 2017 07:35:06 UTC.

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