Time Watch Investments : Announcements and Notices - Continuing Connected Transactions (1) Distribution Agreement for Multi-brand Watches in the United States; and (2) Packaging Procurement Agreement for Packaging and Fixtures

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時計寶投資有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 2033)

1. DISTRIBUTION AGREEMENT FOR MULTI-BRAND WATCHES IN THE UNITED STATES; AND
2. PACKAGING PROCUREMENT AGREEMENT FOR PACKAGING AND FIXTURES

On 28 July 2017, GWG entered into the Multi-brand US Distribution Agreement with ILG in relation to the sale of the Products by the ILG Group to GWG on wholesale basis for GWG's sale of the Products in the United States for a term of one year commencing from 1 July 2017 to 30 June 2018 (both dates inclusive). It is expected that the transaction amount for the transactions under the Multi-brand US Distribution Agreement for the year ending 30 June 2018 will not exceed the annual cap of HK$15.6 million.

On 28 July 2017, TWB entered into the Packaging Procurement Agreement with Tremont in respect of the Packages and the Fixtures for a term of one year commencing from 1 July 2017 to 30 June 2018 (both dates inclusive) unless terminated earlier by a party serving three months notice in writing on the other party or otherwise pursuant to the terms and conditions of the Packaging Procurement Agreement. It is expected that the transaction amount for the transactions under the Packaging Procurement Agreement for the year ending 30 June 2018 will not exceed the annual cap of HK$23.4 million.

As (i) ILG is owned as to approximately 57.75% by Mr. Chainani and his brother; (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 Tremont, which is owned as to 100% by ILG) is a connected person of the Company at the subsidiary level. As such, the transactions under each of the Multi- brand US Distribution Agreement and the Packaging Procurement 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 Multi-brand US Distribution Agreement and the Packaging Procurement Agreement are on normal commercial terms; (iii) the Board (including all the independent non-executive Directors) has approved the respective transactions under each of the Multi- brand US Distribution Agreement and the Packaging Procurement Agreement and confirmed that each of the Multi-brand US Distribution Agreement and the Packaging Procurement 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 Multi-brand US Distribution Agreement and the Packaging Procurement 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 Multi-brand US Distribution Agreement and the Packaging Procurement Agreement.

The Board hereby announces that on 28 July 2017, GWG entered into the Multi-brand US Distribution Agreement with ILG in relation to the sale of the Products by the ILG Group to GWG on wholesale basis for GWG's sale of the Products in the United States on the principal terms and conditions as set out below:

Multi-brand US Distribution Agreement

Date: 28 July 2017

Parties: (1) ILG, as supplier; and

(2) GWG, as distributor.

During the term of the Multi-brand US Distribution Agreement, ILG (on behalf of other members of the ILG Group) has agreed to (i) grant GWG a non-exclusive right to market, sell and distribute the Products on retail basis in the United States (including via online shop for delivery in the United States); and (ii) sell the Products to GWG on wholesale basis pursuant to the terms and conditions thereof. GWG may place orders with ILG Group for purchase of the Products by delivering a purchase order which shall specify, among others, the quantity, models and other specifications of the Products, the expected delivery date(s), the delivery instructions and any other terms for the sale and purchase of the Products. ILG shall indicate to GWG as to whether it accepts such purchase orders so placed by GWG together with the aggregate purchase price for the Products so ordered within two business days from the date of delivery of such purchase orders.

The pricing of the Products varies and is not subject to any laws or government regulations, and there is no published reference price by any authority. Pursuant to the Multi-brand US Distribution Agreement, the purchase price per unit of Products to be supplied shall be an agreed percentage of discount (the "Discount Percentage") to the recommended retail price (the "Recommended Retail Price") of each of the Products in the United States from time to time informed by ILG Group to GWG. The Discount Percentage has been fixed and agreed by the parties, and has been expressly stipulated in the Multi-brand US Distribution Agreement.

Pursuant to the Multi-brand US Distribution Agreement, the terms and conditions for the sale and purchase of the Products by ILG and GWG (including the purchase price for the Products) shall be no less favourable as those obtained by ILG Group to its other distributors of the Products who are Independent Third Parties. Pursuant to the Multi-brand US Distribution Agreement, ILG Group shall supply to GWG up-to-date copies of the Recommended Retail Price of the Products from time to time and give GWG not less than one month's notice in writing of any alteration in such Recommended Retail Price.

To the best of the knowledge, information and belief of the Directors after making reasonable enquiry, in deciding the Recommended Retail Price of each of the Products, ILG Group, as a licensee of the brand owner to distribute Products globally, has to follow the pricing guidelines set by the brand owner and the market position of the relevant brand of the Products from time to time.

The terms and conditions of the Multi-brand US Distribution Agreement, including the Discount Percentage, have been determined and agreed among the parties after arms' length negotiation. In particular, in determining the Discount Percentage, the Group had taken into account the percentage of discount ILG Group offered to its other distributors of the Products who are Independent Third Parties (the "Independent Distributors") so as to ensure that the Discount Percentage so offered to GWG is fair and reasonable and no less favourable to the Group than that offered by ILG Group to its Independent Distributors.

In order to assess whether the Discount Percentage is fair and reasonable and no less favourable than that offered by ILG Group to Independent Distributors, the Group would make enquiries to ILG Group for the discount offered to its Independent Distributors every six months. The transactions under the Multi-brand US Distribution Agreement will also be subject to annual review by the independent non-executive Directors and the auditors of the Company under Rule 14A.55 and 14A.56 of the Listing Rules.

Before making any purchase order under the Multi-brand US Distribution Agreement, the Company would consider a number of factors, including but not limited to the demand of the Products in the market, and the costs, profit margin of the retail sale of the Products by the Group in the United States with reference to the combined effect of the Discount Percentage and the Recommended Retail Price.