Fu Yu : AGM (Fu-Yu-AGM23-Appendix)

APPENDIX 1

SUMMARY SHEET FOR RENEWAL OF SHARE PURCHASE MANDATE

The Singapore Exchange Securities Trading Limited (the "SGX-ST") assumes no responsibility for the correctness of any of the statements made, reports contained or opinions expressed in this Appendix 1 ("Appendix"). If you are in doubt as to the action that you should take, you should consult your stockbroker or other professional adviser immediately.

1. Shares Purchased In The Previous Twelve Months
   Pursuant to the share purchase mandate obtained at the Annual General Meeting on 20 April 2023 ("Share Purchase Mandate"), the Company had not bought back any issued ordinary shares in the capital of the Company (the "Shares") by way of market or off-market acquisitions.
   As at 26 March 2024 ("Latest Practicable Date"), the Company does not hold any treasury Shares ("Treasury Shares").
2. Renewal Of The Share Purchase Mandate
   The Ordinary Resolution No. 7 if passed at the forthcoming annual general meeting to be held on 25 April 2024 ("FY2023 AGM") will renew the Share Purchase Mandate approved by the shareholders of the Company ("Shareholders") from the date of the FY2023 AGM at which the proposed renewal of the Share Purchase Mandate is approved until:
3. 1. the date on which the next annual general meeting of the Company is held or is required by law to be held;
   2. the date on which the share purchases are carried out to the full extent of the Share Purchase Mandate; or
   3. the date on which the authority conferred in the Share Purchase Mandate is revoked or varied by an ordinary resolution of the Shareholders of the Company in general meeting,

whichever is the earliest ("Relevant Period").

The authority conferred on the Directors by the Share Purchase Mandate to purchase Shares may be renewed at each subsequent annual general meeting or other general meetings of the Company.

1. Authority and Limits Maximum Number of Shares
2. 1. Only Shares which are issued and fully paid-up may be purchased or acquired by the Company pursuant to the Share Purchase Mandate. The total number of Shares which may be purchased or acquired pursuant to the Share Purchase Mandate during the Relevant Period shall not exceed 10% of the total number of issued Shares (excluding Treasury Shares and subsidiary holdings) as at the date of the FY2023 AGM at which approval for the proposed renewal of the Share Purchase Mandate is being sought.
   2. Based on the existing issued and paid-up share capital of the Company of 761,994,775 Shares (excluding Treasury Shares) as at the Latest Practicable Date, assuming no further Shares are issued, and no further Shares are purchased or acquired by the Company, or held as Treasury Shares, on or prior to the FY2023 AGM, the proposed purchases by the Company of up to a maximum of ten per cent. (10%) of its issued share capital under the Share Purchase Mandate will result in the purchase of up to 76,199,477 Shares. The Company does not have any subsidiary holdings as at the Latest Practicable Date.

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Maximum Price

1. Any Share purchases undertaken by the Company shall be at a price of up to but not exceeding the Maximum Price.
2. The Maximum Price is a sum which shall not exceed the sum constituting five per cent. (5%) above the average closing price of the Shares over the period of five (5) market days in which transactions in the Shares on the SGX-ST were recorded before the day on which such purchase is made and deemed to be adjusted for any corporate action that occurs during the relevant five (5) days period and the day on which the purchases are made in the case of a Market Purchase.
3. In the case of an Off-Market Purchase, the Maximum Price is a sum which shall not exceed the sum constituting twenty per cent. (20%) above the average closing price of the Shares over the period of five (5) market days in which transactions in the Shares on the SGX-ST were recorded immediately preceding the date on which the Company makes an announcement of an offer under an equal access scheme and deemed to be adjusted for any corporate action that occurs after the relevant five (5) days period.

Listing Status on the SGX-ST

1. 1. The Directors will ensure that the Share purchases will not have any effect on the listing of the Company's securities including the Shares listed on the SGX-ST. Rule 723 of the Listing Manual of the SGX-ST requires at least ten per cent. (10%) of the total number of issued shares (excluding Treasury Shares, preference shares and convertible equity securities) in a class that is listed is at all times held by the public. The Directors shall safeguard the interests of public Shareholders before undertaking any Share purchases. Before exercising the Share Purchase Mandate, the Directors shall at all times take due cognisance of (a) the then shareholding spread of the Company in respect of the number of Shares held by substantial Shareholders and by non-substantial Shareholders and (b) the volume of trading on the SGX-ST in respect of the Shares immediately before the exercise of any Share purchases.
   2. As at the Latest Practicable Date, approximately 524,602,264 Shares (68.85%) of a total of 761,994,775 Shares issued by the Company (excluding Treasury Shares) are held by the public. The Company will ensure that the Share purchases will not cause market illiquidity or affect orderly trade and will ensure that Rule 723 of the Listing Manual is complied with.
2. Mode of Purchase
   Shares Purchases can be effected by the Company in either one of the following two (2) ways or both:

1. 1. by way of market purchases of Shares on the Official List of SGX-ST, which means a purchase transacted through the ready market ("Market Purchase"); or
   2. by way of off-market acquisitions on an equal access scheme in accordance with Section 76C of the Act ("Off-MarketPurchase").
2. Off-MarketPurchases

1. For purchases of Shares made by way of an Off-Market Purchase, the Company shall issue an offer document to all Shareholders. The offer document shall contain, inter alia, the following information:

1. the terms and conditions of the offer;
2. the period and procedures for acceptances;
3. the reasons for the proposed Shares Purchase;

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1. 1. the consequences, if any, of Shares purchased by the Company that will arise under the Singapore Code on Take-overs and Mergers or any other applicable take-over rules;
   2. whether the purchase of Shares, if made, would have any effect on the listing of the Company's securities on the Official List of SGX-ST;
   3. details of any purchase of Shares made by the Company in the previous twelve (12) months whether through Market Purchases or Off-Market Purchases, including the total number of Shares purchased, the purchase price per Share or the highest and lowest prices paid for such purchases of Shares, where relevant, and the total consideration paid for such purchases; and
   4. whether the Shares purchased by the Company will be cancelled or kept as Treasury Shares.
2. All Offeree Shareholders shall be given a reasonable opportunity to accept any offer made by the Company to purchase their Shares under the Shares Purchase Mandate.
3. The Company may offer to purchase Shares from time to time under the Shares Purchase Mandate subject to the requirement that the terms of any offer to purchase Shares by the Company shall be ranked pari passu in respect of all Offeree Shareholders save under the following circumstances:
4. 1. where there are differences in consideration attributable to the fact that an offer relates to Shares with different accrued dividend entitlements;
   2. where there are differences in consideration attributable to the fact that an offer relates to Shares with different amounts remaining unpaid; and
   3. where there are differences in an offer introduced solely to ensure that every Shareholder is left with a whole number of Shares in board lots of 100 Shares after the Shares Purchases, in the event there are Offeree Shareholders holding odd number of Shares.

1. Rationale For The Share Purchase Mandate
   The proposed Share Purchase Mandate will give the Company the flexibility to undertake purchases of its Shares at any time, subject to market conditions, during the period when the Share Purchase Mandate is in force.
   The Directors believe that the Share Purchase Mandate will provide the Company with a mechanism to facilitate the return of surplus cash over and above its ordinary capital requirements, in an expedient and cost-efficient manner. The Share Purchase Mandate will also allow the Directors to exercise greater control over the Company's share capital structure, dividend payout and cash reserves, with a view to enhancing the net tangible assets and/or earnings per Share. The Directors further believe that Share purchases may also buffer short-term share price volatility and offset the effects of share price speculation. Where Shares are purchased by the Company and are held as Treasury Shares, it will also enable the Company to transfer the Treasury Shares for the purposes of the Fu Yu Restricted Share Plan.
   The purchase or acquisition of Shares will only be undertaken if the Directors believe that it can benefit the Company and Shareholders. Shareholders should note that purchases or acquisitions of Shares pursuant to the Share Purchase Mandate may not be carried out to the full 10% limit as authorised. No purchase or acquisition of Shares will be made in circumstances which would have or may have a material adverse effect on the financial condition, liquidity and capital of the Company and the Group.

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1. Funding of Share Purchases
   In purchasing Shares, the Company may only apply funds legally available for such purchase in accordance with its Constitution and the applicable laws in Singapore. The Company may not purchase Shares for a consideration other than cash or for settlement otherwise in accordance with the trading rules of the SGX-ST. Any Share Purchase undertaken by the Company shall be made out of capital or profits that are available for distribution as dividends so long as the Company is solvent (as defined in Section 76F(4) of the Act). Any purchase by the Company may be made out of capital or profits that are available for distribution as dividends, so long as the Company is solvent (as defined by Section 76F(4) of the Act).
   Pursuant to Section 76F(4) of the Act, a company is solvent if (a) it is able to pay its debts in full at the time of payment and will be able to pay its debts as they fall due in the normal course of business in the twelve (12) months following such date of payment and (b) the value of its assets is not less than the value of its liabilities (including contingent liabilities) and such value of its assets will not, after any purchase of shares for purposes of any proposed acquisition or release of the company's obligations, become less than the value of its liabilities (including contingent liabilities). In determining whether the Company is solvent, the Directors must have regard to the most recently audited financial statements, other relevant circumstances, and may rely on valuations or estimations of assets or liabilities. In determining the value of contingent liabilities, the Directors may take into account the likelihood of the contingency occurring, as well as any counterclaims by the Company.
   The Company intends to use internal sources of funds or external borrowings, or a combination of both, to finance its Share purchases.
   Where the consideration paid by the Company for the Share purchases is made out of profits, such consideration will correspondingly reduce the amount of profits available for the distribution of cash dividends by the Company. However, where the consideration paid by the Company for the Share purchases is made out of capital, the amount of profits available for the distribution of cash dividends by the Company will not be reduced.
2. Financial Impact Of The Proposed Share Purchases

1. The purchased Shares may be:

1. held by the Company; or
2. dealt with, at any time, in accordance with Section 76K of the Act, as Treasury Shares. Section 76K of the Act allows the Company to:

1. sell the Treasury Shares (or any of them) for cash;
2. transfer the Treasury Shares (or any of them) for the purposes of or pursuant to any share scheme of the Company, whether for employees, Directors or other persons;
3. transfer the Treasury Shares (or any of them) as consideration for the acquisition of shares in or assets of another company or assets of a person;
4. cancel the Treasury Shares (or any of them); or
5. sell, transfer or otherwise use the Treasury Shares for such other purposes as may be prescribed by the Minister for Finance.

The aggregate number of Shares held as Treasury Shares shall not at any time exceed ten per cent. (10%) of the total number of Shares at that time. Any Shares in excess of this limit shall be disposed of or cancelled in accordance with Section 76K of the Act within six (6) months after the limit is first exceeded, or such further period as may be allowed by the Accounting and Corporate Regulatory Authority ("ACRA").

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Under the Act, where Shares purchased or acquired by the Company are cancelled, the Company shall:

1. reduce the amount of the Company's share capital where the Shares were purchased or acquired out of the capital of the Company;
2. reduce the amount of the Company's profits where the Shares were purchased or acquired out of the profits of the Company; or
3. reduce the amount of the Company's share capital and profits proportionately where the Shares were purchased or acquired out of both the capital and the profits of the Company,

by the total amount of the purchase price paid by the Company for the Shares cancelled.

The Company cannot exercise any right in respect of Treasury Shares. In particular, the Company cannot exercise any right to attend or vote at meetings and for the purposes of the Act, the Company shall be treated as having no right to vote and the Treasury Shares will be treated as having no voting rights.

In addition, no dividend may be paid, and no other distribution (whether in cash or otherwise) of the Company's assets (including any distribution of assets to members of the Company on winding up) may be made, to the Company in respect of Treasury Shares. However, the allotment of Shares as fully paid bonus shares in respect of Treasury Shares is allowed. Also, a subdivision or consolidation of any Treasury Shares into Treasury Shares of a greater or smaller number is allowed so long as the total value of the Treasury Shares after the subdivision or consolidation is the same as before.

2. The financial effects arising from a purchase or acquisition of Shares pursuant to the Share Purchase Mandate on the Group and the Company will depend on, inter alia, whether the Shares are purchased or acquired out of profits and/or capital of the Company, the number of Shares purchased or acquired, the consideration paid for such Shares and whether the Shares purchased or acquired are held in treasury or cancelled. The financial effect on the unaudited financial statements of the Group and the Company will depend, inter alia, on the factors set out below:

1. Purchase or Acquisition out of Profits and/or Capital
   Under the Act, purchases or acquisitions of Shares by the Company may be made out of the Company's profits and/or capital so long as the Company is solvent. Where the consideration paid by the Company for the purchase or acquisition of Shares is made out of profits, such consideration (excluding brokerage, commission, applicable goods and service tax and other related expenses) will correspondingly reduce the amount available for the distribution of cash dividends by the Company. Where the consideration paid by the Company for the purchase or acquisition of Shares is made out of capital, the amount available for the distribution of cash dividends by the Company will not be reduced.
2. Number of Shares Acquired or Purchased
   Based on the 761,994,775 issued Shares as the Latest Practicable Date, the purchase or acquisition of Shares by the Company of up to the maximum limit of 10% of its issued Shares will result in the purchase or acquisition of 76,199,477 Shares.

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1. Maximum Price Paid for Shares Acquired or Purchased
   In the case of a Market Purchase by the Company and assuming that the Company purchases or acquires 76,199,477 Shares at the Maximum Price of S$0.12495 per Share (being the price equivalent to 5% above the Average Closing Price of the Shares for the five
   (5) consecutive Market Days on which the Shares were traded on the SGX-ST immediately preceding the Latest Practicable Date), the maximum amount of funds required for the purchase or acquisition of the 76,199,477 Shares is approximately S$9,521,000 (excluding brokerage, commission, applicable goods and services tax and other related expenses). In the case of an Off-Market Purchase by the Company and assuming that the Company purchases or acquires 76,199,477 Shares at the Maximum Price of S$0.14280 per Share (being the price equivalent to 20% above the Average Closing Price of the Shares for the five consecutive Market Days on which the Shares were traded on the SGX-ST immediately preceding the Latest Practicable Date), the maximum amount of funds required for the purchase or acquisition of the 76,199,477 Shares is approximately S$10,881,000 (excluding brokerage, commission, applicable goods and services tax and other related expenses).

Illustrative Financial Effects

For illustrative purposes only, based on the assumptions set out above and assuming that (i) the purchase or acquisition of Shares are made to the extent aforesaid, (ii) such Shares are funded wholly by internal resources within the Group and (iii) the Company had purchased 76,199,477 Shares (representing 10% of the issued Shares as at the Latest Practicable Date), the financial effects of the purchase of 76,199,477 Shares by way of:

1. purchases made entirely out of capital and held as treasury shares;
2. purchases made entirely out of capital and cancelled;

on the audited financial statements of the Group and the Company for the financial year ended 31 December 2023 pursuant to the Share Purchase Mandate are set out as follows:

(a) Market Purchases

Scenario	A	B
Purchased out of	Capital	Capital
Type of purchase	On-Market	On-Market
Held as Treasury Shares/Cancelled	Held as Treasury	Cancelled
	Shares
Maximum Price share (S$)	0.12495	0.12495
Maximum number of Shares to be	76,199	76,199
purchased ('000)
Total number of issued Shares as at the	761,994	761,994
Latest Practicable Date ('000)
Equivalent % total issued Shares	10%	10%
Maximum funds required (S$'000)	9,521	9,521

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			Group			Company
		Before	After Share	Before	After Share
		Share	Purchase	Share	Purchase
		Purchase			Purchase
			A	B		A	B
			(Held as	(Cancelled)		(Held as	(Cancelled)
As at 31		Treasury			Treasury
December 2023		Shares)			Shares)
		S$'000	S$'000	S$'000	S$'000	S$'000	S$'000
Profit attributable to	(10,113)	(10,113)	(10,113)	(1,107)	(1,107)	(1,107)
equity holders for
the year
Share capital	102,985	102,985	93,464	102,985	102,985	93,464
Capital and other	5,411	5,411	5,411	123	123	123
reserves
Retained profits	61,547	61,547	61,547	22,177	22,177	22,177
Currency translation	(32,500)	(32,500)	(32,500)	-	-	-
reserve
Treasury Shares	-	(9,521)	-	-	(9,521)	-
Shareholders' fund	137,443	127,922	127,922	125,285	115,764	115,764
Net Asset value(1)	134,258	124,737	124,737	125,285	115,764	115,764
(less intangible
asset-goodwill)
Current assets	107,864	98,343	98,343	34,467	24,946	24,946
Current liabilities	30,868	30,868	30,868	14,658	14,658	14,658
Net current assets	76,996	67,475	67,475	19,809	10,288	10,288
Unsecured bank	3,341	3,341	3,341	3,341	3,341	3,341
loans
Cash and cash	60,322	50,801	50,801	13,816	4,295	4,295
equivalents
Number of shares	761,994	685,795	685,795	761,994	685,795	685,795
(in '000)			-	-
Treasury shares	-	76,199	76,199	-
(in '000)
Financial Ratios
Earnings per Share	(1.33)	(1.47)	(1.47)	(0.15)	(0.16)	(0.16)
(cents)
Net assets value	18.04	18.65	18.65	16.44	16.88	16.88
per Share (cents)(2)
Gearing ratios	0.02	0.03	0.03	0.03	0.03	0.03
(times)(3)
Current ratios	3.49	3.19	3.19	2.35	1.70	1.70
(times)(4)

Notes:

1. Net asset value equals to total assets less total liabilities.
2. Based on the total number of Shares issued as at the Latest Practicable Date and adjusted for the effect of the Share purchases or acquisitions.
3. Gearing ratio means total borrowings divided by Shareholders' funds.
4. Current ratio means current assets divided by current liabilities.

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1. Off-MarketPurchases

Scenario					A			B
Purchased out of					Capital		Capital
Type of purchase				Off-Market		Off-Market
Held as Treasury Shares/Cancelled		Held as Treasury		Cancelled
						Shares
Maximum Price share (S$)				0.14280		0.14280
Maximum number of Shares to be			76,199		76,199
purchased ('000)
Total number of issued Shares as at the			761,994		761,994
Latest Practicable Date ('000)
Equivalent % total issued Shares			10%			10%
Maximum funds required (S$'000)			10,881		10,881
			Group				Company
		Before	After Share	Before		After Share
		Share	Purchase	Share		Purchase
	Purchase				Purchase
			A	B			A	B
			(Held as	(Cancelled)		(Held as	(Cancelled)
As at 31		Treasury				Treasury
December 2023		Shares)				Shares)
		S$'000	S$'000	S$'000	S$'000		S$'000	S$'000
Profit attributable to	(10,113)	(10,113)	(10,113)	(1,107)	(1,107)	(1,107)
equity holders for
the year
Share capital	102,985	102,985	92,104	102,985	102,985	92,104
Capital and other	5,411	5,411	5,411	123	123	123
reserves
Retained profits	61,547	61,547	61,547	22,177	22,177	22,177
Currency translation	(32,500)	(32,500)	(32,500)	-		-	-
reserve
Treasury Shares	-	(10,881)		-	-	(10,881)	-
Shareholders' fund	137,443	126,562	126,562	125,285	114,404	114,404
Net Asset value(1)	134,258	123,377	123,377	125,285	114,404	114,404
(less intangible
asset-goodwill)
Current assets	107,864	96,983	96,983	34,467	23,586	23,586
Current liabilities	30,868	30,868	30,868	14,658	14,658	14,658
Net current assets	76,996	66,115	66,115	19,809	8,928	8,928
Unsecured bank loans 3,341	3,341	3,341	3,341	3,341	3,341
Cash and cash	60,322	49,441	49,441	13,816	2,935	2,935
equivalents
Number of shares	761,994	685,795	685,795	761,994	685,795	685,795
(in '000)
Treasury shares	-	76,199		-	-	76,199	-
(in '000)
Financial Ratios
Earnings per Share	(1.33)	(1.47)	(1.47)	(0.15)	(0.16)	(0.16)
(cents)
Net assets value	18.04	18.45	18.45	16.44	16.68	16.68
per Share (cents)(2)
Gearing ratios	0.02	0.03	0.03	0.03	0.03	0.03
(times)(3)
Current ratios	3.49	3.14	3.14	2.35	1.61	1.61
(times)(4)

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Notes:

1. Net asset value equals to total assets less total liabilities.
2. Based on the total number of Shares issued as at the Latest Practicable Date and adjusted for the effect of the Share purchases or acquisitions.
3. Gearing ratio means total borrowings divided by Shareholders' funds.
4. Current ratio means current assets divided by current liabilities.

The financial effects set out above are purely for illustrative purposes only. Although the proposed renewal of the Share Purchase Mandate would authorise the Company to buy back up to 10% of the total number of issued Shares (excluding Treasury Shares) as at the date that the Share Purchase Mandate is obtained, the Company may not necessarily buy back or be able to buy back 10% of the total number of issued Shares (excluding Treasury Shares) in full.

1. Consequences of Share Purchases under the Singapore Code on Take-overs and Mergers

1. Appendix 2 of the Take-over Code contains the Share Buy-Back Guidance Note. The take-over implications arising from any purchase or acquisition by the Company of its Shares are set out below.
   Obligation to make a Take-over Offer
2. In accordance with The Singapore Code on Take-overs and Mergers (the "Take-overCode"), a person will be required to make a general offer for a public company if:
3. 1. he and persons acting in concert with him acquires thirty per cent. (30%) or more of the voting rights of the company; or
   2. he and persons acting in concert with him already holds between thirty per cent. (30%) and fifty per cent. (50%) of the voting rights of the company, and he and his concert parties increase their voting rights in the company by more than one per cent. (1%) in any six- month period.

Persons Acting in Concert

1. Under the Take-over Code, persons acting in concert comprise individuals or companies who, pursuant to an agreement or understanding (whether formal or informal) co-operate, through the acquisition by any of them of shares in a company to obtain or consolidate effective control of that company.
2. Unless the contrary is established, the Take-over Code presumes, inter alia, the following individuals and companies to be acting in concert with each other:
3. 1. the following companies:
   2. 1. a company;
      2. the parent company of (i);
      3. the subsidiaries of (i);
      4. the fellow subsidiaries of (i);
      5. the associated companies of any of (i), (ii), (iii) or (iv);

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1. 1. companies whose associated companies include any of (i), (ii), (iii), (iv) or (v); and
   2. any person who has provided financial assistance (other than a bank in the ordinary course of business) to any of the above for the purchase of voting rights.
2. a company with any of its directors (together with their close relatives, related trusts as well as companies controlled by any of the directors, their close relatives and related trusts);
3. a company with any of its pension funds and employee share schemes;
4. a person with any investment company, unit trust or other fund whose investment such person manages on a discretionary basis, but only in respect of the investment account which such person manages;
5. a financial or other professional adviser, including a stockbroker, with its client in respect of the shareholdings of the adviser and persons controlling, controlled by or under the same control as the adviser;
6. directors of a company (together with their close relatives, related trusts and companies controlled by any of such directors, their close relatives and related trusts) which is subject to an offer or where the directors have reason to believe a bona fide offer for their company may be imminent;
7. partners; and
8. the following persons and entities:
9. 1. an individual;
   2. the close relatives of (i);
   3. the related trusts of (i);
   4. any person who is accustomed to act in accordance with the instructions of (i);
   5. companies controlled by any of (i), (ii), (iii) or (iv); and
   6. any person who has provided financial assistance (other than a bank in the ordinary course of business) to any of the above for the purchase of voting rights.

For this purpose, ownership or control of at least twenty per cent (20%) but not more than fifty per cent (50%) of the voting rights of a company will be regarded as the test of associated company status.

The circumstances under which Shareholders, including Directors and persons acting in concert with them respectively, will incur an obligation to make a take-over offer under Rule 14 of the Take- over Code after a purchase or acquisition of Shares by the Company are set out in Appendix 2 of the Take-over Code.

Effect of Rule 14 and Appendix 2

5. In general terms, the effect of Rule 14 and Appendix 2 of the Take-over Code is that, unless exempted, the Directors and persons acting in concert with them will incur an obligation to make a take-over offer for the Company under Rule 14 of the Take-over Code if, as a result of the Company purchasing or acquiring its Shares, the voting rights of such Directors and their concert parties would increase to 30% or more, or if the voting rights of such Directors and their concert parties fall between 30% and 50% of voting rights in the Company, the voting rights of such Directors and their concert parties would increase by more than one per cent. (1%) in any period of six months. In calculating the percentage of voting rights of such Directors and their persons acting in concert with them, treasury shares shall be excluded.

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