Annual General Meeting 2021

Annual General Meeting 2021

The 122^nd Annual General Meeting (“AGM”) of Fraser and Neave, Limited will be convened and held by way of electronic means on Thursday, 21 January 2021 at 9.30 a.m. (Singapore time).

Due to the current COVID-19 situation in Singapore, shareholders will not be able to attend the AGM in person. Shareholders may instead participate in the AGM by:

• observing and/or listening to the AGM proceedings via live audio-visual webcast or live audio-only stream;

• submitting questions in advance of the AGM; and/or

• appointing the Chairman of the Meeting as proxy to attend, speak and vote on their behalf at the AGM.

Persons who hold F&N shares through relevant intermediaries (as defined in section 181 of the Companies Act, Chapter 50), other than CPF and SRS investors, and who wish to participate in the AGM (including observing and/or listening to the AGM proceedings via live audio-visual webcast or live audio-only stream) should contact the relevant intermediary through which they hold such shares as soon as possible in order for the necessary arrangements to be made for their participation in the AGM. Such persons should not use the pre-registration website to pre-register for the live audio-visual webcast or live audio-only stream of the AGM proceedings.

There will be no live voting or live Q&A at the AGM.

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Key Information

Important Documents

Key Dates/Deadlines

In summary, the key dates/deadlines which shareholders should take note of are set out in the table below:

Key dates	Actions
28 December 2020 (Monday)	Shareholders may begin to pre-register here for live audio-visual webcast or live audio-only stream of the AGM proceedings.
5.00 p.m. on 11 January 2021 (Monday)	Deadline for CPF and SRS investors who wish to appoint the Chairman of the Meeting as proxy to approach their respective CPF Agent Banks or SRS Operators to submit their votes.
9.30 a.m. on 18 January 2021 (Monday)	Deadline for shareholders to: submit questions in advance; pre-register for live audio-visual webcast/live audio-only stream of the AGM proceedings; and submit instruments appointing the Chairman of the Meeting as proxy.
9.30 a.m. on 20 January 2021 (Wednesday)	Authenticated shareholders will receive an email which will contain unique user credentials and instructions on how to access the live audio-visual webcast and live audio-only stream of the AGM proceedings. Shareholders who do not receive the Confirmation Email by 9.30 a.m. on 20 January 2021, but have registered by the 18 January 2021 deadline, should contact our Share Registrar, Tricor Barbinder Share Registration Services (A division of Tricor Singapore Pte. Ltd.), at +656236 3550 or 6236 3555 or via email at [email protected] before 6.00 p.m. on 20 January 2021.
Date and time of AGM - 9.30 a.m. on 21 January 2021 (Thursday)	Click on the link in the Confirmation Email and follow the instructions to access the live audio-visual webcast of the AGM proceedings; or Call the toll-free telephone number and follow the instructions in the Confirmation Email to access the live audio-only stream of the AGM proceedings.
5.00 p.m. on 28 January 2021 (Thursday)	Record date for determining entitlements to final dividend, subject to shareholders’ approval at the AGM.
10 February 2021 (Wednesday)	Payment date for final dividend, subject to shareholders’ approval at the AGM.

Pre-Registration for Audio-Visual Webcast/Audio-Only Stream of AGM Proceedings

Appoint Chairman of the Meeting as Proxy to Vote

As shareholders will not be able to vote during the live audio-visual webcast or live audio-only stream of the AGM proceedings, shareholders who wish to vote on the resolutions to be tabled at the AGM must appoint the Chairman of the Meeting as their proxy to attend, speak and vote on their behalf, in accordance with the instructions on the instrument appointing a proxy.

Shareholders may download a copy of the proxy form by clicking on the relevant hyperlink under “Important Documents” above and on SGXNet at the URL https://www.sgx.com/securities/company-announcements. For convenience, printed copies of the proxy form will also be sent by post to shareholders.

Where shareholders (whether individual or corporate) appoint the Chairman of the Meeting as their proxy, they must give specific instructions as to voting, or abstentions from voting, in respect of a resolution in the instrument appointing a proxy, failing which the appointment of the Chairman of the Meeting as proxy for that resolution will be treated as invalid.

The instrument appointing the Chairman of the Meeting as proxy must be submitted in the following manner:

- if submitted by post, be lodged with the Company’s Share Registrar, Tricor Barbinder Share Registration Services (A division of Tricor Singapore Pte. Ltd.), at 80 Robinson Road #11-02, Singapore 068898; or

- if submitted electronically via email, be submitted to the Company’s Share Registrar at [email protected],

in either case, by 9.30 a.m. on 18 January 2021.

A shareholder who wishes to submit an instrument appointing a proxy must complete and sign the proxy form, before submitting it by post to the address provided above, or before scanning and sending it by email to the email address provided above.

CPF and SRS investors who wish to appoint the Chairman of the Meeting as proxy should approach their respective CPF Agent Banks or SRS Operators to submit their votes by 5.00 p.m. on 11 January 2021.
Submission of Questions in Advance of AGM

As shareholders will not be able to ask questions during the live audio-visual webcast or live audio-only stream of the AGM proceedings, it is important for shareholders to pre-register and submit their questions in advance of the AGM.

Shareholders, including CPF and SRS investors, can submit questions related to the resolutions to be tabled for approval at the AGM to the Chairman of the Meeting, in advance of the AGM, in the following manner:

1. Via pre-registration website
Shareholders who pre-register to observe and/or listen to the AGM proceedings may submit their questions here.

2. Via email
Shareholders may submit their questions via email to [email protected].

3. By post
Shareholders may submit their questions by post to the Company’s Share Registrar, Tricor Barbinder Share Registration Services (A division of Tricor Singapore Pte. Ltd.), at 80 Robinson Road #11-02, Singapore 068898.

When sending in your questions via email or by post, please also provide us with the following details:
- your full name;
- your address; and
- the manner in which you hold shares in F&N (e.g., via CDP, CPF, SRS and/or scrip).

Deadline to submit questions: All questions must be submitted by 9.30 a.m. on 18 January 2021.

We will endeavour to address all substantial and relevant questions received from shareholders prior to the AGM by publishing our responses to such questions below and on SGXNet prior to the AGM. If we are unable to do so, we will address those substantial and relevant questions which have not already been addressed prior to the AGM, during the AGM itself through the live audio-visual webcast and live audio-only stream of the AGM proceedings.

We will also publish the minutes of the AGM below and on SGXNet, and the minutes will include the responses to substantial and relevant questions from shareholders which are addressed during the AGM.
Responses to Questions for AGM
Q1. Please provide an update regarding F&N's recent investment into Starbucks (Thailand) via Coffee Concepts and also share the percentage revenue that this investment is currently contributing to the financials of FY2020.
- As our investment in Starbucks Thailand is equity-accounted, we do not account for its revenue in our financials.
- Starbucks Thailand business has been adversely impacted by the COVID-19 pandemic, much like many other businesses globally. The regulations set during the Nationwide State of Emergency declared on 25 March 2020 significantly impacted its on-premise sales. As COVID-19 restrictions began to ease in the second half of 2020, we saw gradual improvement in its business.
- Despite the adverse impact of COVID-19 pandemic, this investment remains earnings accretive and contributed positively to F&N earnings in FY2020.
Q2. There was action to raise awareness against unhealthy impact of sugar laden drinks. What is actual impact on company business for past year. If possible, please share on plans going forward to mitigate this for drinks business.
- Over the last decade, diet-related issues like obesity have become a growing global concern. At F&N, we recognise these concerns and have actively reduced the sugar content of our beverages to deliver great tasting and healthier choices. We believe in the gradual recalibration of consumer’s taste acceptance of reduced sweetness is the way forward. F&N’s concerted effort to reduce the sugar content in our products has contributed significantly to a steady decline of our sugar footprint – over 56% reduction from 2004-2020 and has been met with very positive consumer response.
- The Group offers consumers healthier beverage options, from reduced or low sugar to no sugar. We have also expanded our range of water to include exciting options like sparkling water, which is in growing demand.
- Today, F&N provides healthier choice options in every market and in the ready-to-drink beverage category. The Group’s strong market positions in key categories – isotonic, tea, liquid milk, soya, water and canned milk – in our traditional stronghold markets of Singapore, Malaysia and Thailand demonstrate not only the strength of our brands, but our ability to build on our market positions in the consumer market.
- We are confident that our efforts to drive a healthier product portfolio and engage our communities on healthy living correspond closely to evolving consumer trends and offers us further opportunities for growth. And that the breadth and depth of our portfolio will continue to appeal to the wide spectrum of the consumer market.
Q3. Company's plans to acquire land in Malaysia for dairy farm and milk production was scrapped. Did this limit company's ability to scale and is company actively looking for similar land to increase dairy farm and milk production. https://www.businesstimes.com.sg/companies-markets/perlis-ruler-sells-stake-in-fn-unit-after-land-purchase-deal-scrapped
- Last year, we announced that the Group had entered into a conditional agreement to acquire a 4,454-hectare of agricultural land in Perlis, Malaysia for a cash consideration of RM156m. In April 2020, the seller rescinded the sale. We will continue to seek out and evaluate other opportunities for an integrated crop and dairy farming project whenever they arise.
- The Group remains committed to offering our consumers the highest quality of fresh milk and growing our presence in the liquid milk sector. In addition to looking for opportunities for an integrated crop and dairy farming project, F&N will continue to work closely with our suppliers and farmers to widen our milk sources.
Q4. What is the maximum amount of Chang beer that can be produced by Emerald Brewery? How much will it affect the bottom line?
- Emerald Brewery has a current production capacity of approximately 500,000 hectolitres, but had been planned for a maximum capacity of 1.2 million hectolitres. The brewery produces and distributes CHANG beer in five packaging formats – 330ml and 500ml cans, 320ml and 620ml bottles and 30-litre keg.
- As the Group continues to build its presence in Myanmar, we expect gestation losses in the first few years of operations. Like every growing market, competition in the Myanmar beer market is intense. We will continue to invest in our brands and build a sustainable business in Myanmar for the long-term growth of the Group.
Q5. What is the rationale for keeping the printing and publishing business given its lack of synergy and consistent poor performance?
- Since 2014, Times Publishing Group (“TPG”) has been actively restructuring its business to better position the company for future growth. While the COVID-19 pandemic has derailed its FY2020 performance, we are confident that TPG has the right strategies in place and is on track to achieve sustainable performance.
- Within TPG, the Education Publishing and Printing divisions remain profitable and are key players in their respective industry. Our Education Publishing is the leading profit contributor to TPG with its strong portfolio of education products and services. As a major publisher in Singapore, it has expanded its global network to over 80 countries with its MARSHALL CAVENDISH EDUCATION brand and remains in a strong growth position. Our recently endorsed Cambridge Assessment International Education products will continue to enhance our market positioning in Southeast Asia whilst our strategy to build a strong international presence with our digital and online offerings are also progressing according to plan.
- Printing division is also profitable. Its strong position arose from transformational steps taken over the last few years to consolidate and match its capacity and demand for traditional print (magazines and books). As key print customers begin to reduce their global supply chain reliance on China, we expect our Printing division to benefit from this change. In addition, the acquisition of the 60% stake in Print Lab Pte. Ltd. (“Print Lab”) in 2019 has also enabled our Printing division to diversify its portfolio into the fast-growing integrated marketing and print solutions for the out-of-home print market, serving the fast-moving consumer group, consumer retail, automobile and financial segments. Print Lab is now working closely with our Food & Beverage business. We have also embarked on various projects focusing on sustainable printing solutions and this will help to further reduce our reliance on traditional print customers.
- The retail segment continues to be challenging, and 2020 proved to be an even more difficult year due to the COVID-19 pandemic. Hence, efforts have been put in place to restructure the business, focusing on closing under-performing stores with an aim to achieve sustainable operating performance.
- In such chaotic market environment, TPG has been focused on cash flow and liquidity. Despite its losses, TPG generated positive operating cash flow and remained financially independent from the Group.
- We will continue to review options for all our businesses from time to time, and will make disclosures as required. We also remain committed to ensuring that the Group continues to deliver value to shareholders.
Q6. What was the revenue generated and gestation loss incurred for the beer business in FY2020?
- We are pleased to report that Emerald Brewery recorded lower gestation losses in FY2020, as compared with FY2019, helped by better-than-expected beer sales.
Q7. Could you share the performance of recent acquisitions such as Starbucks Thailand and Genki Sushi (Thailand) since your acquisitions of these businesses?
- Starbucks Thailand: Please see responses to Q1.
- We have divested all our interest in the Genki Sushi business in Thailand in July 2020.
Q8. Do you intend to increase your stake in the Vietnamese operations?
- As a shareholder of Vietnam Dairy Products Joint Stock Company (“Vinamilk”) since 2005, F&N has always expressed that should the opportunity to further increase our interest in Vinamilk arise, the Group will evaluate the merits of that opportunity. In FY2020, the Group successfully acquired another 0.39% of Vinamilk’s shares from the open market, bringing our stake from 20.01% to 20.4%.
- As at 30 September 2020, the market value of F&N’s stake in Vinamilk was approximately $2.7 billion. Our investment reflects our confidence in Vinamilk’s management, growth and long-term prospects.
Q9. Pg 127- Despite revenue of Beverages had reduced by 6.7% and depreciation had increased by 60%. EBITDA had improved PBIT had improved. Could management explain for the improvement of EBITDA.
- Beverages EBITDA improved 32% to $47.4 million, from $35.9 million a year ago. The improvement was due largely to lower gestation losses from greenfield brewery in Myanmar compared with pre-operating costs in FY2019, savings from cost mitigating measures and lower marketing spend in New Markets.

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