Revision and renewal of annual caps of continuing connected transactions

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as 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 announcement.

Forward Fashion (International) Holdings Company Limited

尚 晉（國 際）控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2528)

REVISION AND RENEWAL OF ANNUAL CAPS OF

CONTINUING CONNECTED TRANSACTIONS

Independent Financial Adviser to the Independent Board Committee and

the Shareholders

REVISION AND RENEWAL OF ANNUAL CAPS OF THE NB COOPERATION AGREEMENT

Reference is made to the section headed "Connected Transactions" of the Prospectus.

On 15 April 2015, World First International, an indirect wholly-owned subsidiary of the Company, entered into the NB Cooperation Agreement with White S.R.L. and Twelve S.A., to form NB China for the promotion, marketing and distribution of Products in Macau and the PRC. Pursuant to the NB Cooperation Agreement, the parties agreed that NB China shall purchase Products from White S.R.L. and Factory S.R.L..

Factory S.R.L. is an Independent Third Party. However, for the reasons as disclosed in the Prospectus and set out below, White S.R.L. is a connected person of the Company and the purchase of Products by NB China from White S.R.L. has constituted continuing connected transactions of the Company.

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Recently the Company was informed by White S.R.L. that Factory S.R.L. will cease its supply of Products to NB China with effect from June 2021. As a result, NB China has to shift its demand and orders for Products from Factory S.R.L. to White S.R.L., therefore shifting its purchases of Products from an Independent Third Party to a connected person of the Company. Accordingly, it is expected that the Original Annual Cap under the NB Cooperation Agreement for the year ending 31 December 2021 of HK$3 million will be exceeded. Further, the Original Annual Cap is due to expire on 31 December 2021. As such, the Company proposed to (i) revise the Original Annual Cap for the year ending 31 December 2021 to the Revised Annual Cap; and (ii) renew the annual caps under the NB Cooperation Agreement for the two years ending 31 December 2023.

LISTING RULES IMPLICATIONS

Since the date of the NB Cooperation Agreement and up to the date of this announcement, Twelve S.A. has held approximately 40% equity interest in NB China. Therefore, Twelve S.A. is a substantial shareholder of NB China, an indirect non wholly-owned subsidiary of the Company, and hence a connected person of the Company under Chapter 14A of the Listing Rules. As White S.R.L. is indirectly wholly-owned by Twelve S.A., it is an associate of Twelve S.A. Accordingly, White S.R.L. is a connected person of the Company under Chapter 14A of the Listing Rules.

As one or more of the applicable percentage ratios (defined under the Rule 14.07 of the Listing Rules) in respect of the Revised Annual Cap and the Renewed Annual Caps are more than 5%, the Revised Annual Cap and the Renewed Annual Caps are subject to reporting, announcement, annual review and approval of the independent Shareholders under Chapter 14A of the Listing Rules.

SHAREHOLDERS' WRITTEN APPROVAL

An application will be made by the Company to the Stock Exchange for a waiver from strict compliance with Rule 14A.36 of the Listing Rules in relation to the requirement for the Company to hold a general meeting to approve a connected transaction under Rule 14A.37 of the Listing Rules.

If the abovementioned waiver under Rule 14A.37 of the Listing Rules is granted by the Stock Exchange, no extraordinary general meeting of the Company will be held for the purpose of considering and approving the Revised Annual Cap and the Renewed Annual Caps. If the abovementioned waiver is not granted by the Stock Exchange, the Company will hold an extraordinary general meeting to obtain the requisite approval from the Shareholders.

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INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISOR

An Independent Board Committee consisting of all independent non-executive Directors has been formed to advise the Shareholders on the Revised Annual Cap and the Renewed Annual Caps. The Company has appointed an Independent Financial Advisor to advise the Independent Board Committee and the Shareholders on the Revised Annual Cap and the Renewed Annual Caps.

DESPATCH OF CIRCULAR

A circular containing, among other things, details of the Revised Annual Cap and the Renewed Annual Caps, the recommendation from the Independent Board Committee and the advice of the Independent Financial Adviser, will be dispatched to the Shareholders on or before 28 May 2021. If it is expected that there will be a delay to the dispatch of the circular, a further announcement will be published in accordance with the Listing Rules stating the reason for the delay and the new expected date of despatch of the circular.

REVISION AND RENEWAL OF ANNUAL CAPS OF THE NB COOPERATION AGREEMENT

Reference is made to the section headed "Connected Transactions" of the Prospectus.

On 15 April 2015, World First International, an indirect wholly-owned subsidiary of the Company, entered into the NB Cooperation Agreement with White S.R.L. and Twelve S.A., to form NB China for the promotion, marketing and distribution of Products in Macau and the PRC. Pursuant to the NB Cooperation Agreement, the parties agreed that NB China shall purchase Products from White S.R.L. and Factory S.R.L..

Factory S.R.L. is an Independent Third Party. However, for the reasons as disclosed in the Prospectus and set out below, White S.R.L. is a connected person of the Company and the purchase of Products by NB China from White S.R.L. has constituted continuing connected transactions of the Company.

Recently the Company was informed by White S . R . L . that Factory S . R . L . will cease its supply of Products to NB China with effect from June 2021. As a result, NB China has to shift its demand and orders for Products from Factory S.R.L. to White S . R . L . , therefore shifting its purchases of Products from an Independent Third Party to a connected person of the Company. Accordingly, it is expected that the Original Annual Cap under the NB Cooperation Agreement for the year ending 31 December 2021 of HK$3 million will be exceeded. Further, the Original Annual Cap is due to expire on 31 December 2021. As such, the Company proposed to (i) revise the Original Annual Cap for the year ending 31 December 2021 to the Revised Annual Cap; and (ii) renew the annual caps under the NB Cooperation Agreement for the two years ending 31 December 2023.

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The NB Cooperation Agreement

As disclosed in the Prospectus, the principal terms of the NB Cooperation Agreement are set out as below:

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Historical amounts and the annual caps

The table below sets out the amount of aggregate purchases made by NB China from White S.R.L. and Factory S.R.L. for the years and periods indicated:

For further details of the historical amount of aggregate purchases made by NB China from White S.R.L. for the financial years ended 31 December 2016, 2017 and 2018, please refer to the section headed "Connected Transactions" of the Prospectus.

The table below sets out the Original Annual Cap, the Revised Annual Cap and the Renewed Annual Caps of the NB Cooperation Agreement:

The above Revised Annual Cap and the Renewed Annual Caps were determined with reference to the historical actual transaction amounts, the terms under the NB Cooperation Agreement, and the expected sales volume and future business plan of NB China for the three years ending 31 December 2023. As at the date of this announcement, the Original Annual Cap for the year ending 31 December 2021 has not been exceeded.

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REASONS FOR THE REVISION AND RENEWAL OF ANNUAL CAPS

As disclosed in the Prospectus, the parties entered into the NB Cooperation Agreement on 15 April 2015 with the objective of forming NB China, to maintain and promote Products in Macau and the PRC. The formation of NB China with Neil Barrett's brand owner, White S.R.L., was the Group's first and strategically important cooperation project with an international brand owner. As at the date of this announcement, there were 17 mono-brand stores carrying Neil Barrett in Macau, the PRC and Taiwan, of which 15 mono-brand stores are operated by the Group and two mono-brand stores, which are all in the PRC, are operated by the Group's sub-distributors.

In light of the above, the Directors are of the view that (i) the NB Cooperation Agreement was entered into in the ordinary and usual course of the Group and are in the interests of the Company and Shareholders as a whole; (ii) the NB Cooperation Agreement are on normal commercial terms and are fair and reasonable; and (iii) (other than the independent non- executive Directors whose view is reserved pending the advice of the Independent Financial Adviser to the Independent Board Committee and the Shareholders) the Revised Annual Cap and the Renewed Annual Caps were proposed with the intentions to ensure continuation of the existing cooperation with White S.R.L. and were in the interest of the Company and its Shareholders as a whole.

Save for the Revised Annual Cap and the Renewed Annual Caps, there has been no change in the terms and conditions of the NB Cooperation Agreement.

INFORMATION OF THE PARTIES

The Company

The Company is incorporated in the Cayman Islands with limited liability and the issued shares of which are listed on the Main Board of the Stock Exchange. It is principally engaged in the retail of fashion apparel of international brands ranging from established designer label brands, popular global brands to up-and-coming brands in the PRC, Macau, Hong Kong and Taiwan.

World First International

World First International is a company incorporated in the BVI with limited liability and an indirect wholly-owned subsidiary of the Company. It is an investment holding company.

NB China

NB China is a company incorporated in Hong Kong and an indirect non-wholly owned subsidiary of the Company. It is owned as to approximately 60% by World First International and approximately 40% by Twelve S.A.. It is principally engaged in the promotion, marketing and distribution of Products in Macau and the PRC.

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Twelve S.A.

Twelve S.A. is a company incorporated in Luxembourg which is principally engaged in fashion business. Since the date of the NB Cooperation Agreement and up to the date of this announcement, Twelve S.A. has held approximately 40% equity interest in NB China. Therefore, Twelve S.A. is a substantial shareholder of NB China, an indirect non wholly- owned subsidiary of the Company, and hence a connected person of the Company under Chapter 14A of the Listing Rules. To the best of the Directors' knowledge, information and belief of the Directors after having made all reasonable enquires, the shares of Twelve S.A. are directly held by an Independent Third Party and is a connected person of the Company only for the reason of its 40% equity interest in NB China.

White S.R.L.

White S.R.L. is a company incorporated in Italy which is principally engaged in fashion business. As White S.R.L. is indirectly wholly-owned by Twelve S.A., it is an associate of Twelve S.A. Accordingly, White S.R.L. is a connected person of the Company under Chapter 14A of the Listing Rules.

APPROVAL OF THE BOARD

None of the Directors is considered to have a material interest in the NB Cooperation Agreement, the Revised Annual Cap and the Renewed Annual Caps and has to abstain from voting on the resolutions approving the Revised Annual Cap and the Renewed Annual Caps. Save for the independent non-executive Directors whose view is reserved pending the advice of the Independent Financial Adviser, the Directors have approved the Revised Annual Cap and the Renewed Annual Caps.

LISTING RULES IMPLICATIONS

Since the date of the NB Cooperation Agreement and up to the date of this announcement, Twelve S.A. has held approximately 40% equity interest in NB China. Therefore, Twelve S.A. is a substantial shareholder of NB China, an indirect non wholly-owned subsidiary of the Company, and hence a connected person of the Company under Chapter 14A of the Listing Rules. As White S.R.L. is indirectly wholly-owned by Twelve S.A., it is an associate of Twelve S.A. Accordingly, White S.R.L. is a connected person of the Company under Chapter 14A of the Listing Rules.

As one or more of the applicable percentage ratios (defined under the Rule 14.07 of the Listing Rules) in respect of the Revised Annual Cap and the Renewed Annual Caps are more than 5%, the Revised Annual Cap and the Renewed Annual Caps are subject to reporting, announcement, annual review and approval of the independent Shareholders under Chapter 14A of the Listing Rules.

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SHAREHOLDERS' WRITTEN APPROVAL

An application will be made by the Company to the Stock Exchange for a waiver from strict compliance with Rule 14A.36 of the Listing Rules in relation to the requirement for the Company to hold a general meeting to approve a connected transaction under Rule 14A.37 of the Listing Rules on the basis that:

1. to the best of the Directors' knowledge, information and belief having made all reasonable enquiries, no Shareholder had a material interest in the Revised Annual Cap and the Renewed Annual Caps, and no Shareholder is required to abstain from voting if a general meeting of the Company is held to approve the Revised Annual Cap and the Renewed Annual Caps;
2. a written approval to the Revised Annual Cap and the Renewed Annual Caps has been given by Gold Star Fashion Limited, a Shareholder holding 300,000,000 shares of the Company representing approximately 75% of the voting rights in the general meeting of the Company as at the date of this announcement;
3. as Gold Star Fashion Limited holding approximately 75% of the voting rights of the Company has already given its approval to the Revised Annual Cap and the Renewed Annual Caps, any resolution(s) put forward at the general meeting for approving the Revised Annual Cap and the Renewed Annual Caps, if it is held, will surely be passed and therefore the holding of a general meeting in this regard would serve no valuable purpose;
4. in light of the COVID-19 pandemic, holding of a physical general meeting would inevitably expose the Shareholders or the attendees to the risk of transmission of the virus; and
5. in light of the COVID-19 pandemic, the Company is obliged to implement stringent precautionary measures at the physical general meeting or arrange an online meeting with the use of technology (e.g. virtual meetings) to enable non-physical attendance and voting. The Directors consider that strict compliance with Rule 14A.36 of the Listing Rules with the implementation of the precautionary measures at the physical general meeting or adoption of an online meeting would be unduly burdensome and impose unnecessary administrative costs to the Company given the little value of holding such general meeting.

If the abovementioned waiver under Rule 14A.37 of the Listing Rules is granted by the Stock Exchange, no extraordinary general meeting of the Company will be held for the purpose of considering and approving the Revised Annual Cap and the Renewed Annual Caps. If the abovementioned waiver is not granted by the Stock Exchange, the Company will convene an extraordinary general meeting to obtain the requisite approval from the Shareholders.

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INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISOR

An Independent Board Committee consisting of all independent non-executive Directors has been formed to advise the Shareholders on the Revised Annual Cap and the Renewed Annual Caps. The Company has appointed an Independent Financial Advisor to advise the Independent Board Committee and the Shareholders on the Revised Annual Cap and the Renewed Annual Caps.

DESPATCH OF CIRCULAR

A circular containing, among other things, details of the Revised Annual Cap and the Renewed Annual Caps, the recommendation from the Independent Board Committee and the advice of the Independent Financial Adviser, will be dispatched to the Shareholders on or before 28 May 2021. If it is expected that there will be a delay to the dispatch of the circular, a further announcement will be published in accordance with the Listing Rules stating the reason for the delay and the new expected date of despatch of the circular.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions shall have the following meanings:

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As at the date of this announcement, the Board comprises Mr. Fan Wing Ting, Ms. Chen Xingyi, Mr. Kevin Trantallis, Mr. Fong Yat Ming and Ms. Fan Tammy as the Executive Directors, and Mr. Chau Kwok Keung, Mr. Yu Chun Kau and Mr. Cheung Chun Yue, Anthony as the Independent Non-executive Directors.

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