[Financial Statements and Notes](index=4&type=section&id=Financial%20Statements%20and%20Notes) [Consolidated Statement of Profit or Loss](index=4&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) The Group's revenue grew 16.4% to HK$1.5 billion, but profit attributable to equity holders declined 19.2% to HK$52.49 million due to reduced government grants Consolidated Statement of Profit or Loss Summary (For the six months ended September 30) | Indicator | 2021 (HKD thousands) | 2020 (HKD thousands) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 1,498,604 | 1,286,985 | +16.4% | | Gross Profit | 157,282 | 171,281 | -8.2% | | Operating Profit | 81,950 | 73,673 | +11.2% | | Profit Before Tax | 65,906 | 54,378 | +21.2% | | Profit Attributable to Equity Holders | 52,493 | 64,951 | -19.2% | | Basic Earnings Per Share (HK cents) | 40.52 | 50.14 | -19.2% | - The primary reason for the period's profit decline was a significant reduction in government grants[18](index=18&type=chunk) - Other income (primarily government grants) for the current period was **HK$5.66 million**, compared to **HK$23.46 million** in the prior period[18](index=18&type=chunk)[48](index=48&type=chunk) - Staff costs in the prior period were significantly reduced due to **HK$122 million** received from the 'Employment Support Scheme' subsidy[51](index=51&type=chunk) [Consolidated Statement of Financial Position](index=5&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of September 30, 2021, the Group reported total assets of HK$2.427 billion and net assets of HK$754 million, with a net current liability of HK$2.35 million offset by HK$723 million in cash Consolidated Statement of Financial Position Summary | Indicator | As of September 30, 2021 (HKD thousands) | As of March 31, 2021 (HKD thousands) | | :--- | :--- | :--- | | Non-current Assets | 1,524,598 | 1,645,746 | | Current Assets | 902,259 | 802,293 | | Current Liabilities | 904,608 | 811,902 | | **Net Current Liabilities** | **(2,349)** | **(9,609)** | | Non-current Liabilities | 768,056 | 858,301 | | **Net Assets** | **754,193** | **777,836** | - Despite net current liabilities, the directors believe the Group's expected cash flows from operations will strengthen its financial position, enabling it to meet financial obligations over the next twelve months, thus the financial statements are prepared on a going concern basis[36](index=36&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) The Group generated HK$358 million in net cash from operations, with net outflows from investing (HK$49.11 million) and financing (HK$232 million) activities, resulting in period-end cash of HK$693 million Condensed Consolidated Statement of Cash Flows Summary (For the six months ended September 30) | Item | 2021 (HKD thousands) | 2020 (HKD thousands) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 358,089 | 342,947 | | Net Cash Used in Investing Activities | (49,105) | (73,026) | | Net Cash Used in Financing Activities | (231,507) | (229,221) | | Net Increase in Cash and Cash Equivalents | 77,477 | 40,700 | | Cash and Cash Equivalents at Period-End | 693,304 | 552,021 | [Notes to the Financial Statements](index=12&type=section&id=Notes%20to%20the%20Financial%20Statements) Financial notes detail accounting policies, segment performance, asset impairment, dividends, and related party transactions, with Hong Kong as the main revenue and profit source [Segment Reporting](index=13&type=section&id=Segment%20Reporting) The Hong Kong segment generated HK$1.427 billion in revenue and HK$78.65 million in profit, while Mainland China contributed HK$70.01 million in revenue but incurred a HK$7.08 million loss Segment Performance Summary (For the six months ended September 30) | Segment | Revenue (HKD thousands) | Profit/(Loss) (HKD thousands) | | :--- | :--- | :--- | | Hong Kong Restaurants | 1,427,194 | 78,653 | | Mainland China Restaurants | 70,013 | (7,083) | [Dividends](index=18&type=section&id=Dividends) The Board declared an interim dividend of 25.0 HK cents per share, lower than the prior year, and paid a final dividend of 60.0 HK cents per share for the previous fiscal year - Interim dividend declared at **25.0 HK cents per share**, totaling approximately **HK$32.39 million**[56](index=56&type=chunk) - Final dividend paid for FY2021 was **60.0 HK cents per share**, totaling approximately **HK$77.73 million**[57](index=57&type=chunk) [Asset Impairment](index=20&type=section&id=Asset%20Impairment) The Group recognized asset impairment losses of HK$3.94 million for right-of-use assets and HK$2.40 million for other property, plant, and equipment due to underperforming branches, a significant decrease from the prior year Asset Impairment Losses (For the six months ended September 30) | Asset Category | 2021 (HKD thousands) | 2020 (HKD thousands) | | :--- | :--- | :--- | | Right-of-use Assets | 3,939 | 29,259 | | Other Property, Plant and Equipment | 2,401 | 18,260 | [Related Party Transactions](index=27&type=section&id=Related%20Party%20Transactions) Significant related party transactions involve property leases from companies beneficially owned by the Executive Chairman and his family, incurring approximately HK$3.26 million in related depreciation and interest expenses - The Group leases properties from companies beneficially owned by Executive Chairman Mr. Lo Hoi Keung and his family (Sun Jet International, Hing Lap Company Limited)[87](index=87&type=chunk)[88](index=88&type=chunk) [Management Discussion and Analysis](index=30&type=section&id=Management%20Discussion%20and%20Analysis) [Overall Performance](index=30&type=section&id=Overall%20Performance) The Group's revenue grew 16.4%, and despite a 19.2% decline in reported profit due to reduced government grants, core profit turned positive to HK$54.9 million, indicating healthy underlying business growth - Revenue increased by **16.4%** to **HK$1.4986 billion**, but profit attributable to equity holders decreased by **19.2%** to **HK$52.5 million**[95](index=95&type=chunk) - Excluding the impact of government grants and asset impairment, the period's profit was **HK$54.9 million**, compared to a loss of **HK$30.3 million** in the prior period, achieving a turnaround[95](index=95&type=chunk) [Business Review](index=30&type=section&id=Business%20Review) The Group achieved stable business growth with sales and customer traffic recovering to pre-pandemic levels, driven by menu optimization, digital platforms, delivery partnerships, and social media marketing, with Hong Kong performing steadily and Mainland China poised for growth [Hong Kong Operations](index=32&type=section&id=Hong%20Kong%20Operations) Hong Kong operations showed steady performance with sales and customer traffic recovering to pre-pandemic levels, driven by menu optimization, baking production line acquisition, new branch openings, and strong takeaway sales from specialty restaurants - Total sales and customer traffic significantly increased year-on-year, recovering to **pre-pandemic levels**[96](index=96&type=chunk) - Acquired a baking production line, enabling **in-house production** of most baked goods and enhancing product quality[99](index=99&type=chunk) - The 'Fairwood Care for the Elderly' community service program's membership continued to grow, reaching **280,000 members** during the period[103](index=103&type=chunk) [Mainland China Operations](index=32&type=section&id=Mainland%20China%20Operations) Mainland China operations recovered slower due to reduced cross-border traffic and Guangzhou's lockdown, but business restructuring and management localization are complete, with one new store opened and plans for six to seven more - Mainland operations experienced slower recovery, impacted by reduced cross-border traffic and the **Guangzhou lockdown**[104](index=104&type=chunk) - Business restructuring and management localization are complete, with a new POS system integrated with local online platforms and a new membership program launched[104](index=104&type=chunk) [Digitalization and Marketing](index=31&type=section&id=Digitalization%20and%20Marketing) The Group advanced digitalization with rapid growth of its 'Click-and-Collect' platform, attracting over 100,000 members, expanded foodpanda delivery, and successfully engaged new customers through innovative social media marketing - The 'Click-and-Collect' online ordering platform's membership program attracted over **100,000 members** within one month of launch[99](index=99&type=chunk) - Strengthened partnership with foodpanda, expanding delivery services to **most areas of Hong Kong**[99](index=99&type=chunk) - First social media marketing campaign saw promotional videos garner **650,000 views** and **100,000 interactions** in two weeks, successfully attracting new customers[100](index=100&type=chunk) [Store Network](index=33&type=section&id=Store%20Network) As of September 30, 2021, the Group operated 155 stores in Hong Kong (143 fast-food, 12 specialty) and 17 stores in Mainland China, totaling 172 outlets Store Network Distribution (As of September 30, 2021) | Region | Store Type | Quantity | | :--- | :--- | :--- | | Hong Kong | Fast-food Restaurants | 143 | | Hong Kong | Specialty Restaurants | 12 | | **Hong Kong Total** | | **155** | | Mainland China | Fast-food Restaurants | 17 | | **Group Total** | | **172** | [Outlook](index=33&type=section&id=Outlook) Facing rising food costs and labor shortages, the Group plans to mitigate risks by optimizing operations, expanding its store network with four to five new outlets by early 2022, and investing in digital marketing and new store designs - Key future challenges include **rising food costs** and **labor shortages**[107](index=107&type=chunk) - Plans to open **four to five new stores** in Hong Kong by early 2022[107](index=107&type=chunk) - Will increase digital channel marketing and prepare to launch **new store designs** to enhance dining experience[107](index=107&type=chunk) - Mainland China market, especially the Greater Bay Area, holds **significant growth potential**[109](index=109&type=chunk) [Financial Review](index=34&type=section&id=Financial%20Review) The Group maintains a robust financial position with HK$723 million in cash, no bank loans, a 0.0% debt-to-equity ratio, HK$275 million in unused credit, and an annualized average return on equity of 13.7% Key Financial Indicators | Indicator | As of September 30, 2021 | As of March 31, 2021 | | :--- | :--- | :--- | | Bank Deposits and Cash | HK$723.4 million | HK$622.1 million | | Bank Loans | None | None | | Debt-to-Equity Ratio | 0.0% | 0.0% | | Unused Bank Standby Credit | HK$275.3 million | HK$269.7 million | - Annualized average return on equity was **13.7%** (20.5% for the year ended March 31, 2021)[113](index=113&type=chunk) [Other Information](index=37&type=section&id=Other%20Information) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=37&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures) Executive Chairman Mr. Lo Hoi Keung and CEO Mr. Lo Fai Shing are deemed to hold approximately 42-44% of the company's shares via family trusts, with HSBC International Trustee Limited holding about 42.79% as trustee - Executive Chairman Mr. Lo Hoi Keung and CEO Mr. Lo Fai Shing are deemed to hold significant company equity through trusts, with interests of approximately **42.87%** and **43.62%** respectively[123](index=123&type=chunk) - HSBC International Trustee Limited, as trustee for various trusts, is deemed to hold approximately **42.79%** of the company's share interests[136](index=136&type=chunk) [Share Option Scheme](index=39&type=section&id=Share%20Option%20Scheme) The 2011 share option scheme expired and a new one was adopted on September 9, 2021, with previously granted options remaining valid, and the report details unexercised options held by directors and employees - The **2011 Share Option Scheme** expired on September 6, 2021, and a **new 2021 Share Option Scheme** has been adopted[129](index=129&type=chunk) - During the period, **20,000 share options** were exercised[77](index=77&type=chunk) - As of period-end, directors and employees still hold a significant number of unexercised share options granted under the 2011 scheme[132](index=132&type=chunk) [Dividend Policy](index=43&type=section&id=Dividend%20Policy) The Board declared an interim dividend of 25.0 HK cents per share, representing approximately 62% of profit attributable to shareholders, payable by December 31, 2021 - Interim dividend declared at **25.0 HK cents per share**, a decrease from **30.0 HK cents** in the prior period[139](index=139&type=chunk) - The interim dividend payout represents approximately **62%** of the profit attributable to equity holders of the Group for the period[139](index=139&type=chunk) [Corporate Governance](index=43&type=section&id=Corporate%20Governance) The company largely complied with the Corporate Governance Code, with a deviation regarding the non-rotation of the Chairman and CEO, which the Board believes ensures leadership continuity and strategic implementation, and the Audit Committee reviewed the interim results - The company complied with the Listing Rules' **Corporate Governance Code**, with one deviation regarding the rotation of directors[142](index=142&type=chunk) - The deviation is that the Chairman and Managing Director (CEO) are **not subject to rotation**, which the Board believes is in the company's best interest to ensure leadership stability and strategic continuity[142](index=142&type=chunk)[144](index=144&type=chunk)

Revenue and Profit Performance - Revenue decreased by 12.7% to HK$2,646.5 million for the year, down from HK$3,030.2 million in 2020 due to the adverse effects of the COVID-19 pandemic on economic activities and restaurant patronage [9]. - Profit for the year increased by 152.4% to HK$153.6 million, compared to HK$60.9 million in 2020, primarily due to improved productivity, efficiency, and various subsidies from the Hong Kong Government [10]. - Basic earnings per share rose by 152.2% to HK$118.59 cents, up from HK$47.03 cents in 2020 [12]. - Profit attributable to equity shareholders rose by 152.4% to HK$153.6 million (2020: HK$60.9 million) [48]. - Basic earnings per share amounted to HK118.59 cents (2020: HK47.03 cents) [48]. Financial Position and Dividends - The Group maintained a healthy financial position with bank deposits, cash, and cash equivalents of HK$622.1 million as of March 31, 2021, with no bank borrowings and a nil gearing ratio [12]. - A proposed final dividend of HK$60.0 cents per share was announced, with a total dividend per share for the year of HK$90.0 cents and a payout ratio of approximately 76% [12]. - The total equity of the Group increased to HK$777.8 million from HK$720.8 million in 2020 [98]. - The total reserves available for distribution to equity shareholders as of 31 March 2021 amounted to HK$356,068,000, down from HK$459,419,000 in 2020 [162]. - The Company reported a final dividend of HK$60.0 cents per share for the year ended 31 March 2021, an increase from HK$50.0 cents in 2020 [159]. Impact of COVID-19 - The pandemic led to significant challenges in the restaurant industry, with a notable decline in dine-in patronage, but takeaway sales increased significantly [54]. - Same-store sales in Hong Kong decreased by approximately 15% due to the pandemic, while in Mainland China, the decline was about 27% in local currency [75][79]. - Various government subsidies helped stabilize the Group's performance despite the decline in sales [58]. - Fairwood expanded its takeaway sales and introduced a new "Click and Collect" platform to mitigate the drop in dine-in sales [75][77]. - The Group maintained a focus on health, hygiene, and safety for staff and customers throughout the pandemic [62]. Operational Developments - The "Click and Collect" online ordering system was rapidly adopted and contributed significantly to the Group's total sales [64]. - New menu items, including clay pot rice dishes and a Golden Cheesy Baked Rice series, were introduced to cater to changing consumer preferences during the pandemic [67]. - The company opened a total of 9 new stores during the year, including 5 in Hong Kong and 4 in Mainland China, bringing the total to 156 stores in Hong Kong and 16 in Mainland China [79][80]. - The company completed the localization of its Mainland China management team to enhance local expertise for better decision-making regarding new store locations [79]. - Plans are in place to expand the menu options to appeal to a wider range of age groups, with increased use of technology for menu selection and ordering [85]. Financial Management and Cost Control - The Group maintained a nil gearing ratio as there were no bank loans as of March 31, 2021 [99]. - The average return on equity rose to 20.5% in 2021, up from 8.1% in 2020 [102]. - The Group's net current liabilities improved to HK$9.6 million from HK$247.0 million in 2020, with a current ratio of 1.0 compared to 0.7 in the previous year [96]. - The company remains committed to cost controls and prudent financial management as part of its strategy moving forward [85]. - Capital expenditures for the year were approximately HK$93.5 million, down from HK$143.6 million in 2020 due to fewer new store openings and renovations [103]. Governance and Compliance - The company is committed to supporting environmental protection and complying with relevant regulations [146]. - The board of directors includes members with extensive experience in finance, management, and human resources [140][142]. - The company has a strong governance structure with various committees overseeing audit and remuneration [138][144]. - The Board was not aware of any non-compliance with applicable laws and regulations that could significantly impact the Group as of the report date [157]. - The Group's operating principles regarding environmental, social, and governance matters will be discussed in the upcoming report [149]. Employee Management - The Group continues to offer competitive remuneration packages and has committed to training programs to enhance employee skills and competencies [122]. - The Group's employee costs are reviewed annually based on performance, with a focus on maintaining competitive compensation [121]. - The Group's total employee count as of March 31, 2021, was approximately 5,600, down from 5,800 in 2020, with staff costs amounting to HK$734.3 million, a decrease of 27.9% from HK$1,019.9 million in 2020 [121]. - Directors and employees of the Group had interests in options to subscribe for shares of the Company granted for HK$1 consideration under the Share Option Scheme [197]. - The Company aims to attract and retain quality personnel through the Share Option Scheme, aligning the interests of option holders with shareholders [196].

Financial Performance - The total revenue for the six months ended September 30, 2020, was HKD 1,286,985, a decrease of 16.4% compared to HKD 1,538,972 for the same period in 2019[19] - The gross profit for the period was HKD 171,281, down from HKD 173,149, reflecting a gross margin of approximately 13.3%[19] - The net profit attributable to equity shareholders for the period was HKD 64,951, an increase of 13.5% from HKD 57,262 in the previous year[20] - The basic and diluted earnings per share were both 50.14 cents, unchanged from the previous period[19] - The total comprehensive income for the period was HKD 67,234, compared to HKD 55,066 in the same period last year, representing a growth of 22.5%[20] - The group's pre-tax profit for the six months ended September 30, 2020, was HKD 54,378,000, down from HKD 70,644,000 in the same period of 2019, representing a decrease of approximately 23%[44][58] - Revenue from food and beverage sales for the six months ended September 30, 2020, was HKD 1,283,959,000, compared to HKD 1,535,143,000 in 2019, indicating a decline of about 16.4%[60] - The group reported a profit from external customers of HKD 1,235,507,000 for the six months ended September 30, 2020, down from HKD 1,468,640,000 in 2019, a decrease of approximately 15.8%[55] Assets and Liabilities - The total assets as of September 30, 2020, were HKD 1,802,298, a decrease from HKD 2,040,298 as of March 31, 2020[23] - The total liabilities were HKD 1,078,268, resulting in a net asset value of HKD 724,030, slightly up from HKD 720,806[26] - The group's total current assets as of September 30, 2020, amounted to HKD 766,146,000, an increase from HKD 668,620,000 as of March 31, 2020[44] - The group's total liabilities as of September 30, 2020, were HKD 914,691,000, compared to HKD 915,652,000 as of March 31, 2020, showing a slight decrease[44] Cash Flow - The company reported a cash and cash equivalents balance of HKD 562,021, an increase from HKD 511,047 in the previous period[23] - The net cash generated from operating activities was HKD 342,947,000, slightly up from HKD 342,903,000 in the prior year[38] - The company incurred a net cash outflow from investing activities of HKD 73,026,000, compared to HKD 47,189,000 in the previous year[38] - The net cash used in financing activities was HKD 229,221,000, an increase from HKD 178,515,000 in the prior year[38] - Cash and cash equivalents as of September 30, 2020, were HKD 552,021,000, down from HKD 636,263,000 at the end of the previous period[38] Dividends and Share Capital - The company declared dividends amounting to HKD 64,767,000 based on the previous year's approved dividend[35] - The interim dividend declared was HKD 30.0 cents per share, up from HKD 23.0 cents per share in the previous year, marking a 30.4% increase[74] - The company issued shares under the share option scheme, resulting in an increase in share capital by HKD 757,000[35] Operational Strategies - The company plans to continue expanding its market presence and invest in new product development to drive future growth[18] - The management highlighted the importance of cost control measures implemented during the period to mitigate the impact of the pandemic on operations[18] - The company has implemented various cost control measures, including negotiating better lease terms and reducing advertising expenses[130] - The company has enhanced its online ordering platform "click-and-collect" to provide a contactless takeaway service[128] - The company remains committed to its core values and social responsibilities, ensuring no layoffs occurred during the pandemic[130] Impact of COVID-19 - The impact of the COVID-19 pandemic has introduced greater uncertainty into the company's operating environment, affecting its financial condition[116] - The company has been closely monitoring the pandemic's impact on its business and has implemented emergency measures[117] - During the review period, takeaway revenue accounted for approximately 40% of total sales, reflecting a shift in consumer behavior due to the pandemic[128] Corporate Governance - The company has complied with the Corporate Governance Code as per the Listing Rules during the six months ending September 30, 2020[169] - The audit committee, consisting of four independent non-executive directors, reviewed the unaudited financial information and interim results for the six months ending September 30, 2020[172] - All directors confirmed compliance with the standard code for securities trading during the six months ending September 30, 2020[173] Share Options - As of September 30, 2020, the company had a total of 1,395,500 unexercised share options under the stock option plan[159] - The company issued 1,040,000 share options at an exercise price of HKD 17.90 per share, with the options exercisable from April 1, 2021, to March 31, 2027[104] - The company's stock options are divided into five tranches with specific vesting dates, the last tranche vesting in April 2025[159]

Financial Performance - Revenue for the year was HK$3,030.2 million, an increase of 2.0% from HK$2,970.5 million in 2019[21] - Profit for the year dropped by 66.2% from HK$179.9 million to HK$60.9 million[22] - Basic earnings per share decreased by 66.4% to HK$47.03 cents, down from HK$140.00 cents in 2019[27] - The adoption of HKFRS 16 had a negative impact of HK$24.3 million on profit, resulting in an adjusted profit of approximately HK$85.2 million, a decrease of 52.7%[26] - The Group's net assets and profit attributable to equity shareholders showed a significant decline compared to previous years[35] - The Group's revenue trend over the past five years indicates fluctuations, with a peak in 2019[32] - Profit attributable to equity shareholders decreased by 66.2% to HK$60.9 million, down from HK$179.9 million in 2019[45] - Gross profit margin fell to 9.2%, down from 12.9% in the previous year[45] - The total equity of the Group decreased to HK$720.8 million from HK$777.7 million in 2019[104] Dividends - A final dividend of HK$50.0 cents per share was proposed, with a total dividend for the year of HK$73.0 cents and a payout ratio of approximately 155%[28] - The Board recommended a final dividend of HK$50.0 cents per share, down from HK$81.0 cents in 2019, resulting in a total annual dividend of HK$73.0 cents, compared to HK$118.0 cents in the previous year[46] - The proposed final dividend for the year ended March 31, 2020, is HKD 0.50 per share, compared to HKD 0.81 per share in 2019[180] - The Company’s Directors proposed the final dividend has not been recognized as a liability at the end of the reporting period[192] Impact of COVID-19 - The COVID-19 outbreak severely impacted the Hong Kong economy, adversely affecting the Group's revenue and store operations[23] - The Group's financial performance was negatively influenced by weakened customer sentiment and social distancing measures[24] - Fairwood's same-store sales growth rate recorded a negative 3% due to the impact of COVID-19 and related restrictions[70] - The Group launched the "Click and Collect" digital order platform at half of its outlets in Hong Kong to enhance operational efficiency and support social distancing measures during the COVID-19 outbreak[86] - Enhanced staff training focused on customer service and hygiene protocols in response to COVID-19 challenges[50] Store Operations and Expansion - The Group opened 16 new stores during the year, including 13 in Hong Kong and 3 in Mainland China, bringing the total to 160 stores in Hong Kong and 12 in Mainland China[80] - Fairwood plans to open around five new stores in Southern China in the coming year, focusing on smaller restaurants catering to delivery preferences[77] - Revenue in Mainland China declined significantly, resulting in a negative same-store sales growth rate of 9% in local currency during the last quarter[76] Product Development and Marketing - The Group launched new products, including Omnipork, a plant-based pork alternative, as part of its "Tasty and Green" series[54] - A "Weekly Surprises" campaign was introduced, offering diverse meal promotions to enhance customer value and satisfaction[56] - Specialty restaurants like ASAP and Taiwan Bowl performed well, achieving solid growth and positive customer feedback[75] - Fairwood has partnered with major food delivery service providers in Mainland China to boost sales amid changing consumer preferences[77] Community Engagement and Social Responsibility - The Group continues to engage with the community, distributing 49,000 "Happy Care for Seniors" cards to provide dining discounts and benefits[81] - The "Care for Seniors" card program saw an increase in card discounts to HK$6 off each order, with an additional 49,000 cards distributed in the community[84] - Charitable donations made by the Group during the year amounted to HKD 20,000, a decrease from HKD 155,000 in 2019[181] Leadership and Governance - The new CEO, Mr. Francis Lo, is expected to bring innovative ideas to the Group, following the retirement of the previous CEO, Mr. Raymond Chan, who served for over 25 years[95][96] - The company has a strong leadership team with members holding advanced degrees in business and finance, contributing to over 35 years of experience in finance and management[151][153] - The company has maintained a focus on corporate governance and accountability through its structured board committees[153] - The leadership team includes members with backgrounds in economics, finance, and business administration, enhancing strategic decision-making capabilities[145][151] Financial Position and Assets - As of March 31, 2020, the Group had total assets of HK$2.7089 billion, an increase from HK$1.2758 billion in 2019, primarily due to the recognition of right-of-use assets amounting to HK$1.4336 billion[101] - The current ratio decreased to 0.7 from 1.6 in 2019, attributed to the recognition of current lease liabilities of HK$479.9 million under current liabilities[101] - Cash and cash equivalents as of March 31, 2020, were HK$511 million, a decrease of 1.7% from HK$519.9 million in 2019[101] - The Group's net current liabilities were HK$247.0 million, a shift from net current assets of HK$248.3 million in 2019, resulting in a current ratio of 0.7 compared to 1.6 in the previous year[104] Employee Management - The Group's employee costs increased to approximately HK$1,019.9 million from HK$963.2 million in 2019, with a total workforce of about 5,800 employees[134] - The Group has enhanced training programs for employees, which has improved staff retention rates and prepared them for career advancement[65] - The Group's initiatives to improve staff satisfaction include recognition programs and extensive training opportunities[63] Compliance and Regulations - The Company was not aware of any non-compliance with applicable laws and regulations that significantly impacted the Group during the reporting period[184] - The Company maintained compliance with the Securities and Futures Ordinance regarding the interests of Directors and chief executives in shares and debentures as of March 31, 2020[200]

Financial Performance - For the six months ended September 30, 2019, the total revenue was HKD 1,538,972,000, an increase from HKD 1,472,992,000 in the same period of 2018, representing a growth of approximately 4.5%[18]. - The net profit attributable to equity shareholders for the same period was HKD 57,262,000, down from HKD 100,660,000 in 2018, indicating a decline of about 43%[23]. - The total comprehensive income for the period was HKD 55,066,000, compared to HKD 95,398,000 in the previous year, reflecting a decrease of approximately 42.3%[28]. - The group reported a gross profit of HKD 173,149,000 for the period, compared to HKD 201,814,000 in the previous year, showing a decline of about 14.2%[18]. - The profit for the period is HKD 100,660,000, with a total comprehensive income of HKD 95,398,000, indicating a decline in overall earnings compared to the previous period[59]. - The operating profit for the six months ended September 30, 2019, was 89,074 thousand HKD, compared to 198,281 thousand HKD in the previous year[5]. - The profit before tax for the six months ended September 30, 2019, was HKD 70,644,000, down 40.7% from HKD 119,172,000 in 2018[132]. - The basic earnings per share for the six months ended September 30, 2019, was HKD 0.44, a decrease of 43% from HKD 0.78 in 2018[155]. - The interim dividend declared was HKD 0.23 per share, down from HKD 0.37 per share in 2018, totaling HKD 29,793,000 compared to HKD 47,597,000 in 2018[151]. Assets and Liabilities - The total assets as of September 30, 2019, were HKD 1,950,179,000, compared to HKD 1,744,465,000 as of March 31, 2019, indicating an increase of approximately 11.8%[54]. - The total liabilities increased to HKD 1,203,246,000 from HKD 966,787,000, representing a rise of about 24.4%[54]. - The total equity attributable to shareholders as of September 30, 2019, is HKD 746,933,000, compared to HKD 777,678,000 for the same period in 2018, representing a decrease of approximately 3.9%[59]. - The total current assets as of September 30 were HKD 773,767,000, an increase from HKD 667,788,000 as of March 31[75]. - The total current liabilities as of September 30 were HKD 979,481,000, compared to HKD 419,527,000 as of March 31[75]. - The group recognized lease liabilities amounting to HKD 420,871,000 under current liabilities as of September 30[75]. - The net current liabilities recorded were HKD 205,714,000, compared to HKD 248,261,000 under previous accounting standards[75]. Cash Flow - Cash generated from operating activities for the six months ended September 30, 2019, is HKD 342,903,000, an increase from HKD 150,186,000 in the prior year[68]. - The net cash used in investing activities is HKD 47,189,000, compared to HKD 32,908,000 in the previous year, reflecting increased investment outflows[68]. - The group’s cash and cash equivalents totaled HKD 636,263,000 as of September 30, 2019, compared to HKD 519,854,000 as of March 31, 2019[171]. - The group’s net cash from operating activities showed a significant increase, reflecting improved operational efficiency[162]. Accounting Standards and Reporting - The group has adopted the revised retrospective method for the initial application of HKFRS 16, which may impact future financial reporting[18]. - The financial report was prepared in accordance with the Hong Kong Financial Reporting Standards, specifically HKFRS 16 on leases, effective from April 1, 2019[80]. - The company did not restate comparative figures due to the adoption of the revised Hong Kong Financial Reporting Standard 16 on April 1, 2019[185]. - The independent auditor did not identify any matters that would lead to a belief that the interim financial report was not prepared in accordance with the relevant accounting standards[190]. Market and Growth Strategies - The company is focusing on expanding its market presence and enhancing its product offerings to drive future growth[18]. - The company introduced a new plant-based pork alternative, "Omnipork," which has been well received in the market[196]. - The company plans to open two new stores in mainland China in the second half of the fiscal year[200]. - Employee training programs were enhanced to improve service quality and employee retention rates[198]. - The company launched flexible promotions and new product tasting offers to cater to changing consumer preferences[196]. - The company continues to focus on its "Feel Good" philosophy to address market challenges and enhance customer experience[198]. Segment Performance - The group has identified two reportable segments: Hong Kong restaurants and Mainland China restaurants for resource allocation and performance evaluation[7]. - Revenue from external customers for the restaurant segment was 1,468,640 thousand HKD, an increase from 1,408,393 thousand HKD[6]. - The group’s total revenue for the six months ended September 30, 2019, was reported at HKD 360,886,000, compared to HKD 344,960,000 for the same period in 2018[168]. - The ASAP brand restaurant recorded double-digit same-store sales growth during the period[199]. Expenses and Costs - The cost of goods sold for food and beverages was HKD 360,886,000 for the six months ended September 30, 2019, compared to HKD 344,960,000 in 2018[145]. - Employee benefits for the six months ended September 30, 2019, totaled HKD 11,315,000, down from HKD 12,630,000 for the same period in 2018[182]. - The group incurred rental expenses of HKD 1,311,000 for a property leased from a related party during the six months ended September 30, 2019[184]. - Depreciation and interest on lease liabilities for the property leased from a related party were HKD 1,238,000 and HKD 169,000 respectively during the same period[184].

Financial Performance - Revenue for the year was HK$2,970.5 million, an increase of 4.6% from HK$2,840.6 million in 2018[34] - Profit for the year decreased by 16.7% from HK$216.1 million to HK$179.9 million[34] - Basic earnings per share were HK$140.00, down from HK$169.16 in 2018[34] - Return on average equity was 23.4%, down from 29.2% in 2018[34] - The profit attributable to equity shareholders has decreased from HK$216.1 million in 2018 to HK$179.9 million in 2019[37] - The gross profit margin receded to 12.9%, compared to 14.3% in the previous year[46] - The Group's revenue increased by 4.6% year-on-year to HK$2,970.5 million for the year ended 31 March 2019, compared to HK$2,840.6 million in 2018[46] - Profit attributable to equity shareholders decreased by 16.7% to HK$179.9 million, down from HK$216.1 million in 2018[46] Dividends - Proposed final dividend of HK$81.0 cents per share, with a total dividend per share for the year of HK$118.0 cents and a payout ratio of approximately 84%[34] - The Board recommended a final dividend of HK81.0 cents per share, down from HK105.0 cents in 2018, resulting in a total annual dividend of HK118.0 cents, which represents approximately 84% of the Group's profit for the year[47] - An interim dividend of HK37.0 cents was paid on December 31, 2018, and a final dividend of HK81.0 cents is recommended for the year ended March 31, 2019, down from HK105.0 cents in 2018[162] - The proposed final dividend is HK81.0 cents per share, totaling HK$104,207,000, down from HK$134,183,000 in 2018[164] Store Operations and Expansion - The Group opened a total of seven new fast food stores in Hong Kong during the year, expanding its business network[64] - Specialty restaurant brands, ASAP and Taiwan Bowl, showed significant sales growth, with a total of ten specialty restaurants operating as of 31 March 2019[65] - In Mainland China, the same-store sales growth rate was approximately -6% due to renovations and investments in new stores[70] - The Group operated a total of 148 stores in Hong Kong, including 138 fast food stores and ten specialty restaurants, and 11 stores in Mainland China as of 31 March 2019[71] - Future plans include expanding the brand presence in Hong Kong and developing the local market in Mainland China, leveraging popular home delivery platforms[84] Financial Position - The net assets of the company have been steadily increasing, reflecting a strong financial position[38] - As of 31 March 2019, the total assets of Fairwood Holdings Limited were HK$1,275.8 million, a decrease from HK$1,291.7 million in 2018[91] - The Group's working capital increased to HK$248.3 million in 2019 from HK$210.3 million in 2018, with a current ratio of 1.6 compared to 1.5 in the previous year[94] - The Group maintained a healthy financial position with total bank loans of HK$0.1 million in 2019, down from HK$1.9 million in 2018, resulting in a gearing ratio of 0.0%[96] Employee and Community Engagement - Total employee costs for the year were approximately HK$963.2 million, an increase from HK$904.7 million in 2018[116] - The Group's total number of employees remained stable at approximately 5,600 as of March 31, 2019[116] - Fairwood distributed over 180,000 "Care for Seniors" cards, representing more than 10% of the senior citizen population in Hong Kong, providing discounts for dining[75] - The Group is committed to supporting environmental protection and complying with relevant regulations, with detailed information to be discussed in the Environmental, Social and Governance Report[159] Corporate Governance and Leadership - The Company is committed to maintaining high standards of corporate governance with independent non-executive directors overseeing audit and remuneration committees[143] - The Company has a strong leadership team with members holding advanced degrees in finance, business administration, and economics, contributing to strategic decision-making[130] - The Company has been actively expanding its management team with experienced professionals from various industries to enhance operational efficiency[134] Strategic Initiatives - The Company is focused on developing new products and technologies to meet market demands and improve customer satisfaction[132] - The Company has a strategic plan for market expansion, aiming to increase its presence in key regions and enhance brand recognition[138] - The Company is exploring potential mergers and acquisitions to drive growth and diversify its business portfolio[144] - The Company aims to leverage its financial management expertise to optimize resource allocation and improve overall financial performance[137] Share Option Scheme - The total number of shares available for issue under the Share Option Scheme is 5,003,528 shares, representing approximately 3.87% of the issued share capital of the Company[181] - The purpose of the Share Option Scheme is to attract and retain quality personnel and align the interests of option holders with shareholders[179] - The options granted under the Share Option Scheme are unlisted and provide the right to subscribe for one ordinary share of HK$1 each[193] - The maximum entitlement for any one participant under the Share Option Scheme shall not exceed 1% of the Company's shares in issue within any twelve-month period[181] - The market value per share decreased from HK$30.80 in 2018 to HK$27.65 in 2019[178] Risk Management - Further discussion on principal risks and uncertainties facing the Group can be found in the "Business Review" and "Prospects" sections of the annual report[155] - The Group's receipts and expenditures were mainly denominated in Hong Kong dollars and Renminbi, with foreign currency risk primarily from US dollars and Renminbi[104][105] - The Group does not expect significant movements in the US dollar/Hong Kong dollar exchange rate due to the peg between the two currencies[105]