快餐帝国(01843) - 2021 - 中期财报

Company Information This section provides an overview of the company's governance structure, including its board of directors, key personnel, contact details, and listing information Board of Directors and Key Personnel This section lists the company's executive directors, independent non-executive directors, and the composition of the audit, remuneration, and nomination committees, specifying each committee's chairman - Executive Directors include Mr. Daniel Tay Kok Siong (Chairman) and Mr. Wong Chee Tat (Chief Executive Officer)[4] - Independent Non-executive Directors are Mr. Yeo Boon Hwee, Mr. Koh Boon Hwee, and Mr. Lim Wee Bin[4] - The Audit Committee is chaired by Mr. Lim Wee Bin, the Remuneration Committee by Mr. Koh Boon Hwee, and the Nomination Committee by Mr. Yeo Boon Hwee[4] Company Contact and Registration Information This section provides the company's principal places of business in Hong Kong and Singapore, registered office, principal bankers, independent auditor, compliance adviser, share registrar, and listing information - The principal place of business in Hong Kong is located at 57th Floor, The Center, 99 Queen's Road Central, Hong Kong[4] - The independent auditor is PricewaterhouseCoopers[4] - The company's shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited, with stock code 1843[4] Management Discussion and Analysis This section reviews the Group's business and financial performance for the period, outlining key operational responses to the COVID-19 pandemic, financial results, future plans, and risk management strategies Business Review During the six-month review period ended September 30, 2020, the global economy was severely impacted by the COVID-19 pandemic; the Group mitigated effects through online sales, new product development, rent rebates, and government subsidies - The COVID-19 pandemic impacted the Group's self-operated specialty stores and dine-in outlets in Singapore and Malaysia, affecting sales and overall profitability[6] - Group countermeasures included promoting online sales through food delivery providers, developing new products like bubble tea, seeking rent rebates and government grants, and encouraging non-critical employees to take annual leave[6] Financial Review The Group's total revenue decreased by 10.2% year-on-year to S$10,788 thousand, primarily due to reduced sales from franchisees/licensees and royalty income, despite growth in self-operated store sales, with significant declines in Indonesia and Malaysia due to lockdowns Total Revenue by Sales Segment for the Six Months Ended September 30 | Revenue Segment | 2020 (S$ thousand) | % of Total Revenue (2020) | 2019 (S$ thousand) | % of Total Revenue (2019) | | :------------------------------ | :----------------- | :------------------------ | :----------------- | :------------------------ | | Specialty Store Sales | 7,351 | 68.1% | 5,948 | 49.5% | | Franchisee/Licensee Sales | 2,736 | 25.4% | 4,573 | 38.1% | | Franchise Fees | 190 | 1.8% | 314 | 2.6% | | Advertising and Promotion Fees | 264 | 2.4% | 122 | 1.0% | | Royalty Fees | 247 | 2.3% | 1,051 | 8.8% | | Total | 10,788 | 100.0% | 12,008 | 100.0% | - Group total revenue decreased by approximately 10.2% year-on-year, mainly due to reduced sales from franchisees and licensees and lower royalty income[10] - Total merchandise sales from self-operated specialty stores in Singapore increased, benefiting from their takeaway-focused nature aligning with customer preferences[11] - Merchandise sales to Indonesia and Malaysia fell by approximately 61% and 37% respectively, primarily due to government-imposed lockdown measures in both countries[10] Gross Profit During the review period, the Group's cost of sales decreased in line with revenue, and the gross profit margin remained relatively stable at approximately 64% - Gross profit margin remained relatively stable at approximately 64% during the review period[17] - Cost of goods sold decreased in line with the decline in revenue[17] Selling and Distribution Expenses Selling and distribution expenses increased by 18.9% (S$430 thousand) year-on-year, primarily due to higher advertising, additional staff costs, rent, and depreciation of right-of-use assets, consistent with the Group's expansion plans - Selling and distribution expenses increased by 18.9% (S$430 thousand), mainly due to higher advertising expenses, additional staff costs, rent expenses, and depreciation of related right-of-use assets[18] - The increase in expenses is part of the Group's expansion plan[18] Administrative Expenses Administrative expenses increased by approximately 12.9% (S$370 thousand), mainly due to higher employee expenses - Administrative expenses increased by approximately 12.9% (S$370 thousand), primarily due to higher employee expenses[19] Other Income During the review period, the Group's other income significantly increased to S$906 thousand, primarily from government grants, compared to only S$7 thousand in the prior period - Other income significantly increased to S$906 thousand, primarily from government grants (compared to S$7 thousand in the prior period)[20] Prospects The Group remains vigilant regarding the COVID-19 pandemic and market fluctuations; prolonged outbreaks or continued lockdown measures in operating countries will adversely affect its business and revenue - The Group remains vigilant regarding the COVID-19 pandemic and market fluctuations[21] - If the pandemic persists or lockdown measures continue in countries where the Group operates, its business and revenue will continue to be adversely affected[21] Interim Dividend The Board of Directors has resolved not to declare any interim dividend for the review period - The Board resolved not to declare any interim dividend for the review period[23] Employees and Remuneration Policy As of September 30, 2020, the Group had 172 employees, with total staff costs of S$2,928 thousand for the review period; employee remuneration is determined by performance, experience, and market conditions, with customized training provided - As of September 30, 2020, the Group had 172 employees, with total staff costs of S$2,928 thousand[24] - Employee remuneration is determined by performance, experience, and market conditions, with customized training provided[24] Share Option Scheme The company adopted a share option scheme on September 23, 2019, to incentivize and reward eligible persons; as of September 30, 2020, no options had been granted or remained outstanding under the scheme - The share option scheme became effective on the listing date, aiming to incentivize or reward eligible persons for their contributions to the Group[25][26] - As of September 30, 2020, no share options were outstanding[25] Purpose of the Share Option Scheme The share option scheme aims to incentivize and reward eligible persons for their contributions or potential contributions to the Group, and to recruit and retain talent - Purpose: To incentivize or reward contributions, and to recruit and retain outstanding talent[26] Eligible Participants The Board may, at its discretion, grant options to employees (including directors), suppliers, customers, R&D support providers, shareholders, or other contributors to any Group member or investee entity - Eligible participants include employees, directors, suppliers, customers, R&D supporters, and shareholders[28] Maximum Number of Shares The total number of shares that may be granted under the share option scheme and any other company share option schemes shall not exceed 80,000,000 shares, representing 10% of the total issued shares as of the interim report date - Maximum number of shares to be granted: 80,000,000 shares, representing 10% of the total issued shares[29] Maximum Entitlement for Each Eligible Participant Unless approved by shareholders in a general meeting, the shares exercisable under all options granted and to be granted to any eligible participant within a 12-month period shall not exceed 1% of the total issued shares; stricter limits apply to grants to substantial shareholders or independent non-executive directors - Shares exercisable by an individual within a 12-month period shall not exceed 1% of the total issued shares[30] - Grants to substantial shareholders or independent non-executive directors exceeding 0.1% or a total value of HKD5 million require independent shareholder approval[30] Period During Which Options Must Be Exercised Options may be exercised at any time within the period determined by the Board, in accordance with the terms of the share option scheme, which shall be within ten years from the date of grant - Options may be exercised within ten years from the date of grant[32] Minimum Period for Holding Options Before Exercise Unless otherwise specified by the Board in the relevant option offer, there is no minimum period for holding an option before its exercise - Unless otherwise specified by the Board, there is no minimum holding period before exercising an option[33] Period for Acceptance of Options and Consideration Payable Eligible persons may accept the option offer within the date specified in the company's offer letter, which shall be no later than 21 days from the offer date; the option grantee shall pay HK$1.00 to the company upon acceptance - Acceptance period: within 21 days from the offer date[34] - Consideration payable: HKD1.00[34] Basis for Determining the Exercise Price The subscription price for option shares shall be determined by the Board and shall be no less than the highest of the closing price on the Stock Exchange on the offer date, the average closing price for the five trading days immediately preceding the offer date, and the nominal value of the shares on the offer date - Exercise price: No less than the highest of the closing price on the offer date, the average closing price for the five preceding trading days, and the nominal value of the shares on the offer date[35] Remaining Term The share option scheme shall be valid and effective for ten years from its adoption date, after which no further options may be granted - The share option scheme is valid for ten years from its adoption date[36] Use of Proceeds from Share Offer The net proceeds from the company's share offer were approximately S$13.0 million; due to the COVID-19 pandemic, the Board resolved to reallocate the unutilized net proceeds and adjust the funding distribution and expected timelines for various initiatives Use of Net Proceeds from Share Offer (As of September 30, 2020) | Purpose Item | Original Net Proceeds Allocation (S$ thousand) | Proposed Change in Net Proceeds Allocation (S$ thousand) | Reallocated Net Proceeds (S$ thousand) | Net Proceeds Utilized as of Sep 30, 2020 (S$ thousand) | Unutilized Revised Net Proceeds Balance as of Sep 30, 2020 (S$ thousand) | Expected Timeline for Full Utilization of Unutilized Proceeds | | :---------------------------------------------------- | :------------------------------------------- | :--------------------------------------- | :------------------------------------- | :--------------------------------------------------- | :------------------------------------------------------- | :------------------------------------ | | Opening of new self-operated specialty stores in Singapore | 2,900 | — | 2,900 | (169) | 2,731 | March 2024 | | Opening of new self-operated specialty stores in West Malaysia | 2,150 | — | 2,150 | (205) | 1,945 | March 2024 | | Expansion of non-self-operated specialty store and dine-in outlet network | 2,720 | (990) | 1,730 | (12) | 1,718 | March 2024 | | Renovation of self-operated specialty stores and dine-in outlets | 2,050 | (590) | 1,460 | (54) | 1,406 | March 2023 | | Staffing enhancement | 1,060 | — | 1,060 | (54) | 1,006 | March 2024 | | Marketing and promotional activities | 1,060 | (360) | 700 | (156) | 544 | March 2024 | | Upgrading IT infrastructure, data management, and franchise management systems | 1,060 | — | 1,060 | — | 1,060 | March 2023 | | General working capital | — | 1,940 | 1,940 | — | 1,940 | March 2024 | | Total | 13,000 | — | 13,000 | (650) | 12,350 | | - Net proceeds from the share offer were approximately S$13.0 million, with unutilized net proceeds reallocated due to the COVID-19 pandemic[38] Future Plans and Material Investments and Capital Assets As of September 30, 2020, the Group had no other material investment and capital asset plans beyond those disclosed in the prospectus and this report - As of September 30, 2020, the Group had no other material investment and capital asset plans[40] Material Investments, Acquisitions and Disposals During the review period and up to the date of this report, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures - During the review period and up to the report date, the Group had no material acquisitions or disposals[41] Charge on the Group's Assets As of September 30, 2020, approximately S$2,404 thousand of the Group's secured bank borrowings were collateralized by properties with a carrying value of approximately S$3,215 thousand - Approximately S$2,404 thousand of secured bank borrowings are collateralized by properties with a carrying value of approximately S$3,215 thousand[42] Financial Risk Management and Financial Instruments The Group's activities expose it to market risks (including foreign exchange, cash flow, and fair value interest rate risks), credit risk, and liquidity risk; there were no changes in risk management policies or derivative activities during the review period - The Group faces market risks (foreign exchange, interest rate), credit risk, and liquidity risk[43] - Risk management policies remained unchanged during the review period, with no derivative activities or financial instruments used to hedge foreign exchange risk[43] Liquidity, Financial Resources and Capital Structure As of September 30, 2020, the Group's total shareholders' equity was approximately S$26.3 million, current assets S$28.9 million, current liabilities S$4.1 million, with a current ratio of approximately 7.0; cash and cash equivalents were S$23.3 million, and the net cash to equity ratio was approximately 0.8 Liquidity and Financial Resources as of September 30, 2020 | Indicator | Sep 30, 2020 (S$ thousand) | Mar 31, 2020 (S$ thousand) | | :------------------------ | :------------------------- | :------------------------- | | Total Shareholders' Equity | 26,300 | 25,100 | | Current Assets | 28,900 | 27,400 | | Current Liabilities | 4,100 | 3,900 | | Current Ratio | 7.0 | 7.0 | | Outstanding Bank Borrowings | 2,404 | 2,444 | | Cash and Cash Equivalents | 23,300 | 21,600 | | Net Cash to Equity Ratio | 0.8 | 0.8 | - The Group holds sufficient cash to meet its commitments and working capital needs, with most bank deposits and cash denominated in Singapore Dollars, Malaysian Ringgit, and Hong Kong Dollars[46] - There have been no significant changes in the company's capital structure since the listing date, with capital comprising only ordinary shares[46] Treasury Policy The Group has adopted a prudent financial management approach for its treasury policy to maintain a healthy liquidity position, with the Board closely monitoring liquidity to ensure funding needs are met - The Group adopts a prudent financial management approach, and the Board closely monitors liquidity to ensure funding needs are met[47] Gearing Ratio As of September 30, 2020, the Group's gearing ratio was approximately 15% (16% as of March 31, 2020), calculated as total liabilities divided by total equity at each period/year-end Gearing Ratio | Indicator | Sep 30, 2020 | Mar 31, 2020 | | :----------- | :----------- | :----------- | | Gearing Ratio | 15% | 16% | - The gearing ratio is calculated as total liabilities divided by total equity[48] Off-Balance Sheet Commitments and Arrangements As of September 30, 2020, the Group had not entered into any significant off-balance sheet commitments or arrangements - As of September 30, 2020, the Group had no significant off-balance sheet commitments or arrangements[49] Events After Reporting Period There were no other significant events after the review period and up to the date of this report - No other significant events occurred after the review period and up to the report date[50] Contingent Liabilities As of September 30, 2020, the Group had no material contingent liabilities - As of September 30, 2020, the Group had no material contingent liabilities[51] Disclosure Information The company's interim report for the six months ended September 30, 2020, will be published on the Stock Exchange and company websites and distributed to shareholders in due course - The interim report will be published on the Stock Exchange website and the company website, and distributed to shareholders in due course[52] Corporate Governance and Other Information This section details the company's corporate governance practices, including directors' and major shareholders' interests, compliance with codes, and the role of the audit committee Directors' and Chief Executive's Interests and Short Positions in Shares and Underlying Shares and Debentures of the Company or its Associated Corporations As of September 30, 2020, Executive Directors Mr. Daniel Tay Kok Siong and Mr. Wong Chee Tat held a 75% equity interest in the company through their controlled corporation, Qiao Mai Limited, each beneficially owning 50% of Qiao Mai Limited Directors' and Chief Executive's Long Positions in Shares | Director Name | Capacity | Nature of Interest | Number of Shares Held | Percentage of Equity | | :--------------------- | :----------------- | :----------------- | :-------------------- | :------------------- | | Daniel Tay Kok Siong | Interest in controlled corporation | Corporate Interest | 600,000,000 | 75% | | Wong Chee Tat | Interest in controlled corporation | Corporate Interest | 600,000,000 | 75% | Directors' Long Positions in Shares of Associated Corporations | Director Name | Associated Corporation | Capacity | Nature of Interest | Number of Shares Held | Percentage of Equity | | :------------ | :------------------- | :------------- | :----------------- | :-------------------- | :------------------- | | Mr. Tay | Qiao Mai Limited | Beneficial Owner | Personal Interest | 1 | 50% | | Mr. Wong | Qiao Mai Limited | Beneficial Owner | Personal Interest | 1 | 50% | - Mr. Daniel Tay Kok Siong and Mr. Wong Chee Tat indirectly hold a 75% equity interest in the company through Qiao Mai Limited[55][59] Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares of the Company As of September 30, 2020, Qiao Mai Limited held a 75% equity interest in the company; additionally, the spouses of Mr. Wong Chee Tat and Mr. Daniel Tay Kok Siong are deemed to have the same share interests due to spousal interests Substantial Shareholders' and Other Persons' Long Positions in Shares | Name/Corporate Name | Capacity | Nature of Interest | Number of Shares Held | Percentage of Equity | | :------------------------- | :------------- | :----------------- | :-------------------- | :------------------- | | Qiao Mai Limited | Beneficial Owner | Personal Interest | 600,000,000 | 75% | | Chong Yi May Cheryl | Spouse's Interest | Family Interest | 600,000,000 | 75% | | Lim Michelle | Spouse's Interest | Family Interest | 600,000,000 | 75% | - Qiao Mai Limited holds 75% of the company's shares, and the spouses of Mr. Wong and Mr. Tay are deemed to have the same interests due to spousal interests[63][64] Purchase, Sale or Redemption of the Company's Listed Securities During the review period, the company did not redeem any of its listed securities, nor did the company or any of its subsidiaries purchase or sell such securities - During the review period, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities[66] Changes in Directors' Information Independent Non-executive Director Mr. Koh Boon Hwee's information changed, as he was appointed Assistant General Counsel of MindChamps PreSchool Limited and resigned as Head of Legal at ICHX Tech Pte. Ltd., both effective August 2020 - Independent Non-executive Director Mr. Koh Boon Hwee was appointed Assistant General Counsel of MindChamps PreSchool Limited and resigned as Head of Legal at ICHX Tech Pte. Ltd[67] Compliance with Corporate Governance Code The company is committed to maintaining high corporate governance standards, having adopted the Corporate Governance Code in Appendix 14 of the Listing Rules, and the Board believes it has complied with the code throughout the review period - The company has adopted the Corporate Governance Code and believes it has complied with it throughout the review period[68][69] Compliance with Model Code The company has adopted the Model Code as its code of conduct for securities transactions by directors and relevant employees, and all directors have confirmed their compliance with the Model Code during the review period - The company has adopted the Model Code, and directors confirmed compliance during the review period[70] Audit Committee The company established an Audit Committee on September 23, 2019, comprising three independent non-executive directors, chaired by Mr. Lim Wee Bin; its primary duties include providing independent opinions, overseeing audit procedures, and reviewing the Group's unaudited interim results and this report - The Audit Committee comprises three independent non-executive directors, chaired by Mr. Lim Wee Bin[73] - The committee has reviewed the Group's unaudited interim results and this report, deeming them compliant with applicable accounting standards and legal requirements[73] Acknowledgement The Board sincerely thanks the Group's shareholders, business partners, and customers for their continued support and expresses gratitude for the efforts of management and staff during the review period - The Board thanks shareholders, business partners, customers for their support, and management and staff for their efforts[74] Condensed Consolidated Statement of Comprehensive Income For the six months ended September 30, 2020, the Group's revenue was S$10,788 thousand, a decrease from the prior year; profit for the period was S$1,232 thousand, with basic and diluted earnings per share of S$0.15 cents Condensed Consolidated Statement of Comprehensive Income (For the Six Months Ended September 30) | Indicator | 2020 (S$ thousand) (Unaudited) | 2019 (S$ thousand) (Unaudited) | | :------------------------------ | :----------------------------- | :----------------------------- | | Revenue | 10,788 | 12,008 | | Cost of Sales | (3,868) | (4,370) | | Gross Profit | 6,920 | 7,638 | | Other Income | 1,059 | 157 | | Other (Losses)/Gains — Net | (371) | 3 | | Selling and Distribution Expenses | (2,710) | (2,280) | | Administrative Expenses | (3,237) | (2,867) | | Finance Income/(Costs) — Net | 13 | (53) | | Profit Before Income Tax | 1,674 | 2,598 | | Income Tax Expense | (442) | (642) | | Profit for the Period Attributable to Owners of the Company | 1,232 | 1,956 | | Exchange differences on translation of foreign operations | (4) | (8) | | Total Comprehensive Income for the Period Attributable to Owners of the Company | 1,228 | 1,948 | | Basic and Diluted Earnings Per Share (S$ cents) | 0.15 | 0.32 | Condensed Consolidated Statement of Financial Position As of September 30, 2020, the Group's total assets were S$34,518 thousand, total liabilities S$8,224 thousand, and equity attributable to owners of the company S$26,294 thousand Condensed Consolidated Statement of Financial Position (As of September 30, 2020) | Indicator | Sep 30, 2020 (S$ thousand) (Unaudited) | Mar 31, 2020 (S$ thousand) (Audited) | | :------------------------------ | :----------------------------------- | :--------------------------------- | | Assets | | | | Non-current Assets | | | | Property, Plant and Equipment | 5,600 | 5,538 | | Current Assets | | | | Inventories | 1,350 | 1,245 | | Trade and Other Receivables and Prepayments | 4,276 | 4,589 | | Cash and Cash Equivalents | 23,292 | 21,554 | | Total Current Assets | 28,918 | 27,388 | | Total Assets | 34,518 | 32,926 | | Equity and Liabilities | | | | Equity | | | | Share Capital | 1,392 | 1,392 | | Share Premium | 17,092 | 17,092 | | Capital Reserve | 7,810 | 6,582 | | Equity Attributable to Owners of the Company | 26,294 | 25,066 | | Liabilities | | | | Current Liabilities | | | | Trade and Other Payables | 2,123 | 1,673 | | Borrowings | 130 | 81 | | Provisions | 105 | 98 | | Deferred Income | 464 | 465 | | Current Income Tax and Liabilities | 507 | 555 | | Lease Liabilities | 792 | 1,013 | | Total Current Liabilities | 4,121 | 3,885 | | Non-current Liabilities | | | | Deferred Income | 979 | 1,027 | | Deferred Tax Liabilities | 16 | 16 | | Borrowings | 2,274 | 2,363 | | Lease Liabilities | 834 | 569 | | Total Non-current Liabilities | 4,103 | 3,975 | | Total Liabilities | 8,224 | 7,860 | | Total Equity and Liabilities | 34,518 | 32,926 | Condensed Consolidated Statement of Changes in Equity For the six months ended September 30, 2020, total equity attributable to owners of the company increased from S$25,066 thousand as of April 1, 2020, to S$26,294 thousand, primarily driven by a profit for the period of S$1,232 thousand Condensed Consolidated Statement of Changes in Equity (For the Six Months Ended September 30) | Indicator | Share Capital (S$ thousand) | Share Premium (S$ thousand) | Capital Reserve (S$ thousand) | Exchange Reserve (S$ thousand) | Accumulated Profits (S$ thousand) | Total Equity (S$ thousand) | | :-------------------------------------- | :-------------------------- | :-------------------------- | :---------------------------- | :----------------------------- | :-------------------------------- | :------------------------- | | As of April 1, 2020 (Audited) | 1,392 | 17,092 | 261 | (187) | 6,508 | 25,066 | | Profit for the period | — | — | — | — | 1,232 | 1,232 | | Other comprehensive loss for the period | — | — | — | (4) | — | (4) | | Total Comprehensive (Loss)/Income for the Period | — | — | — | (4) | 1,232 | 1,228 | | As of September 30, 2020 (Unaudited) | 1,392 | 17,092 | 261 | (191) | 7,740 | 26,294 | | | | | | | | | | As of April 1, 2019 (Audited) | — | — | 261 | (204) | 4,046 | 4,103 | | Profit for the period | — | — | — | — | 1,956 | 1,956 | | Other comprehensive loss for the period | — | — | — | — | (8) | (8) | | Total Comprehensive Income/(Loss) for the Period | — | — | — | — | 1,956 | 1,948 | | Adoption of IFRS 16 | — | — | — | — | 73 | 73 | | Issue of ordinary shares by the Company — Completion of Reorganisation | * | — | — | — | — | — | | Dividends declared for the period | — | — | — | (1,000) | — | (1,000) | | (Recognised directly in equity) | * | — | (1,000) | — | (1,000) | | | As of September 30, 2019 (Unaudited) | — | 261 | 5,002 | (212) | 5,051 | | Condensed Consolidated Statement of Cash Flows For the six months ended September 30, 2020, net cash generated from operating activities was S$3,020 thousand; net cash used in investing activities was S$73 thousand, and net cash used in financing activities was S$748 thousand, resulting in a net increase in cash and cash equivalents of S$2,199 thousand, with an ending balance of S$23,292 thousand Condensed Consolidated Statement of Cash Flows (For the Six Months Ended September 30) | Indicator | 2020 (S$ thousand) (Unaudited) | 2019 (S$ thousand) (Unaudited) | | :------------------------------ | :----------------------------- | :----------------------------- | | Cash generated from operations | 3,511 | 4,411 | | Income tax paid | (491) | (378) | | Net Cash from Operating Activities | 3,020 | 4,033 | | Purchase of property, plant and equipment | (148) | (210) | | Interest received | 75 | 10 | | Net Cash Used in Investing Activities | (73) | (200) | | Principal portion of lease payments | (646) | (776) | | Interest paid | (62) | (28) | | Repayment of borrowings | (40) | (1,039) | | Listing expenses | — | (296) | | Net Cash Used in Financing Activities | (748) | (2,139) | | Net Increase in Cash and Cash Equivalents | 2,199 | 1,694 | | Cash and cash equivalents at beginning of period | 21,554 | 4,263 | | Net effect of exchange rate changes on consolidated subsidiaries | (461) | (11) | | Cash and Cash Equivalents at End of Review Period | 23,292 | 5,946 | Notes to the Condensed Consolidated Financial Statements This section provides detailed notes to the condensed consolidated financial statements, covering general information, basis of preparation, accounting policies, estimates, financial risk management, segment information, and specific financial line items 1 General Information Fast Food Empire Holdings Limited and its subsidiaries primarily engage in wholesale and retail of snack food and beverages; the company is incorporated in the Cayman Islands, listed on the Main Board of the Stock Exchange, and its condensed consolidated interim financial information is unaudited but reviewed by the Audit Committee - The Group primarily engages in the wholesale and retail of snack food and beverages[107] - Shares were initially listed on the Main Board of the Stock Exchange[108] - The condensed consolidated interim financial information is unaudited but has been reviewed by the Audit Committee[109] 2 Basis of Preparation This condensed consolidated interim financial information is prepared in accordance with IAS 34 Interim Financial Reporting and applicable disclosure requirements of Appendix 16 of the Listing Rules, presented under the historical cost convention, with Singapore dollars as the functional currency, and should be read in conjunction with the Group's consolidated financial statements for the year ended March 31, 2020 - Prepared in accordance with IAS 34 and Appendix 16 of the Listing Rules[110] - Presented in Singapore Dollars[111] - Should be read in conjunction with the Group's consolidated financial statements for the year ended March 31, 2020[111] 3 Principal Accounting Policies The accounting policies and methods of computation used in the condensed consolidated interim financial information are consistent with those applied in the preparation of the Group's consolidated financial statements for the year ended March 31, 2020 - Accounting policies are consistent with the 2020 fiscal year consolidated financial statements[112] 4 Accounting Estimates The preparation of condensed consolidated interim financial information requires management to make judgments, estimates, and assumptions affecting the application of accounting policies, reported amounts of assets and liabilities, and income and expenses; key judgments and estimation uncertainties are consistent with those disclosed in the 2020 annual report - Preparation of financial information involves management judgments, estimates, and assumptions[114] - Key judgments are consistent with those disclosed in the 2020 annual report[114] 5 Financial Risk Management and Financial Instruments The Group's operations are exposed to market risks (including foreign exchange, cash flow, and fair value interest rate risks), credit risk, and liquidity risk; risk management policies remained unchanged, and no derivative activities were undertaken during the review period, with carrying amounts of liquid financial assets and liabilities approximating fair values at the reporting date - The Group faces market risk, credit risk, and liquidity risk[115] - Risk management policies remained unchanged during the review period[116] - Carrying amounts of liquid financial assets and liabilities approximate fair values[117] 6 Segment Information The Group's chief operating decision maker considers all operations as a single operating segment; geographically, Singapore revenue increased while Malaysia and Indonesia revenues decreased, with non-current assets primarily concentrated in Singapore - The chief operating decision maker considers all business as a single operating segment[121] Revenue by Geographical Area (For the Six Months Ended September 30) | Region | 2020 (S$ thousand) (Unaudited) | 2019 (S$ thousand) (Unaudited) | | :--------- | :----------------------------- | :----------------------------- | | Singapore | 5,844 | 4,719 | | Malaysia | 4,200 | 5,395 | | Indonesia | 574 | 1,658 | | United States | 69 | 224 | | Others | 101 | 12 | | Total | 10,788 | 12,008 | Non-current Assets by Geographical Area (As of September 30, 2020) | Region | Sep 30, 2020 (S$ thousand) (Unaudited) | Mar 31, 2020 (S$ thousand) (Audited) | | :--------- | :----------------------------------- | :--------------------------------- | | Singapore | 4,953 | 4,644 | | Malaysia | 647 | 894 | | Total | 5,600 | 5,538 | 7 Other Income For the six months ended September 30, 2020, other income significantly increased to S$1,059 thousand, primarily driven by S$906 thousand in government grants, compared to only S$7 thousand in the prior period Other Income (For the Six Months Ended September 30) | Source | 2020 (S$ thousand) (Unaudited) | 2019 (S$ thousand) (Unaudited) | | :----------- | :----------------------------- | :----------------------------- | | Government grants | 906 | 7 | | Operating fee income | 33 | 43 | | Others | 120 | 107 | | Total | 1,059 | 157 | - Government grants are the primary reason for the significant increase in other income[126] 8 Finance Income / (Costs) — Net For the six months ended September 30, 2020, net finance income was S$13 thousand, compared to a net cost of S$53 thousand in the prior period, primarily due to increased interest income Finance Income/(Costs) — Net (For the Six Months Ended September 30) | Item | 2020 (S$ thousand) (Unaudited) | 2019 (S$ thousand) (Unaudited) | | :--------- | :----------------------------- | :----------------------------- | | Interest income | 75 | 10 | | Interest expense | (62) | (63) | | Net | 13 | (53) | - Net finance shifted from a cost to income, primarily due to increased interest income[129] 9 Income Tax Expense For the six months ended September 30, 2020, income tax expense was S$442 thousand, down from S$642 thousand in the prior period; taxes are provided at applicable rates in operating countries, 17% for Singapore and approximately 24% for Malaysia Income Tax Expense (For the Six Months Ended September 30) | Item | 2020 (S$ thousand) (Unaudited) | 2019 (S$ thousand) (Unaudited) | | :------------- | :----------------------------- | :----------------------------- | | Singapore income tax | 324 | 476 | | Malaysia income tax | 118 | 166 | | Total | 442 | 642 | - Singapore corporate income tax is provided at an estimated 17% of assessable profit, while Malaysian entities are subject to an income tax rate of approximately 24%[134] 10 Profit for the Period Profit for the period is derived after deducting expenses such as employee benefits, total directors' remuneration, retirement benefit costs, and depreciation of property, plant, and equipment Profit for the Period Deductions (For the Six Months Ended September 30) | Item | 2020 (S$ thousand) (Unaudited) | 2019 (S$ thousand) (Unaudited) | | :--------------------- | :----------------------------- | :----------------------------- | | Wages, salaries and allowances | 2,711 | 2,010 | | Retirement benefit costs — defined contribution plans | 217 | 138 | | Depreciation of property, plant and equipment | 779 | 862 | 11 Dividends For the six months ended September 30, 2020, the company declared no dividends, compared to S$1,000 thousand declared in the prior period Dividends (For the Six Months Ended September 30) | Item | 2020 (S$ thousand) (Unaudited) | 2019 (S$ thousand) (Unaudited) | | :----------- | :----------------------------- | :----------------------------- | | Dividends declared during the period | — | 1,000 | 12 Earnings Per Share For the six months ended September 30, 2020, basic and diluted earnings per share were S$0.15 cents, down from S$0.32 cents in the prior period; diluted EPS equals basic EPS as there were no outstanding potentially dilutive ordinary shares Earnings Per Share (For the Six Months Ended September 30) | Indicator | 2020 (Unaudited) | 2019 (Unaudited) | | :------------------------------ | :--------------- | :--------------- | | Profit attributable to owners of the Company (S$ thousand) | 1,228 | 1,948 | | Weighted average number of ordinary shares outstanding | 800,000,000 | 600,000,000 | | Basic and diluted earnings per share (S$ cents per share) | 0.15 | 0.32 | - Diluted earnings per share is equal to basic earnings per share because there were no outstanding potentially dilutive ordinary shares as of the end of the reporting period[139] 13 Changes in Property, Plant and Equipment During the review period, the Group acquired property, plant, and equipment (including furniture and fixtures, kitchen equipment, office equipment, and renovation works) totaling approximately S$152 thousand; right-of-use assets capitalized under IFRS 16 amounted to approximately S$5.8 million - During the review period, acquisitions of furniture and fixtures, kitchen equipment, office equipment, and renovation works totaled approximately S$152 thousand[142] - Right-of-use assets capitalized under IFRS 16 amounted to approximately S$5.8 million[142] 14 Inventories Inventories comprise fast-moving consumable items; for the period ended September 30, 2020, the cost of inventories recognized as cost of sales was S$3,868 thousand, a decrease from S$4,370 thousand in the prior period - Inventories include fast-moving consumable items[142] - For the period ended September 30, 2020, the cost of inventories recognized as cost of sales was S$3,868 thousand (2019: S$4,370 thousand)[142] 15 Trade and Other Receivables and Prepayments As of September 30, 2020, total trade and other receivables amounted to S$4,276 thousand, with trade receivables at S$368 thousand; the aging analysis of trade receivables shows S$226 thousand overdue by more than 90 days Trade and Other Receivables (As of September 30, 2020) | Item | Sep 30, 2020 (S$ thousand) (Unaudited) | Mar 31, 2020 (S$ thousand) (Audited) | | :------------------------- | :----------------------------------- | :--------------------------------- | | Trade receivables | 368 | 389 | | Other receivables | 3,908 | 4,200 | | Trade and Other Receivables | 4,276 | 4,589 | Aging Analysis of Trade Receivables (As of September 30, 2020) | Aging | Sep 30, 2020 (S$ thousand) | Mar 31, 2020 (S$ thousand) | | :----------- | :------------------------- | :------------------------- | | Current to 30 days | 91 | 153 | | 31 to 60 days | 30 | 122 | | 61 to 90 days | 21 | 84 | | Over 90 days | 226 | 30 | | Total | 368 | 389 | 16 Cash and Cash Equivalents As of September 30, 2020, total cash and cash equivalents amounted to S$23,292 thousand, primarily consisting of cash at bank Cash and Cash Equivalents (As of September 30, 2020) | Item | Sep 30, 2020 (S$ thousand) (Unaudited) | Mar 31, 2020 (S$ thousand) (Audited) | | :--------- | :----------------------------------- | :--------------------------------- | | Cash at bank | 23,288 | 21,541 | | Cash on hand | 4 | 13 | | Total | 23,292 | 21,554 | 17 Trade and Other Payables As of September 30, 2020, total trade and other payables amounted to S$2,123 thousand, with trade payables at S$574 thousand; the aging analysis of trade payables indicates most amounts are within 30 days Trade and Other Payables (As of September 30, 2020) | Item | Sep 30, 2020 (S$ thousand) (Unaudited) | Mar 31, 2020 (S$ thousand) (Audited) | | :--------------------- | :----------------------------------- | :--------------------------------- | | Trade payables | 574 | 333 | | Other payables and accrued expenses | 1,549 | 1,340 | | Total | 2,123 | 1,673 | Aging Analysis of Trade Payables (As of September 30, 2020) | Aging | Sep 30, 2020 (S$ thousand) | Mar 31, 2020 (S$ thousand) | | :----------- | :------------------------- | :------------------------- | | Current to 30 days | 455 | 236 | | 31 to 60 days | 52 | 88 | | Over 60 days | 67 | 9 | | Total | 574 | 333 | 18 Borrowings As of September 30, 2020, the Group's total outstanding bank borrowings were S$2,404 thousand, comprising S$130 thousand in current borrowings and S$2,274 thousand in non-current borrowings; the weighted average effective annual interest rate was 1.6%, and all borrowings are secured by Group properties Borrowings (As of September 30, 2020) | Item | Sep 30, 2020 (S$ thousand) (Unaudited) | Mar 31, 2020 (S$ thousand) (Audited) | | :--------- | :----------------------------------- | :--------------------------------- | | Current bank borrowings | 130 | 81 | | Non-current bank borrowings | 2,274 | 2,363 | | Total | 2,404 | 2,444 | - The weighted average effective annual interest rate for borrowings is 1.6%[151] - All Group borrowings are secured by Group properties with a current value of approximately S$3,215 thousand[151] 19 Significant Related Party Transactions During the review period and as of September 30, 2020, the Group had no significant related party transactions or balances, with only key management compensation disclosed Key Management Compensation (For the Six Months Ended September 30) | Item | 2020 (S$ thousand) (Unaudited) | 2019 (S$ thousand) (Unaudited) | | :------------------- | :----------------------------- | :----------------------------- | | Salaries and other short-term employee benefits | 977 | 319 | - No significant related party transactions or balances occurred during the review period[154]