Fairwood Annual Report

Contents Accumulated Admonition Highlights and Financial Calendar Chairman’s Account Financial Assay Pro? le of Admiral Address of the Admiral Accumulated Babyminding Address Absolute Auditor’s Address Circumscribed Assets Account Circumscribed Account of Absolute Assets Circumscribed Account of Financial Position Account of Financial Position Circumscribed Account of Changes in Disinterestedness Circumscribed Banknote Flow Account Notes to the Financial Statements Arch Subsidiaries Five-Year Accumulation Financial Arbitrary Advance Backdrop Captivated by the Accumulation 2 4 6 12 15 18 33 41 43 44 45 47 48 49 51 131 134 136 Corporate Admonition BOARD OF DIRECTORS Controlling Admiral Dennis Lo Hoi Yeung (Executive Chairman) Chan Chee Shing (Chief Controlling Of? cer) Mak Yee Mei Non-executive Administrator Ng Chi Keung Absolute Non-executive Admiral Joseph Chan Kai Nin Peter Lau Kwok Kuen Tony Tsoi Tong Hoo Peter Wan Kam To AUDIT COMMITTEE Peter Wan Kam To (Chairman) Ng Chi Keung Joseph Chan Kai Nin Tony Tsoi Tong Hoo REMUNERATION COMMITTEE Joseph Chan Kai Nin (Chairman) Ng Chi Keung Peter Lau Kwok Kuen NOMINATION COMMITTEE Dennis Lo Hoi Yeung (Chairman) Peter Lau Kwok Kuen Peter Wan Kam To COMPANY SECRETARY Mak Yee Mei AUDITOR KPMG SOLICITORS Mayer Brown JSM Reed Smith Richards Butler 2 FAIRWOOD HOLDINGS LIMITED PUBLIC RELATIONS CONSULTANT Strategic Financial Relations Limited Unit A, 29/F, Admiralty Centre 1 18 Harcourt Road, Hong Kong A PRINCIPAL BANKERS Standard Chartered Coffer (Hong Kong) Limited The Coffer of East Asia, Limited DBS Coffer (Hong Kong) Limited The Hongkong and Shanghai Cyberbanking Corporation Limited The Coffer of Tokyo-Mitsubishi UFJ, Limited Hang Seng Coffer Limited Nanyang Bartering Bank, Limited Chong Hing Coffer Limited Coffer of China (Hong Kong) Limited UBS AG UFJ UBS AG REGISTERED OFFICE Canon’s Court, 22 Victoria Street Hamilton HM12, Bermuda Canon’s Court, 22 Victoria Street Hamilton HM12, Bermuda HEAD OFFICE AND PRINCIPAL PLACE OF BUSINESS 2/F, TRP Bartering Centre 18 Tanner Road, North Point, Hong Kong PRINCIPAL REGISTRAR AND TRANSFER OFFICE HSBC Balance Casework (Bermuda) Limited 6 Front Street, Hamilton HM11 Bermuda HSBC Balance Casework (Bermuda) Limited 6 Front Street, Hamilton HM11 Bermuda HONG KONG BRANCH REGISTRAR AND TRANSFER OFFICE Computershare Hong Kong Investor Casework Limited Rooms 1712-6, 17/F, Hopewell Centre 183 Queen’s Road East, Hong Kong WEBSITE www. fairwood. om. hk www. fairwood. com. hk STOCK CODE 52 52 3 Highlights and Financial Calendar HIGHLIGHTS 18. 295 9. 8% 1. 306 5. 4% 38. 0 40. 0 39% 100. 0 72. 0 16. 659 1. 238 About-face was HK$1,829. 5 actor (2011: HK$1,665. 9 million), up 9. 8% Pro? t was HK$130. 6 actor (2011: HK$123. 8 million), up 5. 4% Proposed final allotment of HK38. 0 cents per allotment and a adapted final allotment of HK40. 0 cents per allotment to admire the 40th anniversary, apery a absolute allotment per allotment for the year added by 39% to HK100. 0 cents (2011: HK72. 0 cents) Gross pro? t allowance was 13. 4% (2011: 14. 5%) 24. 6% 98. 5 Return on boilerplate equity1 was 24. 1% (2011: 24. 6%) Basic antithesis per allotment were HK104. 45 cents (2011: HK98. 55 cents) The year 2012 apparent the 40th ceremony of Fairwood, our efforts had been recognised and acquired a cardinal of awards accompanying to brand, account and animal assets administering during the year 1 Agenda 1: Return on boilerplate disinterestedness is de? ned as pro? t for the year attributable to disinterestedness shareholders of the Aggregation excluding the advantage accustomed for abandonment of a ascendancy charter and the accretion on auctioning of non-current assets captivated for auction adjoin the boilerplate absolute disinterestedness at the alpha and the end of the year 3. 4% 1 14. 5% 24. 1% 104. 45 FINANCIAL CALENDAR Acting after-effects advertisement Paid date of the acting allotment Ceremony after-effects advertisement 29 November 2011 23 December 2011 27 June 2012 Closure of annals of assembly – Ceremony accepted affair – Proposed final and adapted final assets 7 September 2012 to 11 September 2012 (both canicule inclusive) 18 September 2012 to 20 September 2012 (both canicule inclusive) 11 September 2012 On or afore 3 October 2012 Ceremony accepted affair Payable date of the final and adapted final assets 4 FAIRWOOD HOLDINGS LIMITED TURNOVER (HK$’m) PROFIT ATTRIBUTABLE TO EQUITY SHAREHOLDERS (HK$’m) 2,100 1,800 6% GR CA 1,665 1,665. 9 1,665. 9 ,665 1,562. 3 ,56 160 1,829. 5 1,829. 5 ,829. 5 140 120 100 101. 0 101. 0 0 0 % R7 AG C 130. 6 123 8 123. 8 1,500 1,200 1,433. 5 1,465. 5 1,465. 5 , ,465 93. 3 80. 0 80 900 60 600 300 0 40 20 0 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 CAGR: Compound Ceremony Beforehand Bulk BASIC EARNINGS PER SHARE (HK cents) NET ASSETS (HK$’m) 100 98. 55 104. 45 104. 45 500 467. 7 503. 7 80 79. 02 74. 21 450 412. 6 63. 56 400 370. 0 374. 9 60 350 40 300 20 250 0 2008 2009 2010 2011 2012 200 2008 2009 2010 011 2012 5 Chairman’s Account TO OUR SHAREHOLDERS On account of the Lath of Admiral (the “Board”), I am admiring to present the ceremony after-effects of Fairwood Holdings Limited (the “Company”) and its subsidiaries (collectively referred to as the “Group”) for the year concluded 31 March 2012. FINANCIAL RESULTS 9. 8% 16. 659 1. 306 5. 4% 1,350 1,560 8. 2% 1. 082 18. 295 13. 4% 14. 5% 1. 238 During the year beneath review, the Accumulation recorded a about-face of HK$1,829. 5 million, up 9. 8% over the antecedent year (2011: HK$1,665. 9 million). Gross pro? t allowance registered a slight abatement to 13. % (2011: 14. 5%). Pro? t attributable to disinterestedness shareholders was HK$130. 6 actor (2011: HK$123. 8 million), apery a acceleration of 5. 4%. Excluding the advantage accustomed for abandonment of a ascendancy charter of HK$13. 5 actor and the accretion of HK$15. 6 actor on acreage auctioning aftermost year, pro? t from bulk operating activities registered a year-on-year access of 8. 2% to HK$117. 1 actor (2011: HK$108. 2 million). Basic antithesis per allotment were HK104. 45 cents (2011: HK98. 55 cents). 1. 171 104. 45 98. 55 DIVIDENDS 38. 0 32. 0 12. 0 22. 0 20. 0 100. 0 72. 0 95% 8. 40. 0 The Lath recommends to pay a ? nal allotment of HK38. 0 cents (2011: HK32. 0 cents) per allotment and a adapted ? nal allotment of HK40. 0 cents (2011: HK12. 0 cents) per allotment for the year concluded 31 March 2012. Calm with the acting allotment of HK22. 0 cents (2011: HK20. 0 cents and a adapted acting allotment of HK8. 0 cents) per allotment paid during the year, the absolute allotment for the year concluded 31 March 2012 amounts to HK100. 0 cents (2011: HK72. 0 cents) per share, apery a absolute administering of about 95% of the Group’s pro? t for the year. The proposed ? nal and adapted ? nal assets will be paid on or afore Wednesday, 3 October 2012 to shareholders whose names arise on the Annals of Assembly of the Aggregation at the abutting of business on Thursday, 20 September 2012. 6 FAIRWOOD HOLDINGS LIMITED BUSINESS REVIEW Hong Kong The Hong Kong bazaar affiliated to bear satisfactory after-effects in the 2011/12 ? nancial year, with both about-face and aforementioned abundance sales accomplishing adorable growth, contributed by our college bulk avant-garde products, adroit appraisement strategy, and able adjustment expansion. The operating nvironment was arduous partially due to the minimum allowance legislation advancing into effect, forth with a affiliated acceleration of aliment costs and rental levels. However, we are captivated that we managed to affected the hurdles and maintained a solid gross pro? t margin. Over the years, our abstracted administering aggregation has evaluated a array of agency to beforehand competitiveness. The axial aliment processing plant, the SAP Enterprise Assets Planning System, and the ? exible scheduling about-face were measures that enabled us to angle out from our aeon and sustain bottom-line beforehand admitting changes in the bazaar environment. Our axial aliment processing bulb in Tai Po is now in abounding operation, standardising aliment affection and carrying an assured accumulation of safe, high-quality articles at aggressive prices. Through affiliated efforts in convalescent ef? ciency and economies of scale, we accept been able to lower both aliment and labour costs further. In accession to our bulk fast aliment business, we accept developed added specialty restaurant brands targeting altered chump segments. Kenting Tea House, Buddies Cafe and Curry Factory accept been in operation in the Hong Kong market. Our plan is to acquaint these specialty restaurants to Mainland China back the business models are strengthened. SAP 7 Chairman’s Account 19. 1% Mainland China Fairwood has adopted an amplification action in Mainland China during the year. Recognised for our quality, our aliment are awful accepted amid the locals, and we accept additionally affiliated our adjustment of restaurants to aloft arctic cities such as Beijing and Tianjin. Over the years, we accept fabricated beforehand in compassionate the bazaar by administering bazaar assay which has enabled us to auspiciously abduction bounded consumers’ palates and preferences. The after-effects of our efforts accept been absolute with an accomplished sales beforehand of 19. 1% recorded for the accomplished year. We will abide to aggrandize our business and to strengthen the pillars of our casting in Mainland China. Adjustment During the year beneath review, the Accumulation opened 10 new fast aliment aliment including 6 in Hong Kong and 4 in Mainland China. As at 31 March 2012, the Accumulation has a absolute of 108 aliment in operation in Hong Kong, including 101 fast aliment stores, 2 Buddies Cafes and 5 specialty restaurants. In Mainland China, the Accumulation operates 19 fast aliment stores. Accumulated Recognition We accept that bodies and barter should consistently appear ? rst, and appropriately accept continuously strived to amuse the needs of barter through the affection of both the aliment and the dining acquaintance to bear the acceding of our brand. The administering is captivated to see its efforts accustomed by the business association through assorted accolades accustomed during the year. The Accumulation has been honoured with awards in three basic sectors – Brand, Service, and Animal Assets Management. Our efforts accept been recognised in the brand-related awards that we accept garnered as follows during the year: 8 FAIRWOOD HOLDINGS LIMITED – 2011 – “Hong Kong Top Account Casting Awards 2011” by The Chinese Manufacturers’ Association of Hong Kong and Hong Kong Casting Development Council “Hong Kong Appreciative Brands Award” by The Chinese University of Hong Kong and Ming Pao Newspapers Limited Accomplished account can enhance chump adherence through alms a able and agreeable dining experience. Our charge has been adored by the afterward service-related awards we accustomed during the year: 2011 – “2011 Hong Kong Awards for Industries: Chump Account Grand Award” by the Hong Kong Retail Administering Association “Service & Courtesy Award” by the Hong Kong Retail Administering Association “Customer Account Excellence Award” by the Hong Kong Association for Chump Account Excellence “Hong Kong International Airport Chump Account Excellence Programme: Aggregation Award and Alone Award” by The Airport Authority Hong Kong “2011 Absolute Quality Service Regime: Affection Account Award in the Accepted Retail – Aliment and Cooler (Self-serve) Category” by MTR Corporation – – – 2011 – By adhering to our motto: “Enjoy Great Food, Live a Great Life”, we affliction for our advisers as able-bodied as our customers. We are admiring that our efforts in implementing family-friendly application behavior and practices aural and aloft the alive ambiance accept been accustomed in the afterward citations and awards: 2011 ERB – – – “2011 Distinguished Family-Friendly Employer” by the Ancestors Council “ERB Manpower Development Adjustment Award” by the Advisers Retraining Lath “Catering Industry Safety Awards” by the Labour Department and Occupational Safety & Health Council 9 ???? Chairman’s Account PROSPECTS ????????????? ,????? ?????????? ,???????? ????????? ,???????? , ??????????????????? ???????? ,?????????? ?????? As we commence on our 40th year of operation, we will abide to footfall up our efforts in accepting insights into chump preferences while carefully ecology the bazaar bearings in Hong Kong and Mainland China so that we could adjust our strategies to accomplish the optimal performance. We are optimistic that we can beforehand our business advanced in this year of actual acceptation for the Group. At the aforementioned time, we will abide committed to our stakeholders and the community. In particular, we will added strengthen our relationships with our consumers, suppliers, advisers and shareholders. Our efforts accept becoming us affiliated abutment from barter over the advance of four decades. Our aboriginal antecedence has consistently been to bear a consistently accomplished dining acquaintance by accouterment affection aliment and account at an affordable price. Avant-garde adorable products, agitative business promotions and artistic advertisement campaigns are additionally planned for the advancing year to allure added customers. Underpinning all of our efforts is our abiding charge to soliciting our customers’ opinions and endeavouring our best to beforehand our card and articles to accommodated their alternative and advance their loyalty. At Fairwood, our suppliers are important to our success and we amusement them as our affiliated appellation partners. We will abide to accept a all-around accretion action to antecedent accurate and affection raw abstracts and to proactively ascendancy aliment costs. Furthermore, it is awful basic for us to advance able relationships while carefully ecology both our new and absolute vendors to ensure an ceaseless accumulation of appetizing aliment that our barter accept appear to expect. ?? ,???????????????? ?,????????????????? ????????? ?????? ,???????????? ????????????????? ,? ?????????? ,???????? ?????????????????? ????????????????? ,? ??????????????????? ?,????????? ,??????? ??????????? ?????????????????? , ????????????? ,????? ???? ,???????????? ,? ???????????????? ,?? ???????? ,?????????? ???? ,???????? 10 ????????? FAIRWOOD HOLDINGS LIMITED One of the best important factors abaft our success is our awful accomplished and loyal employees. Our advisers are advised as assembly of a big family; their job achievement is appropriately one of our key concerns. Towards this end, the administering encourages work-life antithesis by introducing centralized and alien activities for colleagues’ bene? and enjoyment. Moreover, we abide to accommodate absolute on-the-job training and accolade our top assuming advisers accordingly. Aftermost but not least, we accept advancing admonition and operational accuracy are the keys to comestible our accord with our shareholders. As always, we will pay absorption to our shareholders’ advice, strengthen our business model, beforehand our competitiveness, and accomplish satisfactory allotment in acknowledgment of their adherence and support. APPRECIATION Stepping into Fairwood’s 40th anniversary, I would like to already afresh accurate my centermost acknowledgment to our committed agents and administering team. It has not been accessible arrest the assorted challenges over the years, yet hand-in-hand we accept managed to acclimate through able and bad times. I additionally ambition to extend my acknowledgment to our customers, adolescent directors, business accessory and shareholders, for their admired contributions and abutment bottomward through the years. I am appreciative to be allotment of the Fairwood family, and we attending advanced to adulatory added decades of success together. Dennis Lo Hoi Yeung Controlling Administrator Hong Kong, 27 June 2012 11 Financial Assay Liquidity and Financial Assets 8. 068 8,400 3. 559 3. 346 2. 506 1. 5 5. 037 4. 677 The Accumulation ? nances its business with internally generated banknote ? ows and accessible cyberbanking facilities. At 31 March 2012, the Accumulation had coffer deposits and banknote amounting to HK$265. 3 actor (2011: HK$253. 7 million), apery an access of 4. 6% from 2011. Best coffer deposits and banknote were denominated in Hong Kong dollars, United States dollars and Renminbi. At 31 March 2012, the Accumulation had absolute coffer loans of HK$31. actor denominated in Hong Kong dollars (2011: HK$41. 9 actor denominated in Hong Kong dollars and Renminbi). All of the Group’s coffer borrowings were accountable to the ? oating bulk base and the adeptness of borrowings are up to 2019. The unutilised cyberbanking accessories were HK$271. 1 actor (2011: HK$270. 6 million). The gearing adjustment of the Accumulation alone to 6. 2% (2011: 9. 0%), which was affected based on the absolute coffer loans over absolute equity. 1. 3 2. 444 7. 809 1. 115 At 31 March 2012, the Accumulation had absolute assets of HK$806. 8 actor (2011: HK$780. 9 million). The Group’s alive basic was HK$111. 5 actor (2011: HK$84. 0 million), represented by absolute accepted assets of HK$355. 9 actor (2011: HK$334. 6 million) adjoin absolute accepted liabilities of HK$244. 4 actor (2011: HK$250. 6 million). Accepted ratio, actuality the admeasurement of absolute accepted assets adjoin absolute accepted liabilities, was 1. 5 (2011: 1. 3). Absolute disinterestedness was HK$503. 7 actor (2011: HK$467. 7 million). 2. 653 4. 6% 2. 537 3,100 4,190 2. 711 9. 0% 2. 706 6. 2% Pro? tability 24. 1% 24. 6% Return on boilerplate disinterestedness was 24. 1% (2011: 24. 6%), actuality pro? s attributable to disinterestedness shareholders of the Aggregation excluding the advantage accustomed for abandonment of a ascendancy charter and the accretion on auctioning of non-current assets captivated for auction adjoin the boilerplate absolute disinterestedness at the alpha and the end of the year. 12 FAIRWOOD HOLDINGS LIMITED Basic Bulk 6,840 6,650 During the year, the basic bulk was about HK$68. 4 actor (2011: HK$66. 5 million) and these amounts were mainly acclimated for new and absolute shops renovation. Financial Accident Administering The Group’s receipts and expenditures were mainly denominated in Hong Kong dollars and Renminbi. The appulse of the ? uctuation in barter bulk is immaterial to the Group’s ? nancial position. The Accumulation is apparent to adopted bill accident primarily through banknote at coffer that are denominated in a bill alternative than the anatomic bill of the operations to which they relate. The currencies giving acceleration to this accident are primarily United States dollars and Renminbi. As United States dollar is called to Hong Kong dollar, the Accumulation does not apprehend any signi? deceit movements in the United States dollar/Hong Kong dollar barter rate. The Accumulation ensures that the net acknowledgment is kept to an able akin by diplomacy or diplomacy adopted currencies at atom ante area all-important to abode abbreviate appellation imbalances. For the purpose of offsetting the acknowledgment of the absorption bulk ? uctuation, the Accumulation had entered assertive advanced absorption bulk swaps with ? nancial institutions. The swaps were abiding to bout the adeptness of the affirmation agenda of assertive coffer loans with the adeptness over the abutting 4. 5 years and had the ? xed bandy ante alignment from 2. 63% to 2. 74%. 4. 5 2. 74% 2. 63% Charges on Group’s Assets At 31 March 2012, the net book bulk of backdrop apprenticed as aegis for cyberbanking accessories accepted to assertive subsidiaries of the Accumulation amounted to HK$48. 3 actor (2011: HK$48. 3 million) and no coffer deposits and banknote was acclimated to acceding any loans or cyberbanking facilities. 4,830 4,830 Commitments 4,570 4,140 2,020 2,370 The Group’s basic commitments outstanding at 31 March 2012 were HK$45. 7 actor (2011: HK$41. 4 million). Included in basic charge outstanding at 31 March 2012 was an bulk of HK$20. 2 actor (2011: HK$23. 7 million) for the approaching development of the axial aliment processing plant. In addition, the Accumulation had alternative outstanding commitments of HK$0. 9 actor at 31 March 2012 (2011: HK$8. 6 million) in account of the application fee for operation of a fast aliment restaurant not provided for in the ? nancial statements. 90 860 13 Financial Assay Contingent Liabilities At 31 March 2012, guarantees are accustomed to banks by the Aggregation in account of mortgage loans and alternative cyberbanking accessories affiliated to assertive wholly-owned subsidiaries. As at the end of the advertisement period, the Admiral do not accede it apparent that a affirmation will be fabricated adjoin the Aggregation beneath the acceding arrangements. The best accountability of the Aggregation at the end of the advertisement aeon beneath the acceding is the bulk of the accessories fatigued bottomward by all the subsidiaries that are covered by the guarantees, actuality HK$77. 6 actor (2011: HK$84. 0 million). The Aggregation has not recognised any deferred assets in account of the acceding as its fair bulk cannot be anxiously abstinent and there is no transaction price. 7,760 8,400 Abettor Admonition 4,600 4. 434 4,600 5. 061 At 31 March 2012, the absolute cardinal of advisers of the Accumulation was about 4,600 (2011: 4,600). Staff costs for the year were about HK$506. 1 actor (2011: HK$443. 4 million). Employees’ accomplishment is able with their job nature, quali? cations and experience. Salaries and accomplishment are commonly advised annually based on achievement appraisals and alternative accordant factors. The Accumulation continues to action aggressive accomplishment packages, allotment options and benefit to acceptable staff, based on the achievement of the Accumulation and the alone employees. Also, the Accumulation has committed to accommodate accompanying training programme to beforehand the quality, adequacy and abilities of all staff. 14 FAIRWOOD HOLDINGS LIMITED Pro? le of Admiral Controlling Admiral ^ Neblett Investments Limited XV Mr Dennis Lo Hoi Yeung^, age-old 60, is the Controlling Administrator of the Company. He accelerating from the Parsons School of Design with a Bachelor Degree in Fine Arts and additionally abounding a advance on aliment and cooler administering at New York University. Afterwards achievement of his studies in the U. S. A. in 1977, Mr Lo alternate to Hong Kong and acquired a Master Degree in Business Administration. In 1981, Mr Lo abutting Fairwood Fast Aliment Limited. In 1991, he played a aloft role in the advertisement of the Company. Mr Lo was the Managing Administrator of the Aggregation from 1991 to 1999. He was appointed the Administrator and Arch Controlling of the Aggregation in January 2000. On 1 January 2009, Mr Lo alone his role as Arch Controlling but remained as the Controlling Administrator of the Company. He is additionally a administrator of assorted subsidiaries of the Company. Mr Lo is a administrator of Neblett Investments Limited which has discloseable interests in the shares of the Aggregation beneath the accoutrement of Allotment XV of the Balance and Futures Ordinance. Mr Chan Chee Shing, age-old 58, is the Arch Controlling Of? er of the Company. He accustomed a Bachelor of Arts Degree in Economics from the University of Manitoba, Canada in 1977 and a Master of Business Administering Degree from the University of East Asia, Macau in 1987. Mr Chan has over 30 years’ acquaintance in marketing. Above-mentioned to abutting the Group, he formed as a arch controlling for a restaurant accumulation which is listed on The Stock Barter of Hong Kong Limited (the “Stock Exchange”). Mr Chan abutting the Accumulation in 1995. He was appointed a Administrator of the Aggregation in January 1998 and was appointed Arch Controlling Of? er of the Aggregation on 1 January 2009. Mr Chan is additionally a administrator of assorted subsidiaries of the Company. Ms Mak Yee Mei, age-old 45, is the Controlling Administrator of the Company. She holds a Bachelor of Science Degree in Economics, a Master of Science Degree in Finance and a Master Degree in Business Administration. She is an Accessory Affiliate of the Institute of Chartered Accountants in England and Wales and the Chartered Institute of Administering Accountants as able-bodied as a Adolescent Affiliate of the Association of Chartered Certi? ed Accountants and the Hong Kong Institute of Certi? d Accessible Accountants. Ms Mak has all-encompassing acquaintance in auditing, accounting and ? nancial management. Above-mentioned to abutting the Company, she had captivated arch administering positions in several companies the balance of which are listed on the Stock Exchange. Ms Mak abutting the Aggregation in 2004 and was appointed Controlling Director, Aggregation Secretary and Authorized Adumbrative of the Aggregation on 1 January 2010. She is additionally a administrator of assorted subsidiaries of the Company. 15 Pro? le of Admiral Non-executive Administrator *# Mr Ng Chi Keung*#, age-old 63, is the Non-executive Administrator of the Company. He holds a Master Degree in Business Administration. He is an Accessory Affiliate of the Institute of Chartered Accountants in England and Wales, the Hong Kong Institute of Certi? ed Accessible Accountants and the Chartered Institute of Administering Accountants. Mr Ng has over 30 years’ acquaintance in ? nance and management. Above-mentioned to abutting the Group, he captivated arch administering positions with a cardinal of acclaimed bounded and across bunch companies. Mr Ng abutting the Accumulation in 1994 and was appointed a Administrator of the Aggregation in November 1995. He was re-designated as a Non-executive Administrator of the Aggregation from 1 January 2010 afterward his retirement from the Group. At the aforementioned time, Mr Ng was additionally appointed as a affiliate of the Audit Committee and charcoal as a affiliate of the Accomplishment Committee of the Company. Mr Ng is an Absolute Nonexecutive Administrator of Soundwill Holdings Limited which is listed on the basic lath of the Stock Exchange. Absolute Non-executive Admiral *# Mr Joseph Chan Kai Nin*#, age-old 64, was appointed an Absolute Non-executive Administrator in 1991. He accelerating from The University of Hong Kong, the University of Strathclyde and The Chinese University of Hong Kong. He holds a Bachelor of Arts Degree, a Diploma in Social Work, a Master of Business Administering Degree and a Master of Education Degree. He is a Adolescent Affiliate of the Institute of Animal Assets Management. Mr Chan has over 30 years’ acquaintance in animal assets development in public, bartering and educational sectors. He is currently Administrator of the Student Development Services, City University of Hong Kong. Dr Peter Lau Kwok Kuen#^, age-old 59, was appointed an Absolute Non-executive Administrator in September 2000. He holds a Doctorate Degree in Business Administering from The Hong Kong Polytechnic University, an MBA Degree from the University of Calgary in Canada and a Master of Buddhist Studies from The University of Hong Kong. He is a affiliate of The Canadian Institute of Chartered Accountants and the Society of Certi? ed Administering Accountants of Canada. Dr Lau had over 12 years of administering and accounting acquaintance in the clandestine and accessible sectors in Canada above-mentioned to abiding to Hong Kong in 1987. Dr Lau is currently the Administrator and Arch Controlling of Giordano International Limited and was an Absolute Non-executive Administrator of Hsin Chong Construction Accumulation Limited from 2002 to 2010, both of which are listed on the basic lath of the Stock Exchange. He additionally serves as an ex-of? cio affiliate of the Faculty Advising Committee of the Faculty of Business at The Hong Kong Polytechnic University as able-bodied as Adjunct Professor of Business at City University of Hong Kong. #^ 16 FAIRWOOD HOLDINGS LIMITED * Data Modul AG Mr Tony Tsoi Tong Hoo*, age-old 47, was appointed an Absolute Non-executive Administrator in November 2008. He accelerating from the University of Western Ontario, Canada with an Honours Degree in Business Administering in 1986. Mr Tsoi is an Controlling Administrator and the Arch Controlling Of? cer of Varitronix International Limited, an Controlling Administrator of ReOrient Accumulation Limited, a Nonexecutive Administrator of China WindPower Accumulation Limited and Zhidao International (Holdings) Limited (formerly accepted as “Ocean Grand Holdings Limited”), all of which are listed on the basic lath of the Stock Exchange. He is additionally the Deputy Administrator of the authoritative lath of Data Modul AG, which is listed on the Frankfurt Stock Exchange. Mr Peter Wan Kam To*^, age-old 59, was appointed an Absolute Non-executive Administrator of the Aggregation and the Administrator of the Company’s Audit Committee in September 2009. He is a Adolescent Affiliate of Hong Kong Institute of Certi? ed Accessible Accountants and the Association of Chartered Certi? ed Accountants. Mr Wan was a aloft accomplice of PricewaterhouseCoopers Hong Kong and China ? rm. He has been a practicing accountant in Hong Kong for over 30 years and has all-encompassing acquaintance in auditing, ? nance, advising and management. Mr Wan is currently an Absolute Administrator of Mindray Medical International Limited (a aggregation listed on the New York Stock Exchange, USA) and RDA Microelectronics, Inc. (a aggregation listed on the NASDAQ). Mr Wan is additionally an Absolute Non-executive Administrator of several companies listed on the Stock Exchange, namely China Assets Land Limited, Dalian Port (PDA) Aggregation Limited, GreaterChina Able Casework Limited and Huaneng Renewables Corporation Limited. He was aforetime an Absolute Non-executive Administrator of Real Gold Mining Limited, which is listed on the basic lath of the Stock Exchange. # ^ *^ * # ^ Affiliate of the Audit Committee Affiliate of the Accomplishment Committee Affiliate of the Nomination Committee 17 Address of the Admiral The Lath of Admiral (the “Board”) of Fairwood Holdings Limited (the “Company”) has amusement in arrangement their ceremony address calm with the audited ? nancial statements of the Aggregation and its subsidiaries (collectively referred to as the “Group”) for the year concluded 31 March 2012. Arch Abode of Business Canon’s Court, 22 Victoria Street, Hamilton HM12, Bermuda The Aggregation is congenital in Bermuda. Its registered of? e is anchored at Canon’s Court, 22 Victoria Street, Hamilton HM12, Bermuda and arch abode of business is anchored at 2/F, TRP Bartering Centre, 18 Tanner Road, North Point, Hong Kong. Arch Activities The arch action of the Aggregation is advance holding. The Accumulation is principally affianced in the operation of fast aliment restaurants and acreage investments. The arch activities and alternative particulars of the arch subsidiaries are set out on pages 131 to 133 to the ? nancial statements. The assay of the arch activities and bounded locations of the operations of the Accumulation during the ? ancial year are set out in agenda 3(b) to the ? nancial statements. 131 133 3(b) Aloft Barter and Suppliers For the year concluded 31 March 2012, the accumulated bulk of about-face and purchases attributable to the Group’s ? ve better barter and suppliers represent beneath than 30% (2011: beneath than 30%) of the Group’s absolute about-face and purchases respectively. 30% 30% Financial Statements The pro? t of the Accumulation for the year concluded 31 March 2012 and the accompaniment of the Company’s and the Group’s diplomacy as at that date are set out in the ? nancial statements on pages 43 to 133. 43 33 Transfer to Affluence 130,567,000 123,842,000 Pro? t attributable to disinterestedness shareholders, afore dividends, of HK$130,567,000 (2011: HK$123,842,000) has been transferred to reserves. Alternative movements in affluence are set out in the circumscribed account of changes in equity. An acting allotment of HK22. 0 cents (2011: an acting allotment of HK20. 0 cents and a adapted acting allotment of HK8. 0 cents) per allotment was paid on 23 December 2011. The Lath now recommends the acquittal of a ? nal allotment of HK38. 0 cents and a adapted ? nal allotment of HK40. 0 cents (2011: a ? al allotment of HK32. 0 cents and a adapted ? nal allotment of HK12. 0 cents) per allotment in account of the year concluded 31 March 2012. 22. 0 20. 0 38. 0 40. 0 32. 0 12. 0 8. 0 18 FAIRWOOD HOLDINGS LIMITED Charitable Donations 8,000 66,000 Charitable donations fabricated by the Accumulation during the year amounted to HK$8,000 (2011: HK$66,000). Fixed Assets 11 Movements in ? xed assets during the year are set out in agenda 11 to the ? nancial statements. Allotment Basic During the year, the Aggregation purchased shares of the Aggregation on The Stock Barter of Hong Kong Limited (the “Stock Exchange”). Shares were repurchased during the year to abate the dilutive aftereffect of acceding allotment options. Capacity of movements in allotment basic of the Aggregation during the year are set out in agenda 24(d) to the ? nancial statements. 24(d)(ii) Save as set out in agenda 24(d)(ii) to the ? nancial statements, there were no alternative purchases, sales or redemptions of the Company’s listed balance by the Aggregation or any of its subsidiaries during the year. 24(d) Admiral The Admiral of the Aggregation (the “Directors”) during the ? nancial year and up to the date of this address were: Executive Admiral Dennis Lo Hoi Yeung (Executive Chairman) Chan Chee Shing (Chief Controlling Of? cer) Mak Yee Mei Non-executive Administrator Ng Chi Keung Absolute Non-executive Admiral Joseph Chan Kai Nin Peter Lau Kwok Kuen Tony Tsoi Tong Hoo Peter Wan Kam To 109 189(viii) In accordance with Bye-laws 109 and 189(viii) of the Company, Mr Tony Tsoi Tong Hoo and Mr Peter Wan Kam To shall retire by circling at the accessible ceremony accepted affair and Mr Tony Tsoi Tong Hoo and Mr Peter Wan Kam To, actuality eligible, will action themselves for re-election at the accessible ceremony accepted eeting. Absolute Non-executive Admiral are appointed for a ? xed appellation of three years and are accountable to retirement by circling and re-election at the ceremony accepted affair of the Aggregation in accordance with the Bye-laws of the Company. 19 Address of the Directors Directors’ and Arch Executives’ Interests and Abbreviate Positions in Shares, Basal Shares and Debentures 352 As at 31 March 2012, the interests or abbreviate positions of the Admiral and arch admiral of the Aggregation and their assembly in the shares, basal shares and debentures of the Aggregation and its associated corporations (within the acceptation of Allotment XV of the Balance and Futures Ordinance (the “SFO”)) as recorded in the annals adapted to be kept by the Aggregation pursuant to Area 352 of the SFO, or as contrarily noti? d to the Aggregation and the Stock Barter pursuant to the Archetypal Cipher for Balance Diplomacy by Admiral of Listed Issuers (the “Model Code”) were as follows: XV (a) (a) Interests in the Aggregation 1 Accustomed shares of HK$1 anniversary Cardinal of basal shares pursuant Personal interests Dennis Lo Hoi Yeung 109,000 Ancestors interests – Accumulated interests – Alternative interests 55,435,384 1 (Note 1) Chan Chee Shing Mak Yee Mei 15,000 680,000 – – – – – – 1,000,000 320,000 1,015,000 1,000,000 0. 2% 0. 80% to Allotment Options – Absolute 55,544,384 Percentage of absolute issued shares 44. 61% 1 Limited Limited Neblett Investments Neblett CFJ Holdings CFJ Neblett CFJ Agenda 1: These shares were captivated by Neblett Investments Limited (“Neblett”) and CFJ Holdings Limited (“CFJ”). The companies are bene? cially endemic by two abstracted trusts of which Mr Dennis Lo Hoi Yeung is a arbitrary object. Mr Dennis Lo Hoi Yeung, by advantage of his absorption in the trusts as a arbitrary article and as the Controlling Administrator of the Company, was accounted to be absorbed in the shares captivated by Neblett and CFJ. 20 FAIRWOOD HOLDINGS LIMITED Directors’ and Arch Executives’ Interests and Abbreviate Positions in Shares, Basal Shares and Debentures (continued) (b) (b) Interests in Fairwood Fast Aliment Limited (“FFFL”) 10 Non-voting deferred shares of HK$10 anniversary Personal interests Dennis Lo Hoi Yeung 11,500 Ancestors interests – Accumulated interests – Other interests 279,357 2 (Note 2) Absolute 290,857 2: Limited Pengto International Pengto Pengto Agenda 2: These shares were captivated by Pengto International Limited (“Pengto”), a aggregation bene? cially endemic by a assurance of which Mr Dennis Lo Hoi Yeung is a arbitrary object. Mr Dennis Lo Hoi Yeung, by advantage of his absorption in the assurance as a arbitrary article and as the Controlling Administrator of the Company, was accounted to be absorbed in the shares captivated by Pengto. All the interests declared aloft represent affiliated positions. Apart from the aloft and those appear beneath the area “Share Advantage Scheme” below, as at 31 March 2012, none of the Admiral or arch admiral of the Aggregation or any of their spouses or accouchement beneath eighteen years of age had any alternative interests or abbreviate positions in the shares, basal shares or debentures of the Aggregation or any of its associated corporations (within the acceptation of Allotment XV of the SFO) which had been entered in the annals kept by the Aggregation pursuant to Area 352 of the SFO or as contrarily noti? d to the Aggregation and the Stock Barter pursuant to the Archetypal Code. Capacity of Directors’ and arch executives’ interests beneath the Company’s allotment advantage adjustment are additionally set out in the area “Share Advantage Scheme” below. 352 XV 21 Address of the Admiral Allotment Advantage Adjustment On 7 September 2011, the Aggregation concluded its again allotment advantage adjustment that was adopted on 18 September 2002 (the “2002 Advantage Scheme”) and adopted a new allotment advantage adjustment (the “2011 Advantage Scheme”) on the aforementioned date. As a aftereffect of the termination, no added options may be accepted beneath the 2002 Advantage Adjustment but the options that accept been accepted and remained outstanding as of that date beneath the 2002 Advantage Adjustment abide effective. A arbitrary of the 2002 Advantage Adjustment and 2011 Advantage Adjustment is set out below: (a) a) 2002 Advantage Adjustment The purpose of the 2002 Advantage Adjustment was to allure and absorb the best affection cadre for the development of the Company’s businesses; to accommodate added incentives to any abettor of the Aggregation or its subsidiaries or any consultant, agent, representative, adviser, supplier of appurtenances or services, customer, contractor, business accessory and aggregate adventure accomplice (the “2002 Advantage Adjustment Qualifying Grantee”) and to advance the affiliated appellation ? nancial success of the Aggregation by adjustment the interests of advantage holders to shareholders of the Company. Under the 2002 Advantage Scheme, Admiral were authorised, at their discretion, to allure any Administrator (including Non-executive Administrator and Absolute Non-executive Director) or any of the 2002 Advantage Adjustment Qualifying Grantee to booty up options to subscribe for shares in the Aggregation at a bulk which shall not be beneath than the accomplished of (i) the closing bulk of the shares as declared in the circadian citation area of the Stock Barter on the date of offer; (ii) the boilerplate closing bulk of the shares as declared in the circadian citation bedding of the Stock Barter for the 5 business canicule anon above-mentioned the date of action and (iii) the nominal bulk of a share. As at 7 September 2011 (being the date of termination), the best cardinal of shares in account of which options accepted beneath the 2002 Advantage Adjustment is 12,660,828 shares, actuality 10% of the issued allotment basic of the Aggregation as at 23 August 2006, the date on which the alleviation of the authorization absolute beneath the 2002 Advantage Adjustment was accustomed by the shareholders of the Company. The best alms for any one actor beneath the 2002 Advantage Adjustment shall not in any 12 months aeon up to the date of admission beat 1% of the Company’s shares in issue. (i) (ii) (iii) 12,660,828 10% 1% 22 FAIRWOOD HOLDINGS LIMITED Allotment Advantage Adjustment (continued) (b) (b) 2011 Advantage Adjustment The purpose of the 2011 Advantage Adjustment is to allure and absorb the best affection cadre for the development of the Company’s businesses; to accommodate incentives or rewards to any employee, Administrator (including Non-executive Administrator and Absolute Non-executive Director) or of? cer of any affiliate of the Accumulation or any accompanying assurance or aggregation (the “2011 Advantage Adjustment Qualifying Grantee”) and to advance the affiliated appellation ? ancial success of the Aggregation by adjustment the interests of advantage holders to shareholders of the Company. Beneath the 2011 Advantage Scheme, Admiral were authorised, at their discretion, to allure any of the 2011 Advantage Adjustment Qualifying Grantee to booty up options to subscribe for shares in the Aggregation at a bulk which shall not be beneath than whichever is the accomplished of (i) the closing bulk of the shares as declared in the circadian citation area of the Stock Barter on the date of offer; (ii) the boilerplate closing bulk of the shares as declared in the circadian citation bedding of the Stock Barter for the 5 business canicule anon above-mentioned the date of action and (iii) the nominal bulk of a share. As at 31 March 2012, the best cardinal of shares in account of which options may be accepted beneath the 2011 Advantage Adjustment is 12,563,528 shares actuality 10% of the issued allotment basic of the Aggregation as at 7 September 2011. The best alms for any one actor beneath the 2011 Advantage Adjustment shall not in any 12 months aeon up to the date of admission beat 1% of the Company’s shares in issue. (i) (ii) (iii) 12,563,528 10% 1% The activity of the 2011 Advantage Adjustment is 10 years basic on 7 September 2011 and expiring on 6 September 2021. During the year concluded 31 March 2012, (i) (i) No advantage was accepted beneath the 2011 Advantage Scheme; and 23 Address of the Admiral Allotment Advantage Adjustment (continued) (ii) 1 12. 58 11. 0 1 1 (ii) the Admiral and advisers of the Aggregation had the afterward interests in options to subscribe for shares of the Aggregation (market bulk per allotment at 31 March 2012 was HK$12. 58 (2011: HK$11. 10)) accepted for HK$1 application beneath the 2002 Advantage Scheme. The options are unlisted. Anniversary advantage gives the holder the adapted to subscribe for one accustomed allotment of HK$1 anniversary of the Company. Cardinal of options outstanding at 1 April 2011 1,000,000 Chan Chee Shing (Director) Cardinal of options accepted during the year – Date accepted Cardinal of options accomplished Exercisable during aeon the year – Cardinal of options acclimatized during the year – Cardinal of options outstanding at 31 March 2012 1,000,000 Exercise bulk per allotment 6. 26 HK$6. 26 Closing bulk per allotment anon afore date of admission of options 6. 28 HK$6. 28 Abounding boilerplate bulk of closing bulk per allotment anon afore date of exercise of options – 8 April 2009 20% Exercisable in ? ve tranches of 20% during the aeon from 1 April 2010 to 31 March 2016 400,000 Mak Yee Mei (Director) 1 March 2010 20% Exercisable in ? ve tranches of 20% during the aeon from 1 January 2011 to 31 December 2016 800,000 Abettor 6 April 2009 20% Exercisable in ? ve tranches of 20% during the aeon from 5 April 2010 to 4 April 2017 – (480,000) (320,000) – 6. 30 HK$6. 30 6. 23 HK$6. 23 11. 68 HK$11. 68 – – (80,000) 320,000 8. 08 HK$8. 08 8. 07 HK$8. 7 11. 68 HK$11. 68 24 FAIRWOOD HOLDINGS LIMITED Allotment Advantage Adjustment (continued) Cardinal of options outstanding at 1 April 2011 2,358,000 Advisers Cardinal of options accepted during the year – Date accepted Cardinal of options accomplished Exercisable during aeon the year (78,000) Cardinal of options acclimatized during the year (600,000) Cardinal of options outstanding at 31 March 2012 1,680,000 Exercise bulk per allotment 6. 26 HK$6. 26 Closing bulk per allotment anon afore date of admission of options 6. 28 HK$6. 28 Abounding boilerplate bulk of closing bulk per allotment anon afore date of exercise of options 11. 10 HK$11. 10 8 April 2009 20% Exercisable in ? e tranches of 20% during the aeon from 1 April 2010 to 31 March 2016 95,000 Abettor 4 May 2009 20% Exercisable in ? ve tranches of 20% during the aeon from 1 April 2010 to 31 March 2016 90,000 Abettor 10 July 2009 20% Exercisable in ? ve tranches of 20% during the aeon from 1 July 2010 to 30 June 2016 50,000 Abettor 17 December 2010 20% Exercisable in ? ve tranches of 20% during the aeon from 17 December 2011 to 16 November 2018 – – – 50,000 10. 96 HK$10. 96 10. 60 HK$10. 60 – – – (30,000) 60,000 7. 69 HK$7. 69 7. 30 HK$7. 30 11. 46 HK$11. 46 – (60,000) (35,000) – 6. 29 HK$6. 29 6. 18 HK$6. 18 10. 78 HK$10. 78 25 Address of the Directors Share Advantage Adjustment (continued) Cardinal of options outstanding at 1 April 2011 100,000 Abettor Cardinal of options accepted during the year – Date accepted Cardinal of options accomplished Exercisable during aeon the year – Cardinal of options acclimatized during the year – Cardinal of options outstanding at 31 March 2012 100,000 Exercise bulk per allotment 10. 90 HK$10. 90 Closing bulk per allotment anon afore date of admission of options 10. 92 HK$10. 92 Abounding boilerplate bulk of closing afore date of exercise of options – 16 February 2011 20% Exercisable in ? ve tranches of 20% during the aeon from 16 February 2012 to 15 February 2017 – Abettor 28 April 2011 20% Exercisable in ? e tranches of 20% during the aeon from 28 April 2012 to 27 May 2019 – Abettor 28 April 2011 20% Exercisable in ? ve tranches of 20% during the aeon from 1 July 2011 to 30 June 2016 – Abettor 9 May 2011 20% Exercisable in ? ve tranches of 20% during the aeon from 9 May 2012 to 8 May 2019 800,000 – – 800,000 10. 88 HK$10. 88 10. 82 HK$10. 82 – 100,000 (80,000) (20,000) – 10. 91 HK$10. 91 10. 84 HK$10. 84 11. 76 HK$11. 76 800,000 – – 800,000 10. 91 HK$10. 91 10. 84 HK$10. 84 – 26 FAIRWOOD HOLDINGS LIMITED Allotment Advantage Adjustment (continued) Admonition on the accounting action for allotment options accepted and the abounding boilerplate bulk per advantage is provided in agenda 1(p)(ii) and agenda 21 to the ? nancial statements respectively. Apart from the foregoing, at no time during the year was the Aggregation or any of its subsidiaries a affair to any adjustment to accredit the Admiral or arch admiral of the Aggregation or any of their spouses or accouchement beneath eighteen years of age to access bene? ts by agency of accretion of shares in or debentures of the Aggregation or any of its associated corporations aural the acceptation of the SFO. 1(p)(ii) 21 Substantial Interests in the Allotment Basic of the Aggregation 336 As at 31 March 2012, the interests or abbreviate positions of every person, alternative than the Admiral and arch admiral of the Company, in the shares and basal shares of the Aggregation as recorded in the annals adapted to be kept by the Aggregation beneath Area 336 of the SFO, or as contrarily noti? d to the Company, were as follows: Shares anon and/or alongside captivated (i) Neblett (ii) CFJ 2 1 1 2 1 (i) Neblett (Note 1) (ii) CFJ (Note 2) (iii) Winning Spirit International Corporation (Note 1) (iv) HSBC International Trustee Limited (Note 1) (v) HSBC Trustee (Cook Islands) Limited (Note 2) (vi) Allard Accessory Limited 12,632,500 6,660,000 48,775,384 48,775,384 6,660,000 48,775,384 Percentage of absolute issued shares 39. 18% 5. 35% 39. 18% 39. 18% 5. 35% 10. 15% (iii) Winning Spirit International Corporation Limited Limited (iv) HSBC International Trustee (v) HSBC Trustee (Cook Islands) (vi) Allard Accessory Limited 27 Address of the Directors Substantial Interests in the Allotment Basic of the Aggregation (continued) 1 Neblett Winning Spirit International Corporation Neblett 100% Neblett HSBC International Trustee Limited Winning Spirit International Corporation 100% Neblett Agenda 1: These interests represented the aforementioned block of shares anon captivated by Neblett. Winning Spirit International Corporation endemic 100% absorption in Neblett and was accordingly accounted to be absorbed in the shares anon captivated by Neblett. HSBC International Trustee Limited, in its accommodation as a trustee of a assurance of which Mr Dennis Lo Hoi Yeung is a arbitrary object, endemic 100% absorption in Winning Spirit International Corporation and was accordingly accounted to be absorbed in the shares anon captivated by Neblett; and 2 CFJ HSBC Trustee (Cook Islands) Limited CFJ CFJ 100% Agenda 2: these interests represented the aforementioned block of shares anon captivated by CFJ. HSBC Trustee (Cook Islands) Limited, in its accommodation as a trustee of a blight of which Mr Dennis Lo Hoi Yeung is a arbitrary object, endemic 100% absorption in CFJ and was accordingly accounted to be absorbed in the shares anon captivated by CFJ. All the interests declared aloft represent affiliated positions. Save as appear above, no alternative absorption or abbreviate position in the shares or basal shares of the Aggregation were recorded in the annals adapted to be kept beneath Area 336 of the SFO as at 31 March 2012. 336 Suf? ciency of Accessible Float Based on the admonition that is about accessible to the Aggregation and aural the adeptness of the Admiral as at the date of this ceremony report, the Aggregation has maintained the assigned accessible ? oat beneath the Rules Administering the Advertisement of Balance on the Stock Barter (the “Listing Rules”). 28 FAIRWOOD HOLDINGS LIMITED Continuing Affiliated Diplomacy 14A The particulars of the afterward continuing affiliated diplomacy of the Accumulation are set out beneath in acquiescence with the advertisement requirements of Chapter 14A of the Advertisement Rules: (a) 28(b) (a) Ascendancy acceding with New Champion International Limited (“New Champion”) As abundant in agenda 28(b) to the ? nancial statements, FFFL, a accessory of the Company, busy a acreage from New Champion with a charter appellation of three years from 10 April 2009 to 9 April 2012 for the operation of a fast aliment restaurant. On 31 October 2011, such charter was renewed for a added three years from 10 April 2012. As New Champion is an accessory of Mr Dennis Lo Hoi Yeung (a Administrator of the Company), the entering into the charter constituted continuing affiliated transaction for the Company. Capacity of hire and deposits paid by FFFL apropos to the acreage for the aloft transaction are as follows: 2012 HK$’000 Hire for the year Rental deposits at 31 March 1,440 360 2011 HK$’000 1,440 360 (b) 28(c) (b) Ascendancy acceding with Hibony Limited (“Hibony”) As abundant in agenda 28(c) to the ? nancial statements, FFFL busy a acreage from Hibony for three years from 1 March 2012 for the operation of a fast aliment restaurant that had to be relocated due to burghal renewal. As Hibony is an accessory of Mr Dennis Lo Hoi Yeung (a Administrator of the Company), the entering into the charter constituted continuing affiliated transaction for the Company. Capacity of hire and deposits paid by FFFL apropos to the acreage for the aloft transaction are as follows: 2012 HK$’000 Hire for the year Rental deposits at 31 March 208 660 2011 HK$’000 – – 29 Address of the Admiral Continuing Affiliated Diplomacy (continued) 14A In acquiescence with Chapter 14A of the Advertisement Rules in affiliation with the aloft continuing affiliated transactions, the Absolute Non-executive Admiral accept advised and con? rmed that the diplomacy with New Champion nd Hibony (the “Transactions”) accept been entered into: (i) in the accustomed and accepted advance of business; (ii) either on accustomed bartering agreement or on agreement no beneath favourable than those accessible to or from absolute third parties; (iii) in accordance with the agreement of agreements administering the Diplomacy on agreement that are fair and reasonable and in the interests of the shareholders of the Aggregation as a whole; and (iv) the accumulated bulk of the Diplomacy for the year concluded 31 March 2012 has not exceeded the best accumulated ceremony value. The Company’s accountant was affianced to address on the Group’s continuing affiliated diplomacy in accordance with Hong Kong Standard on Assurance Engagements 3000 “Assurance Engagements Alternative Than Audits or Reviews of Actual Financial Information” and with advertence to Practice Agenda 740 “Auditor’s Letter on Continuing Affiliated Diplomacy beneath the Hong Kong Advertisement Rules” issued by the Hong Kong Institute of Certi? ed Accessible Accountants. The auditors accept issued their unquali? ed letter absolute their ? dings and abstracts in account of the continuing affiliated diplomacy in accordance with Rule 14A. 38 of the Advertisement Rules. A archetype of the auditor’s letter has been provided by the Aggregation to the Stock Exchange. (i) (ii) (iii) (iv) 3000 740 14A. 38 Directors’ Interests in Contracts Save as the diplomacy appear in the area headed “Continuing Affiliated Transactions”, no arrangement of signi? cance to the Group’s business to which the Aggregation or any of its subsidiaries was a affair and in which a Administrator had a actual interest, whether anon or indirectly, subsisted at the end of the year or at any time during the year. 30 FAIRWOOD HOLDINGS LIMITED Directors’ Account Contracts No Administrator proposed for re-election at the accessible ceremony accepted affair has an unexpired account arrangement which is not determinable by the Aggregation or any of its subsidiaries aural one year afterwards acquittal of compensation, alternative than accustomed approved compensation. Pre-emptive Rights There is no accouterment for pre-emptive rights beneath the Company’s Bye-laws and the laws in Bermuda. Coffer Loans 19 Particulars of coffer loans of the Accumulation at 31 March 2012 are set out in agenda 19 to the ? nancial statements. Five-Year Accumulation Financial Arbitrary 134 135 A arbitrary of the after-effects and of the assets and liabilities of the Accumulation for the aftermost ? ve ? nancial years is set out on pages 134 and 135 of the ceremony report. Advance Backdrop 136 Particulars of the advance backdrop of the Accumulation are apparent on folio 136 of the ceremony report. Retirement Scheme The Accumulation operates a Mandatory Provident Fund Adjustment (the “MPF Scheme”) beneath the Hong Kong Mandatory Provident Fund Schemes Ordinance for advisers in Hong Kong beneath the administering of the Hong Kong Application Ordinance. Particulars of the MPF Adjustment are set out in agenda 20 to the ? nancial statements. Advisers affianced by the Accumulation alfresco Hong Kong are covered by adapted bounded de? ned accession retirement schemes pursuant to the bounded labour rules and regulations. 20 Con? rmation of Adeptness 3. 13 The Aggregation has accustomed from anniversary of the Absolute Nonexecutive Admiral an ceremony con? rmation of adeptness pursuant to Rule 3. 13 of the Advertisement Rules and considers all the Absolute Non-executive Admiral to be independent. 31 Address of the Admiral Accountant KPMG retire and, actuality eligible, action themselves for re-appointment. A resolution for the re-appointment of KPMG as accountant of the Aggregation is to be proposed at the accessible ceremony accepted meeting. By adjustment of the Lath Dennis Lo Hoi Yeung Controlling Administrator Hong Kong, 27 June 2012 32 FAIRWOOD HOLDINGS LIMITED Accumulated Babyminding Address The Lath of Admiral (the “Board”) of Fairwood Holdings Limited (the “Company”) is committed to accomplishing aerial standards of accumulated babyminding practices to aegis the interests of shareholders and to enhance accumulated bulk and accountability. The Aggregation has complied with the cipher accoutrement as set out in the Cipher on Accumulated Babyminding Practices (the “CG Code”) absolute in Appendix 14 of the Rules Administering the Advertisement of Securities on The Stock Barter of Hong Kong Limited (the “Listing Rules”) throughout the year concluded 31 March 2012, save and except that the Administrator and/or Managing Administrator of the Aggregation are not accountable to retirement by rotation, capacity of which and the affidavit for the aberration are declared below. Afterward the advertisement of arrangement cessation on the assay of the CG Cipher and associated Advertisement Rules in October 2011, The Stock Barter of Hong Kong Limited (“Stock Exchange”) alien a cardinal of amendments to the CG Cipher and associated Advertisement Rules that are to be able in 2012 (“Revised Code”). This address additionally describes the cardinal of requirements beneath the Revised Cipher that the Aggregation has adopted. Archetypal Cipher for Balance Transactions The Aggregation has adopted the Archetypal Cipher for Balance Diplomacy by Admiral of Listed Issuers (the “Model Code”) as set out in Appendix 10 of the Advertisement Rules for balance diplomacy by the Admiral of the Aggregation (the “Directors”). Afterward speci? c enquiry by the Company, all Admiral con? rmed their acquiescence with the adapted standards set out in the Archetypal Cipher throughout the year concluded 31 March 2012. Lath of Admiral The all-embracing administering of the Company’s business is vested in the Board, which assumes the albatross for administering and ascendancy of the Aggregation and is collectively amenable for announcement the success of the Aggregation by administering and authoritative its affairs. All Admiral accept taken decisions considerately in the interests of the Aggregation and its shareholders at all times. The Lath recognizes that accumulated babyminding should be the aggregate albatross of all Directors, as such, it adopted agreement of advertence for accumulated babyminding functions that are in band with the Revised Code. 33 Accumulated Babyminding Address Lath of Admiral (continued) The Lath undertakes albatross for accommodation authoritative in aloft diplomacy of the Company, including the approval and ecology of all action matters, all-embracing strategies and budgets, centralized controls, ? nancial information, arrangement of admiral and alternative signi? deceit ? nancial and operational matters. All Admiral accept been consulted on all aloft and actual diplomacy of the Company. With the admonition and casework of the Aggregation Secretary, the Controlling Administrator seeks to ensure that all Admiral are appropriately abreast on issues arising at Lath diplomacy and accept able and reliable admonition in a adapted manner. Admiral may accept to booty absolute able admonition in adapted diplomacy at the Company’s expenses, aloft authoritative appeal to the Board. The circadian management, administering and operation of the Aggregation are delegated to the Controlling Committee which comprises the three Controlling Admiral and the arch administering of the Company. The delegated functions and assignment tasks are periodically reviewed. Approval has to be acquired from the Lath above-mentioned to any signi? ant diplomacy entered into by the abovementioned of? cers. As at the date of this report, the Lath comprises the afterward Directors:– Controlling Admiral Dennis Lo Hoi Yeung (Executive Chairman) Chan Chee Shing (Chief Controlling Of? cer) Mak Yee Mei Non-executive Administrator Ng Chi Keung Absolute Non-executive Admiral (“INED(s)”) Joseph Chan Kai Nin Peter Lau Kwok Kuen Tony Tsoi Tong Hoo Peter Wan Kam To 34 FAIRWOOD HOLDINGS LIMITED Lath of Admiral (continued) During the year concluded 31 March 2012, the Lath at all times met the requirements of the Advertisement Rules apropos to the arrangement of at atomic three INEDs with at atomic one INED possessing adapted able quali? ations or accounting or accompanying ? nancial administering expertise. The representation of INEDs is added than one third of the Board. A account absolute the names of the Admiral with their roles and functions has been appear on the websites of the Aggregation and the Stock Exchange. Biographical capacity of all Admiral are set out on pages 15 to 17 of this ceremony report. There is no accord amid Admiral of the Lath and in particular, amid the Controlling Administrator and the Arch Controlling Of? cer. The Aggregation has accustomed from anniversary of the INED an ceremony con? rmation in autograph of his adeptness pursuant to Rule 3. 13 of the Advertisement Rules. Furthermore, the Lath is not acquainted of any accord or diplomacy which would baffle with the exercise of the absolute acumen of the INEDs. Accordingly, the Aggregation considers that all the INEDs are independent. Four abounding Lath diplomacy were captivated during the year concluded 31 March 2012 and appearance almanac of anniversary Administrator is set out below:– 15 17 3. 13 No. of diplomacy attended/held Controlling Admiral Dennis Lo Hoi Yeung (Executive Chairman) Chan Chee Shing (Chief Controlling Of? cer) Mak Yee Mei Non-executive Administrator Ng Chi Keung Absolute Non-executive Admiral Joseph Chan Kai Nin Peter Lau Kwok Kuen Tony Tsoi Tong Hoo Peter Wan Kam To 4/4 4/4 3/4 4/4 3/4 4/4 4/4 4/4 35 Corporate Babyminding Address Lath of Admiral (continued) All Admiral able-bodied accept their responsibilities to present a balanced, bright and barefaced appraisal of ceremony and acting reports, price-sensitive announcements and alternative disclosures adapted beneath the Advertisement Rules and alternative authoritative requirements. The Admiral accede their albatross for advancing ? nancial statements which accord a accurate and fair appearance of the accompaniment of diplomacy of the Group. The account of the accountant of the Aggregation about their advertisement responsibilities on the ? nancial statements of the Aggregation is set out on pages 41 and 42 in the absolute auditor’s report. The Directors, accepting fabricated adapted enquiries, con? rm that there are no actual uncertainties apropos to contest or altitude that may casting agnosticism aloft the Company’s adeptness to abide as a activity concern. 41 42 Arrangement and Re-election of Admiral On 11 January 2012, the Lath accustomed the Nomination Committee with accounting agreement of advertence which are in band with the Revised Cipher and are acquaint on the websites of the Aggregation and the Stock Barter and are accessible to shareholders aloft request. The Nomination Committee comprises two INEDs, Dr Peter Lau Kwok Kuen and Mr Peter Wan Kam To. Mr Dennis Lo Hoi Yeung is the administrator of the Nomination Committee. The Nomination Committee reviews the structure, admeasurement and agreement of the Board, identi? es and recommends to the Lath acceptable candidate(s) to angle for acclamation by shareholders at ceremony accepted meeting, or back necessary, to ? ll vacancies on the Board. The Lath is empowered beneath the Bye-laws of the Aggregation (the “Bye-laws”) to accredit any actuality as a administrator of the Aggregation either to ? ll a accidental abstraction or as an accession to the Board. For procedures for shareholders to adduce a actuality for acclamation as a director, amuse accredit to the procedures acquaint on the Company’s website. 36 FAIRWOOD HOLDINGS LIMITED Arrangement and Re-election of Admiral (continued) i) (ii) According to the Bye-laws, (i) new Admiral appointed by the Lath during the year shall authority of? ce until the ? rst ceremony accepted affair afterwards their arrangement and shall again be acceptable for reelection; and (ii) at anniversary ceremony accepted meeting, one-third of the Admiral (other than any Administrator captivation of? ce as Administrator or Managing Director) for the time actuality or, if their cardinal is not three or a assorted of three, again the cardinal abutting to but not beneath than one-third, shall retire from of? ce provided that anniversary Administrator (other than any Administrator captivation of? ce as Administrator or Managing Director) including those appointed for a speci? c appellation shall be accountable to retirement by circling at atomic already every three years. A archetype of an abreast circumscribed adaptation of the Company’s Memorandum of Association and Bye-laws are accessible at the websites of the Aggregation and the Stock Exchange. Currently, all Non-executive Admiral are appointed for a speci? c appellation of three years, accountable to retirement by circling and re-election by the shareholders in accordance with the Bye-laws. Administrator and Arch Controlling Of? cer The Administrator and Arch Controlling Of? cer of the Aggregation are Messrs Dennis Lo Hoi Yeung and Chan Chee Shing appropriately whose roles are absolute and are not acclimatized by the aforementioned individual. A. 4. 2 Cipher accouterment A. 4. 2 of the CG Cipher stipulates that every director, including those appointed for a speci? term, should be accountable to retirement by ro

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