FAIRWOOD HOLDINGS LIMITED (Incorporated in Bermuda with Limited Liability) (Stock Code: 52)

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. FAIRWOOD HOLDINGS LIMITED (Incorporated in Bermuda with limited liability) (Stock Code: 52) ANNUAL RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 31 MARCH 2018 HIGHLIGHTS • Profit for the year increased by 5.3% from HK$205.3 million to HK$216.1 million • Revenue was HK$2,840.6 million (2017: HK$2,580.9 million), increased by 10.1% • Return on average equity1 was 29.2% (2017: 29.5%) • Basic earnings per share were HK169.16 cents (2017: HK161.43 cents) • Final dividend of HK105.0 cents per share was proposed, representing a total dividend per share for the year of HK142.0 cents and a payout ratio of approximately 84% Note 1: Return on average equity is defined as profit attributable to equity shareholders of the Company against the average total equity at the beginning and the end of the year – 1 – ANNUAL RESULTS The Board of Directors (the “Board”) of Fairwood Holdings Limited (the “Company”) is pleased to announce the consolidated results of the Company and its subsidiaries (collectively referred to as the “Group”) for the year ended 31 March 2018, together with the comparative figures for the year ended 31 March 2017, as follows: CONSOLIDATED STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 31 MARCH 2018 2018 2017 Note HK$’000 HK$’000 Revenue 3 2,840,571 2,580,904 Cost of sales (2,434,701) (2,181,429) Gross profit 405,870 399,475 Other revenue 4 7,377 7,641 Other net gain/(loss) 4 10,778 (9,209) Selling expenses (31,227) (24,453) Administrative expenses (133,947) (121,533) Net impairment losses on property, plant and equipment (8,668) (4,892) Valuation gain on investment properties 4,850 2,510 Profit from operations 255,033 249,539 Finance costs 5(a) (68) (94) Profit before taxation 5 254,965 249,445 Income tax 6 (38,888) (44,164) Profit for the year attributable to equity shareholders of the Company 216,077 205,281 Earnings per share 8 Basic HK169.16 cents HK161.43 cents Diluted HK167.11 cents HK159.11 cents – 2 – CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2018 2018 2017 HK$’000 HK$’000 Profit for the year attributable to equity shareholders of the Company 216,077 205,281 Other comprehensive income for the year: Item that may be reclassified subsequently to profit or loss: – Exchange differences on translation of financial statements of subsidiaries in Mainland China 3,616 (2,280) Total comprehensive income for the year attributable to equity shareholders of the Company 219,693 203,001 – 3 – CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 MARCH 2018 At At 31 March 31 March 2018 2017 Note HK$’000 HK$’000 Non-current assets Investment properties 46,030 41,180 Other property, plant and equipment 493,838 453,715 Interests in leasehold land held for own use under operating leases 6,192 6,404 546,060 501,299 Goodwill 1,001 1,001 Rental deposits paid 71,602 69,089 Other financial assets 9 7,785 7,885 Deferred tax assets 107 145 626,555 579,419 Current assets Inventories 40,500 41,672 Trade and other receivables 10 87,747 79,182 Other financial assets 9 16,246 1,132 Current tax recoverable 67 – Bank deposits and cash 520,597 502,979 665,157 624,965 Current liabilities Trade and other payables 11 430,890 393,514 Bank loan 1,720 1,720 Current tax payable 10,491 9,370 Provisions 12 11,774 12,642 454,875 417,246 Net current assets 210,282 207,719 Total assets less current liabilities 836,837 787,138 – 4 – At At 31 March 31 March 2018 2017 Note HK$’000 HK$’000 Non-current liabilities Bank loan 143 1,863 Deferred tax liabilities 24,614 25,477 Rental deposits received 2,165 1,310 Provisions 12 46,809 43,196 73,731 71,846 Net assets 763,106 715,292 Capital and reserves Share capital 127,793 127,164 Reserves 635,313 588,128 Total equity 763,106 715,292 – 5 – Notes: 1 BASIS OF PREPARATION The annual results set out in the announcement are extracted from the Group’s financial statements for the year ended 31 March 2018. The Group’s financial statements have been prepared in accordance with all applicable Hong Kong Financial Reporting Standards (“HKFRSs”), which collective term includes all applicable individual Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards (“HKASs”) and Interpretations issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”), accounting principles generally accepted in Hong Kong and the disclosure requirements of the Hong Kong Companies Ordinance. The Group’s financial statements also comply with the applicable disclosure provisions of the Rules Governing the Listing of Securities (the “Listing Rules”) on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”). 2 CHANGES IN ACCOUNTING POLICIES The HKICPA has issued several amendments to HKFRSs that are first effective for the current accounting period of the Group. None of these developments impact on the accounting policies of the group. However, additional disclosure has been included in the Group’s financial statements to satisfy the new disclosure requirements introduced by the amendments to HKAS 7, Statement of cash flows: Disclosure initiative, which require entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes. The Group has not applied any new standard or interpretation that is not yet effective for the current accounting period. 3 REVENUE AND SEGMENT REPORTING (a) Revenue The principal activities of the Group are operation of fast food restaurants and property investments. Revenue represents the sales value of food and beverages sold to customers and rental income. An analysis of revenue is as follows: 2018 2017 HK$’000 HK$’000 Sale of food and beverages 2,833,144 2,573,823 Property rental 7,427 7,081 2,840,571 2,580,904 Further details regarding the Group’s principal activities are disclosed below: – 6 – (b) Segment reporting The Group manages its businesses by two divisions, namely Hong Kong restaurants and Mainland China restaurants, which are organised by geographical location. In a manner consistent with the way in which information is reported internally to the Group’s most senior executive management for the purposes of resource allocation and performance assessment, the Group has identified the following two reportable segments. No operating segments have been aggregated to form the following reportable segments. – Hong Kong restaurants: this segment operates restaurants in Hong Kong. – Mainland China restaurants: this segment operates restaurants in Mainland China. Other segments generate profits mainly from leasing of investment properties and include corporate expenses. (i) Segment results For the purposes of assessing segment performance and allocating resources between segments, the Group’s most senior executive management monitors the results to each reportable segment on the following bases: Revenue and expenses are allocated to the reportable segments with reference to revenue generated by those segments and expenses incurred by those segments or which otherwise arise from the depreciation or amortisation of assets attributable to those segments. Performance is measured based on segment profit before taxation. Items not specifically attributable to individual segments are not allocated to the reportable segments. In addition to receiving segment information concerning segment profit, management is provided with segment information concerning revenue (including inter-segment revenue) and cost of sales (including food cost, labour cost, rent and rates and depreciation). The inter-segment transactions were conducted on normal commercial terms and were priced with reference to prevailing market prices and in the ordinary course of business. Segment assets information is not reported to or used by the Group’s most senior executive management. Information regarding the Group’s reportable segments as provided to the Group’s most senior executive management for the purposes of resource allocation and assessment of segment performance for the years ended 31 March 2018 and 2017 is set out below. – 7 – Hong Kong Mainland China restaurants restaurants Other segments Total 2018 2017 2018 2017 2018 2017 2018 2017 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Revenue from external customers 2,702,855 2,464,845 130,289 108,978 7,427 7,081 2,840,571 2,580,904 Inter-segment revenue – – – – 4,793 4,841 4,793 4,841 Reportable segment revenue 2,702,855 2,464,845 130,289 108,978 12,220 11,922 2,845,364 2,585,745 Reportable segment profit 240,974 236,829 8,987 3,145 8,822 11,841 258,783 251,815 Interest income 7,323 7,597 54 44 – – 7,377 7,641 Interest expense on bank loans 68 106 – – – – 68 106 Depreciation and amortisation 93,424 82,541 4,503 3,926 864 880 98,791 87,347 Impairment losses on property, plant and equipment 11,160 4,892 – – – – 11,160 4,892 Reversal of impairment losses on property, plant and equipment 2,492 – – – – – 2,492 – (ii) Reconciliations of reportable segment profit 2018 2017 HK$’000 HK$’000 Profit Reportable segment profit before taxation 258,783 251,815 Change in fair value of other financial liabilities at fair value through profit or loss – 12 Valuation gain on investment properties 4,850 2,510 Net impairment losses on property, plant and equipment (8,668) (4,892) Consolidated profit before taxation 254,965 249,445 – 8 – (iii) Geographic information The following table sets out information about the geographical location of (i) the Group’s revenue from external customers and (ii) the Group’s investment properties, other property, plant and equipment, interests in leasehold land held for own use under operating leases and goodwill (“specified non-current assets”).

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