MS CONCEPT LIMITED

(Incorporated in the Cayman Islands with limited liability)

Stock Code: 8447

SHARE OFFER

Sole Sponsor

Joint Bookrunners and Joint Lead Managers

IMPORTANT

If you are in any doubt about any of the contents of this prospectus, you should obtain independent professional advice.

MS CONCEPT LIMITED

(Incorporated in the Cayman Islands with limited liability)

LISTING ON GEM OF THE STOCK EXCHANGE OF HONG KONG LIMITED BY WAY OF SHARE OFFER

Number of Offer Shares : 250,000,000 Shares (subject to the Offer Size Adjustment Option) Number of Placing Shares : 225,000,000 Shares (subject to reallocation and the Offer Size Adjustment Option) Number of Public Offer Shares : 25,000,000 Shares (subject to reallocation) Offer Price : Not more than HK$0.27 per Offer Share and expected to be not less than HK$0.23 per Offer Share, plus brokerage of 1%, SFC transaction levy of 0.0027% and Stock Exchange trading fee of 0.005% (payable in full on application in Hong Kong dollars and subject to refund) Nominal value : HK$0.01 each Stock code : 8447

Sole Sponsor

Joint Bookrunners and Joint Lead Managers

==> picture [146 x 35] intentionally omitted <==

Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this prospectus, 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 prospectus.

A copy of this prospectus, having attached thereto the documents specified in the section headed ‘‘Documents Delivered to the Registrar of Companies in Hong Kong and Available for Inspection’’ in Appendix V to this prospectus, has been registered with the Registrar of Companies as required by Section 342C of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong). The Registrar of Companies and the Securities and Futures Commission in Hong Kong take no responsibility as to the contents of this prospectus or any of the other documents referred to above.

Prior to making an investment decision, prospective investors should consider carefully all of the information set out in this prospectus, including but not limited to the risk factors set out in the section headed ‘‘Risk Factors’’ in this prospectus.

The Offer Price is expected to be fixed by the Price Determination Agreement to be entered into between the Joint Bookrunners (for themselves and on behalf of the Underwriters) and our Company on the Price Determination Date, which is expected to be on or around Monday, 9 April 2018 or such later date as the Joint Bookrunners (for themselves and on behalf of the Underwriters) and our Company may agree. The Offer Price will not be more than HK$0.27 per Offer Share and is expected to be not less than HK$0.23 per Offer Share. The Joint Bookrunners (for themselves and on behalf of the Underwriters), with the consent of our Company, may reduce the indicative Offer Price range and/or the number of Offer Shares stated in this prospectus at any time prior to the morning of the last day for lodging applications under the Public Offer. If this occurs, notice of reduction of the indicative Offer Price range and/or the number of Offer Shares will be published on the website of the Stock Exchange at www.hkexnews.hk and our Company’s website at www.mrsteak.com.hk. If the Joint Bookrunners (for themselves and on behalf of the Underwriters) and our Company are unable to reach an agreement on the Offer Price on or before the Price Determination Date, the Share Offer will not become unconditional and will lapse immediately. In the case of such event, a notice will be published on the website of the Stock Exchange at www.hkexnews.hk and our Company’s website at www.mrsteak.com.hk.

Prospective investors of the Offer Shares should note that the Sole Sponsor and/or the Joint Bookrunners (for themselves and on behalf of the Underwriters) is entitled, in their sole and absolute discretion, to terminate the Underwriting Agreements with immediate effect by giving notice in writing to us if any of the events set forth under the section headed ‘‘Underwriting — Underwriting arrangement and expenses — Grounds for termination’’ of this prospectus occurs at any time prior to 8:00 a.m. (Hong Kong time) on the Listing Date. Should the Sole Sponsor and/or the Joint Managers (for themselves and on behalf of the Public Offer Underwriters) terminate the Public Offer Underwriting Agreement, the Share Offer will not proceed and will lapse. Further details of these termination provisions are set out in the section headed ‘‘Underwriting’’ of this prospectus. It is important that prospective investors refer to that section for further details.

29 March 2018

CHARACTERISTICS OF GEM

GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration.

Given that the companies listed on GEM are generally small and mid-sized companies, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM.

The principal means of information dissemination on GEM is publication on the internet website operated by the Stock Exchange. Listed companies are not generally required to issue paid announcements in gazetted newspaper. Accordingly, prospective investors should note that they need to have access to the website of the Stock Exchange at www.hkexnews.hk in order to obtain up-to-date information on companies listed on GEM.

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EXPECTED TIMETABLE

If there is any change in the following expected timetable of the Share Offer, we will issue an announcement in Hong Kong to be posted on the website of our Company at www.mrsteak.com.hk and the website of the Stock Exchange at www.hkexnews.hk.

Date[(Note][1)] Public Offer commences and WHITE and YELLOW Application Forms available from. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Thursday, 29 March 2018 Application lists of Public Offer open[(Note][2)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11:45 a.m. on Friday, 6 April 2018 Latest time for lodging WHITE and YELLOW Application Forms . . . . . . . . . . . . . . . . . . . 12:00 noon on Friday, 6 April 2018 Latest time to give electronic application instructions to HKSCC[(Note][3)] . . . . . . . . . . . . . 12:00 noon on Friday, 6 April 2018 Application lists of Public Offer close[(Note][2)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12:00 noon on Friday, 6 April 2018 Expected Price Determination Date on or before[(Note][4)] . . . . . . . . . . . . . . . . . . . . . . Monday, 9 April 2018 Announcement of (i) the final Offer Price; (ii) indications of the levels of interest in the Placing; (iii) the levels of applications of the Public Offer; (iv) the basis of allotment of the Public Offer Shares; and (v) the number of Offer Shares reallocated, if any, between the Public Offer and the Placing to be published on the website of the Stock Exchange at www.hkexnews.hk and our Company’s website at www.mrsteak.com.hk[(Note][5)] on or before. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 13 April 2018 Results of allocations in the Public Offer will be available at www.tricor.com.hk/ipo/result with a ‘‘search by ID’’ function on . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 13 April 2018 Announcement of results of allotment of the Public Offer (with successful applicants’ identification document numbers, where applicable) to be available through a variety of channels as described in the section headed ‘‘How to Apply for Public Offer Shares — 10. Publication of results’’ of this prospectus) on or before. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 13 April 2018 Despatch/collection of share certificates and/or refund cheques on or before[(Notes][6][to][10)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 13 April 2018 Dealings in Shares on GEM to commence at. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Monday, 16 April 2018

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EXPECTED TIMETABLE

Notes:

All dates and times refer to Hong Kong local dates and times, except as otherwise stated.
If there is a ‘‘black’’ rainstorm warning or a tropical cyclone warning signal number 8 or above in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Friday, 6 April 2018, the application lists will not open and close on that day. For further details, please see the section headed ‘‘How to Apply for Public Offer Shares — 9. Effect of bad weather on the opening of the application lists’’ of this prospectus.
Applicants who apply for Public Offer Shares by giving electronic application instructions to HKSCC should refer to the section headed ‘‘How to Apply for Public Offer Shares — 5. Applying by giving electronic application instructions to HKSCC via CCASS’’ of this prospectus.
Please note that the Price Determination Date, being the date on which the Offer Price is to be determined, is expected to be on or before Monday, 9 April 2018. If, for any reason, the Offer Price is not agreed between our Company and the Joint Bookrunners (for themselves and on behalf of the Underwriters) on or before the Price Determination Date or such later date as may be agreed between our Company and the Joint Bookrunners (for themselves and on behalf of the Underwriters), the Share Offer will not become unconditional and will lapse immediately. Notwithstanding that the Offer Price may be less than the maximum Offer Price of HK$0.27 per Offer Share, applicants must pay the maximum Offer Price of HK$0.27 per Offer Share at the time of application, plus brokerage of 1%, SFC transaction levy of 0.0027% and Stock Exchange trading fee of 0.005%, but the surplus application monies will be refunded, without interest, as provided in the section headed ‘‘How to Apply for Public Offer Shares’’ of this prospectus.
None of our Company’s website or any of the information contained in our Company’s website forms part of this prospectus.
Share certificates for the Offer Shares are expected to be issued on or before Friday, 13 April 2018 but will only become valid certificates of title at 8:00 a.m. on Monday, 16 April 2018 provided that (a) the Share Offer has become unconditional in all respects; and (b) none of the Underwriting Agreements has been terminated in accordance with its terms. If the Public Offer does not become unconditional or either of the Underwriting Agreements is terminated, we will make an announcement as soon as possible.
Refund cheques will be issued in respect of wholly or partially unsuccessful applications pursuant to the Public Offer, and in respect of successful applications if the Offer Price as finally determined is less than the price payable on application. Refund by cheque(s) will be made out to you, or if you are joint applicants, to the first-named applicant on your Application Form. Part of your Hong Kong identity card number/passport number, or, if you are joint applicants, part of the Hong Kong identity card number/passport number of the first-named applicant provided by you may be printed on your refund cheque, if any. Such data may also be transferred to a third party for refund purposes. Your banker may require verification of your Hong Kong identity card number/passport number before encashment of your refund cheque, if any. Inaccurate completion of your Hong Kong identity card number/passport number may lead to a delay in encashment of, or may invalidate, your refund cheque.
Applicants for 1,000,000 Public Offer Shares or more on WHITE Application Form(s) may collect their refund cheques (where relevant) and/or share certificates (where relevant) personally from our Hong Kong Branch Share Registrar, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, from 9:00 a.m. to 1:00 p.m. on Friday, 13 April 2018 or any other day as announced by us as the date of despatch/collect of share certificates/refund cheques.

Individuals who are eligible for personal collection must not authorise any other person(s) to make collection on their behalf. Corporate applicants which opt for personal collection must attend by their authorised representative(s) bearing a letter of authorisation from such corporation(s) stamped with the corporation’s chop. Both individuals and authorised representatives (if applicable) must produce, at the time of collection, evidence of identity acceptable to our Hong Kong Branch Share Registrar.

Applicants for 1,000,000 Public Offer Shares or more on YELLOW Application Form(s) may collect their refund cheques, if any, in person but may not collect their share certificates personally, which will be deposited into CCASS for the credit of their designated CCASS Participants’ stock accounts or CCASS Investor Participants’ stock accounts, as appropriate. The procedures for collection of refund cheques for YELLOW Application Form applicants are the same as those for WHITE Application Form applicants.

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EXPECTED TIMETABLE

Uncollected share certificates and refund cheques (if any) will be despatched by ordinary post at the applicant’s own risk to the address specified in the relevant Application Form. For further information, applicants should refer to the section headed ‘‘How to Apply for Public Offer Shares — 13. Despatch/collection of share certificates and refund monies’’ of this prospectus.

For further details of the structure and conditions of the Share Offer, you should refer to the section headed ‘‘Structure and Conditions of the Share Offer’’ of this prospectus.

Share certificates for the Offer Shares will only become valid certificates of title to which they relate at 8:00 a.m. (Hong Kong time) on the Listing Date provided that (i) the Share Offer has become unconditional in all respects; and (ii) the right of termination as described in the section headed ‘‘Underwriting — Underwriting arrangements and expenses — Grounds for termination’’ in this prospectus has not been exercised and has lapsed. Investors who trade our Shares on the basis of publicly available allocation details prior to the receipt of share certificates or prior to the share certificates becoming valid certificates of title do so entirely at their own risk.

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CONTENTS

This prospectus is issued by our Company solely in connection with the Share Offer and does not constitute an offer to sell or a solicitation of an offer to buy any security other than the Offer Shares offered by this prospectus pursuant to the Share Offer. This prospectus may not be used for the purpose of, and does not constitute, an offer to sell or a solicitation of an offer in any other jurisdiction or in any other circumstances.

You should rely only on the information contained in this prospectus to make your investment decision. Our Company, the Sole Sponsor, the Joint Bookrunners and the Joint Lead Managers and the Underwriters, any of their respective directors, advisers, officers, employees, agents or representatives or any other person or party involved in the Share Offer have not authorised anyone to provide you with information that is different from what is contained in this prospectus. Any information or representation not made in this prospectus must not be relied on by you as having been authorised by our Company, the Sole Sponsor, the Joint Bookrunners and the Joint Lead Managers, the Underwriters, any of their respective directors, advisers, officers, employees, agents or representatives or any other person involved in the Share Offer.

	Page
CHARACTERISTICS OF GEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	i
EXPECTED TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	ii
CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	v
SUMMARY AND HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25
FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	26
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	27
WAIVER FROM STRICT COMPLIANCE WITH THE GEM LISTING RULES . . . . . . . . . . .	40
INFORMATION ABOUT THIS PROSPECTUS AND THE SHARE OFFER . . . . . . . . . . . . . . .	41
DIRECTORS AND PARTIES INVOLVED IN THE SHARE OFFER . . . . . . . . . . . . . . . . . . . . .	45
CORPORATE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	48
INDUSTRY OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	50
REGULATORY OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	61
HISTORY, DEVELOPMENT AND REORGANISATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	69

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CONTENTS

	Page
BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	78
CONNECTED TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	131
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . . . .	134
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . .	143
SUBSTANTIAL SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	148
SHARE CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	149
FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	153
FUTURE PLANS AND USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	204
UNDERWRITING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	211
STRUCTURE AND CONDITIONS OF THE SHARE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . .	219
HOW TO APPLY FOR PUBLIC OFFER SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	225
APPENDIX I — ACCOUNTANTS’ REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-1
APPENDIX II — UNAUDITED PRO FORMA FINANCIAL INFORMATION . . . . . . . . . . .	II-1
APPENDIX III — SUMMARY OF THE CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLANDS COMPANY LAW . . . . . . . . . . . . . . . . . . . . . . .	III-1
APPENDIX IV — STATUTORY AND GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . .	IV-1
APPENDIX V — DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES IN HONG KONG AND AVAILABLE
FOR INSPECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	V-1

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SUMMARY AND HIGHLIGHTS

This summary aims to give you an overview of the information contained in this prospectus. As this is a summary, it does not contain all the information that may be important to you. You should read the whole prospectus before you decide to invest in the Offer Shares. There are risks associated with any investment. Some of the particular risks in investing in the Offer Shares are set forth in the section headed ‘‘Risk Factors’’ of this prospectus. You should read that section carefully before you decide to invest in the Offer Shares.

Various expressions used in this summary are defined in the sections headed ‘‘Definitions’’ and ‘‘Glossary’’ in this prospectus.

OVERVIEW

We are a restaurant group operating western and Japanese casual dining restaurants in Hong Kong. We aim to deliver ‘‘affordable luxury’’ dining experience with high quality food, desirable ambience and thoughtful service at affordable prices under different brands. Since the opening of our first restaurant in November 2000, we have been expanding our footprint in Hong Kong gradually through our multi-brand business model. As at the Latest Practicable Date, we owned and operated 13 restaurants in Hong Kong, including six restaurants serving various western cuisine along with our signature steak under our ‘‘Mr. Steak’’ brand, one buffet restaurant serving international cuisine under our ‘‘Mr. Steak — Buffet à la minute’’ brand, three restaurants under our ‘‘Sky Bar’’ brand offering western cuisine along with our signature seafood dishes and a wide selection of wines and cocktails, two western specialty restaurants under our ‘‘Bistro Bloom’’ and ‘‘Bistro Bloom/Marbling’’ brands serving modern and trendy western food along with specialty meat cuts, and one Japanese specialty restaurant under our ‘‘Hana’’ brand serving ‘‘Nabemono’’ — Japanese hot pot dishes such as Sukiyaki, Shabu Shabu and Seiromushi. Our Directors believe that our multi-brand concept and brand recognition would enable our Group to further diversify our customer base with different tastes and preferences across Hong Kong.

The following table sets out the breakdown of our revenue from our restaurant operation by brands for FY2016, FY2017 and the six months ended 30 September 2016 and 30 September 2017:

Mr. Steak (Note 1) Mr. Steak — Buffet à la minute (Note 2) Sky Bar (Note 3) Specialty restaurants (Note 4) Total	FY2016 Total revenue % of total revenue (HK$’000) % 62,092 32.5 58,943 30.8 39,489 20.6 30,879 16.1 191,403 100.0	FY2017 Total revenue % of total revenue (HK$’000) % 86,026 37.0 67,540 29.0 43,225 18.6 35,931 15.4 232,722 100.0	For the six months ended 30 September 2016 2017 Total revenue % of total revenue Total revenue % of total revenue (HK$’000) % (HK$’000) % (unaudited) 40,679 34.9 49,300 38.7 34,349 29.5 35,259 27.7 23,221 19.8 23,419 18.5 18,382 15.8 19,119 15.1 116,631 100.0 127,097 100.0	For the six months ended 30 September 2016 2017 Total revenue % of total revenue Total revenue % of total revenue (HK$’000) % (HK$’000) % (unaudited) 40,679 34.9 49,300 38.7 34,349 29.5 35,259 27.7 23,221 19.8 23,419 18.5 18,382 15.8 19,119 15.1 116,631 100.0 127,097 100.0
				100.0

Notes:

Our restaurants under our ‘‘Mr. Steak’’ brand include MS(ST), MS(KB), MS(TY), MS(KF) and MS(KH).
Our restaurant under our ‘‘Mr. Steak — Buffet à la minute’’ brand refers to MS(Buffet).
Our restaurants under our ‘‘Sky Bar’’ brand include SB(CWB), SB(MK) and SB(YL).
Our specialty restaurants include Hana(CWB), BB(CWB) and BB(MK).

OUR CUSTOMERS AND SUPPLIERS

We target a wide range of customers and substantially all of our customers are retail customers from the general public. As such, there was no single customer that accounted for more than 5% of our total revenue of each of FY2016, FY2017 and the six months ended 30 September 2017. During the Track Record Period, we provide takeaway services for our corporate customers, which contributed less than 2% of our total revenue for the Track Record Period. Please refer to the section headed ‘‘Financial Information’’ in this prospectus for further details. During the Track Record Period, our suppliers mainly consisted of food ingredient suppliers, beverage suppliers and ancillary equipment and utensil suppliers. Our purchasing department maintained a list of approved food ingredients suppliers and beverage suppliers; among those, we had developed a range of three to 17 years of business relationship with our

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SUMMARY AND HIGHLIGHTS

five largest suppliers during the Track Record Period. As at the Latest Practicable Date, we had over 120 approved suppliers of food ingredients and beverages. Our five largest suppliers for the Track Record Period consisted of suppliers which mainly supplied meat, frozen foods, seafood and vegetables. For FY2016, FY2017 and the six months ended 30 September 2017, the total purchases from our five largest suppliers in aggregate amounted to approximately 60.2%, 67.4% and 66.8%, respectively, and the purchases from our largest supplier, Elite, amounted to 46.8%, 54.8% and 46.2%, respectively, of our total purchases for the same periods. In particular, over the years, we purchased and secured stable and high-quality food ingredients from our largest supplier, Elite, which is our connected person and one of the key suppliers of high-quality meat and seafood in Hong Kong as supported by the CIC Report. Please refer to the section headed ‘‘Business — Overview of restaurant operations and management — Suppliers — Our relationship with Elite’’ in this prospectus for further details. For the analysis of our cost of inventories sold and the sensitivity analysis, please refer to the section headed ‘‘Financial Information’’ in this prospectus for further details.

OUR COMPETITIVE STRENGTHS

We believe the following competitive strengths will position us to achieve sustainable growth: (i) we are one of the major market players in the western casual dining restaurants market in Hong Kong with strong brand recognition; (ii) our restaurants are strategically located in prime areas in Hong Kong; (iii) we have a diversified customer base through our multi-brand business model; (iv) we are committed to offering our customers ‘‘affordable luxury’’ dining experience with high quality food, desirable ambience and thoughtful services at affordable prices; (v) we maintain stable and good relationship with our suppliers; and (vi) we have an experienced management team. Please refer to the section headed ‘‘Business — Competitive strengths’’ in this prospectus for further details.

OUR BUSINESS STRATEGIES

To maintain our competitiveness in the restaurant industry and to position our Group to capture a larger market share whilst maintaining our existing customer base, our Group intends to implement the following strategies: (i) continue to expand our restaurant network; (ii) establish a new central kitchen for our restaurants; (iii) enhance and upgrade our existing restaurant facilities; and (iv) enhance our marketing and promotion initiatives. Please refer to the section headed ‘‘Business — Business strategies’’ in the prospectus for further details.

SUMMARY OF FINANCIAL INFORMATION

SUMMARY OF FINANCIAL INFORMATION
Highlights of combined statements of profit or loss	and other	comprehensive income of our Group
			For the six months ended
			30 September
	FY2016	FY2017	2016	2017
	HK$’000	HK$’000	HK$’000	HK$’000
			(unaudited)
Revenue	194,780	234,873	117,625	128,207
Cost of inventories sold	(62,223)	(79,244)	(40,182)	(42,062)
Gross profit	132,557	155,629	77,443	86,145
Staff costs	(55,331)	(65,171)	(31,253)	(34,528)
Rentals and related expenses	(41,573)	(49,802)	(24,227)	(27,211)
Profit before tax	12,669	13,508	9,007	9,987
Profit and total comprehensive income for the year/
period attributable to owners of our Group	10,616	11,312	7,516	8,331

Our revenue increased by approximately HK$40.1 million, or 20.6% from approximately HK$194.8 million for FY2016 to approximately HK$234.9 million for FY2017. The increase in revenue was mainly attributable to the increase in revenue derived from (i) MS(KH) and MS(KB) under ‘‘Mr. Steak’’ brand by approximately HK$23.9 million, which commenced their operation in December 2015 and October 2016, respectively; (ii) MS(Buffet) under ‘‘Mr. Steak — Buffet à la minute’’ brand by approximately HK$8.6 million; and (iii) SB(CWB) and SB(YL) under ‘‘Sky Bar’’ brand by approximately HK$6.6 million. Our revenue increased by approximately HK$10.6 million, or 9.0% from approximately

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SUMMARY AND HIGHLIGHTS

HK$117.6 million for the six months ended 30 September 2016 to approximately HK$128.2 million for the six months ended 30 September 2017. The increase in revenue was mainly attributable to revenue of approximately HK$9.4 million derived by MS(KB) that commenced business in October 2016. Our net profit increased by approximately HK$0.7 million or 6.6% from approximately HK$10.6 million for FY2016 to approximately HK$11.3 million for FY2017; while our net profit increased by approximately HK$0.8 million or 10.7% from approximately HK$7.5 million for the six months ended 30 September 2016 to approximately HK$8.3 million for the six months ended 30 September 2017.

The overall gross profit margin of our Group decreased from approximately 68.1% for FY2016 to approximately 66.2% for FY2017. The decrease was mainly due to the larger revenue contribution by MS(Buffet) during FY2017. Owing to the nature of buffet dining, MS(Buffet) hence normally recorded a lower gross profit margin.

For details, please refer to the section headed ‘‘Financial Information — Period to period comparison of results of operation’’ in this prospectus.

Highlights of combined statements of financial position

			As at
	As at	31 March	30 September
	2016	2017	2017
	HK$’000	HK$’000	HK$’000
Non-current assets	23,938	23,467	21,039
Current assets	28,159	28,754	34,700
Current liabilities	37,827	38,989	40,026
Net current liabilities	9,668	10,235	5,326
Net assets	14,270	13,232	15,713

We recorded net current liabilities of approximately HK$9.7 million, HK$10.2 million, HK$5.3 million and HK$15.4 million as at 31 March 2016, 31 March 2017, 30 September 2017 and 31 January 2018, respectively as a result of classification of loan repayable after more than one year with repayment on demand clauses as current liabilities and our Directors, having taken into account all information that could reasonably be expected to be available, consider that the banks will not exercise their discretion to demand immediate repayment but will allow such borrowings to be repaid in accordance with the scheduled dates set out in the relevant agreements. After adjusting for the abovementioned borrowings, we would have adjusted net current assets of approximately HK$7.3 million, HK$2.2 million and HK$10.8 million as at 31 March 2016, 31 March 2017 and 30 September 2017. We were able to generate positive cash flow from our operations; we have been and will continue to be prudent in monitoring our working capital.

As at 31 January 2018, our Group had unutilised banking facilities of approximately HK$3.9 million. To manage liquidity risk, our Group monitors and maintains a level of cash and bank balances deemed adequate by our management to finance our Group’s operations and mitigate the effects of fluctuations in cash flows. Each of our operating subsidiaries prepares weekly cash flow plans and daily cash flow records for regular review and approval by our executive Directors.

In relation to the bank borrowings, our Group has implemented policy to regularly monitor current and expected liquidity requirements and our compliance with debt covenants, to ensure that we maintain sufficient reserves of cash and adequate committed lines of funding from banks to meet liquidity requirements in the short and longer term.

For further details, please refer to section headed ‘‘Financial Information — Net current liabilities’’ of this prospectus.

– 3 –

SUMMARY AND HIGHLIGHTS

Highlights of combined statement of cashflow

Operating cashflow before working capital changes Net cash generated from operating activities Net cash used in investing activities Net cash used in financing activities Net (decrease)/increase in cash and cash equivalents Cash and bank balances	FY2016 FY2017 HK$’000 HK$’000 18,521 20,118 16,793 22,561 (7,705) (4,149) (10,108) (22,648) (1,020) (4,236) As at 31 March 2016 2017 HK$’000 HK$’000 9,349 5,113	For the six months ended 30 September 2016 2017 HK$’000 HK$’000 (unaudited) 12,128 13,263 11,862 12,350 (599) (770 (11,147) (2,498 116 9,082 As at 30 September 2017 HK$’000 14,195

Our operating cashflow before working capital changes amounted to approximately HK$20.1 million for FY2017, representing an increase of approximately HK$1.6 million, or 8.6%, from approximately HK$18.5 million for FY2016. Such increase was partly attributable to increase in depreciation expense of approximately HK$0.5 million and increase in profit before tax of approximately HK$0.8 million for FY2017 as compared with FY2016. As for the six months ended 30 September 2016 and 30 September 2017, the operating cashflow before working capital changes increased from approximately HK$12.1 million to approximately HK$13.3 million, as a result of increase in profit before tax of approximately HK$1.0 million for the six months ended 30 September 2017.

Our cash and bank balances decreased by approximately HK$4.2 million from approximately HK$9.3 million as at 31 March 2016 to approximately HK$5.1 million as at 31 March 2017, and increased to approximately HK$14.2 million as at 30 September 2017. For further details of our cash flows, please refer to the section headed ‘‘Financial information — Liquidity and capital resources’’ of this prospectus.

Comparable restaurant sales

Comparable restaurant sales for a given fiscal year refer to the revenue of all restaurants qualified as comparable restaurants during that year/period. We define comparable restaurants as restaurants that were operating throughout the periods under comparison. The newly opened and closed restaurants are excluded under comparison. For example, the comparable restaurants for FY2017 are restaurants that were operating throughout both FY2016 and FY2017. For this purpose, we regard restaurants which were temporarily closed for renovation as comparable restaurants.

Number of comparable restaurants Mr. Steak Mr. Steak-Buffet à la Minute Sky Bar Specialty restaurant Total number Revenue of comparable restaurants (HK$’000) Profit before taxation for comparable restaurants (HK$’000) Percentage change of profit before taxation for comparable restaurants	FY2016 3 1 2 2 8 171,799 13,481	FY2017 4 1 3 3 11 222,868 14,192 5.3	For the six months ended 2016 2017 4 5 1 1 3 3 3 3 11 12 116,631 127,097 9,640 10,103 4.8	For the six months ended 2016 2017 4 5 1 1 3 3 3 3 11 12 116,631 127,097 9,640 10,103 4.8
				12
				127,097 10,103 4.8

– 4 –

SUMMARY AND HIGHLIGHTS

The table below sets forth the operating profit/loss of each of our comparable restaurants operated for the year/period indicated:

Mr. Steak — Buffet à la minute MS(Buffet) Mr. Steak MS(ST) MS(TY) MS(KF) MS(KH) MS(KB) Specialty restaurants BB(CWB) BB(MK) Hana(CWB) Sky Bar SB(CWB) SB(MK) SB(YL)	FY2016 HK$’000 6,534 620 2,019 (314) 344 — (1,048) 1,121 (195) (1,060) 4,761 (1,293) 11,489	FY2017 HK$’000 7,194 (11) 2,014 41 426 (491) 562 251 352 (394) 3,979 (873) 13,050	For the six months ended 30 September 2017 HK$’000 4,394 (262) 1,459 178 1,055 900 39 778 198 117 1,281 (299) 9,838

Notes:

(1) Our BB(CWB) was formerly known as ‘‘Mr. Steak’’ which commenced operation in May 2009. We ceased the operation of ‘‘Mr. Steak’’ in August 2015, renovated, rebranded and recommenced business under our self-own brand ‘‘Bistro Boom/Marbling’’ developed by our Group in September 2015. The location of the restaurant has remained unchanged and the style of cuisine served has remained as western cuisine.

(2) Our BB(MK) was formerly known as ‘‘Mr. Steak’’ which commenced operation in December 2004. We ceased the operation of ‘‘Mr. Steak’’ in November 2016, renovated, rebranded and recommenced business under our self-own brand ‘‘Bistro Bloom’’ developed by our Group in December 2016. The location of the restaurant has remained unchanged and the style of cuisine served has remained as western cuisine.

(3) MS(KB) commenced operation in October 2016.

(4) MS(KH) commenced operation in December 2015.

(5) SB(YL) commenced operation in August 2015.

We had five restaurants, namely MS(Buffet), MS(TY), MS(KH), SB(MK) and BB(MK), that recorded positive operating margins throughout FY2016, FY2017 and the six months ended 30 September 2017. Moreover, we had five, four and two restaurants that recorded negative operating margins for FY2016, FY2017 and the six months ended 30 September 2017, respectively, which contributed approximately 28.1%, 19.7% and 9.1% of our revenue from restaurants operations for the respective period during the Track Record Period. Please refer to the section headed ‘‘Business — Operational performance of our restaurants — Loss-making restaurants and measures to maintain our operating margin’’ in this prospectus for the reasons of loss-making and the business strategy on enhancing the performance of loss-making restaurants.

– 5 –

SUMMARY AND HIGHLIGHTS

OPERATIONAL PERFORMANCE OF OUR RESTAURANTS

The table below sets out the operating data of each of our restaurants for FY2016, FY2017 and the six months ended 30 September 2017.

FY2016

		Number of		Average
		operation		spending per			Seat	Operating
	Number of	days		customer per	Average daily	turnover rate		margin (Note
Our restaurants	customer visits	(Note 1)	Total revenue	meal (Note 2)	revenue (Note 3)	per	day (Note 4)	5)
	(approximate)		(approximate)	(approximate)	(approximate)	(approximate)		(approximate)
			(HK$’000)	(HK$)	(HK$’000)		(times)	(%)
Mr. Steak — Buffet à la minute
MS(Buffet)	149,352	366	58,943	395	161		1.7	11.1
Mr. Steak
MS(ST)	54,189	366	12,423	229	34		2.3	5.0
MS(TY)	119,997	366	22,748	190	62		2.3	8.9
MS(KF)	107,121	366	18,240	170	50		2.4	-1.7
MS(KH)	57,784	109	8,681	150	80		3.4	4.0
MS(KB)	—	—	—	—	—		—	—
Specialty restaurants
BB(CWB)	57,023	309	12,502	219	40		2.8	-8.4
BB(MK)	57,527	365	13,377	233	37		2.4	8.4
Hana(CWB)	12,536	196	5,000	399	26		1.4	-3.9
Sky Bar
SB(CWB)	65,252	365	12,133	186	33		1.6	-8.7
SB(MK)	83,015	365	21,433	258	59		1.9	22.2
SB(YL)	27,360	213	5,923	217	28		1.2	-21.8

FY2017

				Average
		Number of		spending per			Seat	Operating
	Number of	operation	Total	customer per	Average daily	turnover rate		margin
Our restaurants	customer visits	days	Revenue	meal (Note 2)	revenue (Note 3)	per	day (Note 4)	(Note 5)
	(approximate)		(approximate)	(approximate)	(approximate)	(approximate)		(approximate)
			(HK$’000)	(HK$)	(HK$’000)		(times)	(%)
Mr. Steak — Buffet à la minute
MS(Buffet)	168,887	365	67,540	400	185		2.0	10.7
Mr. Steak
MS(ST)	45,423	365	11,287	248	31		1.9	-0.1
MS(TY)	109,383	365	22,654	207	62		2.1	8.9
MS(KF)	95,916	365	18,518	193	51		2.2	0.2
MS(KH)	205,627	365	23,714	115	65		3.6	1.8
MS(KB)	65,721	178	9,853	150	55		3.3	-5.0
Specialty restaurants
BB(CWB)	76,203	364	16,031	210	44		3.1	3.5
BB(MK)	51,721	363	11,371	220	31		2.2	2.2
Hana(CWB)	18,963	364	8,529	450	23		1.1	4.1
Sky Bar
SB(CWB)	61,148	364	14,566	238	40		1.5	-2.7
SB(MK)	69,614	364	18,525	266	51		1.6	21.5
SB(YL)	58,065	364	10,134	175	28		1.4	-8.6

– 6 –

SUMMARY AND HIGHLIGHTS

Six months ended 30 September 2017

				Average
		Number of		spending per			Seat	Operating
	Number of	operation		customer per	Average daily	turnover rate		margin
Our restaurants	customer visits	days	Total revenue	meal (Note 2)	revenue (Note 3)	per	day (Note 4)	(Note 5)
	(approximate)		(approximate)	(HK$)	(approximate)	(approximate)		(approximate)
			(HK$’000)		(HK$’000)		(times)	(%)
Mr. Steak — Buffet à la minute
MS(Buffet)	85,037	182	35,259	415	194		2.0	12.5
Mr. Steak
MS(ST)	24,203	182	5,529	230	30		2.1	-4.7
MS(TY)	55,765	182	11,170	200	61		2.2	13.1
MS(KF)	52,079	182	9,797	189	54		2.3	1.8
MS(KH)	106,360	182	13,428	126	74		3.8	7.9
MS(KB)	51,719	182	9,376	182	52		2.5	9.6
Specialty restaurants
BB(CWB)	36,315	182	7,952	219	44		3.0	0.5
BB(MK)	32,799	182	7,073	216	39		2.8	11.0
Hana(CWB)	9,583	182	4,094	427	23		1.1	4.8
Sky Bar
SB(CWB)	30,126	182	7,845	259	43		1.5	1.5
SB(MK)	34,534	182	9,486	275	52		1.6	13.5
SB(YL)	36,119	182	6,088	168	33		1.8	-4.9

Notes:

FY2016 consists of 366 days since year 2016 is a leap year.
Average spending per customer per meal is calculated by dividing the total revenue by the total number of customer visits of the relevant restaurant during the period.
Average daily revenue is calculated by dividing the total revenue by the number of operation days of the relevant restaurant during the period.
Seat turnover rate per day is calculated by dividing the number of customer visits by the number of seats and the number of operation days of the relevant restaurant during the period.
Operating margin is calculated by dividing the operating profit for the period by revenue. Operating profit is defined as profit for the period before other income, other revenue and income tax expenses.

The average daily revenue of our buffet restaurant, MS(Buffet), increased by HK$24,000 or 14.9% from approximately HK$161,000 for FY2016 to approximately HK$185,000 for FY2017 with the number of customer visits increased by approximately 13.1% from 149,352 for FY2016 to approximately 168,887 for FY2017 with stable average spending per meal of approximately HK$400 across FY2016 and FY2017, which was mainly due to increase in advertisements made during FY2017 as evidenced by the increase in marketing expenses by approximately HK$0.2 million.

The operating margin of MS(ST) decreased from approximately 5.0% for FY2016 to approximately -0.1% for FY2017 and further decreased to approximately -4.7% for the six months ended 30 September 2017. The decrease in operating margin was due to lack of customer traffic in the location of MS(ST) that led to decrease in revenue. The operating margin of MS(KB) increased from approximately -5.0% for FY2017 to approximately 9.6% for the six months ended 30 September 2017. Such improvement was due to the increase in the average spending per customer per meal and the increase in customer visits, primarily resulting from the combined effect of menu re-engineering and upward menu price adjustments.

– 7 –

SUMMARY AND HIGHLIGHTS

KEY FINANCIAL RATIOS

The table below sets forth certain key financial ratios of our Group for the Track Record Period:

			As at/For the
			six months
	As at	As at	ended
	31 March	31 March	30 September
	2016/FY2016	2017/FY2017	2017
Gross profit margin (%)	68.1	66.2	67.2
Net profit margin (%)	5.4	4.8	6.5
Return on total assets (%) (Note 1)	20.4	21.7	29.8
Return on equity (%) (Note 2)	74.4	85.5	105.7
Interest coverage ratio (times) (Note 3)	19.6	16.9	27.3
Current ratio (times) (Note 4)	0.7	0.7	0.9
Quick ratio (times) (Note 5)	0.7	0.7	0.8
Gearing ratio (%) (Note 6)	211.2	191.0	150.5
Debt to equity ratio (%) (Note 7)	145.7	152.4	60.2

Notes:

(1) For FY2016 and FY2017, the calculation of return on total assets is calculated by dividing net profit after tax for the year by total assets and multiplying the resulting value by 100%. For the six months ended 30 September 2017, the calculation of return on total assets is calculated by dividing net profit after tax before listing expenses for the period by total assets, multiplying by 183 days, and then multiplying the resulting value by 100%.
(2) For FY2016 and FY2017, the calculation of return on equity is calculated by dividing net profit for the year attributable to owners of the Company by equity attributable to owners of the Company and multiplying the resulting value by 100%. For the six months ended 30 September 2017, the calculation of return on equity is calculated by dividing net profit before listing expenses for the period attributable to owners of the Company by equity attributable to owners of the Company, multiplying by 183 days, and then multiplying the resulting value by 100%.
(3) Interest coverage ratio is calculated based on profit for the year/period before interest and tax divided by interest expense for the year/period.
(4) Current ratio is calculated based on the total current assets at the end of the year/period divided by the total current liabilities at the end of the respective year/period.
(5) Quick ratio is calculated based on the total current assets (excluding inventory) at the end of the year/period divided by the total current liabilities of the respective year/period.
(6) Gearing ratio is calculated based on the total debts at the end of the year/period divided by equity attributable to owners of the Company at the end of the year/period. Total debt includes payables incurred not in the ordinary course of business.
(7) Debt-to-equity ratio is calculated based on net debt at the end of the year/period divided by total equity at the end of the year/period and multiplied by 100%. Net debt is defined to include all borrowings net of bank balances and cash.

For details, please refer to the section headed ‘‘Financial Information — Key financial ratios analysis’’ in this prospectus.

COMPETITION

The market for western casual dining restaurants in Hong Kong is highly competitive and fragmented. While the independent western casual dining restaurants are dominant in terms of total number, the leading restaurant groups within such a segment are normally those operating multi-brand or chain restaurants with a large number of outlets. The top five western casual dining restaurants groups in Hong Kong accounted for approximately 10.7% of the overall market in terms of revenue generated in FY2017. In FY2017, our Group had a market share of 1.6% in terms of total revenue from our restaurant outlets (excluding the ‘‘Hana’’ Japanese restaurant) in the western casual dining restaurants market in Hong Kong.

Please refer to the section headed ‘‘Industry Overview — Competitive landscape of the western casual dining restaurants market in Hong Kong’’ in this prospectus for further details.

– 8 –

SUMMARY AND HIGHLIGHTS

RECENT DEVELOPMENT

We have leased a premises located on the second floor of East Point City in Tseung Kwan O for our 13[th] restaurant, MS(TKO), which is a ‘‘Mr. Steak’’ restaurant, in September 2017. The lease term for the premises is a fixed term of 4 years and the new restaurant has a leased area of approximately 213.0 sq.m. with a customer seating capacity of approximately 94 seats. MS(TKO) commenced operations in January 2018, and for which, our Group (i) incurred capital expenditure of approximately HK$2.2 million for the renovation works and approximately HK$0.6 million for purchase of kitchen equipment and utensils; and (ii) paid the management and rental deposit in aggregate of approximately HK$1.1 million in November 2017. Based on the combined unaudited management account of our Group for the one month ended 28 February 2018, MS(TKO) has achieved breakeven with net profit of approximately HK$0.3 million; and it is expected that the performance of this restaurant would not have material impact to our Group’s overall financial performance for the year ending 31 March 2018 given its short operating period. Other than MS(TKO), our Group did not have other expansion plan that would incur material capital expenditure subsequent to the Track Record Period for the year ending 31 March 2018.

As at the Latest Practicable Date, we have received indication from the landlord of MS(ST) of its intention to re-brand the shopping mall and therefore we do not plan to renew the lease for this restaurant. Our Group will continue to operate MS(ST) until the expiry of its lease on 14 April 2018. The revenue contributed by MS(ST) to our Group for FY2016, FY2017 and for the six months ended 30 September 2017 were approximately HK$12.4 million, HK$11.3 million and HK$5.5 million, respectively. The operating margin contributed by MS(ST) for FY2016, FY2017 and for the six months ended 30 September 2017 were approximately 5.0%, -0.1% and -4.7%, respectively. Having considered its decreasing revenue contribution and loss-making performance, our Directors are of the view that the closure of MS(ST) will enhance our Group’s overall profitability.

RISK FACTORS

Our Group believes that there are certain risks and uncertainties involved in its operations, some of which are beyond our Group’s control. Our Group has categorised these risks and uncertainties into: (i) risks relating to our business; (ii) risks relating to our industry; and (iii) risks relating to the Share Offer and our Shares. Some of our major risks include:

. We experienced net current liabilities during the Track Record Period
. The lack of suitable locations on commercially viable terms, the increase in rental expenses and the failure to renew existing leases of the leased properties on terms acceptable to us may adversely affect our results of operations
. Elite, our largest supplier and our connected person, accounted for a substantial portion of our purchases
. The western casual dining restaurants market may lose popularity and our financial conditions and future growth may be adversely affected
. Opening new restaurants may result in fluctuations in our financial performance
. We are susceptible to instances of food poisoning, customer complaints and any other negative publicity associated with our restaurants or on food safety in general, in which case the value of our brands may suffer
. Any negative publicity relating to the restaurant industry could adversely impact our brands, business and results of operations
. The restaurant industry is highly competitive

As different investors may have different interpretations and criteria when determining the significance of a risk, you should read the section headed ‘‘Risk Factors’’ in this prospectus in its entirety before you decide to invest in our Shares.

– 9 –

SUMMARY AND HIGHLIGHTS

OUR SHAREHOLDERS

Immediately after completion of the Share Offer and the Capitalisation Issue (without taking into account any Shares which may be allotted and issued upon the exercise of the Offer Size Adjustment Option and any options which may be granted under the Share Option Scheme), Mr. John Kwong, Ms. Ingrid Ip, Ms. Kwong Man Yui, Mr. Joseph Kwong, Ms. Melanie Kwong and Future More, being a group of our Controlling Shareholders acting in concert, will together control the voting right of 750,000,000 Shares, representing 75% of the entire issued share capital of our Company. None of our Controlling Shareholders is interested in any business which is, whether directly or indirectly, in competition with our business in Hong Kong. For details, please refer to the section headed ‘‘Relationship with our Controlling Shareholders’’ in this prospectus.

Elite is a supplier of chilled and frozen meat and seafood and other food supplies in Hong Kong. Since Elite is owned as to 50%, 25% and 25% by Ms. Ingrid Ip, Mr. Joseph Kwong and Ms. Melanie Kwong, respectively, who are our Controlling Shareholders, Elite is a connected person of our Company. We have entered into the Master Supply Agreement in respect of procurement of chilled and frozen meat and seafood and other food supplies from Elite, which shall commence from the Listing Date until 31 March 2020 and will constitute continuing connected transactions for our Group. We have applied to the Stock Exchange for, and the Stock Exchange has granted, a waiver from the strict compliance with the requirements in respect of the relevant non-exempt continuing connected transactions under Chapter 20 of the GEM Listing Rules. The details of such non-exempt continuing connected transactions and the wavier are set out in the section headed ‘‘Connected Transactions’’ of this prospectus.

DIVIDENDS

For FY2016, FY2017 and the six months ended 30 September 2017, certain subsidiaries now comprising our Group paid dividends of approximately HK$9.8 million, HK$12.4 million and HK$5.9 million to their then shareholders, respectively. Our subsidiaries further declared special dividends of HK$1.0 million and HK$8.0 million on 30 October 2017 and 20 November 2017, respectively, which was fully settled in December 2017. Dividends paid in prior periods may not be indicative of future dividend payments. Our Company does not currently have any specific dividend policy. Our Directors are of the view that the amount of any dividends to be declared in the future will depend on, among others, our result of operations, cash flows and financial condition, general business conditions and strategies, our operating and capital requirements, the amount of distributable profits based on the generally accepted accounting principles in Hong Kong and other factors.

For details, please refer to the section headed ‘‘Financial Information — Dividend’’ in this prospectus.

REASONS FOR THE LISTING AND USE OF PROCEEDS

Our Directors estimate that the net proceeds from the Share Offer (after deducting estimated expenses payable by our Group in connection with the Listing, but assuming the Offer Size Adjustment Option is not exercised) will be approximately HK$37.0 million based on the Offer Price of HK$0.25 per Offer Share (being the mid-point of the indicative Offer Price range between HK$0.23 and HK$0.27 per Offer Share). We intend that the proceeds will be applied as follows:

Expanding our restaurant network in strategic locations in Hong Kong Maintaining steady food quality by setting up a central kitchen Enhancing and upgrading our restaurant facilities Strengthening customer relationship and our brand awareness	For the six months ending 30 September 2018 HK$’000 5,000 5,400 1,500 900 12,800	For the six months ending 31 March 2019 HK$’000 11,500 — 500 400 12,400	For the six months ending 30 September 2019 HK$’000 3,500 — 3,000 400 6,900	For the six months ending 31 March 2020 HK$’000 3,500 — — 400 3,900	Total HK$’000 23,500 5,400 5,000 2,100 36,000	Approximate % of net proceeds % 63.5 14.6 13.5 5.7
						97.3

– 10 –

SUMMARY AND HIGHLIGHTS

The remaining HK$1.0 million, approximately 2.7% of the net proceeds, will be used as our Group’s general working capital. For details, please refer to the section headed ‘‘Future Plans and Use of Proceeds’’ in this prospectus.

Our Directors believe that the Listing will provide our Group with financial resources for the execution of our business strategies and plans as stated in the section headed ‘‘Business — Business Strategies’’ and strengthen our competitiveness in the market. Please also refer to the section headed ‘‘Future Plans and Use of Proceeds — Reasons for the Listing’’ for further details on our reasons for the Listing.

LISTING EXPENSES

For FY2016, FY2017 and the six months ended 30 September 2017, we did not incur any listing expenses. Our Group expects that the total listing expenses, which are non-recurring in nature, is estimated to be HK$25.5 million (based on the mid-point of our indicative Offer Price range being HK$0.25 per Offer Share), of which (i) approximately HK$5.6 million and HK$11.1 million are expected to be recognised in the income statement for the year ending 31 March 2018 and 31 March 2019, respectively; and (ii) HK$8.8 million is expected to be recognised as a deduction in equity directly for the year ending 31 March 2019. Accordingly, the financial results of our Group for the year ending 31 March 2018 and 31 March 2019 are expected to be significantly affected by the estimated expenses in relation to the Listing. As a result, it is expected that there will be a significant decrease in net profit for the year ending 31 March 2018 and 31 March 2019.

LEGAL PROCEEDINGS

During the Track Record Period and up to the Latest Practicable Date, we recorded 48 reportable accidents which occurred at workplaces and no employees’ compensation or personal injury claim in respect of these 48 reportable accidents has been filed by the injured persons against our Group. Our Directors take the view that the amount of such potential claims to be borne by our Group in the proceedings shall be covered by the insurance policies maintained by us and the damages, costs and expenses of such claims will be indemnified by the Controlling Shareholders under the Deed of Indemnity. Please refer to the section headed ‘‘Business — Legal proceedings’’ in this prospectus for further details.

NON-COMPLIANCE

During the Track Record Period and up to the Latest Practicable Date, we had the following noncompliance incidents: (i) names/signs of our restaurants, namely MS(ST), BB(MK) and BB(CWB), are different from those stated in the liquor licences contrary to the Dutiable Commodities Ordinance (‘‘Incident I’’); (ii) failure to obtain water pollution control licences for some of our restaurants during the Track Record Period and up to the Latest Practicable Date contrary to the Water Pollution Control Ordinance (‘‘Incident II’’); (iii) provision of food and beverages at times which were not covered by the general restaurant licences contrary to the Food Business Regulations (‘‘Incident III’’); and (iv) selling restricted food without valid restricted food permits contrary to the Food Business Regulations (‘‘Incident IV’’). Our Legal Counsel opines that, in respect of Incident I, II and III, there are no potential liabilities or legal consequences as the prosecutions in respect of all relevant restaurants is time-barred. The maximum penalty arising from Incident IV is HK$10,300, respectively. For details of our noncompliances, please refer to the section headed ‘‘Business — Legal and regulatory compliance — Noncompliance of our Group’’ in this prospectus.

– 11 –

SUMMARY AND HIGHLIGHTS

OFFER STATISTICS

The Share Offer comprises the Public Offer of 25,000,000 Shares initially offered in Hong Kong, and the Placing of 225,000,000 Shares (subject, in each case, to re-allocation and the Offer Size Adjustment Option on the basis as described in the section headed ‘‘Structure and Conditions of the Share Offer’’ in this prospectus).

Offer’’ in this prospectus).
	Based on the	Based on the
	Offer Price of	Offer Price of
	HK$0.23 per	HK$0.27 per
	Offer Share	Offer Share
Market capitalisation (Note 1)	HK$230 million	HK$270 million
Unaudited pro forma adjusted net tangible assets
per Share (Notes 2 and 3)	HK$0.0481	HK$0.0574

Notes:

The calculation of the market capitalisation of the Shares is based on 1,000,000,000 Shares in issue and to be issued immediately after completion of the Share Offer but does not take account of any Shares which may be allotted and issued upon the exercise of the Offer Size Adjustment Option and any options which may be granted under the Share Option Scheme or any Shares which may be allotted and issued or repurchased by our Company pursuant to the issuing mandate and the repurchase mandate.
For the calculation of the unaudited pro forma adjusted combined net tangible asset value per Share attributable to the Shareholders, please refer to the section headed ‘‘Unaudited Pro Forma Financial Information’’ in Appendix II to this prospectus.
The unaudited pro forma adjusted consolidated net tangible assets attributable to the owners of our Company does not take into account the interim dividend of HK$8,950,000 declared on 30 October 2017 and 20 November 2017. Had the interim dividend of HK$8,950,000 declared on 30 October 2017 and 20 November 2017 been taken into account of, the unaudited pro forma adjusted combined net tangible assets attributable to the owners of our Company per Share would have been further adjusted approximately to HK$39,113,000 and HK$0.0391 per Share respectively, based on the Offer Price of HK$0.23 per Share, and approximately to HK$48,412,000 and HK$0.0484 per Share respectively, based on the Offer Price of HK$0.27 per Share.

MATERIAL ADVERSE CHANGE

Save as disclosed in the paragraph headed ‘‘Listing expenses’’ above in this section, our Directors have confirmed that, up to the date of this prospectus, there had been no material adverse change in the financial or trading or prospects of our Group since 30 September 2017, being the date to which our latest audited financial information was prepared, and there had been no event since 30 September 2017 which would materially affect the information shown in the Accountants’ Report set out in Appendix I to this prospectus. We expect that the listing expense, which is non-recurring nature, is estimated to be recognised in the income statement by approximately HK$5.6 million and HK$11.1 million for the year ending 31 March 2018 and 31 March 2019, respectively; as a result, we expect that our Group will record a net loss for the year ending 31 March 2019.

– 12 –

DEFINITIONS

In this prospectus, unless the context otherwise requires, the following expressions have the following meanings.

‘‘Able Leader’’
Able Leader Asia Limited, a company incorporated in Hong Kong on 26 July 2012 and wholly-owned by an Independent Third Party as at the Latest Practicable Date
‘‘Accountants’ Report’’ the accountants’ report of our Group for the Track Record Period, the text of which is set out in Appendix I to this prospectus
‘‘affiliate’’ in relation to a body corporate, any subsidiary undertaking or parent undertaking of such body corporate, and any subsidiary undertaking of any such parent undertaking for the time being
‘‘Active Wisdom’’
Active Wisdom Limited, a company incorporated in Hong Kong on 17 August 1993 and is wholly-owned by Ms. Ingrid Ip and Ms. Kwong Man Yui in equal shares as at the Latest Practicable Date
‘‘Application Form(s)’’ WHITE Application Form(s) and YELLOW Application Form(s) or, where the context so requires, any of them
‘‘Articles of Association’’ or ‘‘Articles’’
the articles of association of our Company conditionally adopted on 23 March 2018 with effect from the Listing Date and as amended from time to time, a summary of which is set out in Appendix III to this prospectus
‘‘associate(s)’’
has the meaning ascribed to it under the GEM Listing Rules
‘‘BB(CWB)’’
a restaurant operated by our Group under the brand name ‘‘Bistro Bloom/Marbling’’ and located at Fashion Walk in Causeway Bay, Hong Kong
‘‘BB(MK)’’
a restaurant operated by our Group under the brand ‘‘Bistro Bloom’’ and located at Langham Place in Mong Kok, Hong Kong
‘‘Board’’ or ‘‘Board of Directors’’
the board of Directors
‘‘Building Authority’’

the Director of Buildings as defined in the Buildings Ordinance

‘‘Buildings Department’’ or ‘‘BD’’ Buildings Department of the Hong Kong Government
‘‘Buildings Ordinance’’

the Buildings Ordinance (Chapter 123 of the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time

‘‘Business Day’’ or ‘‘business day’’ any day (other than Saturday, Sunday or public holiday in Hong Kong) on which banks in Hong Kong are generally open for normal banking business

– 13 –

DEFINITIONS

‘‘Business Registration Ordinance’’ the Business Registration Ordinance (Chapter 310 of the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time
‘‘BVI’’
the British Virgin Islands
‘‘Capitalisation Issue’’

the issue of 749,999,900 Shares to be made upon capitalisation of certain sums standing to the credit of the share premium account of our Company referred to in the paragraph headed ‘‘Statutory and General Information — A. Further information about our Company and our subsidiaries — 3. Written resolutions of sole Shareholder’’ in Appendix IV to this prospectus

‘‘Cayman Share Registrar’’ Conyers Trust Company (Cayman) Limited
‘‘CCASS’’ Central Clearing and Settlement System
‘‘CCASS Clearing Participant’’
a person admitted to participate in CCASS as a direct clearing participant or general clearing participant
‘‘CCASS Custodian Participant’’
a person admitted to participate in CCASS as a custodian participant
‘‘CCASS Investor Participant’’
a person admitted to participate in CCASS as an investor participant who may be an individual or joint individuals or a corporation
‘‘CCASS Operational Procedures’’
the operational procedures of HKSCC in relation to CCASS, containing the practices, procedures and administrative requirements relating to the operations and functions of CCASS, as from time to time in force
‘‘CCASS Participant’’
a CCASS Clearing Participant, a CCASS Custodian Participant or a CCASS Investor Participant
‘‘China Industrial Securities’’
China Industrial Securities International Capital Limited, a corporation licensed to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO
‘‘CIC’’

China Insights Consultancy Limited, a market research and consulting company, an Independent Third Party

‘‘CIC Report’’

the industry expert report issued by CIC commissioned by our Company, an extract of which is set out in the section headed ‘‘Industry Overview’’ in this prospectus

‘‘close associate(s)’’

has the meaning ascribed to it under the GEM Listing Rules

– 14 –

DEFINITIONS

‘‘Co-Lead Manager’’
‘‘Companies Law’’
‘‘Companies Ordinance’’
‘‘Companies Registry’’
‘‘Companies (Winding Up and Miscellaneous Provisions) Ordinance’’ or ‘‘CWUMPO’’
‘‘Company’’
‘‘Compliance Adviser’’
‘‘Concert Party Deed’’
‘‘connected person(s)’’
‘‘connected transaction’’
‘‘Controlling Shareholder(s)’’
‘‘core connected person(s)’’

China Industrial Securities, the co-lead manager of the Share Offer

the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands

the Companies Ordinance (Chapter 622 of the Laws of Hong Kong), as amended, modified and supplemented from time to time

the Companies Registry of Hong Kong

the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong), as amended and supplemented or otherwise modified from time to time
MS Concept Limited, a company incorporated in the Cayman Islands as an exempted company with limited liability on 8 November 2017
Alliance Capital Partners Limited, a licensed corporation to carry on type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the SFO
the concert party deed dated 23 November 2017 between Mr. John Kwong, Ms. Ingrid Ip, Ms. Kwong Man Yui, Mr. Joseph Kwong and Ms. Melanie Kwong, details of which are set out in the section headed ‘‘History, Development and Reorganisation — Parties acting in concert’’ in this prospectus

has the meaning ascribed to it under the GEM Listing Rules

has the meaning ascribed to it under the GEM Listing Rules

has the meaning ascribed to it under the GEM Listing Rules and in the case of our Company, refers to Mr. John Kwong, Ms. Ingrid Ip, Ms. Kwong Man Yui, Mr. Joseph Kwong, Ms. Melanie Kwong and Future More. The shareholding of each of our Controlling Shareholders in our Company immediately following completion of the Reorganisation, the Share Offer and the Capitalisation Issue (without taking into account any Share which may be allotted and issued upon the exercise of the Offer Size Adjustment Option and any option which may be granted under the Share Option Scheme) are set out in the section headed ‘‘Substantial Shareholders’’ in this prospectus

has the meaning ascribed to it under the GEM Listing Rules

– 15 –

DEFINITIONS

‘‘Corporate Governance Code’’

the Corporate Governance Code as set out in Appendix 15 to the GEM Listing Rules as amended, supplemented or otherwise modified from time to time

‘‘Deed of Indemnity’’
a deed of indemnity dated 23 March 2018 and entered into by our Controlling Shareholders in favour of our Company (for itself and as trustee for each of its subsidiaries), particulars of which are set out in the section headed ‘‘Statutory and General Information — E. Other information — 1. Tax and other indemnities’’ in Appendix IV to this prospectus
‘‘Deed of Non-competition’’
a non-competition deed dated 23 March 2018 and entered into by our Controlling Shareholders in favour of our Company (for itself and as trustee for each of its subsidiaries), in respect of certain non-competition undertakings given by our Controlling Shareholders in favour of our Company, particulars of which are set out in the section ‘‘Relationship with our Controlling Shareholders — Non-competition undertaking’’ in this prospectus
‘‘Director(s)’’
the director(s) of our Company
‘‘Dutiable Commodities (Liquor) Regulations’’ or ‘‘DCR’’
the Dutiable Commodities (Liquor) Regulations (Chapter 109B of the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time
‘‘Dutiable Commodities Ordinance’’ or ‘‘DCO’’
the Dutiable Commodities Ordinance (Chapter 109 of the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time
‘‘electronic application instruction(s)’’
instruction given by a CCASS Participant electronically via CCASS to HKSCC, being one of the methods to apply for the Offer Shares
‘‘Elite’’
Elite Fresh Food Company Limited, a company incorporated in Hong Kong on 16 October 1984 with limited liability and owned as to 50%, 25% and 25% by Ms. Ingrid Ip, Mr. Joseph Kwong and Ms. Melanie Kwong, respectively, as at the Latest Practicable Date and hence a connected person of our Company
‘‘Employees’ Compensation Ordinance’’ or ‘‘ECO’’
the Employees’ Compensation Ordinance (Chapter 282 of the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time
‘‘Employment Ordinance’’ or ‘‘EO’’ the Employment Ordinance (Chapter 57 of the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time

– 16 –

DEFINITIONS

‘‘Environmental Protection Department’’ or ‘‘EPD’’

the Environmental Protection Department of the Hong Kong Government

‘‘Fire Services Department’’ or ‘‘FSD’’

the Hong Kong Fire Services Department of the Hong Kong Government

‘‘Fire Services (Fire Hazard Abatement) Regulations’’ or ‘‘FSR’’

the Fire Services (Fire Hazard Abatement) Regulations (Chapter 95F of the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time

‘‘Food and Environmental Hygiene Department’’ or ‘‘FEHD’’
the Food and Environmental Hygiene Department of the Hong Kong Government
‘‘Food Business Regulation’’ or ‘‘FBR’’

the Food Business Regulation (Chapter 132X of the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time

‘‘Future More’’

Future More Company Limited, a company incorporated with limited liability in the BVI on 7 November 2017 and owned as to 14%, 18%, 18%, 25% and 25% by Mr. John Kwong, Ms. Ingrid Ip, Ms. Kwong Man Yui, Mr. Joseph Kwong and Ms. Melanie Kwong upon Listing, and being a Controlling Shareholder

‘‘FY2016’’ the financial year ended 31 March 2016
‘‘FY2017’’ the financial year ended 31 March 2017
‘‘GDP’’ gross domestic product, the total market value of all the goods and services produced within the borders of a nation during a specified period of time
‘‘GEM’’ GEM of the Stock Exchange

‘‘GEM Listing Rules’’ the Rules Governing the Listing of Securities on GEM, as amended, modified and supplemented from time to time

‘‘General Rules of CCASS’’ the terms and conditions regulating the use of CCASS, as may be amended or modified from time to time and where the context so permits, shall include the CCASS Operational Procedures

‘‘Group’’, ‘‘we, ‘‘us’’ or ‘‘our’’ our Company and its subsidiaries at the relevant time or, where the context otherwise requires, in respect of the period prior to our Company becoming the holding company of its present subsidiaries pursuant to the Reorganisation, its present subsidiaries and the businesses operated by such subsidiaries

– 17 –

DEFINITIONS

‘‘Hana(CWB)’’ a restaurant operated by our Group under the brand ‘‘Hana’’ and located at Soundwill Plaza II — Midtown in Causeway Bay, Hong Kong
‘‘HKD’’ or ‘‘HK$’’ and ‘‘cents’’ Hong Kong dollars and cents respectively, the lawful currency of Hong Kong
‘‘HKFRS’’ Hong Kong Financial Reporting Standards, which include Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards and Interpretations issued by Hong Kong Institute of Certified Public Accountants
‘‘HKSCC’’ Hong Kong Securities Clearing Company Limited
‘‘HKSCC Nominees’’
HKSCC Nominees Limited
‘‘Hong Kong’’ or ‘‘HKSAR’’ or the Hong Kong Special Administrative Region of the People’s ‘‘HK’’ Republic of China
‘‘Hong Kong Branch Share Tricor Investor Services Limited, the branch share registrar and Registrar’’ transfer office of our Company in Hong Kong
‘‘Hong Kong Government’’ the government of Hong Kong

‘‘Hong Kong Subsidiaries’’ Lord Master and Meric Investment, our indirectly wholly-owned subsidiaries

‘‘Independent Third Party(ies)’’

an individual(s) or a company(ies) who or which, to the best of our Directors’ knowledge, information and belief, having made all reasonable enquiries, is/are independent of and not connected with (within the meaning of the GEM Listing Rules) our Company, its subsidiaries or any of their respective associates

‘‘Inland Revenue Department’’ or ‘‘IRD’’

the Inland Revenue Department of the Hong Kong Government

‘‘Inland Revenue Ordinance’’ or ‘‘IRO’’

the Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time

‘‘Internal Control Adviser’’

HLB Hodgson Impey Cheng Risk Advisory Services Limited

‘‘Joint Bookrunners’’ or ‘‘Joint Lead Managers’’

Alliance Capital and Sincere Securities, the joint bookrunners and the joint lead managers of the Share Offer

‘‘Labour Department’’

the Labour Department of the Hong Kong Government

– 18 –

DEFINITIONS

‘‘Latest Practicable Date’’

21 March 2018, being the latest practicable date prior to the printing of this prospectus for the purpose of ascertaining certain information in this prospectus

‘‘Legal Counsel’’

Ms. Kennis Tai, barrister-at-law in Hong Kong, who is an Independent Third Party

‘‘Liquor Licensing Board’’ or ‘‘LLB’’

the Liquor Licensing Board of the Hong Kong Government

‘‘Listing’’

listing of the Shares on GEM of the Stock Exchange

‘‘Listing Date’’
the date, expected to be on or about 16 April 2018, on which dealings in the Shares first commence on GEM
‘‘Lord Master’’
Lord Master Limited (爵士有限公司), a limited liability company incorporated in Hong Kong on 6 December 2002 and our whollyowned subsidiary
‘‘Master Supply Agreement’’
the master supply agreement dated 23 March 2018 entered into between MS Restaurant and Elite in relation to the supply of chilled and frozen meat and seafood and other food supplies by Elite to our Group
‘‘Memorandum’’ or ‘‘Memorandum the memorandum of association of our Company adopted on 23 of Association’’ March 2018 and as amended from time to time
‘‘Meric Investment’’
Meric Investment Limited (明力投資有限公司), a limited liability company incorporated in Hong Kong on 29 March 2000 and our wholly-owned subsidiary
‘‘Mr. John Kwong’’
Mr. Kwong Tai Wah, being our chairman of the Board, chief executive officer, one of our executive Directors, one of our Controlling Shareholders, the spouse of Ms. Ingrid Ip, the father of Ms. Kwong Man Yui, and the brother of Mr. Joseph Kwong and Ms. Melanie Kwong
‘‘Mr. Joseph Kwong’’
Mr. Kwong Tai Wing Joseph, being one of our Controlling Shareholders, the brother of Mr. John Kwong and Ms. Melanie Kwong, the uncle of Ms. Kwong Man Yui, and the brother-in-law of Ms. Ingrid Ip
‘‘Ms. Ingrid Ip’’ Ms. Ip Yin King Ingrid, being one of our Controlling Shareholders, the spouse of Mr. John Kwong, the mother of Ms. Kwong Man Yui, and the sister-in-law of Mr. Joseph Kwong and Ms. Melanie Kwong

– 19 –

DEFINITIONS

‘‘Ms. Kwong Man Yui’’ Ms. Kwong Man Yui, being one of our executive Directors, one of our Controlling Shareholders, the daughter of Mr. John Kwong and Ms. Ingrid Ip, and the niece of Mr. Joseph Kwong and Ms. Melanie Kwong
‘‘Ms. Melanie Kwong’’ Ms. Kwong Ching Yee Melanie, being one of our Controlling Shareholders, the sister of Mr. John Kwong and Mr. Joseph Kwong, the aunt of Ms. Kwong Man Yui, and the sister-in-law of Ms. Ingrid Ip
‘‘MS Restaurant’’ MS Restaurant Group Limited, a company incorporated with limited liability in the BVI on 7 November 2017 and directly wholly-owned by our Company and being the intermediate holding company of our Group
‘‘MS(Buffet)’’ a restaurant operated by our Group under the brand ‘‘Mr. Steak — Buffet à la minute,’’ and located at World Trade Centre (also known as the ‘‘WTC More’’) in Causeway Bay, Hong Kong
‘‘MS(KB)’’ a restaurant operated by our Group under the brand ‘‘Mr. Steak’’ and located at Telford Plaza in Kowloon Bay, Hong Kong
‘‘MS(KF)’’ a restaurant operated by our Group under the brand ‘‘Mr. Steak’’ and located at Metroplaza in Kwai Fong, Hong Kong
‘‘MS(KH)’’ a restaurant operated by our Group under the brand ‘‘Mr. Steak’’ and located at Kornhill Plaza in Quarry Bay, Hong Kong
‘‘MS(ST)’’ a restaurant operated by our Group under the brand ‘‘Mr. Steak’’ and located at New Town Plaza in Shatin, Hong Kong
‘‘MS(TKO)’’
a restaurant operated by our Group under the brand ‘‘Mr. Steak’’ and located at East Point City in Tseung Kwan O, Hong Kong
‘‘MS(TY)’’
a restaurant operated by our Group under the brand ‘‘Mr. Steak’’ and located at Maritime Square in Tsing Yi, Hong Kong
‘‘MTR’’ the Mass Transit Railway in Hong Kong
‘‘Occupational Safety and Health the Occupational Safety and Health Regulation (Chapter 509A of Regulation’’ or ‘‘OSHR’’ the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time

– 20 –

DEFINITIONS

‘‘Offer Price’’

the final offer price per Offer Share in HK$ (exclusive of brokerage of 1%, SFC transaction levy of 0.0027% and Stock Exchange trading fee of 0.005%) of not more than HK$0.27 per Share and expected to be not less than HK$0.23 per Share, at which the Offer Shares, to be determined in the manner further described in the section headed ‘‘Structure and Conditions of the Share Offer — Offer Price’’ in this prospectus

‘‘Offer Share(s)’’
the Public Offer Shares and the Placing Shares
‘‘Offer Size Adjustment Option’’
the option to be granted by our Company to the Placing Underwriters, exercisable by the Joint Bookrunners (for themselves and on behalf of the Placing Underwriters), to require our Company to allot and issue up to an additional 37,500,000 Shares, representing 15% of the Offer Shares under the Share Offer, at the Offer Price, details of which are set out in the section headed ‘‘Structure and Conditions of the Share Offer’’ in this prospectus
‘‘Personal Data (Privacy) the Personal Data (Privacy) Ordinance (Chapter 486 of the Laws Ordinance’’ or ‘‘PDO’’ of Hong Kong), as amended, supplemented or otherwise modified from time to time
‘‘Placing’’
conditional placing of the Placing Shares by the Underwriters on behalf of our Company for cash at the Offer Price as described in the section headed ‘‘Structure and Conditions of the Share Offer’’ in this prospectus
‘‘Placing Shares’’
the 225,000,000 new Shares, initially being offered by our Company for subscription under the Placing, subject to reallocation and the Offer Size Adjustment Option as described in the section headed ‘‘Structure and Conditions of the Share Offer’’ in this prospectus
‘‘Placing Underwriters’’
the underwriters of the Placing
‘‘Placing Underwriting Agreement’’
the conditional underwriting agreement relating to the Placing which is expected to be entered into among our Company, our executive Directors, our Controlling Shareholders, the Sole Sponsor, the Joint Bookrunners, the Joint Lead Managers, the Co-Lead Manager and the Placing Underwriters, particulars of which are summarised in the section headed ‘‘Underwriting’’ in this prospectus
‘‘PRC’’ or ‘‘China’’
the People’s Republic of China excluding, for the purpose of this prospectus, Hong Kong, Macau and Taiwan

– 21 –

DEFINITIONS

‘‘Predecessor Companies Ordinance’’
‘‘Price Determination Agreement’’
‘‘Price Determination Date’’
‘‘Public Health and Municipal Services Ordinance’’ or ‘‘PHMSO’’
‘‘Public Offer’’
‘‘Public Offer Shares’’
‘‘Public Offer Underwriters’’
‘‘Public Offer Underwriting Agreement’’
‘‘Regulation S’’
‘‘Reorganisation’’
‘‘Reporting Accountants’’

the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) as in force from time to time before 3 March 2014

the agreement to be entered into by the Joint Bookrunners (for themselves and on behalf of the other Underwriters) and us on the Price Determination Date to record and fix the Offer Price

the date, expected to be on or around Monday, 9 April 2018, or such other date as may be agreed between our Company and the Joint Bookrunners (for themselves and on behalf of the Underwriters), on which the Offer Price is determined by entering into the Price Determination Agreement

the Public Health and Municipal Services Ordinance (Chapter 132 of the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time
the offer of the Public Offer Shares for subscription by the members of the public in Hong Kong for cash at the Offer Price (plus brokerage of 1%, SFC transaction levy of 0.0027% and Stock Exchange trading fee of 0.005%), payable in full on application, and subject to the terms and conditions described in this prospectus and the Application Forms
the 25,000,000 new Shares initially being offered for subscription under the Public Offer, subject to re-allocation as described in the section headed ‘‘Structure and Conditions of the Share Offer’’ in this prospectus

the underwriters of the Public Offer

the conditional underwriting agreement relating to the Public Offer dated 28 March 2018 entered into between our Company, our Controlling Shareholders, our executive Directors, the Sole Sponsor, the Joint Bookrunners, the Joint Lead Managers, the CoLead Manager and the Public Offer Underwriters, particulars of which are summarised in the section headed ‘‘Underwriting’’ in this prospectus
Regulation S under the U.S. Securities Act
the corporate reorganisation arrangement implemented by our Group in preparation for the Listing, particulars of which are summarised in the section headed ‘‘History, Development and Reorganisation — Reorganisation’’ in this prospectus

HLB Hodgson Impey Cheng Limited, our reporting accountants

– 22 –

DEFINITIONS

‘‘SB(CWB)’’ a restaurant operated by our Group under the brand ‘‘Sky Bar’’ and located at Lee Theatre Plaza in Causeway Bay, Hong Kong ‘‘SB(MK)’’ a restaurant operated by our Group under the brand ‘‘Sky Bar’’ and located at Langham Place in Mong Kok, Hong Kong

‘‘SB(YL)’’ a restaurant operated by our Group under the brand ‘‘Sky Bar’’ and located at Yoho Mall in Yuen Long, Hong Kong
‘‘SFC’’ the Securities and Futures Commission of Hong Kong

‘‘SFO’’ the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time

‘‘Share(s)’’ ordinary share(s) with a nominal value of HK$0.01 each in the share capital of our Company
‘‘Share Offer’’ the Public Offer and the Placing
‘‘Share Option Scheme’’

the share option scheme conditionally approved and adopted by our Company on 23 March 2018, the principal terms of which are summarised in the section headed ‘‘Statutory and General Information — D. Share Option Scheme’’ in Appendix IV to this prospectus

‘‘Shareholder(s)’’

holder(s) of the Share(s)

‘‘Sincere Securities’’
Sincere Securities Limited, a corporation licensed to carry out Type 1 (dealing in securities), Type 4 (advising on securities) and Type 9 (asset management) regulated activities under the SFO
‘‘Sole Sponsor’’ or ‘‘Alliance Capital’’
Alliance Capital Partners Limited, a corporation licensed to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO
‘‘Stock Exchange’’
The Stock Exchange of Hong Kong Limited
‘‘subsidiary(ies)’’
has the meaning ascribed to it under the Companies Ordinance
‘‘substantial shareholder(s)’’
has the meaning ascribed to it under the GEM Listing Rules and details of our substantial shareholders are set out in the section headed ‘‘Substantial Shareholders’’ in this prospectus
‘‘Takeovers Code’’
the Codes on Takeovers and Mergers and Share Buy-backs of Hong Kong, as amended, supplemented and modified from time to time

– 23 –

DEFINITIONS

‘‘Track Record Period’’

comprises FY2016, FY2017 and the six months ended 30 September 2017

‘‘Underwriters’’

the Public Offer Underwriter(s) and the Placing Underwriter(s), details of which are set out in the section headed ‘‘Underwriting’’ in this prospectus

‘‘Underwriting Agreements’’
the Public Offer Underwriting Agreement and the Placing Underwriting Agreement
‘‘U.S.’’

the United States of America

‘‘U.S. Securities Act’’
U.S. Securities Act of 1933, as amended, supplemented or otherwise modified from time to time
‘‘US$’’ or ‘‘USD’’
United States dollars, the lawful currency of the United States
‘‘Water Pollution Control Ordinance’’ or ‘‘WPCO’’
the Water Pollution Control Ordinance (Chapter 358 of the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time
‘‘WHITE Application Form(s)’’ the application form(s) for the Public Offer Shares for use by the public who require such Public Offer Shares to be issued in the applicant’s own name
‘‘Yau Tsim Mong district’’ a district in Hong Kong covering Yau Ma Tei, Tsim Sha Tsui and Mong Kok
‘‘YELLOW Application Form(s)’’ the application form(s) for the Public Offer Shares for use by the public who require such Public Offer Shares to be deposited directly into CCASS
‘‘sq. m.’’ or ‘‘m[2] ’’ square metre(s)
‘‘%’’ per cent.

Unless otherwise specified, all references to any shareholding in our Company in this prospectus assume no Shares are allotted and issued upon the exercise of the Offer Size Adjustment Option and any options which may be granted under the Share Option Scheme.

Certain amounts and percentage figures included in this prospectus have been subject to rounding adjustments. Accordingly, figures shown in total in certain tables may not be the arithmetic aggregation of the figures preceding them.

If there is any inconsistency between this prospectus and the Chinese translation of this prospectus, this prospectus shall prevail.

– 24 –

GLOSSARY

This glossary contains explanations of certain terms used in this prospectus as they relate to our Company and they are used in this prospectus in connection with our business. These terms and their given meanings may not correspond to standard industry definitions or usage of those terms.

‘‘breakeven’’ the time when a restaurant’s monthly revenue is able to cover its monthly operating costs and expenses on accounting basis ‘‘CAGR’’ compound annual growth rate, a method of assessing the average growth of a value over a certain time period

‘‘GFA’’ gross floor area ‘‘investment payback’’ the time when a restaurant’s accumulated net cash inflow since its commencement of operation is able to cover the initial investment amount ‘‘sous chef’’ a chef ranking next to the head chef in a kitchen

– 25 –

FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that are, by their nature, subject to significant risks and uncertainties. In some cases, the words such as ‘‘aim’’, ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘going forward’’, ‘‘intend’’, ‘‘may’’, ‘‘plan’’, ‘‘potential’’, ‘‘predict’’, ‘‘propose’’, ‘‘seek’’, ‘‘should’’, ‘‘will’’, ‘‘would’’ and other similar expressions or the negative use of such words are used to identify forward-looking statements. These forward-looking statements include, without limitation, statements relating to:

. our Group’s business and operating strategies and plans of operation;
. the amount and nature of, and potential for, future development of our Group’s business;
. our Company’s dividend distribution plans;
. the regulatory environment as well as the general industry outlook for the industry in which our Group operate;
. future developments in the industry in which our Group operate; and
. the trend of the economy of Hong Kong in general.

These statements are based on several assumptions, including those regarding our Group’s present and future business strategy and the environment in which our Group will operate in the future.

Our Group’s future results could differ materially from those expressed or implied by such forward-looking statements. In addition, our Group’s future performance may be affected by various factors including, without limitation, those discussed in the sections headed ‘‘Risk Factors’’, ‘‘Business’’, ‘‘Financial Information’’ and ‘‘Future Plans and Use of Proceeds’’ in this prospectus.

Subject to the requirements of the applicable laws, rules and regulations, our Company does not have any obligation to update or otherwise revise the forward-looking statements in this prospectus, whether as a result of new information, future events or otherwise. As a result of these and other risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this prospectus might not occur in the way our Company expects, or at all. Should one or more risks or uncertainties stated in the aforesaid sections materialise, or should any underlying assumptions prove to be incorrect, actual outcomes may vary materially from those indicated. Prospective investors should therefore not place undue reliance on any of the forward-looking statements. All forward-looking statements contained in this prospectus are qualified by reference to the cautionary statements as set out in this section.

In this prospectus, statements of, or references to, our Group’s intentions or those of any of our Directors are made as at the date of this prospectus. Any such intentions may change in light of future developments.

– 26 –

RISK FACTORS

You should carefully consider all of the information in this prospectus including the risks and uncertainties described below before making an investment in the Share Offer. The business, financial condition or results of operations of our Group could be materially and adversely affected by any of these risks and uncertainties. The trading price of our Shares could decline due to any of these risks and uncertainties, and you may lose all or part of your investment.

RISKS RELATING TO OUR BUSINESS

We experienced net current liabilities during the Track Record Period

We recorded net current liabilities of approximately HK$9.7 million, HK$10.2 million and HK$5.3 million as at 31 March 2016, 31 March 2017 and 30 September 2017, respectively. Our net current liability position during the Track Record Period was mainly attributable to our bank borrowings of approximately HK$17.0 million, HK$12.4 million and HK$16.1 million as at 31 March 2016, 31 March 2017 and 30 September 2017, respectively, which were repayable after more than one year but subject to the lending bank’s right of repayment on demand. There is no assurance that our Group will not record net current liabilities in the future. A significant net current liability position may impair our operational flexibility and adversely affect our ability to expand our business. If we do not generate sufficient cash inflow from our operating activities to meet our present and future financial needs, our results of operations and financial condition as well as our ability to implement our expansion plans will be adversely affected. For details, please refer to the section headed ‘‘Financial Information — Net current liabilities’’ in this prospectus.

The lack of suitable locations on commercially viable terms, the increase in rental expenses and the failure to renew existing leases of the leased properties on terms acceptable to us may adversely affect our results of operations

As at the Latest Practicable Date, all of our restaurants are located in the major districts of Hong Kong, with three, five and five restaurants in Kowloon, the New Territories and Hong Kong Island respectively. As it is our business strategy for our restaurants to be easily accessible with intensive penetrating power in different districts, it is strategically important for our restaurants to be located at diversified locations. However, commercially viable choices that meet our site selection criteria could be limited. If we relocate or open new restaurants, we cannot assure that we would be able to find suitable premises for our restaurants with commercially reasonable terms, or if we negotiate the terms of renewal with the landlords before the expiry of the lease agreements, we cannot assure that we would be able to renew such lease agreements on terms acceptable to us, in which cases our operation, relocation plans or expansion plans may be delayed or disrupted and our results of operation and financial conditions could be adversely affected.

As at the Latest Practicable Date, our Group leased 14 properties in Hong Kong, of which 13 properties were used for our restaurant premises, and thus we are exposed to the fluctuation of the market rent. The rentals and related expenses of our restaurants amounted to approximately HK$41.6 million, HK$49.8 million and HK$27.2 million for FY2016, FY2017 and the six months ended 30 September 2017, respectively, representing approximately 21.4%, 21.2% and 21.2% of our revenue for the respective periods. For the sensitivity analysis that illustrates the impact of hypothetical fluctuations in rental and related expenses on our profit during the Track Record Period, please refer to the section

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headed ‘‘Financial Information — Principal factors affecting our Group’s results of operations and financial condition — Rentals and related expenses’’ in this prospectus. In the event of any increase in market rent, if we are not able to pass the increased rental costs to our customers, our results of operations and financial condition may be adversely affected.

Moreover, we incur significant expenses on the leasehold improvement before the commencement of our restaurant business. If we fail to renew our existing lease agreements and relocate a new restaurant premises, our fixed assets in the form of leasehold improvement would be written off and our financial conditions could be adversely affected.

Elite, our largest supplier and our connected person, accounted for a substantial portion of our purchases

For FY2016, FY2017 and the six months ended 30 September 2017, the amount of purchases from Elite, being our largest supplier and our connected person, accounted for approximately 46.8%, 54.8% and 46.2% respectively of our total purchases. There is no assurance that there will be no deterioration in our relationship with Elite which may have an impact on the quality of food we offer to our customers.

Moreover, we cannot assure you that we are able to respond to such shortage or delay in supply or new marketing strategies effectively by finding alternative suppliers on comparable commercial terms within a short period of time. Any shortage of or delay in the food ingredients by Elite or any change in its existing marketing strategies, such as any sudden reduction in supply volume to us, may affect our ability to fulfill our customers’ demand, in which case our business and results of operation will be materially and adversely affected.

The western casual dining restaurants market may lose popularity and our financial conditions and future growth may be adversely affected

We cannot ensure that our restaurants, which serve western cuisine, will continue to be well received by our customers or that the western casual dining restaurants market will grow at the expected growth rate. If we fail to run our existing restaurants profitably or we fail to change our cuisine served to adapt to market changes, our financial performance may be adversely affected.

Opening new restaurants may result in fluctuations in our financial performance

We intend to open four new restaurants by 31 March 2020. We currently expect to open approximately two and two new restaurants in Hong Kong in the year ending 31 March 2019 and 31 March 2020, respectively. Substantial costs, such as rental deposits, renovation cost and cost on utensils, would be incurred for the opening of new restaurants. Our ability to successfully open new restaurants is subject to risks and uncertainties, such as securing lease agreements for suitable locations and on reasonable terms, obtaining all the necessary licences and permits in a timely manner, recruiting qualified employees and ensuring timely delivery of renovation works. In addition, a new restaurant generally generates lower profit due to lower sales and higher start-up operating costs in the initial stage and requires a period of time from its opening to achieve the breakeven, which may place substantial strain on the managerial, operational and financial resources of our Group. At the initial planning stage for our new restaurants, our Directors target an investment payback period within 30 months and a breakeven period within four months. If we are to implement our expansion plans, our financial

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performance is expected to experience fluctuations given the substantial costs involved and lower profit general in the initial stage of opening. In addition, we cannot ensure that managerial, operational and financial resources of our Group will be adequate to support our network expansion or that our new restaurants could be operated as successfully as our existing restaurants.

We are susceptible to instances of food poisoning, customer complaints and any other negative publicity associated with our restaurants or on food safety in general, in which case the value of our brands may suffer

Our Directors believe that our success depends substantially on the market recognition of our brands, which in turn depends on our effort to protect and enhance the brand awareness of our Group. As we plan to expand our network, maintenance of food quality and quality of customer service may become more difficult. If customers perceive or experience poor standards of hygiene, food quality, customer service quality or injury, the value of our brands could suffer. During the Track Record Period and up to the Latest Practicable Date, the FEHD had received 47 complaints on food quality and hygiene against our Group’s restaurants. For details, please refer to the section headed ‘‘Business — Overview of restaurant operations and management — Quality control’’ in this prospectus.

In addition, we are susceptible to the risk of food poisoning. We cannot guarantee that measures taken by us at present can fully prevent food poisoning. Instances of food poisoning caused by third party food suppliers or reasons which are beyond our control. Reports in the media of the respective instances of food poisoning or any other negative publicity resulting from the publication of industry findings or research reports in relation to our food quality or customer service quality or any complaints from our customers of poor standards of hygiene, food quality, customer service quality or injury, regardless of their validity, if not properly handled, could adversely affect the reputation of our Group, and multiple restaurants, rather than a single restaurant, may be affected, which in turn may affect our results of operations and financial conditions.

We have previously been involved in certain incidents of non-compliance with certain Hong Kong regulatory requirements and may be subject to liabilities

During the Track Record Period and up to the Latest Practicable Date, we had failed to comply with certain Hong Kong laws such as the Dutiable Commodities Ordinance, the Water Pollution Control Ordinance and the Food Business Regulation. In particular, we had the following non-compliance incidents: (i) names/signs of our restaurants, namely MS(ST), BB(MK) and BB(CWB), are different from those stated in the liquor licences contrary to the Dutiable Commodities Ordinance (‘‘Incident I’’); (ii) failure to obtain water pollution control licences for some of our restaurants during the Track Record Period and up to the Latest Practicable Date contrary to the Water Pollution Control Ordinance (‘‘Incident II’’); (iii) provision of food and beverages at times which were not covered by the general restaurant licences contrary to the Food Business Regulations (‘‘Incident III’’); and (iv) selling restricted food without valid restricted food permits contrary to the Food Business Regulations (‘‘Incident IV’’). Our Legal Counsel opines that, in respect of Incident I, II and III, there are no potential liabilities or legal consequences as the prosecutions in respect of all relevant restaurants is time-barred. In respect of Incident IV, the maximum penalty is HK$10,300. For details of noncompliance of our Group, please refer to the section headed ‘‘Business — Legal and regulatory compliance — Non-compliance of our Group’’ in this prospectus. It is possible that prosecution may be taken against us or the respective directors of our subsidiaries for the non-compliance that occurred

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during the Track Record Period and up to the Latest Practicable Date. If the relevant authorities take action against us, we may be subject to substantial penalties or incur other liabilities and if our Controlling Shareholders fail to indemnify us fully, our reputation, cash flow and results of operations may be adversely affected.

Our overall performance may be affected by temporary suspension of our operation for renovation of certain restaurants

We operated 13 restaurants as at the Latest Practicable Date. Our ability to successfully operate our restaurants depends on our ability to increase customer traffic and the average spending per customer per meal, which could be affected by factors such as, increased competition in the restaurant industry, changes in customer preferences, declining economic conditions, customer budgeting constraints, customer sensitivity to our menu price increases, our reputation and brand recognition and customer dining experiences. In order to adapt to changes in customer preferences and improve their dining experiences, we may re-position the cuisine that we serve or the style of our restaurants by way of renovation of our restaurant premises and our operation of the relevant restaurant may be temporarily suspended. We cannot guarantee that the operation of our existing restaurants will continue to be successful to generate net profit sufficient to recoup the loss incurred by the temporarily closed restaurants that undergo renovation. If our existing restaurants turn out to be not as profitable, our overall performance may be adversely affected.

We will rely on our central kitchen to supply some of our semi-processed or processed food ingredients used in our restaurants and any disruption of operation at our central kitchen could adversely affect our business and operations

After Listing, we plan to set up our central kitchen to support the food preparation and processing of our restaurants. Our Group expects that some of the semi-processed or processed food ingredients used in our restaurants would be first processed at our central kitchen before delivery to our restaurants. Any disruption of operation at our central kitchen arising from factors like electricity and water suspensions may result in our failure to deliver our food ingredients to our restaurants in a timely manner. This may cause our restaurants to remove certain items from our menus, whether temporarily or on a permanent basis. We may experience a significant reduction in revenue, resulting in a material adverse effect on our business and results of operations. As such, any disruption of operation at our central kitchen may potentially increase our cost and time in preparation of the food ingredients, causing an adverse impact on our financial performance.

We may not adequately protect our intellectual property, which could confuse, dilute or tarnish our brand appeal

We may not adequately protect our intellectual property. As at the Latest Practicable Date, we had three registered trademarks in Hong Kong. Please refer to the section headed ‘‘Business — Intellectual property’’ and the section headed ‘‘Statutory and General Information — B. Further information about the business of our Group — 2. Intellectual property rights of our Group’’ in Appendix IV to this prospectus for further details. If we are held by any court or tribunal for infringement of any trademark of others, our business may be adversely affected.

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RISK FACTORS

In addition, if our competitors infringe upon our trademark or imitate our dishes, we may be required to initiate litigation to protect and enforce our trademark and other intellectual property rights if necessary. Any commencement of litigation could incur substantial costs and lead to diversion of resources, which could negatively affect our results of operations, profitability and prospects. Any negative publicity and complaints regarding any infringing party’s unauthorised use of our trademarks, brands and logos (or any party’s legitimate use of similar trademarks, brands and logos) could also confuse, dilute or tarnish, directly or indirectly, our restaurants’ brand appeal, which could materially damage our results of operations, profitability and prospects.

All the liquor licences of our restaurants were held by individuals

All of the liquor licences of our restaurants were held by individuals as at the Latest Practicable Date. For details, please refer to the section headed ‘‘Business — Legal and regulatory compliance — Licensing’’ in this prospectus.

Pursuant to the Dutiable Commodities (Liquor) Regulations, any transfer of a liquor licence must be conducted in the prescribed form with the consent of the liquor licence holder. In case of illness or temporary absence of the liquor licence holder, the secretary of the Liquor Licensing Board may in his/ her discretion authorise any person to manage the licensed premises upon application by the liquor licence holder. Please refer to the section headed ‘‘Regulatory Overview’’ in this prospectus for further details.

If the relevant employee refuses to give consent to a transfer application when a transfer is required, or fails to make an application in respect of his/her illness or temporary absence or makes a cancellation application without our consent, or if an application for new issue of a liquor licence is required in case of death or insolvency of the relevant employee, the relevant restaurant may have to cease its sale of liquor for the time being, in which case our business and profitability may be adversely affected.

Our success counts on our ability to maintain effective quality control

Our success is dependent on the quality of our food which in turn relies upon the effectiveness of our quality control system. Such effectiveness depends on various factors, such as the design of the quality control system and the compliance with the quality control policies and guidelines by our employees. For details of our quality control measures, please refer to the section headed ‘‘Business — Overview of restaurant operations and management — Quality control’’ in this prospectus. We cannot ensure that (i) our quality control system will prove to be effective at all times or that (ii) all of our employees will strictly adhere to the quality control policies and guidelines at all times. Any significant failure of the system, failure to detect defective food supplies, failure to observe proper hygiene and cleanliness and other standards in our Group’s operations could have a material adverse effect on our food quality, which in turn could give rise to potential liability and affect our reputation and results of operations.

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Our success depends on our key personnel and our ability to attract, motivate and retain a sufficient number of qualified employees

Our success is dependent on our key management personnel, namely, our executive Directors Mr. John Kwong, Ms. Kwong Man Yui and Mr. Lam On Fai, who are pivotal to the overall business development strategy, overall management and administration, major business decision of our Group and overseeing day-to-day management of our restaurants. For details of the background of our executive Directors, please refer to the section headed ‘‘Directors, Senior Management and Employees’’ in this prospectus. If our key management personnel resigns and if we are unable to locate a suitable substitute for replacement, our overall management and administration and implementation of business development strategy may be adversely affected.

In view of the highly service-oriented nature of the restaurant operations, our success depends upon our ability to attract, motivate and retain a sufficient number of qualified employees, such as restaurant managers, kitchen staff and waiters, in order to maintain the operation of our existing restaurants and meet the anticipated need associated with our expansion plans. Individuals with sufficient experience in the restaurant industry are in short supply and competition for such employees is intensive. If we are not able to motivate and retain a sufficient number of suitable employees at commercially reasonable costs, we may encounter a higher employee turnover rate or widespread employee dissatisfaction, in which case we may not be able to ensure the quality of food and services for our customers. Our expansion plans may also be disrupted. Any of the above could have a material adverse effect on our business and results of operations.

In addition, competition for qualified employees could assert an upward pressure on the staff costs. As at the Latest Practicable Date, we employed a total of 233 full-time employees who had passed the probationary period. We incurred staff costs which amounted to approximately HK$55.3 million, HK$65.2 million and HK$34.5 million respectively for FY2016, FY2017 and the six months ended 30 September 2017, representing approximately 28.4%, 27.8% and 26.9% of our total revenue, for the respective periods. Moreover, we are required to comply with the statutory minimum wage requirements, the rate of which was HK$34.5 per hour as at the Latest Practicable Date. The statutory minimum wage rate may be further revised upward in the future. In view of our anticipated business expansion and the upward revision of the statutory minimum wage, our Directors expect an increase in our staff costs. If we fail to pass the increased staff costs onto our customers without losing our competitiveness, our profitability would be adversely affected.

Our results of operations are susceptible to periodic fluctuations due to seasonality

Our results of operations may experience periodic fluctuations due to seasonality. During the Track Record Period, we generally recorded a relatively higher revenue from April to August and December of each calendar year as we believe that our customers who are dining with their family members tend to dine out more frequently in western casual dining restaurants during certain festive holidays (e.g. Easter and Christmas) and summer holiday. Accordingly, our results of operations may fluctuate significantly from period to period and a comparison of different periods may not be meaningful.

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RISK FACTORS

We may not be able to detect, deter and prevent all instances of fraud or other misconduct committed by our employees, suppliers or other third parties

During the Track Record Period, we accepted cash of approximately HK$36.8 million, HK$41.1 million and HK$23.4 million, representing approximately 18.9%, 17.5% and 18.3% of our total revenue as payment for FY2016, FY2017 and the six months ended 30 September 2017, respectively. Therefore, we are susceptible to any misappropriation of cash by our employees. We may not be able to detect, deter or prevent all such instances of fraud, theft, dishonesty, or other misconduct committed by our employees, suppliers or other third parties. Any such misconduct committed against our interests, including past acts that have gone undetected and future acts, may have a material adverse effect on our business, results of operations and financial conditions.

Our insurance coverage may be insufficient to protect us against potential liabilities arising in the course of operations

We do not maintain insurance policies against all risks associated with our business, either because our Directors have deemed it commercially unfeasible to do so, or the risk is minimal, or because the insurers have carved certain risks out of their standard policies. These risks include, without limitation, events such as the loss of business arising from increased competition, the loss of any business resulting from negative effects on changes in customers’ tastes and preferences. Our business, financial position and results of operations could be materially and adversely affected if an incident occurs in which we have inadequate insurance coverage. In addition, we cannot ensure that we will be able to renew the existing insurance policies on commercially reasonable terms.

Information technology system failures could interrupt our operations and adversely affect our business

Since we depend on our information technology system across our operations to manage our pointof-sales, costs and tables, to place orders of inventories and to maintain our accounts, any failure or damage of our information technology system could lead to interruptions in our operations and adversely affect our business.

We also receive and maintain certain personal information of our customers from our operation. If our network security is compromised and such information is stolen or obtained by unauthorised persons or used inappropriately, we may be liable for the leakage. Any proceedings arising from leakage of personal information could lead to significant liabilities, which would in turn adversely affect our business and financial condition.

Our historical financial condition and results of operations may not be indicative of our future performance

Our future success depends on various factors, including, among other things, the continuing popularity of our brands, our ability to secure suitable restaurant locations on commercially viable terms, ability to retain suitable restaurant personnel, stable and timely supply of food ingredients on commercially viable terms, effective management of our operations, successful implementation of our expansion plans, spending power of our target customers and the macroeconomic conditions of Hong Kong, some of which are beyond our control.

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We cannot ensure that we will be able to operate our restaurants as successfully in the future or that the macroeconomic condition of Hong Kong will not deteriorate. In the event that we fail to operate our restaurants as successfully or the macroeconomic conditions in Hong Kong becomes unfavourable, our financial condition and results of operations may be adversely affected and our historical financial conditions and results of operations may not be indicative of our future performance.

RISKS RELATING TO OUR INDUSTRY

Any negative publicity relating to the restaurant industry could adversely impact our brands, business and results of operations

Our restaurant business can be adversely affected by any negative publicity, news coverage or allegations in printed and online media regarding restaurant operations, in particular food quality, safety and hygiene issues. Even reports on public health concerns, negative news coverage or media attention concerning our competitors or our suppliers may potentially affect consumers’ perception of our business. Any such negative publicity could materially tarnish our brands as well as harm our restaurant business.

If we fail to rebuild and maintain our reputation, we may lose the ability to retain our customers or attract new customers, which may materially and adversely impair our restaurant business. Our business prospects may also be jeopardised.

The restaurant industry is highly competitive

As a restaurant operator, we face intense competition from a diverse group of restaurant chains, individual restaurants operators and food manufacturers who are engaged in the production of similar products. While restaurants in Hong Kong serving western casual dining compete with us directly, we also compete with restaurants in different market segments to a lesser extent. In addition, we face intense competition from new market entrants. Our Group’s business and results of operations may be adversely affected in the event that we are not able to stay competitive in terms of our pricing, the quality of our food offered and the level of our service.

As our Group intends to expand our restaurant network, we have to compete with other restaurant operators as well as retailers for space and experienced employees. The competition for suitable locations may increase the bargaining power of landlords, thus leading to potentially high rents for suitable locations. We may also have to offer experienced management and restaurant staff higher wages in order to recruit or retain them. Such instances will increase the operating costs of our Group, thereby affecting our financial performance.

We also compete against other restaurants on an array of attributes such as quality of food, customer service, pricing and the overall dining experience. Some of our competitors may have larger customer bases, stronger brand reputation, longer operating history and greater financial, marketing and other resources. If we are not able to compete against existing competitors and new market entrants effectively, our business and results of operations may be adversely affected.

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RISK FACTORS

Our restaurant business involves inherent industrial risks and occupational hazards which, if materialised, may affect our business operations and financial results

Our restaurant business involves inherent industrial risks and occupational hazards, which may not be eliminated through implementing safety measures. We participate in certain activities presenting risks and dangers, among which are food ingredients cutting, water boiling and cooking in kitchen. Thus, we are exposed to risks related to such activities, such as finger cuts, scalding and fire. We cannot assure that such risks will not cause a material and adverse impact on us in the future. Such risks, if materialised, may disrupt our business and damage our reputation, which may also affect the validity of our licences, business operations and results of operations.

The prices and timely supply of food ingredients are subject to continuing fluctuation

Our success depends on reliable sources of food ingredients such as meat, seafood, frozen food and vegetables at competitive prices delivered in a timely manner. The prices and timely supply of food ingredients are subject to a variety of factors, some of which are beyond our control, including fluctuations in aggregate supply and demand or other external conditions, such as seasonal shifts, climate, natural disasters, diseases, suppliers’ ceasing operations, severe traffic accidents or delays, labour strikes or change in laws and regulations. Our suppliers may also be affected by higher costs of production and transportation, rising labour costs and other expenses that they pass onto us. Our cost of inventories sold amounted to approximately HK$62.2 million, HK$79.2 million and HK$42.1 million, representing approximately 31.9%, 33.7% and 32.8% of our total revenue for FY2016, FY2017 and the six months ended 30 September 2017, respectively. Moreover, we cannot assure that our key suppliers will continue to provide us with food ingredients at reasonable prices, or in a timely manner. For the sensitivity analysis that illustrates the impact of hypothetical fluctuations in cost of inventories sold on our profit during the Track Record Period, please refer to the section headed ‘‘Financial Information — Principal factors affecting our Group’s results of operations and financial condition — Food ingredient and beverage costs’’ in this prospectus. If we are not able to manage these costs or to pass such additional costs onto our customers or locate alternative suppliers within a short period of time on commercially viable terms in the event that our relationship with major suppliers deteriorates, our future profit margin could be adversely affected. Alternatively, we may be required to remove certain menu offerings of our restaurants, which in turn could adversely affect our results of operations.

Minimum wage requirements in Hong Kong may further increase and impact our staff costs in the future

With effect from 1 May 2017, the statutory minimum wage rate was increased from HK$32.5 per hour to HK$34.5 per hour. Please refer to the section headed ‘‘Regulatory Overview’’ in this prospectus for further details. The increase in salary made it difficult for our restaurants to recruit suitable employees. The salaries of all of our restaurant employees were higher than the applicable statutory minimum wage during the Track Record Period. If there is any further increase in the statutory minimum wage rate in Hong Kong, our staff costs would likely increase correspondingly as a result. As wages increase, competition for qualified employees also increases, which may indirectly result in further increases in our staff costs. Given the competitive market environment in Hong Kong, we may not be able to increase our prices high enough to pass these increased staff costs onto our customers, in which case our business and results of operations would be materially and adversely affected.

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Our business is heavily dependent on the macroeconomic situation in Hong Kong and any reductions in discretionary consumer spending as a result of economic downturn may adversely affect our business

Our business is operating restaurants in Hong Kong, the performance of which is closely related to the macroeconomic conditions of Hong Kong. If we are unable to divert our business to other new markets, any deterioration of the Hong Kong economy, contraction of consumer expenditure on food, fear of a recession and decreases in consumer confidence may lead to a reduction of customer traffic and average spending per customer per meal at our restaurants, which could materially and adversely affect our financial conditions and results of operations.

We are susceptible to incidents of outbreaks of diseases such as contagious diseases of animals, food-borne illnesses and health epidemics

Any outbreak of food-borne diseases such as Bovine Spongiform Encephalopathy, also known as mad cow disease, and Swine Influenza, also known as pig flu, may lead to a loss in customer confidence and reduce customer traffic, which will in turn affect our results of operations. In addition, any negative publicity relating to these and other health-related matters may affect consumers’ perception of the food safety in general, which will consequently reduce customer traffic of our restaurants and adversely affect our results of operations.

Furthermore, other illnesses, such as hand, foot and mouth disease or avian influenza, could adversely affect the supply of some of our food products and significantly increase our costs. We also face risks relating to health epidemics. Past occurrences of epidemics or pandemics, depending on their scale of occurrence, have caused different degrees of damage to the economy in Hong Kong. An outbreak of any epidemics or pandemics in the areas where we operate our restaurants may result in quarantines, temporary closures of our restaurants, travel restrictions or the sickness or death of our key personnel and guests. Any of the above may cause material disruptions to our operations, which in turn may materially and adversely affect our business and results of operations.

The restaurant operations in Hong Kong may be subject to stringent licensing requirements and hygiene standards

It is expected that operations of restaurants in Hong Kong are required to comply with increasingly stringent licensing regulations. If the requirements for obtaining general restaurant licences, liquor licences, water pollution control licences, the relevant hygiene permits, the approval on fire protection and other relevant permits in Hong Kong become more stringent in the future, we would have to increase our compliance costs.

If we fail to obtain the requisite licences on a timely basis, or at all, we may be subject to the potential liabilities if we continue to operate without licences. Alternatively, we may have to suspend our restaurant business for the time being. Either case could materially and adversely affect our financial conditions and results of operations.

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Unforeseeable business interruptions could adversely affect our business

Accidents or unforeseen events such as natural disasters, adverse weather conditions, power failures and power shortages, hardware and software failures, computer viruses, labour strikes or severe traffic accidents or delays, and other events, which are beyond our control, may interrupt our operations and lead to delay in or failure of deliveries of food ingredients to our restaurants resulting food product contamination or spoilage, especially when such events occur in regions in which our operations and food ingredient suppliers are located. In addition, there may also be incidents such as malfunction of refrigeration facilities or inappropriate handling during transportation by the relevant suppliers, which could also lead to food deterioration. This may result in failure on our part to provide quality food and services to customers, thereby affecting our business and undermining our reputation.

RISKS RELATING TO THE SHARE OFFER AND OUR SHARES

There has been no prior public market for our Shares and the liquidity, market price and trading volume of our Shares may be volatile

Prior to the Listing, there is no public market for our Shares. The listing of, and the permission to deal with, our Shares on the Stock Exchange do not guarantee the development of an active public market or the sustainability thereof following completion of the Share Offer. Factors such as variations in our Group’s revenue, earnings and cash flows, strategic alliances or acquisitions made by our Group or its competitors, loss of key personnel, litigation, fluctuations in the market prices for the products or the raw materials of our Group, the liquidity of the market for our Shares, the general market sentiment regarding the restaurant industries could cause the market price and trading volume of our Shares to change substantially. In addition, both the market price and liquidity of the Shares could be adversely affected by factors beyond our Group’s control and unrelated to the performance of our Group’s business, especially if the financial market in Hong Kong experiences a significant price and volume fluctuation. In such cases, investors may not be able to sell their Shares at or above the Offer Price.

Investors may experience dilution if our Group issues additional Shares in the future

Our Group may issue additional Shares upon exercise of options to be granted under our Share Option Scheme in the future. The increase in the number of Shares outstanding after the issue would result in the reduction in the percentage ownership of our Shareholders and may result in a dilution in the earnings per Share and net asset value per Share. In addition, our Group may need to raise additional funds in the future to finance business expansion, new development and acquisitions. If additional funds are raised through the issuance of new equity or equity-linked securities of our Company other than on a pro-rata basis to our existing Shareholders, the shareholding of such Shareholders in our Company may be reduced or such new securities may confer rights and privileges that take priority over those conferred by the Offer Shares.

Any disposal by our Controlling Shareholders of a substantial number of Shares in the public market could materially and adversely affect the market price of the Shares

There is no guarantee that our Controlling Shareholders will not dispose of its Shares following the expiration of their respective lock-up periods after the Listing. Our Group cannot predict the effect, if any, of any future sales of the Shares by any of our Controlling Shareholders, may have on the market

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RISK FACTORS

price of our Shares. Sales of a substantial number of our Shares in the public market, or the market perception that such sales may occur, could materially and adversely affect the prevailing market price of the Shares.

Investors may experience difficulties in enforcing their shareholders’ rights because our Company is incorporated in the Cayman Islands, and the protection to minority shareholders under the Cayman Islands law may be different from that under the laws of Hong Kong or other jurisdictions

Our Company is incorporated in the Cayman Islands and its affairs are governed by the Articles of Association, the Companies Law and common law applicable in the Cayman Islands. The laws of the Cayman Islands may differ from those of Hong Kong or other jurisdictions where investors may be located. As a result, our minority Shareholders may not enjoy the same rights as those pursuant to the laws of Hong Kong or such other jurisdictions. A summary of the Cayman Islands company law on protection of our minority Shareholders is set out in Appendix III to this prospectus.

Future issues, offers or sale of Shares may adversely affect the prevailing market price of our Shares

Future issue of Shares by our Company or the disposal of a substantial number of Shares by any of the Shareholders or the perception that such issues or sale may occur, may negatively impact the prevailing market price of our Shares. We cannot give any assurance that such event will not occur in the future.

RISKS RELATING TO THIS PROSPECTUS

Statistics and industry information contained in this prospectus may not be accurate and should not be unduly relied upon

Certain facts, statistics, and data presented in the section headed ‘‘Industry Overview’’ of this prospectus and elsewhere in this prospectus relating to the industry in which we operate have been derived, in part, from various publications and industry-related sources prepared by government officials or Independent Third Parties. In addition, our Directors believe that the sources of information are appropriate sources for such information and our Directors have no reason to believe that such information is false or misleading or that any fact that would render such information false or misleading has been omitted. However, neither our Group, our Directors, the Sole Sponsor, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, their respective affiliates or advisers, nor any parties involved in the Share Offer (the ‘‘Professional Parties’’) have independently verified, or make any representation as to, the accuracy of such information and statistics. It cannot be assured that statistics derived from such sources are prepared on a comparable basis or that such information and statistics are stated or prepared at the same standard or level of accuracy as, or consistent with, those in other publications within or outside Hong Kong. Accordingly, such information and statistics may not be accurate and should not be unduly relied upon.

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RISK FACTORS

Our Group’s future results could differ materially from those expressed in or implied by the forward-looking statements

This prospectus includes various forward-looking statements that are based on various assumptions. Our Group’s future results could differ materially from those expressed in or implied by such forward-looking statements. For details of these statements and the associated risks, please refer to the section headed ‘‘Forward-Looking Statements’’ of this prospectus.

Investors should read this entire prospectus carefully and we strongly caution you not to place any reliance on any information (if any) contained in press articles or other media regarding us and the Share Offer including, in particular, any financial projections, valuations or other forward looking statement

Prior to the publication of this prospectus, there may be press or other media, which contains certain information referring to us and the Share Offer that is not set out in this prospectus. We wish to emphasise to potential investors that neither we nor any of the Sole Sponsor, the Joint Bookrunners, the Joint Lead Managers and the Underwriters, their directors, officers, employees, advisers, agents or involved in the Share Offer has authorised the disclosure of such information in any press or media, and neither the press reports, any future press reports nor any repetition, elaboration or derivative work were prepared by, sourced from, or authorised by us or any of the Professional Parties. Neither we nor any Professional Parties accept any responsibility for any such press or media coverage or the accuracy or completeness of any such information. We make no representation as to the appropriateness, accuracy, completeness or reliability of any such information or publication. To the extent that any such information is not contained in this prospectus or is inconsistent or conflicts with the information contained in this prospectus, we disclaim any responsibility, liability whatsoever in connection therewith or resulting therefrom. Accordingly, prospective investors should not rely on any such information in making your decision as to whether to subscribe the Offer Shares. You should rely only on the information contained in this prospectus and the Application Forms.

– 39 –

WAIVER FROM STRICT COMPLIANCE WITH THE GEM LISTING RULES

In preparing for the Listing, we have sought the following waiver from strict compliance with the relevant provisions of the GEM Listing Rules:

NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS

Our Group has entered into transactions with Elite for its supply of chilled and frozen meat and seafood and other food ingredients that are expected to continue after the Listing, which will constitute non-exempt continuing connected transactions of our Company under the GEM Listing Rules upon the Listing. We have applied to the Stock Exchange for, and the Stock Exchange has granted, a waiver from strict compliance with the requirements in respect of the relevant non-exempt continuing connected transactions under Chapter 20 of the GEM Listing Rules. Details of such non-exempt continuing connected transactions and the wavier are set out in the section headed ‘‘Connected Transactions’’ of this prospectus.

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INFORMATION ABOUT THIS PROSPECTUS AND THE SHARE OFFER

DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS

This prospectus, for which our Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Companies (Winding Up and Miscellaneous Provisions) Ordinance, the Securities and Futures (Stock Market Listing) Rules (Chapter 571V of the Laws of Hong Kong) and the GEM Listing Rules for the purpose of giving information with regard to our Company. Our Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this prospectus is accurate and complete in all material respects and not misleading or deceptive and there are no other matters the omission of which would make any statement in this prospectus misleading.

INFORMATION ON THE SHARE OFFER

This prospectus is published solely in connection with the Share Offer and the listing of the Shares on GEM, which is sponsored by the Sole Sponsor and managed by the Joint Bookrunners and the Joint Lead Managers.

The Offer Shares are offered for subscription solely on the basis of the information contained and representations made in this prospectus and the Application Forms and on the terms and subject to the conditions set out herein and therein. No person is authorised in connection with the Share Offer to give any information, or to make any representation, not contained in this prospectus, and any information or representation not contained in this prospectus must not be relied upon as having been authorised by our Company, the Sole Sponsor, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, any of their respective directors, officers, agents, employees or any other persons or parties involved in the Share Offer.

Details of the structure of the Share Offer, including its conditions, are set out in the section headed ‘‘Structure and Conditions of the Share Offer’’ of this prospectus, and the procedures for applying for the Public Offer Shares are set out in the section headed ‘‘How to Apply for Public Offer Shares’’ of this prospectus and in the relevant Application Forms.

APPLICATION FOR LISTING OF OUR SHARES ON GEM

Our Company has applied to the Stock Exchange for the listing of, and permission to deal in, the Shares in issue and to be issued pursuant to the Share Offer and the Capitalisation Issue and any Shares which may be issued pursuant to the exercise of the Offer Size Adjustment Option and any option which may be granted under the Share Option Scheme.

No part of the Shares or loan capital of our Company is listed, traded or dealt in on any other stock exchange. At present, our Company is not seeking or proposing to seek a listing of, or permission to deal in, any part of the Shares or loan capital on any other stock exchange.

Under section 44B(1) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance, any allotment made in respect of any application will be invalid if the listing of, and permission to deal in, the Offer Shares on GEM is refused before the expiration of three weeks from the date of the closing of the Share Offer, or such longer period (not exceeding six weeks) as may, within the said three weeks, be notified to us by the Stock Exchange.

– 41 –

INFORMATION ABOUT THIS PROSPECTUS AND THE SHARE OFFER

Pursuant to Rule 11.23(7) of the GEM Listing Rules, at the time of Listing and at all times thereafter, our Company must maintain the ‘‘minimum prescribed percentage’’ of 25% of the issued share capital of our Company in the hands of the public (as defined in the GEM Listing Rules). A total of 250,000,000 Offer Shares, representing 25% of the enlarged issued share capital of our Company will be in the hands of the public immediately following completion of the Share Offer and the Capitalisation Issue and upon Listing (without taking into account the Shares to be allotted and issued upon the exercise of the Offer Size Adjustment Option and any options to be granted under the Share Option Scheme).

ABOUT THE SHARE OFFER

We have not authorised anyone to provide any information or to make any representation not contained in this prospectus. You should not rely on any information or representation not contained in this prospectus as having been authorised by us, the Sole Sponsor, the Joint Bookrunners, the Joint Lead Managers, the Underwriters or any of our or their respective directors, officers or representatives or any other persons involved in the Share Offer.

The delivery of this prospectus should not, under any circumstances, constitute a representation that there has been no change or development reasonably likely to involve a change in our affairs since the date of this prospectus or imply the information contained in this prospectus is correct as at the date subsequent to the date of this prospectus.

STRUCTURE AND CONDITIONS OF THE SHARE OFFER

Details of the structure of the Share Offer, including its conditions, are set out in the section headed ‘‘Structure and Conditions of the Share Offer’’ of this prospectus.

PROCEDURE FOR APPLICATION FOR PUBLIC OFFER SHARES

The procedure for application for Public Offer Shares is set out in the section headed ‘‘How to Apply for Public Offer Shares’’ of this prospectus and on the relevant Application Forms.

FULLY UNDERWRITTEN

This prospectus is published in connection with the Share Offer. The Listing is sponsored by the Sole Sponsor. The Public Offer is fully underwritten by the Public Offer Underwriters under the terms and conditions of the Public Offer Underwriting Agreement. The Placing Underwriting Agreement relating to the Placing is expected to be entered on or around the Price Determination Date, subject to agreement on pricing of the Offer Shares between the Joint Bookrunners (for themselves and on behalf of the Underwriters) and our Company. The Share Offer is managed by the Joint Bookrunners, the Joint Lead Managers and the Co-Lead Manager. Further information relating to the Underwriters and the Share Offer and the underwriting arrangements is set out in the section headed ‘‘Underwriting’’ of this prospectus.

If, for any reason, the Offer Price is not agreed, the Share Offer will not proceed and will lapse. For further information about the Underwriters and the underwriting arrangements, please refer to the section headed ‘‘Underwriting’’ of this prospectus.

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INFORMATION ABOUT THIS PROSPECTUS AND THE SHARE OFFER

RESTRICTIONS ON OFFER AND SALE OF OFFER SHARES

No action has been taken to permit a public offering of the Offer Shares in any jurisdiction other than Hong Kong. Accordingly, this prospectus may not be used for the purpose of, and does not constitute, an offer or invitation in any jurisdiction or in any circumstances in which such an offer or invitation is not authorised or to any person to whom it is unlawful to make such an offer or invitation.

The Public Offer Shares are offered to the public for subscription solely on the basis of the information contained and the representations made in this prospectus and the related Application Forms. No person is authorised in connection with the Share Offer to give any information, or to make any representation, not contained in this prospectus, and any information or representation not contained in this prospectus must not be relied upon as having been authorised by our Company, the Sole Sponsor, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, any of their respective directors or any other person involved in the Share Offer.

Each person acquiring the Offer Shares will be required, and is deemed by his acquisition of the Offer Shares, to confirm that he is aware of the restrictions on offers of the Offer Shares described in this prospectus and that he is not acquiring, and has not been offered any Offer Shares in circumstances that contravene any such restrictions.

The distribution of this prospectus and the offering and sale of the Offer Shares in other jurisdictions are subject to restrictions and may not be made except as permitted under the applicable securities laws of such jurisdictions and pursuant to registration with or authorisation by the relevant securities regulatory authorities or an exception therefrom. In particular, the Offer Shares have not been publicly offered or sold, directly or indirectly, in the United States.

Prospective investors for the Offer Shares should consult their financial advisers and take legal advice, as appropriate, to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdiction. Prospective investors for the Offer Shares should inform themselves as to the relevant legal requirements of applying for the Offer Shares and any applicable exchange control regulations and applicable taxes in the countries of their respective citizenship, residence or domicile.

HONG KONG REGISTER AND STAMP DUTY

Our principal register of members will be maintained by the principal share registrar in the Cayman Islands. Dealings in the Shares on GEM will be registered on our Hong Kong branch register of members maintained by Tricor Investor Services Limited in Hong Kong.

Only Shares registered on our Hong Kong branch register of members maintained by the Hong Kong Branch Share Registrar in Hong Kong may be traded on GEM. Dealings in our Shares registered on our Hong Kong branch register of members in Hong Kong will be subject to Hong Kong stamp duty.

PROFESSIONAL TAX ADVICE RECOMMENDED

If you are unsure about the taxation implications of subscribing for or purchasing, holding or disposing of or dealings in our Shares, you should consult your professional advisers. None of our Company, the Sole Sponsor, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, their respective directors and any other person involved in the Share Offer accepts responsibility for any tax effects on, or liability of, any person or holders of Shares resulting from subscribing for, purchasing, holding or disposing of or dealings in our Shares.

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INFORMATION ABOUT THIS PROSPECTUS AND THE SHARE OFFER

SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS

If the Stock Exchange grants the listing of, and permission to deal in, our Shares on GEM and our Company complies with the stock admission requirements of HKSCC, our Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the date of commencement of dealings in our Shares on GEM or, under contingent situation, such other date HKSCC chooses. Investors should seek the advice of their stockbroker or other professional adviser for details of those settlement arrangements as such arrangements will affect their rights, interest and liabilities.

Settlement of transactions between participants of the Stock Exchange is required to take place in CCASS on the second Business Day after any trading day.

All necessary arrangements have been made for our Shares to be admitted to CCASS.

All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

COMMENCEMENT OF DEALINGS IN THE SHARES

Dealings in our Shares on GEM are expected to commence at 9:00 a.m. on Monday, 16 April 2018.

Our Shares will be traded in board lots of 10,000 Shares each. The stock code for our Shares is 8447. We will not issue temporary documents of title.

LANGUAGE

If there is any inconsistency between this prospectus and the Chinese translation of this prospectus, this prospectus shall prevail. If there is any inconsistency between the Chinese names of the Chinese entities mentioned in this prospectus and their English translation, the Chinese names shall prevail.

CURRENCY TRANSLATIONS

Unless otherwise specified, translations of US$ into HK$ in this prospectus are based on the exchange rate set out below (for the purpose of illustration only):

US$1.00 = HK$7.80

No representation is made that any amounts in US$ and HK$ can be or could have been converted at the relevant dates at the above exchange rate or any other rates or at all.

ROUNDING

Certain amounts and percentage figures included in this prospectus have been subject to rounding adjustments. Accordingly, totals of rows or columns of numbers in tables may not be equal to the apparent total of individual items. Where information is presented in thousands or millions of units, amounts may have been rounded up or down. Any discrepancies in any table between totals and sums of amounts listed therein are due to rounding.

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DIRECTORS AND PARTIES INVOLVED IN THE SHARE OFFER

DIRECTORS

Name	Residential address	Nationality
Executive Directors
Mr. Kwong Tai Wah (鄺大華)	Flat A, 6/F	Chinese
	Birchwood Place
	96 Macdonnell Road
	Central
	Hong Kong
Ms. Kwong Man Yui (鄺文蕊)	Flat A, 6/F	Chinese
	Birchwood Place
	96 Macdonnell Road
	Central
	Hong Kong
Mr. Lam On Fai (林安輝)	Flat D, 24/F	Chinese
	Gee Lan Mansion
	7 Westlands Road
	Quarry Bay
	Hong Kong
Independent non-executive Directors
Mr. Lai Ming Fai Desmond (黎明輝)	Flat 16F, Block 1	Chinese
	Ronsdale Garden
	25 Tai Hang Drive
	Jardine’s Lookout
	Hong Kong
Dr. Cheng Lee Lung (鄭利龍)	Flat 101	Chinese
	Block 27
	Heng Fa Chuen
	Hong Kong
Mr. Kwok Yiu Chung (郭耀松)	Unit D, 11/F	Chinese
	Tower 5, Bellagio
	33 Castle Peak Road
	Sham Tseng
	Hong Kong

For further information on the profile and background of our Directors, please refer to the section headed ‘‘Directors, Senior Management and Employees’’ in this prospectus.

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DIRECTORS AND PARTIES INVOLVED IN THE SHARE OFFER

PARTIES INVOLVED IN THE SHARE OFFER

Sole Sponsor Alliance Capital Partners Limited Room 1502–1503A Wing On House 71 Des Voeux Road Central Central Hong Kong (A licensed corporation carrying on Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO)

Joint Bookrunners and Alliance Capital Partners Limited Joint Lead Managers Room 1502–1503A Wing On House 71 Des Voeux Road Central Central Hong Kong Sincere Securities Limited 9/F, Cosco Tower 183 Queen’s Road Central Sheung Wan Hong Kong Co-Lead Manager China Industrial Securities International Capital Limited 7/F, Three Exchange Square 8 Connaught Place Central Hong Kong

Legal advisors to our Company As to Hong Kong law Hastings & Co. 5/F, Gloucester Tower The Landmark 11 Pedder Street Central Hong Kong As to Cayman Islands law Conyers Dill & Pearman Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman, KY1-1111 Cayman Islands

– 46 –

DIRECTORS AND PARTIES INVOLVED IN THE SHARE OFFER

Legal advisors to the Sole Sponsor and As to Hong Kong law the Underwriters D. S. Cheung & Co. 29/F, Bank of East Asia Harbour View Centre 56 Gloucester Road, Wanchai Hong Kong Auditors and reporting accountants HLB Hodgson Impey Cheng Limited Certified Public Accountants 31/F, Gloucester Tower The Landmark 11 Pedder Street Central Hong Kong Internal control adviser HLB Hodgson Impey Cheng Risk Advisory Services Limited 31/F, Gloucester Tower The Landmark 11 Pedder Street Central Hong Kong Independent industry consultant China Insights Consultancy Limited 10/F, Tomorrow Square 399 West Nanjing Road Huangpu District Shanghai PRC 200003 Receiving Bank DBS Bank (Hong Kong) Limited 11/F, The Center 99 Queen’s Road Central Central, Hong Kong

– 47 –

CORPORATE INFORMATION

Registered office in the Cayman Cricket Square, Hutchins Drive Islands P.O. Box 2681 Grand Cayman, KY1-1111 Cayman Islands Headquarters and principal place of Room 2313, 23/F business in Hong Kong registered Hong Kong Plaza under Part 16 of the Companies 186–191 Connaught Road West Ordinance Hong Kong Company’s website http://www.mrsteak.com.hk/ (Information contained in this website does not form part of this prospectus) Company secretary Mr. Kwok Siu Man (a fellow member of The Hong Kong Institute of Chartered Secretaries) 31/F, 148 Electric Road North Point, Hong Kong Compliance officer Ms. Kwong Man Yui Flat A, 6/F Birchwood Place 96 Macdonnell Road Central Hong Kong Authorised representatives Mr. Kwong Tai Wah Flat A, 6/F Birchwood Place 96 Macdonnell Road Central Hong Kong Mr. Kwok Siu Man 31/F, 148 Electric Road North Point, Hong Kong Audit Committee Mr. Lai Ming Fai Desmond (Chairman) Dr. Cheng Lee Lung Mr. Kwok Yiu Chung Remuneration Committee Mr. Kwok Yiu Chung (Chairman) Mr. Lai Ming Fai Desmond Dr. Cheng Lee Lung

– 48 –

CORPORATE INFORMATION

Nomination Committee Mr. Kwong Tai Wah (Chairman) Mr. Kwok Yiu Chung Dr. Cheng Lee Lung Principal share registrar and Conyers Trust Company (Cayman) Limited transfer office in the Cricket Square, Hutchins Drive Cayman Islands P.O. Box 2681 Grand Cayman, KY1-1111 Cayman Islands Hong Kong branch share registrar and Tricor Investor Services Limited transfer office Level 22, Hopewell Centre 183 Queen’s Road East Hong Kong Principal banker DBS Bank (Hong Kong) Limited 11/F, The Center 99 Queen’s Road, Central Central, Hong Kong Compliance adviser Alliance Capital Partners Limited Room 1502–1503A Wing On House 71 Des Voeux Road Central Central Hong Kong

(A licensed corporation carrying on Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO)

– 49 –

INDUSTRY OVERVIEW

The information presented in this section is derived from the CIC Report, which is based on information sourced from CIC’s database, publicly available information sources, industry reports, as well as data obtained from interviews and other sources. We believe that these information sources are appropriate and have taken reasonable care in extracting and reproducing such information. We have no reason to believe that such information is false or misleading, or that any fact has been omitted that would render such information false or misleading. The information has not been independently verified by us, the Sole Sponsor, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, any of their respective directors, officers, representatives, employees, agents or professional advisers, or any other person or party (except CIC) involved in the Share Offer, and no representation is given as to the completeness, accuracy, or fairness of such information. Accordingly, such information should not be unduly relied upon.

SOURCES OF INFORMATION

We commissioned CIC, an independent market research consulting firm, to conduct a detailed analysis of, and prepare a final report on Hong Kong’s western casual dining restaurants market for the period from 2013 to 2022. We agreed to pay CIC a total fee of HK$360,000, which we believe reflects the market rate for similar services. CIC is an investment consulting company established in Hong Kong. Its services include industry consulting, commercial due diligence, and strategic consulting. Its professional team of consultants has been tracking the latest market trends in multiple industries and has extensive experience in, and insightful market knowledge of, the abovementioned industries.

CIC undertook both primary and secondary research using a variety of resources. Primary research involved interviewing key industry experts and leading industry participants in western restaurant market in Hong Kong. Secondary research involved analysing data from various publicly available data sources, including government releases, company reports, independent research reports, and CIC’s internal database.

ASSUMPTIONS

In compiling and preparing the report, CIC has adopted the following assumptions: (i) the overall social, economic, and political environment in Hong Kong is expected to remain stable during the forecast period; (ii) related key industry drivers are likely to propel continued growth in Hong Kong’s restaurant industry throughout the forecast period, including increasing dining-out expenditure by consumers in Hong Kong as their income levels rise, opportunities of business expansion brought by the newly-developed areas in Hong Kong, the growing variety of cuisines that are able to attract consumers to increase dining-out expenditure; and (iii) there is no extreme force majeure or new set of industry regulations that will affect the market either dramatically or fundamentally.

The CIC Report primarily focuses on the western casual dining restaurants market in Hong Kong, the jurisdiction where our business operations are conducted. Our Directors confirm that after taking reasonable care, there has been no material adverse change in the market information included herein subsequent to the published dates for the relevant data contained in the CIC Report, changes which may qualify, contradict, or have an impact on the information presented in this section. Except as otherwise indicated, all data and forecasts contained in this section are derived from the CIC Report. The ‘‘Forecast Period’’ refers to the period from 2018 to 2022.

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INDUSTRY OVERVIEW

OVERVIEW OF THE RESTAURANT INDUSTRY IN HONG KONG

Hong Kong has been an internationally important city serving tens of millions of visitors. The restaurant industry in Hong Kong is extremely well-developed in terms of industrial regulation, professional services and variety of high-quality cuisines.

Major Segments of the Restaurant Industry in Hong Kong

Based on the classification standards of Hong Kong Census and Statistics Department and CIC’s analysis, the major segments of the restaurant industry in Hong Kong can be categorised as follows:

Segment Descriptions

Chinese Restaurants . Chinese restaurants refer to restaurants mostly offering various types of Chinese cuisines including, but not limited to, Cantonese, Beijing, Sichuan, Shanghai, Shandong, Fujian, Jiangsu, Zhejiang, Hunan and Anhui cuisines.
Asian Restaurants . Asian restaurants refer to restaurants offering various nonChinese Asian cuisines including, but not limited to, Japanese, Korean and Thai cuisines.
Western Restaurants . Western restaurants refer to restaurants mostly offering western cuisines including, but not limited to, French, Italian, British, American and Mexican cuisines.
Fast Food Restaurants . Fast food restaurants refer to Asian and western restaurants where customers get the food and find their seats by themselves. This segment also includes cafeterias, snack shops and food stalls at food courts.
Bars . Bars refer to establishments specialised in offering alcoholic beverages with a small number of carefully selected and prepared dishes or snacks. This segment includes clubs and pubs.
Other Catering . Other catering establishments include coffee shops, beverage Establishments serving places, herbal tea shops, places providing event catering services and those establishments which are not described in previous sections.

Source: CIC Report

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INDUSTRY OVERVIEW

In the segments mentioned above, the Chinese, Asian and western restaurants can be divided into fine dining and casual dining segments. Up to the Latest Practicable Date, our Group is mainly involved in operating 12 western casual dining restaurants in Hong Kong.

Comparison between western fine dining and casual dining restaurants in Hong Kong

Cuisines and dishes Service Average spending per guest Other features	Fine dining . Customers are served multiple- course meals, ranging from appetisers and soups to main courses and desserts. . Comprehensive drinks are offered including alcoholic and non- alcoholic drinks. . A full table service is provided including seating arrangements, order taking, delivery of food to the table and payment processing. . Spending per guest per meal is normally not lower than HK$400 to over HK$1,000 for dinner. . The major guests for western fine dining restaurants are guests who are looking for a supreme service. . Some guests choose western fine dining restaurants for some special occasions such as anniversaries or birthday gatherings. . The dining time for a typical guest is over 1.5 hours. Reservation is always required. The turnover rate is lower when compared to that of most western casual dining restaurants. . Western fine dining restaurants are mostly located in high-end shopping malls in city centres and five-star hotels.	Casual dining
		. Simpler menus are provided with affordable prices. Hot dishes such as pasta, burgers and soup are the most common offers for western casual dining restaurants. . Standard sets of meals are provided during lunch time, afternoon tea and dinner time. . Basic table service is provided. The extent of table service provided depends on target clientele and the overall operating budget of the restaurant. . Spending per guest per meal is normally between HK$100 to HK$400 for dinner. Spending guest per meal is usually below HK$150 for a standard lunch meal. . The major guests of western casual restaurants are young consumers aged between 25 and 40. These guests prefer a casual and relaxing atmosphere. . The dining time for a typical guests ranges from 1 to 1.5 hours so the turnover rate for western casual restaurants is relatively higher when compared with that of western fine dining restaurants. . Western casual dining restaurants are mostly located in popular shopping malls for strong and steady traffics.

Source: CIC Report

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INDUSTRY OVERVIEW

Recent Development of the Restaurant Industry in Hong Kong

The overall restaurant industry in Hong Kong is quite mature and saturated, and growth in this industry is mostly driven by the overall growth of the local economy. The following table presents the information and data about the overall development of Hong Kong’s restaurant industry between 2013 and 2017:

Total receipts(Note 1) (HKD billion) Total purchases(Note 2) (HKD billion) Number of establishments Compensation of employees (HKD billion) Operating expenses(Note 3) (HKD billion) As percentage of total receipts	2013 97.0 33.7 13,855 34.6 37.7 38.9%	2014 100.4 34.4 13,904 36.9 40.1 39.9%	2015 104.4 35.2 13,555 38.4 41.6 39.8%	2016 107.4 35.6 13,383 40.8 43.2 40.2%	2017 112.7 36.3 n/a n/a n/a n/a	CAGR (2013–2017) 3.8% 1.9% n/a n/a n/a n/a

Notes:

Total receipts refer to the sales generated from the operation of restaurants.
Total purchases refer to the value of purchases of food, beverages, and other goods for sale.
Operating expenses refer to those including rental expenses, labour expenses, interest expenses, expenses on purchase of raw materials and ingredients, and other major expenses for operating a restaurant.

Source: Census and Statistics Department of the Hong Kong Government

Labour costs and rental fees are also expected to continue increasing in the future along with the development of Hong Kong’s overall economy. Moreover, rental fees for properties in the New Territories will likely increase at a relatively faster rate compared to other well-developed areas.

Thanks to the relatively stable economic growth in Hong Kong, the market size of restaurant industry in terms of total receipts grew from approximately HK$97.0 billion in 2013 to approximately HK$112.7 billion in 2017, representing a CAGR of 3.8%. The market size is expected to further grow to approximately HK$133.0 billion in 2022, representing a CAGR of 3.4% between 2017 and 2022, according to the CIC Report.

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INDUSTRY OVERVIEW

Market size and forecast of the restaurant market by segment in terms of total receipts, Hong Kong, 2013–2022E

==> picture [388 x 235] intentionally omitted <==

----- Start of picture text -----

HKD billion
150.0
128.2 133.0
123.8
125.0100.075.0 11.7 15.4 97.07.3 100.412.3 16.1 7.8 104.413.0 16.9 8.1 107.413.4 17.4 8.5 112.714.5 18.3 8.9 116.115.1 19.1 9.4 119.815.8 20.0 9.8 10.3 16.6 20.8 10.7 17.6 21.7 11.1 18.7 22.5
50.0 17.0 17.7 18.9 20.1 21.3 22.5 23.7 25.1 26.5 28.0
25.0
45.6 46.5 47.5 48.0 49.7 50.0 50.5 51.0 51.7 52.7
0.0
2013 2014 2015 2016 2017 2018E 2019E 2020E 2021E 2022E
CAGR (2013–2017) CAGR (2017–2022E)
Chinese restaurant 2.2% 1.2%
Fast food shop 5.8% 5.6%
Western restaurant 4.4% 4.2%
Asian restaurant 5.5% 5.2%
Other eating and drinking place 5.1% 4.5%
----- End of picture text -----

Source: CIC Report

Among the major restaurant segments, the western restaurant segment was the third largest, having grown from approximately HK$15.4 billion in 2013 to approximately HK$18.3 billion in 2017, representing a CAGR of 4.4%. This segment is expected to reach approximately HK$22.5 billion by 2022, representing a CAGR of 4.2% between 2017 and 2022. This rapid growth is primarily due to the changing and diversification of consumer eating habits and the increasing number of western restaurants in Hong Kong.

OVERVIEW OF THE WESTERN CASUAL DINING RESTAURANTS MARKET IN HONG KONG

The growing popularity of casual dining activities in Hong Kong

Hong Kong consumers have been growing increasingly fond of eating out in casual dining restaurants, as they have longer working hours, smaller families, and more social activities that are suitable in casual dining establishments. Western casual dining restaurants have greatly benefited from the growing popularity of the casual dining experience. According to the CIC Report, the overall market size of western casual dining restaurants in terms of total receipts grew from approximately HK$12.3 billion in 2013 to approximately HK$14.7 billion in 2017, representing a CAGR of 4.6%. This growth momentum is also expected to sustain in the near future, with the market size expected to expand to approximately HK$18.1 billion in 2022, representing a CAGR of 4.2% between 2017 and 2022.

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INDUSTRY OVERVIEW

Market size and forecast of western restaurant market by segment in terms of total receipts, Hong Kong, 2013–2022E

==> picture [397 x 187] intentionally omitted <==

----- Start of picture text -----

HKD billion
50.0 CAGR (2013–2017) CAGR (2017–2022E)
45.0 Western casual dining restaurants 4.6% 4.2%
Western fine dining restaurant 3.8% 4.1%
40.0
35.0
30.0
25.020.015.0 15.43.1 16.13.2 16.93.3 17.43.4 18.33.6 19.13.8 20.03.9 20.84.1 21.74.2 22.54.4
10.0
5.0 12.3 12.9 13.6 14.0 14.7 15.3 16.1 16.7 17.5 18.1
0.0
2013 2014 2015 2016 2017 2018E 2019E 2020E 2021E 2022E
Source: CIC Report
----- End of picture text -----

Drivers of the western casual dining restaurants market in Hong Kong

We believe the following factors will drive continued growth in the western casual dining restaurants market in Hong Kong:

. Increasing per capita expenditures on dining out. With the recovery of the global economy and Hong Kong’s economy restoring consumer confidence, consumption levels are expected to continue gaining strength in the near future. Expenditure on food is expected to continue increasing steadily alongside the increasing customer income. Per capita expenditure on dining out for Hong Kong residents increased from approximately HK$19,020 in 2013 to approximately HK$22,527 in 2017, representing a CAGR of 4.3% for this period. Per capita expenditure is expected to continue increasing to HK$27,314 by 2022, representing a CAGR of 3.9% between 2017 and 2022.
. Rebounding number of international tourist. The number of visitors to Hong Kong declined in both 2015 and 2016 as a result of an uncertain outlook for the global economy and antiparallel trading protests that led to the decrease of mainland China tourists under the individual visit scheme, among other reasons. The number of visitors is expected to rebound to reach approximately 70.4 million by 2022 as the Hong Kong Government takes effective measures to rebuild the city’s positive image as a hospitable travel destination to attract more international tourists.
. New opportunities provided by new development areas (‘‘NDA’’). According to the 2016 Hong Kong Policy Address, a handful of development projects are currently progressing as scheduled in order to address the housing shortage problems. These development projects include Kwu Tung North and Fanling North NDAs, Tung Chung New Town Extension, Hung Shui Kiu NDA, and Yuen Long South Development, and are expected to provide over 7.8 million sq.m. of new floor area for commercial and industrial use. With the continuous

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INDUSTRY OVERVIEW

investment in developing commercial property, especially in terms of projects located in the north area and Lantau Island, the number of customers frequenting local businesses and the overall demand for catering services are expected to increase accordingly.

. Rising public demand for healthy and premium cuisines. There is a noticeable trend in Hong Kong that consumers are gaining a stronger preference for healthier cuisines which are normally higher priced. These new healthy and premium cuisines are normally introduced into the Hong Kong restaurant industry by numerous casual dining restaurant operators. For example, beef and seafood have gained a wider acceptance by Hong Kong consumers as healthier choices of meat due to their lower fat content and higher protein content comparatively to pork. As a result, western casual dining cuisines that offer these healthier ingredients have gained stronger preference among Hong Kong consumers in the past decade.

Important trends of the restaurant industry in Hong Kong

The following are noticeable trends in the restaurant industry in Hong Kong:

. Diversification of positioning. Restaurant groups in Hong Kong tend to develop and establish diverse brands of catering services to expand their businesses and capture a higher market share. In terms of target customers, restaurant groups launch different establishments to capture customers from both the high-end and mass markets. In terms of cuisine, restaurant groups are increasingly choosing to launch restaurants serving non-Cantonese Chinese cuisines, Asian cuisines and western cuisines.
. Integration of supply-chain management. It is common for restaurants in the Hong Kong market to maintain a stable and long-term relationship with their major suppliers in order to secure stable supply of raw materials with good quality. With smaller restaurant operators being forced out of the market and larger players taking a larger share of the market, the supply chain for the consumer catering service has also become more concentrated and specialised. The ever more integrated supply chain for catering service groups will help lower the procurement costs by simplifying the management and increasing the efficiency of communication and delivery.
. Growing importance of digital marketing. In order to attract consumer attention and gain more business traffic for restaurants, it is essential for the catering service providers to make full use of internet communication media and technology such as online advertising, mobile device application advertising (such as OpenRice), social media advertising, etc. Social media and mobile phone applications have become one of the primary sources of searching for and learning about restaurants, especially for the younger generation.

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INDUSTRY OVERVIEW

Challenges for the development of western casual dining restaurants market in Hong Kong

Major challenges for the positive development of Hong Kong casual dining restaurant industry include the following:

. Labour shortage. Few young people in Hong Kong are willing to work as service staff in the restaurant industry, with this kind of employment being of a high intensity and with relatively lower wages. Median working hours per week adds up to over 54 hours and the median hourly wage is HK$44.7, the latter of which is lower than most of other industries in Hong Kong.
. Stable supply of key food ingredients. Given most of food ingredients consumed in Hong Kong must be imported, unexpected food safety incidents can suddenly and unexpectedly hit the supply of key food ingredients in the market. For example, because of quality issues with Brazilian beef in 2017, all Brazilian beef imported into Hong Kong had to be destroyed that year. Restaurant operators should have stable supplies of quality ingredients from reliable suppliers and importers in Hong Kong.

Consumer Price Index in Hong Kong

The Consumer Price Indexes (‘‘CPI’’) of the important ingredients used by western restaurants in Hong Kong have been generally growing in tandem with the Composite Consumer Price Index, presented by the following chart:

Consumer Price Indexes for major food ingredients, Hong Kong, 2013–2017

==> picture [431 x 247] intentionally omitted <==

----- Start of picture text -----

180
170
160
150 Pork
140 Beef
130 Poultry
Frozen meat
120
Fresh vegetables
110
100
2013 2014 2015 2016 2017
Frozen Fresh
Pork Beef Poultry meat vegetables
CAGR(2013–2017) 3.8% 1.7% 6.6% 0.9% 0.4%
Source: Census and Statistics Department of the Hong Kong Government
----- End of picture text -----

All the indexes above have steadily grown between 2013 and 2017 primarily due to the heavy reliance on imported ingredients. The rising prices of major ingredients will pressure restaurant groups if the price inflation of ingredients cannot be effectively transferred to consumers.

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INDUSTRY OVERVIEW

The costs of labour and rent for the restaurant industry in Hong Kong

The following table briefly illustrates the costs of labour and rental expenses in Hong Kong:

						CAGR
	2013	2014	2015	2016	2017	(2013–2017)
Number of employees	245,217	243,731	246,072	242,584	n/a	n/a
Median hourly wage in the restaurant
industry (HKD per hour)	37.2	39.9	42.3	44.7	n/a	n/a
Rental index (1999=100) for private
retail premises	165.5	173.1	182.5	178.6	182.5	2.5%

Source: Census and Statistic Departments of the Hong Kong Government

Entry Barriers

Major entry barriers for Hong Kong’s western casual dining market include (but are not limited to) the following:

. Large initial investment. A large initial capital investment is required to ensure that a restaurant can benefit from continued business expansion. Raising an adequate level of funds can therefore be a major challenge for new entrants. Establishing a western casual dining restaurants requires investments in rent for the venue, decorations, facilities, electric appliances, personnel recruitment, etc. New entrants that are not financially strong may find it difficult to operate a western casual dining restaurants at the scale required.
. Experienced and qualified staff. The chef is one of the most important factors in terms of the core competitiveness of a given restaurant. This is also true for western casual dining restaurants in Hong Kong. Most premium steakhouse head chefs in Hong Kong are wellexperienced and most of them are from western countries. These chefs have a deeper understanding of cooking methods for western-style dishes. New participants therefore may find it difficult to provide dishes offering the same quality taste representative of current leading restaurants in the industry.
. Complex licensing application procedures. There are multiple legal and administrative requirements in Hong Kong for opening a new restaurant, including, among other things, a general restaurant licence, a liquor licence and water pollution control licences. There are also hygiene and environmental requirements that a new entrant must first meet in order to get started. Multiple governmental departments, including Hong Kong’s Food and Environmental Hygiene Department, Liquor Licensing Board, Environmental Protection Department, and other departments are all involved in the application process. Thus, the complex and time-consuming application process creates yet another entry barrier for new participants in the restaurant industry.

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INDUSTRY OVERVIEW

Key success factors

Key success factors for Hong Kong’s western casual dining market include (but are not limited to) the following:

. Innovating variety of cuisines offered. In order to stand out amongst the intense business competition, restaurant groups in Hong Kong are becoming increasingly focused on providing innovative and signature dishes that incorporate new ingredients, flavours and cooking methods that are less commonly seen. These creative cuisines can greatly help to attract customers, arouse their interest and facilitate consumption.
. Location. A well-selected location is one of the most important factors for the success of a restaurant, since the location always indicates the size of potential customer traffic. Restaurants located in the central commercial properties, transportation hubs and tourist areas will be better positioned to enjoy a stable flow of consumer traffic.
. A well-experienced management team. An experienced and dedicated management team is a core asset for restaurant groups and helps them to build close relationships with key suppliers and customers, while their in-depth knowledge of the industry helps them to stay abreast of any industry developments and market trends.

COMPETITIVE LANDSCAPE OF THE WESTERN CASUAL DINING RESTAURANTS MARKET IN HONG KONG

The market for western casual dining restaurants in Hong Kong is highly competitive and fragmented. While the independent western casual dining restaurants are dominant in terms of total number, the leading restaurant groups within such a segment are normally those operating multi-brand or chain restaurants with a large number of outlets. The top five western casual dining restaurants groups in Hong Kong accounted for approximately 10.7% of the overall market in terms of revenue generated in FY2017. In FY2017, our Group ranked fourth in the overall western casual dining restaurants market in Hong Kong, achieving a market share of approximately 1.6% in terms of total revenue from our restaurant outlets (excluding the ‘‘Hana’’ Japanese restaurant).

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INDUSTRY OVERVIEW

Ranking of western casual dining restaurants groups in terms of revenue in FY2017

Rank Name of company Headquarters location 1 Competitor A Hong Kong 2 Dining Concepts Holdings Limited (stock code: 8056) Hong Kong 3 Competitor C U.S. 4 Our Group Hong Kong 5 Competitor D Hong Kong Others Total	Revenue from western casual restaurants in FY2017 (HKD million) 440.6 398.4 250.7 224.2 193.4 12,638.5 14,145.9	Share of total market Description (%) 3.1 Comprehensive western casual restaurants including general western style restaurants and bars 2.8 Comprehensive western casual restaurants including, not limited to, Italian, British, American, Mexican style restaurants and bars 1.8 Steak-featured restaurants 1.6 Comprehensive western casual restaurants including steak-featured restaurants, bars and general western restaurants 1.4 American style western restaurants 89.3 100.0

Source: CIC Report

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REGULATORY OVERVIEW

We are a restaurant group in Hong Kong operating 13 restaurants. This section sets forth a summary of the laws and regulations applicable to our business.

LAWS RELATING TO THE OPERATION OF RESTAURANTS

Depending on the nature of business of our Group’s operations, there are three principal types of licences that may be required for the operation of our Group’s restaurants in Hong Kong. They are as follows:

(a) a general restaurant licence to be issued before commencement of the relevant food business operation;
(b) a liquor licence required to be issued before commencement of sale of liquor in the restaurant premises; and
(c) a water pollution control licence.

The following sets forth the material aspects of Hong Kong laws and regulations relating to our business operations in Hong Kong.

General restaurant licence

Any person operating a restaurant in Hong Kong is required to obtain a general restaurant licence from the FEHD under the PHMSO and the FBR before commencing the restaurant business. A general restaurant licence permits the licensee to prepare and sell all kinds of food for consumption at the premises.

It is provided under section 31(1) of the FBR that no person shall carry on or cause, permit or suffered to be carried on any restaurant except with a general restaurant licence. FEHD will consider whether certain requirements in respect of health, hygiene, ventilation, gas safety, building structure and means of escape are met before issuing a licence. The FEHD will also consult the Buildings Department and the Fire Services Department (the ‘‘FSD’’) in accessing the suitability of premises for use as a restaurant, where the fulfilment of the Buildings Department’s structural standard and the fulfilment of the FSD’s fire safety requirement are considered. The FEHD may, under section 33C of the FBR, grant provisional restaurant licences to new applicants who have fulfilled the basic requirements in accordance with the FBR pending completion of all outstanding requirements for the issue of a full restaurant licence. A provisional restaurant licence is valid for a period of six months or a lesser period and a full restaurant licence is valid generally for a period of one year, both subject to payment of the prescribed licence fees and continuous compliance with the requirements under the relevant legislation and regulations. A provisional restaurant licence is renewable on one occasion and a full restaurant licence is renewable annually.

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REGULATORY OVERVIEW

Restricted food permit

Under sections 31(1), 31(A) and Schedule 2 of the FBR and according to the guideline of the FEHD, it is required that no person shall sell, or offer or expose for sale, or possess for sale or for use in the preparation of any article of food for sale, any of the foods specified in Schedule 2 of the FBR (including sashimi, oysters to be eaten in raw state, live fish and shell fish).

Under section 35 of the FBR, any person who is guilty of an offence under section 31(1) may be liable to a maximum fine of HK$50,000, imprisonment for six months and HK$900 for each day where the offence is a continuing offence.

Demerit points system

The demerit points system is a penalty system operated by the Food and Environmental Hygiene Department to sanction food businesses for repeated violations of relevant hygiene and good safety legislation. Under the system:

(a) if within a period of 12 months, a total of 15 demerit points or more have been registered against a licensee in respect of any licensed premises, the licence in respect of such licensed premises will be subject to suspension for seven days (‘‘First Suspension’’);
(b) if, within a period of 12 months from the date of the last offence leading to the First Suspension, a total of 15 demerit points or more have been registered against the licensee in respect of the same licensed premises, the licence will be subject to suspension for 14 days (‘‘Second Suspension’’);
(c) thereafter, if within a period of 12 months from the date of the last offence leading to the Second Suspension, a total of 15 demerit points or more have been registered against the licensee in respect of the same licensed premises, the licence will be subject to cancellation;
(d) for multiple offences found during any single inspection, the total number of demerit points registered against the licensee will be the sum of the demerit points for each of the offences;
(e) the prescribed demerit points for a particular offence will be doubled and tripled if the same offence is committed for the second and the third time within a period of 12 months; and
(f) any alleged offence pending, that is the subject of a hearing and not yet taken into account when a licence is suspended, will be carried over for consideration of a subsequent suspension if the licensee is subsequently found to have violated the relevant hygiene and food safety legislation upon the conclusion of the hearing at a later date.

Hygiene manager and hygiene supervisor scheme

To strengthen food safety supervision in licensed food premises, the FEHD has introduced the Hygiene Manager and Hygiene Supervisor Scheme (the ‘‘Scheme’’).

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REGULATORY OVERVIEW

(A) The requirements

Under the Scheme, all large food establishments and food establishments producing high risk food are required to appoint a hygiene manager (‘‘HM’’) and a hygiene supervisor (‘‘HS’’); and all other food establishments are required to appoint a HM or a HS. General restaurants which accommodate over 100 customers are required to appoint a HM plus a HS.

(B) Training/appointment of HM and HS

Food business operators are required to train up their staff or appoint qualified persons to take up the post of HM or HS. According to ‘‘A Guide to Application for Restaurant Licences’’ of the FEHD, one of the criteria for the issuance of a provisional licence/full general restaurant licence is the submission of a duly completed nomination form for HM and/or HS together with a copy of the relevant course certificate(s).

Liquor licence

For the sale of liquor in a restaurant in Hong Kong, a restaurant operator has to obtain a liquor licence from the LLB under the DCO. It is provided under section 17(3B) of the DCO that where regulations prohibit the sale or supply of any liquor except with a liquor licence, no person shall sell, or advertise or expose for sale, or supply, or possess for sale or supply, liquor except with a liquor licence. Rule 25A of the DCR prohibits the sale of liquor at any premises for consumption at the place or occasion except with a liquor licence. The LLB will consider the fitness of the applicant to hold the licence, the suitability of the premises to which the application relates in supplying intoxicating liquor and the public interest before granting the liquor licence. A liquor licence will only be issued when the relevant premises have also been issued with a full or provisional restaurant licence. A liquor licence will only be valid if the relevant premises remain licensed as a restaurant. All applications for liquor licences are referred to the Commissioner of Police and the District Officer concerned for comments. A liquor licence is only granted if the applicant can devote sufficient time and attention to the proper management of the liquor-licensed premises. Therefore, all licences are granted to our employees at the relevant locations.

A liquor licence is valid for a period of one year or a lesser period, subject to the continuous compliance with the requirements under the relevant legislation and regulations. Any person who contravenes section 17(3B) of the DCO commits an offence and is liable on conviction to a fine of HK$1,000,000 and to imprisonment for two years.

As at the Latest Practicable Date, we have obtained the relevant licences required for all of our restaurant in Hong Kong and have obtained the liquor licences (under the name of our employees) as required under the DCO before the commencement of any sale of liquor in our relevant restaurant premises in Hong Kong.

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REGULATORY OVERVIEW

Environmental regulatory compliance

Water pollution control

In Hong Kong, discharges of trade effluents into specific water control zones are subject to control by the EPD under the WPCO.

Under sections 8(1) and 8(2) of the WPCO, a person who discharges (i) any waste or polluting matters into waters of Hong Kong in a water control zone; or (ii) any matter into any inland waters in a water control zone which tends (either directly or in combination with other matter which has entered those waters) to impede the proper flow of water in a manner leading or likely to lead to substantial aggravation of pollution, commits an offence and where any such matter is discharged from any premises, the occupier of the premises also commits an offence. Under sections 9(1) and 9(2) of the WPCO, a person who discharges any matter into a communal sewer or communal drain into a water control zone commits an offence and where any such matter is discharged into a communal sewer or communal drain in a water control zone from any premises, the occupier of the premises also commits an offence. Under section 11 of the WPCO, a person who commits an offence under section 8(1), 8(2), 9(1) or 9(2) of the WPCO, is liable to imprisonment for six months and a fine of HK$200,000 for first offence and up to HK$400,000 for a second or subsequent offence and in addition, if the offence is continuing, to a fine of HK$10,000 for each day the offence has continued. Under section 11 of the WPCO, a person who commits an offence under section 8(1A) or 9(1) or 9(2) of the WPCO by discharging any poisonous or noxious matter into a communal sewer or communal drain is liable to imprisonment for one year and a fine of HK$400,000 for first offence and up to HK$1,000,000 and imprisonment for two years for a second or subsequent offence and in addition, if the offence is continuing, to a fine of HK$40,000 for each day the offence has continued.

A water pollution control licence may be granted for a period of not less than two years, subject to payment of the prescribed licence fee and continuous compliance with the requirements under the relevant legislation and regulations. A water pollution control licence is renewable.

OTHER REGULATIONS RELATING TO OUR BUSINESS OPERATIONS

Mandatory Provident Fund (‘‘MPF’’) Schemes

The MPF schemes are defined contribution retirement scheme managed by authorised independent trustees. The Mandatory Provident Fund Schemes Ordinance (Chapter 485 of the laws of Hong Kong) provides that an employer shall participate in an MPF scheme and make contributions for its employees aged between 18 and 65. Under the MPF scheme, an employer and its employees are both required to contribute 5% of the employee’s monthly relevant income as mandatory contribution for and in respect of the employee, subject to the minimum and maximum relevant income levels for contribution purposes. The maximum level of relevant income for contribution purposes is currently HK$30,000 per month or HK$360,000 per year.

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REGULATORY OVERVIEW

Employees’ compensation

The ECO establishes a no-fault and non-contributory employee compensation system for work injuries and lays down the rights and obligations of employers and employees in respect of injuries or death caused by accidents arising out of and in the course of employment, or by prescribed occupational diseases.

Under the ECO, if an employee sustains an injury or dies as a result of an accident arising out of and in the course of his employment, his employer is in general liable to pay compensation even if the employee might have committed acts of faults or negligence when the accident occurred. Similarly, an employee who suffers incapacity or dies arising from an occupational disease is entitled to receive the same compensation as that payable to employees injured in occupational accidents.

According to section 40 of the ECO, all employers (including contractors and subcontractors) are required to take out insurance policies to cover their liabilities both under the ECO and at common law for injuries at work in respect of all their employees (including full-time and part-time employees). An employer who fails to comply with the ECO to secure an insurance cover is liable on conviction to a fine of HK$100,000 and imprisonment for two years. Our Company confirms that as at the Latest Practicable Date, employee compensation insurance has been obtained for all of our employees.

According to section 48 of the ECO, an employer shall not, without the consent of the Commissioner for Labour, terminate, or give notice to terminate, the contract of service of an employee (who has suffered incapacity or temporary incapacity in circumstances which entitle him to compensation under the ECO) before occurrence of certain events. Any person who commits breach of this provision is liable on conviction to a maximum fine of HK$100,000.

Minimum wage

With effect from 1 May 2017, the Minimum Wage Ordinance (Chapter 608 of the Laws of Hong Kong) provides for a prescribed minimum hourly wage rate at HK$34.5 per hour for every employee employed under the Employment Ordinance (Chapter 57 of the Laws of Hong Kong). Any provision of the employment contract which purports to extinguish or reduce the right, benefit or protection conferred on the employee by the Minimum Wage Ordinance is void.

Occupiers liability

The Occupiers Liability Ordinance (Chapter 314 of the Laws of Hong Kong) regulates the obligations of a person occupying or having control of premises on injury resulting to persons or damage caused to goods or other property lawfully on the land.

The Occupiers Liability Ordinance imposes a common duty of care on an occupier of a premises to take reasonable care of the premises in all circumstances so as to ensure that his visitor will be reasonably safe in using the premises for the purposes for which he is invited or permitted by the occupier to be there.

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REGULATORY OVERVIEW

Occupational safety and health

The Occupational Safety and Health Ordinance (Chapter 509 of the Laws of Hong Kong) (the ‘‘OSHO’’) provides for the safety and health protection to employees in workplaces, both industrial and non-industrial.

Employers must as far as reasonably practicable ensure the safety and health in their workplaces by:

(a) providing and maintaining plant and work systems that are safe and without risks to health;
(b) making arrangement for ensuring safety and absence of risks to health in connection with the use, handling, storage or transport of plant or substances;
(c) providing all necessary information, instruction, training, and supervision for ensuring safety and health;
(d) providing and maintaining safe access to and egress from the workplaces; and
(e) providing and maintaining a working environment that is safe and without risks to health.

Failure to comply with the above provisions constitutes an offence and the employer is liable on conviction to a fine of HK$200,000. An employer who fails to do so intentionally, knowingly or recklessly commits an offence and is liable on conviction to a fine of HK$200,000 and to imprisonment for six months.

The Commissioner for Labour may also issue improvement notices against non-compliance of this Ordinance or the Factories and Industrial Undertakings Ordinance (Chapter 59 of the laws of Hong Kong), or suspension notices against activity of workplace which may create imminent hazard to the employees. Failure to comply with such notices constitutes an offence punishable by a fine of HK$200,000 and HK$500,000 respectively and imprisonment of up to one year.

Our Directors have confirmed that our Group has obtained or applied for all relevant licences, certificates and permits as required under the relevant laws and regulations in Hong Kong for our restaurants and, save as disclosed under the section headed ‘‘Business — Legal and regulatory compliance — Non-compliance of our Group’’ in this prospectus, has complied with the applicable laws and regulations in all material aspects in Hong Kong during the Track Record Period and up to the Latest Practicable Date.

Factories and Industrial Undertakings

Factories and Industrial Undertakings (Fire Precautions in Notifiable Workplaces) Regulations (Chapter 59V of the Laws of Hong Kong) (‘‘FIU(F)R’’) ensures that the proprietor of every workplace shall maintain a means of escape from the workplace in good condition and free from obstruction. Under Regulation 5(1) of the FIU(F)R, the proprietor of every notifiable workplace shall maintain in good condition and free from obstruction every doorway, stairway and passageway within the workplace which affords a means of escape from the workplace in case of fire. Regulation 14(5) of the FIU(F)R

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REGULATORY OVERVIEW

stipulates that the proprietor of any notifiable workplace who contravenes regulation 5(1) without reasonable excuse commits an offence and is liable to a fine of HK$200,000 and to imprisonment for six months.

Fire hazard abatement

Pursuant to section 14(1) of the Fire Services (Fire Hazard Abatement) Regulations, a person commits an offence if the person, being the owner, tenant, occupier or person in charge of the premises, permits or suffers to be set out or left, any article or thing that obstructs or may obstruct the means of escape in respect of the premises.

Under section 14(2) of the FSR, a person who commits an offence under this section shall be liable (a) on a first conviction, to a fine of HK$100,000; (b) on a subsequent conviction, to a fine of HK$200,000 and to imprisonment for one year, and, in any case, to a further fine of HK$20,000 for each day during which the offence continues.

Employment

EO provides for, amongst other things, the protection of the wages of employees, to regulate general conditions of employment, and for matters connected therewith. Under section 25 of the EO, where a contract of employment is terminated, any sum due to the employee shall be paid to him as soon as it is practicable and in any case not later than seven days after the day of termination. Any employer who wilfully and without reasonable excuse contravenes section 25 of the EO commits an offence and is liable to a maximum fine of HK$350,000 and to imprisonment for a maximum of three years. Further, under section 25A of the EO, if any wages or any sum referred to in section 25(2)(a) are not paid within seven days from the day on which they become due, the employer shall pay interest at a specified rate on the outstanding amount of wages or sum from the date on which such wages or sum become due up to the date of actual payment. Any employer who wilfully and without reasonable excuse contravenes section 25A of the EO commits an offence and is liable on conviction to a maximum fine of HK$10,000.

Trade Descriptions

Trade Descriptions Ordinance (Chapter 362 of the Laws of Hong Kong) (‘‘TDO’’) is one of the key legislations regulating advertising and promotion practices in Hong Kong. A trade description includes an indication of quantity, composition, and fitness for purpose, performance, physical characteristics and place of origin with respect to any goods. Under section 7A of the TDO, it is an offence for any person to apply a false or misleading trade description to service or to supply service to which false trade descriptions have been applied. Under sections 13E, 13F, 13G, 13H and 13I of the TDO, misleading omission and aggressiveness in advertisements, bait advertising, bait and switch advertising and wrongly accepted payment are prohibited.

A person who commits an offence under sections 7, 7A, 13E, 13F, 13G, 13H or 13I of the TDO shall be subject, on conviction on indictment, to a fine of HK$500,000 and to imprisonment for five years, and on summary conviction, to a fine at HK$100,000 and to imprisonment for two years.

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REGULATORY OVERVIEW

Competition

The Competition Ordinance (Chapter 619 of the Laws of Hong Kong) is to prohibit conduct that prevents, restricts or distorts competition in Hong Kong; to prohibit mergers that substantially lessen competition in Hong Kong, and to provide for incidental and connected matters.

This ordinance includes the First Conduct Rule, which states that an undertaking shall not make or give effect to an agreement, engage in a concerted practice, or, as a member of an association of undertakings, make or give effect to a decision of the association, if the object or effect of the agreement, concerted practice or decision is to prevent, restrict or distort competition in Hong Kong, and the Second Conduct Rule, which prohibits anti-competitive conduct by a party with substantial market power; and the Merger Rule, which states that an undertaking that has a substantial degree of market power in a market must not abuse that power by engaging in conduct that has as its object or effect the prevention, restriction or distortion of competition in Hong Kong. Upon breach, the Competition Tribunal may impose against offenders pecuniary penalty, director disqualifications, and prohibition, damage and other orders. For pecuniary penalty, section 93 of the Competition Ordinance enables the Competition Tribunal to award a penalty up to 10% of the turnover of the undertakings involved for up to three years in which the contravention occurs.

Personal data and privacy

The Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong) (the ‘‘PDPO’’) provides that a data user shall not do an act, or engage in a practice, that contravenes a data protection principle unless the act or practice, as the case may be, is required or permitted under the PDPO. The PDPO also places a statutory duty on data users to comply with the requirements of the six data protection principles contained in Schedule 1 of this ordinance. The six data protection principles are as follows: (i) principle 1 — purpose and manner of collection of personal data; (ii) principle 2 — accuracy and duration of retention of personal data; (iii) principle 3 — use of personal data; (iv) principle 4 — security of personal data; (v) principle 5 — information to be generally available; and (vi) principle 6 — access to personal data.

The PDPO also gives data subjects to the following rights: (i) the right to be informed of whether any data user holds their personal data; (ii) the right to be supplied with a copy of such data; and (iii) the right to request correction of any data they consider to be inaccurate. Non-compliance with a data protection principle may lead to a complaint to the Privacy Commissioner for Personal Data.

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HISTORY, DEVELOPMENT AND REORGANISATION

OVERVIEW

Our history can be traced back to 2000 when Mr. John Kwong and Ms. Melanie Kwong established our Group’s first restaurant under the brand of ‘‘Mr. Steak’’ in Wanchai with their family wealth through our subsidiary, Meric Investment. In 2002, our subsidiary Lord Master was established, and since then we have been expanding our footprint in Hong Kong gradually through our multi-brand business model and became a restaurant group in Hong Kong operating 13 restaurants under Meric Investment and Lord Master.

We strive to deliver ‘‘affordable luxury’’ dining experience with high quality food, desirable ambience and thoughtful service at affordable prices under different brands. As at the Latest Practicable Date, we owned and operated six restaurants serving various western cuisine along with our signature steak under our ‘‘Mr. Steak’’ brand, one buffet restaurant serving international cuisine under our ‘‘Mr. Steak — Buffet à la minute’’ brand, three restaurants under our ‘‘Sky Bar’’ brand offering western cuisine along with our signature seafood dishes and a wide selection of wines and cocktails, two western specialty restaurants under our ‘‘Bistro Bloom’’ and ‘‘Bistro Bloom/Marbling’’ brands serving modern and trendy western food along with specialty meat cuts, and one Japanese specialty restaurant under our ‘‘Hana’’ brand serving ‘‘Nabemono’’ — Japanese hot pot dishes such as Sukiyaki, Shabu Shabu and Seiromushi.

BUSINESS MILESTONE

The following table sets out the key developments and milestones of our Group since our establishment.

Year	Milestone
November 2000	Our first ‘‘Mr. Steak’’ restaurant was opened in Wanchai serving our
	signature steak such as sirloin steak and rib-eye steak
December 2004	We opened our ‘‘Mr. Steak’’ restaurant in Mongkok
June 2005	We opened our ‘‘Mr. Steak’’ restaurant in Shatin
June 2006	We opened our first buffet restaurant serving international cuisine under the
	brand of ‘‘Mr. Steak — Buffet à la minute’’ in Causeway Bay
November 2008	Our first ‘‘Sky Bar’’ restaurant was opened in Mongkok which is a
	combination of restaurant, bar & lounge with entertainment offering western
	cuisine along with our signature seafood dishes and a wide selection of wines
	and cocktails
May 2009	We opened our ‘‘Mr. Steak’’ restaurant in Causeway Bay
July 2011	We opened our first Japanese restaurant under the brand of ‘‘Hana’’ in
	Causeway Bay specialising in serving ‘‘Nabemono’’ — Japanese hot pot
	dishes such as Sukiyaki, Shabu Shabu and Seiromushi

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HISTORY, DEVELOPMENT AND REORGANISATION

Year

Milestone

August 2012 We opened our ‘‘Mr. Steak’’ restaurant in Tsing Yi

October 2013 We opened our ‘‘Mr. Steak’’ restaurant in Kwai Fong

February 2014 We opened our ‘‘Sky Bar’’ restaurant in Causeway Bay
August 2014 ‘‘Mr. Steak — Buffet à la minute’’ restaurant was relocated and re-opened in Causeway Bay
September 2015 We opened our ‘‘Sky Bar’’ restaurant in Yuen Long

Our ‘‘Mr. Steak’’ restaurant in Causeway Bay was renovated and re-branded, and recommenced business under ‘‘Bistro Bloom/Marbling’’ serving modern and trendy western food along with specialty meat cuts

November 2015 Our ‘‘Hana’’ restaurant was relocated and reopened in Causeway Bay
December 2015 We opened our ‘‘Mr. Steak’’ restaurant in Kornhill, Quarry Bay
May 2016 Our ‘‘Hana’’ restaurant was awarded ‘‘Best of Japanese Restaurant’’ by Hong Kong Walker magazine
October 2016 We opened our ‘‘Mr. Steak’’ restaurant in Kowloon Bay
December 2016 Our ‘‘Mr. Steak’’ restaurant in Mongkok was renovated and re-branded, and recommenced business under ‘‘Bistro Bloom’’ serving modern and trendy western food
May 2017 Our ‘‘Mr. Steak — Buffet à la minute’’ restaurant was awarded ‘‘OpenRice Best Restaurant Award — Best Buffet’’ by OpenRice

January 2018 We opened our ‘‘Mr. Steak’’ restaurant in Tseung Kwan O

CORPORATE HISTORY AND DEVELOPMENT

As at the Latest Practicable Date, our Group comprised our Company and three subsidiaries. Set out below is the brief history of our Company and its subsidiaries.

Our Company

Our Company, being the listing vehicle of our Group, was incorporated in the Cayman Islands under the Companies Law as an exempted company with limited liability on 8 November 2017 and was registered as a non-Hong Kong company under Part 16 of the Companies Ordinance on 7 December 2017. As at the date of incorporation, our Company had an authorised share capital of HK$380,000 divided into 38,000,000 shares of HK$0.01 each, of which one Share was allotted and issued nil paid to

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HISTORY, DEVELOPMENT AND REORGANISATION

an independent initial subscriber and transferred on the same day to Future More. Following completion of the Reorganisation, our Company became the holding company of our subsidiaries. For details of the Reorganisation, please refer to the paragraph headed ‘‘Reorganisation’’ below in this section.

MS Restaurant

MS Restaurant was incorporated in the BVI with limited liability on 7 November 2017. MS Restaurant is authorised to issue up to a maximum of 50,000 ordinary shares of a single class with par value of US$1.00 each, of which one share was allotted and issued as fully paid to Future More at par.

MS Restaurant was set up to be the holding company of Meric Investment and Lord Master for the purpose of Listing.

On 23 March 2018, as part of the Reorganisation, Future More transferred its entire shareholding interests in MS Restaurant to our Company, in consideration of our Company allotting and issuing as fully paid 99 Shares to Future More and crediting as fully paid the nil-paid Share held by Future More.

Upon completion of the Reorganisation, MS Restaurant became a wholly-owned subsidiary of the Company. For details of the Reorganisation, please refer to the paragraph headed ‘‘Reorganisation’’ below in this section.

Meric Investment

On 29 March 2000, Meric Investment was incorporated in Hong Kong as a limited liability company with an authorised share capital of HK$10,000 divided into 10,000 ordinary shares of the then par value of HK$1.00 each, of which two shares were issued to two independent initial subscribers.

On 27 July 2000, each of the independent initial subscribers transferred one share of Meric Investment to each of Mr. John Kwong and Ms. Melanie Kwong at par and such transfers were legally completed on the same date.

On 6 December 2012, Meric Investment further allotted and issued one share to each of Mr. John Kwong and Mr. Joseph Kwong at par. Upon the allotment, Meric Investment was owned as to 50% by Mr. John Kwong, 25% by Mr. Joseph Kwong and 25% by Ms. Melanie Kwong.

On 1 December 2017, Mr. John Kwong, Mr. Joseph Kwong and Ms. Melanie Kwong transferred their entire interest in the issued share capital of Meric Investment to MS Restaurant (being the nominee of Future More), in consideration of Future More (the then holding company of MS Restaurant) allotting and issuing 13, seven and seven new shares to each of Mr. John Kwong, Mr. Joseph Kwong and Ms. Melanie Kwong respectively, credited as fully paid. Upon completion of the aforesaid transfers, Meric Investment became a direct wholly-owned subsidiary of MS Restaurant.

As at the Latest Practicable Date, Meric Investment operated BB(CWB), MS(TY), MS(KF), MS(ST), MS(KH) and SB(CWB).

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HISTORY, DEVELOPMENT AND REORGANISATION

Lord Master

On 6 December 2002, Lord Master was incorporated in Hong Kong as a limited liability company with an authorised share capital of HK$10,000 divided into 10,000 ordinary shares of the then par value of HK$1.00 each, of which two shares were issued to two independent initial subscribers.

On 17 May 2003, each of the independent initial subscribers transferred one share of Lord Master to each of Ms. Melanie Kwong and Active Wisdom at par and such transfers were legally completed on the same date. Active Wisdom was beneficially owned by Mr. John Kwong and Ms. Ingrid Ip as at 17 May 2003. Since November 2007, Active Wisdom was legally and beneficially owned by Ms. Ingrid Ip and Ms. Kwong Man Yui.

On 6 December 2012, Lord Master further allotted and issued one share to each of Active Wisdom and Mr. Joseph Kwong at par. Upon completion of the allotment, Lord Master was owned as to 50% by Active Wisdom, 25% by Mr. Joseph Kwong and 25% by Ms. Melanie Kwong.

On 1 December 2017, Active Wisdom, Mr. Joseph Kwong and Ms. Melanie Kwong transferred their entire interest in the issued share capital of Lord Master to MS Restaurant (being the nominee of Future More), in consideration of Future More (the then holding company of MS Restaurant) allotting and issuing 18 new shares to each of Ms. Ingrid Ip, Ms. Kwong Man Yui, Mr. Joseph Kwong and Ms. Melanie Kwong, credited as fully paid. Upon completion of the aforesaid transfers, Lord Master became a direct wholly-owned subsidiary of MS Restaurant.

As at the Latest Practicable Date, Lord Master operated BB(MK), Hana(CWB), MS (Buffet), MS(KB), MS(TKO), SB(MK) and SB(YL).

PARTIES ACTING IN CONCERT

Mr. John Kwong, Ms. Ingrid Ip, Ms. Kwong Man Yui, Mr. Joseph Kwong and Ms. Melanie Kwong are family members. Mr. John Kwong, Mr. Joseph Kwong and Ms. Melanie Kwong are siblings whereas Ms. Ingrid Ip is the wife of Mr. John Kwong, with Ms. Kwong Man Yui being their daughter. Since 2012, Mr. John Kwong, Mr. Joseph Kwong and Ms. Melanie Kwong were the beneficial owners of Meric Investment while Ms. Ingrid Ip, Ms. Kwong Man Yui, Mr. Joseph Kwong and Ms. Melanie Kwong were the ultimate beneficial owners of Lord Master. Both Meric Investment and Lord Master are the operating subsidiaries of our Group (together, the ‘‘Operating Subsidiaries’’). Each of Mr. John Kwong, Ms. Ingrid Ip, Ms. Kwong Man Yui, Mr. Joseph Kwong and Ms. Melanie Kwong, in making and implementing key decisions regarding the finance, management and operation of the Operating Subsidiaries, has been acting in concert with one another to exert management influence on our Group as a controlling group and to ensure that the business of the Operating Subsidiaries is heading to a direction consistent with the overall business objective of our Group as a whole. As we were a group of private entities in the past, these arrangements were not formalised in writing and each of Mr. John Kwong, Ms. Ingrid Ip, Ms. Kwong Man Yui, Mr. Joseph Kwong and Ms. Melanie Kwong was content with these arrangements based on their family relationship, as well as the trust and confidence they have in one another.

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HISTORY, DEVELOPMENT AND REORGANISATION

Mr. John Kwong, Ms. Ingrid Ip, Ms. Kwong Man Yui, Mr. Joseph Kwong and Ms. Melanie Kwong have confirmed that the concert party arrangements with respect to each Operating Subsidiary had become effective since they were the beneficial owners of the shares of the relevant Operating Subsidiaries.

On 23 November 2017, in preparation for the Listing, Mr. John Kwong, Ms. Ingrid Ip, Ms. Kwong Man Yui, Mr. Joseph Kwong and Ms. Melanie Kwong executed the Concert Party Deed, whereby they confirmed the existence of their concert party arrangements in the past, as well as their intention to continue to act in the above manner upon the Listing to consolidate their control of the Operating Subsidiaries until the Concert Party Deed is terminated by them in writing. According to the Concert Party Deed, each of Mr. John Kwong, Ms. Ingrid Ip, Ms. Kwong Man Yui, Mr. Joseph Kwong and Ms. Melanie Kwong acknowledge and confirm that:

(a) each of them has acted and shall continue to act in concert that each of them has consulted and shall continue to consult one another and engage in discussion with a view to reaching unanimous decisions among themselves on such matters being the subject matters of any shareholders’ resolutions and, including but not limited to, all operating, financing, management and strategic decisions, prior to putting forward such resolutions to be passed at any shareholders’ meeting of each of Meric Investment, Lord Master and our Company (as the case may be) and has historically voted and shall continue to vote on such resolutions unanimously to ensure our Group will progress in the same direction as agreed between them;
(b) where there is any suitable business opportunity for our Group, they have been engaging and participating in, and shall, after completion of the Reorganisation, through our Company continue to engage and participate in, such investments and business opportunities; and
(c) they have centralised, and shall continue to centralise the ultimate control and make final decisions with respect to the interests in the businesses of our Group as a whole as an integrated enterprise.

Hence, pursuant to the Concert Party Deed, Mr. John Kwong, Ms. Ingrid Ip, Ms. Kwong Man Yui, Mr. Joseph Kwong and Ms. Melanie Kwong will together be entitled to exercise and control approximately 75% of our entire issued share capital upon completion of the Capitalisation Issue and the Share Offer (without taking into account the Shares which may be allotted and issued upon the exercise of the Offer Size Adjustment Option and any options which may be granted under the Share Option Scheme) and are regarded as a group of Controlling Shareholders for the purposes of the GEM Listing Rules.

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HISTORY, DEVELOPMENT AND REORGANISATION

REORGANISATION

The following charts show the shareholding structure of our Group immediately prior to the Reorganisation and the Share Offer:

==> picture [409 x 239] intentionally omitted <==

----- Start of picture text -----

Ms. Ingrid Ip Ms. Kwong Man Yui
50% 50%
Active Wisdom
Mr. John Kwong Mr. Joseph Kwong Ms. Melanie Kwong
(Hong Kong)
50% 25% 25%
Meric Investment
(Hong Kong)
50% 25% 25%
Lord Master
(Hong Kong)
----- End of picture text -----

In preparation for the Listing, our Company was incorporated in the Cayman Islands and the companies comprising our Group have undergone the Reorganisation to rationalise our Group structure. The Reorganisation involved the following steps:

On 7 November 2017, Future More was incorporated in the BVI with limited liability. Future More was authorised to issue up to a maximum of 50,000 ordinary shares of a single class with par value of US$1.00 each, of which one share was allotted and issued as fully paid to Mr. John Kwong. Future More was set up as a vehicle of Mr. John Kwong, Ms. Ingrid Ip, Ms. Kwong Man Yui, Mr. Joseph Kwong and Ms. Melanie Kwong to hold their interest in our Company.
On 7 November 2017, MS Restaurant was incorporated in the BVI with limited liability. MS Restaurant was authorised to issue up to a maximum of 50,000 ordinary shares of a single class with par value of US$1.00 each, of which one share was allotted and issued as fully paid to Future More.
On 8 November 2017, our Company was incorporated in the Cayman Islands with limited liability having an authorised share capital of HK$380,000 divided into 38,000,000 Shares of HK$0.01 each, of which one Share was allotted and issued nil-paid to an independent initial subscriber and transferred on the same day to Future More.
On 1 December 2017, Mr. John Kwong, Mr. Joseph Kwong and Ms. Melanie Kwong transferred their entire interest in the issued share capital of Meric Investment to MS Restaurant (being the nominee of Future More), in consideration of Future More allotting and

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HISTORY, DEVELOPMENT AND REORGANISATION

issuing 13, seven and seven new shares to each of Mr. John Kwong, Mr. Joseph Kwong and Ms. Melanie Kwong respectively, credited as fully paid. The number of shares allotted was determined after taking into account the valuation of Meric Investment and Lord Master based on their respective earnings before interest, taxes, depreciation and amortisation (‘‘EBITDAs’’) as at 31 March 2017. Upon completion of the aforesaid transfers, Meric Investment became a direct wholly-owned subsidiary of MS Restaurant.

On 1 December 2017, Active Wisdom, Mr. Joseph Kwong and Ms. Melanie Kwong transferred their entire interest in the issued share capital of Lord Master to MS Restaurant (being the nominee of Future More), in consideration of Future More allotting and issuing 18 new shares to each of Ms. Ingrid Ip, Ms. Kwong Man Yui, Mr. Joseph Kwong and Ms. Melaine Kwong, credited as fully-paid. The number of shares allotted was determined after taking into account the valuation of Meric Investment and Lord Master based on their respective EBITDAs as at 31 March 2017. Upon completion of the aforesaid transfer, Lord Master became a direct wholly-owned subsidiary of MS Restaurant.
On 23 March 2018, our Company (as purchaser) and Future More (as vendor) entered into a sale and purchase agreement pursuant to which Future More transferred the entire issued share capital of MS Restaurant to our Company in consideration of our Company (i) allotting and issuing 99 Shares to Future More, credited as fully paid at par; and (ii) crediting as fully paid the one nil-paid Share held by Future More.

As at the Latest Practicable Date, the Reorganisation had been properly and legally completed in compliance with all relevant laws and regulations.

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HISTORY, DEVELOPMENT AND REORGANISATION

The following chart sets out the corporate structure of our Group immediately following the Reorganisation but before the Share Offer and the Capitalisation Issue:

==> picture [416 x 295] intentionally omitted <==

----- Start of picture text -----

Ms. Kwong
Mr. John Kwong Ms. Ingrid Ip Mr. Joseph Kwong Ms. Melanie Kwong
Man Yui
14% 18% 18% 25% 25%
Future More
(BVI)
100%
Company
(Cayman Islands)
100%
MS Restaurant
(BVI)
100% 100%
Meric Investment Lord Master
(Hong Kong) (Hong Kong)
----- End of picture text -----

Conditional upon the share premium account of our Company being credited as a result of the issue of new Shares pursuant to the Share Offer, an amount standing to the credit of the share premium account of our Company will be capitalised and applied in paying up in full 749,999,900 Shares at par for allotment and issue to Future More, to enable it to maintain its aggregate shareholding in our Company at a percentage of 75% of the enlarged issued share capital of our Company (without taking into account any Shares which may be allotted and issued upon the exercise of the Offer Size Adjustment Option and any options which may be granted under the Share Option Scheme).

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HISTORY, DEVELOPMENT AND REORGANISATION

The following chart sets out the shareholding structure of our Group immediately following the completion of the Share Offer and the Capitalisation Issue (without taking into account any Shares which may be allotted and issued upon the exercise of the Offer Size Adjustment Option and any options which may be granted under the Share Option Scheme):

==> picture [423 x 294] intentionally omitted <==

----- Start of picture text -----

Mr. John Ms. Kwong Mr. Joseph Ms. Melanie
Ms. Ingrid Ip
Kwong Man Yui Kwong Kwong
14% 18% 18% 25% 25%
Future More
Public
(BVI)
75% 25%
Company
(Cayman Islands)
100%
MS Restaurant
(BVI)
100% 100%
Meric Investment Lord Master
(Hong Kong) (Hong Kong)
----- End of picture text -----

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BUSINESS

OVERVIEW

We are a restaurant group operating western and Japanese casual dining restaurants in Hong Kong. We aim to deliver ‘‘affordable luxury’’ dining experience with high quality food, desirable ambience and thoughtful services at affordable prices under different brands. Since the opening of our first restaurant in November 2000, we have been expanding our footprint in Hong Kong gradually through our multibrand business model. As at the Latest Practicable Date, we owned and operated 13 restaurants in Hong Kong, including six restaurants serving various western cuisine along with our signature steak under our ‘‘Mr. Steak’’ brand, one buffet restaurant serving international cuisine under our ‘‘Mr. Steak — Buffet à la minute’’ brand, three restaurants under our ‘‘Sky Bar’’ brand offering western cuisine along with our signature seafood dishes and a wide selection of wines and cocktails, two western specialty restaurants under our ‘‘Bistro Bloom’’ and ‘‘Bistro Bloom/Marbling’’ brands serving modern and trendy western food along with specialty meat cuts, and one Japanese specialty restaurant under our ‘‘Hana’’ brand serving ‘‘Nabemono’’ — Japanese hot pot dishes such as Sukiyaki, Shabu Shabu and Seiromushi. Our Directors believe that our multi-brand concept and brand recognition would enable our Group to further diversify our customer base with different tastes and preferences across Hong Kong.

The following table sets out the breakdown of our revenue from our restaurant operation by brands for FY2016, FY2017 and the six months ended 30 September 2016 and 30 September 2017:

Mr. Steak (Note 1) Mr. Steak — Buffet à la minute (Note 2) Sky Bar (Note 3) Specialty restaurants (Note 4) Total	FY2016 Total revenue % of total revenue (HK$’000) % 62,092 32.5 58,943 30.8 39,489 20.6 30,879 16.1 191,403 100.0	FY2017 Total revenue % of total revenue (HK$’000) % 86,026 37.0 67,540 29.0 43,225 18.6 35,931 15.4 232,722 100.0	For the six months ended 30 September 2016 2017 Total revenue % of total revenue Total revenue % of total revenue (HK$’000) % (HK$’000) % (unaudited) 40,679 34.9 49,300 38.7 34,349 29.5 35,259 27.7 23,221 19.8 23,419 18.5 18,382 15.8 19,119 15.1 116,631 100.0 127,097 100.0	For the six months ended 30 September 2016 2017 Total revenue % of total revenue Total revenue % of total revenue (HK$’000) % (HK$’000) % (unaudited) 40,679 34.9 49,300 38.7 34,349 29.5 35,259 27.7 23,221 19.8 23,419 18.5 18,382 15.8 19,119 15.1 116,631 100.0 127,097 100.0
				100.0

Notes:

Our restaurants under our ‘‘Mr. Steak’’ brand include MS(ST), MS(KB), MS(TY), MS(KF) and MS(KH).
Our restaurant under our ‘‘Mr. Steak — Buffet à la minute’’ brand refers to MS(Buffet).
Our restaurants under our ‘‘Sky Bar’’ brand include SB(CWB), SB(MK) and SB(YL).
Our specialty restaurants include Hana(CWB), BB(CWB) and BB(MK).

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BUSINESS

COMPETITIVE STRENGTHS

Our Directors believe that the following competitive strengths of our Group have contributed to our success and enabled our Group to compete effectively in restaurant industry in Hong Kong.

We are one of the major market players in the western casual dining restaurants market in Hong Kong with strong brand recognition

According to the CIC Report, we are one of the major market players in the western casual dining restaurants market in Hong Kong with a market share of approximately 1.6% in terms of revenue in 2016. Over the years, we have successfully built our brands and have been expanding our footprint in Hong Kong gradually through our multi-brand business model by owning and operating 13 restaurants under our five brands in Hong Kong as at the Latest Practicable Date. Our brands are built on our perseverance in serving quality food and our ability to constantly introduce new and innovative menu items to deliver the exceptional dining experience our customers have come to expect. We attribute the strength of our brands in part to our scalable and efficient operations and strict quality control spanning across a multitude of business functions. We believe that our strong brand recognition enhance and strengthen our bargaining power with our landlords and our strong brand recognition is the key to differentiating our products and services from our competitors.

Our restaurants are strategically located in prime areas in Hong Kong

Our Directors believe that the locations of our Group’s restaurants are vital to our Group’s strategy of reaching customers of different demographics and promotion of our brands and reputation. Our Group strategically locates our restaurants in landmark shopping malls, such as the WTC More, Lee Theatre Plaza, Langham Place, Maritime Square, Kornhill Plaza, New Town Plaza, Metroplaza, Telford Plaza, Yoho Mall and East Point City which are situated in populous districts in Hong Kong including Causeway Bay, Mong Kok, Tsing Yi, Quarry Bay, Shatin, Kwai Fong, Kowloon Bay, Yuen Long and Tseung Kwan O. Our Directors believe that the meticulous choice of locations of our restaurants helps to promote the image of our Group’s restaurants and enhance our competitiveness.

We have a diversified customer base through our multi-brand business model

It is our strategy to establish multiple restaurant brands to allow us to reach different customer segments through the offering of a variety of cuisines at varying prices. As at the Latest Practicable Date, we owned and operated restaurants under five self-owned brands. For further details, please refer to the paragraph headed ‘‘General information and operating data of our restaurants’’ below in this section. Our Directors consider that multiple restaurant brands also enable us to maintain flexibility in our operations and to adapt the tastes and preferences of customers in different market segments, thereby broadening our customer base and reducing our reliance on and exposure to risk in any particular customer segment.

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BUSINESS

We are committed to offering our customers ‘‘affordable luxury’’ dining experience with high quality food, desirable ambience and thoughtful services at affordable prices

Our Directors believe our commitment to delivering ‘‘affordable luxury’’ dining experience with high quality food, desirable ambience and thoughtful services at affordable prices is the key to success in our business operations, and allows our restaurants to generate greater customer traffic thereby enhancing our operating results. As such, the menus and recipes of each of our restaurants have been designed and developed by our head chefs to fit the theme and design of that particular restaurant, and then carefully assessed and selected by our Directors and our executive chef. We also ensure the continual refinement of the quality of our food by making variations to our menus and recipes according to seasons, trends and market receptions. Furthermore, our Group implements internal control and management systems for ensuring the quality of food products served by our Group’s restaurants. To ensure food products served by our Group are in good quality, our executive chef works closely with the head chefs of our restaurants to set the required quality standards and the quantity for different food ingredients. The chefs also participate in the selection of suppliers of different raw materials to ensure the freshness of food ingredients and the stability of supply. For details, please refer to the paragraph headed ‘‘Quality control’’ below in this section.

In addition to the food quality, our Directors consider that the atmosphere and ambience for restaurants are the vital part of the dining experience. Although under different brands and themes, restaurants have been designed to provide contemporary yet cosy and intimate ambience for our customers. Our Group customised the interior design and decoration of each of our restaurants in order to create a unique and comfortable dining environment for our customers, taking into account the type of cuisine, the theme, brand images of the restaurants, our target customers and locations of the restaurants. As supported by the CIC Report, a well-designed physical setting of a restaurant plays an important role in creating customer-centered dining environment, which contributes to higher customer satisfaction and customer loyalty.

We maintain stable and good relationship with our suppliers

According to the CIC Report, maintaining stable and good relationship with suppliers who are able to provide fresh and high-quality food ingredients from reliable sources is vital to the success of restaurant business.

We devoted substantial efforts in securing stable supply of food ingredients that meet our requirement on quality and hygienic standards at competitive prices. We assess, evaluate and select our suppliers carefully and source food ingredients only from our approved suppliers. We have established stable business relationships ranging from three to 17 years with our five largest suppliers during the Track Record Period. Please refer to the paragraph headed ‘‘Suppliers’’ below in this section for further details. In particular, over the years, we purchased and secured stable and high-quality food ingredients from our largest supplier, Elite, which is our connected person and one of the key food ingredient suppliers of high-quality meat and seafood in Hong Kong, as supported by the CIC Report. Please refer to the paragraph headed ‘‘Our relationship with Elite’’ in this section for further details.

Our stable relationship with our suppliers enables us to secure continuous, timely and steady supply of high quality food ingredient from reliable sources at reasonable prices, which enable us to offer stable, high quality, safe and fresh food to our customers and directly enhance our competitiveness and differentiate us from our competitors.

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BUSINESS

We have an experienced management team

Our management team consists of personnel with extensive experience and knowledge in the restaurant industry and restaurant operations. Our management team is led by Mr. John Kwong, the cofounder, chairman of the Board, chief executive officer and executive Director of our Group, who has over 30 years of experience in the food and beverages industry and is familiar with industry trends, market behaviour, customer and supplier impact and dealing with competitions and other operational challenges. In addition, Mr. John Kwong worked on the supply of chilled and frozen meat and seafood for over 30 years and is experienced in assessing the quality and origin of food ingredients, which helped our Group in monitoring the supply and quality of food ingredients and hence maintaining the quality of our food products. On the other hand, Ms. Kwong Man Yui, our executive Director, has over five years of experience in shop leasing management which helped our Group in negotiating and managing the shop leases for our existing restaurants operation and new restaurant development. Mr. Lam On Fai, our executive Director, has over 37 years of experience in restaurant management. Furthermore, Mr. Lee Sai Keung, our executive chef, has over 38 years of experience in the restaurant industry. For details of the experience of our management team, please refer to the section headed ‘‘Directors, Senior Management and Employees’’ in this prospectus. We believe that the collective experience and knowledge and the capabilities of our management team and our commitment to safety and quality ingredients would enable us to maintain financial success, capture market opportunities and ensure our continuing growth in western casual dining restaurants market in Hong Kong.

BUSINESS STRATEGIES

Continue to expand our restaurant network

We adopt a disciplined growth strategy in Hong Kong by expanding into new geographic locations. We believe that our multi-brand business model is crucial to our success. Our Group will continue to expand our restaurant footprint in Hong Kong through this strategy. Apart from the commencement of operation of MS(TKO) in January 2018, we currently expect to open approximately two and two new restaurants in Hong Kong in the year ending 31 March 2019 and 31 March 2020, respectively. The table below set out the details of the restaurants we expect to open:

			Expected			Expected cost
			date of		Expected	to be incurred
		Expected/	commencement		seating	to set up the
No.	Expected brand	Target location	of operation	Expected size	capacity	restaurant
				(sq.ft.)	(seats)	(HK$’000)
				(approximately)	(approximately)
1.	Mr. Steak	Tuen Mun	July 2018	3,000 to 4,000	150	5,000
2.	Mr. Steak —	Tai Po or Yau Tsim	October 2018	10,000	250	11,500 (Note)
	Buffet à la minute	Mong District
3.	Mr. Steak	Central/Kowloon East	May 2019	2,500–4,000	100	3,500
		District/New Territories
		East District
4.	Mr. Steak	Central/Kowloon East	October 2019	2,500–4,000	100	3,500
		District/New Territories
		East District

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BUSINESS

Note: The estimated set-up cost of this restaurant which is expected to be comparable to MS(Buffet) is determined with reference to the initial set-up cost of MS(Buffet) and taken into account other factors such as inflation, its brand, location, size (in terms of gross floor area and seating capacity) and operational needs. Therefore, we expect to incur higher cost to set up this restaurant than that of the other restaurants of our Group.

Considering the diversified demographics of the residents in Hong Kong, we plan to enhance our market share by opening our restaurants in districts that are not on our existing portfolio. We aim to open our restaurants in the prime districts in Hong Kong to attract higher customer flows. We also intend to offer a more spacious dining environment for our customers in the future. In choosing a site for our new restaurant, we have a set of site selection criteria to ensure that the chosen location is compatible with our expansion plans. Our Group will monitor and review our expansion plan from time to time. For further details, please refer to the paragraph headed ‘‘Site selection process’’ below in this section.

During the Track Record Period, our Group opened four new restaurants under different brands owned by us. We also rebranded two restaurants during the Track Record Period. Subsequent to the Track Record Period and up to the Latest Practicable Date, we opened one new restaurant under our ‘‘Mr. Steak’’ brand in Tseung Kwan O.

Our long-term future plan is to set up our new restaurants in various districts across Hong Kong, whereby we can further penetrate into the market, serve customers of different districts in Hong Kong and increase our market share. We aim to increase our market share in the western casual dining restaurants market and strengthen our presence in Hong Kong through our expansion by means of opening new restaurants in strategic locations, including locations which are not within our current restaurant network. Our Group is currently reviewing various potential sites in Hong Kong for opening new restaurants. Although we have yet to formally determine the locations, locations such as Tuen Mun, Tai Po and Yau Tsim Mong district are being further reviewed. Our Group will take into account the accessibility and demographics of the people in the neighbourhood before deciding the locations of our new restaurants. We will also conduct feasibility studies on the rental range and examine competitors’ existence in the vicinity. Our Group will conduct further assessment on breakeven and investment payment at a later stage closer to the execution of our expansion plan in order to collect more timely data. Please refer to the paragraph headed ‘‘Site selection process’’ in this section for further details.

Our Group does not have a current plan to expand our restaurant business overseas. As at the Latest Practicable Date, we did not open any restaurant in the PRC or entered into any arrangement with any third party to licence, franchise or otherwise authorise the use of our Group’s brands for establishing any restaurant operations in the PRC. Also, we do not own and are not licensed to use any registered trademark in the PRC. Nevertheless, we may explore any possibilities to expand into markets other than Hong Kong, including China, if suitable opportunities arise. We will conduct business development studies and feasibility studies including market research, business, financial and legal analysis before we decide to expand our restaurant business into other regions. We currently do not have any plan or timeframe for such expansion.

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BUSINESS

Our Directors are of the view that expansion of our restaurant network will benefit our Group in the following ways:

. Increasing total sales: Our Directors believe that the opening of more restaurants will increase our overall number of customer visits, attract new customers and retain existing customers in various districts in Hong Kong. We believe that such improvement will increase the total sales and consolidate our position in the restaurant industry;
. Raising brand awareness and reputation: By opening more restaurants under our brands in new locations, we will be able to raise brand awareness and reputation among customers in different districts in Hong Kong. It enables our Group to further penetrate the market in various districts in Hong Kong, which may ultimately enhance our Group’s revenue generating capacity and market share;
. Increasing cost efficiency: By increasing the number of our restaurants, the cost efficiency of our Group will be improved by achieving the economies of scale including strengthening our bargaining power over suppliers, enjoying bulk purchase discounts and enhancing the efficiency of marketing and promotion expenses; and
. Diversifying revenue: The opening of more restaurants will diversify our Group’s revenue stream from individual restaurants, which provide a stable flow of customers for us.

We will adopt measures and business strategies to ensure the profitability of our new restaurants, details of which are set out in the paragraph headed ‘‘Loss-making restaurants and measures to maintain our operating margin’’ below in this section.

We plan to spend approximately HK$23.5 million to be funded by the net proceeds from the Share Offer to finance the expansion of our restaurant network as described above.

Establish a new central kitchen for our restaurants

Considering the rapid expansion of our restaurant business and the increasing concerns of food safety and hygiene in Hong Kong, our Group intends to establish a central kitchen for our restaurants. The preparation of food ingredients of our restaurants are currently carried out separately by our respective restaurants. Our head chef and sous chef are responsible for ordering food ingredients with our approved suppliers selected by our management, and our kitchen staff will prepare the food ingredients to different dishes in accordance with the instructions of the head chef and senior kitchen staff. Our Directors believe that by setting up a central kitchen for our restaurants, we can have better control on our food preparation process and standardise the quality of food among our restaurants. We expect that the ingredients of these common dishes will be prepared in the central kitchen and delivered to the respective restaurants where such ingredients will be further processed under the coordination and supervision of the head chef and sous chef, in order to ensure the consistency in quality as well as food safety served in all our restaurants across different locations.

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BUSINESS

Our Directors are of the view that by establishing a central kitchen, we will enjoy lower costs by (i) standardising the operation of common dishes among our restaurants and improving the quality control of our food; (ii) minimising the wastage of food ingredients; and (iii) enhancing our bargaining power over suppliers by purchasing larger quantity of food ingredients. We believe that the establishment of the central kitchen will reduce our overall cost of raw materials and consumables used.

The estimated costs for setting up the new central kitchen, including renovation, equipment purchase, rental deposit costs are approximately HK$5.4 million, which are intended to be funded by the net proceeds from the Share Offer. We foresee that the establishment of our central kitchen will increase our fixed operating expenses including rental fee and staff cost. As at the Latest Practicable Date, we have yet to enter into any formal lease agreement for the establishment of our new central kitchen.

Enhance and upgrade our existing restaurant facilities

Our Directors believe that the ambience of the restaurants is vital to our business success. In order to stay competitive in the market, we plan to purchase kitchen equipment and renovate our existing restaurants. Our Group intends to enhance and upgrade the interior design of our restaurants, restaurant equipment and utensils in our restaurants from time to time. We aim to identify quality kitchen and cooking tools, equipment and alliances to increase the efficiencies of our kitchen staff. We intend to purchase automatic cooking machine to standardise the quality of some of our common dishes in our new central kitchen. In addition, our Group will review and refine our interior design and concept of our existing restaurants regularly. We also intend to arrange for restaurants renovation. We plan to spend approximately HK$5.0 million to be funded by the net proceeds from the Share Offer to enhance and upgrade existing restaurant facilities as described above.

Enhance our marketing and promotion initiatives

We aim to enhance our marketing initiatives in promoting our restaurants. We will continue to promote our restaurants by launching promotion campaigns with credit cards and group shopping networks to promote our restaurants by offering discounts to customers. Our Group will also utilise various media channels such as social media, internet, newspaper and/or magazines to advertise and promote our restaurants. In addition, we intend to introduce a loyalty program in order to attract both repeated and new customers. We plan to provide attractive discounts, such as birthday discounts, to repeated customers who join our loyalty program through the mobile application in order to promote the image of our brands. We plan to spend approximately HK$2.1 million to be funded by the net proceeds from the Share Offer to enhance our marketing and promotion initiatives.

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GENERAL INFORMATION AND OPERATING DATA OF OUR RESTAURANTS

The following map shows the approximate location of our restaurants in Hong Kong as at the Latest Practicable Date:

==> picture [417 x 293] intentionally omitted <==

----- Start of picture text -----

YUEN LONG Yuen Long
Shatin
SHATIN
TSING YI Kwai Tsing KWAI FONG
Kwun Tong
KOWLOON BAY
Yau Tsim Mong
MONGKOK
Sai Kung
TSEUNG KWAN O
Eastern
CAUSEWAY BAY Wan Chai TAIKOO
----- End of picture text -----

Note: The locations of our restaurants shown in the map above are for reference only and may not be an indication of the exact location.

As at the Latest Practicable Date, we owned and operated 13 restaurants in Hong Kong, including six restaurants under our ‘‘Mr. Steak’’ brand, one buffet restaurant under our ‘‘Mr. Steak — Buffet à la minute’’ brand, three restaurants under our ‘‘Sky Bar’’ brand, two western specialty restaurants under our ‘‘Bistro Bloom’’ and ‘‘Bistro Bloom/Marbling’’ brands and one Japanese specialty restaurant under our ‘‘Hana’’ brand.

‘‘Mr. Steak’’ restaurants

During the Track Record Period, we owned and operated five restaurants under our ‘‘Mr. Steak’’ brand, including MS(ST), MS(KB), MS(TY), MS(KF) and MS(KH). In January 2018, we opened the 6th restaurant under our ‘‘Mr. Steak’’ brand, MS(TKO). As suggested by the brand name ‘‘Mr. Steak’’, our ‘‘Mr. Steak’’ restaurants serve our customers with our signature steak such as sirloin steak and rib-eye steak. In addition, our ‘‘Mr. Steak’’ restaurants serve a wide variety of western cuisines including seafood, pasta and salad, targeting at a wide range of customers of different age and dining preferences.

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‘‘Mr. Steak — Buffet à la minute’’ restaurant

We owned and operated one buffet restaurant, MS(Buffet), under our ‘‘Mr. Steak — Buffet à la minute’’ brand in Causeway Bay. Our ‘‘Mr. Steak — Buffet à la minute’’ restaurant serves buffet with international cuisine, targeting our customers who are buffet lovers and have discerning appetites on various kind of food.

In recognition of the quality of our food and services, MS(Buffet) was awarded with the ‘‘OpenRice Best Restaurant Award — Best Buffet’’ in 2017.

‘‘Sky Bar’’ restaurants

Restaurants under our ‘‘Sky Bar’’ brand include SB(CWB), SB(MK)and SB(YL). Each of our ‘‘Sky Bar’’ restaurants is a combination of restaurant, bar & lounge with entertainment in which we served various western cuisine along with our signature seafood dishes, together with a wide selection of wines and cocktails to our customers. Catering for our target customers of younger generation who social gathering with good food and wine, our ‘‘Sky Bar’’ restaurants were decorated in a sleek but cozy look, aiming to promote a unique and chill dining experience for our customers.

Specialty restaurants

Western specialty restaurants

During the Track Record Period, we owned and operated two western specialty restaurants, BB(MK) and BB(CWB) under our ‘‘Bistro Bloom’’ and ‘‘Bistro Bloom/Marbling’’ brands, respectively. Catering for our target customers of younger generation who fancy various trendy western cuisine, our western specialty restaurants serve various modern and trendy western food such as sandwiches, salads, pastas and desserts, along with specialty meat cuts, aiming to provide a casual and laid back dinner atmosphere for our customers, at the same time providing a place where our customers could taste our high quality and special meat cuts.

Japanese specialty restaurant

During the Track Record Period, we operated one Japanese specialty restaurant, Hana(CWB) under our ‘‘Hana’’ brand. Targeting our customers who are beef-lovers and also Japanese food lovers, Hana(CWB) was established by our Group, specialising in serving ‘‘Nabemono’’ — Japanese hot pot dishes such as Sukiyaki, Shabu Shabu and Seiromushi.

In recognition of the quality of our food and services, Hana(CWB) was awarded with the ‘‘Best of Japanese restaurant’’ award by Hong Kong Walker magazine in 2016.

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The table below sets out the general information of our restaurants operated by our Group up to the Latest Practicable Date:

							Number of
						Number of	months
	Date of					months	required to
	commencement					required to	achieve
	of operation of				Seating	achieve	investment
Our restaurant	restaurants	Location	Cuisine served	Licensed area	capacity	breakeven	payback
				(sq.m.)	(seats)
				(approximately)	(approximately)
MS(Buffet)	August 2014	6/F, World Trade Centre	International	849.0	235	2	12
		(also known as ‘‘WTC
		More’’)
		280 Gloucester Road
		Causeway Bay
		Hong Kong
MS(ST)	June 2005	Shop 702, Level 7	Western	186.46	64	2	43
		New Town Plaza
		Phase 1
		Shatin
		New Territories
MS(TY)	August 2012	Shop Unit G03A, G/F	Western	301.4	140	2	9
		Maritime Square
		33 Tsing King Road
		Tsing Yi
		New Territories
MS(KF)	October 2013	Shop Nos. 488–490	Western	312.4	128	2	34
		Level 4 Metroplaza
		223 Hing Fong Road
		Kwai Fong
		New Territories
MS(KH)	December 2015	Shop G9–G10, G/F	Western	338.4	155	1	19
		Kornhill Plaza
		1 Kornhill Road
		Hong Kong
MS(KB)	October 2016	Shop 415–417, Level 4	Western	250.8	112	1	—
		Telford Plaza II
		Kowloon Bay
		Hong Kong
MS(TKO)	January 2018	Shop No. 275	Western	219.8	94	2	—
		Level 2, East Point City
		8 Chung Wa Road
		Tseung Kwan O
		Sai Kung
		New Territories
BB(CWB) (Note 1)	May 2009	Shop C & D, G/F	Western	203.3	67	2	20
		Cleveland Mansion
		Hong Kong

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							Number of
						Number of	months
	Date of					months	required to
	commencement					required to	achieve
	of operation of				Seating	achieve	investment
Our restaurant	restaurants	Location	Cuisine served	Licensed area	capacity	breakeven	payback
				(sq.m.)	(seats)
				(approximately)	(approximately)
BB(MK) (Note 2)	December 2004	Shop 2, Level 13	Western	128.5	65	3	25
		Langham Place
		Mong Kok
		Kowloon
SB(MK)	November 2008	Shop 1, Level 13	Western	269.6	120	2	17
		Langham Place
		Mong Kok
		Kowloon
		Hong Kong
SB(CWB)	February 2014	Shop A, 8/F	Western	322.5	110	4	—
		Lee Theatre Plaza
		99 Percival Street
		Causeway Bay
		Hong Kong
SB(YL)	September 2015	G007, G/F	Western	249.3	111	1	—
		Yoho Mall 1
		9 Yuen Lung Street
		Yuen Long
		New Territories
Hana(CWB)	November 2015	Shop C, G/F.	Japanese	100.5	46	1	23
(Note 3)		Soundwill Plaza II
		Midtown
		1–29 Tang Lung Street
		Causeway bay
		Hong Kong

Notes:

Our BB(CWB) was formerly known as ‘‘Mr. Steak’’ which commenced operation in May 2009, we ceased the operation of ‘‘Mr. Steak’’ in August 2015, renovated, re-branded and recommenced business under our self-own brand ‘‘Bistro Boom/ Marbling’’ developed by our Group in September 2015. The location of the restaurant remained unchanged and the style of cuisine served remain as western cuisine.
Our BB(MK) was formerly known as ‘‘Mr. Steak’’ which commenced operation in December 2004, we ceased the operation of ‘‘Mr. Steak’’ in November 2016, renovated, re-branded and recommenced business under our self-own brand ‘‘Bistro Bloom’’ developed by our Group in December 2016. The location of the restaurant remained unchanged and the style of cuisine served remain as western cuisine.
We opened our first restaurant under the brand of ‘‘Hana’’ in Causeway Bay in July 2011 and ceased its operation in May 2015. We relocated and commenced Hana (CWB) in November 2015.

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Set out below is the movement of number of our restaurants during the Track Record Period and up to the Latest Practicable Date:

As at 1 April 2015 Addition during FY2016 (Notes 1 and 2) Closure during FY2016 (Note 2) As at 31 March 2016 Addition during FY2017 (Note 3) Closure during FY2017 As at 31 March 2017 Addition from 1 April 2017 and up to the Latest Practicable Date (Note 4) Closure from 1 April 2017 and up to the Latest Practicable Date As at the Latest Practicable Date Notes:	Number of our restaurants 9 3 1
	11 1 —
	12 1 —
	13

SB(YL) and MS(KH) commenced their operation in September 2015 and December 2015 respectively.
We ceased operation of Hana(CWB) in May 2015 and relocated and recommenced its operation in November 2015.
MS(KB) commenced its operation in October 2016.
MS(TKO) commenced its operation in January 2018.

Breakeven and investment payback

Our Directors consider the breakeven is reached at the time when the monthly revenue of the restaurant is equal to the monthly expenses, taking into account the non-cash items such as depreciation and amortisation expenses. According to the CIC Report, the industry average for a medium-size western casual dining restaurants ranges from three to five months. As at the Latest Practicable Date, all of our restaurants achieved a breakeven position within one to four months.

Our Directors consider the investment payback is reached at the time when the accumulated net cash inflow from a restaurant since its commencement of operation exceeds its initial investment amount. According to the CIC Report, the industry average for a medium-size western casual dining restaurants for achieving an investment payback is 36 months. As at the Latest Practicable Date, nine of our 13 restaurants had achieved an investment payback within 9 to 43 months.

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During the Track Record Period, SB(CWB), MS(KB) and SB(YL) had not achieved investment payback. SB(CWB) commenced its operation in February 2014 and has not achieved an investment payback. Additional time was required before we were able to achieve investment payback because this restaurant is an ‘‘upstairs shop’’ located in a commercial building where customer traffic was limited at the early stage of our operation and therefore has lower revenue generation capabilities. MS(KB) commenced its operation in October 2016 and has yet to achieve an investment payback as it has only been in operation for 14 months as at the Latest Practicable Date which has not exceeded the industry standard for achieving an investment payback according to the CIC Report. SB(YL) commenced its operation in September 2015 and has yet to achieve an investment payback as it has only been in operation for 27 months as at the Latest Practicable Date which has not exceeded the industry standard for achieving an investment payback according to the CIC Report.

Our Directors consider that although these restaurants are yet to achieve investment payback, the operation of the above restaurants generated non-monetary benefits to our Group, including market penetration by gaining access to a broader variety of potential customers. Our Directors consider those locations are suitable locations to further develop with, and will closely monitor the financial performance and other non-monetary factors.

The above historical breakeven periods and investment payback periods for the restaurants we operated during the Track Record Period are not indicative of our future performance as our Group’s revenue, expenses and operating results may vary from period to period in response to a variety of factors beyond our control. The time required for achieving breakeven and investment payback will be affected by the factors including but not limited to the amount of capital expenditures, scale of restaurants, market reception, location and timing of commencement of operation which are subject to seasonality.

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Operational performance of our restaurants

The table below sets out the operating data of each of our restaurants for FY2016, FY2017 and the six months ended 30 September 2017.

FY2016

				Average
		Number of		spending per		Seat
	Number of	operation days		customer per	Average daily	turnover rate	Operating
Our restaurants	customer visits	(Note 1)	Total revenue	meal (Note 2)	revenue (Note 3)	per day (Note 4)	margin (Note 5)
	(approximate)		(approximate)	(approximate)	(approximate)	(approximate)	(approximate)
			(HK$’000)	(HK$)	(HK$’000)	(times)	(%)
Mr. Steak — Buffet à la minute
MS(Buffet)	149,352	366	58,943	395	161	1.7	11.1
Mr. Steak
MS(ST)	54,189	366	12,423	229	34	2.3	5.0
MS(TY)	119,997	366	22,748	190	62	2.3	8.9
MS(KF)	107,121	366	18,240	170	50	2.4	-1.7
MS(KH)	57,784	109	8,681	150	80	3.4	4.0
MS(KB)	—	—	—	—	—	—	—
Specialty restaurants
BB(CWB)	57,023	309	12,502	219	40	2.8	-8.4
BB(MK)	57,527	365	13,377	233	37	2.4	8.4
Hana(CWB)	12,536	196	5,000	399	26	1.4	-3.9
Sky Bar
SB(CWB)	65,252	365	12,133	186	33	1.6	-8.7
SB(MK)	83,015	365	21,433	258	59	1.9	22.2
SB(YL)	27,360	213	5,923	217	28	1.2	-21.8

Notes:

FY2016 consists of 366 days since year 2016 is a leap year.
Average spending per customer per meal is calculated by dividing the total revenue by the total number of customer visits of the relevant restaurant during the year.
Average daily revenue is calculated by dividing the total revenue by the number of operation days of the relevant restaurant during the year.
Seat turnover rate per day is calculated by dividing the number of customer visits by the number of seats and the number of operation days of the relevant restaurant during the year.
Operating margin is calculated by dividing the operating profit for the year by revenue. Operating profit is defined as profit for the year before other income, other revenue and income tax expenses.

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FY2017

				Average
				spending per		Seat
	Number of	Number of		customer per	Average daily	turnover rate	Operating
Our restaurants	customer visits	operation days	Total Revenue	meal (Note 1)	revenue (Note 2)	per day (Note 3)	margin (Note 4)
	(approximate)		(approximate)	(approximate)	(approximate)	(approximate)	(approximate)
			(HK$’000)	(HK$)	(HK$’000)	(times)	(%)
Mr. Steak — Buffet à la minute
MS(Buffet)	168,887	365	67,540	400	185	2.0	10.7
Mr. Steak
MS(ST)	45,423	365	11,287	248	31	1.9	-0.1
MS(TY)	109,383	365	22,654	207	62	2.1	8.9
MS(KF)	95,916	365	18,518	193	51	2.2	0.2
MS(KH)	205,627	365	23,714	115	65	3.6	1.8
MS(KB)	65,721	178	9,853	150	55	3.3	-5.0
Specialty restaurants
BB(CWB)	76,203	364	16,031	210	44	3.1	3.5
BB(MK)	51,721	363	11,371	220	31	2.2	2.2
Hana(CWB)	18,963	364	8,529	450	23	1.1	4.1
Sky Bar
SB(CWB)	61,148	364	14,566	238	40	1.5	-2.7
SB(MK)	69,614	364	18,525	266	51	1.6	21.5
SB(YL)	58,065	364	10,134	175	28	1.4	-8.6

Notes:

Average spending per customer per meal is calculated by dividing the total revenue by the total number of customer visits of the relevant restaurant during the year.
Average daily revenue is calculated by dividing the total revenue by the number of operation days of the relevant restaurant during the year.
Seat turnover rate per day is calculated by dividing the number of customer visits by the number of seats and the number of operation days of the relevant restaurant during the year.
Operating margin is calculated by dividing the operating profit for the year by revenue. Operating profit is defined as profit for the year before other income, other revenue and income tax expenses.

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Six months ended 30 September 2017

				Average
				spending per		Seat
	Number of	Number of		customer per	Average daily	turnover rate	Operating
Our restaurants	customer visits	operation days	Total revenue	meal (Note 1)	revenue (Note 2)	per day (Note 3)	margin (Note 4)
	(approximate)		(approximate)	(HK$)	(approximate)	(approximate)	(approximate)
			(HK$’000)		(HK$’000)	(times)	(%)
Mr. Steak — Buffet à la minute
MS(Buffet)	85,037	182	35,259	415	194	2.0	12.5
Mr. Steak
MS(ST)	24,203	182	5,529	230	30	2.1	-4.7
MS(TY)	55,765	182	11,170	200	61	2.2	13.1
MS(KF)	52,079	182	9,797	189	54	2.3	1.8
MS(KH)	106,360	182	13,428	126	74	3.8	7.9
MS(KB)	51,719	182	9,376	182	52	2.5	9.6
Specialty restaurants
BB(CWB)	36,315	182	7,952	219	44	3.0	0.5
BB(MK)	32,799	182	7,073	216	39	2.8	11.0
Hana(CWB)	9,583	182	4,094	427	23	1.1	4.8
Sky Bar
SB(CWB)	30,126	182	7,845	259	43	1.5	1.5
SB(MK)	34,534	182	9,486	275	52	1.6	13.5
SB(YL)	36,119	182	6,088	168	33	1.8	-4.9

Notes:

Average spending per customer per meal is calculated by dividing the total revenue by the total number of customer visits of the relevant restaurant during the period.
Average daily revenue is calculated by dividing the total revenue by the number of operation days of the relevant restaurant during the period.
Seat turnover rate per day is calculated by dividing the number of customer visits by the number of seats and the number of operation days of the relevant restaurant during the period.
Operating margin is calculated by dividing the operating profit for the period by revenue. Operating profit is defined as profit for the period before other income, other revenue and income tax expenses.

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Mr. Steak — Buffet à la minute

The average daily revenue of our buffet restaurant, MS(Buffet), under our ‘‘Mr. Steak — Buffet à la minute’’ brand increased by HK$24,000 or 14.9% from approximately HK$161,000 for FY2016 to approximately HK$185,000 for FY2017 while the number of customer visits increased by approximately 13.1% from 149,352 for FY2016 to approximately 168,887 for FY2017 with stable average spending per meal of approximately HK$400 across FY2016 and FY2017, which was mainly due to increase in advertisements made during FY2017 as evidenced by the increase in marketing expenses by approximately HK$0.2 million. The average daily revenue of MS(Buffet) further increased slightly by approximately HK$9,000 or 4.9% to approximately HK$194,000 for the six months ended 30 September 2017 with average spending per customer per meal increased by approximately 3.8% to approximately HK$415 due to menu price adjustment.

‘‘Mr. Steak’’ restaurants

The average daily revenue of the restaurants under our ‘‘Mr. Steak’’ brand increased by HK$38,000 or 16.8% from approximately HK$226,000 for FY2016 to approximately HK$264,000 for FY2017. The increase was mainly attributable to the revenue from MS(KB) which commenced its operation in October 2016. The average daily revenue of our ‘‘Mr. Steak’’ restaurants further increased slightly by approximately HK$7,000 or 2.7% to approximately HK$271,000 for the six months ended 30 September 2017 which was due to the menu price adjustment of MS(KH).

Specialty restaurants

The average daily revenue of our specialty restaurants decreased by HK$5,000 or 4.9% from approximately HK$103,000 for FY2016 to approximately HK$98,000 for FY2017. The decrease was mainly attributable to the decrease in average daily revenue of BB(MK) resulted from the renovation of site from October 2016 to November 2016 that led to its partial cessation of operation. The restaurant served lunch only during the renovation period and therefore its revenue decreased. The average daily revenue of our specialty restaurants returned to approximately HK$106,000 for the six months ended 30 September 2017. BB(CWB) and Hana(CWB) recorded operating margin of approximately -8.4% and -3.9% for FY2016, respectively. Our Directors consider that the negative operating margin of BB(CWB) for FY2016 can be attributable to the relatively high depreciation expenses and utility expenses and that of Hana(CWB) during the same period was principally due to the relatively low seat turnover rate per day. The financial performance of both BB(CWB) and Hana(CWB) in terms of operating margin improved in FY2017 as a result of increase in customer visits and increase in average spending per customer per meal respectively.

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‘‘Sky Bar’’ restaurants

The average daily revenue of the restaurants under our ‘‘Sky Bar’’ brand remained stable at approximately HK$120,000 for FY2016 and at approximately HK$119,000 for FY2017. The average daily revenue of our ‘‘Sky Bar’’ restaurants increased by HK$9,000 or 7.6% to approximately HK$128,000, which was due to the launch of special menu at SB(CWB). SB(CWB) and SB(YL) recorded negative operating margin for both FY2016 and FY2017 primarily due to the relatively higher depreciation expenses and the relatively lower average spending per customer per meal and seat turnover rate. The financial performance of both SB(CWB) and SB(YL) in terms of operating margin improved in the six months ended 30 September 2017 as a result of increase in average spending per customer per meal and increase in customer visits respectively.

Loss-making restaurants and measures to maintain our operating margin

We had five, four and two restaurants that recorded negative operating margins (the ‘‘Loss-making Restaurants’’) for FY2016, FY2017 and the six months ended 30 September 2017, respectively, which contributed approximately 28.1%, 19.7% and 9.1% of our revenue from our restaurant operations for the respective period during the Track Record Period. All of the Loss-making Restaurants other than MS(ST) and SB(YL) recorded positive operating margins for the six months ended 30 September 2017. Taking into account their improving operational performance, our Directors expect that these restaurants will maintain positive operating margins in the future. Although SB(CWB) recorded negative operating margin for FY2016 and FY2017, since its operating margin turned positive for the six months ended 30 September 2017 and SB(CWB) is strategically located in Causeway Bay, a tourist district where we also operate MS(Buffet), BB(CWB) and Hana(CWB), our Directors consider that it is in our Group’s interest to continue operating SB(CWB). For MS(ST), our Group will discontinue its operation after the expiry of its lease in April 2018. For SB(YL), our Directors consider its customer traffic as a major factor leading to its negative operating margin during the Track Record Period. However, in view of (a) the improving operational performance of SB(YL) during the Track Record Period; (b) the expected increase in customer traffic due to the opening of the footbridge to the nearby MTR station and the launching of new phase of the shopping mall at which SB(YL) is situated in mid-2017; and (c) our Group’s long-term strategic plan to set up our restaurants and maintain our business presence in various districts across Hong Kong, our Directors believe that it is in our Group’s interest to continue operating SB(YL). It is expected that the operating margin of SB(YL) will improve for the six months ending 31 March 2018.

To ensure that our Group can maintain or even improve the profitability and operating margins of our Group’s restaurants going forward, we will adopt the following measures and business strategies:

(a) review our menu offerings regularly: We will revisit our menu offerings on a regular basis and may make customary adjustments for different restaurants to ensure that the respective pricing and food selections of these restaurants match the spending power and the taste of our customers in the respective districts in Hong Kong where our restaurants are located. We also innovate new menu offerings so as to attract customers;
(b) enhance brand awareness and generate higher customer traffic through promotional campaigns: We will enhance our marketing initiatives in promoting our restaurants. We will continue to promote our restaurants by launching promotion campaigns with credit cards and group shopping networks which offer discounts to customers. We will also utilise various media channels such as social media, internet, newspaper and/or magazines to advertise and

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promote our restaurants. We plan to engage a social media marketing agent to create and maintain a social media marketing website and we plan to allocate approximately HK$2.1 million of the net proceeds from the Share Offer to enhance our marketing and promotion initiatives. Furthermore, as some of our restaurants are located in tourist districts, we will consider advertising in travel magazines and tourism promotional materials to strengthen our exposure among tourists;

(c) control food costs and monitor wastage: We will exercise cost control during the procurement of food ingredients by comparing the price quotations from suppliers of the same food types and ensuring that we obtain our food ingredients at reasonable prices. We will also design procedures to track, monitor and control wastages at different restaurants and will adjust our serving portions where necessary in order to reduce food costs and improve operating margins;
(d) explore online sales channel: We will consider establishing partnerships with online food delivery services companies where they will offer food ordering and delivery services from our restaurants;
(e) strengthen frontline staff training: We will provide training to our floor staff on sales techniques and serving skills in order to enhance their productivity and ensure to provide delightful experience for the customers in our restaurants; and
(f) adopt strict site selection policy: We will adopt our site selection policy strictly and ensure that only sites with rentals on commercially viable terms will be considered.

OVERVIEW OF RESTAURANT OPERATIONS AND MANAGEMENT

Standardised operation procedures

We believe that we can manage our restaurants efficiently if we standardise our operating procedures. Our Group has adopted a set of standardised operating procedures on daily operation of our restaurants. The set of standardised operating procedures includes the internal control manual in relation to the procurement and payment process system, the cash management system and the risk and safety management.

Management structure

Our management structure is designed to promote efficiency in supervising, directing and supporting our operations, quality control systems, recruitment processes and sales and marketing. Our Board is responsible for formulating overall business strategies and operations of our Group. The daily operations of our restaurants are supervised by our head chef and restaurant manager of each of our restaurants. Our restaurant manager will report directly to our area managers who are responsible for supervising different restaurants within designated regions. Restaurant managers are required to note down the details of the daily operations of the respective restaurants for records.

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Head office management

The overall management of our business and operations is performed at our head office in Hong Kong. Our head office is responsible for the corporate business and finance administration, project and construction including licensing and property management, operational management and supervision, purchasing, business development, human resources management and staff recruitment, and sales and marketing of our Group. Our head office also oversees the performance of each of our restaurants and ensures that the management of the essential aspects, including food quality, service and environment, are properly upheld by each of our restaurants.

Restaurant-level management

Each of our restaurants is operated and managed by its own restaurant management team, consisting of our restaurant manager, assistant manager, head chef and sous chef. Our restaurant-level management team ensures that our restaurants operate efficiently. It also monitors the sales targets of each of our restaurants set by our head office management. Certain management decisions and administrative roles, such as the purchasing of utensils, kitchen equipment and food ingredients, inventory and quality control, are delegated to our restaurant management teams, to maintain flexibility in responding promptly to our daily restaurant demands.

Management meetings

Our Group holds weekly management meetings to discuss the overall management of our restaurants. We also hold bi-weekly meetings with our area managers and area chefs to discuss the operations of our restaurants. We also hold performance meetings once a month to discuss and evaluate on the overall operational performance of our restaurants under different brands. In addition, we hold performance meetings of each of our individual restaurants regularly.

Food preparation

It is an important part of our strategy to offer quality cuisine to maintain our existing customer base and to attract new customers. It is also essential for us to ensure food safety in our restaurants. To achieve this, we have implemented standardised quality control policies and procedures with respect to food safety and quality. The flowchart below is the food preparation process of our Group:

==> picture [381 x 72] intentionally omitted <==

----- Start of picture text -----

Purchasing Receipt
Food Food
of food of food Storage Serving
preparation processing
ingredients ingredients
----- End of picture text -----

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Purchasing and receipt of food ingredients

Our Group adopts the following order placement policies in relation to our food ingredients and suppliers:

Food ingredients

Head chef and sous chef of each of our restaurants are responsible for monitoring the level of daily needs of the restaurant and deciding the types and quantities of food ingredients to be purchased. We place orders with our approved suppliers directly. Upon delivery of the food ingredients, our sous chef, under the supervision of our head chef, weigh the incoming food ingredients with an electronic scale, records the types and quantity of food ingredients and check the information on the delivery notes against our orders before confirming the receipt of the food ingredients. Delivery notes and signed invoices are submitted to our accounting and finance department. For further details of supplier selection, please refer to the paragraph headed ‘‘Supplier selection and management’’ below in this section.

Beverage, ancillary equipment and utensils

In relation to beverage, ancillary equipment and utensils, our restaurant manager and assistant manager of each of our restaurants are responsible for monitoring the stock and checking the price and minimum order quantity with our Group’s approved suppliers. Restaurant managers and assistant managers are responsible for placing purchase orders; and goods are delivered by suppliers to our respective restaurants. They acknowledge the receipt of goods and invoices will be sent to our finance department. For further details of supplier selection, please refer to the paragraph headed ‘‘Supplier selection and management’’ in this section.

Storage

In each of our restaurants, our head chef and sous chef are responsible for ensuring proper processing and storage of our food ingredients. Our restaurant manager is responsible for ensuring proper storage of our beverages. For food ingredients that are perishable, our head chef and sous chef will control the quantity of order to ensure the freshness of the food ingredients. For non-perishable food ingredients, we ensure each of our restaurants maintain adequate stock.

We have developed a set of procedures on storage of our food ingredients. Upon delivery of food ingredients, we store them under appropriate temperature and storage conditions. Meat, seafood, frozen food and vegetables are stored in different containers.

Each of our restaurants performs a stock count on a regular basis. During the Track Record Period, we did not experience any excessive accumulation of inventory of our food ingredients and beverages.

Food preparation and food processing

In order to ensure all dishes are freshly prepared, each of our restaurants conducts its food preparation functions in its own kitchen. Our head chef and sous chef are responsible for the overall operation of the kitchen of our respective restaurant. Under the coordination of the head chef, our

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kitchen staffs conduct our food preparation in accordance with our own recipes to ensure efficiency and quality. Different divisions of our kitchen staffs are responsible for different parts of the food processing chain including washing, cutting, preparing, cooking, serving and dish cleaning.

Serving

Our restaurant staff serve customers the food when they are ready and make sure the ordered items are served in appropriate order.

Development of new dishes

Our Group recognises the importance of introducing new dishes regularly to attract a broader customer base and to maintain loyalty from existing customers. Our menus are modified and updated regularly in response to the changing tastes of our customers and general sentiment. In development of new menus, we review our menus and introduce promotional and festive dishes to attract potential customers by taking into account the market trends, seasonal factors and feedbacks from customers. Our Group aims to make variations to our existing dishes in accordance with seasons and trends. Our Directors and executive chef are responsible for making the final approval of any new dishes to be launched.

Customers

Suppliers

Supplier selection and management

Our Directors believe that serving delicious, safe and fresh food to our customers is vital to our business success. We recognise the importance of having good and quality food ingredients used in the food preparation process in our restaurants. Food ingredient suppliers are carefully selected based on a set of selection criteria, such as the type and quality of ingredients, reputation of the suppliers, cost, service, delivery efficiency and past performance. Our Group maintains a list of approved suppliers of food ingredients and beverages. As at the Latest Practicable Date, we had over 120 approved suppliers of food ingredients and beverages. Potential suppliers are assessed by our purchasing manager and approved by our management based on their backgrounds and business operations.

Our Group has not entered into any long-term contract with our existing suppliers save for the Master Supply Agreement between our Group and Elite, details of which are set out in the section headed ‘‘Connected Transactions’’ of this prospectus. During the Track Record Period, we established stable and good relationships with our Group’s five largest suppliers which have been supplying food ingredients to our Group for a period ranging from three to 17 years. We are confident that we have

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priority in securing supplies from our key suppliers. During the Track Record Period, none of our major suppliers ceased or indicated that it would cease supply of food ingredients to us, and we did not experience any material delays or interruptions of the supply of our food ingredients, early termination of supply agreements, or failure to secure sufficient quantities of irreplaceable food ingredients that had any material adverse impact on our business or results of operation.

Each of the members of our purchasing department confirms to us that he or she is independent from the suppliers in our list of approved suppliers. Our Directors and employees are given training and guidance on how to prevent bribery and kickback arrangements from suppliers. Our Group believes that the standards and restrictions imposed by us are able to effectively prevent us from entering into bribery or kickback arrangements with our suppliers. Our Directors confirm that there is no rebate or kickback arrangement with any of our suppliers. To the best knowledge of our Directors, none of our Directors or employees was involved in any bribery or kickback arrangement with our suppliers during the Track Record Period.

During the Track Record Period, our five largest suppliers carried on the business of supplying meat, seafood and beverages to us. The tables below set forth the profile of our five largest suppliers based on our total purchases attributable to them during FY2016, FY2017 and the six months ended 30 September 2017:

FY2016

Rank Our supplier Principal business activities Food ingredients/ goods provided Approximate years of business with our Group Credit terms Payment method 1 Elite Wholesaler of chilled and frozen meat and seafood and other food supplies in Hong Kong Meat and seafood 17 60 days by cheque 2 Supplier A Vegetable wholesaler in Hong Kong Vegetables 7 30 days by cheque 3 Supplier B Dried food and grocery products wholesaler in Hong Kong Dried food, cereals, oil and canned food products 11 30 days by cheque 4 Supplier C Vegetable wholesaler in Hong Kong Vegetables 3 30 days by cheque 5 Supplier D Seafood wholesaler in Hong Kong Seafood 3 30 days by cheque Sub-total for our five largest suppliers Other suppliers Total	Total purchases (HK$’000) 29,125 2,619 2,267 1,797 1,666 37,474 24,818 62,292	Approximate % of our total purchases % 46.8 4.2 3.6 2.9 2.7
		60.2 39.8
		100

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FY2017

Rank Our supplier Principal business activities Food ingredients/ goods provided Approximate years of business with our Group Credit terms Payment method 1 Elite Wholesaler of chilled and frozen meat and seafood and other food supplies in Hong Kong Meat and seafood 17 60 days by cheque 2 Supplier C Vegetable wholesaler in Hong Kong Vegetables 3 30 days by cheque 3 Supplier B Dried food and grocery products wholesaler in Hong Kong Dried food, cereals, oil and canned food products 11 30 days by cheque 4 Supplier A Vegetable wholesaler in Hong Kong Vegetables 7 30 days by cheque 5 Supplier E Meat and seafood wholesaler in Hong Kong Seafood 6 30 days by cheque Sub-total for our five largest suppliers Other suppliers Total	Total purchases (HK$’000) 43,384 3,263 2,832 1,973 1,939 53,391 25,811 79,202	Approximate % of our total purchases % 54.8 4.1 3.6 2.5 2.4
		67.4 32.6
		100

Six months ended 30 September 2017

Rank Our supplier Principal business activities Food ingredients/ goods provided Approximate years of business with our Group Credit terms Payment method 1 Elite Wholesaler of chilled and frozen meat and seafood and other food supplies in Hong Kong Meat and seafood 17 60 days by cheque 2 Supplier F Meat and seafood wholesaler in Hong Kong Seafood 3 30 days by cheque 3 Supplier C Vegetable wholesaler in Hong Kong Vegetables 3 30 days by cheque 4 Supplier B Dried food and grocery products wholesaler in Hong Kong Dried food, cereals, oil and canned food products 11 30 days by cheque 5 Supplier E Meat and seafood wholesaler in Hong Kong Seafood 6 30 days by cheque Sub-total for our five largest suppliers Other suppliers Total	Total purchases (HK$’000) 19,461 2,919 2,792 1,852 1,100 28,124 13,967 42,091	Approximate % of our total purchases % 46.2 7.0 6.6 4.4 2.6
		66.8 33.2
		100

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Save for Elite (a company beneficially owned as to 50% by Ms. Ingrid Ip, 25% by Mr. Joseph Kwong and 25% by Ms. Melanie Kwong, details of which are set out in the section headed ‘‘Connected Transactions’’ in this prospectus) which was our largest supplier during the Track Record Period, none of our Directors, their respective close associates or any Shareholder who, to the best of our Directors’ knowledge, owns more than 5% of the issued share capital of the Company, had any interest in any of our Group’s five largest suppliers during the Track Record Period.

Our relationship with Elite

For FY2016, FY2017 and the six months ended 30 September 2017, our purchases from Elite accounted for approximately 46.8%, 54.8% and 46.2% of our total purchases, respectively. Our purchases from our five largest suppliers accounted for approximately 60.2%, 67.4% and 66.8% respectively, of our total purchases during the same period. Please refer to section headed ‘‘Risk Factors — Elite, our largest supplier and our connected person, accounted for a substantial portion of our purchases’’ in this prospectus for further details of our supplier concentration risk.

Elite, being our largest supplier during the Track Record Period, was also one of our customers. During the Track Record Period, we engaged Elite to enter into arrangement with certain group shopping network operators for the sale of prepaid dining coupons of our Group’s restaurants. For FY2016, FY2017 and the six months ended 30 September 2017, our revenue attributable to such transactions amounted to approximately HK$1.5 million, nil and nil, respectively, representing approximately 0.8%, nil and nil of our total revenue, respectively. These transactions had ceased in March 2016 and will not continue after Listing.

Background of Elite

Elite is a company incorporated in Hong Kong with limited liability in 1984 which is a wholesaler of chilled and frozen meat and seafood and other food supplies in Hong Kong. According to the CIC Report, Elite is one of the key suppliers of high-quality meat and seafood in Hong Kong and ranked the third (in terms of the value of imported food ingredients) among the major high-quality meat and seafood suppliers in Hong Kong. For the two financial years ended 31 March 2017, Elite had over 500 customers and its five largest customers for FY2016 and FY2017 included (a) our Group, (b) a retail chain in Hong Kong offering a premium selection of fresh produce, seafood, meat, fine wines, health foods and snacks and other lifestyle products, (c) a group of luxury hotels and casino resorts in Macau, (d) a group of premium hotels owned and operated by one of the major property companies in Hong Kong, (e) a group of restaurants operated by a leading food and beverage company comprising of Chinese, Asian and European restaurants, quick service restaurants, bakery shops and institutional catering and (f) a group of restaurants operated by a full-service multi-brand restaurant group in Hong Kong. Based on the audited accounts of Elite for FY2016 and FY2017 and its unaudited management accounts for the six months ended 30 September 2017, the revenue of Elite amounted to approximately HK$303.0 million, HK$326.3 million and HK$172.5 million for FY2016, FY2017 and the six months ended 30 September 2017, respectively.

Since Elite is owned as to 50%, 25% and 25% by Ms. Ingrid Ip, Mr. Joseph Kwong and Ms. Melanie Kwong, respectively, who are our Controlling Shareholders, Elite is a connected person of our Company. Please refer to the section headed ‘‘Connected Transactions’’ in this prospectus for further details.

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Sustainability of our business

We will continue to purchase food ingredients from Elite after Listing. We entered into a legally binding Master Supply Agreement with Elite, our connected person, details of which are set out in the section headed ‘‘Connected Transactions’’ in this prospectus. Our Directors believe that our continued purchases from Elite and the extent of supplier concentration during the Track Record Period is not an extreme case and will not materially affect our sustainability of business taking into account the following factors:

(a) Our mutual and complementary business relationship with Elite: For FY2016, FY2017 and the six months ended 30 September 2017, we were one of the five largest customers of Elite, contributing approximately 9.6%, 13.3% and 11.3% of its revenue, respectively. Taking into consideration of our established market position in the western casual dining restaurants market in Hong Kong (we are one of the major market players in the western casual dining restaurants market in Hong Kong with a market share of approximately 1.6% in terms of revenue in 2016 according to the CIC Report), our constant demand for high quality food ingredients from reliable source and our position as Elite’s key customer, we believe we have a mutual and complementary business relationship with Elite;
(b) Reputation and quality: We recognise the importance of having quality food ingredients used in our food preparation process and carefully select food ingredient suppliers which can meet our selection criteria, including without limitation, the industry reputation of the suppliers and their quality of food ingredients. According to the CIC Report, Elite is one of the key suppliers of high quality meat and seafood in Hong Kong and ranked third (in terms of the value of imported food ingredients) among the major high quality meat and seafood suppliers in Hong Kong. As such, we believe Elite has gained a strong industry position and reputation in the market. Furthermore, we purchase food ingredients from Elite principally because our Directors believe it can provide continuous, timely and steady supply of high quality food ingredients from reliable sources. Quality of the food ingredients supplied by Elite has been proven over the past 17 years and has kept up with our stringent quality standards. Our Directors believe, as supported by the CIC Report, that our reliance on Elite, a reliable and reputable food ingredient supplier with which we have established a close and stable business relationship for the past 17 years, is in line with industry norm;
(c) Normal commercial terms: The terms of purchases with Elite are normal commercial terms which are no less favourable to our Group and determined after arm’s length negotiation with Elite. As confirmed by Elite, in arriving at the credit term to be offered and the sales price of food ingredients supplied to its customers (including our Group), Elite has adopted the same policy to determine the sales price and credit term on order-by-order basis after arm’s length negotiations taking account of various factors such as the expected purchase costs incurred by Elite, quantity ordered by customers, delivery cost (which hinges on delivery schedule, delivery arrangement and location requested by customers), payment terms and length of credit period offered to its customers, business relationship with its customers, prices of similar food ingredients offered by its competitors and other prevailing market conditions. In general, Elite offered credit term of 60 days to a majority of its top five largest customers (including our Group) during Track Record Period. Given that Elite generally applies the same criteria in determining pricing and credit term to all of its customers (including our

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Group), Elite confirms that the terms of our Group’s purchases from Elite during the Track Record Period were on normal commercial terms which are comparable to those offered by Elite to its other independent customers on similar purchasing arrangement;

(d) Our ability to maintain flexibility in supplier selection and source from other food ingredient suppliers: Our Group maintains a list of approved suppliers of food ingredients and beverages comprising over 120 approved suppliers as at the Latest Practicable Date. Moreover, under the Master Supply Agreement, we are not bound to make purchases from Elite. Our Directors believe we maintain flexibility in supplier selection and are able to source from other food ingredients suppliers to reduce the level of supplier concentration. As Mr. John Kwong and Mr. Lam On Fai, our executive Directors, and Mr. Lee Sai Keung, our executive chef, have over 30 years of experience in the food and beverages industry, they have maintained wellestablished business connections or personal relationship with a number of food ingredients suppliers in Hong Kong. According to the CIC Report, there are approximately 30 major high-quality meat and seafood suppliers that focus on serving restaurant groups in Hong Kong, with each of these suppliers having annual imported value over HK$100 million in 2016; among those, at least three suppliers have business scale similar to Elite that can offer their products to our Group at terms, price, quantity and quality comparable to those offered by Elite. During the Track Record Period, we did not experience any shortage in supplies of food ingredients. Given our established presence in the market, in the unlikely event that our relationship with Elite is terminated, our Directors believe that we will be able to approach other food ingredients suppliers and purchase from them on comparable terms. To maintain flexibility in supplier selection and as a contingency plan, we will continue to maintain our relationship and close contact with such food ingredients suppliers and, where feasible, obtain and negotiate supply terms with them in advance;
(e) Master Supply Agreement: In preparation for the Listing and to secure a long-term supply of food ingredients, we entered into the Master Supply Agreement with Elite on 23 March 2018 for a term commencing from the Listing Date to 31 March 2020 and may be renewed, subject to compliance of the Listing Rules. We believe the Master Supply Agreement will help ensure a steady supply of food ingredients from Elite. For details of the terms of the Master Supply Agreement, please refer to the section headed ‘‘Connected Transactions’’ in this prospectus. As Elite has provided us with a stable and timely supply of high quality food ingredients over the years, with our established long-term business relationship with Elite and the Master Supply Agreement, our Directors are of the view that the risk of Elite terminating or reducing its supply of food ingredients to our Group is low; and
(f) Prospect of the industry and viability of our business: Our Directors are of the view that the outlook of the western casual dining restaurants market will remain positive given the growing popularity of western casual dining in Hong Kong. According to the CIC Report, the overall market size of western casual dining restaurants in terms of total receipts grew from approximately HK$14.3 billion in 2012 to approximately HK$17.4 billion in 2016, representing a CAGR of 5.1%. This growth momentum is also expected to sustain in the near future, with the market size expected to expand to approximately HK$21.8 billion in 2021, representing a CAGR of 4.6% between 2016 and 2021. For further information about the prospects of the industry and the related growth drivers, please refer to the section headed ‘‘Industry Overview — Drivers of the western casual dining restaurants market in Hong

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Kong’’ in this prospectus. Given the ample business opportunities in the western casual dining restaurants market, our Directors believe that our business will continue to be viable in the foreseeable future despite our supplier concentration.

Our raw materials and purchase cost control

The major raw materials purchased by our Group are food ingredients including meat, seafood, frozen food and vegetables. Our cost of inventories sold amounted to approximate HK$62.2 million, HK$79.2 million and HK$42.1 million for FY2016, FY2017 and the six months ended 30 September 2017, which represented 31.9%, 33.7% and 32.8% of our revenue for FY2016, FY2017 and the six months ended 30 September 2017, respectively.

The prices of food ingredients were determined with reference to quality, sources and adequacy of supply, our Group’s relationship with our suppliers and seasonal factors. We are of the view that the prices of raw materials which our Group purchased during the Track Record Period were consistent with the then prevailing market prices. Our Group will continue to follow the market prices under normal operation and market conditions.

The overall cost of food ingredients is closely monitored and it is generally kept below a certain percentage of the total revenue of a particular restaurant. Our Group will monitor the costs of food ingredients through comparing the price quotations from suppliers of the same food types.

Inventory management

Our head chef and sous chef are responsible for inventory management at each of our restaurants. To ensure our food ingredients are fresh, we conduct daily inspection on the food ingredients provided by our suppliers and we keep a minimum level of fresh and perishable food ingredients on hand.

For non-perishable food ingredients, we ensure adequate level of stock is kept in our restaurants based on the respective operational needs of our restaurants. For details of our inventory turnover days, please refer to the section headed ‘‘Financial Information — Analysis of selected items of combined statement of financial position — Inventories’’ in this prospectus.

Based on the experience of our Directors and senior management, fresh and chilled seafood has a shelf life of approximately seven to 14 days, fresh meat has a shelf life of up to 90 days in vacuum state, frozen seafood and meat have a shelf life of up to two years, and vegetables have a shelf life of approximately three to five days.

Quality control

Our Group maintains strict quality control system and adopts high hygiene standard throughout the entire food production process. Our Directors believe that effective quality control is important to the operation of our restaurants.

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Supply chain quality control

Our concern over food safety and hygiene plays a significant part in the selection process of our suppliers. Orders for all food ingredients are only placed with our authorised suppliers. The head chef and sous chef of each of our restaurants evaluate the quality of food ingredients supplied by the suppliers daily upon receipt of food ingredients. Our Group will cease to source food ingredients from suppliers who fail to provide quality food ingredients. For details of the procedures we adopt in selecting suppliers, please refer to the paragraph headed ‘‘Suppliers — Supplier selection and management’’ in this section.

Restaurant quality control

Our restaurant managers, head chef and sous chef are responsible for overseeing the quality control at our respective restaurants. They inspect the food ingredients and other suppliers upon delivery, supervising the food preparation process and overseeing the kitchen area. In addition, we perform quality checks at the respective restaurant on a regular basis to ensure that the food, the services and the environment meet the relevant standards.

After the Listing, we plan to set up a central kitchen to centralise our food preparation process and standardise the quality of food among our restaurants. We expect that the ingredients of certain common dishes will be prepared in the central kitchen and delivered to the respective restaurants where such ingredients will be further processed under the coordination and supervision of the head chef and sous chef, in order to ensure the consistency in quality as well as food safety served in all our restaurants across different locations. Please refer to the paragraph headed ‘‘Business strategies’’ in this section for further details.

Food quality and safety

Upon delivery of the food ingredients and other supplies to our individual restaurants, our head chef and sous chef will perform quality check on the food ingredients and other supplies. We will reject and return the food ingredients and supplies which fail to meet our standards to our suppliers outright.

Hygiene

We adopt standardised quality control policies with respect to hygiene in our restaurants. Our restaurant staffs are required to clean and sanitise each of our restaurants every day before and after business hours.

Service quality and customer feedback management

Offering quality services to our customers is of our utmost concern. Our restaurant managers are responsible for training our employees on customer services.

We receive feedback from our customers directly in our restaurants, and also collect feedback from our customers through our guest comment cards, social media pages and food-critic websites. Our restaurant managers discuss the feedback from our customers at briefing sessions with the staffs in each

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of our restaurants. We will compile and classify all the feedback and then identify the major issues, which will be further discussed with the relevant personnel and our senior management with a view to improving the overall quality operations of our restaurant operations.

Our Group deals with customer feedback seriously. As soon as we receive a complaint from a customer in our restaurant, our restaurant manager will try to resolve the matter to our customer’s satisfaction at restaurant level. If the complaint is not being resolved at restaurant level, the matter will be referred to our senior management for follow-up.

If we receive a customer’s complaint from the FEHD, Consumer Council, Hong Kong Tourism Board or other regulatory authorities, we will conduct an investigation of the case in the branch concerned and reply to the respective authority or department. During the Track Record Period and up to the Latest Practicable Date, the FEHD had received 47 complaints (the ‘‘Complaints’’) on food quality and hygiene against our Group’s restaurants. Of the 47 Complaints, (a) 28 of them are related to various incidents of allegedly providing unwholesome food, alleged presence of foreign substance in food, allegedly unhygienic condition of food and pest infestation, alleged food poisoning and complaints against emission of hot air at our restaurants and (b) 19 of them are related to an incident of allegedly providing unwholesome food and causing discomfort to customers after consumption of raw oysters at MS(Buffet) in January 2017 (the ‘‘Incident’’). After occurrence of the Incident, we stopped the sales of the raw oysters harvested from the relevant areas immediately and tightened our food hygiene standards and quality checks procedures to avoid recurrence of similar incidents in the future. Upon inspections, sample takings and investigations by FEHD, FEHD had concluded that no irregularity was found or detected in our restaurants and the results of sample taking are satisfactory in respect of all of the Complaints. Also, FEHD had not issued any summons or taken any further actions in respect of the Complaints and the Incident. Our general restaurant licences were not subject to any suspension, revocation, disqualification and/or refusal to renew as a result of the Complaints and the Incident. Furthermore, our Directors confirm that our Group was never subject to any criminal prosecution initiated by any government authorities for non-compliance of any laws and regulations of Hong Kong as a result of the Complaints and the Incident. As such, our Directors believe that the Complaints and the Incident did not cause any material adverse impact on our business, results of operations and financial position during the Track Record Period and up to the Latest Practicable Date.

Our Directors confirm that during the Track Record Period and up to the Latest Practicable Date, our Group’s restaurants were not subject to any deduction of demerit points by the FEHD under its demerit point systems. Please refer to the section headed ‘‘Regulatory Overview’’ of this prospectus for further details of the demerit point systems.

Save as disclosed above, our Directors were not aware of any incidents of customer complaints claiming material compensation that could have a material adverse impact on our business, results of operations and financial position during the Track Record Period and up to the Latest Practicable Date.

SITE SELECTION PROCESS

Our Directors consider that identifying a suitable location for our restaurant is crucial in determining the long-term success of our Group. Our Group’s restaurants are currently located at the prime areas or the landmark shopping malls, such as WTC More, Lee Theatre Plaza, Langham Place,

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Maritime Square, Kornhill Plaza, New Town Plaza, Metroplaza, Telford Plaza, Yoho Mall and East Point City in Hong Kong. We are particularly meticulous in selecting the locations of our restaurants. Our Group consider the following factors before we decide the location for opening our new restaurants:

. accessibility and customer traffic of the potential sites: whether the potential sites are situated in an area with high customer flow and whether it is easily assessable by pedestrians and vehicles;
. size: whether the proposed location can meet our target size requirement;
. rental and other costs of operation: whether our Group can operate profitably based on the rental and other costs of operation, and whether the rental costs fall within our acceptable proportion of total costs;
. proximity to our competitors: where there exists competition (i) between the proposed location and the locations of the restaurants operated by our Group; and/or (ii) between the proposed location and other existing and potential restaurants operated by others, if any, the extent of the competition in terms of number, size and nature of business; and
. demographics: the demographics of the people in the neighbourhood of the proposed location including their age, income levels, education and spending patterns.

Our Directors are involved in the site selection process, including but not limited to, evaluation, inspection and approval of the site for our new restaurant operations. We select each site strategically so as to achieve our aim to increase our market share in the industry and generate higher revenue for our Group.

We typically follow the procedures as set out below for the establishment of a new restaurant:

. selecting a site: our Directors and senior management will decide a suitable site for our new restaurant;
. assessing feasibility: our Group will conduct due diligence research in the operation aspect, including rental costs, demographics and streams of people in the neighbourhood area, upon selection of a site;
. devising restaurant concept: we will hold internal meetings to work out a preliminary restaurant concept for the proposed restaurant once the location is approved by our Directors;
. lease negotiation and execution: once our Directors approve the location and the restaurant concept of our new restaurant, our Group will commence negotiating the terms of the lease with the landlord. We will take into account rental costs, comparable rents of sites of similar size in the vicinity, potential increase in the rental upon the expiry of the lease. Our Directors will sign the lease with the landlord if we are satisfied with the proposed terms of the lease after negotiation;

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. renovation: upon signing of the lease, our Group will commence the interior designing of the restaurant. We engage independent contractors to carry out the renovation work for us. It generally takes 45–70 days for renovation;
. licensing and permits: when the renovation work is in progress, our Group concurrently applies various licences and permits necessary for the operation restaurant, including, among others, general restaurant licences, liquor licences and water pollution control licence. For details of the licensing requirements, please refer to the section headed ‘‘Regulatory Overview’’ in this prospectus; and
. sourcing staff: our Group will confirm the number of staff members that our new restaurant requires to employ. We will explore the possibility of internal transfers and promotions. Then we will recruit new employees and provide trainings for them before the opening of our new restaurant.

SALES AND MARKETING

Customers and customer service

Substantially all of our customers are retail customers from the general public. As such, there were no single customer that accounted for more than 5% of our total revenue of FY2016, FY2017 and the six months ended 30 September 2017, respectively. We also provide takeaway services for our corporate customers, which contributed less than 2% of our total revenue for the Track Record Period. Our Directors confirmed that we had no material dispute with any of our customers during the Track Record Period and up to the Latest Practicable Date.

Our Directors believe that the customer services rendered by our employees are crucial to our Group’s reputation. To ensure that our service is to the satisfaction of our customers, we provide internal training and guidelines to our restaurant management personnel and restaurant staff. Managers of each restaurant hold regular briefing sessions with all front-line employees to review staff performance. In case of any customer complaint on our dishes or quality of services, our restaurant managers would report to the management personnel immediately. We will investigate and attend to the customers promptly.

Pricing policy

In determining the prices of the food items and beverages on our menu in all our restaurants, our Group takes into consideration (i) the cost of the food items and beverages; (ii) the overall operating cost, including the rental of the respective restaurant; (iii) our target profit margin; (iv) prices of similar food items and beverages set by our competitors; and (v) the affordability of our target customers.

Our Group reviews our menu of each of our restaurants on a regular basis. We adjust the menu prices in response to the price fluctuations to the costs of raw materials and food items, the operating costs and the general market trends. The scope of adjustment may vary with different restaurants. We also review the selection of menu items regularly.

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Our prices on our menus of each of our restaurants were relatively stable during the Track Record Period. Please refer to the section headed ‘‘Financial Information — Principal factors affecting our Group’s results of operations and financial condition — Customer traffic and average spending per customer’’ in this prospectus for an overview of our estimated average spending per customer per meal for comparable restaurants during the Track Record Period.

Settlement and cash management

Our customers usually settle their bills by credit card. Some of them settle their bills in cash. The table below illustrates the breakdown of the revenue by types of settlement of our Group during the Track Record Period:

Settlement by way of: Credit cards Cash Others (Note)	FY2016 (HK$’000) 153,116 36,816 4,848 194,780	FY2017 (HK$’000) 191,586 41,135 2,152 234,873	For the six months ended 30 September 2017 (HK$’000) 103,116 23,440 1,651
			128,207

Note: During Track Record Period, sale of food to corporate customers in relation to takeaway order services was settled by cheque.

Credit cards

Our restaurants accept credit cards from major credit cards issuers for bill settlement. We normally receive remittances from the relevant credit card issuers, net of service charges, two to three business days after the day on which the credit card transaction is approved. During the Track Record Period, service charges of approximately 2% of the bill amounts were imposed on our restaurants by the credit card issuers.

Cash

Many of our customers’ bills are settled by credit cards but we still receive certain amounts of cash in our restaurants daily. We have measures in place for cash handling to confirm the accuracy of the amount of the cash receipt at each of our restaurants. In each of our Group’s restaurants, our assistant manager is responsible for collecting the cash receipts and depositing them into the bank accounts of the respective restaurants and submitting the bank receipts to our senior management on daily basis. In case the banks are closed for non-business days, the cash collected on the previous days will be deposited to the banks on the following day. Our accounts department would cross check the balance against the records provided by each of the restaurant and the bank, where any discrepancies will be investigated by the restaurant manager of each of our restaurants or our areas managers. We have taken out insurance

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for the cash we keep at our restaurants. Our Directors confirmed that during the Track Record Period, there was no incident of any material cash misappropriation or theft of cash by our employees, customers or other third parties.

Our internal control policy includes measures and procedures to prevent occurrence of fraud involving employees. We encourage our employees to report any suspected incidents of fraud to our executive Directors for further investigation.

Seasonality

Our restaurants are subject to seasonal fluctuations in our revenue. We typically recorded a higher revenue from April to August and December as we believe that our customers who are dining with their family members tend to dine out more frequently in western casual dining restaurants during certain festive holidays (e.g. Easter and Christmas) and summer holiday. In order to counteract any effect that we may experience in the low restaurant season, we may launch marketing campaigns to attract customers.

Marketing and promotion

Our marketing team is responsible for formulating and introducing our marketing strategies. Our Group also arranges placement of advertisement in well-circulated food magazines to promote our dining offers. We have also devoted our resources in electronic platforms, such as our Group’s website and Facebook pages for promoting our special dining offers. We usually promote our latest dining offers on our Facebook pages. The purposes of our marketing strategies include: (i) to enhance our image and brand awareness; and (ii) to increase our revenue by attracting new customers and retaining existing customers for repeated visits. Beside formulating our marketing strategies and updating our websites to promote our restaurants, we will also monitor food discussion forums, food blogs or websites in order to capture the ratings, recommendations and criticisms posted by diners or food critics.

Our Directors recognise the importance of promoting brand awareness regularly. In order to promote our brands further, we, from time to time, offer certain set menus at valuable price to attract our customers. We also launch special promotional campaigns, offering semi-buffet dinner to lure customers at our restaurants. We believe that by offering different dining promotions to our customers will attract them to visit our restaurants repeatedly.

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AWARDS AND CERTIFICATIONS

Our Directors believe that being recognised as an outstanding restaurant group is a motivation for both of our Group and our employees to make further progress and improvement. As at the Latest Practicable Date, our Group had received the following awards and certifications:

Awards

Year of Grant	Award	Awarding Body
2016	Best of Japanese Restaurant	Hong Kong Walker magazine
2017	OpenRice Best Restaurant Award — Best Buffet	OpenRice
Certifications
Validity Period	Certification	Awarding Body
30 August 2017 to	Hygiene Control System Certification —	Hong Kong Quality
29 August 2020	Provision of Catering Services	Assurance Agency

COMPETITION

The market for western casual dining restaurants in Hong Kong is highly competitive and fragmented. While the independent western casual dining restaurants are dominant in terms of total number, the leading restaurant groups within such a segment are normally those operating multi-brand or chain restaurants with a large number of outlets. The top five western casual dining restaurants groups in Hong Kong accounted for approximately 10.7% of the overall market in terms of revenue generated in FY2017. In FY2017, our Group had a market share of approximately 1.6% in terms of total revenue from our restaurant outlets (excluding the ‘‘Hana’’ Japanese restaurant) in the western casual dining restaurants market in Hong Kong.

Please refer to the section headed ‘‘Industry Overview — Competitive landscape of the western casual dining restaurants market in Hong Kong’’ in this prospectus for further details.

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EMPLOYEES

The following table sets forth the number of our employees (full-time employees or part-time casual workers) by functional role as at 31 March 2016, 31 March 2017, 30 September 2017 and the Latest Practicable Date:

Management Finance, accounting and administration Sales and marketing Procurement Restaurant staff Chefs and kitchen staff Floor staff Total:	Number of employees as at 31 March 2016 7 4 3 0 125 125 264	Number of employees as at 31 March 2017 9 4 3 0 138 133 287	Number of employees as at 30 September 2017 14 9 3 1 137 143 307	Number of employees as at the Latest Practicable Date 14 8 3 1 149 129
				304

Due to the nature of the restaurant industry and in light of the range of restaurants we operate, we are in high demand of labour. Therefore, employing part-time casual labour to supplement our workforce in restaurants is necessary for our operation. One key feature of part-time casual workers is that they may only work at a particular restaurant on an ad-hoc or day-to-day basis, or for a short period of time (of less than 60 days). As at 31 March 2016, 31 March 2017, 30 September 2017, the Latest Practicable Date, we employed 53, 72, 85 and 71 casual workers who worked as our floor staff or chef and kitchen staff, respectively.

During the Track Record Period and up to the Latest Practicable Date, there had not been any labour strikes within our Group and we did not experience any material labour disputes or any material insurance claims related to employees’ injuries. Our Directors believe that we have maintained a good working relationship with our employees.

Our Group has provided a defined contribution to the mandatory provident fund as required under the Mandatory Provident Fund Schemes Ordinance for our eligible employees in Hong Kong. We have also complied with the statutory minimum wage requirement provided under the Minimum Wage Ordinance and implemented by the Labour Department in Hong Kong during the Track Record Period and up to the Latest Practicable Date.

Employee safety

We are obliged to comply with certain safety laws and regulations and occupational health and safety regulations issued by the relevant occupational health and safety authorities in Hong Kong. Our Directors strive to create a safe working environment for our employees. In order to achieve this aim,

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we have implemented safety guidelines and procedures to promote work safety on work sites. We have also introduced kitchen operation manual which provides clear guidance to our kitchen staff on various restaurant safety matters. In addition, we provide adequate trainings for all of our newly recruited and existing employees.

We maintain a record of all work injuries sustained by our employees in order to monitor our work safety effectively. During the Track Record Period and up to the Latest Practicable Date, we recorded 48 reportable accidents which occurred at workplaces. All of these accidents involve injuries caused by accidents arising out of employment and suffered by our employees, such as slip and fall and injured whilst lifting or carrying. Our Directors confirm that, save as disclosed above, no significant workplace accidents had occurred in our restaurants. In addition, our Group did not experience any labour disputes. As at the Latest Practicable Date, no employees’ compensation or personal injury claim in respect of these 48 reportable accidents has been filed by the injured persons against our Group. Our Directors take the view that the amount of any potential claims arising from the said reportable accidents to be borne by our Group in the proceedings shall be covered by the insurance policies maintained by us and the damages, costs and expenses of such claims will be indemnified by the Controlling Shareholders under the Deed of Indemnity. Please refer to the paragraph headed ‘‘Legal proceedings’’ in this section for further details.

Training programmes

Our Group aims to equip our employees with adequate knowledge and skills required for their work. Orientation and staff handbook will be provided to all newly recruited employees which set out our Group’s policy and procedures, work flows, job duties and introduction of our restaurant background. In addition, we also provide regular trainings for our employees to ensure that our employees duly comply with the safety requirements. Our Directors believe that these training programs are vital to increase our employees’ knowledge of our restaurants and restaurant industry. We are also of the view that by organising these training programmes, the service quality and managerial skills of our employees will be improved so as to enhance our customers’ dining experience at our restaurants.

Recruitment and retention

Recruitment in restaurant industry is highly competitive. Our Directors believe that by offering attractive remuneration packages, including competitive wages, benefits, discretionary bonuses and internal promotion opportunities, we will be able to recruit suitable candidates.

Our Directors believe that retention of our well-trained and experienced employees is vital to our business success. We also offer promotion opportunities to our existing employees based on their performance. Our Group maintained an average annual turnover rate of employees at 37.9%, 61.4% and 28.4% for FY2016, FY2017 and the six months ended 30 September 2017, respectively, calculated by dividing the number of employees departing after the probationary period during the year/period by the total number of employees at the end of the year/period. During the Track Record Period and up to the Latest Practicable Date, there had not been any labour strikes within our Group and we did not experience any material labour disputes or any material insurance claims related to employees’ injuries. Our Directors believe that we have maintained a good working relationship with our employees.

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In addition, our Group has conditionally adopted the Share Option Scheme. Our purpose of adopting the Share Option Scheme is to enable us to grant options to the participants in recognition of their contribution made to our Group. Please refer to the section headed ‘‘Statutory and General Information — D. Share Option Scheme’’ in Appendix IV to this prospectus.

PROPERTIES

As at the Latest Practicable Date, our Group did not own any property.

As at the Latest Practicable Date, our Group leased 14 properties in Hong Kong, of which 13 properties were used for our Group’s restaurants and one property was used for our Group’s head office. The leases of our Group have a term of 18 months to six years. All of our leased properties are leased from Independent Third Parties. Our current leases have expiration dates ranging from three months to nearly four years. The size of our leased properties ranged from 100.53 sq.m. to 848.97 sq.m. Our rental and related expenses amounted to approximately 21.4%, 21.2% and 21.2% of our revenue for FY2016, FY2017 and the six months ended 30 September 2017, respectively.

The table below sets out details of the properties leased and occupied by our Group for our restaurants as at the Latest Practicable Date:

					Use of		Option for
No.	Branch	Address	Licensed area	Rental type	property	Lease expiry date	renewal
			(sq.m.)
			(approximately)
1	MS(ST)	Shop 702, Level 7	186.4	Basic rent or turnover rent,	Restaurant	14 April 2018	N/A
		New Town Plaza		whichever is higher		(Note 1)
		Phase 1
		Shatin
		New Territories
2	MS(Buffet)	6/F, The World Trade Centre	849.0	Basic rent or turnover rent,	Restaurant	30 April 2018	Two years
		(also known as		whichever is higher		(Note 2)
		‘‘WTC More’’)
		280 Gloucester Road
		Causeway Bay
		Hong Kong
3	MS(TY)	Shop Unit G03A, G/F	301.4	Basic rent or turnover rent,	Restaurant	5 March 2019	N/A
		Maritime Square		whichever is higher
		33 Tsing King Road
		Tsing Yi
		New Territories
4	MS(KF)	Shop Nos. 488–490, Level 4	312.4	Basic rent or turnover rent,	Restaurant	31 July 2019	N/A
		Metroplaza		whichever is higher
		223 Hing Fong Road
		Kwai Fong
		Kwai Chung
		New Territories
5	MS(KH)	Shop G9–G10, G/F	338.4	Basic rent or turnover rent,	Restaurant	9 September 2019	Two years
		Kornhill Plaza		whichever is higher
		1 Kornhill Road
		Hong Kong

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					Use of		Option for
No.	Branch	Address	Licensed area	Rental type	property	Lease expiry date	renewal
			(sq.m.)
			(approximately)
6	MS(KB)	Shop 415–417, Level 4	250.8	Basic rent or turnover rent,	Restaurant	9 August 2020	Two years
		Telford Plaza II		whichever is higher
		Kowloon Bay
		Hong Kong
7	MS(TKO)	Shop No. 275	213.0	Basic rent or turnover rent,	Restaurant	31 August 2021	Two years
		East Point City		whichever is higher
		8 Chung Wa Road
		Hang Hau
		New Territories
8	BB(CWB)	Shop C&D, G/F	203.0	Basic rent or turnover rent,	Restaurant	31 January 2019	One year
		Cleveland Mansion		whichever is higher
		5–7 Cleveland Street
		Fashion Walk
		Causeway Bay
		Hong Kong
9	BB(MK)	Shop No. 2, Level 13	128.5	Basic rent or turnover rent,	Restaurant	30 November 2021	N/A
		Langham Place		whichever is higher
		8 Argyle Street
		Mong Kok
		Kowloon
10	SB(MK)	Shop 1, Level 13	269.6	Basic rent or turnover rent,	Restaurant	30 November 2021	N/A
		Langham Place		whichever is higher
		8 Argyle Street
		Mong Kok
		Kowloon
11	SB(CWB)	Shop A, 8/F	322.5	Basic rent or turnover rent,	Restaurant	14 November 2018	N/A
		Lee Theatre Plaza		whichever is higher
		99 Percival Street
		Causeway Bay
		Hong Kong
12	SB(YL)	Shop G007, G/F	249.3	Basic rent or turnover rent,	Restaurant	2 July 2018	Two years
		Yoho Mall		whichever is higher		(Note 3)
		9 Yuen Lung Street
		Yuen Long
		New Territories
13	Hana(CWB)	Shop C, G/F	100.5	Basic rent or turnover rent,	Restaurant	19 August 2019	Two years
		Soundwill Plaza II —		whichever is higher
		Midtown
		1–29 Tang Lung Street
		Causeway Bay
		Hong Kong

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Notes:

As our Group has received indication from the landlord of MS(ST) of its intention to re-brand the shopping mall as at the Latest Practicable Date, we do not plan to renew the lease for this restaurant. Our Group will continue to operate MS(ST) until the expiry of its lease on 14 April 2018.
Our Group has exercised the option for the renewal of the lease of MS(Buffet) for a term of two years from 1 May 2018 to 30 April 2020. The landlord has indicated the acceptance of such renewal.
Our Group has exercised the option for the renewal of the lease of SB(YL) for a term of two years from 3 July 2018 to 2 July 2020. The landlord has indicated the acceptance of such renewal.

The table below sets out details of the property leased and occupied by our Group for our office as at the Latest Practicable Date:

				Use of		Option for
No.	Address	Gross floor area	Rental type	property	Lease expiry date	renewal
		(sq.m.)
		(approximately)
1	Room 2313-2315, 23/F	261.8	Basic rent	Office	31 March 2020	N/A
	Hong Kong Plaza
	186-191 Connaught Road
	West
	Hong Kong

Our lease renewal, restaurant closure and renovation policy

Our Group adopts a disciplined lease renewal and restaurant closure policy in order to achieve sustainable growth of our Group’s restaurants business. We will take into account a number of factors, including the financial performance of the respective restaurant preceding the expiry of the lease, the proposed terms of the new lease, the customer traffic pattern and the future development in the vicinity before we decide whether to renew the property lease of our restaurant or to close it.

As at the Latest Practicable Date, we have received indication from the landlord of MS(ST) of its intention to re-brand the shopping mall, we do not plan to renew the lease for this restaurant. Save as disclosed above we had not received any indication from the landlords that they may not renew our leases.

INSURANCE

Our Group maintains insurance for (i) employees’ compensation liability for personal injury and illness, (ii) public liability insurance to cover our Group against any claims of illness, injuries or damages to personal property of the customers, (iii) money risk insurance for loss of money contained in our business premises during business hours and kept in locked safe, drawer or cash register after business hours and for loss of money in transit, (iv) physical property insurance, and (v) employees’ medical insurance. Our Directors believe that our insurance coverage is in line with the standard industry practice in Hong Kong.

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ENVIRONMENTAL MATTERS

Our Group’s restaurants operations are subject to environmental protection laws and regulations in Hong Kong. In addition, our Directors believe that we should consider our social responsibility in our restaurants operations. As such, our Group would take into account factors that may affect the environment in our restaurants operations. Our Group has implemented policies and measures such as the installation of electrostatic precipitators to ensure that we duly comply with the environmental laws and regulations in all of our restaurants.

During the Track Record Period, save as disclosed in the paragraph headed ‘‘Legal and regulatory compliance’’ in this section, we were in material compliance with applicable laws and regulations relating to the environment.

INTELLECTUAL PROPERTY

Our Group recognises the importance of protecting and enforcing our intellectual property rights. Therefore, we take necessary steps to protect our intellectual property rights.

As at the Latest Practicable Date, our Group owned three registered trademarks in Hong Kong under the name of Meric Investment. These trademarks are currently being used by our Group. As at the Latest Practicable Date, we had made two trademarks applications. As at the Latest Practicable Date, we did not receive any claim against our Group for infringement of any trademark nor were we aware of any pending or threatened claims in relation to any such infringement, nor had any claim been made by our Group against third parties in relation to the infringement of intellectual property rights owned by us or third parties. In addition, we are the registered owner of, among others, three domain names, http://www.mrsteak.com.hk, http://www.bistrobloom.com.hk/ and http://www.marbling.com.hk/. For details of our trademarks and domain names, please refer to the section headed ‘‘Statutory and General Information’’ in Appendix IV to this prospectus.

LEGAL AND REGULATORY COMPLIANCE

Save as disclosed below and in the paragraph headed ‘‘Non-compliance of our Group’’ in this section, our Directors confirmed that our 13 restaurants had obtained all relevant licences, approvals, certificates and permits that are material to our restaurant operations in Hong Kong.

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Our Group is required to obtain certain licences in order for us to operate our restaurants in Hong Kong. As at the Latest Practicable Date, we	have obtained for each of our restaurants (i) a general restaurant licence issued by the FEHD and (ii) a liquor licence issued by the Liquor Licencing	Board and (iii) a water pollution control licence issued by the Environmental Protection Department. A general restaurant licence is generally granted	for a term of one year and is subject to annual renewal. A liquor licence is normally granted for a term of two years or less and is subject to renewal.	A water pollution licence is generally granted for a validity period of not less than five years and is renewable. Our Group will apply for renewal of	the relevant licences as and when necessary. Our Directors are of the view that there are no legal impediment for our Group to renew all relevant	licences and permits which will expire in 2018.	The table below sets forth details of the general restaurant licence, liquor licence and water pollution control licence in respect of each of our Group’s	restaurants.	General Restaurant Licence Liquor Licence Water Pollution Control Licence	Licence Validity period of Licence Validity period of Validity period of	Branch Holder number the current licence Holder number the current licence Holder Licence number the current licence	MS(Buffet) Lord Master 2212810851 12 February 2018– Shih Kan Tan 5212826990 24 July 2017– Lord Master WT00028964-2017 28 August 2017–	11 February 2019 23 July 2019 31 August 2022	MS(ST) Meric Investment 2297003980 9 January 2018– Lam Ching 5297001954 26 July 2017– Meric Investment WT00028547-2017 4 August 2017–	8 January 2019 Hie 25 July 2019 31 August 2022	(Note 1)	MS(TY) Meric Investment 2291802002 1 March 2018– Lee Sai Keung 5291820360 9 October 2017– Meric Investment WT00028823-2017 15 August 2017–	28 February 2019 8 October 2019 31 August 2022	MS(KF) Meric Investment 2291800875 11 April 2018– Lee Wing Hei 5291820430 15 November 2016– Meric Investment WT00028329-2017 11 July 2017–	10 April 2019 14 November 2018 31 July 2022	MS(KH) Meric Investment 2211806693 11 July 2017– Cheung Shu 5211823426 15 January 2018– Meric Investment WT00029197-2017 27 September 2017–	10 July 2018 Keung 14 January 2019 30 September 2022	MS(KB) Lord Master 2251804495 8 January 2018– Jim Ka Kit 5251822461 25 November 2017– Lord Master WT00028820-2017 25 August 2017–	7 January 2019 24 November 2018 31 August 2022	MS(TKO) Lord Master 3898803939 17 January 2018– Chui Wai 5298822107 18 January 2018– Lord Master (Note 2) WT00030678-2018 23 March 2018–	16 July 2018 Hung 16 July 2018 (Note 2) 31 March 2023	(Note 2)

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General Restaurant Licence Liquor Licence Water Pollution Control Licence	Licence Validity period of Licence Validity period of Validity period of	Branch Holder number the current licence Holder number the current licence Holder Licence number the current licence	BB(MK) Lord Master 2262800396 2 August 2017– Chong Mei 5262000063 3 January 2017– Lord Master WT00028818-2017 1 September 2017–	1 August 2018 Fung 2 January 2019 30 September 2022	BB(CWB) Meric Investment 2212804694 16 November 2017– Leung Yat 5218803034 20 May 2017– Meric Investment WT00028961-2017 22 August 2017–	15 November 2018 Sing, 19 May 2018 31 August 2022	Francis	Hana(CWB) Lord Master 2212812468 17 May 2017– Leung Kwok 5212829005 17 November 2017– Lord Master WT00028965-2017 22 August 2017–	16 May 2018 Sui 16 November 2018 31 August 2022	SB(MK) Lord Master 2262806783 2 June 2017– Ko Man Wai 5262801615 25 November 2016– Lord Master WT00028821-2017 1 September 2017–	1 June 2018 24 November 2018 30 September 2022	SB(CWB) Meric Investment 2212810365 31 October 2017– Chan Ka Chun 5212826343 1 April 2018– Meric Investment WT00021015-2015 19 March 2015–	30 October 2018 31 March 2020 31 March 2020	SB(YL) Lord Master 2294805190 25 February 2018– Hui Shiu Hong 5294822507 8 September 2017– Lord Master WT00028238-2017 19 July 2017–	24 February 2019 7 September 2018 31 July 2022	Notes:	1. As our Group has received indication from the landlord of MS(ST) of its intention to re-brand the shopping mall as at the Latest Practicable Date, we do not plan to renew the lease for this restaurant.	Our Group will continue to operate MS(ST) until the expiry of its lease on 14 April 2018 and has accordingly renewed the general restaurant licence for this restaurant.	2. MS(TKO) has commenced restaurant operation on 18 January 2018. Our Group has applied for the water pollution control licence before the commencement of operation and the application has been	acknowledged by the EPD. The licence was granted on 23 March 2018. As advised by the Legal Counsel, the wastewater from restaurants will normally be discharged to public foul sewers. The	wastewater should be treated before discharging to attain the standards specified in the licence. From experience, the EPD has to make a pre-licensing visit to the food premises after commencement of	operation to determine the flow rate and the discharge determinants before granting a water pollution control licence. Therefore, it is inevitable for a restaurant to operate in the absence of a water	pollution control licence for a reasonable period so that the water metre can be checked for a meaningful result. Our Legal Counsel is of the view that there is no non-compliance issue as non-	compliance with duty will be excused where compliance is physically impossible.

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Licences for our Group’s operations in Hong Kong

The table below sets forth the remaining validity period of the licences for our operating restaurants in Hong Kong as at the Latest Practicable Date. Our Group will apply for licence renewal for the relevant licences in due course.

	Validity period	Validity period
	of less than	of more than
	one year	one year
	(number)	(number)
Type of licence
General restaurant licence (Note 1)	12	1
Liquor licence (Note 2)	9	4
Water pollution licence	—	13

Notes:

As at the Latest Practicable Date, we operated 13 restaurants with general restaurant licences, all of which were granted endorsement of certain restricted food.
A liquor licence is required for all our restaurants where alcoholic beverages are served.

Our administration department has been designated to keep track of the expiry dates of all the relevant licences and make the necessary renewal applications to ensure that we are able to obtain and maintain all the necessary licences in time for our restaurant operations in Hong Kong. We will make sure that our restaurants will carry out the business activities only with the valid licences, certificates and/or permits required.

For details of the relevant regulatory requirements regarding the above licences, please refer to the section headed ‘‘Regulatory Overview’’ in this prospectus.

Usage of music

In addition to the licences mentioned above and in the course of our business, music and songs are played at our restaurants for the entertainment of our customers. The use of the music at our restaurants is subject to payment of licence fees, and Hong Kong Recording Industry Alliance Limited (‘‘HKRIA’’) is the licensing body for use of music and songs registered in the Copyright Licensing Bodies Registry of the Intellectual Property Department.

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As at the Latest Practicable Date, the following restaurants had been licenced by HKRIA for the use of music managed by HKRIA. Details of the licences are set out below:

		HKRIA
Restaurant	Licence number	Licencing period
MS(Buffet)	46695-RET-009-1153	1 November 2017 to 31 October 2018
MS(ST)	48063-RET-009-3733	1 December 2017 to 30 November 2018
MS(TY)	45874-RET-009-2093	1 September 2017 to 31 August 2018
MS(KF)	46691-RET-009-3733	1 September 2017 to 31 August 2018
MS(KB)	48061-RET-009-1153	1 December 2017 to 30 November 2018
MS(KH)	46693-RET-009-3733	1 September 2017 to 31 August 2018
MS(TKO)	49012-RET-009-1153	18 January 2018 to 17 January 2019
BB(MK)	48062-RET-001-1153	2 December 2017 to 1 December 2018
BB(CWB)	48058-RET-009-3733	1 December 2017 to 30 November 2018
Hana(CWB)	48060-RET-009-1153	1 December 2017 to 30 November 2018
SB(MK)	47992-BAL-001-1153	1 January 2018 to 31 December 2018
SB(CWB)	46689-RET-009-3733	1 September 2017 to 31 August 2018
SB(YL)	46687-RET-009-1153	1 September 2017 to 31 August 2018

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We had complied with the applicable laws and regulations in all material aspects as set out in the section headed ‘‘Regulatory Overview’’ in this	prospectus during the Track Record Period and up to the Latest Practicable Date, save and except our Group had on certain occasions failed to comply	with certain applicable laws and regulations in Hong Kong, a summary of which is set out below:	Internal control measures adopted	by our Group to prevent re-	Particulars of Reasons for Maximum potential liabilities Rectification actions taken occurrence of the non-compliance	No. non-compliance non-compliance (where applicable) and legal consequences and status and ensure continuing compliance	1. Names/signs of our Group’s restaurants, The omission was due to an inadvertent oversight A person who commits an offence under section 36(1) of Dutiable Applications for amendment Our Group has prepared a list	namely MS(ST), BB(MK) and BB(CWB), are of an administrative staff of our Group, who failed Commodities Ordinance shall be liable to imprisonment for two years and to the liquor licences of setting out all our liquor licences	different from those stated in the liquor to take into account the change of names/signs a fine of HK$1,000,000. those restaurants had been with the actual restaurant names/	licences contrary to section 36(1) of the after the renovation works of the restaurants when made in October 2017. signs and expiration dates for the	Dutiable Commodities Ordinance. applying for the liquor licences. Our Legal Counsel advised that section 36(1) of the DCO creates a strict submission of licence renewal	liability offence. As at the Latest Practicable applications, to be updated by our	Date, amended liquor administration department and to be	According to our Legal Counsel, section 36(1) of the Dutiable licences have been issued checked by our executive Director,	Commodities Ordinance imposes personal liability on the licensee (not the in respect of MS(ST), Mr. Lam On Fai.	owner of the restaurant) to provide accurate information as he submits BB(MK) and BB(CWB).	the application. The licensees of MS(ST), BB(MK) and BB(CWB) at the Our Group had also notified our	relevant time were Mr. Lam Ching Hie, Ms. Chong Mei Fung and Mr. senior management and the staff	Leung Yat-Sing, Francis, respectively who were our employees. Our who are responsible for licensing	Legal Counsel opines that the employer-employee relationship itself did that we must use the actual	not constitute the employees acting as agents of our Group in respect of restaurant names/signs when applying	the liquor licences. Under the DCO, holders of liquor licences are for licences and shall notify the	required to devote sufficient time and attention to the proper management liquor Licensing Board whenever	of the liquor-licensed premises and therefore all licences must be held by there is any change of names/signs.	our employees in their own capacity as opposed to being our agent. Our	Legal Counsel thus opines that our Group is not liable for the licensee’s	default under section 36(1) of the Dutiable Commodities Ordinance.	Our Legal Counsel further opines that the validity of the relevant liquor	licences was not affected by the above non-compliance in relation to the	names/signs of restaurants and our Group could sell liquor before the	completion of amendments of the respective liquor licences. It is because	the legal effect of the grant of a liquor licence stands as an approval	from the LLB or other authorities concerned to supply liquor inside the	specified premises. Accordingly, the Company should not be accused of	selling liquor without a licence. As a result, no provision was made in	respect of such non-compliance.	According to our Legal Counsel, the prosecution against the licensees of	all the relevant restaurants is time-barred as at the date of this	prospectus.

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occurrence of the non-compliance	and ensure continuing compliance	Mr. Lam On Fai, our executive	Director, has been designated to	supervise the applications for all	required licences, permits and	approvals and coordinating the	timely preparation and submission of	relevant licences applications.		We will engage an external	professional consultant in handling	licence matters and advising our	responsible staff, including Mr. Lam	On Fai, our executive Director, on	the licensing requirements		The external professional consultant	we intend to engage has more than	20 years of experience in the	provision of professional food	licensing services and co-ordination	of food licensing courses. It has	certification and has a broad base of	clients in food and beverage industry	in Hong Kong, including Chinese	restaurants, Japanese restaurants,	hotels, cafés, central kitchens and	food courts, some of which are	operated by companies listed on the	Stock Exchange.
Rectification actions taken	and status	As at the Latest Practicable	Date, our Group had	already obtained water	pollution control licences	for all of our Group’s	restaurants.
Maximum potential liabilities	(where applicable) and legal consequences	A person who commits an offence under sections 8 and 9 of the Water	Pollution Control Ordinance shall be liable to imprisonment for six	months and (a) for a first offence, a fine of HK$200,000; (b) for a	second or subsequent offence, a fine of HK$400,000, and in addition, if	the offence is a continuing offence, to a fine of HK$10,000 for each day	during which the offence has continued.		As advised by our Legal Counsel, the prosecution is time-barred in	respect of all the restaurants as at the date of this prospectus.
Reasons for	non-compliance	Since 2000, we had engaged three external	independent licensing consultants for different	periods continuously to apply for the relevant	licences for the operation of our restaurants and	advising on licensing matter. The three licensing	consultants were appointed in 2000, 2005 and	2013 respectively and they did not advise our	Group to apply for the water pollution control	licences before commencement of operation. As	our administration staff relied on the licensing	consultants to advise on the necessary licences to	be obtained, and as such our Group did not apply	for water pollution control licences for its	restaurants.		After the restaurants were opened, our Group was	inadvertent and failed to apply for the water	pollution licences as the licensing consultants did	not remind our Group of such requirements and	our Group did not receive any warnings or notices	in this respect.	Furthermore, given that (i) we have never received	any written request or warning from the	Environmental Protection Department requiring us	to apply for water pollution control licences and	(ii) the grant of water pollution control licences	was not a prerequisite for the grant of the general	restaurant licences, our management was less alert	to the relevance of the water pollution control	licences until recently when we engaged legal	advisers for purpose of the Listing.
Particulars of	non-compliance	Certain restaurants of our Group failed to	obtain water pollution control licences during	the Track Record Period in breach of sections	8 and 9 of the Water Pollution Control	Ordinance.		The restaurants in question have been	operated without water pollution control	licences during the following periods:		MS(Buffet): August 2014 to August 2017;	MS(ST): June 2005 to August 2017;	MS(TY): August 2012 to August 2017;	MS(KF): October 2013 to July 2017;	MS(KH): December 2015 to September 2017;	MS(KB): October 2016 to August 2017;	BB(MK): December 2004 to August 2017;	BB(CWB): May 2009 to August 2017;	Hana(CWB): November 2015 to August 2017;	SB(MK): November 2008 to August 2017; and	SB(YL): September 2015 to July 2017.
	No.	2.

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occurrence of the non-compliance	and ensure continuing compliance	Mr. Lam On Fai, our executive	Director, has been designated to	supervise the renewal of all required	licences, permits and approvals by	monitoring the pending expiry dates	of all licences, permits and	approvals and coordinating the	timely preparation and submission of	relevant licences renewal	applications.		Our Group has notified the senior	management and the staff who are	responsible for licensing that the	restaurants operated by our Group	must not operate without valid	licences.
Rectification actions taken	and status	Hana(CWB) and MS(KH)	were granted the general	restaurant licences on 17	May 2016 and 11 July	2016 respectively.
Maximum potential liabilities	(where applicable) and legal consequences	A person who commits an offence under section 31(1) of the FBR shall	be liable to a maximum penalty for a fine of HK$50,000 and HK$900 for	each day if the offence is a continuing offence and an imprisonment for	six months.		Our Legal Counsel is of the view that the incidents of non-compliance	are time-barred. As such, there would be no risk of prosecution.
Reasons for	non-compliance	On 7 April 2016, our Group was informed by the	Buildings Department during their inspection that	certain improvement measures in relation to the	means of escape in case of fire had to be carried	out by Hana(CWB) as a pre-requisite to fulfil the	general requirements for obtaining the general	restaurant licence. As time was required to carry	out the necessary improvement measures and for	the FEHD to follow up, the general restaurant	licence was issued on 17 May 2016, which was	after the expiry of the relevant provisional general	restaurant licence on 2 May 2016.		Also, on 8 June 2016, our Group was informed by	the Fire Services Department during their	inspection that certain improvement measures in	relation to the means of escape in case of fire had	to be carried out by MS(KH) as a pre-requisite to	fulfil the general requirements for obtaining the	general restaurant licence. As time was required to	carry out the necessary improvement measures and	for the FEHD to follow up, the general restaurant	licence was issued on 11 July 2016, which was	after the expiry of the relevant provisional general	restaurant licence on 9 June 2016.	Provisional general restaurant licences have been	obtained by Hana (CWB) and MS(KH) when their	operation commenced. To obtain provisional	general restaurant licences, the relevant	requirements of the Buildings Department and Fire	Services Department in respect of means of escape	in case of fire must be fulfilled. Our Directors	genuinely believed, and as confirmed by our Legal	Counsel, that the requirements for obtaining a	general restaurant licence and a provisional general	restaurant licence are the same in relation to the	required standard of means of escape, as such	when our Group applied for the general restaurant	licences, no improvement measures were taken in	respect of the means of escape which resulted in	the delay in obtaining the general restaurants	licences.	For both incidents, our Directors confirm that	there were no material safety issues with the	relevant premises.
Particulars of	non-compliance	Hana(CWB) continued to operate in breach of	section 31(1) of the FBR between 3 May	2016 and 16 May 2016 when the provisional	general restaurant licence had expired on 2	May 2016 and before the general restaurant	licence was granted on 17 May 2016.		MS(KH) continued to operate in breach of	section 31(1) of the FBR between 10 June	2016 and 10 July 2016 when the provisional	general restaurant licence had expired on 9	June 2016 and before the general restaurant	licence was granted on 11 July 2016.
	No.	3.

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occurrence of the non-compliance	and ensure continuing compliance	Mr. Lam On Fai, our executive	Director, has been designated to	supervise the applications for all	required licences, permits and	approvals and coordinating the	timely preparation and submission of	relevant licences renewal	applications.
Rectification actions taken	and status	As at the Latest Practicable	Date, our Group had	obtained all relevant	restricted food permits for	the restricted food items we	intend to sell.
Maximum potential liabilities	(where applicable) and legal consequences	A person who commits an offence under section 30(1) of the FBR shall	be liable to a fine of HK$50,000, imprisonment for six months and	HK$900 for each day for continuing offence.		As advised by our Legal Counsel, given that (i) as at the Latest	Practicable Date, our Group had obtained all relevant restricted food	permits for the restricted food items we intend to sell; and (ii) as at the	Latest Practicable Date, our Group had not received any other notice	from the relevant government authority in respect of the non-compliance	regarding restricted food permit, the risk of prosecution against our	Group, our Directors and/or officers for such non-compliance is not high.	In the unlikely event that prosecution is initiated against our Group, the	maximum penalty is HK$10,300.
Reasons for	non-compliance	The omission was due to the inadvertent oversight	of an administrative staff of our Group, who	handled licensing matters relating to our Group’s	business operations.
Particulars of	non-compliance	During the Track Record Period, BB(CWB)	and SB(MK) sold certain restricted food	without valid permits in breach of section	30(1) of the FBR. Such non-compliance was	discovered during the due diligence exercise	in connection with the preparation of the	Listing.
	No.	4.

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Our Directors consider that no provision in relation to the above non-compliance incidents is required to be made in the financial information of our Group for the Track Record Period and as at the respective year/period end, because the risk of our Group being prosecuted in respect of the above noncompliance incidents is either remote or non-existent based on the opinion from our Legal Counsel.

Having considered that (i) the above non-compliance incidents were neither intentional nor wilful; (ii) the incidents did not involve dishonesty, fraud and misconduct on the part of our Group and the Directors; and (iii) necessary remedial actions have been taken to avoid recurrence of the noncompliance incidents, our Directors are of the view, and the Sole Sponsor concurs, that (i) the abovementioned non-compliance incidents would not affect the suitability of listing of our Company under Rule 11.06 of the GEM Listing Rules; and (ii) the non-compliance incidents would not give rise to the concerns on the ability of our Directors to oversee our Company’s operation and the suitability of our Directors under Rules 5.01 and 5.02 of the GEM Listing Rules.

LEGAL PROCEEDINGS

Litigations in relation to employees’ compensation claims and common law personal injury claims against our Group as at the Latest Practicable Date

Liabilities of an employer in the case of personal injuries to employees by accidents arising out of and in the course of their employment include those under (i) the Employees’ Compensation Ordinance; and (ii) common law personal injury claim. The Employees’ Compensation Ordinance establishes a nofault, non-contributory employee compensation system which gives employees the right to compensation in respect of (i) injuries or death caused by accidents arising out of and in the course of employment, or (ii) prescribed occupational diseases under the Employees’ Compensation Ordinance. A common law personal injury claim may arise if the injury is caused to an employee by our negligence, breach of statutory duty, or other wrongful act or omission. For some of the potential claims, even if the relevant employees’ compensation had been settled under our employees’ compensation insurance, the injured employees may still pursue litigation claims through personal injury claims against us under common law. The damages awarded under common law claims are normally reduced by the value of the compensation paid or payable under the Employees’ Compensation Ordinance in any event.

During the Track Record Period and up to the Latest Practicable Date, we recorded 48 reportable accidents (i.e. workplace accidents that were required to be reported to the Labour Department in accordance with the Employees’ Compensation Ordinance and other applicable laws and regulations) which occurred at workplaces and no employees’ compensation or personal injury claim in respect of these 48 reportable accidents has been filed by the injured persons against our Group. The employees’ compensation claims and personal injury claims have the respective limitation period of two years and three years. As such court proceedings have not commenced, we are not in a position to assess the likely quantum of such potential claims. Nevertheless, these accidents have not caused any disruption to our Group’s business or any adverse impact on our Group to obtain any licences or permits for our operation. Our Directors take the view that the amount of such potential claims to be borne by our Group in the proceedings are expected to be covered by the insurance policies maintained by us and the damages, costs and expenses of such claims will be indemnified by our Controlling Shareholders under the Deed of Indemnity. Please refer to the paragraph headed ‘‘Insurance’’ in this section for details of

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the insurance policies and the section headed ‘‘Statutory and General Information — E. Other Information — 1. Tax and other indemnities’’ in Appendix IV to this prospectus for details of the Deed of Indemnity.

Save as disclosed above, our Directors, to the best of their knowledge, information and belief having made all reasonable enquiries, are not aware of any litigation proceedings pending or threatened against us which could have a material adverse effect on our financial condition or results of operations.

INTERNAL CONTROL AND RISK MANAGEMENT

We endeavour to uphold the integrity of our business by maintaining an internal control and risk management system into our organisational structure. In preparation for the Listing and to further improve our internal control system, on 24 October 2017, we engaged the Internal Control Adviser to perform an evaluation of the adequacy and effectiveness of our Group’s internal control system including the areas of financial, operation, compliance and risk management.

On 31 October 2017, the Internal Control Adviser completed the first review of our internal control system on, among others, our control environment, risk assessment, control activities, information and communication, monitoring activities, financial reporting and disclosure, human resources and payroll, cash management and treasury, sales and receipts cycle, management and compliance procedures with the Corporate Governance Code as set out in Appendix 15 to the GEM Listing Rules. The following table sets forth the major findings and recommendations provided by the Internal Control Adviser and the measures implemented by our Group:

Major findings	Major findings	Recommendations	Status of implementation of recommendations
.	Failure to set up any	We should ensure that our Group maintains sound	We updated our Internal Control Manual on December
	internal audit department	and effective internal controls to safeguard	2017 and we will engage an independent internal control
	to perform on-going	shareholders’ investment and our Group’s assets.	consultant upon Listing to ensure that the potential risk
	monitoring of our		in operations could be found and remedial action can be
	operating activities		taken in advance. We will engage the Internal Control
			Adviser to conduct an annual review on the adequacy
			and effectiveness of our internal control system,
			including areas of financial, operational, compliance and
			risk management. When considered necessary and
			appropriate, we will seek professional advice and
			assistance from independent internal control consultants,
			external legal advisers and/or other appropriate
			independent professional advisers with respect to
			matters related to our internal controls and legal
			compliance. Furthermore, we will set up an internal
			audit department immediately after Listing to conduct
			quarterly internal reviews and assessments on the
			effectiveness of our Group’s internal control measures.
			Through on-going monitoring of our internal control
			system, proper compliance can be ensured of the
			established controls.

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Major findings	Major findings	Recommendations	Recommendations	Status of implementation of recommendations
.	No operation policies and	We should establish a set of policies and procedures		We have established and started implementing new
	procedures in relation to	in order to:		policies and procedures including the recommendations
	the opening area, with			by the Internal Control Adviser in December 2017. The
	unpackaged ready-to-eat	a.	ensure the food served in the self-service	policies and procedures are set out properly and comply
	food for self-service, set		opening area is effectively monitored by	with section 4.5 of Food Hygiene Code issued by the
	up in some of our		employees who have been trained to follow	Food and Environmental Hygiene Department.
	restaurants		safe operation procedures;
		b.	provide separate and suitable utensils (e.g.
			tongs, scoops, etc.) or other effective means
			of dispensing, for each type of food served
			at the self-service opening area to protect the
			food from cross-contamination. These
			utensils should be regularly replaced by
			clean ones;
		c.	provide display cases, food guards (e.g. salad
			bar sneeze guards) or other appropriate
			barriers that can effectively protect the food
			from contamination; and
		d.	ensure the ice used for cooling food served
			at the self-service opening area is made of
			potable water.

. Lack of internal We should provide regular updates on licensing We conducted training in relation to the licensing monitoring of licensing requirement to our staff in order to prevent requirements for our responsible staff including Mr. status and compliance occurrence of non-compliance. Lam On Fai, our executive Director, in October 2017 issues in relation to and November 2017 restaurant operations We should also appoint an external professional consultant with experience in handling licence We will engage an external professional consultant in matters for listed companies operating in restaurant handling licence matters and advising our responsible industry. staff, including Mr. Lam On Fai, our executive Director, on the licensing requirements

The external professional consultant we intend to engage has more than 20 years of experience in the provision of professional food licensing services and coordination of food licensing courses. It has been accredited with ISO 9001:2008 certification and has a broad base of clients in food and beverage industry in Hong Kong, including Chinese restaurants, Japanese restaurants, hotels, cafés, central kitchens and food courts, some of which are operated by companies listed on the Stock Exchange. We will engage a legal adviser to advise our responsible staff, including Mr. Lam On Fai, our executive Director, on the updates on the laws and regulations in relation to licensing in Hong Kong

We will comply with the Corporate Governance Code as set out in Appendix 15 to the GEM Listing Rules. We have established three board committees, namely, the Audit Committee, the Nomination Committee and the Remuneration Committee, with respective terms of reference in compliance with the Corporate Governance Code. For details, please refer to the section headed ‘‘Directors, Senior Management and Employees — Board committees’’ of this prospectus.

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To avoid potential conflicts of interest, we will implement corporate governance measures as set out in section headed ‘‘Relationship with our Controlling Shareholders — Corporate governance measures’’ of this prospectus.

Our Directors will review our corporate governance measures and our compliance with the Corporate Governance Code each financial year and comply with the ‘‘comply or explain’’ principle in our corporate governance reports to be included in our annual reports after Listing.

Our Group has also adopted the following measures to ensures continuous compliance with the GEM Listing Rules upon Listing:

. we shall establish system and manuals in relation to, among others, distribution of annual, interim and quarterly reports and publication, handling and monitoring of inside information prior to public announcement and other requirements under the GEM Listing Rules;
. our Director attended training sessions conducted by our legal advisers as to Hong Kong law on the on-going obligations and duties of a director of a company whose shares are listed on the Stock Exchange;
. we have engaged Alliance Capital Partners Limited as our compliance adviser and will, upon Listing, engage a legal adviser as to Hong Kong laws, which will advise and assist our Board on compliance matters in relation to the GEM Listing Rules and/or other relevant laws and regulations applicable to our Company; and
. we have established the Audit Committee which comprises Mr. Lai Ming Fai Desmond, Dr. Cheng Lee Lung and Mr. Kwok Yiu Chung who are our independent non-executive Directors. The Audit Committee has adopted its terms of reference which sets out clearly its duties and obligations to, among other things, overseeing the internal control procedures and accounting and financial reporting matter of our Group, and ensuring compliance with the relevant laws and regulations. For the biographical details of our members of the Audit Committee, please refer to the section headed ‘‘Directors, Senior Management and Employees’’ of this prospectus.

We will engage the Internal Control Adviser to conduct an annual review on the adequacy and effectiveness of our internal control system for the financial year ending 31 March 2018, including areas of financial, operational, compliance and risk management. When considered necessary and appropriate, we will seek professional advice and assistance from independent internal control consultants, external legal advisers and/or other appropriate independent professional advisers with respect to matters related to our internal controls and legal compliance. Furthermore, we will set up an internal audit department immediately after Listing to conduct quarterly internal reviews and assessments on the effectiveness of our Group’s internal control measures.

On 1 December 2017, the Internal Control Adviser performed a follow up review on our internal control system and we did not note any findings of material weakness or insufficiency in our Group’s internal control system.

On the basis of the above, our Directors confirm, and the Sole Sponsor concurs, that the internal control measures implemented by our Group are sufficient and could effectively ensure a proper internal control system of our Group and prevent any occurrence of non-compliance incident in the future.

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CONNECTED TRANSACTIONS

NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS

Purchase of food supplies from Elite

During the Track Record Period, our Group had entered into certain transactions with Elite for the supply of chilled and frozen meat and seafood and other food ingredients to our Group. After the Listing, we will continue to carry out such transactions with Elite and such transactions will constitute continuing connected transactions (the ‘‘Continuing Connected Transactions’’) for our Group under Chapter 20 of the GEM Listing Rules. Details of the purchase transactions with Elite are set out below.

Background of Elite

Elite is a company with limited liability incorporated in Hong Kong on 16 October 1984 and is a supplier of chilled and frozen meat and seafood and other food ingredients in Hong Kong. Since Elite is owned as to 50%, 25% and 25% by Ms. Ingrid Ip, Mr. Joseph Kwong and Ms. Melanie Kwong respectively, who are our Controlling Shareholders, Elite is a connected person of our Company and the transactions contemplated under the Master Supply Agreement therefore constitute continuing connected transactions for our Group under Chapter 20 of the GEM Listing Rules.

Nature of the transactions

On 23 March 2018, the Master Supply Agreement was entered into between MS Restaurant as purchaser and Elite as supplier whereby our Group will purchase and Elite will supply chilled and frozen meat and seafood and other food ingredients to our Group for our restaurant operation.

The term of the Master Supply Agreement will commence on the Listing Date until 31 March 2020. The purchase price will be determined with reference to the prevailing comparable market price. Specific terms of the transactions will be determined on order-by-order basis and separate purchase orders will be entered into by the parties.

Reasons for and the benefits of the transactions

We have sourced food ingredients from Elite since the commencement of business of our Group in 2000. According to the CIC Report, Elite is one of the key high quality meat and seafood wholesaler in Hong Kong and ranked third in terms of value of imported food ingredients in Hong Kong. Since our Group is satisfied with the quality and timely delivery of the food ingredients by Elite during the Track Record Period and the terms offered by Elite to our Group are of normal commercial terms, our Directors are of the view that it will be in the interests of our Group and our Shareholders as a whole to continue such transactions with Elite. As such, after the Listing, our Group will continue to purchase the food ingredients from Elite.

Furthermore, given that our Group has established a long-term relationship with Elite which has been providing food ingredients to our Group since 2000, we believe we would achieve better and more efficient communication with Elite as to our business needs as compared to other third parties. In addition, the long-term relationship between our Group and Elite in turn provides us with business and operational convenience. Hence, our Directors believe that the entering into the Master Supply Agreement will bring synergies to our Group’s operation.

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CONNECTED TRANSACTIONS

Historical transaction value

During the Track Record Period, the total purchase from Elite amounted to approximately HK$29,125,000, HK$43,384,000 and HK$19,461,000 respectively for FY2016, FY2017 and the six months ended 30 September 2017, which constituted approximately 46.8%, 54.8% and 46.2% of our total purchases for FY2016, FY2017 and the six months ended 30 September 2017, respectively.

Pricing Policy

The purchase price for the transactions will be determined on order-by-order basis with reference to the prevailing comparable market price after arm’s length negotiation with Elite. Our Group will purchase the chilled and frozen meat and seafood and other food supplies on an as-needed basis. As the food ingredients from Elite is generally readily available in the market, we will obtain quotation from at least two other independent suppliers that provide similar food ingredients before we make any purchase from Elite. Based on the fee quotes provided by other independent suppliers, we will be able to ensure that the purchase price to be paid to Elite by our Group represents the prevailing market price on normal commercial terms.

Proposed annual caps

It is expected that our total purchases from Elite for the years ending 31 March 2018, 31 March 2019 and 31 March 2020 will not exceed HK$40,000,000, HK$50,000,000 and HK$65,000,000 respectively.

Basis of annual caps

The proposed annual caps set out above for the three financial years ending 31 March 2020 was determined with reference to factors such as (i) the historical transaction amount between our Group and Elite; (ii) the expected demand of the relevant food ingredients by our Group for the three years ending 31 March 2020; (iii) the estimated business growth of our Group after the Listing; (iv) the new restaurants to be opened by our Group before 31 March 2020; and (v) the expected inflation that affects the price of food ingredients.

Implications under the GEM Listing Rules

Based on the annual caps under the Master Supply Agreement as mentioned above, the relevant percentage ratios is more than 5% and the annual consideration is more than HK$10,000,000. Therefore, the transactions under the Master Supply Agreement constitute non-exempt continuing connected transactions and are subject to reporting, annual review, announcement, circular and independent shareholders’ approval requirements under the GEM Listing Rules.

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APPLICATION FOR WAIVER

Our Board considers that strict compliance with the announcement and independent shareholders’ approval requirements would be unduly burdensome and would add unnecessary administrative costs to our Company. Our Company has applied to the Stock Exchange, and the Stock Exchange has granted, a waiver pursuant to Rule 20.103 of the GEM Listing Rules to exempt the transactions under the Master Supply Agreement from strict compliance with the announcement and independent shareholders’ approval requirements under the GEM Listing Rules on the conditions set out below:

(i) the annual cap amounts for the continuing connected transactions under the Master Supply Agreement ending 31 March 2020 as stated above will not be exceeded;
(ii) our Company will comply with the relevant requirements under Chapter 20 of the GEM Listing Rules for purpose of the Master Supply Agreement;
(iii) upon expiry of the waiver granted for the period ending 31 March 2020, our Company will comply with the relevant requirements under Chapter 20 of the GEM Listing Rules; and
(iv) in the event of any future amendments to the GEM Listing Rules imposing more stringent requirements than those applicable provisions under Chapter 20 of the GEM Listing Rules as at the date of this prospectus relating to the continuing connected transactions, our Company will take immediate steps to ensure compliance with such requirements within a reasonable period.

Confirmation from our Directors

Our Directors, including the independent non-executive Directors, confirm that the Master Supply Agreement was entered into on normal commercial terms, in the ordinary and usual course of business and is fair and reasonable to our Group on the basis that the terms of the Master Supply Agreement are no less favourable to our Group than terms offered by Independent Third Parties, and therefore is in the interests of our Company and the Shareholders as a whole. Our Directors, including the independent non-executive Directors, are of the view that the annual cap amounts under the Master Supply Agreement are fair and reasonable and in the interests of our Company and the Shareholders as a whole.

Confirmation from the Sole Sponsor

The Sole Sponsor is of the view that the Master Supply Agreement was entered into in the ordinary and usual course of business of our Group and on normal commercial terms that are no less favourable to our Group and that the terms of the Master Supply Agreement and the annual cap amounts set out above are fair and reasonable and in the interests of our Company and the Shareholders as a whole.

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DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

OVERVIEW

The following table sets forth certain information regarding our Directors and senior management:

			Date of
			appointment	Date of		Relationship with
		Present position(s) in	as current	joining our	Brief description of roles	other Directors and
Name	Age	our Company	position	Group	and responsibilities	senior management
Executive Directors
Mr. Kwong Tai Wah	63	Chairman, chief	8 November	27 July 2000	Responsible for the overall	Father of Ms. Kwong
(鄺大華)		executive officer and	2017		management and strategic	Man Yui
		executive Director			planning of our Group and
					serving as the chairman of
					the Nomination Committee
Ms. Kwong Man Yui	33	Vice chairlady and	15 December	26 July 2017	Responsible for the strategic	Daughter of Mr.
(鄺文蕊)		executive Director	2017		planning (including but not	Kwong Tai Wah
					limited to site selection
					and devising restaurant
					concepts), leasing,
					marketing, public relations
					and overall management of
					our Group
Mr. Lam On Fai	56	Executive Director	15 December	1 September	Responsible for the overall	Not applicable
(林安輝)			2017	2006	management of the
					restaurants of our Group
Independent non-executive	Directors
Mr. Lai Ming Fai	45	Independent non-	23 March	23 March	Providing independent advice	Not applicable
Desmond (黎明輝)		executive Director	2018	2018	to the Board, advise on
					corporate governance
					matters, serving as the
					chairman of the Audit
					Committee and a member
					of the Remuneration
					Committee
Dr. Cheng Lee Lung	65	Independent non-	23 March	23 March	Providing independent advice	Not applicable
(鄭利龍)		executive Director	2018	2018	to the Board, advise on
					corporate governance
					matters, serving a member
					of the Audit Committee,
					Remuneration Committee
					and Nomination
					Committee
Mr. Kwok Yiu Chung	55	Independent non-	23 March	23 March	Providing independent advice	Not applicable
(郭耀松)		executive Director	2018	2018	to the Board, advise on
					corporate governance
					matters, serving as the
					chairman of the
					Remuneration Committee
					and a member of the Audit
					Committee and
					Nomination Committee

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DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

Date of appointment Date of Relationship with Present position(s) in as current joining our Brief description of roles other Directors and Name Age our Company position Group and responsibilities senior management Senior management Mr. Lee Sai Keung 56 Executive chef of our 14 June 2013 9 February Responsible for the overall Not applicable (李世強) Group 2009 management and planning of cuisine and the general management of the culinary team of our Group Ms. Li Wai Ping 38 Accounts Manager 18 December 14 September Responsible for the overall Not applicable (李惠萍) 2017 2017 accounting and administrative matters of our Group

DIRECTORS

The Board currently consists of six Directors, comprising three executive Directors and three independent non-executive Directors.

The functions and duties of the Board include but not limited to determining business plans and investment plans, preparing annual budget proposals and exercising other powers, functions and duties as conferred by the Articles of Association.

EXECUTIVE DIRECTORS

Mr. Kwong Tai Wah (鄺大華), aged 63, is the co-founder, chairman of the Board, chief executive officer and the executive Director of our Company. Mr. John Kwong was appointed to the Board on 8 November 2017. He is responsible for the overall management and strategic planning of our Group. Mr. John Kwong obtained his Bachelor’s degree of Arts from the University of Windsor in May 1978.

Mr. John Kwong has over 30 years of experience in the food and beverage industry. Prior to establishing our Group’s first restaurant under the brand of ‘‘Mr. Steak’’ with Ms. Melanie Kwong in July 2000, Mr. John Kwong worked in Poon Wynne International Limited, which was principally engaged in food import, distribution and processing, from May 1978 to September 1984. Mr. John Kwong has been a director of Elite since 1986, which was principally engaged in the supply of chilled and frozen meat and seafood.

Our Company’s corporate governance practices are based on principles and code provisions as set out in the Corporate Governance Code (‘‘CG Code’’) in Appendix 15 to the GEM Listing Rules. Except for the deviation from CG Code provision A.2.1, our Company’s corporate governance practices have complied with the CG Code.

CG Code provision A.2.1 stipulates that the roles of chairman of the Board and chief executive should be separate and should not be performed by the same individual. Mr. John Kwong is the chairman of the Board and the chief executive officer of our Group. In view of Mr. John Kwong has been operating and managing our Group since 2000, our Board believes that it is in the best interest of

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our Group to have Mr. John Kwong taking up both roles for effective management and business development. Therefore, our Directors consider that the deviation from CG Code provision A.2.1 is appropriate in such circumstance.

Ms. Kwong Man Yui (鄺文蕊), aged 33, is the daughter of Mr. John Kwong and Ms. Ingrid Ip. Ms. Kwong Man Yui is the vice chairlady of the Board and the executive Director of our Company. Ms. Kwong Man Yui was appointed to the Board on 15 December 2017. She is responsible for the strategic planning (including but not limited to site selection and devising restaurant concepts), leasing, marketing, public relations and overall management of our Group. Ms. Kwong Man Yui obtained her Bachelor’s degree of Commerce with distinction from the University of Toronto in June 2006 and her Master’s degree of Science in Real Estate with credit from the University of Hong Kong in November 2011. Ms. Kwong Man Yui has over 5 years of experience in business management and shop leasing. She joined John Swire & Sons, a real estate investment company, in September 2008 as a management trainee and was promoted to the position of property officer in September 2011. Ms. Kwong Man Yui left John Swire & Sons in October 2013 and joined Elite in February 2014 as an associate director providing management and consultancy service to our Group.

Mr. Lam On Fai (林安輝), aged 56, is the executive Director of our Group. Mr. Lam was appointed to the Board on 15 December 2017. He is responsible for the overall management of the restaurants of our Group. Mr. Lam attained his secondary school education in July 1979. He joined the restaurant Noon Gun Grill as a junior waiter in May 1980 and subsequently served The Excelsior Grill as a senior waiter and left in January 1994 as an assistant manager overseeing the operation of the restaurant. From January 1994 to October 1995, Mr. Lam worked as an executive assistant manager in the restaurant Café Deco Bar & Grill. Thereafter, Mr. Lam worked as a western restaurant manager of The Bloomsbury Room and Members Bar of Butterfield’s from October 1995 to September 1997. Mr. Lam worked at Asia Standard Catering Limited from June 1998 to August 2006 and his last position was assistant general manager. In September 2006, Mr. Lam joined our Group as a group operation manager.

INDEPENDENT NON-EXECUTIVE DIRECTORS

Mr. Lai Ming Fai Desmond (黎明輝), aged 45, was appointed as an independent non-executive Director of our Group on 23 March 2018. Mr. Lai obtained his Bachelor’s degree of Commerce in Accounting and Finance from the University of New South Wales in October 1995. Mr. Lai joined PricewaterhouseCoopers in January 1997 and left as an associate director in February 2014. From March 2014 to December 2016, Mr. Lai worked as a director of KPMG Advisory (Hong Kong) Limited. Since January 2017, Mr. Lai has been Chief Financial Officer of Asia Television Digital Media Limited, an over-the-top video service provider, and Star Platinum Enterprises Limited, a wholly-owned subsidiary of Co-Prosperity Holdings Limited, a company listed on the Main Board of Stock Exchange (stock code: 707). He became an associate of the Hong Kong Society of Accountants (currently known as the Hong Kong Institute of Certified Public Accountants) and a fellow member of CPA Australia in August 1999 and June 2014 respectively. Mr. Lai is currently a non-practising certified public accountant in Hong Kong.

Dr. Cheng Lee Lung (鄭利龍), aged 65, was appointed as an independent non-executive Director of our Group on 23 March 2018. Dr. Cheng obtained his Bachelor’s degree in Science and Master’s degree in Science from Chelsea College (currently known as King’s College London), University of London in August 1976 and July 1981 respectively. He obtained his Doctor’s degree in Information and

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DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

Communication Engineering from the Tsinghua University in July 2004. From January 1982 to November 1989, Dr. Cheng worked as an engineer and later as a technical consultant and a technical officer in Green Island Cement Co. Ltd., U.D.I Limited and Standard Telephones and Cables Pty. Limited respectively, which all are engineering consultancy companies. Dr. Cheng joined the City Polytechnic of Hong Kong (currently known as the City University of Hong Kong) as a senior lecturer in March 1990 and has been an assistant professor since 1995. Dr. Cheng is a chartered engineer and a senior member of the Institute of Electrical and Electronics Engineers. Between 1995 and 1996, he was the chairman of the electronics division of the Hong Kong Institution of Engineers. From 2000 to 2002, he was the chairman of the training sub-committee of Hong Kong Institution of Engineers. Dr. Cheng currently holds a number of professional, government advisory and public positions in Hong Kong.

Mr. Kwok Yiu Chung (郭耀松), aged 55, was appointed as an independent non-executive Director of our Group on 23 March 2018. Mr. Kwok attained his secondary school education in 1981 and obtained a professional diploma in Chinese food and beverage management (中式飲食管理專業文憑) from Tao Miao Institute of the Vocational Training Council in September 2009. He was a director of Hill Bo Seafood Restaurant (豪寶海鮮酒家), Hill Bo Restaurant (豪寶餐廳) and Star Restaurant (明星餐廳) from 1992 to 1997, from 1998 to 2002 and from 2000 to 2002 respectively. Since December 2003, Mr. Kwok has been working as a manager of the chain hotpot restaurant, Calf Bone King (小肥牛). Mr. Kwok has been appointed to various positions of the Hong Kong Federation of Restaurants & Related Trades (香港餐飲聯業協會) (the ‘‘Federation’’) since 2007. From 2007 to 2011, he was appointed as a director of the Federation. From 2011 to 2015, he was appointed as a vice-chairman of the executive and members affairs divisions of the Federation. Since 2015, he has been re-appointed as a director of the Federation.

Other disclosure pursuant to Rule 17.50(2) of the GEM Listing Rules

Save as disclosed above, each of our Directors (i) did not hold other positions in our Company or other members of our Group as at the Latest Practicable Date; (ii) had no other relationship with any Directors, senior management or substantial or controlling shareholders of our Company as at the Latest Practicable Date; and (iii) did not hold any other directorships in listed public companies in the three years prior to the date of this prospectus. Immediately following completion of the Share Offer and the Capitalisation Issue, save as the interests in the Shares which are disclosed in the section headed ‘‘Substantial Shareholders’’ of this prospectus, each of our Directors will not have any interest in the Shares within the meaning of Part XV of the SFO.

Save as disclosed herein, to the best of the knowledge, information and belief of our Directors having made all reasonable enquiries, there were no other matters with respect to the appointment of our Directors that need to be brought to the attention of our Shareholders and there was no information relating to our Directors that is required to be disclosed pursuant to Rules 17.50(2)(h) to (v) of the GEM Listing Rules as at the Latest Practicable Date.

SENIOR MANAGEMENT

Mr. Lee Sai Keung (李世強), aged 56, is the executive chef of our Group. Mr. Lee is responsible for the overall management and planning of cuisine and the general management of the culinary team of our Group. Mr. Lee attained his secondary school education in July 1979 and obtained a Certificate in Professional Cookery (Western Style) from the Vocational Training Council in July 1983. Mr. Lee joined The Hongkong Hotel in August 1979 as an apprentice cook and left as a kitchen section head in

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January 1989. During November 1984 and September 1985, Mr. Lee went to Switzerland for training and was employed by the casino Kursaal-Casino AG. From February 1989 to November 1989, Mr. Lee worked as a demi chef de partie and later as a chef de partie in Manly Pacific Parkroyal Hotel in Australia. Subsequently, Mr. Lee came back to Hong Kong and joined Majestic Hotel as a section chef in February 1992 and was promoted to a head chef in May 1997. Mr. Lee left Majestic Hotel in November 1998. From September 1999 to May 2007, Mr. Lee worked as an executive chef in Macau Jockey Club. In February 2009, Mr. Lee joined our Group as head chef and became an executive chef in June 2013.

Ms. Li Wai Ping (李惠萍), aged 38, is the accounts manager of our Group. Ms. Li is responsible for the overall accounting and administrative matters of our Group. Ms. Li completed the Level 2 Bookkeeping and Accounts course with distinction endorsed by the London Chamber of Commerce and Industry Examinations Board in 2003. She obtained her Bachelor’s degree of Arts in Accountancy from The Hong Kong Polytechnic University in October 2009. She completed the Professional Level of the Association of Chartered Certified Accountants examinations in January 2014 and is currently a member in good standing. From October 2005 to August 2006, Ms. Li worked as an accounts clerk and secretary in Kut & Co., a law firm in Hong Kong. She joined Hua Min Tourism Reservation Co., Ltd., a travelling services provider, as an accountant in August 2006 and left in February 2007. From March 2007 to June 2012, Ms. Li worked as an accountant in MediConcepts Limited, a company providing design and manufacturing service for medical device development. She joined Yu Hing Manufacturing Company Ltd., a manufacturer of plastic and metal products and parts as the chief accountant in July 2012 and left in July 2015. From August 2015 to September 2017, Ms. Li worked as a senior accounts supervisor in Elite. She joined our Group as a senior accounts supervisor in September 2017 and became an accounts manager in December 2017.

Save as disclosed above, none of our senior management had been a director of any public company the securities of which are listed on any securities market in Hong Kong or overseas in the three years immediately preceding the date of this prospectus and there is no information which needs to be disclosed pursuant to Rule 17.50(2)(h) to (v) of the GEM Listing Rules or any other matters concerning any senior management which need to be brought to the attention of our Shareholders.

COMPANY SECRETARY

Mr. Kwok Siu Man (郭兆文), aged 59, was appointed as our company secretary on 15 December 2017. Mr. Kwok has over 30 years of legal, corporate secretarial and management experience. He is an executive director and the Head of Corporate Secretarial of Boardroom Corporate Services (HK) Limited and a director of Boardroom Share Registrars (HK) Limited.

From January 2011 to March 2013, Mr. Kwok was the group company secretary of the Lai Sun group comprising Lai Sun Garment (International) Limited (stock code: 191), Lai Sun Development Company Limited (stock code: 488), eSun Holdings Limited (stock code: 571), Lai Fung Holdings Limited (stock code: 1125) and Media Asia Group Holdings Limited (stock code: 8075), and the company secretary of Crocodile Garments Limited (stock code: 122) concurrently. Mr. Kwok was also an independent non-executive director of Grand Ocean Advanced Resources Company Limited (stock code: 65), a company listed on the Main Board of the Stock Exchange, from February 2015 to February 2016. In addition, Mr. Kwok was a council member and a chief examiner of the international qualifying examinations of The Hong Kong Institute of Chartered Secretaries (the ‘‘HKICS’’). Further, he has been

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an independent non-executive director of Tak Lee Machinery Holdings Limited (stock code: 8142), a company listed on GEM since June 2017 and a member of the executive committee of Federation of Share Registrars Limited since September 2017.

Mr. Kwok obtained a professional diploma in company secretaryship and administration and a Bachelor’s degree of Arts from the Hong Kong Polytechnic University in November 1983 and November 1994, respectively and a post-graduate diploma in laws from the Manchester Metropolitan University in the United Kingdom in July 1998. He passed the Common Professional Examinations in England and Wales in July 1998. He was named in the ‘‘International WHO’S WHO of Professionals’’ in 1999. As at the Latest Practicable Date, Mr. Kwok was a fellow member of each of the Institute of Chartered Secretaries and Administrators in the United Kingdom, the Institute of Financial Accountants in England, the HKICS, the Association of Hong Kong Accountants, The Hong Kong Institute of Directors and the Institute of Public Accountants in Australia and members of a number of other professional bodies.

Mr. Kwok is not an individual employee of our Company, but acts as an external service provider.

AUTHORISED REPRESENTATIVES

Mr. John Kwong and Mr. Kwok Siu Man have been appointed as the authorised representatives of our Company under Rule 5.24 of the GEM Listing Rules.

COMPLIANCE OFFICER

Ms. Kwong Man Yui has been appointed as the compliance officer of our Company on 15 December 2017. For her biographical information, please refer to the paragraph headed ‘‘Executive Directors’’ above in this section.

COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE

Our Directors are committed to achieving high standards of corporate governance with a view to safeguarding the interests of the Shareholders. To accomplish this, our Group will comply with the Corporate Governance Code as set out in Appendix 15 to the GEM Listing Rules and the associated GEM Listing Rules.

COMPLIANCE ADVISER

Our Company has appointed Alliance Capital Partners Limited as the compliance adviser of our Company pursuant to Rule 6A.19 of the GEM Listing Rules. Pursuant to Rule 6A.23 of the GEM Listing Rules, our Group must consult with, and if necessary, seek advice from the compliance adviser on a timely basis in the following circumstances:

(i) before the publication of any regulatory announcement, circular or financial report;
(ii) where a transaction, which might be a notifiable or connected transaction under the GEM Listing Rules, is contemplated by our Group, including share issues and share repurchases;

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(iii) where our Group proposes to use the proceeds of the Share Offer in a manner different from that detailed in this prospectus or where our Group’s business activities, developments or results of operation deviate from any forecast, estimate or other information in this prospectus; and
(iv) where the Stock Exchange makes an inquiry of our Company regarding unusual movements in the price or trading volume of the Shares or any other matters under Rule 17.11 of the GEM Listing Rules.

The terms of appointment shall commence on the Listing Date and end on the date on which our Group complies with Rule 18.03 of the GEM Listing Rules in respect of the financial results for the second full financial year after the Listing, or until the agreement is terminated, whichever is the earlier.

BOARD COMMITTEES

Audit Committee

Our Company established the Audit Committee on 23 March 2018 with written terms of reference in compliance with Rules 5.28 to 5.33 of the GEM Listing Rules and paragraph C.3 of the Corporate Governance Code and Corporate Governance Report as set out in Appendix 15 to the GEM Listing Rules. The primary duties of the Audit Committee are mainly to make recommendations to the Board on the appointment and removal of external auditors; review the financial statements and material advice in respect of financial reporting; and oversee internal control procedures of our Company. The Audit Committee currently consists of three members, namely Mr. Lai Ming Fai Desmond, Dr. Cheng Lee Lung and Mr. Kwok Yiu Chung. The chairman of our Audit Committee is Mr. Lai Ming Fai Desmond.

Remuneration Committee

Our Company established the Remuneration Committee on 23 March 2018 with written terms of reference in compliance with Rules 5.34 to 5.36 of the GEM Listing Rules and paragraph B.1 of the Corporate Governance Code and Corporate Governance Report as set out in Appendix 15 to the GEM Listing Rules. The primary duties of the Remuneration Committee are to make recommendations to the Board on the overall remuneration policy and structure relating to all Directors and senior management of our Group; review performance based remuneration; and ensure none of our Directors determine their own remuneration. The Remuneration Committee currently consists of three members, namely Mr. Kwok Yiu Chung, Mr. Lai Ming Fai Desmond and Dr. Cheng Lee Lung. The chairman of the Remuneration Committee is Mr. Kwok Yiu Chung.

Nomination Committee

Our Company established the Nomination Committee on 23 March 2018 with written terms of reference in compliance with paragraph A.5 of the Corporate Governance Code and Corporate Governance Report as set out in Appendix 15 to the GEM Listing Rules. The primary duties of the Nomination Committee are to review the structure, size and composition of the Board on a regular basis; identify individuals suitably qualified to become Board members; assess the independence of independent non-executive Directors; and make recommendations to the Board on relevant matters

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relating to the appointment or re-appointment of Directors. The Nomination Committee currently consists of three members, namely Mr. John Kwong, Mr. Kwok Yiu Chung and Dr. Cheng Lee Lung. The chairman of the Nomination Committee is Mr. John Kwong.

DIRECTORS’ AND EMPLOYEES’ EMOLUMENTS

For each of the two years ended 31 March 2016 and 31 March 2017 and the six months ended 30 September 2017, the aggregate amount of fees, salaries, allowances, discretionary payments, bonuses and contribution to pension schemes paid by our Company to our Directors were approximately HK$685,000, HK$733,000 and HK$505,000 respectively. It is estimated that under the arrangements currently in force, the aggregate remuneration (including directors’ fee, basic salary, allowance, noncash benefit and retirement scheme contribution) payable to our Directors (including the independent non-executive Directors) for the year ending 31 March 2018 will be approximately HK$1.5 million. We shall maintain relevant liability insurance for our Directors upon Listing.

The remuneration paid by our Company to our top five highest paid individuals (including our Directors) for each of the two years ended 31 March 2016 and 31 March 2017 and the six months ended 30 September 2017 were approximately HK$2,562,000, HK$2,583,000 and HK$1,261,000 respectively.

During the Track Record Period, no remuneration was paid by our Company to, or receivable by, our Directors or our five highest paid individuals as an inducement to join or upon joining our Company. No compensation was paid by our Company to, or receivable by, our Directors, past Directors or our five highest paid individuals for the loss of the any office in connection with the management of the affairs of any subsidiary of our Company during the Track Record Period.

During the Track Record Period, none of our Directors waived any emoluments. Save as disclosed above, no other payments have been paid, or are payable, by our Company or any of our subsidiaries to our Directors or our five highest paid individuals during the Track Record Period.

Under the remuneration policy of our Company, the remuneration committee will consider factors, such as salaries paid by comparable companies, tenure, commitment, responsibilities and performance, in assessing the amount of remuneration payable to our Directors, senior management and employees.

REMUNERATION POLICY

The Director’s fee for each of our Directors is subject to the Board’s review from time to time in its discretion after taking into account the recommendation of our Remuneration Committee. The remuneration package of each of our Directors is determined by reference to market terms, seniority, experiences, duties and responsibilities of that Director within our Group. Our Directors are entitled to statutory benefits as required by law from time to time such as pension.

Prior to the Listing, the remuneration policy of our Group to reward its employees and executives is based on their performance, qualifications, competence displayed and market comparable. Remuneration package typically comprises salary, contribution to pension schemes and discretionary bonuses relating to the profit of the relevant company. Upon and after the Listing, the remuneration package of our Directors and the senior management will, in addition to the above factors, be linked to

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the return to the Shareholders. The Remuneration Committee will review annually the remuneration of all our Directors to ensure that it is attractive enough to attract and retain a competent team of executive members.

DIRECTORS’ COMPETING INTERESTS

None of our Controlling Shareholders, nor any Directors or their respective close associates has any interest in any business, apart from the business operated by members of our Group, that competes, directly or indirectly, with our Group’s business which requires disclosure pursuant to Rule 11.04 of the GEM Listing Rules.

EMPLOYEES

For details of the employees of our Group, please refer to the section headed ‘‘Business — Employees’’ of this prospectus.

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RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS

OUR CONTROLLING SHAREHOLDERS

Immediately after completion of the Share Offer and the Capitalisation Issue (without taking into account the Shares to be allotted and issued pursuant to the exercise of the Offer Size Adjustment Option and any options which may be granted under the Share Option Scheme), Future More will hold 75% of our Company’s entire issued share capital. Future More is owned as to 14% by Mr. John Kwong, 18% by Ms. Ingrid Ip, 18% by Ms. Kwong Man Yui, 25% by Mr. Joseph Kwong and 25% by Ms. Melanie Kwong, who are considered as a group of Controlling Shareholders that are acting in concert.

On 23 November 2017, Mr. John Kwong, Ms. Ingrid Ip, Ms. Kwong Man Yui, Mr. Joseph Kwong and Ms. Melanie Kwong entered into the Concert Party Deed to acknowledge and confirm, among other things, that they are parties acting in concert in respect of each of Meric Investment, Lord Master and our Company and shall continue to do so. Details of the Concert Party Deed are set out in the section headed ‘‘History, Development and Reorganisation — Parties acting in concert’’ in this prospectus. As such, Future More, Mr. John Kwong, Ms. Ingrid Ip, Ms. Kwong Man Yui, Mr. Joseph Kwong and Ms. Melanie Kwong are Controlling Shareholders of our Group, please refer to the section headed ‘‘Substantial Shareholders’’ in this prospectus for their respective shareholding interest in the Company.

Among our Controlling Shareholders, Mr. John Kwong and Ms. Kwong Man Yui are the executive Directors of our Company. For further details, please refer to the section headed ‘‘Directors, Senior Management and Employees — Directors — Executive Directors’’ in this prospectus.

Our Directors have confirmed that none of them and their respective associates is interested in any business which competes, or may compete, directly or indirectly, with the business of our Group. Ms. Ingrid Ip, Mr. Joseph Kwong and Ms. Melanie Kwong are respectively interested in 50%, 25% and 25% of Elite and as such, Elite is an associate of Ms. Ingrid Ip, Mr. Joseph Kwong and Ms. Melanie Kwong. Elite has entered into transactions with our Group during the Track Record Period. The transactions relating to purchase of chilled and frozen meat and seafood and other food ingredients from Elite will continue after the Listing. Elite is a limited liability company incorporated in Hong Kong on 16 October 1984 and is a supplier of chilled and frozen meat and seafood and other food ingredients in Hong Kong. It is our supplier and is in the upstream chain of our Group’s business. For details of our Group’s transaction with Elite, please refer to the section ‘‘Connected Transactions’’.

Between 15 October 2012 and 21 August 2017, Elite owned 50% shareholding interest in Able Leader, which was incorporated in Hong Kong on 26 July 2012 and was an associate of Elite. During the Track Record Period, Able Leader opened a restaurant whereby our Group provided management services, such restaurant was closed down and thus the management services ceased in September 2017. On 21 August 2017, Elite transferred all its interest in Able Leader to an Independent Third Party and thereafter Able Leader ceased to be an associate of Elite. As at the Latest Practicable Date, Elite did not own or operate any restaurant and thus there is no competition between our Group and Elite.

RULE 11.04 OF THE GEM LISTING RULES

Save as disclosed above, each of the Controlling Shareholders, our substantial shareholders, our Directors and their respective close associates do not have any business or interest that competes or is likely to compete, directly or indirectly, with our business, which would require disclosure pursuant to Rule 11.04 of the GEM Listing Rules.

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RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS

INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS

Our Directors consider that our Group is capable of carrying on its business independently from the Controlling Shareholders and their associates after Listing for the following reasons:

Management independence

Our management and operational decisions are made by our Board and senior management. Our Board comprises three executive Directors and three independent non-executive Directors. Although Mr. John Kwong (who is also one of the directors of Elite) holds directorship in our Company, we consider that our Board and senior management will function independently from our Controlling Shareholders because:

(i) each Director is aware of his/her fiduciary duties as a Director which require, among others, that he/she acts for the benefit and in the best interest of our Company and does not allow any conflict between his/her duties as a Director and his/her personal interests;
(ii) in the event that there is a potential conflict of interest arising out of any transaction to be entered into between our Group and our Directors or their respective associates, the interested Director(s) shall abstain from voting at the relevant board meetings of our Company in respect of such transactions, and shall not be counted in forming quorum. Our Group has also adopted certain corporate governance measures for conflict situation, details of which are set out in the paragraph headed ‘‘Corporate governance measures’’ in this section; and
(iii) all our senior management members are independent from our Controlling Shareholders. They have substantial experience in the industry we are engaged in and have served our Group for a period of time during which they have demonstrated their capability of discharging their duties independently from our Controlling Shareholders.

Operational independence

We do not share operation team, facilities and equipment with our Controlling Shareholders and their associates. We have independent access to suppliers and customers and an independent management team to handle our day-to-day operations. We are also in possession of all relevant licences necessary to carry on and operate our business and we have our leased premises, selfowned facilities and sufficient workforce to operate our restaurants independently from our Controlling Shareholders and their associates.

Although during the Track Record Period, there were certain transactions between us and our related parties, details of which are set out in note 29 of the Accountants’ Report set out in Appendix I to this prospectus, our Directors have confirmed that these related party transactions were conducted in the ordinary course of business and on normal commercial terms. Save as disclosed in the section headed ‘‘Connected Transactions’’ in this prospectus, none of the historical related party transactions with the connected persons is expected to continue after the Listing.

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RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS

We have entered into the Master Supply Agreement with Elite for the provision of chilled and frozen meat and seafood and other food ingredients which will commence on the Listing Date. Under the Master Supply Agreement, the purchase price for the transactions will be determined with reference to the prevailing comparable market price after arm’s length negotiation with Elite. Our Group has the flexibility to procure from other independent suppliers where the price offered by Elite is less favourable than the market price. For details, please refer to the section headed ‘‘Connected Transactions’’ in this prospectus.

In view of the above, our Directors consider that there is no operational dependence by us on our Controlling Shareholders.

Financial independence

We have an independent financial system and make financial decisions according to our own business needs. During the Track Record Period, we maintained facilities with three banks, two of which were secured by the personal guarantee provided by Mr. John Kwong, Mr. Joseph Kwong and Ms. Melanie Kwong and the remaining was secured by the personal guarantee provided by Mr. John Kwong and Ms. Melanie Kwong. All personal guarantee from the Controlling Shareholders and corporate guarantee from Elite will be released upon Listing. Our Directors confirm that we will not rely on our Controlling Shareholders for financing after the Share Offer as we expect that our working capital will be funded by our operating income.

NON-COMPETITION UNDERTAKING

In order to avoid any future competition between our Group and the Controlling Shareholders, each of the Controlling Shareholders under the Deed of Non-competition undertakes and covenants with our Company (for itself and as trustee for each of its subsidiaries) that for so long as he/she/it and/or his/ her/its associates, directly or indirectly, whether individually or taken together, remain a controlling shareholder(s) of our Company:

(i) he/she/it will not, and will procure his/her/its associates not to (other than through our Group or in respect of each covenantor (together with his/her/its associates), as a holder of not more than 5% of the issued shares or stock of any class or debentures of any company listed on any recognised stock exchange) directly or indirectly carry on, engage or otherwise be interested (in each case whether as shareholder, director, partner, agent, employee or otherwise and whether for profit, reward or otherwise) in any business which is or may be in competition with the business carried on by our Group from time to time (the ‘‘Restricted Activity’’), except where our Company’s approval as mentioned in the paragraph below is obtained.

The Controlling Shareholders and their respective associates are entitled to engage or have an interest in any Restricted Activity if after offering the new business opportunities such as investment, engagement or participation (the ‘‘New Business Opportunities’’) to our Company pursuant to (ii) below, our Company has confirmed in writing (the ‘‘Approval

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RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS

Notice’’) that none of our Group members wishes to be engaged or interested in the relevant Restricted Activity and it has approved the relevant Controlling Shareholders and their respective associates to engage or have any interest in the Restricted Activity. Any Director who is interested in the relevant Restricted Activity shall not vote on relevant resolutions approving the Approval Notice;

(ii) if any of the Controlling Shareholders and/or his/her/its associates decide to invest, be engaged, or participate in any Restricted Activity, whether directly or indirectly, in compliance with the Deed of Non-competition, he/she/it will and/or will procure his/her/its associates (other than members of our Group) to disclose the terms of such investment, engagement or participation to our Company and our Directors as soon as practicable and use his/her/its best endeavors to procure that the New Business Opportunities is offered to our Company on terms no less favorable than the terms on which such investment, engagement or participation is offered to him/her/it and/or his/her/its associates. When any New Business Opportunities are referred to our Company by any of the Controlling Shareholders, the independent non-executive Directors will consider such opportunity on various aspects including viability and profitability;
(iii) he/she/it will not, and will procure his/her/its associates not to, directly or indirectly, solicit, interfere with or entice away from any member of our Group, any natural person, legal entity, enterprise or otherwise who, to any of our Controlling Shareholder’s knowledge, as at the date of the Deed of Non-competition, is or has been or will after the date of the Deed of Non-competition be, a customer, supplier, distributor, sales or management, technical staff or employee (of managerial grade or above) of any member of our Group; and
(iv) he/she/it will not, and will procure his/her/its associates not to, exploit his/her/its knowledge or information obtained from our Group to compete, directly or indirectly, with the Restricted Activity.

The Deed of Non-competition and the rights and obligations thereunder are conditional and will take effect immediately upon Listing.

The obligations of the Controlling Shareholders under the Deed of Non-competition will remain in effect until:

(a) the date on which the Shares cease to be listed on the Stock Exchange; or
(b) the Controlling Shareholders and his/her/its associates, individually and/or collectively, cease to be deemed as a controlling shareholder of our Company (within the meaning defined in the GEM Listing Rules from time to time); or
(c) the Controlling Shareholders and his/her/its associates, individually and/or collectively beneficially own or are interested in the entire issued share capital of our Company,

whichever occurs first.

Nothing in the Deed of Non-competition shall prevent the Controlling Shareholders or any of their associates from carrying on any business whatsoever other than the Restricted Activity.

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RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS

CORPORATE GOVERNANCE MEASURES

The following corporate governance measures will be adopted to monitor the compliance with the Deed of Non-competition:

(i) our independent non-executive Directors shall review, at least on an annual basis, the compliance with the Deed of Non-competition by the Controlling Shareholders and their respective associates on their existing or future competing businesses;
(ii) the Controlling Shareholders shall promptly provide all information necessary for the annual review by our Company’s independent non-executive Directors and the enforcement of the Deed of Non-competition and provide to our Company a written confirmation relating to the compliance with the Deed of Non-competition and make an annual declaration on compliance with the Deed of Non-competition in the annual report of our Company;
(iii) our Company shall disclose decisions on matters reviewed by its independent non-executive Directors relating to the compliance and enforcement of the undertakings provided by the Controlling Shareholders either through the corporate governance report as set out in the annual report of our Company, and/or by way of announcements to the public;
(iv) any New Business Opportunities under the Deed of Non-competition and all other matters determined by the Board as having a potential conflict of interest with our Controlling Shareholders will be referred to the independent non-executive Directors for discussion and decision. When necessary, such independent non-executive Directors will engage an independent financial adviser to advise them on the relevant matters. In the event any New Business Opportunities presented by or otherwise arising in connection with any of our Controlling Shareholders are turned down by our Group according to the Deed of Noncompetition, our Company will disclose the decision, as well as the basis for such decision in the annual report or interim report of our Company. The annual report of our Company will include the views and decisions, with bases, of the independent non-executive Directors on whether to take up any New Business Opportunities under the Deed of Non-competition or other matters having a potential conflict of interest with our Controlling Shareholders that have been referred to the independent non-executive Directors;
(v) further, if a Controlling Shareholder or a Director has a conflict of interest in a matter to be considered, he/she/it shall act in accordance with the requirements of the GEM Listing Rules, regarding voting on such matter; and
(vi) the compliance adviser of our Company shall provide our Company with professional advice on compliance of continuing obligations under the GEM Listing Rules in accordance with the provisions of the compliance adviser agreement and the requirements of the GEM Listing Rules.

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SUBSTANTIAL SHAREHOLDERS

So far as our Directors are aware, immediately following the completion of the Capitalisation Issue and the Share Offer (without taking into account any Shares which may be allotted and issued pursuant to the exercise of Offer Size Adjustment Option and any options which may be granted under the Share Option Scheme), the following persons/entities will have an interest or a short position in the Shares or the underlying Shares which would be required to be disclosed to our Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or, directly or indirectly, be interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of our Group:

					Percentage of
Name			Nature of interest	Number of Shares(Note 1)	shareholding
Future	More(Note	2)	Beneficial owner	750,000,000 Shares (L)	75%

Notes:

1 The letter (L) denotes the person’s long position in our Shares.
Future More will be legally interested in 750,000,000 Shares upon Listing. Future More is owned as to 14% by Mr. John Kwong, 18% by Ms. Ingrid Ip, 18% by Ms. Kwong Man Yui, 25% by Mr. Joseph Kwong and 25% by Ms. Melanie Kwong, who are considered as a group of Controlling Shareholders that are acting in concert.

On 23 November 2017, Mr. John Kwong, Ms. Ingrid Ip, Ms. Kwong Man Yui, Mr. Joseph Kwong and Ms. Melanie Kwong entered into the Concert Party Deed to acknowledge and confirm, among other things, that each of them has acted and shall continue to act in concert in respect of each of Meric Investment, Lord Master and our Company. Details of the Concert Party Deed are set out in the section headed ‘‘History, Development and Reorganisation — Parties acting in concert’’ in this prospectus. As such, pursuant to the parties acting in concert arrangement, each of our Controlling Shareholders, namely, Mr. John Kwong, Ms. Ingrid Ip, Ms. Kwong Man Yui, Mr. Joseph Kwong and Ms. Melanie Kwong is deemed to be interested in 75% of the issued share capital of our Company.

Save as disclosed herein, our Directors are not aware of any person who will, immediately following completion of the Share Offer and the Capitalisation Issue but without taking into account the Shares to be allotted and issued upon the exercise of the Offer Size Adjustment Option and any options which may be granted under the Share Option Scheme, have an interest or a short position in Shares or underlying Shares which would fall to be disclosed to our Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, who will, directly or indirectly, be interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of our Group and are therefore regarded as substantial shareholders under the Listing Rules.

UNDERTAKINGS

Each of our Controlling Shareholders has given certain undertakings in respect of the Shares he/ she/it held to our Company, the Sole Sponsor, the Joint Bookrunners (for themselves and on behalf of the Underwriters) and the Stock Exchange, details of which are set out under the section headed ‘‘Underwriting — Undertakings’’. Our Controlling Shareholders have also given undertakings in respect of the Shares to our Company and the Stock Exchange as required by Rules 13.16A(1) and 13.19 of the GEM Listing Rules.

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SHARE CAPITAL

The tables as shown below assume the Share Offer and the Capitalisation Issue have become unconditional and the issue of Shares pursuant thereto is made as described herein (without taking into account any Shares which may be allotted and issued upon the exercise of the Offer Size Adjustment Option and any options which may be granted under the Share Option Scheme).

The authorised and issued share capital of our Company following the completion of the Capitalisation Issue and Share Offer is as follows:

Authorised share capital: 1,500,000,000 Shares of HK$0.01 each	HK$ 15,000,000.00

Shares in issue or to be issued, fully paid or credited as fully paid:

100 Shares in issue as at the date of this prospectus 749,999,900 Shares to be issued pursuant to Capitalisation Issue 250,000,000 New Shares to be issued pursuant to the Share Offer 1,000,000,000 Total	1.00 7,499,999.00 2,500,000.00
	10,000,000.00

Note: Pursuant to the written resolutions of the sole Shareholder passed on 23 March 2018, conditional upon the share premium account of the Company being credited as a result of the Share Offer, our Directors were authorised to capitalise the amount of HK$7,499,999.00 from the amount standing to the credit of the share premium account of the Company and to appropriate such amount as to pay up in full at par 749,999,900 Shares for allotment and issue to the persons whose names appeared on the register of members of the Company at the close of business on the Business Day immediately before the Listing Date, in proportion (or as nearly as possible without involving fractions) to their respective shareholdings in the Company.

Assuming the Offer Size Adjustment Option is exercised in full, the issued share capital of our Company immediately after completion of the Capitalisation Issue and Share Offer will be HK$10,375,000 divided into 1,037,500,000 Shares.

ASSUMPTIONS

The above table assumes that the Share Offer becomes unconditional and the issue of Shares pursuant to the Share Offer and the Capitalisation Issue are made. It takes no account of any Shares which may be allotted and issued pursuant to the exercise of the options which may be granted under the Share Option Scheme or any Shares which may be issued or repurchased by us pursuant to the general mandates granted to our Directors to issue or repurchase Shares as described below.

MINIMUM PUBLIC FLOAT

Pursuant to Rule 11.23(7) of the GEM Listing Rules, at the time of the Listing and at all times thereafter, our Company must maintain the ‘‘minimum prescribed percentage’’ of 25% of the issued share capital of our Company in the hands of the public (as defined in the GEM Listing Rules).

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SHARE CAPITAL

RANKING

The Offer Shares will be ordinary shares in the share capital of our Company and will rank pari passu in all respects with all Shares in issue or to be issued as mentioned in this prospectus and, in particular, will rank in full for all dividends or other distributions declared, made or paid on our Shares in respect of a record date which falls after the date of this prospectus save for the entitlement under the Capitalisation Issue.

CIRCUMSTANCES WHERE MEETING OF THE COMPANY IS REQUIRED

There are certain circumstances where annual general meetings or extraordinary general meetings of our Company are required under our Articles and the GEM Listing Rules. A general summary of such circumstances are set out below:

. an annual general meeting of our Company must be held in each year, other than the year of adoption of the Articles (within a period of not more than fifteen (15) months after the holding of the last preceding annual general meeting or a period of eighteen (18) months from the date of adoption of the Articles, unless a longer period would not infringe the rules of any Designated Stock Exchange (as defined in the Articles)) at such time and place as may be determined by our Board.
. our Board may, at its discretion, call extraordinary general meetings. However, any one or more members holding at the date of deposit of the requisition not less than one-tenth of the paid up capital of our Company carrying the right of voting at general meetings of our Company (the ‘‘requisitionist’’) shall have the right, by written requisition to our Board or the secretary of our Company, to require an extraordinary general meeting to be called by our Board for the transaction of any business specified in such requisition; and such meeting shall be held within two (2) months after the deposit of such requisition. If within twenty one (21) days of such deposit our Board fails to proceed to convene such meeting the requisitionist(s) himself/herself/itself/themselves may do so in the same manner, and all reasonable expenses incurred by the requisitionist(s) as a result of the failure of our Board shall be reimbursed to the requisitionist(s) by our Company.

Other than the above circumstances, certain corporate actions may require the approval of members, which would be obtained at a general meeting. For details, please refer to the section headed ‘‘Summary of the Constitution of our Company and Cayman Islands Company Law’’ in Appendix IV to this prospectus.

SHARE OPTION SCHEME

Our Company has conditionally adopted the Share Option Scheme. The principal terms of the Share Option Scheme are summarised in the section headed ‘‘Statutory and General Information — D. Share Option Scheme’’ in Appendix IV to this prospectus.

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SHARE CAPITAL

GENERAL MANDATE TO ISSUE SHARES

Conditional on the conditions as stated in the section headed ‘‘Structure and Conditions of the Share Offer’’ below being fulfilled, our Directors have been granted a general unconditional mandate to allot, issue and deal with Shares and to make or grant offers, agreements or options which might require such Shares to be allotted and issued or dealt with subject to the requirement that the aggregate number of Shares so allotted and issued or agreed conditionally or unconditionally to be allotted and issued (otherwise than pursuant to a rights issue, or scrip dividend scheme or similar arrangements, or a specific authority granted by the Shareholders) shall not exceed:

(a) 20% of the aggregate number of Shares in issue immediately following the completion of the Share Offer and the Capitalisation Issue; and
(b) the aggregate number of Shares repurchased pursuant to the authority granted to our Directors as referred to in the paragraph headed ‘‘General mandate to repurchase shares’’ below.

This mandate does not cover Shares to be allotted, issued, or dealt with under a rights issue or upon the exercise of any options which may be granted under the Share Option Scheme. This general mandate to issue Shares will remain in effect until:

(a) the conclusion of our Company’s next annual general meeting;
(b) the expiration of the period within which our Company’s next annual general meeting is required to be held by any applicable laws of the Cayman Islands or the Articles; or
(c) it is varied or revoked by an ordinary resolution of the Shareholders in general meeting, whichever is the earliest.

For further details of this general mandate, please refer to the section headed ‘‘A. Further information about our Company and our subsidiaries — 3. Written resolutions of the sole Shareholder’’ in Appendix IV to this prospectus.

GENERAL MANDATE TO REPURCHASE SHARES

Subject to the conditions set forth in the section headed ‘‘Structure and Conditions of the Share Offer’’ of this prospectus being fulfilled, our Directors have been granted a general mandate to exercise all the powers of our Company to purchase on the Stock Exchange or on any other stock exchange on which the securities of our Company may be listed and which is recognised by the SFC and the Stock Exchange for this purpose, such number of Shares as will represent up to 10% of the aggregate number of our Shares in issue immediately following completion of the Share Offer and the Capitalisation Issue.

This general mandate only relates to repurchases made on the Stock Exchange or on any other stock exchange on which the Shares are listed (and which is recognised by the SFC and the Stock Exchange for this purpose), and which are in accordance with the GEM Listing Rules and all applicable laws.

This general mandate will expire:

(i) at the conclusion of our Company’s next annual general meeting; or

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SHARE CAPITAL

(ii) the expiration of the period within which our Company is required by the Articles or any applicable laws of the Cayman Islands to hold its next annual general meeting; or
(iii) when varied or revoked by an ordinary resolution of our Shareholders in general meeting, whichever occurs first.

For further details of the repurchase mandate, please see the section headed ‘‘Statutory and General Information — A. Further information about our Company and our subsidiaries — 3. Written resolutions of the sole Shareholder’’ in Appendix IV to this prospectus.

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FINANCIAL INFORMATION

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our combined financial statements as at and for the years ended 31 March 2016 and 31 March 2017, and the six months ended 30 September 2016 and 30 September 2017, and the accompanying notes included in the Accountants’ Report set out in Appendix I to this prospectus. The Accountants’ Report has been prepared in accordance with HKFRSs. Potential investors should read the whole Accountants’ Report set out in Appendix I to this prospectus and not rely merely on the information contained in this section. The following discussion and analysis contains forward looking statements that involve risks and uncertainties. For additional information regarding these risks and uncertainties, please refer to the section headed ‘‘Risk Factors’’ in this prospectus.

Our financial information and the discussion and analysis below assume that our current structure had been in existence throughout the Track Record Period. For further information in relation to our Group structure, please refer to the section headed ‘‘History, Development and Reorganisation’’ in this prospectus.

OVERVIEW

We are a restaurant group in Hong Kong established in November 2000, principally serving local customers across various demographics at affordable price. We principally operate western casual dining restaurants serving various cuisines under multi-brands. Leveraging on extensive industry experience in catering industry, our Group commits to delivering ‘‘affordable luxury’’ dining experience with high quality food, desirable ambience and thoughtful services.

As at the Latest Practicable Date, we owned and operated 13 restaurants serving various cuisines, including six restaurants serving various western cuisine along with our signature steak under our ‘‘Mr. Steak’’ brand, one buffet restaurant serving international cuisine under our ‘‘Mr. Steak — Buffet à la minute’’ brand, three restaurants under our ‘‘Sky Bar’’ brand offering western cuisine along with our signature seafood dishes and a wide selection of wines and cocktails, two western specialty restaurants under our ‘‘Bistro Bloom’’ and ‘‘Bistro Bloom/Marbling’’ brands serving modern and trendy western food along with specialty meat cuts, and one Japanese specialty restaurant under our ‘‘Hana’’ brand serving ‘‘Nabemono’’ — Japanese hot pot dishes such as Sukiyaki, Shabu Shabu and Seiromushi.

All of our restaurants are strategically located in prime locations proximal to shopping plazas or residential areas in Hong Kong such as World Trade Center (also known as WTC More) and Lee Theatre Plaza in Causeway Bay, New Town Plaza in Shatin, Kornhill Plaza in Quarry Bay, Langham Place in Mongkok, Telford Plaza in Kowloon Bay, Yoho Mall in Yuen Long and East Point City in Tseung Kwan O. Our Group believes leveraging on the constant traffic and demand from local residents would constantly drive and bring in new dining demands and highly beneficial to our Group.

Our Directors believe, our multi-brands concept, brand recognition and value proposition would enable our Group to further diversify our customer bases with different tastes and dining preferences across Hong Kong.

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FINANCIAL INFORMATION

The following table sets out the breakdown of our revenue from our restaurant operation by brands for FY2016, FY2017 and the six months ended 30 September 2017:

Mr. Steak (Note 1) Mr. Steak — Buffet à la minute (Note 2) Sky Bar (Note 3) Specialty restaurants (Note 4) Total	FY2016 Total revenue % of total revenue (HK$’000) % 62,092 32.5 58,943 30.8 39,489 20.6 30,879 16.1 191,403 100.0	FY2017 Total revenue % of total revenue (HK$’000) % 86,026 37.0 67,540 29.0 43,225 18.6 35,931 15.4 232,722 100.0	For the six months ended 30 September 2016 2017 Total revenue % of total revenue Total revenue % of total revenue (HK$’000) % (HK$’000) % unaudited 40,679 34.9 49,300 38.7 34,349 29.5 35,259 27.7 23,221 19.8 23,419 18.5 18,382 15.8 19,119 15.1 116,631 100.0 127,097 100.0	For the six months ended 30 September 2016 2017 Total revenue % of total revenue Total revenue % of total revenue (HK$’000) % (HK$’000) % unaudited 40,679 34.9 49,300 38.7 34,349 29.5 35,259 27.7 23,221 19.8 23,419 18.5 18,382 15.8 19,119 15.1 116,631 100.0 127,097 100.0
				100.0

Notes:

Our restaurants under our ‘‘Mr. Steak’’ brand include MS(ST), MS(KB), MS(TY), MS(KF) and MS(KH).
Our restaurant under our ‘‘Mr. Steak — Buffet à la minute’’ brand refers to MS(Buffet).
Our restaurants under our ‘‘Sky Bar’’ brand include SB(CWB), SB(MK) and SB(YL).
Our specialty restaurants include Hana(CWB), BB(CWB) and BB(MK).

Our revenue increased by approximately HK$40.1 million, or 20.6% from approximately HK$194.8 million for FY2016 to approximately HK$234.9 million for FY2017, and by approximately HK$10.6 million, or 9.0% from approximately HK$117.6 million for the six months ended 30 September 2016 to approximately HK$128.2 million for the six months ended 30 September 2017. Our net profit increased by approximately HK$0.7 million or 6.6% from approximately HK$10.6 million for FY2016 to approximately HK$11.3 million for FY2017; while our net profit increased by approximately HK$0.8 million or 10.7% from approximately HK$7.5 million for the six months ended 30 September 2016 to approximately HK$8.3 million for the six months ended 30 September 2017.

Restaurant operations Sales of food(Note) Total	FY2016 Total revenue % of total revenue (HK$’000) % 191,403 98.3 3,377 1.7 194,780 100.0	FY2017 Total revenue % of total revenue (HK$’000) % 232,722 99.1 2,151 0.9 234,873 100.0	For the six months ended 30 September 2016 2017 Total revenue % of total revenue Total revenue % of total revenue (HK$’000) % (HK$’000) % unaudited 116,631 99.2 127,097 99.1 994 0.8 1,110 0.9 117,625 100.0 128,207 100.0	For the six months ended 30 September 2016 2017 Total revenue % of total revenue Total revenue % of total revenue (HK$’000) % (HK$’000) % unaudited 116,631 99.2 127,097 99.1 994 0.8 1,110 0.9 117,625 100.0 128,207 100.0
				100.0

Note: The sales of food principally comprise the sales from the provision of takeaway service to our corporate customers during the Track Record Period.

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FINANCIAL INFORMATION

Our revenue mainly derived from restaurant operation. During the Track Record Period, the restaurant operation contributed to approximately 98.3%, 99.1%, 99.2% and 99.1% of our total revenue, for FY2016, FY2017 and the six months ended 30 September 2016 and 30 September 2017, respectively. The sales of food to our corporate customers contributed approximately 1.7%, 0.9%, 0.8% and 0.9% of our total revenue, for FY2016, FY2017 and the six months ended 30 September 2016 and 30 September 2017, respectively.

Our management team has extensive industry knowledge and management skills in restaurant operations. Our management team is led by Mr. John Kwong, the co-founder, chairman of our Board, chief executive officer and executive Director of our Group, who has more than 30 years of experience in the food and beverage industry. In addition, Ms. Kwong Man Yui, our executive Director, has over five years of experience in shop leasing management which helped our Group in negotiating and managing the shop leases for our existing restaurants operation and new restaurant development. Mr. Lam On Fai, our executive Director, has over 37 years of experience in the restaurant management. Furthermore, Mr. Lee Sai Keung, our executive chef, has over 38 years of experience in the restaurant industry. During the Track Record Period, under the leadership of our management team, we had achieved an increase in net profit. We believe that the capabilities of our management team and our commitment to safety and quality ingredients, will continue to enable us to maintain financial success, capture market opportunities and ensure our continued growth in western casual dining restaurants business in Hong Kong. For the biographical details of our management team, please refer to the section headed ‘‘Directors, Senior Management and Employees’’ in this prospectus

BASIS OF PREPARATION AND PRESENTATION

Our Company was incorporated in the Cayman Islands on 8 November 2017 as an exempted company with limited liability under the Companies Law. In preparation for the Listing, our Group underwent the Reorganisation. For further details of the Reorganisation, please refer to the section headed ‘‘History, Development and Reorganisation’’ in this prospectus. As a result of the Reorganisation, our Company became the holding company of the companies now comprising our Group on 23 March 2018, which were under the common control of our Controlling Shareholders before and after the Reorganisation. The combined financial statements for the Track Record Period which have been prepared as if our Company had always been the holding company of the companies now comprising our Group and the current group structure had been in existence throughout the Track Record Period, or since the earliest day on which the results and cash flows were presented or the day when the subsidiaries first came under the common control of our Controlling Shareholders, where there is a shorter period. All intragroup assets, liabilities, equity, income, expenses and cash flows relating to transactions between members of our Group are eliminated in full on combination.

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FINANCIAL INFORMATION

PRINCIPAL FACTORS AFFECTING OUR GROUP’S RESULTS OF OPERATIONS AND FINANCIAL CONDITION

Our results of operations and financial performance have been and will continue to be affected by a number of factors, many of which may be beyond our control, including those factors set out in the section headed ‘‘Risk Factors’’ in this prospectus and those set forth below.

Macro-economic condition of Hong Kong and spending power of our target customers

During the Track Record Period, we generally targeted retail customers with strong spending power. Our Directors anticipate that our revenue will continue to be primarily derived from customers across different segments. The results of our operations are vulnerable to the economy of Hong Kong as all of our restaurants are located in Hong Kong. Our Directors anticipate that our revenue will continue to be primarily derived from this market segment in the foreseeable future. As the spending power of our target customers are vulnerable to economic downturn and political and social instability, we cannot assure that the economic, political and social conditions in Hong Kong will always be favourable to our catering business in Hong Kong. Any unfavourable economic, political and social conditions may adversely affect the spending power of our target customers, and thus our results of operation and financial condition.

Growth of the western casual dining restaurants market in Hong Kong

Our future growth and prospects depend on the growth of Hong Kong western casual dining restaurants market. As per the past statistics, as a result of the stable economic growth since 2012, Hong Kong has experienced a stable increase in per capita expenditure on dining-out activities.

Market competition

As a restaurant operator, we face intense competition within the restaurant industry from a diverse group of restaurant chains and individual restaurant operators. While western casual dining restaurants in Hong Kong serving similar cuisines which compete with us, we also compete with restaurants in different market segments to a lesser extent.

We compete against other restaurants on an array of attributes such as taste of food, customer service, pricing, ambience and the overall dining experience. Some of our competitors may have larger customer bases, stronger brand reputation, longer operating histories and greater financial, marketing and other resources. If we are not able to compete against existing competitors and new market entrants effectively, our business and results of operations may be adversely affected.

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FINANCIAL INFORMATION

The number of restaurants in our restaurant network

We generate substantially all of our revenue from food and beverage sales at our restaurants. Food and beverage sales are affected by the number of our restaurants in operation and the number of total operating days of our restaurants, which in turn are affected by the openings and closures of our restaurants.

The following table sets forth the number of our restaurants in operation as at the dates indicated.

As at 1 April 2015 Addition during FY2016 (Note 1 and 2) Closure during FY2016 (Note 2) As at 31 March 2016 Addition during FY2017 (Note 3) Closure during FY2017 As at 31 March 2017 Addition from 1 April 2017 and up to the Latest Practicable Date (Note 4) Closure from 1 April 2017 and up to the Latest Practicable Date As at the Latest Practicable Date Notes:	Number of our restaurants 9 3 1
	11 1 —
	12 1 —
	13

SB(YL) and MS(KH) commenced their operation in September 2015 and December 2015 respectively.
We ceased operation of Hana(CWB) in May 2015 and relocated and recommenced its operation in November 2015.
MS(KB) commenced its operation in October 2016.
MS(TKO) commenced its operation in January 2018.

We launched SB(YL), MS(KH), MS(KB) and Hana (CWB) during the Track Record Period and our number of restaurants steadily grew for FY2016 and FY2017. Our restaurant at Fashion Walk in Causeway Bay ceased its operation under the ‘‘Mr. Steak’’ brand in August 2015 and rebranded to our BB(CWB) in late September 2015. We renovated our ‘‘Mr. Steak’’ restaurant at Langham Place in Mong Kok and rebranded it to BB(MK) in December 2016.

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FINANCIAL INFORMATION

The table below sets forth information on the revenue and number of our restaurants in operation throughout each year/period indicated and restaurants newly opened and closed during the applicable year/period.

		Restaurants
	Restaurants	newly	Restaurants
	in operation	opened		closed
	throughout	during the	during the
FY2016	the year	year		year	Total
	(HK$’000, except number			of restaurants)
Revenue	171,799	18,488		1,116	191,403
Percentage of total revenue	89.7%	9.7%		0.6%	100.0%
Number of restaurants	8	3		1
		Restaurants
	Restaurants	newly	Restaurants
	in operation	opened		closed
	throughout	during the	during the
FY2017	the year	year		year	Total
	(HK$’000, except number			of restaurants)
Revenue	222,868	9,854		—	232,722
Percentage of total revenue	95.8%	4.2%		—	100.0%
Number of restaurants	11	1		—
		Restaurants
	Restaurants	newly	Restaurants
	in operation	opened		closed
For the six months ended	throughout	during the	during the
30 September 2017	the period	period		period	Total
	(HK$’000, except number			of restaurants)
Revenue	127,097	—		—	127,097
Percentage of total revenue	100.0%	—		—	100.0%
Number of restaurants	12	—		—

Comparable restaurant sales

Comparable restaurant sales for a given fiscal year refer to the revenue of all restaurants qualified as comparable restaurants during that year/period. We define comparable restaurants as restaurants that were operating throughout the periods under comparison. The newly opened and closed restaurants are excluded under comparison. For example, the comparable restaurants for FY2017 are restaurants that were open throughout both FY2016 and FY2017. For this purpose, we regard restaurants which were temporarily closed for renovation as comparable restaurants. Comparable restaurant sales are primarily affected by the seat turnover rate per day and the average spending per customer per meal. We are

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FINANCIAL INFORMATION

focused on increasing comparable restaurant sales by driving through a variety of initiatives, including continuously introducing new and innovative menu offerings and upgrading the decoration of existing restaurants.

			For the six months	ended
			30 September
	FY2016	FY2017	2016	2017
	(HK$’000,	except number of restaurants)
Number of comparable restaurants	8	11	11	12
Comparable restaurant sales	171,799	222,868	116,631	127,097
Average revenue per comparable
restaurant	21,475	20,261	10,603	10,591

The overall average revenue per comparable restaurant decreased by approximately 5.6% from approximately HK$21.5 million for FY2016 to approximately HK$20.3 million for FY2017, primarily due to renovation of our BB(MK) during September 2016 to October 2016. The overall revenue per comparable restaurants remained stable for the six months ended 30 September 2016 and 30 September 2017 at approximately HK$10.6 million.

Customer traffic and average spending per customer

Our business is significantly affected by changes in customer traffic and average spending per customer. We record the customer count through our point-of-sales systems at each restaurant. Average spending per customer is a measure of our restaurant sales divided by the customer count of the relevant restaurants during the same period. The customer traffic and average spending per customer at our restaurants are affected by, among other things, macroeconomic factors, our menu mix and pricing, changes in discretionary spending patterns and consumer tastes, and lifestyle trends of the general public. The following table sets forth the estimated seated turnover rate and estimated average spending per customer per meal of comparable restaurants during the Track Record Period:

			For the six months ended	For the six months ended
			30 September
	FY2016	FY2017	2016	2017
Number of comparable restaurants	8	11	11	12
Seat turnover rate of comparable
restaurants	2.2 times	2.1 times	2.3 times	2.2 times
Average spending per customer per
meal of comparable restaurants	HK$235	HK$247	HK$241	HK$242

The overall seat turnover rate of comparable restaurant remained stable throughout the Track Record Period.

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FINANCIAL INFORMATION

The overall average spending per customer per meal of comparable restaurants increased by approximately 5.1% from approximately HK$235 for FY2016 to approximately HK$247 for FY2017, which was mainly due to the increase of average spending per customer per meal in MS(KF), SB(CWB) and Hana (CWB). The overall average spending per customer per meal remained relatively stable from approximately HK$241 for the six months ended 30 September 2016 and approximately HK$242 for the six months ended 30 September 2017.

Our profitability is affected in part by our ability to successfully grow revenue from our existing restaurants. We are committed to further improving our financial performance by securing strategic locations of our restaurant premises to increase customer traffic and introducing innovative food dishes to our menu to attract more customers.

Our pricing policy in response to the changing market conditions

In determining the prices of the food items and beverages on our menu of our restaurants, we take into account (i) the cost of the food items and beverages; (ii) the overall operating cost, including the rental of the individual restaurant; (iii) target profit margins; and (iv) prices of similar food items and beverages set by our competitors. The price of each menu item also depends on the ability of our Group to continue to reach the target customers and to pass on the costs increase to our customers. Further details of our pricing policy are set out in the section headed ‘‘Business — Sales and marketing — Pricing policy’’ in this prospectus. If we fail to attract the target customers or to adjust our pricing strategy in response to the changing market environment, the operating results and financial performance of our Group could be affected.

Food ingredients are the major raw materials purchased by our Group. We source food ingredients, such as meat, seafood, frozen food and vegetables from suppliers in Hong Kong. Save for the Master Supplier Agreement between our Group and Elite, details of which are set out in the section headed ‘‘Connected Transactions’’ in this prospectus, we have not entered into any long-term contract with our suppliers which we believe, is in line with the market practice, and therefore we may not able to control the price fluctuations of food ingredients. The costs of food ingredients and price fluctuations will have a direct impact on our profitability.

Food ingredient and beverage costs

Cost of inventories sold is a major component of our operating expenses and the food ingredient and beverage prices have a direct impact on our cost of inventories sold, which in turn affect our results of operations. Cost of inventories sold comprises mainly cost of food ingredients and beverages. For FY2016, FY2017 and the six months ended 30 September 2016 and 30 September 2017, our cost of inventories sold amounted to approximately HK$62.2 million, HK$79.2 million, HK$40.2 million and HK$42.1 million, respectively, representing approximately 31.9%, 33.7%, 34.2% and 32.8% of our revenue for the respective periods. The principal food ingredients used in our operations include, but not limited to, meat, seafood, frozen food and vegetables. During the Track Record Period, our Group purchased food ingredient supplies from Elite which amounted to approximately HK$29.1 million, HK$43.4 million and HK$19.5 million for FY2016, FY2017 and the six months ended 30 September 2017, respectively. For details of our relationship with Elite, please refer to the sections headed ‘‘Business — Overview of restaurant operations and management — Our relationship with Elite’’ and ‘‘Connected Transactions’’ in this prospectus.

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FINANCIAL INFORMATION

We have devoted substantial efforts to securing sufficient supply of these ingredients that meet our quality standards and at competitive prices. For details, please refer to the section headed ‘‘Business — Overview of restaurant operations and management — Suppliers — Our raw material and purchase cost control’’ in this prospectus. However, despite the various initiatives we have undertaken, the price and supply of these ingredients are nonetheless subject to a number of factors that are beyond our control, including availability and demand, as food and beverage are primarily determined at market prices in Hong Kong.

Our food ingredients are sourced from suppliers in Hong Kong which supply both local and imported ingredients. According to the CIC Report, consumer price indices with respect to the major ingredients used by us have generally increased during the Track Record Period. In response to this trend, we have, among other things, increased prices of selected menu items, screened additional suppliers for food ingredients of similar quality but at lower prices and enhanced relationships with our major suppliers to secure better pricing. Our cost of inventories sold as a percentage of the total revenue will continue to be a key performance indicator of the overall efficiency and profitability of our business operations.

The following sensitivity analysis illustrates the impact of hypothetical fluctuations in cost of inventories sold on our profit before tax and our profit for the year during the Track Record Period. Fluctuations are assumed to be 5% and 10% for FY2016, FY2017 and the six months ended 30 September 2016 and 30 September 2017, with reference to the approximate range of CAGR of the consumer price index for major food ingredient in Hong Kong from 2012 to 2016 according to the CIC Report.

FY2016
Hypothetical Fluctuation	+5%	-5%	+10%	-10%
	HK$’000	HK$’000	HK$’000	HK$’000
Change in cost of inventories sold	3,111	(3,111)	6,222	(6,222)
Change in profit before tax	(3,111)	3,111	(6,222)	6,222
Change in profit for the year	(2,598)	2,598	(5,195)	5,195
FY2017
Hypothetical Fluctuation	+5%	-5%	+10%	-10%
	HK$’000	HK$’000	HK$’000	HK$’000
Change in cost of inventories sold	3,962	(3,962)	7,924	(7,924)
Change in profit before tax	(3,962)	3,962	(7,924)	7,924
Change in profit for the year	(3,308)	3,308	(6,617)	6,617

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FINANCIAL INFORMATION

Six months ended 30 September 2016
Hypothetical Fluctuation	+5%	-5%	+10%	-10%
	HK$’000	HK$’000	HK$’000	HK$’000
Change in cost of inventories sold	2,009	(2,009)	4,018	(4,018)
Change in profit before tax	(2,009)	2,009	(4,018)	4,018
Change in profit for the period	(1,678)	1,678	(3,355)	3,355
Six months ended 30 September 2017
Hypothetical Fluctuation	+5%	-5%	+10%	-10%
	HK$’000	HK$’000	HK$’000	HK$’000
Change in cost of inventories sold	2,103	(2,103)	4,206	(4,206)
Change in profit before tax	(2,103)	2,103	(4,206)	4,206
Change in profit for the period	(1,756)	1,756	(3,512)	3,512

Staff costs

Restaurant operations are highly service-oriented on the floor and also labour intensive in the kitchen. Staff costs were therefore another major component of our operating expenses. Our staff costs have a significant impact on our profitability and our Group’s success, which, to a considerable extent, depend upon our ability to attract, motivate, train and retain our qualified employees, including restaurant floor and kitchen staff. We offer competitive remuneration packages, training and promotion opportunities to our staff. For FY2016, FY2017 and the six months ended 30 September 2016 and 30 September 2017, our staff costs amounted to approximately HK$55.3 million, HK$65.2 million, HK$31.3 million and HK$34.5 million, respectively, representing approximately 28.4%, 27.8%, 26.6% and 26.9% of our revenue for the respective periods. As a percentage of revenue, our staff costs remained relatively stable during the Track Record Period.

In view of the local labour laws on the minimum wages, the statutory minimum wage in Hong Kong increased from HK$32.5 per hour in 2015 to HK$34.5 per hour in 2017. We believe the resulting upward pressure on our total staff costs as a percentage of total revenue could be mitigated by (i) increasing productivity of our staff and enhancing our efficiency by providing various on-the-job training programmes; (ii) minimising staff turnover by implementing various employee retention initiatives to promote employee loyalty and motivate our employees; and (iii) optimising staff mix through internal promotions, transfers and re-allocations of employees from our existing restaurants.

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FINANCIAL INFORMATION

The following sensitivity analysis illustrates the impact of hypothetical fluctuations in staff costs on our profit before tax and our profit for the year/period during the Track Record Period. Fluctuations are assumed to be 5% and 10% for FY2016, FY2017 and the six months ended 30 September 2016 and 30 September 2017, with reference to the median hourly wage in the restaurant industry according to the CIC Report.

FY2016
Hypothetical Fluctuation	+5%	-5%	+10%	-10%
	HK$’000	HK$’000	HK$’000	HK$’000
Change in staff costs	2,767	(2,767)	5,533	(5,533)
Change in profit before tax	(2,767)	2,767	(5,533)	5,533
Change in profit for the year	(2,310)	2,310	(4,620)	4,620
FY2017
Hypothetical Fluctuation	+5%	-5%	+10%	-10%
	HK$’000	HK$’000	HK$’000	HK$’000
Change in staff costs	3,259	(3,259)	6,517	(6,517)
Change in profit before tax	(3,259)	3,259	(6,517)	6,517
Change in profit for the year	(2,721)	2,721	(5,442)	5,442
Six months ended 30 September 2016
Hypothetical Fluctuation	+5%	-5%	+10%	-10%
	HK$’000	HK$’000	HK$’000	HK$’000
Change in staff cost	1,563	(1,563)	3,125	(3,125)
Change in profit before tax	(1,563)	1,563	(3,125)	3,125
Change in profit for the period	(1,305)	1,305	(2,609)	2,609
Six months ended 30 September 2017
Hypothetical Fluctuation	+5%	-5%	+10%	-10%
	HK$’000	HK$’000	HK$’000	HK$’000
Change in staff cost	1,726	(1,726)	3,453	(3,453)
Change in profit before tax	(1,726)	1,726	(3,453)	3,453
Change in profit for the period	(1,441)	1,441	(2,883)	2,883

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FINANCIAL INFORMATION

Rentals and related expenses

We operate all of our restaurants on leased premises, and the changes in the level of rental expenses will have a direct impact on our profitability. The costs of leasing and maintaining our restaurants and office premises are reflected in our rentals and related expenses. For FY2016, FY2017 and the six months ended 30 September 2016 and 30 September 2017, our rentals and related expenses amounted to approximately HK$41.6 million, HK$49.8 million, HK$24.2 million and HK$27.2 million, respectively, representing approximately 21.4%, 21.2%, 20.6% and 21.2% of our revenue for the respective periods.

A particular restaurant’s rental expenses normally vary with the size and location of the restaurant. Our restaurant leases have initial fixed lease terms of 18 months to six years, with some granting us an option to renew such lease terms upon re-negotiation of rental prices and other rental terms.

For every lease that our Group enters into, we will consider whether the rental expense, taking into account whether it is on fixed or contingent terms, as a percentage of our expected revenue to be derived by the restaurant in question, is within the range acceptable to us, taking into account the expected customer traffic and expected average spending of each customer. As we intend to continue to open new restaurants and expand our restaurant network, we expect our rentals and related expenses for our restaurants to increase generally in the future. According to the CIC report, the average CAGR for private retail premises in Hong Kong between 2012 and 2016 is 4.2%.

The following sensitivity analysis illustrates the impact of hypothetical fluctuations in rentals and related expenses on our profit before tax and our profit for the year/period during the Track Record Period. Fluctuations are assumed to be 4% for FY2016, FY2017 and the six months ended 30 September 2016 and 30 September 2017, with reference to the CAGR of rental index for private retail premises from 2012 to 2016 according to the CIC Report.

FY2016
Hypothetical Fluctuation	+4%	-4%
	HK$’000	HK$’000
Change in rentals and related expenses	1,663	(1,663)
Change in profit before tax	(1,663)	1,663
Change in profit for the year	(1,389)	1,389
FY2017
Hypothetical Fluctuation	+4%	-4%
	HK$’000	HK$’000
Change in rentals and related expenses	1,992	(1,992)
Change in profit before tax	(1,992)	1,992
Change in profit for the year	(1,663)	1,663

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FINANCIAL INFORMATION

Six months ended 30 September 2016
Hypothetical Fluctuation	+4%	-4%
	HK$’000	HK$’000
Change in rentals and related expenses	969	(969)
Change in profit before tax	(969)	969
Change in profit for the period	(809)	809
Six months ended 30 September 2017
Hypothetical Fluctuation	+4%	-4%
	HK$’000	HK$’000
Change in rentals and related expenses	1,088	(1,088)
Change in profit before tax	(1,088)	1,088
Change in profit for the period	(908)	908

Seasonality

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our financial information has been prepared in accordance with HKFRS. We have identified certain accounting policies that are critical to the preparation of our financial information. These accounting policies are important for understanding of our financial position and results of operations and are set forth in note 3 to the Accountants’ Report in Appendix I to this prospectus.

The preparation of the financial information requires our directors to make significant and subjective estimates, assumptions and judgments that affect the carrying amounts of assets and liabilities, at the end of each financial year/period. The estimates and associated assumptions are based on experience and other factors that are considered to be relevant. Our estimates and underlying assumptions are reviewed by our management on an ongoing basis.

However, uncertainties about these assumptions, estimates and judgments could result in outcomes that require a material adjustment to the carrying amount of the assets and liabilities in the future. These key assumptions and estimates are set forth in note 5 to the Accountants’ Report in Appendix I to this prospectus. Our Directors believe that the following critical accounting policies and accounting estimates involve the most significant or subjective judgments and estimates used in the preparation of the financial information that our management considers to be critical in the portrayal of the financial position and results of operations.

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FINANCIAL INFORMATION

The Accountants’ Report in Appendix I to this prospectus is not qualified or modified by the reporting accountants.

Revenue recognition

We measure revenue at fair value of the consideration received or receivable and represents amounts receivable for catering services provided in the normal course of business. We recognize revenue from our restaurant operations when our catering services have been provided to our customers.

Property, plant and equipment

During the Track Record Period, our property, plant and equipment comprised leasehold improvement, furniture and fixtures, catering and other equipment. Our property, plant and equipment, are stated at cost less subsequent accumulated depreciation and any subsequent accumulated impairment losses, if any. The cost of an item of property, plant and equipment comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Depreciation is recognised so as to write off the cost of items of property, plant and equipment less their residual values over their estimated useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each financial year/period end, with the effect of any changes in estimate accounted for a prospective basis. An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the combined statements of profit or loss and other comprehensive income.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is calculated on a first-in, first-out basis. Net realisable value is determined as estimated selling prices less any estimated costs to be incurred up to such sale. We estimate the net realisable value for inventories based primarily on the current market conditions and the historical experience of selling products of a similar nature.

Impairment of loans and receivables

We assess at the end of each financial year/period whether there is any objective evidence that a financial asset is impaired. To determine whether there is objective evidence of impairment, our Group considers factors such as the credit history, probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience of assets with similar credit risk characteristics.

Deferred tax assets

Deferred tax assets are recognised for deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary difference can be utilized. Significant management judgment is required to determine the amount of deferred tax assets

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FINANCIAL INFORMATION

that can be recognised, based upon the likely timing and level of future taxable profits. Our deferred tax assets amounted to approximately HK$0.9 million, HK$1.3 million and HK$1.7 million as at 31 March 2016, 31 March 2017 and 30 September 2017, respectively.

Our Directors believe that the estimates and judgments were accurate during the Track Record Period by comparing with actual results, and we confirm that there was no material change in our accounting policies, estimates and underlying assumptions during the Track Record Period, and as at the Latest Practicable Date, we did not expect to make any changes to such estimates and underlying assumptions in light of our current business operations and future plans.

RESULTS OF OPERATIONS OF OUR GROUP

The table below sets out a summary, for the years/periods indicated, of our combined results of operations. Our historical results presented below are not necessarily indicative of the results that may be expected for any future year/period:

Combined statements of profit or loss and other comprehensive income of our Group

Revenue Cost of inventories sold Gross profit Other revenue and other income Staff costs Depreciation of property, plant and equipment Rentals and related expenses Fuel and utility expenses Administrative expenses Finance cost Profit before tax Income tax expenses	FY2016 HK$’000 194,780 (62,223) 132,557 1,028 (55,331) (5,262) (41,573) (4,495) (13,573) (682) 12,669 (2,053)	FY2017 HK$’000 234,873 (79,244) 155,629 1,083 (65,171) (5,762) (49,802) (5,335) (16,285) (849) 13,508 (2,196)	For the six months ended 30 September 2016 2017 HK$’000 HK$’000 (unaudited) 117,625 128,207 (40,182) (42,062 77,443 86,145 402 462 (31,253) (34,528 (2,670) (2,845 (24,227) (27,211 (2,726) (2,604 (7,510) (9,052 (452) (380 9,007 9,987 (1,491) (1,656	For the six months ended 30 September 2016 2017 HK$’000 HK$’000 (unaudited) 117,625 128,207 (40,182) (42,062 77,443 86,145 402 462 (31,253) (34,528 (2,670) (2,845 (24,227) (27,211 (2,726) (2,604 (7,510) (9,052 (452) (380 9,007 9,987 (1,491) (1,656
				86,145 462 (34,528 (2,845 (27,211 (2,604 (9,052 (380
				9,987 (1,656

Profit and total comprehensive income for the year/period

10,616 11,312 Profit and total comprehensive income for the year/period attributable to: Owners of the Company 10,616 11,312	7,516 7,516	8,331
		8,331

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FINANCIAL INFORMATION

We generate our revenue substantially from our restaurant operations in Hong Kong during the Track Record Period. Our Group’s revenue was	settled by way of cash and credit cards during the Track Record Period for all of our retail customers.	The table below sets forth the breakdown of the revenue of each of our restaurants operated for the year/period indicated:	For the six months ended 30 September	FY2016 FY2017 2016 2017	% of total Operating % of total Operating % of total Operating % of total Operating	Revenue revenue profit/loss Revenue revenue profit/loss Revenue revenue profit/loss Revenue revenue profit/loss	HK$’000 % HK$’000 HK$’000 % HK$’000 HK$’000 % HK$’000 HK$’000 % HK$’000	(unaudited) (unaudited)	Mr. Steak — Buffet à la minute	MS(Buffet) 58,943 30.8% 6,534 67,540 29.0% 7,194 34,349 29.5% 3,755 35,259 27.7% 4,394	Mr. Steak	MS(ST) 12,423 6.5% 620 11,287 4.9% (11) 5,710 4.9% (21) 5,529 4.3% (262)	MS(TY) 22,748 12.0% 2,019 22,654 9.7% 2,014 11,655 10.0% 1,243 11,170 8.8% 1,459	MS(KF) 18,240 9.5% (314) 18,518 8.0% 41 9,906 8.5% 623 9,797 7.7% 178	MS(KH) 8,681 4.5% 344 23,714 10.2% 426 13,408 11.5% 1,094 13,428 10.5% 1,055	MS(KB) — 0.0% — 9,853 4.2% (491) — 0.0% (438) 9,376 7.4% 900	Specialty restaurants	BB(CWB) 12,502 6.5% (1,048) 16,031 6.9% 562 7,380 6.3% (193) 7,952 6.3% 39	BB(MK) 13,377 7.0% 1,121 11,371 4.9% 251 7,048 6.0% 952 7,073 5.6% 778	Hana(CWB) 5,000 2.6% (195) 8,529 3.6% 352 3,954 3.5% (172) 4,094 3.2% 198	Sky Bar	SB(CWB) 12,133 6.3% (1,060) 14,566 6.3% (394) 7,864 6.7% 99 7,845 6.2% 117	SB(MK) 21,433 11.2% 4,761 18,525 8.0% 3,979 9,724 8.3% 2,103 9,486 7.5% 1,281	SB(YL) 5,923 3.1% (1,293) 10,134 4.3% (873) 5,633 4.8% (30) 6,088 4.8% (299)	191,403 100.0% 11,489 232,722 100.0% 13,050 116,631 100.0% 9,015 127,097 100.0% 9,838	Notes:	(1) Our BB(CWB) was formerly known as ‘‘Mr. Steak’’ which commenced operation in May 2009. We ceased the operation of ‘‘Mr. Steak’’ in August 2015, renovated, rebranded	and recommenced business under our self-own brand ‘‘Bistro Bloom/Marbling’’ developed by our Group in September 2015. The location of the restaurant has remained	unchanged and the style of cuisine served has remained as western cuisine.	(2) Our BB(MK) was formerly known as ‘‘Mr. Steak’’ which commenced operation in December 2004. We ceased the operation of ‘‘Mr. Steak’’ in November 2016, renovated,	rebranded and recommenced business under our self-own brand ‘‘Bistro Bloom’’ developed by our Group in December 2016. The location of the restaurant has remained	unchanged and the style of cuisine served has remained as western cuisine.	(3) MS(KB) commenced operation in October 2016.	(4) MS(KH) commenced operation in December 2015.	(5) SB(YL) commenced operation in August 2015.

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FINANCIAL INFORMATION

In terms of revenue contributions, our top five restaurants contributed approximately 69.2%, 64.3%, 67.2% and 61.7% of our total revenue for FY2016, FY2017 and the six months ended 30 September 2016 and 30 September 2017, respectively.

Our customers who consume at our restaurants settle their bills by way of credit cards or cash. During the Track Record Period, credit card sales accounted for majority of our revenue settlement. Our revenue from provision of takeaway services to corporate customers was settled by cheque. The following table sets forth the breakdown of our revenue by means of settlement for the years/periods indicated:

Credit card sales Cash sales Others(Note) Total	FY2016 % of total revenue HK$’000 % 153,116 78.6 36,816 18.9 4,848 2.5 194,780 100.0	FY2017 % of total revenue HK$’000 % 191,586 81.6 41,135 17.5 2,152 0.9 234,873 100.0	For the six months ended 30 September 2016 2017 % of total revenue % of total revenue HK$’000 % HK$’000 % (unaudited) 97,266 82.7 103,116 80.4 19,364 16.5 23,440 18.3 995 0.8 1,651 1.3 117,625 100.0 128,207 100.0	For the six months ended 30 September 2016 2017 % of total revenue % of total revenue HK$’000 % HK$’000 % (unaudited) 97,266 82.7 103,116 80.4 19,364 16.5 23,440 18.3 995 0.8 1,651 1.3 117,625 100.0 128,207 100.0
				100.0

Note: During the Track Record Period, sale of food to corporate customers in relation to takeaway order services was settled by cheque.

Cost of inventories sold

Our cost of inventories sold primarily represents the cost of all the food ingredients and beverages used in our operations. The principal food ingredients purchased by our Group include meat, seafood, frozen food and vegetables. For FY2016, FY2017 and the six months ended 30 September 2016 and 30 September 2017, our cost of inventories sold amounted to approximately HK$62.2 million, HK$79.2 million, HK$40.2 million and HK$42.1 million, respectively, representing approximately 31.9%, 33.7%, 34.2% and 32.8% of our Group’s total revenue for such periods, respectively.

Throughout the Track Record Period, our cost of inventories sold continued to increase as our restaurant sales continued to increase. Going forward, we expect our cost of inventories sold to further increase as we will further expand our restaurant network in Hong Kong. Despite the growing inflation in general in recent years, the overall percentage of our cost of inventories sold over our total revenue generated from restaurant operations was maintained at a relatively stable level.

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FINANCIAL INFORMATION

Other revenue and other income

Our other revenue and other income primarily consists of tips income, sponsorship income and others. Tips income represents tips we received from customers as part of our restaurant operations. Sponsorship income represents income received from our suppliers for taking part in their brand promotion activities. Others primarily include compensation income from insurance in relation to the injuries of our staff or other sponsorship income. The following set forth the components of our other revenue and other income for the years/periods indicated:

Tips income Sponsorship income Gain on disposal of property, plant and equipment Management fee income Bank interest income Others Total	FY2016 HK$’000 384 369 85 — 7 183 1,028	% 37.4 35.9 8.2 0.0 0.7 17.8 100.0	FY2017 HK$’000 435 279 — 102 2 265 1,083	% 40.1 25.8 — 9.4 0.2 24.5 100.0	For the 2016 HK$’000 (unaudited) 225 53 — 35 1 88 402	six months ended 30 September 2017 % HK$’000 % 56.0 200 43.3 13.2 125 27.1 — — — 8.7 30 6.5 0.2 1 0.2 21.9 106 22.9 100.0 462 100.0	six months ended 30 September 2017 % HK$’000 % 56.0 200 43.3 13.2 125 27.1 — — — 8.7 30 6.5 0.2 1 0.2 21.9 106 22.9 100.0 462 100.0
							100.0

Staff costs

Our staff costs comprise salaries and benefits, including wages, salaries, bonuses, staff benefits and retirement benefit scheme contributions payable to all employee. We had 211, 215 and 222 full time employee who had passed the probationary period as at 31 March 2016, 31 March 2017 and 30 September 2017, respectively. Our staff costs amounted to approximately HK$55.3 million, HK$65.2 million, HK$31.3 million and HK$34.5 million for FY2016, FY2017 and the six months ended 30 September 2016 and 30 September 2017, respectively, representing approximately 28.4%, 27.8%, 26.6% and 26.9% of our revenue of such periods, respectively. The table below sets forth the staff costs by category for the years/periods indicated:

Salaries and other allowance Directors’ remuneration Retirement benefit scheme contributions Total	FY2016 HK$’000 52,193 685 2,453 55,331	FY2017 HK$’000 61,528 733 2,910 65,171	For the six months ended 30 September 2016 2017 HK$’000 HK$’000 (unaudited) 29,522 32,449 339 505 1,392 1,574 31,253 34,528	For the six months ended 30 September 2016 2017 HK$’000 HK$’000 (unaudited) 29,522 32,449 339 505 1,392 1,574 31,253 34,528
				34,528

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FINANCIAL INFORMATION

Depreciation of property, plant and equipment

Our depreciation of property, plant and equipment represents depreciation charges for our property, plant and equipment which comprise leasehold improvement, furniture and fixtures, catering and other equipment. For FY2016, FY2017 and the six months ended 30 September 2016 and 30 September 2017, our depreciation amounted to approximately HK$5.3 million, HK$5.8 million, HK$2.7 million and HK$2.8 million, respectively, representing 2.7%, 2.5%, 2.3% and 2.2% of our revenue of such periods, respectively.

Rentals and related expenses

Our rentals and related expenses primarily represent the rental payments under operating leases, government rates and property management fee paid for our restaurants and office premises. For the FY2016, FY2017 and the six months ended 30 September 2016 and 30 September 2017, our rentals and related expenses amounted to approximately HK$41.6 million, HK$49.8 million, HK$24.2 million and HK$27.2 million and accounted for approximately 21.4%, 21.2%, 20.6% and 21.2% of our revenue for such periods, respectively.

During Track Record Period, our restaurant leases typically have initial lease terms between 18 months to six years, with some lease agreements containing an option for us to renew such lease terms for periods ranging from one to two years, exercisable at our discretion. The following table sets forth the terms of our current leases for our restaurants as at the Latest Practicable Date:

Number of restaurants with leases expiring Option to renew No option to renew Total	By 31 March 2018 — — —	Beyond 31 March 2018 8 5 13	Total 8 5
			13

As at the Latest Practicable Date, as we have received indication from the landlord of MS(ST) of its intention to rebrand the relevant shopping mall, we do not plan to renew the lease for this restaurant. Our Group has exercised the options for the renewal of the leases of MS(Buffet) and SB(YL) pursuant to the respective tenancy agreements and both landlords have indicated the acceptance of such renewal. Save as disclosed above we had not received any indication from the landlords that they may not renew our leases.

Fuel and utility expenses

Our fuel and utility expenses primarily consist of expenses incurred for electricity, gas and water utilities. For FY2016, FY2017 and the six months ended 30 September 2016 and 2017, our utility expenses amounted to approximately HK$4.5 million, HK$5.3 million, HK$2.7 million and HK$2.6 million, respectively, representing approximately 2.3%, 2.3%, 2.3% and 2.0% of our revenue for such periods, respectively.

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FINANCIAL INFORMATION

Administrative expenses

Administrative expenses mainly include credit card handling charges, advertising and promotion expenses for our brands, cleaning expenses for both our restaurants and office, consumables for our restaurant operations, legal and professional fees, advertising and promotion expenses and insurance. The following table sets forth a breakdown of our administrative expenses for the years/periods indicated:

Credit card handling charges Cleaning expenses Consumables Legal and professional fees (Note) Advertising and promotion expenses Insurance Repairs and maintenance Transportation Printing and stationary Licence fee Telecommunication Auditors’ remuneration Loss on written-off of property, plant and equipment Others	FY 2016 2017 HK$’000 % HK$’000 % 2,916 21.5 3,571 21.9 2,197 16.2 4,012 24.6 1,667 12.3 2,083 12.8 1,555 11.4 1,003 6.2 1,289 9.5 1,523 9.4 1,032 7.6 1,138 7.0 554 4.1 766 4.7 496 3.7 510 3.1 481 3.5 501 3.1 152 1.1 143 0.9 145 1.1 147 0.9 100 0.7 120 0.7 — — 1 0.0 989 7.3 767 4.7 13,573 100.0 16,285 100.0	For the six months ended 30 September 2016 2017 HK$’000 % HK$’000 % (unaudited) 1,829 24.4 2,059 22.7 1,538 20.5 2,624 29.0 941 12.5 1,111 12.3 529 7.0 300 3.3 747 9.9 725 8.0 561 7.5 605 6.7 382 5.1 477 5.3 248 3.3 254 2.8 224 3.0 236 2.6 74 1.0 131 1.4 78 1.0 78 0.9 — — — — — — 52 0.6 359 4.8 400 4.4 7,510 100.0 9,052 100.0	For the six months ended 30 September 2016 2017 HK$’000 % HK$’000 % (unaudited) 1,829 24.4 2,059 22.7 1,538 20.5 2,624 29.0 941 12.5 1,111 12.3 529 7.0 300 3.3 747 9.9 725 8.0 561 7.5 605 6.7 382 5.1 477 5.3 248 3.3 254 2.8 224 3.0 236 2.6 74 1.0 131 1.4 78 1.0 78 0.9 — — — — — — 52 0.6 359 4.8 400 4.4 7,510 100.0 9,052 100.0
			100.0

Note: The legal and professional fees included the management and consultancy services provided by Elite to our Group in relation to the operation of our Group. For FY2016, FY2017 and the six months ended 30 September 2017, the consideration paid by our Group to Elite amounted to approximately HK$1,232,000, HK$986,000 and HK$233,000 respectively. These transactions had ceased in July 2017 and will not continue after the Listing.

For FY2016, FY2017 and the six months ended 30 September 2016 and 30 September 2017, our administrative expenses amounted to approximately HK$13.6 million, HK$16.3 million, HK$7.5 million and HK$9.1 million, respectively, representing approximately 7.0%, 6.9%, 6.4% and 7.1% of our total revenue for such periods, respectively.

Income tax expense

Our restaurant operations in Hong Kong are subject to Hong Kong profits tax of 16.5% on estimated assessable profit arising in Hong Kong. We have no tax obligation arising from other jurisdictions during the Track Record Period. Please refer to note 13 to the Accountants’ Report as set out in Appendix I to this prospectus for further details. Our effective tax rate for our restaurant operations in Hong Kong was approximately 16.2%, 16.3%, 16.6% and 16.6% for FY2016, FY2017 and the six months ended 30 September 2016 and 30 September 2017, respectively.

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FINANCIAL INFORMATION

PERIOD TO PERIOD COMPARISON OF RESULTS OF OPERATION

FY2016 compared to FY2017

Revenue

Our total revenue increased by approximately HK$40.1 million or 20.6%, from approximately HK$194.8 million for FY2016 to approximately HK$234.9 million for FY2017. The increase was mainly attributable to the followings:

Mr. Steak

Our revenue generated from ‘‘Mr. Steak’’ restaurants increased by approximately HK$23.9 million or 38.5% from approximately HK$62.1 million for FY2016 to approximately HK$86.0 million for FY2017. The increase was mainly attributable to the revenue derived from MS(KH) and MS(KB) which commenced its operation in December 2015 and October 2016, respectively.

Revenue contributed by MS(KH) increased by approximately HK$15.0 million or 1.72 times from approximately HK$8.7 million for FY2016 to approximately HK$23.7 million for FY2017 as MS(KH) commenced its operation in December 2015 and only four months of revenue were recorded for FY2016.

MS(KB) commenced its operation in October 2016 and contributed revenue of approximately HK$9.9 million for FY2017.

Mr. Steak — Buffet à la minute

Revenue of MS(Buffet) increased by HK$8.6 million or 14.6% from approximately HK$58.9 million of FY2016 to approximately HK$67.5 million of FY2017 with average number of customer visit increased by approximately 13.1% from 149,352 for FY2016 to approximately 168,887 for FY2017 with stable average spending per meal across FY2016 and FY2017, which was mainly attributable to increase in advertisements made during FY2017 as evidenced by increase in marketing expenses by approximately HK$0.2 million.

Sky Bar

Our revenue generated from ‘‘Sky Bar’’ restaurants increased by approximately HK$3.7 million or 9.4% from approximately HK$39.5 million for FY2016 to approximately HK$43.2 million for FY2017. The increase was mainly attributable to the increased revenue derived from SB(CWB) and SB(YL) with an aggregate amount of approximately HK$6.6 million and partially offset by decrease in revenue of SB(MK) by approximately HK$2.9 million.

Revenue contributed by SB(CWB) increased by approximately HK$2.4 million or 19.8% from approximately HK$12.1 million for FY2016 to approximately HK$14.5 million for FY2017. The increase in revenue was mainly attributable to the increase average spending of customer per meal of approximately 28.0% despite the decrease in number of customer visit by approximately 6.3%. The increase in average spending for customer per meal was mainly attributable to the launch of special menu for Sky Bar periodically.

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FINANCIAL INFORMATION

Revenue contributed by SB(YL) increased by approximately HK$4.2 million or 71.2% from approximately HK$5.9 million for FY2016 to approximately HK$10.1 million for FY2017 as SB(YL) commenced its operation in September 2015 hence only seven months of revenue were recorded for FY2016.

The decrease in revenue of SB(MK) by approximately HK$2.9 million or 13.6% from approximately HK$21.4 million for FY2016 to approximately HK$18.5 million for FY2017 was mainly due to the change in trade mix by landlord where more similar restaurants were introduced at the same floor during FY2017.

Specialty restaurants

The revenue of Hana(CWB) increased by approximately HK$3.5 million or 70.0% from approximately HK$5.0 million for FY2016 to approximately HK$8.5 million for FY2017, which was attributable to the increase in both average spending of customer per meal and average number of visits by approximately 12.8% and 51.3%, respectively. Hana(CWB) commenced operation at the current premise since November 2015 where only five-month result were recorded for FY2016. The revenue of BB(CWB) increased by approximately HK$3.5 million or 28.0% from approximately HK$12.5 million for FY2016 to approximately HK$16.0 million for FY2017, which was mainly attributable to the increase in average number of customer visits by approximately 33.6% despite the slight decrease in average spending of customer per meal by approximately 4.1%. BB(CWB) was closed for renovation during August 2015 to September 2015 and the number of customer visits for FY2017 increased after the renovation.

The increased revenue from Hana(CWB) and BB(CWB) was partially offset by the decrease in revenue in BB(MK) by approximately HK$2.0 million or 14.9% from approximately HK$13.4 million of FY2016 to approximately HK$11.4 million for FY2017. The decrease in revenue of BB(MK) was resulted from the renovation of restaurant from October 2016 to November 2016 for the purpose of rebranding from ‘‘Mr. Steak’’ to ‘‘Bistro Bloom’’. The rebranded BB(MK) commenced business on same site in December 2016. The restaurant served lunch only during the renovation period and therefore its revenue decreased.

Cost of inventories sold

Our costs of inventories sold increased by approximately HK$17.0 million, or 27.3% from approximately HK$62.2 million for FY2016 to approximately HK$79.2 million for FY2017, which was primarily due to increase in cost of inventories sold contributed from restaurants under Mr. Steak brand by approximately HK$8.2 million for FY2017 as compared with FY2016, while increase in cost of inventories sold contributed from restaurants under Mr. Steak-Buffet à la minute, Sky Bar and specialty restaurants were approximately HK$5.3 million, HK$2.5 million and HK$1.5 million, respectively, for FY2017 as compared with FY2016.

Mr. Steak

The increase in cost of inventories sold under Mr. Steak brand by approximately HK$8.2 million or 44.8% from approximately HK$18.3 million for FY2016 to approximately HK$26.5 million for FY2017 was mainly contributed by the commencement of operation of MS(KH) in December 2015, the revenue of which increased by approximately HK$4.9 million or 1.8 times from approximately HK$2.7

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million for FY2016 to approximately HK$7.6 million for FY2017. The increase was also due to the commencement of operation of MS(KB) in October 2016 that contributed an increase of approximately HK$3.2 million for FY2017.

Mr. Steak — Buffet à la minute

The increase in cost of inventories sold contributed by MS(Buffet) of approximately HK$5.3 million or 23.3% from approximately HK$22.7 million for FY2016 to approximately HK$28.0 million for FY2017 was corresponding to the increase in revenue of MS(Buffet).

Sky Bar

The cost of inventories sold of Sky Bar increased by approximately HK$2.5 million or 22.7% from approximately HK$11.0 million for FY2016 to approximately HK$13.5 million for FY2017, which was mainly contributed by SB(YL), of which cost of inventories sold increased by approximately HK$1.2 million. SB(YL) commenced operation since September 2015 and therefore only seven-month cost of inventories sold was recorded in FY2016. The increase in the cost of inventories sold was also contributed by SB(CWB) which had an increase in revenue of approximately 19.8% as explained above.

Specialty restaurants

The cost of inventories sold of our specialty restaurants increased by approximately HK$1.5 million or 16.9% from HK$8.9 million for FY2016 to approximately HK$10.4 million for FY2017, which was mainly contributed by BB(CWB) and Hana(CWB), of which cost of inventories sold increased by approximately HK$1.0 million and HK$1.0 million, respectively. The increase in costs of inventories sold of Hana(CWB) was due to the introduction of special menu in providing premium beef from Japan.

Gross profit and gross profit margin

Our gross profit increased by approximately HK$23.0 million, or 17.3% from approximately HK$132.6 million for FY2016 to approximately HK$155.6 million for FY2017. The increase of gross profit was mainly due to (i) commencement of Hana(CWB) at its current premise since November 2015; (ii) commencement of SB(YL) and MS(KH) since August 2015 and December 2015 respectively which contributed only seven-month and four-month results for FY2016; and (iii) commencement of MS(KF) since October 2016 which contributed six-month result for FY2017. However, the overall gross profit margin decreased from approximately 68.1% for FY2016 to approximately 66.2% for FY2017. The decrease was mainly due to the larger revenue contribution by MS(Buffet) during FY2017. Given the nature of buffet dining, MS(Buffet) hence normally recorded a lower gross profit margin when compared to the overall gross profit margin of our Group.

Other revenue and other income

Our other revenue and other income remained a stable level with approximately HK$1.0 million for FY2016 and approximately HK$1.1 million for FY2017.

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Staff costs

Our staff costs increased by approximately HK$9.9 million, or 17.9% from approximately HK$55.3 million for FY2016 to approximately HK$65.2 million for FY2017. The increase in staff costs was primarily due to an increase in the average number of headcounts for the expansion of our Group given that SB(YL), MS(KH) and MS(KB) commenced operation since August 2015, December 2015 and October 2016 respectively. The increase in our staff costs was in line with our increase in revenue and the total number of restaurants during FY2017.

Depreciation of property, plant and equipment

Our depreciation increased by approximately HK$0.5 million, or 9.4%, from approximately HK$5.3 million for FY2016 to approximately HK$5.8 million for FY2017. The increase was mainly due to increase in depreciation for SB(YL), MS(KH) and MS(KB) which commenced operation since August 2015, December 2015 and October 2016, respectively.

Rentals and related expenses

Our rentals and related expenses increased by approximately HK$8.2 million, or 19.7% from approximately HK$41.6 million for FY2016 to approximately HK$49.8 million for FY2017. The increase was primarily due to the increase in rent and rates as well as building management fee by approximately HK$6.9 million and HK$1.1 million, respectively. The increase in rent and rates from FY2016 to FY2017 was principally attributable to the commencement of businesses of (i) SB(YL) in August 2015 that increased our rent and rates by approximately HK$0.5 million; (ii) MS(KH) in December 2015 that increased our rents and rates by HK$2.6 million; (iii) MS(KB) in October 2016 that resulted in an increase in rents and rates by approximately HK$1.8 million. In addition, the increase in turnover rent by MS(Buffet) given the increase in revenue and the relocation of Hana(CWB) led to increase in rents and rates by approximately HK$1.3 million and approximately HK$0.8 million for FY2017, respectively.

Fuel and utility expenses

Our fuel and utility expenses increased by approximately HK$0.8 million, or 17.8% from approximately HK$4.5 million for FY2016 to approximately HK$5.3 million for FY2017 which was primarily due to increase in number of restaurants in operations during FY2017.

Administrative expenses

Our administrative expenses increased by approximately HK$2.7 million or 19.9% from approximately HK$13.6 million for FY2016 to approximately HK$16.3 million for FY2017. The increase was primarily due to increase in cleansing expense, credit card charges and consumable expense by approximately HK$1.8 million, HK$0.7 million and HK$0.4 million, respectively, owing to increase in number of restaurants and the engagement of a dish cleaning service provider since third quarter of FY2016.

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FINANCIAL INFORMATION

Profit before tax

As a result of the foregoing, we had profit before tax of approximately HK$12.7 million and HK$13.5 million for FY2016 and FY2017, respectively.

Income tax expenses

Our income tax expenses increased by approximately HK$0.1 million, or 4.8% from approximately HK$2.1 million for FY2016 to approximately HK$2.2 million for FY2017. Our effective income tax rates for FY2016 and FY2017 were approximately 16.2% and 16.3%, respectively.

Net profit and net profit margin

As a result of the cumulative effect of the above factors, our net profit was approximately HK$10.6 million and HK$11.3 million for FY2016 and FY2017, respectively.

Our net profit margin was approximately 5.4% and 4.8% for FY2016 and FY2017, respectively. The decrease in net profit margin was mainly due to the decrease in gross profit margin and increase in staff costs and rental and related expenses.

Six months ended 30 September 2016 compared to six months ended 30 September 2017

Revenue

Our revenue increased by approximately HK$10.6 million or 9.0%, from approximately HK$117.6 million for the six months ended 30 September 2016 to approximately HK$128.2 million for the six months ended 30 September 2017. The increase was mainly attributable to the followings:

Mr. Steak

Increase in overall revenue was mainly attributable to revenue contribution by MS(KB) amounted to approximately HK$9.4 million since its commencement of business in October 2016. The increase in revenue was partially offset by the decrease in revenue of MS(TY) by approximately HK$0.5 million or 4.3% from approximately HK$11.7 million for the six months ended 30 September 2016 to approximately HK$11.2 million for the six months ended 30 September 2017 owing to decrease in the number of average customer visits by approximately 3.4% while the average spending per meal remained stable.

Mr. Steak — Buffet à la minute

MS(Buffet) also contributed slight increase in revenue by approximately HK$1.0 million or 2.9% from approximately HK$34.3 million for the six months ended 30 September 2016 to approximately HK$35.3 million for the six months ended 30 September 2017 with average spending per meal increased from approximately HK$388 to approximately HK$415 due to the menu price adjustment.

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FINANCIAL INFORMATION

Sky Bar

Our revenue generated from Sky Bar increased slightly from approximately HK$23.2 million for the six months ended 30 September 2016 to approximately HK$23.4 million for the six months ended 30 September 2017. The increase was mainly attributable to the increase in revenue of SB(YL) by approximately HK$0.5 million and partially offset by decrease in revenue of SB(MK) by approximately HK$0.2 million, which was mainly attributable by the decrease in average number of customer visits while the average spending per meal remained stable.

Specialty restaurants

The revenue of BB(CWB) increased by approximately HK$0.6 million or 8.1% from approximately HK$7.4 million for the six months ended 30 September 2016 to approximately HK$8.0 million for the six months ended 30 September 2017 with increase in average spending of customer per meal by approximately 6.8%.

Cost of inventories sold

Our costs of inventories sold increased by approximately HK$1.9 million, or 4.7% from approximately HK$40.2 million for the six months ended 30 September 2016 to approximately HK$42.1 million for the six months ended 30 September 2017, which was primarily due to increase in cost of inventories sold contributed by MS(KB) which commenced its operation since October 2016 where no such costs was incurred for the six months ended 30 September 2016.

Gross profit and gross profit margin

Our gross profit increased by approximately HK$8.7 million, or 11.2% from approximately HK$77.4 million for the six months ended 30 September 2016 to approximately HK$86.1 million for the six months ended 30 September 2017. The increase in gross profit was mainly contributed by MS(KB) which commenced operation since October 2016. The overall gross profit margin increased by approximately 1.4% from approximately 65.8% for the six months ended 30 September 2016 to 67.2% for the six months ended 30 September 2017, which was mainly attributable to (i) adjustment of our menu, including introduction of seasonal items and special items to cater for different variety of customers and elimination of food items with lower profit margins during the six months ended 30 September 2017 (ii) menu price upward adjustments.

Other revenue and other income

Our other revenue and other income increased by approximately HK$0.1 million or 25.0% from approximately HK$0.4 million for the six months ended 30 September 2016 to approximately HK$0.5 million for the six months ended 30 September 2017, primarily resulting from increase in sponsorship income of approximately HK$72,500 for the six months ended 30 September 2017.

Staff costs

Our staff costs increased by approximately HK$3.2 million, or 10.2% from approximately HK$31.3 million for the six months ended 30 September 2016 to approximately HK$34.5 million for the six months ended 30 September 2017. The increase in staff costs was primarily due to an increase in the

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number of headcounts employed owing to the opening of MS(KB) in October 2016. As a percentage of our revenue, our staff costs increased from approximately 26.6% for the six months ended 30 September 2016 to approximately 26.9% for the six months ended 30 September 2017.

Depreciation of property, plant and equipment

Our depreciation increased by approximately HK$0.1 million, or 3.7%, from approximately HK$2.7 million for the six months ended 30 September 2016 to approximately HK$2.8 million for the six months ended 30 September 2017.

Rentals and related expenses

Our rentals and related expenses increased by approximately HK$3.0 million, or 12.4% from approximately HK$24.2 million for the six months ended 30 September 2016 to approximately HK$27.2 million for the six months ended 30 September 2017. The increase was mainly due to the increase in minimum lease payment of MS(KB), BB(MK) and SB(MK) and increase in turnover rent of MS(Buffet) and SB(CWB).

Fuel and utility expenses

Our fuel and utility expenses decreased slightly by approximately HK$0.1 million or 3.7% from approximately HK$2.7 million for each of the six months ended 30 September 2016 to approximately HK$2.6 million for the six months ended 30 September 2017, respectively given the combined effects of commencement of operations by MS(KB) in October 2016 and the decrease in tariff charged by electricity providers in 2017.

Administrative expenses

Our administrative expenses increased by approximately HK$1.6 million, or by 21.3% from approximately HK$7.5 million for the six months ended 30 September 2016 to approximately HK$9.1 million for the six months ended 30 September 2017. The increase was primarily due to increase in cleansing expense, credit card charges and consumable expense by approximately HK$1.1 million, HK$0.2 million and HK$0.2 million, respectively, given the increase in total number of restaurants and the engagement of a dish cleaning service provider since third quarter of FY2016.

Profit before tax

As a result of the foregoing, we had profit before tax of approximately HK$9.0 million and approximately HK$10.0 million, for the six months ended 30 September 2016 and 30 September 2017, respectively.

Income tax expenses

Our income tax expenses increased by approximately HK$0.2 million, or 13.3% from approximately HK$1.5 million for the six months ended 30 September 2016 to approximately HK$1.7 million for the six months ended 30 September 2017. Our effective income tax rate was approximately 16.6% for the six months ended 30 September 2016. For the six months ended 30 September 2017, we recorded an effective income tax rate of approximately 16.6%.

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FINANCIAL INFORMATION

Net profit and net profit margin

As a result of the cumulative effect of the above factors, our net profit was approximately HK$7.5 million and approximately HK$8.3 million for each of the six months ended 30 September 2016 and 30 September 2017, respectively.

Our net profit margin was approximately 6.4% and 6.5% for the six months ended 30 September 2016 and 30 September 2017, respectively. The net profit margin remained stable as the slight improvement of gross profit margin was partially offset by the increase in rental expenses and staff costs.

COMMITMENTS

As at 31 March 2016, 31 March 2017 and 30 September 2017, our Group had commitments for future minimum lease payments in respect of rented premises under non-cancellable operating leases which fall due as follows:

Within one year In the second to fifth years, inclusive	As at 31 March 2016 2017 HK$’000 HK$’000 32,782 35,782 44,009 50,011 76,791 85,793	As at 30 September 2017 HK$’000 36,533 39,712
		76,245

The above lease commitments represent basic rents only and do not include contingent rents payable in respect of certain restaurants leased by our Group. In general, these contingent rents are calculated based on the relevant restaurants’ turnover pursuant to the terms and conditions as set out in the respective rental agreements. It is not possible to estimate in advance the amount of such contingent rent payable. During the Track Record Period, the amounts of contingent rental recognised as expenses were approximately HK$3.5 million, HK$4.2 million and HK$2.5 million for FY2016, FY2017 and the six months ended 30 September 2017, respectively.

Save as disclosed above, we did not have any material capital commitments as at 31 March 2016, 31 March 2017 and 30 September 2017. As at Latest Practicable Date, we have entered a rental agreement with landlord for a lease term of 4 years and paid the deposit of approximately HK$0.7 million for our new restaurant in East Point City at Tseung Kwan O. It commenced operation in January 2018.

Other than the contractual obligations set forth above, we do not have any other operating lease commitments, capital commitments or other long-term liabilities.

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FINANCIAL INFORMATION

CAPITAL EXPENDITURE AND COMMITMENTS

Capital expenditure

Our Group’s capital expenditures during the Track Record Period are set out in the table below:

			For the six
			months ended
			30 September
	FY2016	FY2017	2017
	HK$’000	HK$’000	HK$’000
Leasehold improvements	5,562	2,817	1,015
Furniture and fixtures	739	432	48
Catering and other equipment	1,514	533	40

Our planned capital expenditures in the coming years will include the opening and upgrading of restaurants and the setting up of a central kitchen in Hong Kong as disclosed in the section headed ‘‘Future Plans and Use of Proceeds’’ in this prospectus. Our Directors expects that the planned capital expenditure will be principally funded by the net proceeds from the Share Offer and cash generated from our operations, as well as other possible equity and debt financings as and when appropriate.

Save as disclosed above and the additions of property, plant and equipment, such as office equipments, furniture, fixtures and equipments and leasehold improvement necessary for our business operations which will be made by our Group from time to time, our Group had no material planned capital expenditures as at the Latest Practicable Date.

Operating lease commitments

Our Group as lessee

Our Group leases various restaurant properties and office premises under operating lease agreements. The following table sets forth our future minimum lease payments under non-cancellable operating leases as at 31 March 2016, 31 March 2017 and 30 September 2017, respectively:

Within one year In the second to fifth years, inclusive	As at 31 2016 HK$’000 32,782 44,009 76,791	March 2017 HK$’000 35,782 50,011 85,793	As at 30 September 2017 HK$’000 36,533 39,712
			76,245

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FINANCIAL INFORMATION

LIQUIDITY AND CAPITAL RESOURCES

We have historically funded our liquidity and capital requirements primarily through a combination of capital contributions from our Controlling Shareholders and internally generated funds form our operating activities. We had net cash generated from our restaurant operating activities of approximately HK$16.8 million and HK$22.6 million and HK$12.4 million for FY2016, FY2017 and the six months ended 30 September 2017, respectively. We require cash mainly for general working capital needs and capital expenditures for opening new restaurants and upgrading our existing restaurants in Hong Kong. As at 31 March 2016, 31 March 2017 and 30 September 2017, we had bank balance and cash of approximately HK$9.3 million, HK$5.1 million and HK$14.2 million, respectively. All of our Group’s cash and bank balances are held in Hong Kong dollars.

We intend to finance our working capital requirements and the intended capital expenditures for the 12 months following the date of this prospectus with the following sources of funding:

(i) net cash inflows to be generated from our operating activities;
(ii) the cash and bank balances available, which were HK$15.8 million as at 31 January 2018; and
(iii) net proceeds to be received by our Group from the Share Offer.

Based on the above, we believe that we will have sufficient funds for our present working capital requirement for at least the next 12 months from the date of this prospectus.

Cash flows of our Group

The following table sets forth the combined statements of cash flows for FY2016, FY2017 and the six months ended 30 September 2016 and 30 September 2017:

Net cash generated from operating activities Net cash used in investing activities Net cash used in financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year/period Cash and cash equivalents at the end of the year/period	FY2016 HK$’000 16,793 (7,705) (10,108) (1,020) 10,369 9,349	FY2017 HK$’000 22,561 (4,149) (22,648) (4,236) 9,349 5,113	For the six months ended 30 September 2016 2017 HK$’000 HK$’000 (unaudited) 11,862 12,350 (599) (770) (11,147) (2,498) 116 9,082 9,349 5,113 9,465 14,195

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FINANCIAL INFORMATION

Net cash generated from operating activities

We derive our cash inflow generated from operating activities primarily from the receipts from our restaurant operations. Cash outflow from operating activities mainly comprised costs of inventories sold, staff costs, rentals and related expenses and administrative expenses. Our cash generated from operating activities reflected our profit before tax, adjusted for non-cash and non-operating items, which primarily included, depreciation of property, plant and equipment, the effects of changes in working capital, which mainly consisted of changes in trade receivables, deposits, prepayments and other receivables, trade payables and accruals and other payments.

For FY2016, net cash generated from operating activities was approximately HK$16.8 million, consisting of cash generated from operations of approximately HK$18.8 million and income tax paid of approximately HK$2.0 million. Our cash flow before working capital adjustments was approximately HK$18.5 million. Profit before tax for FY2016 was approximately HK$12.7 million. Positive working capital adjustments reflected an increase in the trade payables of approximately HK$0.8 million which was primarily attributable to the increase in trade payables in relation to the procurement of raw materials and an increase in other payables and accruals due to utility expenses incurred of approximately HK$0.2 million under the commercial operation of SB(YL) and MS(KH) in August 2015 and December 2015, respectively. Such positive adjustments were partially offset by an increase in deposit, prepayments and other receivables by approximately HK$0.6 million of deposits paid for SB(YL) and MS(KH).

For FY2017, net cash generated from operating activities was approximately HK$22.6 million, consisting of cash generated from operations of approximately HK$24.2 million and income tax paid of approximately HK$1.6 million. Our cash flow before working capital adjustments was approximately HK$20.1 million. Profit before tax for FY2017 was approximately HK$13.5 million. Positive working capital adjustments reflected an increase in the trade payables of approximately HK$4.4 million which was primarily attributable to the increase in trade payables in relation to the procurement of raw materials with food and beverages suppliers as a result of the expansion of our restaurant network and increase in total purchase and an increase in other payables and accruals due to accrued staff costs under the commencement of operations of MS(KB) and turnover rent payable of MS(Buffet) under the promising performance incurred of approximately HK$1.2 million. Such positive adjustments were partially offset by an increase in deposit, prepayments and other receivables by approximately HK$1.7 million of deposits paid for MS(KB) which commenced operation in October 2016.

For the six months ended 30 September 2017, net cash generated from operating activities was approximately HK$12.4 million and net profit of approximately HK$8.3 million. Our cash flow before working capital adjustments was approximately HK$13.3 million. Negative working capital adjustments reflected an increase in the trade receivables of approximately HK$1.1 million which was primarily attributable to increase in credit card sales during month-end of September 2017 when compared to the year ended 31 March 2017 and resulted in an increase in trade receivables. Such negative adjustments were partially offset by an increase in trade payables by approximately HK$0.4 million which was mainly attributable to higher purchase for the six months ended 30 September 2017 when compared to 31 March 2017 given the increase in revenue, and increase in accruals and other payables approximately HK$0.1 million given the increase in turnover rent payable by MS(Buffet).

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FINANCIAL INFORMATION

Net cash used in investing activities

Our cash used in investing activities mainly consists of purchase for acquisition of property, plant and equipment. Our cash flow from investing activities mainly represents interest received.

For FY2016, we had net cash used in investing activities of HK$7.7 million, which was mainly due to the purchase of property, plant and equipment with the amount of HK$7.8 million mainly for the renovation and rebranding of ‘‘Mr. Steak’’ in Fashion Walk, Causeway Bay to BB(CWB) in September 2015, renovation and relocation of Hana(CWB) in November 2015 and commencement of business for SB(YL) and MS(KH) in August 2015 and December 2015, respectively.

For FY2017, we had net cash used in investing activities of HK$4.1 million, which was primarily due to the purchase of property, plant and equipment in the amount of HK$3.8 million mainly for renovation and rebranding of ‘‘Mr. Steak’’ in Langham Place, Mong Kok to BB(MK) in December 2016 during the year and commencement of business for MS(KB) in October 2016.

For the six months ended 30 September 2017, we had net cash used in investing activities of approximately HK$0.8 million, was which primarily due to the purchase of property, plant and equipment in the amount of HK$0.7 million mainly for modification of SB(MK) during April 2017.

Net cash used in financing activities

Our cash inflows from financing activities primarily include cash received from bank borrowings for general working capital. Our cash outflows from financing activities primarily include dividend paid, repayment of bank borrowing, advance to director, shareholders, related companies and interest payment.

Net cash used in financing activities for FY2016 was approximately HK$10.1 million, which was primarily consisted of dividend paid of approximately HK$9.8 million, advanced to Active Wisdom of approximately HK$6.0 million which was of non-trade nature, repayment of bank borrowings of approximately HK$3.9 million and the advance to a director and shareholders of approximately HK$1.2 million and approximately HK$1.1 million which were unsecured, interest free and repayable on demand, respectively. These cash outflow was partially offset by the proceeds from revolving bank facilities of HK$12.5 million.

Net cash used in financing activities for FY2017 was approximately HK$22.6 million, which was primarily consisted of divided paid of approximately HK$12.4 million, repayment of bank borrowings of approximately HK$4.9 million and the advance to a director and shareholders of approximately HK$2.4 million and approximately HK$2.1 million, respectively.

For the six months ended 30 September 2017, our cash used in financing activities was approximately HK$2.5 million, which was primarily consisted of dividend paid of approximately HK$5.9 million, repayment of bank borrowings of approximately HK$2.6 million, repayment to a related company of approximately HK$6.0 million, the advance to a director and shareholders of approximately HK$0.5 million and approximately HK$0.3 million which were of unsecured, interest free and repayable on demand, respectively. These cash outflows was partially offset by the proceeds from bank borrowing of HK$7.0 million from revolving bank facilities and repayment from Active Wisdom by approximately HK$6.0 million.

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FINANCIAL INFORMATION

ANALYSIS OF SELECTED ITEMS OF COMBINED STATEMENTS OF FINANCIAL POSITION

Property, plant and equipment

Our property, plant and equipment decreased by approximately HK$2.0 million or 13.3% from approximately HK$15.0 million as at 31 March 2016 to approximately HK$13.0 million as at 31 March 2017, primarily due to the additions to property, plant and equipment of approximately HK$3.8million under the commercial operation of MS(KB), net-off by depreciation for FY2017 amounted to approximately HK$5.8 million.

Our property, plant and equipment decreased by approximately HK$1.8 million or 13.8% from approximately HK$13.0 million as at 31 March 2017 to approximately HK$11.2 million as at 30 September 2017, primarily due to additions to property, plant and equipment by approximately HK$1.1million under the renovation of SB(MK) in April 2017, net-off by depreciation amounted approximately HK$2.8 million for the six months ended 30 September 2017.

Inventories

During the Track Record Period, our inventories mainly comprised of food and beverages used in our operations. Please refer to the sections headed ‘‘Business — Overview of restaurant operations and management — Our raw materials and purchase cost control’’ and ‘‘Business — Overview of restaurant operations and management — Inventory management’’ for details on our inventory policy.

The following table sets out the breakdown of our Group’s inventories as at the end of each reporting period during the Track Record Period:

Food ingredients Beverages and others Total	As at 31 March 2016 2017 HK$’000 HK$’000 497 511 247 191 744 702	As at 30 September 2017 HK$’000 542 188
		730

The following table sets out the inventory turnover days of our Group for the Track Record Period:

						For the six
						months ended
						30 September
				FY2016	FY2017	2017
				Days	Days	Days
Inventory	turnover	days	(Note)	4.2	3.3	3.1

Note: Inventory turnover days are calculated by dividing the average inventory balance by cost of inventories sold for the year multiplied by the number of days during the year (i.e. 365 days for each of the years ended 31 March 2016 and 2017 and 183 days for the six months ended 30 September 2017). Average inventory balance is the average of the beginning and ending inventory balances for the relevant year/period and then multiplied by 365/183 days.

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FINANCIAL INFORMATION

As at 31 March 2016 and 31 March 2017, our inventory balance remained stable at approximately HK$0.7 million.

Our inventory turnover days remained relatively low level with approximately 4.2 days, 3.3 days and 3.1 days for FY2016, FY2017 and the six months ended 30 September 2017, primarily attributable to a stringent inventory control measure we undertook in our Group in order to maintain inventory level at optimum level for three to four days while keeping the freshness of food ingredients despite there was an increase in total number of restaurants from 11 restaurants as at 31 March 2016 to 12 restaurants as at 30 September 2017.

As at Latest Practicable Date, 100% of our inventories as at 30 September 2017 have been subsequently utilised.

Trade receivables

During the Track Record Period, since substantially all of our customers settled their bills by cash or credit cards, our Group’s trade receivables mainly represented receivables from credit card issuers and certain corporate customers who settled with us by cheques. The settlement terms of credit card companies are usually 7 days after the service rendered date; while certain corporate customers which are considered well established, we offer credit terms of 90 days. We normally receive remittances from the relevant credit card issuers, net of service charges, on the second business day after the day on which the credit card transaction is approved.

As at 31 March 2016, 31 March 2017 and 30 September 2017, our trade receivables amounted to approximately HK$1.1 million, HK$0.9 million and HK$2.0 million, respectively. The relatively higher balance of trade receivables as at 30 September 2017 was primarily due to the higher portion of settlement by our restaurant customers by way of credit cards at that particular time.

The following table sets out the ageing analysis of our trade receivables based on the invoice date as at the end of each reporting period during the Track Record Period:

0 to 30 days 31 to 60 days 61 to 90 days Over 90 days Total	As at 31 March 2016 2017 HK$’000 HK$’000 841 833 207 26 5 25 15 34 1,068 918	As at 30 September 2017 HK$’000 1,667 227 26 50
		1,970

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FINANCIAL INFORMATION

As at 31 March 2016, 31 March 2017 and 30 September 2017, approximately HK$15,000, HK$34,000 and HK$50,000 of our trade receivables were past due for which our Group has not provided for impairment loss. Set out below is the ageing analysis on such trade receivables:

One to three months past due More than three months past due Total	As at 31 March 2016 2017 HK$’000 HK$’000 9 25 6 9 15 34	As at 30 September 2017 HK$’000 48 2
		50

Based on past experiences, our management believes that no impairment allowances is necessary in respect of these amounts as there has not been a significant change in credit quality of the trade receivables from the invoice date up to the end of the reporting period.

As at Latest Practicable Date, approximately HK$1.9 million or 99.9% of our Group’s trade receivables as at 30 September 2017 were subsequently settled.

The following table sets out the trade receivables turnover days of our Group for the Track Record Period:

Trade receivables turnover days (Note)	FY2016 (Days) 2.0	FY2017 (Days) 1.5	For the six months ended 30 September 2017 (Days) 2.1

Note: Trade receivables turnover days are calculated by dividing the average trade receivables balance by revenue for the relevant year multiplied by the number of days during the year (i.e. 365 days for each of the years ended 31 March 2016 and 2017 and 183 days for the six months ended 30 September 2017). Average trade receivables balance is the average of the beginning and ending trade receivables balances for the relevant year/period end then multiplied by 365/183 days.

For FY2016, FY2017 and the six months ended 30 September 2017, trade receivables turnover days of our Group were approximately 2.0 days, 1.5 days and 2.1 days respectively, which was generally in line with the fact that over average 80.3% of our total revenue was settled by our customers by credit cards over the Track Record Period.

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FINANCIAL INFORMATION

Deposits, prepayments and other receivables

The table below sets out our total prepayments, deposits and other receivables as at the dates indicated:

Deposits, prepayment and other receivables	As at 31 March 2016 2017 HK$’000 HK$’000 13,785 15,876	As at 30 September 2017 HK$’000 15,899

Our deposits, prepayments and other receivables increased by approximately HK$2.1 million or 15.2% from HK$13.8 million as at 31 March 2016 to approximately HK$15.9 million as at 31 March 2017, primarily due to deposit made for lease agreement of our Group. Our deposits, prepayments and other receivables remained stable at approximately HK$15.9 million as at 30 September 2017.

Trade payables

Our trade payables mainly related to our purchases of food ingredients and beverages from suppliers for our restaurant operations. All of our trade payables are expected to be settled within 90 days. During the Track Record Period, payment terms granted by our suppliers are normally within 30 days to 60 days after the monthly statement is issued.

The following table sets out the ageing analysis of our trade payables based on the invoice date as at the end of each reporting period during the Track Record Period:

0–30 days 31–60 days 61–90 days Over 90 days Total	As at 31 March 2016 2017 HK$’000 HK$’000 5,812 5,727 — 813 — 1,560 — 2,088 5,812 10,188	As at 30 September 2017 HK$’000 6,913 — 3,467 202
		10,582

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FINANCIAL INFORMATION

The following table sets out the trade payable turnover days of our Group for the Track Record Period:

Trade payables turnover days (Note)	FY2016 (Days) 31.7	FY2017 (Days) 36.9	For the six months ended 30 September 2017 (Days) 45.2

Note: Trade payables turnover days are calculated by dividing the average trade payables balance by cost of inventories sold for the relevant year multiplied by the number of days during the year (i.e. 365 days for each of the years ended 31 March 2016 and 2017 and 183 days for the six months ended 30 September 2017). Average trade payables balance is the average of the beginning and ending trade payables balances for the relevant year/period end then multiplied by 365/183 days.

As at 31 March 2016, 31 March 2017 and 30 September 2017, our trade payables amounted to approximately HK$5.8 million, HK$10.2 million and HK$10.6 million, respectively. The increase in our trade payables was generally in line with the increase in our costs of inventories sold mainly as a result of the expansion of our restaurant network and increase in total purchase. As at 31 March 2017, our Group settled part of the trade payables aged between 61–90 days prior to period end, hence lowered its outstanding balance. Overall, the total balance of trade payables of our Group as at 31 March 2017 and 30 September 2017 remained at similar level which was in line with our scale of operation. Our trade payables increased slightly from approximately HK$10.2 million as at 31 March 2017 to approximately HK$10.6 million as at 30 September 2017 by approximately HK$0.4 million or 3.9%, which was mainly due to increase in number of restaurants.

For FY2016, FY2017 and the six months end 30 September 2017, trade payables turnover days of our Group were approximately 31.7 days, 36.9 days and 45.2 days, respectively. Trade payables turnover days of our Group for the Track Record Period were generally in line with the payment terms normally granted by our suppliers to us, which were generally within 30 days to 60 days after the monthly statement is issued and the fact that our suppliers normally issue their monthly statements to our Group on a monthly basis for the purchases made by our Group in the last preceding month.

As at Latest Practicable Date, 100% of our Group’s trade payables as at 30 September 2017 has been subsequently settled.

Our Directors have confirmed that our Group did not have any material default in payment of trade payables during the Track Record Period.

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FINANCIAL INFORMATION

Accrual and other payables

The table below sets out the breakdown of our accrual and other payables for the Track Record Period:

Accrual Other payables Receipt in advance	As at 31 March 2016 2017 HK$’000 HK$’000 1,505 2,220 239 679 33 78 1,777 2,977	As at 30 September 2017 HK$’000 2,300 651 166
		3,117

Our accrual and other payables increased by approximately HK$1.2 million or 66.7% from approximately HK$1.8 million as at 31 March 2016 to approximately HK$3.0 million as at 31 March 2017 primarily due to the increase in (i) accrued salaries and wages, (ii) rental expenses payable and (iii) accrued utility expense.

Our accrual and other payables were approximately HK$3.1 million as at 30 September 2017.

During the Track Record Period and up to the Latest Practicable Date, our Directors confirm that we did not default in payment of any trade and non-trade payables.

Interest-bearing bank borrowing

During the Track Record Period, we used bank borrowings to manage our general working capital requirements.

The table below sets out the breakdown of our bank loans as at the dates indicated:

Bank borrowings	As at 2016 HK$’000 21,849	31 March 2017 HK$’000 16,980	As at 30 September 2017 HK$’000 21,358

The effective interest rate of our bank loans was approximately ranged from 4.25% to 5.50%, 4.25% to 5.50% and 3.93% to 5.50% for FY2016, FY2017 and the six months ended 30 September 2017.

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FINANCIAL INFORMATION

Pledged bank deposits/bank balances and cash

Pledged bank deposits represent fixed bank deposits in a designated bank account as security for our general banking facilities granted to our Group. Bank balances and cash comprised of short-term bank deposit and cash held by us. During the Track Record Period, pledged bank deposits and bank balances carried interest at interest rates ranging from approximately 0.08% to 0.14% per annum.

The table below sets out the breakdown of our bank balances and cash that are denominated in Hong Kong dollars:

			As at
	As at 31 March		30 September
	2016	2017	2017
	HK$’000	HK$’000	HK$’000
Cash and bank balances
— Pledged fixed deposits	2,011	2,013	2,014
— Cash and bank balances	9,349	5,113	14,195

Amounts due from/to related parties

The following table sets forth a summary of the amounts due from and to related parties, including related companies, Controlling Shareholders and a director, as at the end of each reporting period during the Track Record Period:

Amounts due from related companies Amounts due from a director Amounts due from Controlling Shareholders Amounts due to a related company	As at 31 2016 HK$’000 6,000 1,654 1,076 8,730 8,294	March 2017 HK$’000 6,060 4,093 3,150 13,303 8,294	As at 30 September 2017 HK$’000 — 4,560 3,400
			7,960
			2,294

The amount due from related companies mainly included the amount due to Active Wisdom of approximately HK$6.0 million, HK$6.0 million and nil as at 31 March 2016, 31 March 2017 and 30 September 2017, respectively. The amounts were unsecured, interest-free and repayable on demand.

The amounts due from a director and Controlling Shareholders were mainly non-interest bearing advances provided. Back in 2000, Mr. John Kwong and Ms. Melanie Kwong established our Group’s first restaurant in Wanchai with their family wealth, and since 2001, they advanced the funding to our Group through Elite. Since then, our Group had been fulfilling its capital expenditures for the opening of new restaurants by utilising both its internal generated resources and the advances from Elite. The

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FINANCIAL INFORMATION

amount due to a related company represented the balance of such advances that had been carried forward for the aforesaid purpose and was fully settled in December 2017. These amounts are non-trade in nature, unsecured, interest-free and repayable on demand.

Save as the balance with related parties of our Group in connection with the continuing connected transactions which was trade in nature, the amounts due from and to related parties of our Group will be fully settled prior to the Listing.

NET CURRENT LIABILITIES

The table below sets out selected information for our current assets and current liabilities as at the dates indicated, respectively:

Current assets Inventories Trade receivables Deposits, prepayment and other receivables Prepaid tax Amount due from a director Amounts due from shareholders Amounts due from related companies Pledged bank deposits Cash and bank balances Current liabilities Amounts due to a related company Trade payables Accruals and other payables Tax payables Bank borrowings Net current liabilities	As at 31 March 2016 2017 HK$’000 HK$’000 744 702 1,068 918 5,703 6,705 554 — 1,654 4,093 1,076 3,150 6,000 6,060 2,011 2,013 9,349 5,113 28,159 28,754 8,294 8,294 5,812 10,188 1,777 2,977 95 550 21,849 16,980 37,827 38,989 (9,668) (10,235)	As at 30 September 2017 HK$’000 730 1,970 7,831 — 4,560 3,400 — 2,014 14,195 34,700 2,294 10,582 3,117 2,675 21,358 40,026 (5,326)	As at 31 January 2018 HK$’000 (unaudited) 719 1,025 7,399 52 — 28 — 2,015 15,761 26,999 — 17,886 4,484 594 19,465 42,429 (15,430)

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FINANCIAL INFORMATION

As at 31 March 2016 and 31 March 2017, our Group recorded net current liabilities of approximately HK$9.7 million and HK$10.2 million respectively. As at 31 March 2016, our net current liabilities position comprised (i) approximately HK$37.8 million of current liabilities, of which approximately HK$21.8 million were bank borrowings (out of such borrowings, approximately HK$17.0 million, or approximately 78.0%, represented bank borrowings due after one year which contained repayment on demand clauses) and an amount of HK$8.3 million due to a related company, Elite, which was of non-trade nature and was fully settled in mid of December 2017; and (ii) approximately HK$28.2 million current assets, of which approximately 33.0% was cash and bank balance.

As at 31 March 2017, our net current liabilities position mainly comprised (i) approximately HK$39.0 million of current liabilities, of which approximately HK$17.0 million were bank borrowings (out of such borrowings, approximately HK$12.4 million (72.9%) represented bank borrowings due after one year which contained repayment on demand clauses) and an amount of HK$8.3 million due to a related company, Elite, which was of non-trade nature; and (ii) approximately HK$28.8 million current assets, of which approximately 17.7% was cash and bank balance. In particular, the decrease in cash and bank balance from approximately HK$9.3 million as at 31 March 2016 to approximately HK$5.1 million as at 31 March 2017 was primarily due to deposits paid and acquisition of property, plant and equipment for MS(KB) for FY2017.

As at 30 September 2017, our net current liabilities position mainly comprised (i) approximately HK$40.0 million of current liabilities, of which approximately HK$21.4 million were bank borrowings (out of such borrowings, approximately HK$16.1 million (75.2%) represented bank borrowings due after one year which contained repayment on demand clause) and HK$2.3 million were amount due to a related company, Elite, which was of non-trade nature and was fully settled in mid of December 2017; and (ii) approximately HK$34.7 million of current assets, of which approximately 40.9% was cash and bank balances. As at the Latest Practicable Date, all outstanding balances of the amount due from a director has been fully settled.

Reasons for our net current liabilities position during the Track Record Period

Our Directors considered that our net current liabilities position recorded during the Track Record Period was mainly attributable to the following reasons:

(i) Loans repayable after more than one year with repayment on demand clauses

Our bank borrowings under current liabilities of approximately HK$39.0 million as at 31 March 2017 included five instalment loans obtained from three commercial banks in Hong Kong of approximately HK$17.0 million in aggregate. Despite the fact that most of these bank borrowings are secured by pledged assets and will mature in the years 2017, 2019 and 2025 respectively, each of them is subject to the lending bank’s right of repayment on demand. These borrowings were classified as current liabilities in our combined financial information in accordance with Hong Kong Interpretation 5 Presentation of Financial Statements — Classification by the Borrower of a Term Loan that Contains a Repayment on Demand Clause. Considering the sufficiency of the collaterals pledged in favour of the banks to secure such loans, our Directors considered it improbable that the banks will exercise their right to demand immediate repayment. Details of the maturity profile of our borrowings, including our bank borrowings, are set out under the paragraph headed ‘‘Indebtedness’’ in this section. During the Track Record Period, none of our borrowings had been recalled by our banks before their respective maturity dates.

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FINANCIAL INFORMATION

(ii) Amount due to our related company

As at 30 September 2017, amount due to our related company, amounted to approximately HK$2.3 million. As at Latest Practicable Date, the balance was fully settled by way of bank transfer.

Adjusting for the abovementioned bank borrowing of approximately HK$21.8 million, HK$17.0 million and HK$21.4 million as at 31 March 2016, 31 March 2017 and 30 September 2017 respectively and the amount due to a related company of approximately HK$8.3 million, HK$8.3 million and HK$2.3 million settled as at the respective period end, our Group would have recorded a net current asset of approximately HK$20.4 million, HK$15.1 million and HK$18.4 million as at 31 March 2016, 31 March 2017 and 30 September 2017 respectively.

Our Directors’ view

Going forward, our Directors consider that our Group has sufficient financial resources to address our net current liabilities position based on the following:

(i) outstanding current portion of bank borrowings (being the major component of net current liabilities) of approximately HK$5.1 million (without taking into account the portion that are not repayable within one year but contain a repayment on demand clause of approximately HK$14.4 million) as at 31 January 2018 was sufficiently covered by our cash and bank balances of approximately HK$15.8 million on hand as at 31 January 2018.
(ii) Our Group had recorded stable cash inflow from our operating activities of approximately HK$16.8 million and HK$22.6 million for FY2016 and FY2017 respectively; and
(iii) as at 31 January 2018, our Group had undrawn bank facilities of approximately HK$3.9 million.

Working Capital Sufficiency

Our Directors are of the opinion that our Group has sufficient working capital for our present requirements for at least the next 12 months from the date of this prospectus, taking into account (i) our Group’s internal resources, (ii) available banking facilities, and (iii) the estimated net proceeds from the Share Offer.

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FINANCIAL INFORMATION

INDEBTEDNESS

Borrowings

The table below set out our amount due to a related company as at 31 March 2016, 31 March 2017 and 31 January 2018, being the Latest Practicable Date for the purpose of indebtedness statement:

			As at	As at
	As at 31 March		30 September	31 January
	2016	2017	2017	2018
	HK$’000	HK$’000	HK$’000	HK$’000
				(unaudited)
Amount due to a related
company	8,294	8,294	2,294	—

Amount due to a related company is non-trade in nature and is unsecured, interest-free and repayable on demand. As at the Latest Practicable Date, the amount was fully settled. Such amount represents advance from the related company to our Group for financing our daily operations and supporting our capital expenditures.

Bank borrowings

As at 31 March 2016, 31 March 2017 and 31 January 2018, our borrowings mainly consisted of bank borrowings. The following table sets forth a breakdown of our bank borrowings by scheduled repayment dates set out in the loan agreements as at the dates indicated:

									As at	As at
				As	at	31	March	30	September	31 January
				2016			2017		2017	2018
				HK$’000			HK$’000		HK$’000	HK$’000
										(unaudited)
Bank	loan	—	secured	14,550			12,158		17,813	16,787
		—	unsecured	7,299			4,822		3,545	2,678

All of our bank borrowings were denominated in Hong Kong dollar and the effective interest rates as at 31 March 2016 and 2017 and 31 January 2018 ranged from 4.25% to 5.50%, 4.25% to 5.50% and 3.93% to 5.50% per annum, respectively.

We currently anticipate that the utilisation level of such bank facilities will remain stable. During the Track Record Period, we maintained facilities with three banks, two of which were secured by the personal guarantee provided by Mr. John Kwong, Mr. Joseph Kwong and Ms. Melanie Kwong and the remaining was secured by the personal guarantee provided by Mr. John Kwong and Ms. Melanie Kwong. Further, two of the three bank facilities were in addition secured by the corporate guarantee provided by Elite. All personal and corporate guarantee of such facilities will be released upon Listing.

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FINANCIAL INFORMATION

As at 31 January 2018, being the Latest Practicable Date for determining our indebtedness, the indebtedness amount that our Group incurred was approximately HK$19.5 million. As at the Latest Practicable Date, we had utilised banking facility of approximately HK$2.1 million and unutilised bank facilities of HK$3.9 million. Our Directors confirmed that there has been no material change in our indebtedness since 31 January 2018 and up to the Latest Practicable Date.

Save as disclosed in this prospectus, as at 31 January 2018 we did not have any other borrowings, mortgages, charges, debentures or debt securities, issued or outstanding, or authorised or otherwise created but unissued, or other similar indebtedness, finance lease commitment, liabilities under acceptances, acceptance credits, hire purchase commitments, material contingent liabilities or guarantees.

During the Track Record Period and up to the Latest Practicable Date, to the best of our Directors’ knowledge, our Directors confirm that we are not aware of any material defaults in the payment of trade and non-trade payables or bank borrowings or any defaults in material financial covenants.

Save as the balance with related parties of our Group in connection with the continuing connected transactions, the amounts due from and to related parties of our Group will be fully settled prior to the Listing.

RELATED PARTY TRANSACTIONS

With respect to the related party transactions set forth in note 29 to the Accountants’ Report to Appendix I to this prospectus, our Directors confirm that each transaction set forth therein were conducted in accordance with terms as agreed between us and the respective related parties, were conducted on an arm’s length basis and did not distort our results of operations for the Track Record Period or make our historical results not reflective of our future performance.

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FINANCIAL INFORMATION

KEY FINANCIAL RATIOS ANALYSIS

The table below sets forth certain key financial ratios of our Group for the Track Record Period:

			For the six
			months ended
			30 September
	FY2016	FY2017	2017
Profitability ratios
Return on total assets (%) (Note 1)	20.4	21.7	29.8
Return on equity (%) (Note 2)	74.4	85.5	105.7
Interest coverage ratio (times) (Note 3)	19.6	16.9	27.3
Liquidity ratios
Current ratio (times) (Note 4)	0.7	0.7	0.9
Quick ratio (times) (Note 5)	0.7	0.7	0.8
Capital adequacy ratio
Gearing ratio (%) (Note 6)	211.2	191.0	150.5
Debt to equity ratio (%) (Note 7)	145.7	152.4	60.2

Notes:

(1) For FY2016 and FY2017, the calculation of return on total assets is calculated by dividing net profit after tax for the year by total assets and multiplying the resulting value by 100%. For the six months ended 30 September 2017, the calculation of return on total assets is calculated by dividing net profit after tax before listing expenses for the period by total assets, multiplying by 183 days, and then multiplying the resulting value by 100%.
(2) For FY2016 and FY2017, the calculation of return on equity is calculated by dividing net profit for the year attributable to owners of the Company by equity attributable to owners of the Company and multiplying the resulting value by 100%. For the six months ended 30 September 2017, the calculation of return on equity is calculated by dividing net profit before listing expenses for the period attributable to owners of the Company by equity attributable to owners of the Company, multiplying by 183 days, and then multiplying the resulting value by 100%.
(3) Interest coverage ratio is calculated based on profit for the year/period before interest and tax divided by interest expense for the year/period.
(4) Current ratio is calculated based on the total current assets at the end of the year/period divided by the total current liabilities at the end of the respective year/period.
(5) Quick ratio is calculated based on the total current assets (excluding inventory) at the end of the year/period divided by the total current liabilities of the respective year/period.
(6) Gearing ratio is calculated based on the total debts at the end of the year/period divided by equity attributable to owners of the Company at the end of the year/period. Total debt includes payables incurred not in the ordinary course of business.
(7) Debt-to-equity ratio is calculated based on net debt at the end of the year/period divided by total equity at the end of the year/period and multiplied by 100%. Net debt is defined to include all borrowings net of bank balances and cash.

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FINANCIAL INFORMATION

Return on total assets

Our Group’s return on total assets was approximately 20.4%, 21.7% and 29.8% for FY2016, FY2017 and the six months ended 30 September 2017, respectively. The increase of our return on total assets from approximately 20.4% for FY2016 to approximately 21.7% for FY2017 was primarily due to the increase in net profit as a result of increase in total number of our restaurants. Our return on total assets increased to approximately 29.8% for the six months ended 30 September 2017, which was mainly due to revenue contributed by MS(KB) which commenced business in October 2016 while the total assets remained stable.

Return on equity

Our Group’s return on equity was approximately 74.4%, 85.5%, and 105.7% for FY2016, FY2017 and the six months ended 30 September 2017, respectively. The increase of our return on equity was mainly due to the increase in net profit as a result of increase in our total number of restaurants.

Interest coverage ratio

Our Group’s interest coverage ratio were approximately 19.6 times and 16.9 times for FY2016 and FY2017. The decrease of interest coverage ratio was mainly due to the increase of finance costs of approximately 24.5% while the profit before interest and tax increased by approximately 7.5% over the same period.

The interest coverage ratio increased significantly to approximately 27.3 times for the six months ended 30 September 2017 owing to increase in profit before interest and tax and decrease in finance costs.

Current ratio

As at 31 March 2016, 31 March 2017 and 30 September 2017, our current ratio was approximately 0.7 times, 0.7 times and 0.9 times, respectively. Our current ratio remained relatively stable for FY2016 and FY2017. Our current ratio increased to approximately 0.9 times as at 30 September 2017, which was mainly attributable to a substantial increase of approximately HK$9.1 million or 1.78 times in our cash and bank balances from approximately HK$5.1 million as at 31 March 2017 to approximately HK$14.2 million as at 30 September 2017 due to the raise of a new bank borrowings amounted to HK$7.0 million during the six months ended 30 September 2017.

Quick ratio

We only held minimal inventory during the Track Record Period, accordingly, our quick ratio was substantially the same as our current ratio with similar trend.

Gearing ratio

Our Group’s gearing ratio was approximately 211.2%, 191.0% and 150.5% as at 31 March 2016, 31 March 2017 and 30 September 2017, respectively. Our gearing ratio decreased from approximately 211.2% as at 31 March 2016 to approximately 191.0% as at 31 March 2017, which was primarily due to decrease in bank borrowings from approximately HK$21.8 million as at 31 March 2016 to

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FINANCIAL INFORMATION

approximately HK$17.0 million as at 31 March 2017 given the repayment of bank borrowings amounted to approximately HK$4.8 million during FY2017. Our gearing ratio further decreased to approximately 150.5% as at 30 September 2017 due to the increase in our Group’s equity as a result of improved retained earnings.

Debt to equity ratio

Our Group’s debt to equity ratio was approximately 145.7%, 152.4% and 60.2% as at 31 March 2016, 31 March 2017 and 30 September 2017, respectively. Our debt to equity ratio increased from approximately 145.7% as at 31 March 2016 to approximately 152.4% as at 31 March 2017, which was primarily due to decrease in cash and bank balance from approximately HK$9.3 million to approximately HK$5.1 million that led to an increase of net debt. Our debt to equity ratio further decreased to approximately 60.2% as at 30 September 2017 due to the reduction of amount due to a related company from approximately HK$8.3 million to HK$2.3 million.

CONTINGENT LIABILITIES

As at 31 March 2016, 31 March 2017 and 31 January 2018, we did not have any significant contingent liabilities, respectively.

As at the Latest Practicable Date, other than disclosed in the section entitled ‘‘Business — Legal proceedings’’ of this prospectus, we were not involved in any legal proceedings pending or, to our knowledge, threatened against our Group which could have a material adverse effect on our business or operations. The Directors confirm that as at the Latest Practicable Date, we did not have any material contingent liabilities.

DISCLAIMER

Save as above or as otherwise disclosed herein, we did not have any other outstanding loan issued and outstanding or agreed to be issued, bank overdrafts, loans or other similar indebtedness, liabilities under acceptances, or acceptable credits, debentures, mortgages, charges, hire purchase commitments, guarantees or other material contingent liabilities at the close of business on 31 January 2018, being the Latest Practicable Date for determining our Group’s indebtedness.

Our Directors confirm that there has not been any material adverse change in our Group’s indebtedness, capital commitments and contingent liabilities since 31 January 2018, being the latest practicable date for determining our Group’s indebtedness.

OFF-BALANCE SHEET ARRANGEMENTS

We have not entered into, nor do we expect to enter into, any off-balance sheet arrangements. In addition, we have not entered into any derivative contracts that are indexed to our equity interests and classified as owners’ equity. Further, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or that engages in leasing, hedging or research and development services with us.

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FINANCIAL INFORMATION

DIVIDEND

During FY2016, FY2017 and the six months ended 30 September 2017, certain subsidiaries now comprising our Group paid dividends of approximately HK$9.8 million, HK$12.4 million and HK$5.9 million to their then shareholders, respectively. Our subsidiaries further declared a special dividend of HK$1.0 million and HK$8.0 million on 30 October 2017 and 20 November 2017, respectively, which was fully settled in December 2017. Dividends paid in prior periods may not be indicative of future dividend payments. We cannot guarantee when, if and in what from dividends will be paid in the future.

After the completion of the Listing, our Shareholders will be entitled to receive dividends only when declared by our Board. Our Board has absolute discretion as to whether to declare any dividend for any year end and if any, the amount of dividend and the means of payment. Such discretion is subject to the applicable laws and regulations including the Companies Law and our Articles. Our Company does not currently have any specific dividend policy. Our Directors are of the view that the amount of any dividends to be declared in the future will depend on, among others, our result of operations, cash flows and financial condition, general business conditions and strategies, our operating and capital requirements, the amount of distributable profits based on the generally accepted accounting principles in Hong Kong and other factors.

DISTRIBUTABLE RESERVES

Our Company was incorporated on 8 November 2017. As at 30 September 2017, our Company had no reserve available for distribution.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

Interest rate risk

Other than bank balances with variable interest rate, we have no other significant interest bearing assets. Our management monitors the interest rate exposure on a continuous basis and adjusts the portfolio of bank saving balances where necessary.

Credit risk

We trade with a large number of individual customers and trading terms are mainly on cash and credit card settlement. In view of our operation, we do not have significant credit risk exposure to any single individual customer.

The credit risk of our other financial assets comprise carrying amounts of cash and bank balances, amounts due from a director, a shareholder and related companies. These credit risks are monitored on an ongoing basis.

Liquidity risk

We had net current liabilities as at 31 March 2016, 31 March 2017 and 30 September 2017. We monitor our current and expected liquidity requirements regularly and ensure that sufficient cash and bank balances are available to meet our liquidity requirements for both the short and long term.

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FINANCIAL INFORMATION

Currency risk

Since our Group’s transactions are mainly denominated in Hong Kong dollars, our Directors are of the opinion that our Group’s exposure to foreign exchange rate risk is minimal.

FINANCIAL INSTRUMENTS

During the Track Record Period and up to Latest Practicable Date, we did not enter into any other financial instruments for hedging purposes.

LISTING EXPENSES

Our estimated Listing expenses in relation to the Listing primarily consist of underwriting commissions, legal and professional fees in relation to the Listing, the commissions together with SFC transaction levy and Stock Exchange trading fee. For FY2016, FY2017 and the six months ended 30 September 2017, we did not incur any Listing expenses. Our Group expects that the total listing expenses, which is non-recurring in nature, is estimated to be HK$25.5 million (based on the mid-point of our indicative Offer Price range being HK$0.25 per Offer Share), of which (i) approximately HK$5.6 million and HK$11.1 million are expected to be recognised in the income statement for the year ending 31 March 2018 and 31 March 2019 respectively; and (ii) HK$8.8 million is expected to be recognised as a deduction in equity directly for the year ending 31 March 2019.

Accordingly, the financial results of our Group for the year ending 31 March 2018 and 31 March 2019 are expected to be significantly affected by the estimated expenses in relation to the Listing. As a result, it is expected that there will be a significant decrease in net profit for the year ending 31 March 2018 and 31 March 2019 and we expect that our Group will record a net loss for the year ending 31 March 2019. Our Directors would like to emphasise that this predicted cost of listing is a current estimate for reference only. As such, the actual amount may differ from these estimates and the final amount to be recognised in the combined statement of profit or loss and other comprehensive income of our Group for the year ending 31 March 2018 and 31 March 2019 is subject to adjustment based on audit and the then changes in variables and assumptions.

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FINANCIAL INFORMATION

UNAUDITED PRO FORMA STATEMENT OF ADJUSTED NET TANGIBLE ASSETS

The following is an illustrative statement of our unaudited pro forma adjusted combined net tangible assets and is based on the audited combined net assets attributable to owners of our Company as at 30 September 2017 as shown in the Accountants’ Report, the text of which is set out in Appendix II to this prospectus, and adjusted as described below.

Based on the minimum indicative Offer Price of HK$0.23 per Share Based on the maximum indicative Offer Price of HK$0.27 per Share	Audited combined net tangible assets of our Group attributable to the owners of our Company as at 30 September 2017 HK$’000 (Note 1) 15,713 15,713	Add: Estimated net proceeds from the Share Offer HK$’000 (Note 2) 32,350 41,649	Unaudited pro forma adjusted combined net tangible assets attributable to owners of our Company as at 30 September 2017 HK$’000 (Note 3) 48,063 57,362	Unaudited pro forma adjusted net tangible assets per Share HK cents (Note 4) 4.81
				5.74

Notes:

(1) The audited combined net tangible assets attributable to the owners of our Company as at 30 September 2017 is extracted from the Accountants’ Report set out in Appendix I to this prospectus, which is based on the audited combined net assets of our Group attributable to the owners of our Company as at 30 September 2017 of approximately HK$15,713,000.
(2) The estimated net proceeds from the Share Offer are based on the indicative Offer Price of HK$0.23 per Share and HK$0.27 per Share after deduction of the underwriting fees and other related expenses in connection with the Share Offer.
(3) The unaudited pro forma net tangible assets per Shares is arrived at after having made the adjustments referred to in the preceding paragraphs and on the basis that 1,000,000,000 shares in issue assuming the Share Offer has been completed on 30 September 2017 but without taking into account any shares which may fall to be issued upon the exercise of options granted under the Share Option Scheme or any Share which may be allotted and issued or repurchased by our Company pursuant to the General Mandate to Issue Shares of the General Mandate to Repurchase Shares as described in the section headed ‘‘Share Capital’’ in this prospectus.
(4) No adjustment has been made to the audited combined net tangible assets of our Group attributable to the owners of our Company as at 30 September 2017 to reflect any trading result or other transaction of our Group entered into subsequent to 30 September 2017.
(5) The unaudited pro forma adjusted combined net tangible assets of our Group attributable to the owners of our Company does not take into account the interim dividend of HK$8,950,000 declared on 30 October 2017 and 20 November 2017. Had the interim dividend of HK$8,950,000 declared on 30 October 2017 and 20 November 2017 been taken into account of, the unaudited pro forma adjusted combined net tangible assets of our Group attributable to the owners of our Company per share would have been further adjusted approximately to HK$39,113,000 and HK$0.0391 per Share respectively, based on the Offer Price of HK$0.23 per Share, and approximately to HK$48,412,000 and HK$0.0484 per share respectively, based on the Offer Price of HK$0.27 per Share.

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FINANCIAL INFORMATION

DISCLOSURE UNDER RULES 17.15 TO 17.21 OF THE GEM LISTING RULES

Our Directors confirm that as at the Latest Practicable Date, they were not aware of any circumstances which would give rise to a disclosure requirement under Rules 17.15 to 17.21 of the GEM Listing Rules.

RECENT DEVELOPMENT OF OUR GROUP SUBSEQUENT TO THE TRACK RECORD PERIOD

NO MATERIAL ADVERSE CHANGE

The impact of the listing expenses on the profit and loss accounts has posted a material adverse change in the financial or trading position or prospects of our Group since 30 September 2017 (being the date the latest audited combined financial statements were made up). Prospective investors should be aware of the impact of the listing expenses on the financial performance of our Group for the year ending 31 March 2018 and 31 March 2019.

Save as disclosed above, our Directors have confirmed that, up to the date of this prospectus, there had been no material adverse change in the financial or trading positions of our Company or its subsidiaries since 30 September 2017 (being the date of which our Group’s latest audited combined financial statements were made up as set out in the Accountants’ Report in Appendix I to this prospectus) and there had been no event since 30 September 2017 which would materially affect the information shown in the Accountants’ Report in Appendix I to this prospectus.

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FUTURE PLANS AND USE OF PROCEEDS

FUTURE PLANS

Business objectives

Please refer to the section headed ‘‘Business — Business strategies’’ in this prospectus for a description of our business strategies.

USE OF PROCEEDS

Our Directors consider that the net proceeds from the Share Offer are crucial for financing our Group’s business strategies. Details of our business objectives, strategies and implementation plans are set out in this section. Our Directors estimate that the net proceeds from the Share Offer (after deducting estimated expenses payable by our Group in connection with the Listing, but assuming the Offer Size Adjustment Option is not exercised) will be approximately HK$37.0 million based on the Offer Price of HK$0.25 per Share (being the mid-point of the indicative Offer Price range between HK$0.23 and HK$0.27 per Share). We intend that the net proceeds will be applied as follows:

Expanding our restaurant network in strategic locations in Hong Kong Maintaining steady food quality by setting up a central kitchen Enhancing and upgrading our restaurant facilities Strengthening customer relationship and our brand awareness	For the six months ending 30 September 2018 HK$’000 5,000 5,400 1,500 900 12,800	For the six months ending 31 March 2019 HK$’000 11,500 — 500 400 12,400	For the six months ending 30 September 2019 HK$’000 3,500 — 3,000 400 6,900	For the six months ending 31 March 2020 HK$’000 3,500 — — 400 3,900	Total HK$’000 23,500 5,400 5,000 2,100 36,000	Approximate % of net proceeds % 63.5 14.6 13.5 5.7
						97.3

The remaining HK$1.0 million, approximately 2.7% of the net proceeds, will be used as our Group’s general working capital.

If the final Offer Price is set at the highest or lowest point of the indicative Offer Price range, the net proceeds of the Share Offer will increase or decrease by approximately HK$5.0 million, respectively. In such event, the net proceeds will be used in the same proportions as disclosed above irrespective of whether the Offer Price is determined at the highest or lowest point of the indicative Offer Price range.

We will issue an announcement in accordance with the GEM Listing Rules requirement if there is any material change in the use of proceeds as described above.

If the Offer Size Adjustment Option is exercised in full, the additional net proceeds of approximately HK$8.6 million (assuming that the final Offer Price is set at the mid-point of the indicative Offer Price range) received from the Share Offer will be allocated in accordance with the above allocations on a pro rata basis. For details of the Offer Size Adjustment Option, please refer to the section headed ‘‘Structure and Conditions of the Share Offer — Offer Size Adjustment Option’’ in this prospectus.

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FUTURE PLANS AND USE OF PROCEEDS

Investors should be aware that any part of the business plans of our Group may or may not proceed according to the time frame as described under the paragraph headed ‘‘Implementation plan’’ in this section due to various factors such as changes in customers’ demand and changes in market conditions. Under such circumstances, our Directors will evaluate carefully the situations and will hold the funds as short-term deposits in authorised banks and/or financial institutions in Hong Kong until the relevant business plan materialises.

IMPLEMENTATION PLAN

In light of the business objective of our Group, we will seek to attain the milestones contained in this paragraph from the 1 April 2018 to 31 March 2020. Prospective investors should note that the milestones and their scheduled times for attainment are formulated on the bases and assumptions referred to in the paragraph headed ‘‘Bases and assumptions’’ in this section. These bases and assumptions are inherently subject to many uncertainties, variables and unpredictable factors, in particular the risk factors set out in the section headed ‘‘Risk Factors’’ in this prospectus. Our Group’s actual course of business may vary from the business objectives set out in this prospectus. There can be no assurance that the plans of our Group will materialise in accordance with the expected time frame or that the objectives of our Group will be accomplished at all. Based on the current state of the restaurant industry, our Directors intend to carry out the following implementation plans:

For the six months ending 30 September 2018

Business strategies Use of proceeds Implementation plan Expanding our restaurant HK$5.0 million — Setting up one new restaurant under network in strategic locations our ‘‘Mr. Steak’’ brand in Tuen Mun in Hong Kong
Maintaining steady food quality HK$5.4 million — Setting up the central kitchen by setting up a central kitchen
Enhancing and upgrading our HK$1.5 million — Carry out renovation and restaurant facilities refurbishment in SB(YL)
Strengthening customer HK$0.9 million — Expanding our marketing campaign relationship and our brand by establishing a social media awareness platform and engaging a social media marketing agent to create a social media marketing website

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FUTURE PLANS AND USE OF PROCEEDS

For the six months ending 31 March 2019

Business strategies

Use of proceeds Implementation plan

Expanding our restaurant network in strategic locations in Hong Kong
HK$11.5 million
Setting up one new restaurant under our ‘‘Mr. Steak — Buffet à la minute’’ brand in Tai Po or Yau Tsim Mong District
Enhancing and upgrading our restaurant facilities
HK$0.5 million
Carry out renovation and refurbishment in SB(CWB)
Strengthening customer relationship and our brand awareness
HK$0.4 million
Maintaining the social media marketing website by regular updates and create tailor-made posts for our restaurants

For the six months ending 30 September 2019

Business strategies Use of proceeds Expanding our restaurant HK$3.5 million network in strategic locations in Hong Kong

Implementation plan

Setting up one new restaurant under our ‘‘Mr. Steak’’ brand in Central or Kowloon East District or New Territories East District
Enhancing and upgrading our HK$3.0 million — Carry out renovation and restaurant facilities refurbishment in MS(TY) and MS(KF)
Strengthening customer HK$0.4 million — Monitoring the hit-rate and creating relationship and our brand campaigns and promotional activities awareness for social media marketing

For the six months ending 31 March 2020

Business strategies Use of proceeds Implementation plan Expanding our restaurant HK$3.5 million — Setting up one new restaurant under network in strategic locations our ‘‘Mr. Steak’’ brand in Central or in Hong Kong Kowloon East District or New Territories East District Strengthening customer HK$0.4 million — Continuing to maintain the social relationship and our brand media marketing website and awareness reviewing the effectiveness of our marketing strategies

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FUTURE PLANS AND USE OF PROCEEDS

Expanding our restaurant network in strategic locations in Hong Kong

Our long-term future plan is to have our restaurants in various districts across Hong Kong, whereby our Group can further penetrate into the market, serving customers of different districts in Hong Kong and thus increasing our market share. We plan to achieve this by opening restaurants in suitable and strategic locations, including locations which are not within our existing portfolio. Our expansion plan of opening four new restaurants accords with our Group’s objective of increasing our market share. By means of opening these new restaurants, our Group believes that we can benefit from the economies of scale such as enhancing our bargaining power over suppliers and enjoying bulk purchase discounts. Moreover, through the opening of these four new restaurants, our Group will be able to further increase our penetrating power in different districts in Hong Kong.

We are currently reviewing various potential sites throughout Hong Kong for our restaurants. Although we have yet to formally determine the locations, locations such as Tuen Mun, Tai Po and Yau Tsim Mong district are being further reviewed. We will consider factors such as accessibility and the demographics of the people in the neighbourhood. Our Group will continue with our stringent policy regarding the selection of a suitable location. Before we decide a location, a number of factors will be carefully considered, including, the rental costs, the accessibility and customer traffic and the degree of competition. We tend to open new restaurants in popular shopping malls or in residential districts with high customer flows.

As at the Latest Practicable Date, no lease agreement had been entered into in respect of the planned new restaurants. Based on our experience and our most recent restaurant opening at East Point City in Tseung Kwan O, the investment cost for each new restaurant would be approximately HK$3.5 million which included costs of renovation, furniture and fixtures, utensils, equipment, as well as miscellaneous deposits and legal fees. As such, we allocate HK$3.5 million per restaurant for such spending on new restaurant of similar size, which will be funded by the net proceeds from the Share Offer. Due to higher investment costs in light of different brand, location, size (in terms of gross floor area and seating capacity) and operational needs, we allocate HK$5.0 million and HK$11.5 million for the new restaurant to be set up during the six months ending 30 September 2018 and the new restaurant to be set up during the six months ending 31 March 2019, respectively. The size, branding and operation model of the latter restaurant is expected to be similar to MS(Buffet) and hence we expect to incur even higher investment cost than that of the other restaurants of our Group. During the Track Record Period, the breakeven period of our restaurants was generally between one and four months. At the initial planning stage for our new restaurants, our Directors target an investment payback period within 30 months. Our Directors believe that given the potential locations of the new restaurants are in an environment similar to most of our other locations, the breakeven period for the new restaurants is estimated to be similar to those for most of our other locations, which is one to four months, and the investment payback period is estimated to be within 30 months. However, the historical breakeven period and investment payback period for our restaurants operated during the Track Record Period are not indicative of our future performance as our Group’s revenue, expenses and operating results may vary from period to period in response to a variety of factors beyond our control. For further details of our breakeven period and investment payback period, please refer to the section headed ‘‘Business — General information and operating data of our restaurants — Breakeven and investment payback’’ in this prospectus for further details.

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FUTURE PLANS AND USE OF PROCEEDS

Enhancing and upgrading our restaurant facilities

We plan to upgrade and renovate SB(YL) and SB(CWB) during the year ending 31 March 2019 and MS(TY) and MS(KF) in the year ending 31 March 2020, respectively. Our Directors believe that it is appropriate time to renovate these restaurants as the current tenancy agreements of SB(YL), SB(CWB), MS(TY) and MS(KF) will expire in July 2018, November 2018, March 2019 and July 2019, respectively. The plan of renovation of SB(YL), SB(CWB), MS(TY) and MS(KF) is subject to the renewal of the relevant tenancy upon its expiry. We will negotiate a new tenancy agreement with the landlord of these four premises in due course. The estimated investment cost for the upgrading and renovation work of each of the aforementioned restaurants is expected to be approximately HK$1.5 million, HK$0.5 million, HK$1.5 million and HK$1.5 million, respectively. The total investment costs for restaurants renovations for the two years ending 31 March 2020 are expected to be HK$5.0 million.

Maintaining steady food quality by setting up a central kitchen

Our Group is exploring the opportunity of renting a premises in an industrial building in Chai Wan, with a saleable area of approximately 5,000 sq.ft. for setting up our central kitchen in Hong Kong. The rental of the said premises is approximately HK$1.2 million per year. As such, based on the best estimation of our Directors, the capital expenditure allocated for this purpose is HK$5.4 million, including expenses for decoration, purchasing new kitchenware, freezers and utensils and a truck for delivery of prepared food ingredients to our restaurants, as well as rental deposits and legal fees.

Our Directors believe that by setting up a central kitchen for our restaurants, we can have better control on our food preparation process and standardise the quality of food among our restaurants. We expect that the ingredients of certain common dishes will be prepared in the central kitchen and delivered to the respective restaurants where such ingredients will be further processed under the coordination and supervision of the head chef and sous chef, in order to ensure the consistency in quality as well as food safety served in all our restaurants across different locations.

Our Directors believe that by establishing a central kitchen, our Group will enjoy higher operating efficiency and lower food costs through (i) standardising our certain menu items among our restaurants inside the central kitchen; (ii) improving the quality of food; and (iii) minimising the excess food ingredients consumed and food waste.

Enhancing our marketing and promotion initiatives

To further strengthen customer relationship and our brand awareness, we aim to enhance our marketing initiatives in promoting our restaurants through social media marketing. We plan to establish a social media platform and engage a social media marketing agent to create a social media marketing website. We will maintain the social media marketing website by regular updates and create tailor-made posts for our restaurants. We will also monitor the hit-rate and create campaigns and promotional activities for the social media marketing website, review the effectiveness of the marketing strategy regularly and adjust the promotion strategies accordingly. We plan to spend HK$2.1 million to enhance our marketing and promotion initiatives, which will be funded by the net proceeds from the Share Offer.

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FUTURE PLANS AND USE OF PROCEEDS

BASES AND ASSUMPTIONS

The business objectives set out by our Directors are based on the following bases and assumptions:

. the net proceeds from the Share Offer based on the Offer Price of HK$0.25 per Share (being the mid-point of the stated range of the Offer Price), after deducting related expenses, are estimated to be approximately HK$37.0 million;
. there will be no significant economic change in respect of inflation, interest rate, tax rate and currency exchange rate in Hong Kong which will adversely affect our Group’s business;
. our Group will have sufficient financial resources to meet the planned capital expenditure and business development requirements during the period to which the business objectives relate;
. there will be no material adverse change in the existing laws and regulations, policies or industry or regulatory treatment relating to our Group, or in the political, economic, fiscal or market conditions in which our Group operates;
. there will be no change in the funding requirement for each of the near term business objectives described in this prospectus from the amount as estimated by our Directors;
. there will be no disasters, natural, political or otherwise, which would materially disrupt the business or operations of our Group or cause substantial loss, damage or destruction to its properties or facilities;
. there will be no change in the effectiveness of the licences and permits obtained by our Group;
. there will be no material changes in the bases or rates of taxation applicable to the activities of our Group;
. the Share Offer will be completed in accordance with and as described in the section headed ‘‘Structure and Conditions of the Share Offer’’ in this prospectus;
. our Group is able to maintain its customers;
. our Group will be able to retain key staff in the management and the main operational departments;
. our Group will be able to continue its operations in substantially the same manner as our Group had been operating during the Track Record Period and our Group will also be able to carry out its development plans without disruption adversely affecting its operations or business objectives in any way; and
. our Group will not be adversely affected by the risk factors as set out under the section headed ‘‘Risk Factors’’ in this prospectus.

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FUTURE PLANS AND USE OF PROCEEDS

REASONS FOR THE LISTING

Our Directors believe that our Company and its shareholders will benefit as a whole from the Listing for the following reasons:

. Our Group’s business objective is to become one of the most popular restaurant group in Hong Kong. Our Directors believe the estimated net proceeds from the Share Offer of HK$37.0 million (after deducting the related underwriting fees and expenses payable in relation to the Listing) will provide our Group with financial resources for the execution of our business strategies and plans as set out above, which will help us to pursue our business objective. The capital expenditure requirement for our Group’s implementation plans is expected to amount to approximately HK$36.0 million which is expected to be wholly financed by the net proceeds from the Share Offer and the remaining balance of HK$1.0 million will be used as our Group’s general working capital.
. Our Directors consider that our Group can strengthen our competitiveness in the market through the Listing. It is expected that the brand recognition of our Group can be broadened through the Listing and our corporate profile will be enhanced, which in turn will help attract more customers. Besides, suppliers tend to give preference to restaurant businesses which have a public listing status with a sound reputation, transparent financial disclosures and regulatory supervision. Our Directors believe that our Group’s credibility could be enhanced following the Listing, which would earn us more favourable terms from our suppliers and more opportunities to collaborate with strategic partners.
. The Listing may act as a fund-raising platform for our Group. Through the Listing, our Group can gain direct access to the capital market for equity and/or debt financing to fund our current business operations as well as to finance our future expansion plans. Our Directors believe that this way of financing is beneficial to the overall business development and financial performance of our Group, which in turn will maximise Shareholder return.
. Our Directors believe that through the Listing, the internal control and corporate governance practices of our Group would be further enhanced. Following the Listing, we are required to meet high standards with respect to internal control and corporate governance, which are instrumental in strengthening the overall control and supervision of our Group.
. The Share Offer will enhance the liquidity of the Shares by achieving the listing status of the Shares which will be freely traded on the Stock Exchange when compared to the limited liquidity of the Shares that are privately held before the Listing.
. The Share Offer will enable our Company to enhance its corporate profile, thereby increasing our ability to attract strategic investors for investment in and forming strategic partnerships directly with our Company.

Taking into consideration the above, our Directors believe that a GEM listing is beneficial to our Company and its Shareholders as a whole notwithstanding the dilution effect to the Controlling Shareholders of equity financing as opposed to debt financing.

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UNDERWRITING

PUBLIC OFFER UNDERWRITERS

Joint Bookrunners and Joint Lead Managers

Alliance Capital Partners Limited Sincere Securities Limited

Co-Lead Manager

China Industrial Securities International Capital Limited

UNDERWRITING ARRANGEMENT AND EXPENSES

The Public Offer Underwriting Agreement

Pursuant to the Public Offer Underwriting Agreement, we are offering 25,000,000 Public Offer Shares (subject to reallocation) for subscription on the terms and subject to the conditions of this prospectus and the Application Forms at the Offer Price.

Subject to (i) the Stock Exchange granting listing of, and permission to deal in, the Shares in issue and to be issued as mentioned in this prospectus; and (ii) certain other conditions set out in the Public Offer Underwriting Agreement, the Public Offer Underwriters have severally agreed to apply or procure applications, on the terms and conditions of this prospectus, the related Application Forms and the Public Offer Underwriting Agreement, for the Public Offer Shares now being offered and which are not taken up under the Public Offer.

The Public Offer Underwriting Agreement is conditional on and subject to the Placing Underwriting Agreement having been executed and becoming unconditional.

Grounds for termination

The Joint Bookrunners (for themselves and on behalf of the Underwriters) shall have the absolute right which is exercisable by the Joint Bookrunners (for themselves and on behalf of the Underwriters), upon giving notice in writing to our Company, to terminate the arrangements set out in the Public Offer Underwriting Agreement with immediate effect if any of the following events occur at any time prior to 8:00 a.m. (Hong Kong time) on the Listing Date (which is expected to be on Monday, 16 April 2018):

(a) it has come to the notice of the Joint Bookrunners that:
(i) any statement contained in this prospectus or other documents issued or used by or on behalf of our Company or information provided to the Joint Bookrunners in connection with the Share Offer (the ‘‘Relevant Documents’’), considered by the Joint Bookrunners in their absolute opinion was, when it was issued, or has become, or been discovered to be untrue, inaccurate, incorrect or misleading in any material respect;
(ii) any matter has arisen or has been discovered which would, had it arisen or been discovered immediately before the date of this prospectus, constitute an omission therefrom considered by the Joint Bookrunners in their absolute opinion to be material in the context of the Share Offer;

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UNDERWRITING

(iii) any breach of any of the obligations imposed upon any party to the Public Offer Underwriting Agreement and the Placing Underwriting Agreement considered by the Joint Bookrunners in their absolute opinion to be material in the context of the Share Offer (other than upon any of the Public Offer Underwriters);
(iv) either (1) there has been a breach of any of the warranties or provisions of the Public Offer Underwriting Agreement by any of our Company, our executive Directors or our Controlling Shareholders (collectively, the ‘‘Warrantors’’) or (2) any matter or event showing or rendering any of the warranties contained in the Public Offer Underwriting Agreement, as applicable, in the absolute opinion of the Joint Bookrunners, to be untrue, incorrect or misleading in any material respect when given or repeated;
(v) any event, act or omission which gives or is likely to give rise to any liability of a material nature of any of the Warrantors pursuant to the indemnity provisions under the Public Offer Underwriting Agreement; or
(vi) any event, series of events, matter or circumstance occurs or arises on or after the date of this prospectus and prior to 8:00 a.m. on the Listing Date, would have rendered any warranties, in the absolute opinion of the Joint Bookrunners, untrue, incorrect, inaccurate or misleading in any respect;
(b) there shall develop, occur, happen, exist or come into effect:
(i) any event, or series of events in the nature of force majeure, including, without limitation, acts of government, fire, explosion, flooding, civil commotion, acts of war, acts of God, acts of terrorism (whether or not responsibility has been claimed), declaration of a national or international emergency, riots, public disorder, economic sanctions, outbreaks of diseases or epidemics in Hong Kong;
(ii) any change or development involving a change or development, or any event or series of events, matters or circumstances likely to result in or represent any change or development, in the local, national, regional, international financial, economic, political, military, industrial, fiscal, regulatory, currency, credit, market or exchange control conditions or any monetary or trading settlement system or matters and/or disaster (including without limitation a change in the system under which the value of the Hong Kong currency is linked to that of the currency of the United States, or a material fluctuation in the exchange rate of the Hong Kong dollar);
(iii) any new law or regulation or any change or development involving a prospective change in existing laws or regulations or any change or development involving a prospective change in the interpretation or application thereof by any court or other competent authority in or affecting Hong Kong, the Cayman Islands or BVI (the ‘‘Relevant Jurisdictions’’);
(iv) the imposition of economic sanctions on any of the Relevant Jurisdictions;

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UNDERWRITING

(v) a change or development involving a prospective change in any taxation or exchange control (or the implementation of any exchange control) in any of the Relevant Jurisdictions;
(vi) any litigation or claim of importance instigated against any member of our Group or any Director;
(vii) a Director being charged with an indictable offence or prohibited by operation of law or regulation or otherwise disqualified from taking part in the management of a company;
(viii) a valid demand by any creditor for repayment or payment of any material indebtedness of any member of our Group or in respect of which any member of our Group is liable prior to its stated maturity;
(ix) any material loss or damage sustained by any member of our Group (howsoever caused and whether or not the subject of any insurance or claim against any person);
(x) any material contravention by any member of our Group or any Director of the GEM Listing Rules or any applicable laws;
(xi) a prohibition on our Company for whatever reason from allotting the Offer Shares pursuant to the terms of the Share Offer;
(xii) material non-compliance of this prospectus (and/or any other documents used in connection with the subscription and purchase of the Offer Shares) or any aspect of the Share Offer with the GEM Listing Rules or any other applicable laws by any of our Directors or the Warrantors;
(xiii) the issue or requirement to issue by our Company of a supplement or amendment to any of the Relevant Documents (and/or any other documents used in connection with the subscription of the Offer Shares);
(xiv) any material change in the business, business prospects, financial or trading position, conditions or prospects (financial or otherwise) of our Group taken as a whole;
(xv) a petition or an order is presented for the winding-up or liquidation of any member of our Group or any member of our Group makes any composition or arrangement with its creditors or enters into a scheme of arrangement or any resolution is passed for the winding-up of any member of our Group or a provisional liquidator, receiver or manager is appointed over all or part of the assets or undertaking of any member of our Group or any analogous matter thereto occurs in respect of any member of our Group;
(xvi) any material change or development in the conditions of local, national or international equity securities or other financial markets; or
(xvii) the imposition of any moratorium, suspension or restriction on trading in shares or securities generally on or by the Stock Exchange or by any of the other exchanges or by such system or by order of any regulatory or governmental authority,

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UNDERWRITING

which in each case or in aggregate in the absolute opinion of the Joint Bookrunners (for themselves and on behalf of the Underwriters):

(i) is or will be materially adverse to or may prejudicially affect the business, financial, trading or other condition or prospects of our Group (as a whole) or any member of our Group;
(ii) has or will have a material adverse effect on the success of the Share Offer or the level of interest under the Placing;
(iii) makes or may make it inadvisable, inexpedient or impracticable to proceed with the Share Offer or the delivery of the Offer Shares on the terms and in the manner contemplated by any of the Relevant Documents; or
(iv) has or would have the effect of making any part of the Public Offer Underwriting Agreement (including undertaking) incapable of implementation or performance in accordance with its terms and in the manner contemplated by any of the Relevant Documents and the Public Offer Underwriting Agreement or which prevents the processing of applications and/or payments pursuant to the Share Offer or pursuant to the underwriting thereof.

Without prejudice to the above, if, at any time prior to 8:00 a.m. (Hong Kong time) on the Listing Date, it comes to the notice of the Joint Bookrunners:

(a) any matter or event showing any of the warranties contained in the Public Offer Underwriting Agreement to be untrue, inaccurate or misleading in any material respect when given or repeated or any breach of any of the warranties contained in the Public Offer Underwriting Agreement or any other provision of the Public Offer Underwriting Agreement by any party hereto (other than the Joint Bookrunners), which is considered, in the sole and absolute opinion of the Joint Bookrunners (for themselves and on behalf of the Underwriters), to be material in the context of the Share Offer;
(b) any matter which, had it arisen immediately before the date of this prospectus and not having been disclosed in this prospectus, would have constituted a material omission in the sole and absolute opinion of the Joint Bookrunners (for themselves and on behalf of the Underwriters) in the context of the Share Offer;
(c) any statement contained in this prospectus reasonably considered to be material by the Joint Bookrunners which is discovered to be or becomes untrue, incorrect or misleading in any respect and in the sole and absolute opinion of the Joint Bookrunners (for themselves and on behalf of the Underwriters) to be material in the context of the Share Offer; or
(d) any event, act or omission which gives rise or is likely to give rise to any material liability of any of the Warrantors pursuant to the indemnities contained in the Public Offer Underwriting Agreement,

the Joint Bookrunners (for themselves and on behalf of the Underwriters) shall be entitled (but not bound) by notice in writing to our Company on or prior to such time to terminate the Public Offer Underwriting Agreement.

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UNDERWRITING

Placing Underwriting Agreement

In connection with the Placing, it is expected that we will enter into the Placing Underwriting Agreement with, among others, the Placing Underwriters on terms and conditions that are substantially similar to the Public Offer Underwriting Agreement as described above and on the additional terms described below.

Under the Placing Underwriting Agreement, subject to the conditions set forth therein, the Placing Underwriters are expected to procure subscribers to subscribe for, or failing which they shall subscribe for, the 225,000,000 Placing Shares (subject to reallocation and the Offer Size Adjustment Option) initially being offered pursuant to the Placing. It is expected that the Placing Underwriting Agreement may be terminated on similar grounds as the Public Offer Underwriting Agreement. Potential investors shall be reminded that in the event that the Placing Underwriting Agreement is not entered into, the Share Offer will not proceed. The Placing Underwriting Agreement is conditional on and subject to the Public Offer Underwriting Agreement having been executed, becoming unconditional on or before such time and date in accordance with its terms and not having been terminated. It is expected that pursuant to the Placing Underwriting Agreement, our Company and Controlling Shareholders will make similar undertakings as those given pursuant to the Public Offer Underwriting Agreement as described in the paragraphs headed ‘‘Undertakings to the Stock Exchange’’ and ‘‘Undertakings pursuant to the Public Offer Underwriting Agreement’’ below in this section.

UNDERTAKINGS

Undertaking to the Stock Exchange

Undertakings by our Company

Pursuant to Rule 17.29 of the GEM Listing Rules, our Company has undertaken to the Stock Exchange that save as pursuant to the Share Offer (including the grant and exercise of the options under the Share Option Scheme), no further Shares or securities convertible into equity securities of our Company (whether or not of a class already listed) may be issued by our Company or form the subject of any agreement to such an issue by our Company within six months from the Listing Date (whether or not such issue of Shares or securities of our Company will be completed within six months from the Listing Date), except in certain circumstances prescribed by Rule 17.29 of the GEM Listing Rules.

Undertakings by our Controlling Shareholders

Pursuant to Rule 13.16A(1) of the GEM Listing Rules, each of the Controlling Shareholders has undertaken to the Stock Exchange and our Company that, except for the circumstances permitted pursuant to Rule 13.18 of the GEM Listing Rules, he/she/it shall not:

(a) in the period commencing on the date by reference to which disclosure of his/her/its shareholding in our Company is made in this prospectus and ending on the date which is six months from the Listing Date, dispose of, nor enter into any agreement to dispose of or otherwise create any options, rights, interests or encumbrances in respect of, any of those Shares in respect of which he/she/it is shown by this prospectus to be the beneficial owners; or

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UNDERWRITING

(b) in the period of six months commencing on the date on which the period referred to in paragraph (a) above expires, dispose of, nor enter into any agreement to dispose of or otherwise create any options, rights, interests or encumbrances in respect of, any of our Shares referred to in paragraph (a) above if, immediately following such disposal or upon the exercise or enforcement of such options, rights, interests or encumbrances, the Controlling Shareholders would cease to be controlling shareholders (as defined in the GEM Listing Rules).

Pursuant to Rule 13.19 of the GEM Listing Rules, each of the Controlling Shareholders has further undertaken to our Company and the Stock Exchange that he/she/it shall, and shall procure that the relevant registered holder(s) shall:

(a) in the event that he/she/it pledges or charges any direct or indirect interest in the Shares under Rule 13.18(1) of the GEM Listing Rules or pursuant to any right or waiver granted by the Stock Exchange pursuant to Rule 13.18(4) of the GEM Listing Rules, at any time during the 12-month period from the Listing Date, inform our Company immediately thereafter, disclosing the details specified in Rule 17.43(1) to (4) of the GEM Listing Rules; and
(b) having pledged or charged any interest in the Shares under (a) above, inform our Company immediately in the event that he/she/it becomes aware that the pledgee or chargee has disposed of or intends to dispose of such interest and of the number of Shares affected.

Our Company shall, upon being informed of any matter under (a) or (b) above, forthwith publish an announcement giving details of the same in accordance with the GEM Listing Rules.

Undertakings to the Public Offer Underwriters

Undertakings by our Company

Our Company has undertaken to and covenanted with the Sole Sponsor and the Joint Bookrunners (for themselves and on behalf of the Public Offer Underwriters) that we shall not, unless in compliance with the requirements of the GEM Listing Rules (including but not limited to Rule 17.29 of the GEM Listing Rules), except for the issue of Shares under the Share Offer, the Capitalisation Issue, the grant of any option under the Share Option Scheme or the issue of Shares upon exercise of any option to be granted under the Share Option Scheme, at any time during the period from the date of this prospectus and ending on the date which is six months from the Listing Date (the ‘‘Lock-Up Period’’):

(a) allot, issue, sell, accept subscription for, offer to allot, issue or sell, contract or agree to allot, issue or sell, mortgage, charge, pledge, hypothecate, lend, grant or sell any option, warrant, contract or right to subscribe for or purchase, grant or purchase any option, warrant, contract or right to allot, issue or sell, or otherwise transfer or dispose of or create an encumbrance over, or agree to transfer or dispose of or create an encumbrance over, either directly or indirectly, conditionally or unconditionally, any Shares or other securities of our Company, or any interest in any of the foregoing (including, without limitation, any securities convertible into or exchangeable or exercisable for or that represent the right to receive, or any warrants or other rights to purchase, any Shares), or deposit any Shares or other securities of our Company, with a depositary in connection with the issue of depositary receipts;

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UNDERWRITING

(b) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Shares or other securities of our Company, or any interest in any of the foregoing (including, without limitation, any securities convertible into or exchangeable or exercisable for or that represent the right to receive, or any warrants or other rights to purchase, any Shares);
(c) enter into any transaction with the same economic effect as any transaction specified in (a) or (b) above; or
(d) offer to or agree to or announce any intention to effect any transaction specified in (a), (b) or (c) above, in each case, whether any of the transactions specified in (a), (b) or (c) above is to be settled by delivery of Shares or other securities of our Company, or in cash or otherwise (whether or not such transaction will be completed within the Lock-Up Period).

Undertakings by our Controlling Shareholders

Each of the Controlling Shareholders has jointly and severally undertaken to and covenanted with each of the Sole Sponsor and the Joint Bookrunners (for themselves and on behalf of the Public Offer Underwriters) that, unless in compliance with the GEM Listing Rules, he/she/it shall, and shall procure that his/her/its close associates or the relevant registered holder(s), nominee(s) or trustee(s) holding on trust for him/her/it or the companies controlled by him/her/it, without the prior written consent of the Sole Sponsor and the Joint Bookrunners (for themselves and on behalf of the Public Offer Underwriters):

(a) at any time during the period commencing on the date of this prospectus and ending on, and including, the date that is six months after the Listing Date (the ‘‘First Six-Month Period’’), not to:
(i) sell, offer to sell, contract or agree to sell, mortgage, charge, pledge, hypothecate, lend, grant or sell any option, warrant, contract or right to purchase, grant or purchase any option, warrant, contract or right to sell, or otherwise transfer or dispose of or create any encumbrances over, or agree to transfer or dispose of or create encumbrances over, either directly or indirectly, conditionally or unconditionally, any Shares or any other securities of our Company (including, without limitation, any securities convertible into or exchangeable or exercisable for or that represent the right to receive, or any warrants or other rights to purchase, any Shares, as applicable) in respect of which he/she/it is shown by this prospectus to be the beneficial owner (whether direct or indirect) (the ‘‘Lock-Up Securities’’) or any interest therein;
(ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Lock-Up Securities or any interest therein;
(iii) enter into any transaction with the same economic effect as any transaction specified in paragraph (a)(i) or (a)(ii) above; or
(iv) offer to or agree to or announce any intention to effect any transaction specified in paragraph(a)(i), (a)(ii) or (a)(iii) above,

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UNDERWRITING

in each case, whether any of the transactions specified in paragraph (a)(i), (a)(ii) or (a)(iii) above is to be settled by delivery of the Shares or such other securities of our Company or in cash or otherwise (whether or not the issue of Shares or such other securities will be completed within the First Six-Month Period);

(b) at any time during the six-month period immediately following the First Six-Month Period (the ‘‘Second Six-Month Period’’), not to enter into any of the transactions specified in paragraphs (a)(i), (a)(ii) and (a)(iii) above or offer to or agree to or announce any intention to effect any such transaction if, immediately following any such sale, transfer or disposal or upon the exercise or enforcement of any such options, rights, interests or encumbrances pursuant to such transaction, he/she/it will cease to be the controlling shareholders (as defined in the GEM Listing Rules) of our Company; and
(c) until the expiry of the Second Six-Month Period, in the event that he/she/it enters into any of the transactions specified in paragraphs (a)(i), (a)(ii) and (a)(iii) above or offers to or agrees to or announces any intention to effect any such transaction, take all steps to ensure that any such transaction, offer, agreement or announcement will not create a disorderly or false market in our Shares or any other securities of our Company.

Total commission, fee and expenses

In connection with the Share Offer, the Underwriters will receive an underwriting commission of 8% of the aggregate Offer Price payable for the Offer Shares according to the arrangement of the Underwriting Agreements, out of which they will pay any sub-underwriting commissions.

In connection with the Listing and the Share Offer, the total expenses to be borne by our Company (assuming the Offer Price of HK$0.25 (being the mid-point of the stated range of the Offer Price) including underwriting commission, brokerage, the Stock Exchange trading fee, the SFC transaction levy, the sole sponsorship fee, the listing fees and legal and other professional fees, printing and other expenses) are approximately HK$25.5 million.

Sole Sponsor’s and Underwriters’ interest in our Company

The Sole Sponsor satisfies the independence criteria applicable to sponsor as set out in Rule 6A.07 of the GEM Listing Rules.

Following the completion of the Share Offer, the Underwriters and their respective affiliated companies may hold a certain portion of the Shares as a result of fulfilling their obligations under the Underwriting Agreements.

Save for their interests and obligations under the Underwriting Agreements, the sole sponsorship fee payable to the Sole Sponsor in connection with the Listing, and the fee payable to the Sole Sponsor for acting as our compliance adviser, none of the Sole Sponsor, the Joint Bookrunners, the Joint Lead Managers and the Underwriters is interested, beneficially or otherwise, in any shares in any member of our Group or has any right (whether legally enforceable or not) or option to subscribe for or to nominate persons to subscribe for any shares in any member of our Group.

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STRUCTURE AND CONDITIONS OF THE SHARE OFFER

THE SHARE OFFER

The Share Offer comprises the Placing and the Public Offer. A total of initially 250,000,000 Offer Shares will be made available under the Share Offer, of which 225,000,000 Placing Shares (subject to reallocation and the Offer Size Adjustment Option), representing 90% of the Offer Shares, will initially be conditionally placed with selected professional, institutional and private investors under the Placing. The remaining 25,000,000 Public Offer Shares (subject to reallocation), representing 10% of the Offer Shares, will initially be offered to members of the public in Hong Kong under the Public Offer. The Public Offer is open to all members of the public in Hong Kong as well as to institutional and professional investors. The Public Offer Underwriters have agreed to underwrite the Public Offer Shares under the terms of the Public Offer Underwriting Agreement. The Placing Underwriters will underwrite the Placing Shares pursuant to the terms of the Placing Underwriting Agreement. Further details of the underwriting are set out in the section headed ‘‘Underwriting’’ of this prospectus. Investors may apply for Offer Shares under the Public Offer or indicate an interest for Offer Shares under the Placing, but may not do both.

The Placing

Our Company is expected to offer initially 225,000,000 Shares (subject to reallocation and the Offer Size Adjustment Option) at the Offer Price under the Placing. The number of Placing Shares expected to be initially available for application under the Placing represents 90% of the total number of Offer Shares being initially offered under the Share Offer, and approximately 22.5% of our Company’s enlarged issued share capital immediately after completion of the Share Offer and the Capitalisation Issue. The Placing is expected to be fully underwritten by the Placing Underwriters (subject to satisfaction or waiver of the other conditions provided in the Placing Underwriting Agreement).

It is expected that the Placing Underwriters or selling agents nominated by them, on behalf of our Company, will conditionally place the Placing Shares at the Offer Price with selected professional, institutional and other investors. Professional and institutional investors generally include brokers, dealers, companies (including fund managers) whose ordinary business involves dealing in shares and other securities and corporate entities which regularly invest in shares and other securities.

Allocation of the Placing Shares will be based on a number of factors, including the level and timing of demand and whether or not it is expected that the relevant investor is likely to acquire further Shares and/or hold or sell its Shares after the Listing. Such allocation is intended to result in a distribution of the Placing Shares on a basis which would lead to the establishment of a solid shareholder base to the benefit of our Company and its shareholders as a whole. Investors to whom Placing Shares are offered will be required to undertake not to apply for Shares under the Public Offer.

The Public Offer

Our Company is initially offering 25,000,000 Public Offer Shares for subscription (subject to reallocation) by members of the public in Hong Kong under the Public Offer, representing 10% of the total number of Offer Shares offered under the Share Offer, and approximately 2.5% of our Company’s enlarged issued share capital immediately after completion of the Share Offer and the Capitalisation Issue. The Public Offer is fully underwritten by the Public Offer Underwriters (subject to satisfaction or waiver of the other conditions provided in the Public Offer Underwriting Agreement). Applicants for the

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STRUCTURE AND CONDITIONS OF THE SHARE OFFER

Public Offer Shares are required on application to pay the maximum Offer Price of HK$0.27 per Share plus 1% brokerage, 0.005% Stock Exchange trading fee and 0.0027% SFC transaction levy on each Offer Share.

The Public Offer is open to all members of the public in Hong Kong as well as to institutional and professional investor. An applicant for Shares under the Public Offer will be required to give an undertaking and confirmation in the application submitted by him/her/it that he/she/it has not applied for nor taken up any Shares under the Placing nor otherwise participated in the Placing. Applicants should note that if such undertaking and/or confirmation given by an applicant is breached and/or is untrue (as the case may be), such applicant’s application under the Public Offer is liable to be rejected. Multiple applications or suspected multiple applications and any application made for more than 100% of the Shares initially comprised in the Public Offer (i.e. 25,000,000 Public Offer Shares) are liable to be rejected.

Allocation of the Public Offer Shares to investors under the Public Offer will be based solely on the level of valid applications received under the Public Offer. When there is oversubscription under the Public Offer, allocation of the Public Offer Shares may involve balloting, which would mean that some applicants may be allotted more Public Offer Shares than others who have applied for the same number of the Public Offer Shares, and those applicants who are not successful in the ballot may not receive any Public Offer Shares.

REALLOCATION OF THE OFFER SHARES BETWEEN PLACING AND PUBLIC OFFER

The allocation of the Offer Shares between the Placing and the Public Offer is subject to reallocation on the following basis:

(a) In the event that the Placing Shares are fully subscribed or oversubscribed under the Placing:
(i) if the Public Offer Shares are undersubscribed, the Joint Bookrunners, at their absolute discretion, may reallocate all or any of the unsubscribed Public Offer Shares from the Public Offer to the Placing;
(ii) if the Public Offer Shares are fully subscribed or oversubscribed and the number of Shares validly applied for under the Public Offer represents less than 15 times the number of Shares initially available for subscription under the Public Offer, then up to 25,000,000 Shares may be reallocated to the Public Offer from the Placing, so that the total number of Shares available for subscription under the Public Offer will be increased to 50,000,000 Shares, representing 20% of the total number of Offer Shares initially available for subscription under the Share Offer (before any exercise of the Offer Size Adjustment Option);
(iii) if the number of Shares validly applied for under the Public Offer represents 15 times or more but less than 50 times the number of Shares initially available for subscription under the Public Offer, then Shares will be reallocated to the Public Offer from the Placing, so that the total number of Shares available for subscription under the Public Offer will be increased to 75,000,000 Shares, representing 30% of the number of the Offer Shares initially available for subscription under the Share Offer (before any exercise of the Offer Size Adjustment Option);

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STRUCTURE AND CONDITIONS OF THE SHARE OFFER

(iv) if the number of Shares validly applied for under the Public Offer represents 50 times or more but less than 100 times the number of Shares initially available for subscription under the Public Offer, then Shares will be reallocated to the Public Offer from the Placing, so that the number of Shares available for subscription under the Public Offer will be increased to 100,000,000 Shares, representing 40% of the number of the Offer Shares initially available for subscription under the Share Offer (before any exercise of the Offer Size Adjustment Option); and
(v) if the number of Shares validly applied for under the Public Offer represents 100 times or more the number of Shares initially available for subscription under the Public Offer, then Shares will be reallocated to the Public Offer from the Placing, so that the number of Shares available for subscription under the Public Offer will be increased to 125,000,000 Shares, representing 50% of the number of the Offer Shares initially available for subscription under the Share Offer (before any exercise of the Offer Size Adjustment Option).
(b) In the event that the Placing Shares are undersubscribed under the Placing:
(i) if the Public Offer Shares are undersubscribed, the Share Offer shall not proceed unless fully underwritten by the Underwriters pursuant to the Underwriting Agreements; and
(ii) if the Public Offer Shares are fully subscribed or oversubscribed irrespective of the number of times, then up to 25,000,000 Shares may be reallocated to the Public Offer from the Placing, so that the total number of Shares available for subscription under the Public Offer will be increased to 50,000,000 Shares, representing 20% of the total number of Offer Shares initially available for subscription under the Share Offer (before any exercise of the Offer Size Adjustment Option).

In all cases, the number of Offer Shares allocated to the Placing will be correspondingly reduced.

If reallocation of Shares from the Placing to the Public Offer is done other than pursuant to the clawback mechanism under Practice Note 6 to the GEM Listing Rules (including the circumstances specified under paragraph (a)(iii), (a)(iv) or (a)(v) above), the Offer Shares to be offered in the Public Offer and the Placing may be reallocated as between these offerings at the discretion of the Joint Bookrunners (for themselves and on behalf of the Underwriters), subject to the maximum total number of Offer Shares that may be allocated to the Public Offer, being 50,000,000 Shares, representing twice the number of Offer Shares initially allocated to the Public Offer, in accordance with Guidance Letter HKEX-GL-91-18.

Details of any re-allocation of Offer Shares between the Public Offer and the Placing will be disclosed in the results announcement of the Share Offer, which is expected to be published on Friday, 13 April 2018.

OFFER SIZE ADJUSTMENT OPTION

In connection with the Placing, it is expected that our Company will grant to the Placing Underwriters, exercisable by the Joint Bookrunners (for themselves on behalf of the Placing Underwriters), the Offer Size Adjustment Option to cover over-allocations under the Placing (if any).

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STRUCTURE AND CONDITIONS OF THE SHARE OFFER

Pursuant to the Offer Size Adjustment Option, our Company may be required to allot and issue, at the Offer Price, up to an aggregate of 37,500,000 additional new Shares, representing 15% of the Offer Shares initially available under the Share Offer. The Offer Size Adjustment Option can only be exercised by the Joint Bookrunners at any time during the period from the date of the Placing Underwriting Agreement to 12:00 noon (Hong Kong time) on the business day immediately prior to the date of the announcement of the results of applications and the basis of allocation of the Public Offer Shares; otherwise it will lapse. The Shares to be issued pursuant to the exercise of the Offer Size Adjustment Option will not be used for price stabilisation purpose and are not subject to the Securities and Futures (Price Stabilizing) Rules (Chapter 571W of the Laws of Hong Kong).

If the Offer Size Adjustment Option is exercised in full, the additional Offer Shares will represent approximately 3.61% of the enlarged issued share capital of our Company following completion of the Capitalisation Issue, the Share Offer and the exercise of the Offer Size Adjustment Option but without taking into account any Shares which may be issued upon the exercise of any options that may be granted under the Share Option Scheme. The additional net proceeds that we would receive if the Offer Size Adjustment Option is exercised in full (assuming the Offer Price of HK$0.25 per Offer Share (being the mid-point of the indicative Offer Price range)) are estimated to be approximately HK$8.6 million, which would be applied to the respective uses as disclosed in the section headed ‘‘Future Plans and Use of Proceeds’’ of this prospectus on a pro-rata basis.

Whether the Offer Size Adjustment Option is exercised will be disclosed in the allotment results announcement.

OFFER PRICE

The Offer Price will be fixed by the Price Determination Agreement on the Price Determination Date, which is expected to be on or around Monday, 9 April 2018 or such later date as the Joint Bookrunners (for themselves and on behalf of the Underwriters) and our Company may agree. If the Joint Bookrunners (for themselves and on behalf of the Underwriters) and our Company are unable to reach an agreement on the Offer Price by the Price Determination Date, the Share Offer will not become unconditional and will not proceed. The Joint Bookrunners (for themselves and on behalf of the Underwriters) may, with the consent of our Company, reduce the indicative Offer Price range to below that stated in this prospectus at any time prior to the Price Determination Date. In such a case, our Company will, as soon as practicable following the decision to make such reduction, cause to be published on the website of the Stock Exchange at www.hkexnews.hk and our Company’s website at www.mrsteak.com.hk, an announcement of such change on or before the Price Determination Date and will issue a supplemental prospectus updating investors of the change in the indicative Offer Price; extend the period under which the Public Offer was open for acceptance to allow potential investors sufficient time to consider their subscriptions or reconsider their submitted subscriptions; and give potential investors who had applied for the Shares the right to withdraw their applications under the Public Offer. In such event, details of the arrangement will be announced by our Company as soon as practicable. Prospective investors of the Offer Shares should be aware that the Offer Price to be determined on the Price Determination Date may be, but is currently not expected to be, lower than the indicative Offer Price range stated in this prospectus.

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STRUCTURE AND CONDITIONS OF THE SHARE OFFER

The Offer Price will not be more than HK$0.27 per Offer Share and is expected to be not less than HK$0.23 per Offer Share. The Offer Price will fall within the indicative Offer Price range as stated in this prospectus, unless otherwise announced.

If for any reason the Price Determination Date is changed, our Company will as soon as practicable cause to be published on the website of the Stock Exchange at www.hkexnews.hk and our Company’s website at www.mrsteak.com.hk a notice of the change and if applicable the revised date. The net proceeds from the Share Offer based on the Offer Price of HK$0.25 per Share (being the midpoint of the stated range of the Offer Price) are estimated to be approximately HK$37.0 million, after deduction of the underwriting commission and other expenses relating to the Share Offer and the Listing payable by our Company.

ANNOUNCEMENT OF OFFER PRICE AND BASIS OF ALLOCATIONS

Announcement of the final Offer Price, together with the level of indication of interests in the Placing, the level of applications in the Public Offer and the basis of allocation of the Public Offer Shares is expected to be published on the website of the Stock Exchange at www.hkexnews.hk and our Company’s website at www.mrsteak.com.hk on Friday, 13 April 2018.

PRICE PAYABLE ON APPLICATION

The Offer Price will not be more than HK$0.27 per Offer Share and is expected to be not less than HK$0.23 per Offer Share. Applicants under the Public Offer should pay, on application, the maximum Offer Price of HK$0.27 per Offer Share plus 1% brokerage, 0.005% Stock Exchange trading fee and 0.0027% SFC transaction levy, amounting to a total of HK$2,727.21 per board lot of 10,000 Offer Shares. If the Offer Price, as finally determined in the manner described above, is lower than the maximum Offer Price of HK$0.27 per Offer Share, appropriate refund payments (including the related brokerage, the Stock Exchange trading fee and the SFC transaction levy attributable to the excess application monies) will be made to applicants, without interest.

Further details are set out in the section headed ‘‘How to Apply for Public Offer Shares’’ of this prospectus.

CONDITIONS OF THE SHARE OFFER

Acceptance of all applications for Offer Shares will be conditional upon, among others:

(i) the Stock Exchange granting the listing of, and permission to deal in, the Shares in issue and to be issued as mentioned in this prospectus on GEM and such grant and permission not subsequently being revoked prior to the Listing Date;
(ii) the Price Determination Agreement between our Company and the Joint Bookrunners (for themselves and on behalf of the Underwriters) being entered into on or before the Price Determination Date and such agreement not having been subsequently terminated; and

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STRUCTURE AND CONDITIONS OF THE SHARE OFFER

(iii) the obligations of the Underwriters under the Underwriting Agreements becoming unconditional (including the waiver of any condition(s) by the Joint Bookrunners (for themselves and on behalf of the Underwriters) and the Underwriting Agreements not being terminated in accordance with the terms of that agreement or otherwise).

The consummation of each of the Public Offer and the Placing is conditional upon, among other things, the other offering becoming unconditional and not having been terminated in accordance with its terms.

If such conditions have not been fulfilled or waived by the Joint Bookrunners (for themselves and on behalf of the Underwriters) prior to the times and dates specified, the Share Offer will lapse and the Stock Exchange will be notified immediately. Notice of the lapse of the Share Offer will be published by our Company on the website of the Stock Exchange at www.hkexnews.hk and our Company’s website at www.mrsteak.com.hk on the next Business Day following such lapse.

SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS

Application has been made to the Stock Exchange for the listing of and permission to deal in the Shares in issue and to be issued as mentioned in this prospectus. Subject to the granting of the listing of, and permission to deal in, the Shares in issue and to be issued as mentioned in this prospectus on GEM and the compliance with the stock admission requirements of HKSCC, the Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the Listing Date, or any other date as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange is required to take place in CCASS on the second Business Day after any trading day. Investors should seek the advice of their stockbroker or other professional adviser for details of those settlement arrangements as such arrangements will affect their rights and interests.

All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

All necessary arrangements have been made to enable the Shares to be admitted into CCASS.

DEALINGS AND SETTLEMENT

Assuming that the Share Offer becomes unconditional at or before 8:00 a.m. in Hong Kong on Monday, 16 April 2018, dealings in the Shares on GEM are expected to commence at 9:00 a.m. on Monday, 16 April 2018. Shares will be traded in board lots of 10,000 Shares each.

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HOW TO APPLY FOR PUBLIC OFFER SHARES

1. HOW TO APPLY

If you apply for Public Offer Shares, then you may not apply for or indicate an interest for Placing Shares. To apply for Public Offer Shares, you may:

. use a WHITE or YELLOW Application Form; or
. electronically cause HKSCC Nominees to apply on your behalf.

None of you or your joint applicant(s) may make more than one application, except where you are a nominee and provide the required information in your application.

Our Company, the Joint Bookrunners and the Joint Lead Managers, and their respective agents may reject or accept any application in full or in part for any reason at their discretion.

2. WHO CAN APPLY FOR THE PUBLIC OFFER SHARES

You can apply for Public Offer Shares on a WHITE or YELLOW Application Form if you or the person(s) for whose benefit you are applying:

. are 18 years of age or older;
. have a Hong Kong address;
. are outside the United States, and are not a United States Person (as defined in Regulation S under the U.S. Securities Act); and
. are not a legal or natural person of the PRC.

If you are a firm, the application must be in the individual members’ names. If you are a body corporate, the application form must be signed by a duly authorised officer, who must state his representative capacity, and stamped with your corporation’s chop.

If an application is made by a person under a power of attorney, our Company, the Joint Bookrunners and the Joint Lead Managers may accept it at their discretion and on any conditions they think fit, including evidence of the attorney’s authority.

The number of joint applicants may not exceed four for the Public Offer Shares.

Unless permitted by the GEM Listing Rules, you cannot apply for any Public Offer Shares if you are:

. an existing beneficial owner of Shares and/or any of our subsidiaries;
. a Director or chief executive officer of our Company and/or any of our subsidiaries;
. a connected person of our Company or will become a connected person of our Company immediately upon completion of the Share Offer;

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HOW TO APPLY FOR PUBLIC OFFER SHARES

. an associate (as defined in the GEM Listing Rules) of any of the above; and
. have been allocated or have applied for any Placing Shares or otherwise participate in the Placing.

3. APPLYING FOR PUBLIC OFFER SHARES

Which Application Channel to Use

For Public Offer Shares to be issued in your own name, use a WHITE Application Form.

For Public Offer Shares to be issued in the name of HKSCC Nominees and deposited directly into CCASS to be credited to your or a designated CCASS Participant’s stock account, use a YELLOW Application Form or electronically instruct HKSCC via CCASS to cause HKSCC Nominees to apply for you.

Where to Collect the Application Forms

You can collect a WHITE Application Form and a prospectus during normal business hours from 9:00 a.m. on Thursday, 29 March 2018 to 12:00 noon on Friday, 6 April 2018 from:

(i) any of the following offices of the Public Offer Underwriters:

Alliance Capital Partners Limited

Room 1502–1503A Wing On House 71 Des Voeux Road Central Central Hong Kong

Sincere Securities Limited

9/F, Cosco Tower 183 Queen’s Road Central Sheung Wan Hong Kong

China Industrial Securities International Capital Limited

7/F, Three Exchange Square 8 Connaught Place Central Hong Kong

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HOW TO APPLY FOR PUBLIC OFFER SHARES

(ii) any of the following branches of DBS Bank (Hong Kong) Limited:

District	Branch	Address
Hong Kong Island	North Point Branch	G/F, 391 King’s Road
		North Point
Kowloon	Amoy Plaza Branch	Shops G193–195
		Amoy Plaza
		77 Ngau Tau Kok Road
		Ngau Tau Kok
	Nathan Road —	2/F, Wofoo Commercial Building
	SME Banking Centre	574–576 Nathan Road
		Mongkok
New Territories	Tuen Mun Town Plaza —	Shop 23, G/F
	SME Banking Centre	Tuen Mun Town Plaza (II)
		3 Tuen Lung Street
		Tuen Mun

You can collect a YELLOW Application Form and a prospectus during normal business hours from 9:00 a.m. on Thursday, 29 March 2018 until 12:00 noon on Friday, 6 April 2018 from the Depository Counter of HKSCC at 1/F, One & Two Exchange Square, 8 Connaught Place, Central, Hong Kong or from your stockbroker.

Time for Lodging Application Forms

Your completed WHITE or YELLOW Application Form, together with a cheque or a banker’s cashier order attached and marked payable to ‘‘Ting Hong Nominees Limited — MS Concept Public Offer’’ for the payment, should be deposited in the special collection boxes provided at any of the branches of the receiving bank listed above, at the following times:

Thursday, 29 March 2018 — 9:00 a.m. to 5:00 p.m. Tuesday, 3 April 2018 — 9:00 a.m. to 5:00 p.m. Wednesday, 4 April 2018 — 9:00 a.m. to 5:00 p.m. Friday, 6 April 2018 — 9:00 a.m. to 12:00 noon

The application lists will be opened from 11:45 a.m. to 12:00 noon on Friday, 6 April 2018, the last application day or such later time as described in the paragraph headed ‘‘9. Effect of bad weather on the opening of the applications lists’’ in this section.

4. TERMS AND CONDITIONS OF AN APPLICATION

Follow the detailed instructions in the Application Form carefully; otherwise, your application may be rejected.

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HOW TO APPLY FOR PUBLIC OFFER SHARES

By submitting an Application Form, among other things, (and if you are joint applicants, each of you jointly and severally) for yourself or as an agent or a nominee on behalf of each person of whom you act:

(i) undertake to execute all relevant documents and instruct and authorise our Company and/or the Joint Bookrunners and the Joint Lead Managers (or their agents or nominees), as agents of our Company, to execute any documents for you and to do on your behalf all things necessary to register any Public Offer Shares allocated to you in your name or in the name of HKSCC Nominees as required by the Articles of Association;
(ii) agree to comply with the Companies Ordinance, the CWUMPO and the Articles of Association;
(iii) confirm that you have read the terms and conditions and application procedures set out in this prospectus and in the Application Form and agree to be bound by them;
(iv) confirm that you have received and read this prospectus and have only relied on the information and representations contained in this prospectus in making your application and will not rely on any other information or representations except those in any supplement to this prospectus;
(v) confirm that you are aware of the restrictions on the Share Offer in this prospectus;
(vi) agree that none of our Company, the Sole Sponsor, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, their respective directors, officers, employees, partners, agents, advisers and any other parties involved in the Share Offer is or will be liable for any information and representations not in this prospectus (and any supplement to it);
(vii) undertake and confirm that you or the person(s) for whose benefit you have made the application have not applied for or taken up, or indicated an interest for, and will not apply for or take up, or indicate an interest for, any Offer Shares under the Placing nor participated in the Placing;
(viii) agree to disclose to our Company, our Hong Kong Branch Share Registrar, receiving bank, the Sole Sponsor, the Joint Bookrunners, the Joint Lead Managers, the Underwriters and/or their respective advisers and agents any personal data which they may require about you and the person(s) for whose benefit you have made the application;
(ix) if the laws of any place outside Hong Kong apply to your application, agree and warrant that you have complied with all such laws and none of our Company, the Sole Sponsor, the Joint Bookrunners, the Joint Lead Managers and the Underwriters nor any of their respective officers or advisers will breach any law outside Hong Kong as a result of the acceptance of your offer to purchase, or any action arising from your rights and obligations under the terms and conditions contained in this prospectus and the Application Form;
(x) agree that once your application has been accepted, you may not rescind it because of an innocent misrepresentation;

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(xi) agree that your application will be governed by the laws of Hong Kong;
(xii) represent, warrant and undertake that (i) you understand that the Public Offer Shares have not been and will not be registered under the U.S. Securities Act; and (ii) you and any person for whose benefit you are applying for the Public Offer Shares are outside the United States (as defined in Regulation S) or are a person described in paragraph (h)(3) of Rule 902 of Regulation S;
(xiii) warrant that the information you have provided is true and accurate;
(xiv) agree to accept the Public Offer Shares applied for, or any lesser number allocated to you under the application;
(xv) authorise our Company to place your name(s) or the name of the HKSCC Nominees, on our Company’s register of members as the holder(s) of any Public Offer Shares allocated to you, and our Company and/or its agents to send any share certificate(s) and/or any refund cheque(s) to you or the first-named applicant for joint application by ordinary post at your own risk to the address stated on the application, unless you are eligible to collect the share certificate(s) and/or refund cheque(s) in person;
(xvi) declare and represent that this is the only application made and the only application intended by you to be made to benefit you or the person for whose benefit you are applying;
(xvii) understand that our Company, the Joint Bookrunners and the Joint Lead Managers will rely on your declarations and representations in deciding whether or not to make any allotment of any of the Public Offer Shares to you and that you may be prosecuted for making a false declaration;
(xviii) (if the application is made for your own benefit) warrant that no other application has been or will be made for your benefit on a WHITE or YELLOW Application Form or by giving electronic application instructions to HKSCC by you or by any one as your agent or by any other person; and
(xix) (if you are making the application as an agent for the benefit of another person) warrant that (i) no other application has been or will be made by you as agent for or for the benefit of that person or by that person or by any other person as agent for that person on a WHITE or YELLOW Application Form or by giving electronic application instructions to HKSCC; and (ii) you have due authority to sign the Application Form or give electronic application instructions on behalf of that other person as their agent.

Additional Instructions for YELLOW Application Form

You may refer to the YELLOW Application Form for details.

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APPLYING BY GIVING ELECTRONIC APPLICATION INSTRUCTIONS TO HKSCC VIA CCASS

General

CCASS Participants may give electronic application instructions to apply for the Public Offer Shares and to arrange payment of the money due on application and payment of refunds under their participant agreements with HKSCC and the General Rules of CCASS and the CCASS Operational Procedures.

If you are a CCASS Investor Participant, you may give these electronic application instructions through the CCASS Phone System by calling (852) 2979 7888 or through the CCASS Internet System (https://ip.ccass.com) (using the procedures in HKSCC’s ‘‘An Operating Guide for Investor Participants’’ in effect from time to time).

HKSCC can also input electronic application instructions for you if you go to:

Hong Kong Securities Clearing Company Limited

Customer Service Center 1/F, One & Two Exchange Square, 8 Connaught Place, Central, Hong Kong

and complete an input request form.

You can also collect a prospectus from this address.

If you are not a CCASS Investor Participant, you may instruct your broker or custodian who is a CCASS Clearing Participant or a CCASS Custodian Participant to give electronic application instructions via CCASS terminals to apply for the Public Offer Shares on your behalf.

You will be deemed to have authorised HKSCC and/or HKSCC Nominees to transfer the details of your application to our Company, the Joint Bookrunners, the Joint Lead Managers and our Hong Kong Branch Share Registrar.

Giving electronic application instructions to HKSCC via CCASS

Where you have given electronic application instructions to apply for the Public Offer Shares and a WHITE Application Form is signed by HKSCC Nominees on your behalf:

(i) HKSCC Nominees will only be acting as a nominee for you and is not liable for any breach of the terms and conditions of the WHITE Application Form or this prospectus;

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(ii) HKSCC Nominees will do the following things on your behalf:
. agree that the Public Offer Shares to be allotted shall be issued in the name of HKSCC Nominees and deposited directly into CCASS for the credit of the CCASS Participant’s stock account on your behalf or your CCASS Investor Participant’s stock account;
. agree to accept the Public Offer Shares applied for or any lesser number allocated;
. undertake and confirm that you have not applied for or taken up, will not apply for or take up, or indicate an interest for, any Placing Shares under the Placing;
. (if the electronic application instructions are given for your benefit) declare that only one set of electronic application instructions has been given for your benefit;
. (if you are an agent for another person) declare that you have only given one set of electronic application instructions for the other person’s benefit and are duly authorised to give those instructions as their agent;
. confirm that you understand that our Company, our Directors, the Joint Bookrunners and the Joint Lead Managers will rely on your declarations and representations in deciding whether or not to make any allotment of any of the Public Offer Shares to you and that you may be prosecuted if you make a false declaration;
. authorise our Company to place HKSCC Nominees’ name on our Company’s register of members as the holder of the Public Offer Shares allocated to you and to send share certificate(s) and/or refund monies under the arrangements separately agreed between us and HKSCC;
. confirm that you have read the terms and conditions and application procedures set out in this prospectus and agree to be bound by them;
. confirm that you have received and/or read a copy of this prospectus and have relied only on the information and representations in this prospectus in causing the application to be made, save as set out in any supplement to this prospectus;
. agree that none of our Company, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, the Sole Sponsor, their respective directors, officers, employees, partners, agents, advisers and any other parties involved in the Share Offer, is or will be liable for any information and representations not contained in this prospectus (and any supplement to it);
. agree to disclose your personal data to our Company, our Hong Kong Branch Share Registrar, receiving bank, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, and/or their respective advisers and agents;

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. agree (without prejudice to any other rights which you may have) that once HKSCC Nominees’ application has been accepted, it cannot be rescinded for innocent misrepresentation;
. agree that any application made by HKSCC Nominees on your behalf is irrevocable before the fifth day after the time of the opening of the application lists (excluding any day which is Saturday, Sunday or public holiday in Hong Kong), such agreement to take effect as a collateral contract with us and to become binding when you give the instructions and such collateral contract to be in consideration of our Company agreeing that it will not offer any Public Offer Shares to any person before the fifth day after the time of the opening of the application lists (excluding any day which is Saturday, Sunday or public holiday in Hong Kong), except by means of one of the procedures referred to in this prospectus. However, HKSCC Nominees may revoke the application before the fifth day after the time of the opening of the application lists (excluding for this purpose any day which is a Saturday, Sunday or public holiday in Hong Kong) if a person responsible for this prospectus under Section 40 of the CWUMPO gives a public notice under that section which excludes or limits that person’s responsibility for this prospectus;
. agree that once HKSCC Nominees’ application is accepted, neither that application nor your electronic application instructions can be revoked, and that acceptance of that application will be evidenced by our Company’s announcement of the Public Offer results;
. agree to the arrangements, undertakings and warranties under the participant agreement between you and HKSCC, read with the General Rules of CCASS and the CCASS Operational Procedures, for the giving electronic application instructions to apply for Public Offer Shares;
. agree with our Company, for itself and for the benefit of each Shareholder (and so that our Company will be deemed by its acceptance in whole or in part of the application by HKSCC Nominees to have agreed, for itself and on behalf of each of the Shareholders, with each CCASS Participant giving electronic application instructions) to observe and comply with the Companies Law, the CWUMPO, the Companies Ordinance and the Memorandum and Articles of Association of our Company; and
. agree that your application, any acceptance of it and the resulting contract will be governed by the Laws of Hong Kong.

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Effect of Giving Electronic Application Instructions to HKSCC via CCASS

By giving electronic application instructions to HKSCC or instructing your broker or custodian who is a CCASS Clearing Participant or a CCASS Custodian Participant to give such instructions to HKSCC, you (and, if you are joint applicants, each of you jointly and severally) are deemed to have done the following things. Neither HKSCC nor HKSCC Nominees shall be liable to our Company or any other person in respect of the things mentioned below:

. instructed and authorised HKSCC to cause HKSCC Nominees (acting as nominee for the relevant CCASS Participants) to apply for the Public Offer Shares on your behalf;
. instructed and authorised HKSCC to arrange payment of the maximum Offer Price, brokerage, SFC transaction levy and the Stock Exchange trading fee by debiting your designated bank account and, in the case of a wholly or partially unsuccessful application and/or if the Offer Price is less than the maximum Offer Price per Offer Share initially paid on application, refund of the application monies (including brokerage, SFC transaction levy and the Stock Exchange trading fee) by crediting your designated bank account; and
. instructed and authorised HKSCC to cause HKSCC Nominees to do on your behalf all the things stated in the WHITE Application Form and in this prospectus.

Minimum Purchase Amount and Permitted Numbers

You may give or cause your broker or custodian who is a CCASS Clearing Participant or a CCASS Custodian Participant to give electronic application instructions for a minimum of 10,000 Public Offer Shares. Instructions for more than 10,000 Public Offer Shares must be in one of the numbers set out in the table in the Application Forms. No application for any other number of Public Offer Shares will be considered and any such application is liable to be rejected.

Time for Inputting Electronic Application Instructions

CCASS Clearing/Custodian Participants can input electronic application instructions at the following times on the following dates:

Thursday, 29 March 2018 — 9:00 a.m. to 8:30 p.m.[(Note)] Tuesday, 3 April 2018 — 8:00 a.m. to 8:30 p.m.[(Note)] Wednesday, 4 April 2018 — 8:00 a.m. to 8:30 p.m.[(Note)] Friday, 6 April 2018 — 8:00 a.m.[(Note)] to 12:00 noon

Note: These times are subject to change as HKSCC may determine from time to time with prior notification to CCASS Clearing/Custodian Participants.

CCASS Investor Participants can input electronic application instructions from 9:00 a.m. on Thursday, 29 March 2018 until 12:00 noon on Friday, 6 April 2018 (24 hours daily, except on the last application day).

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The latest time for inputting your electronic application instructions will be 12:00 noon on Friday, 6 April 2018, the last application day or such later time as described in the paragraph headed ‘‘9. Effect of bad weather on the opening of the application lists’’ in this section.

No Multiple Applications

If you are suspected of having made multiple applications or if more than one application is made for your benefit, the number of Public Offer Shares applied for by HKSCC Nominees will be automatically reduced by the number of Public Offer Shares for which you have given such instructions and/or for which such instructions have been given for your benefit. Any electronic application instructions to make an application for the Public Offer Shares given by you or for your benefit to HKSCC shall be deemed to be an actual application for the purposes of considering whether multiple applications have been made.

Section 40 of the CWUMPO

For the avoidance of doubt, our Company and all other parties involved in the preparation of this prospectus acknowledge that each CCASS Participant who gives or causes to give electronic application instructions is a person who may be entitled to compensation under Section 40 of the CWUMPO (as applied by Section 342E of the CWUMPO).

Personal Data

The section of the Application Form headed ‘‘Personal data’’ applies to any personal data held by our Company, the Hong Kong Branch Share Registrar, the receiving bank, the Joint Bookrunners, the Joint Lead Managers, the Sole Sponsor and the Underwriters and any of their respective advisers and agents about you in the same way as it applies to personal data about applicants other than HKSCC Nominees.

6. WARNING FOR ELECTRONIC APPLICATIONS

The subscription of the Public Offer Shares by giving electronic application instructions to HKSCC is only a facility provided to CCASS Participants. Such facilities are subject to capacity limitations and potential service interruptions and you are advised not to wait until the last application day in making your electronic applications. Our Company, our Directors, the Joint Bookrunners, the Joint Lead Managers, the Sole Sponsor and the Underwriters take no responsibility for such applications and provide no assurance that any CCASS Participant will be allotted any Public Offer Shares.

To ensure that CCASS Investor Participants can give their electronic application instructions, they are advised not to wait until the last minute to input their instructions to the systems. In the event that CCASS Investor Participants have problems in the connection to CCASS Phone System/CCASS Internet System for submission of electronic application instructions, they should either (i) submit a WHITE or YELLOW Application Form, or (ii) go to HKSCC’s Customer Service Centre to complete an input request form for electronic application instructions before 12:00 noon on Friday, 6 April 2018.

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7. HOW MANY APPLICATIONS CAN YOU MAKE

Multiple applications for the Public Offer Shares are not allowed except by nominees. If you are a nominee, in the box on the Application Form marked ‘‘For nominees’’ you must include:

. an account number; or
. some other identification code,

for each beneficial owner or, in the case of joint beneficial owners, for each joint beneficial owner. If you do not include this information, the application will be treated as being made for your benefit.

All of your applications will be rejected if more than one application on a WHITE or YELLOW Application Form (whether individually or jointly) or by giving electronic application instructions to HKSCC, is made for your benefit (including the part of the application made by HKSCC Nominees acting on electronic application instructions). If an application is made by an unlisted company and:

. the principal business of that company is dealing in securities; and
. you exercise statutory control over that company, then the application will be treated as being for your benefit.

‘‘Unlisted company’’ means a company with no equity securities listed on the Stock Exchange. ‘‘Statutory control’’ means you:

. control the composition of the board of directors of the company;
. control more than half of the voting power of the company; or
. hold more than half of the issued share capital of the company (not counting any part of it which carries no right to participate beyond a specified amount in a distribution of either profits or capital).

8. HOW MUCH ARE THE PUBLIC OFFER SHARES

The WHITE and YELLOW Application Forms have tables showing the exact amount payable for Shares.

You must pay the maximum Offer Price, brokerage, SFC transaction levy and the Stock Exchange trading fee in full upon application for the Public Offer Shares under the terms set out in the Application Forms.

You may submit an application using a WHITE or YELLOW Application Form in respect of a minimum of 10,000 Public Offer Shares. Each application or electronic application instruction in respect of more than 10,000 Public Offer Shares must be in one of the numbers set out in the table in the Application Form.

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If your application is successful, brokerage will be paid to the Exchange Participants, and the SFC transaction levy and the Stock Exchange trading fee are paid to the Stock Exchange (in the case of the SFC transaction levy, collected by the Stock Exchange on behalf of the SFC).

For further details on the Offer Price, see the section headed ‘‘Structure and Conditions of the Share Offer — Offer Price’’ of this prospectus.

9. EFFECT OF BAD WEATHER ON THE OPENING OF THE APPLICATION LISTS

The application lists will not open if there is:

. a tropical cyclone warning signal number 8 or above; or
. a ‘‘black’’ rainstorm warning,

in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Friday, 6 April 2018.

Instead they will open between 11:45 a.m. and 12:00 noon on the next Business Day which does not have either of those warnings in Hong Kong in force at any time between 9:00 a.m. and 12:00 noon.

If the application lists do not open and close on Friday, 6 April 2018 or if there is a tropical cyclone warning signal number 8 or above or a ‘‘black’’ rainstorm warning signal in force in Hong Kong that may affect the dates mentioned in the section headed ‘‘Expected Timetable’’ of this prospectus, an announcement will be made in such event.

10. PUBLICATION OF RESULTS

Our Company expects to announce the final Offer Price, the level of indication of interest in the Placing, the level of applications in the Public Offer and the basis of allocation of the Public Offer Shares on Friday, 13 April 2018 on our Company’s website at www.mrsteak.com.hk and the website of the Stock Exchange at www.hkexnews.hk.

The results of allocations and the Hong Kong identity card/passport/Hong Kong business registration numbers of successful applicants under the Public Offer will be available at the times and date and in the manner specified below:

. in the announcement to be posted on our Company’s website at www.mrsteak.com.hk and the Stock Exchange’s website at www.hkexnews.hk by no later than 9:00 a.m. on Friday, 13 April 2018;
. from the designated results of allocations website at www.tricor.com.hk/ipo/result with a ‘‘search by ID’’ function on a 24-hour basis from 8:00 a.m. on Friday, 13 April 2018 to 12:00 midnight on Thursday, 19 April 2018;
. by telephone enquiry line by calling (852) 3691 8488 between 9:00 a.m. and 6:00 p.m. from Friday, 13 April 2018 to Wednesday, 18 April 2018 on a Business Day;

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. in the special allocation results booklets which will be available for inspection during opening hours from Friday, 13 April 2018 to Tuesday, 17 April 2018 at the designated receiving bank branches and sub-branches.

If our Company accepts your offer to purchase (in whole or in part), which it may do by announcing the basis of allocations and/or making available the results of allocations publicly, there will be a binding contract under which you will be required to purchase the Public Offer Shares if the conditions of the Share Offer are satisfied and the Share Offer is not otherwise terminated. Further details are contained in the section headed ‘‘Structure and Conditions of the Share Offer’’.

You will not be entitled to exercise any remedy of rescission for innocent misrepresentation at any time after acceptance of your application. This does not affect any other right you may have.

11. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOTTED PUBLIC OFFER SHARES

You should note the following situations in which the Public Offer Shares will not be allotted to

you:

(i) If your application is revoked:

By completing and submitting an Application Form or giving electronic application instructions to HKSCC, you agree that your application or the application made by HKSCC Nominees on your behalf cannot be revoked on or before the fifth day after the time of the opening of the application lists (excluding for this purpose any day which is Saturday, Sunday or public holiday in Hong Kong). This agreement will take effect as a collateral contract with our Company.

Your application or the application made by HKSCC Nominees on your behalf may only be revoked on or before such fifth day if a person responsible for this prospectus under Section 40 of the CWUMPO (as applied by Section 342E of the CWUMPO) gives a public notice under that section which excludes or limits that person’s responsibility for this prospectus.

If any supplement to this prospectus is issued, applicants who have already submitted an application will be notified that they are required to confirm their applications. If applicants have been so notified but have not confirmed their applications in accordance with the procedure to be notified, all unconfirmed applications will be deemed revoked.

If your application or the application made by HKSCC Nominees on your behalf has been accepted, it cannot be revoked. For this purpose, acceptance of applications which are not rejected will be constituted by notification in the press of the results of allocation, and where such basis of allocation is subject to certain conditions or provides for allocation by ballot, such acceptance will be subject to the satisfaction of such conditions or results of the ballot respectively.

(ii) If our Company or our agents exercise their discretion to reject your application:

Our Company, the Joint Bookrunners, the Joint Lead Managers, and their respective agents and nominees have full discretion to reject or accept any application, or to accept only part of any application, without giving any reasons.

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(iii) If the allotment of Public Offer Shares is void:

The allotment of Public Offer Shares will be void if the Listing Division of the Stock Exchange does not grant permission to list the Shares either:

. within three weeks from the closing date of the application lists; or
. within a longer period of up to six weeks if the Listing Division of the Stock Exchange notifies our Company of that longer period within three weeks of the closing date of the application lists.

(iv) If:

. you make multiple applications or suspected multiple applications;
. you or the person for whose benefit you are applying have applied for or taken up, or indicated an interest for, or have been or will be placed or allocated (including conditionally and/or provisionally) Public Offer Shares and Placing Shares;
. your Application Form is not completed in accordance with the stated instructions;
. your payment is not made correctly or the cheque or banker’s cashier order paid by you is dishonoured upon its first presentation;
. the Underwriting Agreements do not become unconditional or are terminated;
. our Company or the Joint Bookrunners and the Joint Lead Managers believe that by accepting your application, it or they would violate applicable securities or other laws, rules or regulations; or
. your application is for more than 100% of the Public Offer Shares initially offered under the Public Offer.

12. REFUND OF APPLICATION MONIES

If an application is rejected, not accepted or accepted in part only, or if the Offer Price as finally determined is less than the maximum Offer Price of HK$0.27 per Offer Share (excluding brokerage, SFC transaction levy and the Stock Exchange trading fee thereon), or if the conditions of the Public Offer are not fulfilled in accordance with ‘‘Structure and conditions of the Share Offer — Conditions of the Share Offer’’ of this prospectus or if any application is revoked, the application monies, or the appropriate portion thereof, together with the related brokerage, SFC transaction levy and the Stock Exchange trading fee, will be refunded, without interest or the cheque or banker’s cashier order will not be cleared.

Any refund of your application monies will be made on Friday, 13 April 2018.

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13. DESPATCH/COLLECTION OF SHARE CERTIFICATES AND REFUND MONIES

You will receive one share certificate for all Public Offer Shares allotted to you under the Public Offer (except pursuant to applications made on YELLOW Application Forms or by electronic application instructions to HKSCC via CCASS where the share certificates will be deposited into CCASS as described below).

No temporary document of title will be issued in respect of the Shares. No receipt will be issued for sums paid on application. If you apply by WHITE or YELLOW Application Form, subject to personal collection as mentioned below, the following will be sent to you (or, in the case of joint applicants, to the first-named applicant) by ordinary post, at your own risk, to the address specified on the Application Form:

. share certificate(s) for all the Public Offer Shares allotted to you (for YELLOW Application Forms, share certificates will be deposited into CCASS as described below); and
. refund cheque(s) crossed ‘‘Account Payee Only’’ in favour of the applicant (or, in the case of joint applicants, the first-named applicant) for (i) all or the surplus application monies for the Public Offer Shares, wholly or partially unsuccessfully applied for; and/or (ii) the difference between the Offer Price and the maximum Offer Price per Offer Share paid on application in the event that the Offer Price is less than the maximum Offer Price (including brokerage, SFC transaction levy and the Stock Exchange trading fee but without interest).

Part of the Hong Kong identity card number/passport number, provided by you or the firstnamed applicant (if you are joint applicants), may be printed on your refund cheque, if any. Your banker may require verification of your Hong Kong identity card number/passport number before encashment of your refund cheque(s). Inaccurate completion of your Hong Kong identity card number/passport number may invalidate or delay encashment of your refund cheque(s).

Subject to arrangement on despatch/collection of share certificates and refund monies as mentioned below, any refund cheques and share certificates are expected to be posted on or around Friday, 13 April 2018. The right is reserved to retain any share certificate(s) and any surplus application monies pending clearance of cheque(s) or banker’s cashier’s order(s).

Share certificates will only become valid at 8:00 a.m. on Monday, 16 April 2018 provided that the Share Offer has become unconditional and the right of termination described in the section headed ‘‘Underwriting’’ of this prospectus has not been exercised. Investors who trade shares prior to the receipt of Share certificates or the Share certificates becoming valid do so at their own risk.

Personal Collection

(i) If you apply using a WHITE Application Form

If you apply for 1,000,000 or more Public Offer Shares and have provided all information required by your Application Form, you may collect your refund cheque(s) and/or share certificate(s) from the Hong Kong Branch Share Registrar at Level 22, Hopewell Centre, 183

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Queen’s Road East, Hong Kong, from 9:00 a.m. to 1:00 p.m. on Friday, 13 April 2018 or such other date as notified by the Company on the website of the Stock Exchange at www.hkexnews.hk or the website of the Company at www.mrsteak.com.hk.

If you are an individual who is eligible for personal collection, you must not authorise any other person to collect for you. If you are a corporate applicant which is eligible for personal collection, your authorised representative must bear a letter of authorisation from your corporation stamped with your corporation’s chop. Both individuals and authorised representatives must produce, at the time of collection, evidence of identity acceptable to the Hong Kong Branch Share Registrar.

If you do not collect your refund cheque(s) and/or share certificate(s) personally within the time specified for collection, they will be despatched promptly to the address specified in your Application Form by ordinary post at your own risk.

If you apply for less than 1,000,000 Public Offer Shares, your refund cheque(s) and/or share certificate(s) will be sent to the address on the relevant Application Form on Friday, 13 April 2018, by ordinary post and at your own risk.

(ii) If you apply using a YELLOW Application Form

If you apply for 1,000,000 Public Offer Shares or more, please follow the same instructions as described above for collection of refund cheque(s). If you have applied for less than 1,000,000 Public Offer Shares, your refund cheque(s) will be sent to the address on the relevant Application Form on Friday, 13 April 2018, by ordinary post and at your own risk.

If you apply by using a YELLOW Application Form and your application is wholly or partially successful, your share certificate(s) will be issued in the name of HKSCC Nominees and deposited into CCASS for credit to your or the designated CCASS Participant’s stock account as stated in your Application Form on Friday, 13 April 2018, or upon contingency, on any other date determined by HKSCC or HKSCC Nominees.

. If you apply through a designated CCASS participant (other than a CCASS investor participant)

For Public Offer Shares credited to your designated CCASS participant’s stock account (other than CCASS Investor Participant), you can check the number of Public Offer Shares allotted to you with that CCASS participant.

. If you are applying as a CCASS investor participant

Our Company will publish the results of CCASS Investor Participants’ applications together with the results of the Public Offer in the manner described in ‘‘Publication of Results’’ above. You should check the announcement published by our Company and report any discrepancies to HKSCC before 5:00 p.m. on Friday, 13 April 2018 or any other date as determined by HKSCC or HKSCC Nominees. Immediately after the credit of the Public Offer Shares to your stock account, you can check your new account balance via the CCASS Phone System and CCASS Internet System.

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(iii) If you apply via Electronic Application Instructions to HKSCC Allocation of Public Offer Shares

For the purposes of allocating Public Offer Shares, HKSCC Nominees will not be treated as an applicant. Instead, each CCASS Participant who gives electronic application instructions or each person for whose benefit instructions are given will be treated as an applicant.

Deposit of Share Certificates into CCASS and Refund of Application Monies

. If your application is wholly or partially successful, your share certificate(s) will be issued in the name of HKSCC Nominees and deposited into CCASS for the credit of your designated CCASS Participant’s stock account or your CCASS Investor Participant stock account on Friday, 13 April 2018, or, on any other date determined by HKSCC or HKSCC Nominees.
. Our Company expects to publish the application results of CCASS Participants (and where the CCASS Participant is a broker or custodian, our Company will include information relating to the relevant beneficial owner), your Hong Kong identity card number/passport number or other identification code (Hong Kong business registration number for corporations) and the basis of allotment of the Public Offer in the manner specified in the paragraph headed ‘‘10. Publication of results’’ above in this section on Friday, 13 April 2018.

You should check the announcement published by our Company and report any discrepancies to HKSCC before 5:00 p.m. on Friday, 13 April 2018 or such other date as determined by HKSCC or HKSCC Nominees.

. If you have instructed your broker or custodian to give electronic application instructions on your behalf, you can also check the number of Public Offer Shares allotted to you and the amount of refund monies (if any) payable to you with that broker or custodian.
. If you have applied as a CCASS Investor Participant, you can also check the number of Public Offer Shares allotted to you and the amount of refund monies (if any) payable to you via the CCASS Phone System and the CCASS Internet System (under the procedures contained in HKSCC’s ‘‘An Operating Guide for Investor Participants’’ in effect from time to time) on Friday, 13 April 2018. Immediately following the credit of the Public Offer Shares to your stock account and the credit of refund monies to your bank account, HKSCC will also make available to you an activity statement showing the number of Public Offer Shares credited to your CCASS Investor Participant stock account and the amount of refund monies (if any) credited to your designated bank account.
. Refund of your application monies (if any) in respect of wholly and partially unsuccessful applications and/or difference between the Offer Price and the maximum Offer Price per Offer Share initially paid on application (including

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HOW TO APPLY FOR PUBLIC OFFER SHARES

brokerage, SFC transaction levy and the Stock Exchange trading fee but without interest) will be credited to your designated bank account or the designated bank account of your broker or custodian on Friday, 13 April 2018.

14. ADMISSION OF THE SHARES INTO CCASS

If the Stock Exchange grants the listing of, and permission to deal in, the Shares and we comply with the stock admission requirements of HKSCC, the Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the date of commencement of dealings in the Shares or any other date HKSCC chooses. Settlement of transactions between Exchange Participants (as defined in the GEM Listing Rules) is required to take place in CCASS on the second Business Day after any trading day.

All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

Investors should seek the advice of their stockbroker or other professional adviser for details of the settlement arrangement as such arrangements may affect their rights and interests.

All necessary arrangements have been made enabling the Shares to be admitted into CCASS.

– 242 –

ACCOUNTANTS’ REPORT

APPENDIX I

The following is the text of a report, prepared for inclusion in this prospectus, received from the independent reporting accountants, HLB Hodgson Impey Cheng Limited, Certified Public Accountants, Hong Kong.

==> picture [230 x 46] intentionally omitted <==

31st Floor Gloucester Tower The Landmark 11 Pedder Street Central Hong Kong

29 March 2018

ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE DIRECTORS OF MS CONCEPT LIMITED AND ALLIANCE CAPITAL PARTNERS LIMITED

Introduction

We report on the historical financial information of MS Concept Limited (the ‘‘Company’’) and its subsidiaries (together, the ‘‘Group’’) set out on pages I-4 to I-44, which comprises the combined statements of financial position as at 31 March 2016, 31 March 2017 and 30 September 2017, the combined statements of profit or loss and other comprehensive income, the combined statements of changes in equity and the combined statements of cash flows for each of the years ended 31 March 2016 and 2017 and the six months ended 30 September 2017 (the ‘‘Relevant Periods’’) and a summary of significant accounting policies and other explanatory information (together, the ‘‘Historical Financial Information’’). The Historical Financial Information set out on pages I-4 to I-44 forms an integral part of this report, which has been prepared for inclusion in the Appendix I to the prospectus of the Company dated 29 March 2018 (the ‘‘Prospectus’’) in connection with the initial listing of shares of the Company on GEM of The Stock Exchange of Hong Kong Limited (the ‘‘Stock Exchange’’).

Directors’ responsibility for the Historical Financial Information

The directors of the Company are responsible for the preparation of the Historical Financial Information that gives a true and fair view in accordance with the basis of preparation and presentation set out in Note 1 to the Historical Financial Information, and for such internal control as the directors of the Company determine is necessary to enable the preparation of Historical Financial Information that is free from material misstatement, whether due to fraud or error.

Reporting accountants’ responsibility

Our responsibility is to express an opinion on the Historical Financial Information and to report our opinion to you. We conducted our work in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 200 ‘‘Accountants’ Reports on Historical Financial Information in Investment Circulars’’ issued by the Hong Kong Institute of Certified Public Accountants (the ‘‘HKICPA’’). This standard requires that we comply with ethical standards and plan and perform our work to obtain reasonable assurance about whether the Historical Financial Information is free from material misstatement.

– I-1 –

ACCOUNTANTS’ REPORT

APPENDIX I

Our work involved performing procedures to obtain evidence about the amounts and disclosures in the Historical Financial Information. The procedures selected depend on the reporting accountants’ judgement, including the assessment of risks of material misstatement of the Historical Financial Information, whether due to fraud or error. In making those risk assessments, the reporting accountants consider internal control relevant to the entity’s preparation of Historical Financial Information that gives a true and fair view in accordance with the basis of preparation and presentation set out in Note 1 to the Historical Financial Information in order to design procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Our work also included evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors of the Company, as well as evaluating the overall presentation of the Historical Financial Information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion the Historical Financial Information gives, for the purposes of the accountants’ report, a true and fair view of the Group’s financial position as at 31 March 2016, 31 March 2017 and 30 September 2017 and of the Group’s financial performance and cash flows for the Relevant Periods in accordance with the basis of preparation and presentation set out in Note 1 to the Historical Financial Information.

Review of stub period comparative financial information

We have reviewed the stub period comparative financial information of the Group which comprises the combined statements of profit or loss and other comprehensive income, the combined statements of changes in equity and the combined statements of cash flows for the six months ended 30 September 2016 and other explanatory information (the ‘‘Stub Period Comparative Financial Information’’). The directors of the Company are responsible for the preparation and presentation of the Stub Period Comparative Financial Information in accordance with the basis of preparation and presentation set out in Note 1 to the Historical Financial Information. Our responsibility is to express a conclusion on the Stub Period Comparative Financial Information based on our review. We conducted our review in accordance with Hong Kong Standard on Review Engagements 2410 ‘‘Review of Interim Financial Information Performed by the Independent Auditor of the Entity’’ issued by the HKICPA. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Based on our review, nothing has come to our attention that causes us to believe that the Stub Period Comparative Financial Information, for the purposes of the accountants’ report, is not prepared, in all material respects, in accordance with the basis of preparation and presentation set out in Note 1 to the Historical Financial Information.

– I-2 –

ACCOUNTANTS’ REPORT

APPENDIX I

Report on Matters under the Rules Governing the Listing of Securities on GEM of the Stock Exchange and the Companies (Winding Up and Miscellaneous Provisions) Ordinance

Adjustments

In preparing the Historical Financial Information, no adjustments to the Underlying Financial Statements as defined on page I-4 have been made.

Dividend

We refer to Note 14 to the Historical Financial Information which contains information about the dividend paid by any entities now comprising the Group in respect of the Relevant Periods.

No historical financial statements for the Company

As at the date of this report, no statutory financial statements have been prepared for the Company since its date of incorporation.

Yours faithfully

HLB Hodgson Impey Cheng Limited

Certified Public Accountants

Shek Lui

Practising Certificate Number: P05895

Hong Kong

– I-3 –

ACCOUNTANTS’ REPORT

APPENDIX I

I. HISTORICAL FINANCIAL INFORMATION OF THE GROUP

Preparation of Historical Financial Information

Set out below is the Historical Financial Information which forms an integral part of this accountants’ report.

The Historical Financial Information in this report was prepared based on the combined financial statements of the Group for the Relevant Periods, which have been prepared in accordance with the accounting policies which conform with Hong Kong Financial Reporting Standards (‘‘HKFRSs’’) issued by the Hong Kong Institute of Certified Public Accountants (the ‘‘HKICPA’’), were audited by us in accordance with Hong Kong Standards on Auditing issued by the HKICPA (collectively known as ‘‘Underlying Financial Statements’’).

The Historical Financial Information is presented in Hong Kong dollar (‘‘HK$’’), which is also the functional currency of the Company and all values are rounded to the nearest thousand (‘‘HK$’000’’) except when otherwise indicated.

– I-4 –

ACCOUNTANTS’ REPORT

APPENDIX I

Combined statements of profit or loss and other comprehensive income

Notes Revenue 7 Cost of inventories sold Gross profit Other revenue and other income 8 Staff costs Depreciation of property, plant and equipment Rental and related expenses Fuel and utility expenses Administrative expenses Finance costs 9 Profit before tax 10 Income tax expenses 13 Profit and total comprehensive income for the year/period Profit and total comprehensive income for the year/period attributable to: Owners of the Company Earnings per share attributable to owners of the Company Basic and diluted (HK cents) 15	Years ended 31 March 2016 2017 HK$’000 HK$’000 194,780 234,873 (62,223) (79,244) 132,557 155,629 1,028 1,083 (55,331) (65,171) (5,262) (5,762) (41,573) (49,802) (4,495) (5,335) (13,573) (16,285) (682) (849) 12,669 13,508 (2,053) (2,196) 10,616 11,312 10,616 11,312 1.42 1.51	Six months ended 30 September 2016 2017 HK$’000 HK$’000 (Unaudited) 117,625 128,207 (40,182) (42,062) 77,443 86,145 402 462 (31,253) (34,528) (2,670) (2,845) (24,227) (27,211) (2,726) (2,604) (7,510) (9,052) (452) (380) 9,007 9,987 (1,491) (1,656) 7,516 8,331 7,516 8,331 1.00 1.11

Details of dividend paid to owners of the Company are set out in Note 14 to the Historical Financial Information.

– I-5 –

ACCOUNTANTS’ REPORT

APPENDIX I

Combined statements of financial position

Notes Non-current assets Property, plant and equipment 16 Deferred tax assets 17 Non-current deposits 20 Current assets Inventories 18 Trade receivables 19 Deposits, prepayments and other receivables 20 Prepaid tax Amount due from a director 21 Amounts due from shareholders 21 Amounts due from related companies 21 Pledged bank deposits 22 Cash and bank balances 23 Current liabilities Amount due to a related company 21 Trade payables 24 Accruals and other payables 25 Tax payables Bank borrowings 26 Net current liabilities Net assets Capital and reserves Share capital 27 Retained earnings Total equity	At 2016 HK$’000 14,997 859 8,082 23,938 744 1,068 5,703 554 1,654 1,076 6,000 2,011 9,349 28,159 8,294 5,812 1,777 95 21,849 37,827 (9,668) 14,270 — 14,270 14,270	31 March 2017 HK$’000 13,016 1,280 9,171 23,467 702 918 6,705 — 4,093 3,150 6,060 2,013 5,113 28,754 8,294 10,188 2,977 550 16,980 38,989 (10,235) 13,232 — 13,232 13,232	At 30 September 2017 HK$’000 11,222 1,749 8,068 21,039 730 1,970 7,831 — 4,560 3,400 — 2,014 14,195 34,700 2,294 10,582 3,117 2,675 21,358 40,026 (5,326) 15,713 — 15,713 15,713

– I-6 –

ACCOUNTANTS’ REPORT

APPENDIX I

Combined statements of changes in equity

At 1 April 2015 Profit and total comprehensive income for the year Dividend paid (Note 14) At 31 March 2016 and at 1 April 2016 Profit and total comprehensive income for the year Dividend paid (Note 14) At 31 March 2017 and at 1 April 2017 Profit and total comprehensive income for the period Dividend paid (Note 14) At 30 September 2017 At 1 April 2016 Profit and total comprehensive income for the period Dividend paid (Note 14) At 30 September 2016 (Unaudited)	Share capital HK$’000 — — — — — — — — — — — — — —	Retained earnings HK$’000 13,454 10,616 (9,800) 14,270 11,312 (12,350) 13,232 8,331 (5,850) 15,713 14,270 7,516 (5,750) 16,036	Total equity HK$’000 13,454 10,616 (9,800) 14,270 11,312 (12,350) 13,232 8,331 (5,850) 15,713 14,270 7,516 (5,750) 16,036

– I-7 –

ACCOUNTANTS’ REPORT

APPENDIX I

Combined statements of cash flows

Cash flows from operating activities Profit before tax Adjustments for: Finance costs Bank interest income (Gain)/loss on disposal and written-off of property, plant and equipment Depreciation of property, plant and equipment Operating cash flows before movements in working capital (Increase)/decrease in inventories (Increase)/decrease in trade receivables Increase in deposits, prepayments and other receivables Increase in trade payables Increase in accruals and other payables Cash generated from operations Profit tax paid Net cash generated from operating activities Cash flows from investing activities Proceeds from disposal of property, plant and equipment Interest received Deposits paid for acquisition of property, plant and equipment Purchase of property, plant and equipment Placement of pledged bank deposits Net cash used in investing activities	Years ended 31 March 2016 2017 HK$’000 HK$’000 12,669 13,508 682 849 (7) (2) (85) 1 5,262 5,762 18,521 20,118 (69) 42 (7) 150 (637) (1,724) 821 4,376 187 1,207 18,816 24,169 (2,023) (1,608) 16,793 22,561 109 — 7 2 — (367) (7,815) (3,782) (6) (2) (7,705) (4,149)	Six months ended 30 September 2016 2017 HK$’000 HK$’000 (Unaudited) 9,007 9,987 452 380 (1) (1) — 52 2,670 2,845 12,128 13,263 25 (28) 74 (1,052) (2,554) (356) 740 394 1,449 129 11,862 12,350 — — 11,862 12,350 — — 1 1 — (34) (598) (736) (2) (1) (599) (770)

– I-8 –

ACCOUNTANTS’ REPORT

APPENDIX I

Cash flows from financing activities Interest paid Advance to a director Advance to shareholders Advance to related companies Repayment from related companies Repayment to a related company New bank borrowings raised Repayment of bank borrowings Dividend paid Net cash used in financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at the beginning of the Relevant Periods Cash and cash equivalents at the end of the Relevant Periods	Years ended 31 March 2016 2017 HK$’000 HK$’000 (664) (856) (1,159) (2,439) (1,076) (2,074) (6,000) (60) — — — — 12,500 — (3,909) (4,869) (9,800) (12,350) (10,108) (22,648) (1,020) (4,236) 10,369 9,349 9,349 5,113	Six months ended 30 September 2016 2017 HK$’000 HK$’000 (Unaudited) (452) (369) (1,343) (467) (1,199) (250) — — — 6,060 — (6,000) — 7,000 (2,403) (2,622) (5,750) (5,850) (11,147) (2,498) 116 9,082 9,349 5,113 9,465 14,195

– I-9 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO THE HISTORICAL FINANCIAL INFORMATION

1. CORPORATE INFORMATION AND BASIS OF PRESENTATION

(a) General information of the Group

The Company was incorporated in Cayman Islands on 8 November 2017 as an exempted company with limited liability under the Companies Law, Cap. 22 of the Cayman Islands. Its ultimate holding company is Future More Company Limited (‘‘Future More’’), a company incorporated in British Virgin Islands (‘‘BVI’’) and owned by Mr. Kwong Tai Wah (‘‘Mr. Kwong’’), Ms. Ip Yin King, Ingrid (‘‘Mrs. Kwong’’), Mr. Kwong Tai Wing, Ms. Kwong Ching Yee, Melanie and Ms. Kwong Man Yui (collectively referred to as the ‘‘Controlling Shareholders’’). The address of the Company’s registered office is Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY11111, Cayman Islands. The principal place of business of the Company is 2313, 23/F, Hong Kong Plaza, 186–191 Connaught Road West, Hong Kong.

The Company is an investment holding company and its subsidiaries are principally engaged in provision of catering services (the ‘‘Listing Business’’) in Hong Kong.

(b) Basis of preparation and basis of presentation

The Historical Financial Information has been prepared based on the accounting policies set out in Note 3 which conform with HKFRSs issued by the HKICPA and the principles of merger accounting under Accounting Guideline 5 Merger Accounting for Common Control Combinations issued by the HKICPA.

Pursuant to the reorganisation (the ‘‘Reorganisation’’) as fully explained in the paragraph headed ‘‘Reorganisation’’ in the section headed ‘‘History, Development and Reorganisation’’ of the Prospectus, the Company become the holding company of the companies now comprising the Group subsequent to the end of the Relevant Periods on 23 March 2018. Immediately prior to and after the Reorganisation, the Listing Business was controlled by the Controlling Shareholders. The Reorganisation is merely a reorganisation of the Listing Business with no change in management of such business and the ultimate owner of the business. Accordingly, the Historical Financial Information has been prepared by applying the principles of merger accounting, as prescribed in Hong Kong Accounting Guideline 5 Merger Accounting for Common Control Combinations issued by the HKICPA, as if the Reorganisation had been completed at the beginning of the Relevant Periods.

The combined statements of profit or loss and other comprehensive income, the combined statements of changes in equity and the combined statements of cash flows of the Group for the Relevant Periods include the results and cash flows of all companies now comprising the Group from the earliest date presented or since the date when the subsidiaries first came under the common control of the Controlling Shareholders, where this is a shorter period. The combined statements of financial position of the Group as at 31 March 2016, 31 March 2017 and 30 September 2017 have been prepared to present the assets and liabilities of the subsidiaries using the existing carrying amounts of the principal business of the Group for all Relevant Periods. No adjustments are made to reflect fair values, or recognise any new assets or liabilities as a result of the Reorganisation.

All intra-group transactions and balances have been eliminated on combination in full.

At 30 September 2017, the Group’s current liabilities exceed its current assets by HK$5,326,000. The net current liabilities arose mainly from the long-term bank borrowings (with maturity dates over one year) amounting to HK$16,078,000 being reclassified as current liabilities at 30 September 2017 due to the overriding right of demand clause as stipulated in the facility agreement of the bank borrowings. The directors of the Company believe that it is not probable that the banks will exercise their discretionary rights to demand immediate repayment. These loan facilities (including those unutilised bank facilities) will continue to be made available to the Group and will not be withdrawn by the banks within the next twelve months from the end of the reporting period.

– I-10 –

ACCOUNTANTS’ REPORT

APPENDIX I

(c) General information of the Group

Upon completion of the Reorganisation and at the date of this report, the Company had direct and indirect interests in the following subsidiaries:

Name of subsidiary
Country/place of
incorporation and
operation and date
of incorporation
Class of
shares held
Issued and
fully paid
share
capital
MS Restaurant Group Limited
(‘‘MS Restaurant’’)
BVI
7 November 2017
Ordinary
US$1
Lord Master Limited
(‘‘Lord Master’’)
Hong Kong
6 December 2002
Ordinary
HK$4
Meric Investment Limited
(‘‘Meric Investment’’)
Hong Kong
29 March 2000
Ordinary
HK$4

Equity interest held by the Company
Principal activities
At 31 March
At
30 September
2017
At the date
of this
report
2016
2017
%
%
%
%
—
—
100
100
Investment holding
100
100
100
100
Provision of catering
services
100
100
100
100
Provision of catering
services

At the date of this report, MS Restaurant is directly held by the Company. All other subsidiaries are indirectly held by the Company.

No statutory financial statements have been prepared for MS Restaurant since its date of incorporation as there is no statutory requirement in BVI.

The statutory financial statement of Lord Master for the year ended 31 March 2016 prepared under the Small and Medium-sized Entity Financial Reporting Standard (‘‘SMEFRS’’) issued by the HKICPA was audited by Danny Ho & Company, certified public accountants registered in Hong Kong. The statutory financial statements of Lord Master for the year ended 31 March 2017 prepared under HKFRSs was audited by HLB Hodgson Impey Cheng Limited, certified public accountants registered in Hong Kong.

Meric Investment adopted 31 December as its financial year end. The statutory financial statements of Meric Investment for the year ended 31 December 2015 prepared under SMEFRS was audited by Danny Ho & Company, certified public accountants registered in Hong Kong. The statutory financial statement of Meric Investment for the year ended 31 December 2016 prepared under HKFRSs was audited by HLB Hodgson Impey Cheng Limited, certified public accountants registered in Hong Kong. As part of the Reorganisation, Meric Investment has changed its year end date to 31 March to conform with the Group.

– I-11 –

ACCOUNTANTS’ REPORT

APPENDIX I

2. APPLICATION OF NEW AND AMENDMENTS TO HKFRSs

For the purpose of preparing and presenting the Historical Financial Information for the Relevant Periods, the Group has consistently applied the HKFRSs issued by the HKICPA that are effective for the Group’s financial period beginning on 1 April 2016 throughout the Relevant Periods.

The Group has not early applied the following new and amendments to HKFRSs and interpretation (‘‘new and amendments to HKFRSs’’) which are not yet effective:

HKAS 28 (Amendments)	Long-term interests in Associates and Joint Ventures2
HKAS 40 (Amendments)	Transfers of Investment Property1
HKFRSs (Amendments)	Annual Improvements to HKFRSs 2014–2016 Cycle except HKFRS 12
	(Amendments)1
HKFRS (Amendments)	Annual Improvements to HKFRSs 2015–2017 Cycle2
HKFRS 2 (Amendments)	Classification and Measurement of Share-based Payment Transactions1
HKFRS 4 (Amendments)	Applying HKFRS 9 Financial Instruments with HKFRS 4 Insurance
	Contracts1
HKFRS 9	Financial Instruments1
HKFRS 9 (Amendments)	Prepayment Features with Negative Compensation2
HKFRS 10 and HKAS 28	Sale or Contribution of Assets between an Investor and its Associate or Joint
(Amendments)	Venture4
HKFRS 15	Revenue from Contracts with Customers and the related Amendments1
HKFRS 16	Leases2
HKFRS 17	Insurance Contracts3
HK (IFRIC) — Int 22	Foreign Currency Transactions and Advance Consideration1
HK (IFRIC) — Int 23	Uncertainty over Income Tax Treatments2

1 Effective for annual periods beginning on or after 1 January 2018, with earlier application permitted. 2 Effective for annual periods beginning on or after 1 January 2019, with earlier application permitted. 3 Effective for annual periods beginning on or after 1 January 2021, with earlier application permitted. 4 Effective for annual periods beginning on or after a date to be determined.

HKFRS 9 Financial Instruments

HKFRS 9 introduces new requirements for the classification and measurement of financial assets, financial liabilities, general hedge accounting and impairment requirements for financial assets.

Key requirements of HKFRS 9 which are relevant to the Group are:

. all recognised financial assets that are within the scope of HKFRS 9 are required to be subsequently measured at amortised cost or fair value. Specifically, debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortised cost at the end of subsequent accounting periods. Debt instruments that are held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets, and that have contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding, are measured at fair value through other comprehensive income. All other debt investments and equity investments are measured at their fair value at the end of subsequent accounting periods. In addition, under HKFRS 9, entities may make an irrevocable election to present subsequent changes in the fair value of an equity investment (that is not held for trading) in other comprehensive income, with only dividend income generally recognised in profit or loss.
. in relation to the impairment of financial assets, HKFRS 9 requires an expected credit loss model, as opposed to an incurred credit loss model under HKAS 39. The expected credit loss model requires an entity to account for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk since initial recognition. In other words, it is no longer necessary for a credit event to have occurred before credit losses are recognised.

– I-12 –

ACCOUNTANTS’ REPORT

APPENDIX I

Based on the Group’s financial instruments and risk management policies as at 30 September 2017, the Group has performed a high-level assessment of the impact upon the adoption of HKFRS 9. This preliminary assessment is based on currently available information and may be subject to changes arising from further detailed analyses or additional reasonable and supportable information being made available to the Group in the future. The directors of the Company do not anticipate that the application of HKFRS 9 in the future will have a material impact on the Group’s future financial position and performance.

HKFRS 15 Revenue from Contracts with Customers

HKFRS 15 was issued which establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. HKFRS 15 will supersede the current revenue recognition guidance including HKAS 18 Revenue, HKAS 11 Construction Contracts and the related Interpretations when it becomes effective.

The core principle of HKFRS 15 is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Specifically, the standard introduces a 5-step approach to revenue recognition:

. Step 1: Identify the contract(s) with a customer
. Step 2: Identify the performance obligations in the contract(s)
. Step 3: Determine the transaction price
. Step 4: Allocate the transaction price to the performance obligations in the contract(s)
. Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation

Under HKFRS 15, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when ‘‘control’’ of the goods or services underlying the particular performance obligation is transferred to the customer. Far more prescriptive guidance has been added in HKFRS 15 to deal with specific scenarios. Furthermore, extensive disclosures are required by HKFRS 15.

In 2016, the HKICPA issued Clarifications to HKFRS 15 in relation to the identification of performance obligations, principal versus agent considerations, as well as licensing application guidance.

The directors of the Company anticipate that the application of HKFRS 15 in the future will not have a material impact on the amounts reported and disclosures made to the financial statements of the Group in the future based on the existing business model of the Group at 30 September 2017.

HKFRS 16 Leases

HKFRS 16 introduces a comprehensive model for the identification of lease arrangements and accounting treatments for both lessors and lessees. HKFRS 16 will supersede HKAS 17 Leases and the related interpretations when it becomes effective.

HKFRS 16 distinguishes lease and service contracts on the basis of whether an identified asset is controlled by a customer. Distinctions of operating leases and finance leases are removed for lessee accounting, and is replaced by a model where a right-of-use asset and a corresponding liability have to be recognised for all leases by lessees, except for short-term leases and leases of low value assets.

The right-of-use asset is initially measured at cost and subsequently measured at cost (subject to certain exceptions) less accumulated depreciation and impairment losses, adjusted for any remeasurement of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at that date. Subsequently, the lease liability is adjusted for interest and lease payments, as well as the impact of lease modifications, amongst others. For the classification of cash flows, the Group currently presents upfront prepaid

– I-13 –

ACCOUNTANTS’ REPORT

APPENDIX I

lease payments as operating lease payments are presented as operating cash flows. Upon the application of HKFRS 16, lease payments in relation to lease liability will be allocated into a principal and an interest portion which will be presented as financing cash flows.

Furthermore, extensive disclosures are required by HKFRS 16.

As at 30 September 2017, the Group has non-cancellable operating lease commitments of HK$76,245,000 as disclosed in note 28 to the Historical Financial Information. A preliminary assessment indicates that these arrangements will meet the definition of a lease under HKFRS 16, and hence the Group will recognise a right-of-use asset and a corresponding liability in respect of all these leases unless they qualify for low value or short-term leases upon the application of HKFRS 16. The combination of straight-line depreciation of the right-of-use asset and the effective interest rate method applied to the lease liability will result in a higher total charge to the profit or loss in the initial years of the lease, and decreasing expenses during the latter part of the lease term, but there is no impact on the total expenses recognised over the lease term. The directors of the Company anticipate that the application of HKFRS 16 would not have significant impact on the net financial position and performance of the Group comparing with HKAS 17 currently adopted by the Group. In addition, the application of new requirements may result changes in measurement, presentation and disclosure as indicated above.

Except as described above, the directors of the Company do not anticipate that the application of other new and amendments to HKFRSs issued but not yet effective will have a material impact on the Group’s financial performance and financial positions.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Historical Financial Information has been prepared in accordance with HKFRSs, which is a collective term includes all applicable individual HKFRSs, Hong Kong Accounting Standards (‘‘HKASs’’) and related interpretations issued by the HKICPA. This Historical Financial Information also complies with the applicable disclosure required by the Rules Governing the Listing of Securities on GEM of The Stock Exchange of Hong Kong Limited and by the Hong Kong Companies Ordinance.

The Historical Financial Information has been prepared on the historical cost basis.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in this Historical Financial Information is determined on such a basis, except for share-based payment transactions that are within the scope of HKFRS 2 Share-based payment, leasing transactions that are within the scope of HKAS 17 Leases, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in HKAS 2 Inventories or value in use in HKAS 36 Impairment of assets.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
. Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
. Level 3 inputs are unobservable inputs for the asset or liability.

The principal accounting policies applied in the preparation of the Historical Financial Information are set out below. These policies have been consistently applied to all years presented, unless otherwise stated.

– I-14 –

ACCOUNTANTS’ REPORT

APPENDIX I

Basis of consolidation

The Historical Financial Information incorporates the financial statements of the Company and entities controlled by the Company and its subsidiaries. Control is achieved when the Company:

. has power over the investee;
. is exposed, or has rights, to variable returns from its involvement with the investee; and
. has the ability to use its power to affect its returns.

The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

Combination of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the Relevant Periods are included in the combined statements of profit or loss and other comprehensive income from the date the Group gains control until the date when the Group ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income are attributed to the owners of the Company. Total comprehensive income of subsidiaries is attributed to the owners of the Company.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group’s accounting policies.

All intra-group assets, liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

Merger accounting for business combination involving entities or businesses under common control

The Historical Financial Information incorporates the financial statements items of the combining entities or businesses in which the common control combination occurs as if they had been combined from the date when the combining entities or business first came under common control of the controlling entity.

The net assets of the combining entities or businesses are combined using the existing book values from the controlling party’s perspective. No amount is recognised in respect of goodwill or excess of acquirer’s interest in the net fair value of acquiree’s identifiable assets and liabilities over cost at the time of common control combination, to the extent of the continuation of the controlling party’s interest.

The combined statements of profit or loss and other comprehensive income include the results of each of the combining entities or businesses from the earliest date presented or since the date when the combining entities or businesses first came under the common control, where this is a shorter period, regardless of the date of the common control combination.

Investments in subsidiaries

Investments in subsidiaries included in the Company’s statement of financial position at cost less any identified impairment losses.

Segment reporting

Operating segments and the amounts of each segment item are reported in the combined financial statements, are identified from the financial information provided regularly to the Group’s most senior executive management for the purposes of resource allocation to, and performance assessment of, the Group’s various lines of business and geographical locations.

– I-15 –

ACCOUNTANTS’ REPORT

APPENDIX I

Individually material operating segments are not aggregated for financial reporting purposes unless the segments have similar economic characteristics and are similar in respect of the nature of products and services, the nature of production processes, the type or class of customers, the methods used to distribute the products or provide the services, and the nature of the regulatory environment. Operating segments which are not individually material may be aggregated if they share a majority of these criteria.

Property, plant and equipment

Property, plant and equipment are stated in the combined statements of financial position at cost, less subsequent accumulated depreciation and subsequent accumulated impairment losses, if any.

The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Expenditure incurred after the property, plant and equipment have been put into operation, such as repair and maintenance, is normally charged to profit or loss in the period in which it is incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of the property, plant and equipment, the expenditure is capitalised as an additional cost of that asset.

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each Relevant Periods, with the effect of any changes in estimate accounted for on a prospective basis. The principal annual rates are as follows:

Leasehold improvements	Over the lease terms
Furniture and fixtures	20%
Catering and other equipment	20–30%

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

Impairment of tangible assets

At the end of each Relevant Periods, the Group reviews the carrying amounts of its tangible assets with finite useful lives to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit (‘‘CGU’’) to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual CGU, or otherwise they are allocated to the smallest group of CGU for which a reasonable and consistent allocation basis can be identified.

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or a CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or the CGU) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.

When an impairment loss subsequently reverses, the carrying amount of the asset (or CGU) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or CGU) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

– I-16 –

ACCOUNTANTS’ REPORT

APPENDIX I

Financial instruments

Financial assets and financial liabilities are recognised when a group entity becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.

Financial assets

Financial assets are classified into loans and receivables. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Interest income is recognised on an effective interest basis for debt instruments.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables (including trade receivables, deposits paid, other receivables, amount due from a director, amounts due from shareholders, amounts due from related companies, pledged bank deposits and cash and bank balances) are measured at amortised cost using the effective interest method, less any identified impairment losses.

Interest income is recognised by applying the effective interest rate, except for short-term receivables where the recognition of interest would be immaterial.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the financial assets have been affected.

For all financial assets, objective evidence of impairment could include:

. significant financial difficulty of the issuer or counterparty; or
. breach of contract, such as a default or delinquency in interest or principal payments; or
. it becoming probable that the borrower will enter bankruptcy or financial reorganisation; or
. the disappearance of an active market for that financial asset because of financial difficulties.

– I-17 –

ACCOUNTANTS’ REPORT

APPENDIX I

For certain categories of financial assets, such as trade receivables, assets that are assessed for impairment on a collective basis even if they were assessed not to be impaired individually. Objective evidence of impairment for a portfolio of receivables could include the Group’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period, as well as observable changes in national or local economic conditions that correlate with default on receivables.

For financial assets that are carried at amortised cost, the amount of the impairment loss recognised is the difference between the asset’s carrying amount and the present value of the estimated future cash flows, discounted at the financial asset’s original effective interest rate.

For financial assets carried at cost, the amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in the profit or loss.

For financial assets measured at amortised cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the financial assets at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

Financial liabilities and equity instruments

Classification as financial liabilities or equity

Financial liabilities and equity instruments issued by a group entity are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Interest expense is recognised on an effective interest basis.

Other financial liabilities

Other financial liabilities (including amount due to a related company, trade payables, accruals and other payables (excluding receipt in advance) and bank borrowings) are subsequently measured at amortised cost, using the effective interest method.

– I-18 –

ACCOUNTANTS’ REPORT

APPENDIX I

Derecognition

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

On derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss.

On derecognition of a financial asset other than in its entirety, the Group allocates the previous carrying amount of the financial asset between the part it continues to recognise, and the part it no longer recognises on the basis of the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognised and the sum of the consideration received for the part no longer recognised and any cumulative gain or loss allocated to it that had been recognised in other comprehensive income is recognised in profit or loss. A cumulative gain or loss that had been recognised in other comprehensive income is allocated between the part that continues to be recognised and the part that is no longer recognised on the basis of the relative fair values of those parts.

The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

Offsetting financial instrument

Financial assets and financial liabilities are offset and the net amount reported in the combined statements of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined on the first-in, first-out basis. Net realisable value is based on estimated selling prices less any estimated selling price for inventories less all costs necessary to make the sale.

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks and other financial institutions, and short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value, having been within three months of maturity at acquisition.

Borrowing costs

Borrowing costs are expensed in the period in which they are incurred.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

– I-19 –

ACCOUNTANTS’ REPORT

APPENDIX I

Current tax

The tax currently payable is based on taxable profit for the Relevant Periods. Taxable profit differs from ‘‘profit before tax’’ as reported in the combined statements of profit or loss and other comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Historical Financial Information and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Current and deferred tax for the Relevant Periods

Current and deferred tax are recognised in profit or loss.

Employee benefits

Retirement benefits scheme

The Group operates a Mandatory Provident Fund retirement benefits scheme (the ‘‘MPF Scheme’’) under the Mandatory Provident Fund Scheme Ordinance for all of its Hong Kong employees. Contributions are required to make at 5% of the employees’ relevant income, with the employers’ contributions subject to a cap of monthly relevant income of HK$30,000 and are charged to profit or loss as they become payable in accordance with the rules of the MPF Scheme. The assets of the MPF Scheme are held separately from those of the Group in an independently administered fund. The Group’s employer contributions vest fully with the employees when contributed into the MPF Scheme.

Revenue recognition

Revenue is measured at fair value of the consideration received or receivable and represents amounts receivable for services provided and food served in the normal course of business and net of discount.

– I-20 –

ACCOUNTANTS’ REPORT

APPENDIX I

Revenue is recognised when the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to the Group and when specific criteria have been met for each of the Group’s activities, as described below.

Revenue from restaurant operations are recognised when catering services have been provided to the customers.
Revenue from sales of food are recognised on transfer of risks and rewards of ownership, which generally coincides with the time when the products are delivered to customers and title is passed.
Management fee income is recognised when the related service is rendered.
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts the estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition.

Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision, including those arising from the contractual obligation specified in the service concession arrangement to maintain or restore the infrastructure before it is handed over to the grantor, is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (where the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Contingent liabilities and contingent assets

A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. It can also be a present obligation arising from past events that is not recognised because it is not probable that outflow of economic resources will be required or the amount of obligation cannot be measured reliably. When a change in the probability of an outflow occurs so that outflow is probable, they will then be recognised as a provision.

A contingent asset is a possible asset that arises from past events and whose existence will only be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. When inflow is virtually certain, an asset is recognised.

Leases

All leases are classified as operating leases.

The Group as lessee

Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

– I-21 –

ACCOUNTANTS’ REPORT

APPENDIX I

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

Dividend distribution

Dividend distribution to the shareholder is recognised as a liability in the Group’s combined financial statements in the period in which the dividend is approved by shareholders of the Company.

Related parties

A party is considered to be related to the Group if:

(a) A person, or a close member of that person’s family, is related to the Group if that person:
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or the Group’s parent.
(b) An entity is related to the Group if any of the following conditions applies:
(i) the entity and the Group are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others);
(ii) one entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group which the other entity is a member);
(iii) both entities are joint ventures of the same third party;
(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
(v) the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group. If the Group is itself such a plan, the sponsoring employers are also related to the Group;
(vi) the entity is controlled or jointly controlled by a person identified in (a);
(vii) a person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity); or
(viii) the entity, or any member of a group of which it is a part, provides key management personnel services to the Group or to the Group’s parent.

A related party transaction is a transfer of resources, services or obligations between the Group and a related party, regardless of whether a price is charged.

Close family members of a person are those family members who may be expected to influence, or to be influenced by, that person in their dealings with the entity.

– I-22 –

ACCOUNTANTS’ REPORT

APPENDIX I

4. FINANCIAL INSTRUMENTS

(a) Financial risk management

The Group’s activities expose it to a variety of financial risks: market risk (including interest rate risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial market and seeks to minimise potential adverse effects on the Group’s financial performance.

Market risk

Interest rate risk

The Group is exposed to interest rate risk relates primarily to variable rate borrowings (Note 26 to the Historical Financial Information for the details of bank borrowings). The Group’s income and operating cash flows are substantially independent of changes in market interest rates. The Group currently does not have an interest rate hedging policy. However, the directors of the Company monitors interest rate exposure and will consider hedging significant interest rate exposure should the need arise.

Sensitivity analysis

The sensitivity analysis below has been determined based on the exposure to interest rates for nonderivative instruments at the end of each reporting period. The analysis is prepared assuming the financial instruments outstanding at the end of the reporting period were outstanding for the whole year. A 25 basis points increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 25 basis points higher/lower and all other variables were held constant, the Group’s pre-tax profit for the year ended 31 March 2016, 31 March 2017 and 30 September 2017 would decrease/increase by HK$55,000, HK$42,000 and HK$53,000 respectively. This is mainly attributable to the Company’s interest rates on its variable rate on bank borrowings.

Credit risk

Credit risk refers to the risk that the counterparty to a financial instrument would fail to discharge its obligation under the terms of the financial instrument and cause a financial loss to the Group.

The Group trade with a large number of individual customer and trading terms are mainly in cash and credit card settlement. In view of the Group’s operation, the Group’s trade receivables are primarily credit card receivables and the directors of the Company consider the credit risk is not high.

In order to minimise the credit risk in relation to the corporate customers, the directors of the Company reviews the recoverable amount of each individual trade debt at the end of each reporting period to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, the directors of the Company consider that the Group’s credit risk is significantly reduced.

The Group has significant concentration of credit risk on amount due from a director, amounts due from shareholders and amounts due from related companies. The directors of the Company consider the counterparty with good credit worthiness based on its past repayment history and subsequent settlement.

The Group deposited its pledged bank deposits and cash and bank balances with approved and reputable banks. Bankruptcy or insolvency of the banks may cause the Group’s right with respect to pledged bank deposits and cash and bank balances held to be delayed or limited. The directors of the Company monitor the credit rating of these banks on an ongoing basis, and considers that the Group’s exposure to credit risk were minimal.

The credit policies have been followed by the Group since prior years and are considered to have been effective in limiting the Group’s exposure to credit risk to a desirable level.

– I-23 –

ACCOUNTANTS’ REPORT

APPENDIX I

Liquidity risk

The following tables detail the Group’s remaining contractual maturity for its non-derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. Specifically, bank borrowings with a repayment on demand clause are included in the earliest time band regardless of the probability of the banks choosing to exercise their rights.

The table includes both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate at the end of each Relevant Periods.

At 31 March 2016 Non-derivative financial liabilities Amount due to a related company Trade payables Accruals and other payables Bank borrowings At 31 March 2017 Non-derivative financial liabilities Amount due to a related company Trade payables Accruals and other payables Bank borrowings	Within 1 year or on demand HK$’000 8,294 5,812 1,744 21,849 37,699 Within 1 year or on demand HK$’000 8,294 10,188 2,899 16,980 38,361	More than 1 year but less than 5 years HK$’000 — — — — — More than 1 year but less than 5 years HK$’000 — — — — —	More than 5 years HK$’000 — — — — — More than 5 years HK$’000 — — — — —	Total contractual undiscounted cash flows HK$’000 8,294 5,812 1,744 21,849 37,699 Total contractual undiscounted cash flows HK$’000 8,294 10,188 2,899 16,980 38,361	Carrying amounts HK$’000 8,294 5,812 1,744 21,849
					37,699
					Total carrying amounts HK$’000 8,294 10,188 2,899 16,980
					38,361

– I-24 –

ACCOUNTANTS’ REPORT

APPENDIX I

At 30 September 2017 Non-derivative financial liabilities Amount due to a related company Trade payables Accruals and other payables Bank borrowings	Within 1 year or on demand HK$’000 2,294 10,582 2,951 21,358 37,185	More than 1 year but less than 5 years HK$’000 — — — — —	More than 5 years HK$’000 — — — — —	Total contractual undiscounted cash flows HK$’000 2,294 10,582 2,951 21,358 37,185	Total carrying amounts HK$’000 2,294 10,582 2,951 21,358
					37,185

Bank borrowings with a repayment on demand clause are included in the ‘‘within 1 year or on demand’’ time band in the above maturity analysis. At 31 March 2016, 31 March 2017 and 30 September 2017, the aggregate carrying amounts of these bank borrowings amounted to HK$21,849,000 and HK$16,980,000 and HK$21,358,000, respectively. Taking into account the Group’s financial position, the directors of the Company do not believe that it is probable that the banks will exercise their discretionary rights to demand immediate repayment. The directors of the Company believe that these bank borrowings will be repaid in accordance with the scheduled repayment dates set out in the loan agreements.

The following table details the Group’s aggregate principal and interest cash outflows for bank borrowings with a repayment on demand clause. To the extent that interest flows are variable rate, the undiscounted amount is derived from weighted average interest rate at the end of each Relevant Periods.

Bank borrowings with a repayment on demand clause At 31 March 2016 At 31 March 2017 At 30 September 2017	Less than 1 year HK$’000 5,717 5,233 6,024	More than 1 year but less than 5 years HK$’000 12,120 8,421 13,110	Over 5 years HK$’000 7,289 5,754 4,995	Total undiscounted cash flows HK$’000 25,126 19,408 24,129	Carrying amounts HK$’000 21,849 16,980 21,358

(b) Capital management

The primary objectives of the Group’s capital management are to safeguard the Group’s ability to continue as a going concern and to maintain healthy capital ratios in order to support its business and maximise the shareholders’ value.

The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the amounts of dividend paid to the shareholders, return on capital to the shareholders or issue of new shares or redemption of existing shares as well as issue of new debts or redemption of existing debts. The Group is not subject to any externally imposed capital requirements. No changes were made in the objectives, policies or processes for managing capital during the Relevant Periods.

– I-25 –

ACCOUNTANTS’ REPORT

APPENDIX I

The Group monitors capital using a gearing ratio, which is expressed as a percentage of total debts over total equity. The gearing ratio at the end of each Relevant Periods were as follows:

Total borrowings (Note (i)) Less: cash and cash equivalents (Note (ii)) Net debts Total equity Net debts to equity ratio Total debts to equity ratio	At 31 March 2016 2017 HK$’000 HK$’000 30,143 25,274 (11,360) (7,126) 18,783 18,148 14,270 13,232 132% 137% 211% 191%	At 30 September 2017 HK$’000 23,652 (16,209
		7,443
		15,713
		47%
		151%

Notes:

(i) Total borrowings include amount due to a related company and bank borrowings in Note 21 and 26 to the Historical Financial Information.

(ii) Cash and cash equivalents include pledged bank deposits and cash and bank balances in Note 22 and 23 to the Historical Financial Information.

(c) Categories of financial instruments

Financial assets Loans and receivables — Trade receivables — Deposits and other receivables — Amount due from a director — Amounts due from shareholders — Amounts due from related companies — Pledged bank deposits — Cash and bank balances Financial liabilities Amortised cost — Amount due to a related company — Trade payables — Accruals and other payables — Bank borrowings	At 31 March 2016 2017 HK$’000 HK$’000 1,068 918 13,222 15,296 1,654 4,093 1,076 3,150 6,000 6,060 2,011 2,013 9,349 5,113 8,294 8,294 5,812 10,188 1,744 2,899 21,849 16,980	At 30 September 2017 HK$’000 1,970 15,082 4,560 3,400 — 2,014 14,195
		2,294 10,582 2,951 21,358

(d) Fair value of financial instruments

The fair values of financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis.

The directors of the Company consider that the carrying amounts of financial assets and financial liabilities recognised in the Historical Financial Information approximate to their fair values.

– I-26 –

ACCOUNTANTS’ REPORT

APPENDIX I

5. KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, which are described in Note 3 to the Historical Financial Information, the directors of the Company are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The followings are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

(a) Impairment of trade receivables

The Group’s management determines the provision for impairment of trade receivables based on an assessment of the recoverability of trade receivables. This assessment is based on the credit history of its debtors and the current market condition, and requires the use of judgements and estimates. Provisions are applied where events or changes in circumstances indicate that the balances may not be collectible. Where the expectation is different from the original estimate, such difference will impact the carrying amount of trade receivables and the provision for impairment losses in the period in which such estimate has been changed. The directors of the Company reassess the provision at the end of each Relevant Periods.

(b) Income taxes

The Group is subject to income taxes in Hong Kong. Significant judgement is required in determining the provision for income taxes. There are many transactions and calculations for which the ultimate determination is uncertain during the ordinary course of business. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such difference will impact the income tax and deferred tax provision in the year in which such determination is made.

(c) Net realisable value of inventories

Net realisable value of inventories is the estimated selling price in the ordinary course of business less estimated selling expenses. These estimates are based on the current market condition and the historical experience of selling products of a similar nature. It could change significantly as a result of changes in customer taste or competitor actions. Management reassesses these estimates at the end of each Relevant Periods.

(d) Useful lives and residual values of property, plant and equipment

The Group’s management determines the estimated useful lives and deprecation method in determining the related depreciation charges for its property, plant and equipment. This estimate is based on the management’s experience of the actual useful lives of property, plant and equipment of similar nature and functions and will take into account the lease term (including renewal option) of the Group’s restaurants. Management will accelerate the depreciation charge where the economic useful lives are shorter than previously estimated due to removal or closure of restaurants. The management will also write-off or write-down the carrying value of the items which are nonstrategic assets that have been abandoned. Actual economic useful lives may differ from estimated economic useful lives.

6. SEGMENT INFORMATION

The Group is principally engaged in the provision of catering services. Information reported to the Group’s management for the purpose of resources allocation and performance assessment, focuses on the operating results of the Group as a whole as the Group’s resources are integrated and no discrete operating segment financial information is available. Accordingly, no additional reportable segment and geographical information have been presented.

– I-27 –

ACCOUNTANTS’ REPORT

APPENDIX I

7. REVENUE

Revenue represents amounts received and receivable from restaurants operations, net of discounts. An analysis of revenue is as follows:

Restaurants operations Sales of food	Years ended 31 March 2016 2017 HK$’000 HK$’000 191,403 232,722 3,377 2,151 194,780 234,873	Six months ended 30 September 2016 2017 HK$’000 HK$’000 (Unaudited) 116,631 127,097 994 1,110 117,625 128,207	Six months ended 30 September 2016 2017 HK$’000 HK$’000 (Unaudited) 116,631 127,097 994 1,110 117,625 128,207
			128,207

8. OTHER REVENUE AND OTHER INCOME

Bank interest income Management fee income Tips income Sponsorship income Gain on disposal of property, plant and equipment Others	Years ended 31 March 2016 2017 HK$’000 HK$’000 7 2 — 102 384 435 369 279 85 — 183 265 1,028 1,083	Six months ended 30 September 2016 2017 HK$’000 HK$’000 (Unaudited) 1 1 35 30 225 200 53 125 — — 88 106 402 462	Six months ended 30 September 2016 2017 HK$’000 HK$’000 (Unaudited) 1 1 35 30 225 200 53 125 — — 88 106 402 462
			462

9. FINANCE COSTS

Interests on bank borrowings	Years ended 31 March 2016 2017 HK$’000 HK$’000 682 849	Six months ended 30 September 2016 2017 HK$’000 HK$’000 (Unaudited) 452 380

– I-28 –

ACCOUNTANTS’ REPORT

APPENDIX I

10. PROFIT BEFORE TAX

The Group’s profit before tax is arrived at after charging/(crediting):

Auditors’ remuneration: — Audit services — Non-audit services Cost of inventories sold Depreciation of property, plant and equipment (Gain)/loss on disposal and written-off of property, plant and equipment Lease payments under operating leases in respect of restaurants and office premises: — Minimum lease payments — Contingent rents Employee benefit expenses (including directors’ remuneration): — Salaries and other allowances — Staff benefits — Retirement benefit scheme contributions	Years ended 31 March 2016 2017 HK$’000 HK$’000 100 120 8 31 108 151 62,223 79,244 5,262 5,762 (85) 1 29,613 35,524 3,511 4,196 33,124 39,720 50,514 60,293 2,346 1,950 2,471 2,928 55,331 65,171	Six months ended 30 September 2016 2017 HK$’000 HK$’000 (Unaudited) — — 4 24 4 24 40,182 42,062 2,670 2,845 — 52 17,132 19,294 2,338 2,490 19,470 21,784 28,800 31,986 1,052 953 1,401 1,589 31,253 34,528	Six months ended 30 September 2016 2017 HK$’000 HK$’000 (Unaudited) — — 4 24 4 24 40,182 42,062 2,670 2,845 — 52 17,132 19,294 2,338 2,490 19,470 21,784 28,800 31,986 1,052 953 1,401 1,589 31,253 34,528
			24 42,062 2,845 52 19,294 2,490
			21,784 31,986 953 1,589
			34,528

11. DIRECTORS’ REMUNERATION

The remuneration of the directors of the Company were set out below:

Executive directors: Mr. Kwong Ms. Kwong Man Yui Mr. Lam On Fai	Directors’ fees HK$’000 — — — —	Year ended 31 March 2016 Salaries, allowances and benefits in kind Retirement benefit scheme contributions HK$’000 HK$’000 — — — — 667 18 667 18	Total HK$’000 — — 685
			685

– I-29 –

ACCOUNTANTS’ REPORT

APPENDIX I

Executive directors: Mr. Kwong Ms. Kwong Man Yui Mr. Lam On Fai Executive directors: Mr. Kwong Ms. Kwong Man Yui Mr. Lam On Fai Executive directors: Mr. Kwong Ms. Kwong Man Yui Mr. Lam On Fai	Year ended 31 March 2017 Directors’ fees Salaries, allowances and benefits in kind Retirement benefit scheme contributions Total HK$’000 HK$’000 HK$’000 HK$’000 — — — — — — — — — 715 18 733 — 715 18 733 Six months ended 30 September 2016 (Unaudited) Directors’ fees Salaries, allowances and benefits in kind Retirement benefit scheme contributions Total HK$’000 HK$’000 HK$’000 HK$’000 — — — — — — — — — 330 9 339 — 330 9 339 Six months ended 30 September 2017 Directors’ fees Salaries, allowances and benefits in kind Retirement benefit scheme contributions Total HK$’000 HK$’000 HK$’000 HK$’000 — 60 3 63 — 100 3 103 — 330 9 339 — 490 15 505	Total HK$’000 — — 733
		733
		505

Mr. Kwong is also the Chief Executive Officer of the Group and his emoluments disclosed above include those for services rendered by him as the Chief Executive Officer.

During the Relevant Periods, no emoluments were paid by the Group to the directors of the Company as an inducement to join or upon joining the Group or as compensation for loss of office. None of the directors of the Company has waived or agreed to waive any emoluments during the Relevant Periods.

No remuneration was paid to the independent non-executive directors during the Relevant Periods as the independent non-executive directors have not been appointed during the Relevant Periods.

– I-30 –

ACCOUNTANTS’ REPORT

APPENDIX I

12. FIVE HIGHEST PAID EMPLOYEES

One of the five individuals with the highest emoluments is a director of the Company, whose emoluments are disclosed in Note 11 to the Historical Financial Information, for the Relevant Periods. The aggregate of the emoluments in respect of the remaining individuals are as follows:

			Six months	ended
	Years ended 31 March		30 September
	2016	2017	2016	2017
	HK$’000	HK$’000	HK$’000	HK$’000
			(Unaudited)
Salaries, allowance and benefits in kind	1,810	1,781	823	886
Retirement benefit scheme contributions	67	69	35	36
	1,877	1,850	858	922
The above individuals with the highest emoluments	are within the following bands:
			Six months	ended
	Years ended 31 March		30 September
	2016	2017	2016	2017
	Number of	Number of	Number of	Number of
	employee	employee	employee	employee
			(Unaudited)
Nil to HK$1,000,000	4	4	4	4

During the Relevant Periods, no emolument were paid by the Group to the five highest paid individuals as an inducement to join or upon joining the Group or as compensation for loss of office.

13. INCOME TAX EXPENSES

Current tax — Hong Kong Profits Tax Charge for the year Over-provision in prior years Deferred tax credit (Note 17)	Years ended 31 March 2016 2017 HK$’000 HK$’000 2,345 2,625 (23) (8) (269) (421) 2,053 2,196	Six months ended 30 September 2016 2017 HK$’000 HK$’000 (Unaudited) 1,932 2,125 — — (441) (469 1,491 1,656	Six months ended 30 September 2016 2017 HK$’000 HK$’000 (Unaudited) 1,932 2,125 — — (441) (469 1,491 1,656
			1,656

Hong Kong Profits Tax is calculated at 16.5% of the estimated assessable profit for the Relevant Periods.

– I-31 –

ACCOUNTANTS’ REPORT

APPENDIX I

The income tax expenses for the Relevant Periods can be reconciled to the profit before tax per the combined statements of profit or loss and other comprehensive income as follows:

Profit before tax Tax at Hong Kong Profits Tax rate of 16.5% Tax effect of: Expenses not deductible for tax purpose Over-provision in prior years One-off tax reduction of Hong Kong Profits Tax by Inland Revenue Department Income tax expenses for the Relevant Periods	Years ended 31 March 2016 2017 HK$’000 HK$’000 12,669 13,508 2,090 2,229 26 15 (23) (8) (40) (40) 2,053 2,196	Six months ended 30 September 2016 2017 HK$’000 HK$’000 (Unaudited) 9,007 9,987 1,486 1,648 5 8 — — — — 1,491 1,656	Six months ended 30 September 2016 2017 HK$’000 HK$’000 (Unaudited) 9,007 9,987 1,486 1,648 5 8 — — — — 1,491 1,656
			1,648 8 — —
			1,656

14. DIVIDEND

No dividend has been paid or proposed by the Company since its date of incorporation.

Prior to the Reorganisation, the Company’s subsidiaries had declared and paid dividend to the shareholders during the Relevant Periods were as follows:

Dividend paid	Years ended 31 March 2016 2017 HK$’000 HK$’000 9,800 12,350	Six months ended 30 September 2016 2017 HK$’000 HK$’000 (Unaudited) 5,750 5,850

Subsequent to the period ended 30 September 2017, dividend of HK$8,950,000 were declared on 30 October 2017 and 20 November 2017 and paid by December 2017.

15. EARNINGS PER SHARE

The calculation of basic earnings per share for the Relevant Periods is based on the profit attributable to owners of the Company for the Relevant Periods and on the assumption that the proposed 750,000,000 ordinary shares in issue, comprising 100 ordinary shares in issue as at the date of this prospectus and 749,999,900 ordinary shares to be issued pursuant to the capitalisation issue as detailed in the section headed ‘‘Share Capital’’ set out in this Prospectus, as if the shares as there were outstanding throughout the entire Relevant Periods.

Diluted earnings per share were same as the basic earnings per share as there were no potential dilutive ordinary shares in existences during the Relevant Periods.

– I-32 –

ACCOUNTANTS’ REPORT

APPENDIX I

16. PROPERTY, PLANT AND EQUIPMENT

Cost At 1 April 2015 Additions Disposal and written-off At 31 March 2016 and at 1 April 2016 Additions Disposal and written-off At 31 March 2017 and at 1 April 2017 Additions Disposal and written-off At 30 September 2017 Accumulated depreciation and impairment At 1 April 2015 Charge for the year Eliminated upon disposal and written-off At 31 March 2016 and at 1 April 2016 Charge for the year Eliminated upon disposal and written-off At 31 March 2017 and at 1 April 2017 Charge for the period Eliminated upon disposal and written-off At 30 September 2017 Carrying amounts At 31 March 2016 At 31 March 2017 At 30 September 2017	Leasehold improvements HK$’000 19,226 5,562 (957) 23,831 2,817 (1,390) 25,258 1,015 (87) 26,186 10,227 3,566 (957) 12,836 4,085 (1,389) 15,532 2,093 (87) 17,538 10,995 9,726 8,648	Furniture and fixtures HK$’000 2,305 739 (87) 2,957 432 — 3,389 48 (490) 2,947 1,316 482 (63) 1,735 526 — 2,261 241 (466) 2,036 1,222 1,128 911	Catering and other equipment HK$’000 5,883 1,514 — 7,397 533 — 7,930 40 (460) 7,510 3,403 1,214 — 4,617 1,151 — 5,768 511 (432) 5,847 2,780 2,162 1,663	Total HK$’000 27,414 7,815 (1,044) 34,185 3,782 (1,390) 36,577 1,103 (1,037) 36,643 14,946 5,262 (1,020) 19,188 5,762 (1,389) 23,561 2,845 (985) 25,421 14,997 13,016 11,222

During the period ended 30 September 2017, additions of leasehold improvements and furnitures and fixtures with the amounts of approximately HK$367,000 was settled by deposits paid recognised at 31 March 2017.

– I-33 –

ACCOUNTANTS’ REPORT

APPENDIX I

17. DEFERRED TAXATION

The following is the deferred tax assets recognised and movements thereon during the Relevant Periods:

At 1 April 2015 Credit to profit or loss (Note 13) At 31 March 2016 and at 1 April 2016 Credit to profit or loss (Note 13) At 31 March 2017 and at 1 April 2017 Credit to profit or loss (Note 13) At 30 September 2017 INVENTORIES Food and beverage, and other operating items for restaurants operations	At 31 March 2016 2017 HK$’000 HK$’000 744 702	Accelerated tax depreciation HK$’000 590 269
		859 421
		1,280 469
		1,749
		At 30 September 2017 HK$’000 730

18. INVENTORIES

Inventories are expected to be recovered within one year. The inventories were carried at net realisable value.

19. TRADE RECEIVABLES

Credit card receivables Other trade receivables	At 31 March 2016 2017 HK$’000 HK$’000 470 625 598 293 1,068 918	At 30 September 2017 HK$’000 1,475 495
		1,970

The Group’s trading terms with its customers are mainly by cash and credit card settlement. The settlement terms of credit card companies are usually 7 days after the service rendered date. Generally, there is no credit period granted to customers, except for certain well established corporate customers in which credit period of 90 days is granted by the Group. The Group seeks to maintain strict control over its outstanding receivables to minimise the credit risk. The Group does not hold any collateral or other credit enhancement over its trade receivables balances. Trade receivables are interestfree.

At 31 March 2016, 31 March 2017 and 30 September 2017, amount of approximately HK$133,000, Nil and Nil included in trade receivables is due by Elite Fresh Food Company Limited (‘‘Elite’’) respectively, a company controlled by Mr. Kwong Tai Wing and Ms. Kwong Ching Yee Melanie, who are the controlling shareholders of the Company and Mrs. Kwong, who is the close family member of Mr. Kwong and Ms. Kwong Man Yui and one of the controlling shareholder of the Company.

– I-34 –

ACCOUNTANTS’ REPORT

APPENDIX I

The Group has a certain concentration of credit risk as certain of the Group’s trade receivables were due from the Group’s largest debtor and the five largest debtors as detailed below.

			At
	At 31 March		30 September
	2016	2017	2017
	%	%	%
Largest debtor	40	63	70
Five largest debtors	98	98	99

The following is an aging analysis of trade receivables, presented based on the invoice dates, which approximates the respective revenue recognition dates and net of allowance for doubtful debts:

0–30 days 31–60 days 61–90 days Over 90 days	At 31 March 2016 2017 HK$’000 HK$’000 841 833 207 26 5 25 15 34 1,068 918	At 30 September 2017 HK$’000 1,667 227 26 50
		1,970

The following is an aging analysis of trade receivables which are not individually nor collectively considered to be impaired:

Neither past due nor impaired One to three months past due More than three months past due	At 31 March 2016 2017 HK$’000 HK$’000 1,053 884 9 25 6 9 1,068 918	At 30 September 2017 HK$’000 1,920 48 2
		1,970

Receivables that were past due but not impaired relate to a number of independent customers that have a good track record with the Group. Based on past experience, the directors of the Company are of the opinion that no provision for impairment is necessary in respect of these balances as there has not been a significant change in credit quality and the balances are still considered fully recoverable.

– I-35 –

ACCOUNTANTS’ REPORT

APPENDIX I

20. DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES

Non-current portion Rental deposits Deposits paid for acquisition of property, plant and equipment Current portion Rental deposits Utility and other deposits Other receivables Prepayments	At 31 March 2016 2017 HK$’000 HK$’000 8,082 8,804 — 367 8,082 9,171 3,434 4,309 1,687 1,722 19 94 563 580 5,703 6,705	At 30 September 2017 HK$’000 8,034 34
		8,068
		5,185 1,821 8 817
		7,831

Prepayments mainly consists of prepaid insurance and prepaid licences fee.

None of the above receivables is neither past due nor impaired. Financial assets included in the above balances related to receivables for which there was no recent history of default. The Group does not hold any collateral over these balances.

21. BALANCES WITH A DIRECTOR, SHAREHOLDERS AND RELATED COMPANIES

Particulars of the amount due from a director is as follows:

Due from a director Mr. Kwong	At 31 March 2016 2017 HK$’000 HK$’000 1,654 4,093	At 30 September 2017 HK$’000 4,560

Particular of the amounts due from shareholders are as follows:

Due from shareholders Mr. Kwong Tai Wing Ms. Kwong Ching Yee Melanie	At 31 March 2016 2017 HK$’000 HK$’000 538 1,575 538 1,575 1,076 3,150	At 30 September 2017 HK$’000 1,700 1,700
		3,400

– I-36 –

ACCOUNTANTS’ REPORT

APPENDIX I

Particular of the amounts due from related companies are as follows:

Due from related companies Active Wisdom Limited (‘‘Active Wisdom’’) (Note (i)) Able Leader Asia Limited (‘‘Able Leader’’) (Note (ii))	At 31 March 2016 2017 HK$’000 HK$’000 6,000 6,000 — 60 6,000 6,060	At 30 September 2017 HK$’000 — —
		—

The maximum amounts due from a director, shareholders and related companies during the Relevant Periods are as follows:

During the years ended 31 March 2016 2017 HK$’000 HK$’000 Due from a director Mr. Kwong 1,654 4,093 Due from shareholders Mr. Kwong Tai Wing 538 1,575 Ms. Kwong Ching Yee Melanie 538 1,575 Due from related companies Active Wisdom (Note (i)) 6,000 6,000 Able Leader (Note (ii)) — 60 Particulars of the amount due to a related company is as follows: At 31 March 2016 2017 HK$’000 HK$’000 Due to a related company Elite (Note (iii)) 8,294 8,294	During the six months ended 30 September 2017 HK$’000 4,560
	1,700 1,700
	6,000 60
	At 30 September 2017 HK$’000 2,294

Notes:

(i) Active Wisdom is a company controlled by Mrs. Kwong and Ms. Kwong Man Yui, who are the controlling shareholders of the Company and close family member of Mr. Kwong.
(ii) Mr. Kwong, the director of the Company, is also the director of Able Leader.
(iii) Elite is a company controlled by Mr. Kwong Tai Wing and Ms. Kwong Ching Yee Melanie, who are the controlling shareholders of the Company and Mrs. Kwong, who is the close family member of Mr. Kwong and Ms. Kwong Man Yui and one of the controlling shareholder of the Company.

– I-37 –

ACCOUNTANTS’ REPORT

APPENDIX I

Balances with a director, shareholders and related companies are non-trade nature, unsecured, interest-free and repayable on demand.

As represented by the directors of the Company, the non-trade nature amount due from a director, amounts due from shareholders, amounts due from related companies and amount due to a related company shall be fully settled before listing.

None of the amounts due from a director, shareholders and related companies are neither past due nor impaired. The financial assets included in the above balance related to receivable for which there was no recent history of default.

22. PLEDGED BANK DEPOSITS

Fixed deposits	At 31 March 2016 2017 HK$’000 HK$’000 2,011 2,013	At 30 September 2017 HK$’000 2,014

The effective interest rates on fixed deposits is 0.14%, 0.08% and 0.08% at 31 March 2016, 31 March 2017 and 30 September 2017 respectively, and mature within one month.

The fixed bank deposits was pledged for general bank facilities granted to the Group.

23. CASH AND BANK BALANCES

Cash and bank balances	At 31 March 2016 2017 HK$’000 HK$’000 9,349 5,113	At 30 September 2017 HK$’000 14,195

Bank balances carry interest at floating rates and placed with creditworthy banks with no recent history of default.

– I-38 –

ACCOUNTANTS’ REPORT

APPENDIX I

Reconciliation of liabilities arising from financial activities is set out as below:

At 1 April 2015 Non-cash changes — Interest expenses on bank borrowings — Dividend declared Cash flows — Inflow from financing activities — Outflow from financing activities At 31 March 2016 and at 1 April 2016 Non-cash changes — Interest expenses on bank borrowings — Dividend declared Cash flows — Inflow from financing activities — Outflow from financing activities At 31 March 2017 and at 1 April 2017 Non-cash changes — Interest expenses on bank borrowings — Dividend declared Cash flows — Inflow from financing activities — Outflow from financing activities At 30 September 2017 At 1 April 2016 Non-cash changes — Interest expenses on bank borrowings — Dividend declared Cash flows — Inflow from financing activities — Outflow from financing activities At 30 September 2016 (Unaudited)	Dividend payable HK$’000 — — 9,800 — (9,800) — — 12,350 — (12,350) — — 5,850 — (5,850) — — — 5,750 — (5,750) —	Interest payable HK$’000 16 682 — — (664) 34 849 — — (856) 27 380 — — (369) 38 34 452 — — (452) 34	Bank borrowings HK$’000 13,258 — — 12,500 (3,909) 21,849 — — — (4,869) 16,980 — — 7,000 (2,622) 21,358 21,849 — — — (2,403) 19,446	Amount due to a related company HK$’000 8,294 — — — — 8,294 — — — — 8,294 — — — (6,000) 2,294 8,294 — — — — 8,294	Total HK$’000 21,568 682 9,800 12,500 (14,373
					30,177 849 12,350 — (18,075
					25,301 380 5,850 7,000 (14,841
					23,690
					30,177 452 5,750 — (8,605
					27,774

– I-39 –

ACCOUNTANTS’ REPORT

APPENDIX I

24. TRADE PAYABLES

The following is aging analysis of trade payables presented based on the invoice dates:

0–30 days 31–60 days 61–90 days Over 90 days	At 31 March 2016 2017 HK$’000 HK$’000 5,812 5,727 — 813 — 1,560 — 2,088 5,812 10,188	At 30 September 2017 HK$’000 6,913 — 3,467 202
		10,582

The average credit period granted by suppliers normally within 90 days.

At 31 March 2016, 31 March 2017 and 30 September 2017, amount of HK$2,937,000, HK$7,290,000 and HK$6,882,000 respectively, included in trade payable is due to Elite, a company controlled by Mr. Kwong Tai Wing and Ms. Kwong Ching Yee Melanie, who are the controlling shareholders of the Company and Mrs. Kwong, who is the close family member of Mr. Kwong and Ms. Kwong Man Yui and one of the controlling shareholder of the Company.

25. ACCRUALS AND OTHER PAYABLES

Accruals Receipt in advance Other payables	At 31 March 2016 2017 HK$’000 HK$’000 1,505 2,220 33 78 239 679 1,777 2,977	At 30 September 2017 HK$’000 2,300 166 651
		3,117

Accruals mainly consist of accrued staff costs, accrued rental expenses and accrued utilities expenses.

26. BANK BORROWINGS

Secured bank borrowings Unsecured bank borrowings	At 31 March 2016 2017 HK$’000 HK$’000 14,550 12,158 7,299 4,822 21,849 16,980	At 30 September 2017 HK$’000 17,813 3,545
		21,358

– I-40 –

ACCOUNTANTS’ REPORT

APPENDIX I

Carrying amount (shown under current liabilities) that contain a repayment on demand clause based on scheduled repayment terms: — Within 1 year — More than 1 year but less than 5 years — Over 5 years	At 31 March 2016 2017 HK$’000 HK$’000 4,869 4,611 10,382 7,051 6,598 5,318 21,849 16,980	At 30 September 2017 HK$’000 5,280 11,420 4,658
		21,358

The bank borrowings are interest bearing at Hong Kong Dollar Prime Rate over a spread or minus a spread as appropriate. The effective interest rate on the Group’s bank borrowings ranged from 4.25% to 5.50%, 4.25% to 5.50% and 3.93% to 5.50% per annum at 31 March 2016, 31 March 2017 and 30 September 2017 respectively.

Bank borrowings with the amounts of approximately HK$12,247,000, HK$11,211,000 and HK$17,573,000 are secured by properties owned by Elite, personal guarantee provided by Mr. Kwong, Mr. Kwong Tai Wing and Ms. Kwong Ching Yee Melanie and corporate guarantee provided by Elite and certain group entities.

Bank borrowings with the amounts of approximately HK$7,299,000, HK$4,822,000 and HK$3,545,000 at 31 March 2016, 31 March 2017 and 30 September 2017 are unsecured, personal guarantee provided by Mr. Kwong, Mr. Kwong Tai Wing and Ms. Kwong Ching Yee Melanie, guarantee provided by the Hong Kong Mortgage Corporation Limited and corporate guarantee provided by Elite and certain group entities.

As represented by the directors of the Company, the personal guarantee provided by Mr. Kwong, Mr. Kwong Tai Wing and Ms. Kwong Ching Yee Melanie, pledged properties and corporate guarantee provided by Elite will be released upon the Listing.

27. SHARE CAPITAL

The Company was incorporated in Cayman Islands with limited liability on 8 November 2017 with an authorised share capital of 38,000,000 ordinary shares of HK$0.01 each. On the same day, one ordinary share was allotted and issued nil paid to the initial subscriber of the Company and was transferred to Future More as part of the Reorganisation. Since the Reorganisation was not completed at 30 September 2017, the share capital in the combined statements of financial position at the respective reporting period represented the aggregate amount of capital of the companies comprising the Group.

– I-41 –

ACCOUNTANTS’ REPORT

APPENDIX I

28. COMMITMENTS

(a) Operating lease commitments

The Group as lessee

The Group leases certain restaurants and office premises under operating lease arrangements. Leases for these properties are negotiated for terms ranging from one to five years. At the end of each Relevant Periods, the Group had commitments for future minimum lease payments under non-cancellable operating leases falling due as follows:

Within one year In the second to fifth years, inclusive	At 31 March 2016 2017 HK$’000 HK$’000 32,782 35,782 44,009 50,011 76,791 85,793	At 30 September 2017 HK$’000 36,533 39,712
		76,245

In addition, the operating leases rentals for certain restaurants are based on the higher of a fixed rental and contingent rent based on the sales of these restaurants, whichever is higher, pursuant to the terms and conditions as set out in the respective rental agreements. As the future sales of these restaurants could not be reliably determined, the relevant contingent rent has not been included above and only the minimum lease commitments have been included in the above table.

The Group does not have an option to purchase the leased premises at the expiry of the lease period.

(b) Capital commitments

The Group had the following outstanding commitments at the end of each Relevant Periods:

Authorised and contracted, but not provided for: — Acquisition of property, plant and equipment	At 31 March 2016 2017 HK$’000 HK$’000 — 536	At 30 September 2017 HK$’000 9

– I-42 –

ACCOUNTANTS’ REPORT

APPENDIX I

29. RELATED PARTIES TRANSACTIONS

(a) Save as disclosed elsewhere in the Historical Financial Information, the Group entered into the following transactions with related parties:

Purchase of food paid/payable from a related company: — Elite Revenue from restaurant operations received/receivable from a related company: — Elite Management fee income received/ receivable from a related company: — Able Leader Management and consultancy fee paid/ payable to a related company: — Elite	Years ended 31 March 2016 2017 HK$’000 HK$’000 29,125 43,384 1,471 — — 102 1,232 986	Six months ended 30 September 2016 2017 HK$’000 HK$’000 (Unaudited) 21,831 19,461 — — 35 30 511 233

The transactions were conducted at terms and conditions mutually agreed between the relevant parties. The directors of the Company are of the opinion that those related party transactions were conducted in the normal ordinary course of business of the Group.

(b) Compensation of key management personnel of the Group, including directors’ remuneration as disclosed in Note 11 to the Historical Financial Information, is as follows:

Salaries, allowances and benefits in kind Retirement benefit scheme contributions	Years ended 31 March 2016 2017 HK$’000 HK$’000 1,210 1,236 36 36 1,246 1,272	Six months ended 30 September 2016 2017 HK$’000 HK$’000 (Unaudited) 567 757 18 24 585 781	Six months ended 30 September 2016 2017 HK$’000 HK$’000 (Unaudited) 567 757 18 24 585 781
			781

(c) Elite, a company controlled by Mr. Kwong Tai Wing and Ms. Kwong Ching Yee Melanie, who are the controlling shareholders of the Company and Mrs. Kwong, close family member of Mr. Kwong and Ms. Kwong Man Yui and one of the controlling shareholder of the Company, had provided corporate guarantee and pledged properties to secured bank borrowings granted to the Group during the Relevant Periods without any charge. As represented by the directors of the Company represent that the corporate guarantees and pledged properties will be released upon the listing.
(d) Mr. Kwong, the director of the Company, Mr. Kwong Tai Wing and Ms. Kwong Ching Yee Melanie, who are the controlling shareholders of the Company, had provided personal guarantee for bank borrowings during the Relevant Periods without any charge. As represented by the directors of the Company represent that the personal guarantees will be released upon the listing.
(e) Details of the balances with related parties at the end of the Relevant Periods are set out in Note 21 to the Historical Financial Information.

– I-43 –

ACCOUNTANTS’ REPORT

APPENDIX I

30. RETIREMENT BENEFITS SCHEME

The Group operates a MPF Scheme under the Hong Kong Mandatory Provident Fund Schemes Ordinance. The assets of the MPF Scheme are held separately from those of the Group in funds under the control of an independent trustee. Under the MPF Scheme, the employees are required to contribute 5% of their monthly salaries or up to a maximum of HK$1,500 and they can choose to make additional contributions. The employer’s monthly contributions are calculated at 5% of the employee’s monthly salaries or up to a maximum of HK$1,500 (the ‘‘Mandatory Contributions’’), and this is the only obligation of the Group with respect to the MPF Scheme to make the required contribution. The employees are entitled to 100% of the employer’s Mandatory Contributions upon their retirement at the age of 65, death or total incapacity.

The retirement benefits scheme contributions arising from the MPF Scheme charged to profit or loss represent contribution paid or payable to the funds by the Group at rates specified in the rules of the MPF Scheme.

The contributions paid and payable to the schemes by the Group are disclosed in Note 10 to the Historical Financial Information.

III. EVENTS AFTER THE REPORTING PERIOD

(a) Pursuant to the Reorganisation as fully explained in the paragraph headed ‘‘Reorganisation’’ in the section headed ‘‘History, Development and Reorganisation’’ of the Prospectus, the Company become the holding company of the companies now comprising the Group subsequent to the end of the Relevant Periods on 23 March 2018.
(b) On 23 March 2018, the shareholder of the Company resolved to increase the authorised share capital of the Company from HK$380,000 to HK$15,000,000 by the creation of an additional of 1,462,000,000 shares, each ranking pari passu with the shares then in issue in all respects.

IV. SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared by the Group or any of its subsidiaries in respect of any period subsequent to 30 September 2017.

– I-44 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION

APPENDIX II

The information set forth below does not form part of the Accountants’ Report from HLB Hodgson Impey Cheng Limited, Certified Public Accountants, Hong Kong, the reporting accountants of the Company, as set forth in Appendix I to this prospectus, and is included herein for illustrative purposes only. The unaudited pro forma financial information should be read in conjunction with the section headed ‘‘Financial Information’’ in this prospectus and the financial information included in the Accountants’ Report set forth in Appendix I to this prospectus.

A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED NET TANGIBLE ASSETS

The following unaudited pro forma statement of adjusted net tangible assets of the Group prepared in accordance with Rule 7.31 of the Rules Governing the Listing of Securities on GEM of The Stock Exchange of Hong Kong Limited (the ‘‘Stock Exchange’’) is for illustrative purposes only, and is set out below to illustrate the effect of the proposed listing of the Company’s share on the Stock Exchange by way of Share Offer (the ‘‘Share Offer’’) on the net tangible assets of the Group attributable to the owners of the Company as of 30 September 2017 as if the Share Offer had taken place on 30 September 2017.

This unaudited pro forma statement of adjusted net tangible assets has been prepared for illustrative purposes only and because of its hypothetical nature, it may not give a true picture of the combined net tangible assets of the Group as at 30 September 2017 or at any future dates following the Share Offer. It is prepared based on the combined net assets of the Group as at 30 September 2017 as set out in the Accountants’ Report of the Group, the text of which is set out in Appendix I to this prospectus, and adjusted as described below. The unaudited pro forma statement of adjusted net tangible assets does not form part of the Accountants’ Report.

Based on the minimum indicative Offer Price of HK$0.23 per Share Based on the maximum indicative Offer Price of HK$0.27 per Share	Audited combined net tangible assets of the Group attributable to the owners of the Company as at 30 September 2017 HK$’000 (Note 1) 15,713 15,713	Add: Estimated net proceeds from the Share Offer HK$’000 (Note 2) 32,350 41,649	Unaudited pro forma adjusted combined net tangible assets attributable to the owners of the Company as at 30 September 2017 HK$’000 (Note 3) 48,063 57,362	Unaudited pro forma adjusted net tangible assets per Share HK cents (note 4) 4.81
				5.74

– II-1 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION

APPENDIX II

Notes:

(1) The audited combined net tangible assets attributable to the owners of the Company as at 30 September 2017 is extracted from the Accountants’ Report set out in Appendix I to this prospectus, which is based on the audited combined net assets of the Group attributable to the owners of the Company as at 30 September 2017 of approximately HK$15,713,000.
(2) The estimated net proceeds from the Share Offer are based on the indicative Offer Price of HK$0.23 per share and HK$0.27 per share after deduction of the underwriting fees and other related expenses in connection with the Share Offer.
(3) The unaudited pro forma net tangible assets per Shares is arrived at after having made the adjustments referred to in the preceding paragraphs and on the basis that 1,000,000,000 shares in issue assuming the Share Offer has been completed on 30 September 2017 but without taking into account of any shares which may fall to be issued upon the exercise of options granted under the Share Option Scheme or any Share which may be allotted and issued or repurchased by the Company pursuant to the General Mandate to Issue Shares of the General Mandate to Repurchase Shares as described in the section headed ‘‘Share Capital’’ in this prospectus.
(4) No adjustment has been made to the audited combined net tangible assets of the Group attributable to the owners of the Company as at 30 September 2017 to reflect any trading result or other transaction of the Group entered into subsequent to 30 September 2017.
(5) The unaudited pro forma adjusted consolidated net tangible assets attributable to the owners of the Company does not take into account the interim dividend of HK$8,950,000 declared on 30 October and 20 November 2017. Had the interim dividend of HK$8,950,000 declared on 30 October 2017 and 20 November 2017 been taken into account of, the unaudited pro forma adjusted combined net tangible assets attributable to the owners of the Company per Share would have been further adjusted approximately to HK$39,113,000 and HK$0.0391 per Share respectively, based on the Offer Price of HK$0.23 per Share, and approximately to HK$48,412,000 and HK$0.0484 per Share respectively, based on the Offer Price of HK$0.27 per Share.

– II-2 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION

APPENDIX II

B. REPORT FROM REPORTING ACCOUNTANT ON THE UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following is the text of a report received from HLB Hodgson Impey Cheng Limited, Certified Public Accountants, Hong Kong, for the purpose of incorporation in this prospectus.

==> picture [230 x 46] intentionally omitted <==

31st Floor Gloucester Tower The Landmark 11 Pedder Street Central Hong Kong

29 March 2018

INDEPENDENT REPORTING ACCOUNTANTS ’ ASSURANCE REPORT ON THE COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION INCLUDED IN A PROSPECTUS

TO THE DIRECTORS OF MS CONCEPT LIMITED

We have completed our assurance engagement to report on the compilation of unaudited pro forma financial information of MS Concept Limited (the ‘‘Company’’) and its subsidiaries (collectively the ‘‘Group’’) by the directors for illustrative purposes only. The unaudited pro forma financial information consists of the unaudited pro forma statement of adjusted net tangible assets of the Group as at 30 September 2017, and related notes (the ‘‘Unaudited Pro Forma Financial Information’’) as set out on pages II-1 to II-5 of the Company’s prospectus dated 29 March 2018, in connection with the proposed offer of the shares of the Company. The applicable criteria on the basis of which the directors have compiled the Unaudited Pro Forma Financial Information are described on pages II-1 to II-5.

The unaudited Pro Forma Financial Information has been compiled by the directors to illustrate the impact of the proposed offer of the shares of the Company on the Group’s financial position as at 30 September 2017 as if the proposed offer of the shares of the Company had taken place at 30 September 2017. As part of this process, information about the Group’s financial position has been extracted by the directors from the Group’s financial information for the period ended 30 September 2017, on which an accountants’ report has been published.

Directors’ Responsibilities for the Unaudited Pro Forma Financial Information

The directors are responsible for compiling the unaudited Pro Forma Financial Information in accordance with paragraph 7.31 of the Rules Governing the Listing of Securities on GEM of The Stock Exchange of Hong Kong Limited (the ‘‘GEM Listing Rules’’) and with reference to Accounting Guideline 7 ‘‘Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars’’ (‘‘AG 7’’) issued by the Hong Kong Institute of Certified Public Accountants (‘‘HKICPA’’).

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UNAUDITED PRO FORMA FINANCIAL INFORMATION

APPENDIX II

Our Independence and Quality Control

We have complied with the independence and other ethical requirements of the ‘‘Code of Ethics for Professional Accountants’’ issued by the HKICPA, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behavior.

Our firm applies Hong Kong Standard on Quality Control 1 issued by the HKICPA and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Reporting Accountants’ Responsibilities

Our responsibility is to express an opinion, as required by paragraph 7.31(7) of the GEM Listing Rules, on the Unaudited Pro Forma Financial Information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the Unaudited Pro Forma Financial Information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

We conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements 3420 ‘‘Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus’’ issued by the HKICPA. This standard requires that the reporting accountants complies with ethical requirements and plans and performs procedures to obtain reasonable assurance about whether the directors have compiled the Unaudited Pro Forma Financial Information in accordance with paragraph 7.31 of the GEM Listing Rules and with reference to AG 7 issued by the HKICPA.

For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical financial information used in compiling the Unaudited Pro Forma Financial Information, nor have we, in the course of this engagement, performed an audit or review of the financial information used in compiling the Unaudited Pro Forma Financial Information.

The purpose of Unaudited Pro Forma Financial Information included in a prospectus is solely to illustrate the impact of a significant event or transaction on unadjusted financial information of the entity as if the event had occurred or the transaction had been undertaken at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the proposed share offer as at 30 September 2017 would have been as presented.

A reasonable assurance engagement to report on whether the Unaudited Pro Forma Financial Information has been properly compiled on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used by the directors in the compilation of the unaudited pro forma financial information provide a reasonable basis for presenting the significant effects directly attributable to the event or transaction, and to obtain sufficient appropriate evidence about whether:

. The related pro forma adjustments give appropriate effect to those criteria; and

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UNAUDITED PRO FORMA FINANCIAL INFORMATION

APPENDIX II

. The unaudited pro forma financial information reflects the proper application of those adjustments to the unadjusted financial information.

The procedures selected depend on the reporting accountants’ judgement, having regard to the reporting accountants’ understanding of the nature of the Company, the event or transaction in respect of which the unaudited pro forma financial information has been compiled, and other relevant engagement circumstances.

The engagement also involves evaluating the overall presentation of the Unaudited Pro Forma Financial Information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion:

(a) the Unaudited Pro Forma Financial Information has been properly compiled by the directors of the Company on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purpose of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 7.31(1) of the GEM Listing Rules.

Yours faithfully

HLB Hodgson Impey Cheng Limited Certified Public Accountants

Shek Lui

Practising Certificate number: P05895 Hong Kong, 29 March 2018

– II-5 –

SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

APPENDIX III

Set out below is a summary of certain provisions of the Memorandum and Articles of Association of the Company and of certain aspects of Cayman company law.

The Company was incorporated in the Cayman Islands as an exempted company with limited liability on 8 November 2017 under the Companies Law. The Company’s constitutional documents consist of its Memorandum of Association and its Articles of Association.

1. MEMORANDUM OF ASSOCIATION

(a) The Memorandum states, inter alia, that the liability of members of the Company is limited to the amount, if any, for the time being unpaid on the shares respectively held by them and that the objects for which the Company is established are unrestricted (including acting as an investment company), and that the Company shall have and be capable of exercising all the functions of a natural person of full capacity irrespective of any question of corporate benefit, as provided in section 27(2) of the Companies Law and in view of the fact that the Company is an exempted company that the Company will not trade in the Cayman Islands with any person, firm or corporation except in furtherance of the business of the Company carried on outside the Cayman Islands.
(b) The Company may by special resolution alter its Memorandum with respect to any objects, powers or other matters specified therein.

2. ARTICLES OF ASSOCIATION

The Articles were conditionally adopted on 23 March 2018 with effect from the Listing Date. The following is a summary of certain provisions of the Articles:

(a) Shares

(i) Classes of shares

The share capital of the Company consists of ordinary shares.

(ii) Variation of rights of existing shares or classes of shares

Subject to the Companies Law, if at any time the share capital of the Company is divided into different classes of shares, all or any of the special rights attached to the shares or any class of shares may (unless otherwise provided for by the terms of issue of that class) be varied, modified or abrogated either with the consent in writing of the holders of not less than three fourths in nominal value of the issued shares of that class or with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of that class. To every such separate general meeting the provisions of the Articles relating to general meetings will mutatis mutandis apply, but so that the necessary quorum (other than at an adjourned meeting) shall be two persons holding or representing by proxy not less than one third in nominal value of the issued shares of that class and at any adjourned meeting

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SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

APPENDIX III

two holders present in person or by proxy (whatever the number of shares held by them) shall be a quorum. Every holder of shares of the class shall be entitled to one vote for every such share held by him.

Any special rights conferred upon the holders of any shares or class of shares shall not, unless otherwise expressly provided in the rights attaching to the terms of issue of such shares, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.

(iii) Alteration of capital

The Company may by ordinary resolution of its members:

(i) increase its share capital by the creation of new shares;
(ii) consolidate all or any of its capital into shares of larger amount than its existing shares;
(iii) divide its shares into several classes and attach to such shares any preferential, deferred, qualified or special rights, privileges, conditions or restrictions as the Company in general meeting or as the directors may determine;
(iv) subdivide its shares or any of them into shares of smaller amount than is fixed by the Memorandum; or
(v) cancel any shares which, at the date of passing of the resolution, have not been taken and diminish the amount of its capital by the amount of the shares so cancelled.

The Company may reduce its share capital or any capital redemption reserve or other undistributable reserve in any way by special resolution.

(iv) Transfer of shares

All transfers of shares may be effected by an instrument of transfer in the usual or common form or in a form prescribed by The Stock Exchange of Hong Kong Limited (the ‘‘Stock Exchange’’) or in such other form as the board may approve and which may be under hand or, if the transferor or transferee is a clearing house or its nominee(s), by hand or by machine imprinted signature or by such other manner of execution as the board may approve from time to time.

The instrument of transfer shall be executed by or on behalf of the transferor and the transferee provided that the board may dispense with the execution of the instrument of transfer by the transferee. The transferor shall be deemed to remain the holder of the share until the name of the transferee is entered in the register of members in respect of that share.

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SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

APPENDIX III

The board may, in its absolute discretion, at any time transfer any share upon the principal register to any branch register or any share on any branch register to the principal register or any other branch register.

The board may decline to recognise any instrument of transfer unless a fee (not exceeding the maximum sum as the Stock Exchange may determine to be payable) determined by the Directors is paid to the Company, the instrument of transfer is properly stamped (if applicable), it is in respect of only one class of share and is lodged at the relevant registration office or registered office or such other place at which the principal register is kept accompanied by the relevant share certificate(s) and such other evidence as the board may reasonably require to show the right of the transferor to make the transfer (and if the instrument of transfer is executed by some other person on his behalf, the authority of that person so to do).

The registration of transfers may be suspended and the register closed on giving notice by advertisement in any newspaper or by any other means in accordance with the requirements of the Stock Exchange, at such times and for such periods as the board may determine. The register of members must not be closed for periods exceeding in the whole thirty (30) days in any year.

Subject to the above, fully paid shares are free from any restriction on transfer and free of all liens in favour of the Company.

(v) Power of the Company to purchase its own shares

The Company is empowered by the Companies Law and the Articles to purchase its own shares subject to certain restrictions and the board may only exercise this power on behalf of the Company subject to any applicable requirements imposed from time to time by the Stock Exchange.

Where the Company purchases for redemption a redeemable share, purchases not made through the market or by tender must be limited to a maximum price determined by the Company in general meeting. If purchases are by tender, tenders must be made available to all members alike.

(vi) Power of any subsidiary of the Company to own shares in the Company

There are no provisions in the Articles relating to ownership of shares in the Company by a subsidiary.

(vii) Calls on shares and forfeiture of shares

The board may from time to time make such calls upon the members in respect of any monies unpaid on the shares held by them respectively (whether on account of the nominal value of the shares or by way of premium). A call may be made payable either in one lump sum or by installments. If the sum payable in respect of any call or instalment is not paid on or before the day appointed for payment thereof, the person or persons from whom the sum is

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SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

APPENDIX III

due shall pay interest on the same at such rate not exceeding twenty per cent. (20%) per annum as the board may agree to accept from the day appointed for the payment thereof to the time of actual payment, but the board may waive payment of such interest wholly or in part. The board may, if it thinks fit, receive from any member willing to advance the same, either in money or money’s worth, all or any part of the monies uncalled and unpaid or installments payable upon any shares held by him, and upon all or any of the monies so advanced the Company may pay interest at such rate (if any) as the board may decide.

If a member fails to pay any call on the day appointed for payment thereof, the board may serve not less than fourteen (14) clear days’ notice on him requiring payment of so much of the call as is unpaid, together with any interest which may have accrued and which may still accrue up to the date of actual payment and stating that, in the event of non payment at or before the time appointed, the shares in respect of which the call was made will be liable to be forfeited.

If the requirements of any such notice are not complied with, any share in respect of which the notice has been given may at any time thereafter, before the payment required by the notice has been made, be forfeited by a resolution of the board to that effect. Such forfeiture will include all dividends and bonuses declared in respect of the forfeited share and not actually paid before the forfeiture.

A person whose shares have been forfeited shall cease to be a member in respect of the forfeited shares but shall, notwithstanding, remain liable to pay to the Company all monies which, at the date of forfeiture, were payable by him to the Company in respect of the shares, together with (if the board shall in its discretion so require) interest thereon from the date of forfeiture until the date of actual payment at such rate not exceeding twenty per cent. (20%) per annum as the board determines.

(b) Directors

(i) Appointment, retirement and removal

At each annual general meeting, one third of the Directors for the time being (or if their number is not a multiple of three, then the number nearest to but not less than one third) shall retire from office by rotation provided that every Director shall be subject to retirement at an annual general meeting at least once every three years. The Directors to retire by rotation shall include any Director who wishes to retire and not offer himself for re-election. Any further Directors so to retire shall be those who have been longest in office since their last re election or appointment but as between persons who became or were last re elected Directors on the same day those to retire will (unless they otherwise agree among themselves) be determined by lot.

Neither a Director nor an alternate Director is required to hold any shares in the Company by way of qualification. Further, there are no provisions in the Articles relating to retirement of Directors upon reaching any age limit.

– III-4 –

SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

APPENDIX III

The Directors have the power to appoint any person as a Director either to fill a casual vacancy on the board or as an addition to the existing board. Any Director appointed to fill a casual vacancy shall hold office until the first general meeting of members after his appointment and be subject to re-election at such meeting and any Director appointed as an addition to the existing board shall hold office only until the next following annual general meeting of the Company and shall then be eligible for re-election.

A Director may be removed by an ordinary resolution of the Company before the expiration of his period of office (but without prejudice to any claim which such Director may have for damages for any breach of any contract between him and the Company) and members of the Company may by ordinary resolution appoint another in his place. Unless otherwise determined by the Company in general meeting, the number of Directors shall not be less than two. There is no maximum number of Directors.

The office of director shall be vacated if:

(aa) he resigns by notice in writing delivered to the Company;
(bb) he becomes of unsound mind or dies;
(cc) without special leave, he is absent from meetings of the board for six (6) consecutive months, and the board resolves that his office is vacated;
(dd) he becomes bankrupt or has a receiving order made against him or suspends payment or compounds with his creditors;
(ee) he is prohibited from being a director by law; or
(ff) he ceases to be a director by virtue of any provision of law or is removed from office pursuant to the Articles.

The board may appoint one or more of its body to be managing director, joint managing director, or deputy managing director or to hold any other employment or executive office with the Company for such period and upon such terms as the board may determine and the board may revoke or terminate any of such appointments. The board may delegate any of its powers, authorities and discretions to committees consisting of such Director or Directors and other persons as the board thinks fit, and it may from time to time revoke such delegation or revoke the appointment of and discharge any such committees either wholly or in part, and either as to persons or purposes, but every committee so formed must, in the exercise of the powers, authorities and discretions so delegated, conform to any regulations that may from time to time be imposed upon it by the board.

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SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

APPENDIX III

(ii) Power to allot and issue shares and warrants

Subject to the provisions of the Companies Law and the Memorandum and Articles and to any special rights conferred on the holders of any shares or class of shares, any share may be issued (a) with or have attached thereto such rights, or such restrictions, whether with regard to dividend, voting, return of capital, or otherwise, as the Directors may determine, or (b) on terms that, at the option of the Company or the holder thereof, it is liable to be redeemed.

The board may issue warrants conferring the right upon the holders thereof to subscribe for any class of shares or securities in the capital of the Company on such terms as it may determine.

Subject to the provisions of the Companies Law and the Articles and, where applicable, the rules of the Stock Exchange and without prejudice to any special rights or restrictions for the time being attached to any shares or any class of shares, all unissued shares in the Company are at the disposal of the board, which may offer, allot, grant options over or otherwise dispose of them to such persons, at such times, for such consideration and on such terms and conditions as it in its absolute discretion thinks fit, but so that no shares shall be issued at a discount.

Neither the Company nor the board is obliged, when making or granting any allotment of, offer of, option over or disposal of shares, to make, or make available, any such allotment, offer, option or shares to members or others with registered addresses in any particular territory or territories being a territory or territories where, in the absence of a registration statement or other special formalities, this would or might, in the opinion of the board, be unlawful or impracticable. Members affected as a result of the foregoing sentence shall not be, or be deemed to be, a separate class of members for any purpose whatsoever.

(iii) Power to dispose of the assets of the Company or any of its subsidiaries

There are no specific provisions in the Articles relating to the disposal of the assets of the Company or any of its subsidiaries. The Directors may, however, exercise all powers and do all acts and things which may be exercised or done or approved by the Company and which are not required by the Articles or the Companies Law to be exercised or done by the Company in general meeting.

(iv) Borrowing powers

The board may exercise all the powers of the Company to raise or borrow money, to mortgage or charge all or any part of the undertaking, property and assets and uncalled capital of the Company and, subject to the Companies Law, to issue debentures, bonds and other securities of the Company, whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party.

– III-6 –

SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

APPENDIX III

(v) Remuneration

The ordinary remuneration of the Directors is to be determined by the Company in general meeting, such sum (unless otherwise directed by the resolution by which it is voted) to be divided amongst the Directors in such proportions and in such manner as the board may agree or, failing agreement, equally, except that any Director holding office for part only of the period in respect of which the remuneration is payable shall only rank in such division in proportion to the time during such period for which he held office. The Directors are also entitled to be prepaid or repaid all travelling, hotel and incidental expenses reasonably expected to be incurred or incurred by them in attending any board meetings, committee meetings or general meetings or separate meetings of any class of shares or of debentures of the Company or otherwise in connection with the discharge of their duties as Directors.

Any Director who, by request, goes or resides abroad for any purpose of the Company or who performs services which in the opinion of the board go beyond the ordinary duties of a Director may be paid such extra remuneration as the board may determine and such extra remuneration shall be in addition to or in substitution for any ordinary remuneration as a Director. An executive Director appointed to be a managing director, joint managing director, deputy managing director or other executive officer shall receive such remuneration and such other benefits and allowances as the board may from time to time decide. Such remuneration may be either in addition to or in lieu of his remuneration as a Director.

The board may establish or concur or join with other companies (being subsidiary companies of the Company or companies with which it is associated in business) in establishing and making contributions out of the Company’s monies to any schemes or funds for providing pensions, sickness or compassionate allowances, life assurance or other benefits for employees (which expression as used in this and the following paragraph shall include any Director or ex Director who may hold or have held any executive office or any office of profit with the Company or any of its subsidiaries) and ex employees of the Company and their dependents or any class or classes of such persons.

The board may pay, enter into agreements to pay or make grants of revocable or irrevocable, and either subject or not subject to any terms or conditions, pensions or other benefits to employees and ex employees and their dependents, or to any of such persons, including pensions or benefits additional to those, if any, to which such employees or ex employees or their dependents are or may become entitled under any such scheme or fund as is mentioned in the previous paragraph. Any such pension or benefit may, as the board considers desirable, be granted to an employee either before and in anticipation of, or upon or at any time after, his actual retirement.

(vi) Compensation or payments for loss of office

Pursuant to the Articles, payments to any Director or past Director of any sum by way of compensation for loss of office or as consideration for or in connection with his retirement from office (not being a payment to which the Director is contractually entitled) must be approved by the Company in general meeting.

– III-7 –

SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

APPENDIX III

(vii) Loans and provision of security for loans to Directors

The Company must not make any loan, directly or indirectly, to a Director or his close associate(s) if and to the extent it would be prohibited by the Companies Ordinance (Chapter 622 of the laws of Hong Kong) as if the Company were a company incorporated in Hong Kong.

(viii) Disclosure of interests in contracts with the Company or any of its subsidiaries

A Director may hold any other office or place of profit with the Company (except that of the auditor of the Company) in conjunction with his office of Director for such period and upon such terms as the board may determine, and may be paid such extra remuneration therefor in addition to any remuneration provided for by or pursuant to the Articles. A Director may be or become a director or other officer of, or otherwise interested in, any company promoted by the Company or any other company in which the Company may be interested, and shall not be liable to account to the Company or the members for any remuneration, profits or other benefits received by him as a director, officer or member of, or from his interest in, such other company. The board may also cause the voting power conferred by the shares in any other company held or owned by the Company to be exercised in such manner in all respects as it thinks fit, including the exercise thereof in favour of any resolution appointing the Directors or any of them to be directors or officers of such other company, or voting or providing for the payment of remuneration to the directors or officers of such other company.

No Director or proposed or intended Director shall be disqualified by his office from contracting with the Company, either with regard to his tenure of any office or place of profit or as vendor, purchaser or in any other manner whatsoever, nor shall any such contract or any other contract or arrangement in which any Director is in any way interested be liable to be avoided, nor shall any Director so contracting or being so interested be liable to account to the Company or the members for any remuneration, profit or other benefits realised by any such contract or arrangement by reason of such Director holding that office or the fiduciary relationship thereby established. A Director who to his knowledge is in any way, whether directly or indirectly, interested in a contract or arrangement or proposed contract or arrangement with the Company must declare the nature of his interest at the meeting of the board at which the question of entering into the contract or arrangement is first taken into consideration, if he knows his interest then exists, or in any other case, at the first meeting of the board after he knows that he is or has become so interested.

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SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

APPENDIX III

A Director shall not vote (nor be counted in the quorum) on any resolution of the board approving any contract or arrangement or other proposal in which he or any of his close associates is materially interested, but this prohibition does not apply to any of the following matters, namely:

(aa) any contract or arrangement for giving to such Director or his close associate(s) any security or indemnity in respect of money lent by him or any of his close associates or obligations incurred or undertaken by him or any of his close associates at the request of or for the benefit of the Company or any of its subsidiaries;
(bb) any contract or arrangement for the giving of any security or indemnity to a third party in respect of a debt or obligation of the Company or any of its subsidiaries for which the Director or his close associate(s) has himself/themselves assumed responsibility in whole or in part whether alone or jointly under a guarantee or indemnity or by the giving of security;
(cc) any contract or arrangement concerning an offer of shares or debentures or other securities of or by the Company or any other company which the Company may promote or be interested in for subscription or purchase, where the Director or his close associate(s) is/are or is/are to be interested as a participant in the underwriting or sub underwriting of the offer;
(dd) any contract or arrangement in which the Director or his close associate(s) is/are interested in the same manner as other holders of shares or debentures or other securities of the Company by virtue only of his/their interest in shares or debentures or other securities of the Company; or
(ee) any proposal or arrangement concerning the adoption, modification or operation of a share option scheme, a pension fund or retirement, death, or disability benefits scheme or other arrangement which relates both to Directors, his close associates and employees of the Company or of any of its subsidiaries and does not provide in respect of any Director, or his close associate(s), as such any privilege or advantage not accorded generally to the class of persons to which such scheme or fund relates.

(c) Proceedings of the Board

The board may meet for the despatch of business, adjourn and otherwise regulate its meetings as it considers appropriate. Questions arising at any meeting shall be determined by a majority of votes. In the case of an equality of votes, the chairman of the meeting shall have an additional or casting vote.

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(d) Alterations to constitutional documents and the Company’s name

The Articles may be rescinded, altered or amended by the Company in general meeting by special resolution. The Articles state that a special resolution shall be required to alter the provisions of the Memorandum, to amend the Articles or to change the name of the Company.

(e) Meetings of members

(i) Special and ordinary resolutions

A special resolution of the Company must be passed by a majority of not less than three fourths of the votes cast by such members as, being entitled so to do, vote in person or, in the case of such members as are corporations, by their duly authorised representatives or, where proxies are allowed, by proxy at a general meeting of which notice has been duly given in accordance with the Articles.

Under the Companies Law, a copy of any special resolution must be forwarded to the Registrar of Companies in the Cayman Islands within fifteen (15) days of being passed.

An ordinary resolution is defined in the Articles to mean a resolution passed by a simple majority of the votes of such members of the Company as, being entitled to do so, vote in person or, in the case of corporations, by their duly authorised representatives or, where proxies are allowed, by proxy at a general meeting of which notice has been duly given in accordance with the Articles.

(ii) Voting rights and right to demand a poll

Subject to any special rights or restrictions as to voting for the time being attached to any shares, at any general meeting on a poll every member present in person or by proxy or, in the case of a member being a corporation, by its duly authorised representative shall have one vote for every fully paid share of which he is the holder but so that no amount paid up or credited as paid up on a share in advance of calls or installments is treated for the foregoing purposes as paid up on the share. A member entitled to more than one vote need not use all his votes or cast all the votes he uses in the same way.

At any general meeting a resolution put to the vote of the meeting is to be decided by way of a poll save that the chairman of the meeting may in good faith, allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands in which case every member present in person (or being a corporation, is present by a duly authorized representative), or by proxy(ies) shall have one vote provided that where more than one proxy is appointed by a member which is a clearing house (or its nominee(s)), each such proxy shall have one vote on a show of hands.

If a recognised clearing house (or its nominee(s)) is a member of the Company it may authorise such person or persons as it thinks fit to act as its representative(s) at any meeting of the Company or at any meeting of any class of members of the Company provided that, if more than one person is so authorised, the authorisation shall specify the number and class of

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shares in respect of which each such person is so authorised. A person authorised pursuant to this provision shall be deemed to have been duly authorised without further evidence of the facts and be entitled to exercise the same powers on behalf of the recognised clearing house (or its nominee(s)) as if such person was the registered holder of the shares of the Company held by that clearing house (or its nominee(s)) including, where a show of hands is allowed, the right to vote individually on a show of hands.

Where the Company has any knowledge that any shareholder is, under the rules of the Stock Exchange, required to abstain from voting on any particular resolution of the Company or restricted to voting only for or only against any particular resolution of the Company, any votes cast by or on behalf of such shareholder in contravention of such requirement or restriction shall not be counted.

(iii) Annual general meetings

The Company must hold an annual general meeting of the Company every year within a period of not more than fifteen (15) months after the holding of the last preceding annual general meeting or a period of not more than eighteen (18) months from the date of adoption of the Articles, unless a longer period would not infringe the rules of the Stock Exchange.

(iv) Notices of meetings and business to be conducted

An annual general meeting must be called by notice of not less than twenty-one (21) clear days and not less than twenty (20) clear business days. All other general meetings must be called by notice of at least fourteen (14) clear days and not less than ten (10) clear business days. The notice is exclusive of the day on which it is served or deemed to be served and of the day for which it is given, and must specify the time and place of the meeting and particulars of resolutions to be considered at the meeting and, in the case of special business, the general nature of that business.

In addition, notice of every general meeting must be given to all members of the Company other than to such members as, under the provisions of the Articles or the terms of issue of the shares they hold, are not entitled to receive such notices from the Company, and also to, among others, the auditors for the time being of the Company.

Any notice to be given to or by any person pursuant to the Articles may be served on or delivered to any member of the Company personally, by post to such member’s registered address or by advertisement in newspapers in accordance with the requirements of the Stock Exchange. Subject to compliance with Cayman Islands law and the rules of the Stock Exchange, notice may also be served or delivered by the Company to any member by electronic means.

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All business that is transacted at an extraordinary general meeting and at an annual general meeting is deemed special, save that in the case of an annual general meeting, each of the following business is deemed an ordinary business:

(aa) the declaration and sanctioning of dividends;
(bb) the consideration and adoption of the accounts and balance sheet and the reports of the directors and the auditors;
(cc) the election of directors in place of those retiring;
(dd) the appointment of auditors and other officers;
(ee) the fixing of the remuneration of the directors and of the auditors;
(ff) the granting of any mandate or authority to the directors to offer, allot, grant options over or otherwise dispose of the unissued shares of the Company representing not more than twenty per cent (20%) in nominal value of its existing issued share capital; and
(gg) the granting of any mandate or authority to the directors to repurchase securities of the Company.
(v) Quorum for meetings and separate class meetings

No business shall be transacted at any general meeting unless a quorum is present when the meeting proceeds to business, but the absence of a quorum shall not preclude the appointment of a chairman.

The quorum for a general meeting shall be two members present in person (or, in the case of a member being a corporation, by its duly authorised representative) or by proxy and entitled to vote. In respect of a separate class meeting (other than an adjourned meeting) convened to sanction the modification of class rights the necessary quorum shall be two persons holding or representing by proxy not less than one third in nominal value of the issued shares of that class.

(vi) Proxies

Any member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint another person as his proxy to attend and vote instead of him. A member who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at a general meeting of the Company or at a class meeting. A proxy need not be a member of the Company and is entitled to exercise the same powers on behalf of a member who is an individual and for whom he acts as proxy as such member could exercise. In addition, a proxy is entitled to exercise the same powers on behalf of a member

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which is a corporation and for which he acts as proxy as such member could exercise if it were an individual member. Votes may be given either personally (or, in the case of a member being a corporation, by its duly authorised representative) or by proxy.

(f) Accounts and audit

The board shall cause true accounts to be kept of the sums of money received and expended by the Company, and the matters in respect of which such receipt and expenditure take place, and of the property, assets, credits and liabilities of the Company and of all other matters required by the Companies Law or necessary to give a true and fair view of the Company’s affairs and to explain its transactions.

The accounting records must be kept at the registered office or at such other place or places as the board decides and shall always be open to inspection by any Director. No member (other than a Director) shall have any right to inspect any accounting record or book or document of the Company except as conferred by law or authorised by the board or the Company in general meeting. However, an exempted company must make available at its registered office in electronic form or any other medium, copies of its books of account or parts thereof as may be required of it upon service of an order or notice by the Tax Information Authority pursuant to the Tax Information Authority Law of the Cayman Islands.

A copy of every balance sheet and profit and loss account (including every document required by law to be annexed thereto) which is to be laid before the Company at its general meeting, together with a printed copy of the Directors’ report and a copy of the auditors’ report, shall not less than twenty-one (21) days before the date of the meeting and at the same time as the notice of annual general meeting be sent to every person entitled to receive notices of general meetings of the Company under the provisions of the Articles; however, subject to compliance with all applicable laws, including the rules of the Stock Exchange, the Company may send to such persons summarised financial statements derived from the Company’s annual accounts and the directors’ report instead provided that any such person may by notice in writing served on the Company, demand that the Company sends to him, in addition to summarised financial statements, a complete printed copy of the Company’s annual financial statement and the directors’ report thereon.

At the annual general meeting or at a subsequent extraordinary general meeting in each year, the members shall appoint an auditor to audit the accounts of the Company and such auditor shall hold office until the next annual general meeting. The remuneration of the auditors shall be fixed by the Company in general meeting or in such manner as the members may determine.

The financial statements of the Company shall be audited by the auditor in accordance with generally accepted auditing standards which may be those of a country or jurisdiction other than the Cayman Islands. The auditor shall make a written report thereon in accordance with generally accepted auditing standards and the report of the auditor must be submitted to the members in general meeting.

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(g) Dividends and other methods of distribution

The Company in general meeting may declare dividends in any currency to be paid to the members but no dividend shall be declared in excess of the amount recommended by the board.

The Articles provide dividends may be declared and paid out of the profits of the Company, realised or unrealised, or from any reserve set aside from profits which the directors determine is no longer needed. With the sanction of an ordinary resolution dividends may also be declared and paid out of share premium account or any other fund or account which can be authorised for this purpose in accordance with the Companies Law.

Except in so far as the rights attaching to, or the terms of issue of, any share may otherwise provide, (i) all dividends shall be declared and paid according to the amounts paid up on the shares in respect whereof the dividend is paid but no amount paid up on a share in advance of calls shall for this purpose be treated as paid up on the share and (ii) all dividends shall be apportioned and paid pro rata according to the amount paid up on the shares during any portion or portions of the period in respect of which the dividend is paid. The Directors may deduct from any dividend or other monies payable to any member or in respect of any shares all sums of money (if any) presently payable by him to the Company on account of calls or otherwise.

Whenever the board or the Company in general meeting has resolved that a dividend be paid or declared on the share capital of the Company, the board may further resolve either (a) that such dividend be satisfied wholly or in part in the form of an allotment of shares credited as fully paid up, provided that the shareholders entitled thereto will be entitled to elect to receive such dividend (or part thereof) in cash in lieu of such allotment, or (b) that shareholders entitled to such dividend will be entitled to elect to receive an allotment of shares credited as fully paid up in lieu of the whole or such part of the dividend as the board may think fit.

The Company may also upon the recommendation of the board by an ordinary resolution resolve in respect of any one particular dividend of the Company that it may be satisfied wholly in the form of an allotment of shares credited as fully paid up without offering any right to shareholders to elect to receive such dividend in cash in lieu of such allotment.

Any dividend, interest or other sum payable in cash to the holder of shares may be paid by cheque or warrant sent through the post addressed to the holder at his registered address, or in the case of joint holders, addressed to the holder whose name stands first in the register of the Company in respect of the shares at his address as appearing in the register or addressed to such person and at such addresses as the holder or joint holders may in writing direct. Every such cheque or warrant shall, unless the holder or joint holders otherwise direct, be made payable to the order of the holder or, in the case of joint holders, to the order of the holder whose name stands first on the register in respect of such shares, and shall be sent at his or their risk and payment of the cheque or warrant by the bank on which it is drawn shall constitute a good discharge to the Company. Any one of two or more joint holders may give effectual receipts for any dividends or other moneys payable or property distributable in respect of the shares held by such joint holders.

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Whenever the board or the Company in general meeting has resolved that a dividend be paid or declared the board may further resolve that such dividend be satisfied wholly or in part by the distribution of specific assets of any kind.

All dividends or bonuses unclaimed for one year after having been declared may be invested or otherwise made use of by the board for the benefit of the Company until claimed and the Company shall not be constituted a trustee in respect thereof. All dividends or bonuses unclaimed for six years after having been declared may be forfeited by the board and shall revert to the Company.

No dividend or other monies payable by the Company on or in respect of any share shall bear interest against the Company.

(h) Inspection of corporate records

Pursuant to the Articles, the register and branch register of members shall be open to inspection for at least two (2) hours during business hours by members without charge, or by any other person upon a maximum payment of HK$2.50 or such lesser sum specified by the board, at the registered office or such other place at which the register is kept in accordance with the Companies Law or, upon a maximum payment of HK$1.00 or such lesser sum specified by the board, at the office where the branch register of members is kept, unless the register is closed in accordance with the Articles.

(i) Rights of minorities in relation to fraud or oppression

There are no provisions in the Articles relating to rights of minority shareholders in relation to fraud or oppression. However, certain remedies are available to shareholders of the Company under Cayman Islands law, as summarised in paragraph 3(f) of this Appendix.

(j) Procedures on liquidation

A resolution that the Company be wound up by the court or be wound up voluntarily shall be a special resolution.

Subject to any special rights, privileges or restrictions as to the distribution of available surplus assets on liquidation for the time being attached to any class or classes of shares:

(i) if the Company is wound up and the assets available for distribution amongst the members of the Company shall be more than sufficient to repay the whole of the capital paid up at the commencement of the winding up, the excess shall be distributed pari passu amongst such members in proportion to the amount paid up on the shares held by them respectively; and

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(ii) if the Company is wound up and the assets available for distribution amongst the members as such shall be insufficient to repay the whole of the paid-up capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the members in proportion to the capital paid up, or which ought to have been paid up, at the commencement of the winding up on the shares held by them respectively.

If the Company is wound up (whether the liquidation is voluntary or by the court) the liquidator may, with the authority of a special resolution and any other sanction required by the Companies Law divide among the members in specie or kind the whole or any part of the assets of the Company whether the assets shall consist of property of one kind or shall consist of properties of different kinds and the liquidator may, for such purpose, set such value as he deems fair upon any one or more class or classes of property to be divided as aforesaid and may determine how such division shall be carried out as between the members or different classes of members. The liquidator may, with the like authority, vest any part of the assets in trustees upon such trusts for the benefit of members as the liquidator, with the like authority, shall think fit, but so that no contributory shall be compelled to accept any shares or other property in respect of which there is a liability.

(k) Subscription rights reserve

The Articles provide that to the extent that it is not prohibited by and is in compliance with the Companies Law, if warrants to subscribe for shares have been issued by the Company and the Company does any act or engages in any transaction which would result in the subscription price of such warrants being reduced below the par value of a share, a subscription rights reserve shall be established and applied in paying up the difference between the subscription price and the par value of a share on any exercise of the warrants.

3. CAYMAN ISLANDS COMPANY LAW

The Company is incorporated in the Cayman Islands subject to the Companies Law and, therefore, operates subject to Cayman Islands law. Set out below is a summary of certain provisions of Cayman company law, although this does not purport to contain all applicable qualifications and exceptions or to be a complete review of all matters of Cayman company law and taxation, which may differ from equivalent provisions in jurisdictions with which interested parties may be more familiar:

(a) Company operations

As an exempted company, the Company’s operations must be conducted mainly outside the Cayman Islands. The Company is required to file an annual return each year with the Registrar of Companies of the Cayman Islands and pay a fee which is based on the amount of its authorised share capital.

(b) Share capital

The Companies Law provides that where a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount of the value of the premiums on those shares shall be transferred to an account, to be called the ‘‘share premium account’’. At the option

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of a company, these provisions may not apply to premiums on shares of that company allotted pursuant to any arrangement in consideration of the acquisition or cancellation of shares in any other company and issued at a premium.

The Companies Law provides that the share premium account may be applied by the company subject to the provisions, if any, of its memorandum and articles of association in (a) paying distributions or dividends to members; (b) paying up unissued shares of the company to be issued to members as fully paid bonus shares; (c) the redemption and repurchase of shares (subject to the provisions of section 37 of the Companies Law); (d) writing-off the preliminary expenses of the company; and (e) writing-off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company.

No distribution or dividend may be paid to members out of the share premium account unless immediately following the date on which the distribution or dividend is proposed to be paid, the company will be able to pay its debts as they fall due in the ordinary course of business.

The Companies Law provides that, subject to confirmation by the Grand Court of the Cayman Islands (the ‘‘Court’’), a company limited by shares or a company limited by guarantee and having a share capital may, if so authorised by its articles of association, by special resolution reduce its share capital in any way.

(c) Financial assistance to purchase shares of a company or its holding company

There is no statutory restriction in the Cayman Islands on the provision of financial assistance by a company to another person for the purchase of, or subscription for, its own or its holding company’s shares. Accordingly, a company may provide financial assistance if the directors of the company consider, in discharging their duties of care and acting in good faith, for a proper purpose and in the interests of the company, that such assistance can properly be given. Such assistance should be on an arm’s-length basis.

(d) Purchase of shares and warrants by a company and its subsidiaries

A company limited by shares or a company limited by guarantee and having a share capital may, if so authorised by its articles of association, issue shares which are to be redeemed or are liable to be redeemed at the option of the company or a shareholder and the Companies Law expressly provides that it shall be lawful for the rights attaching to any shares to be varied, subject to the provisions of the company’s articles of association, so as to provide that such shares are to be or are liable to be so redeemed. In addition, such a company may, if authorised to do so by its articles of association, purchase its own shares, including any redeemable shares. However, if the articles of association do not authorise the manner and terms of purchase, a company cannot purchase any of its own shares unless the manner and terms of purchase have first been authorised by an ordinary resolution of the company. At no time may a company redeem or purchase its shares unless they are fully paid. A company may not redeem or purchase any of its shares if, as a result of the redemption or purchase, there would no longer be any issued shares of the company other than shares held as treasury shares. A payment out of capital by a company for the

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redemption or purchase of its own shares is not lawful unless immediately following the date on which the payment is proposed to be made, the company shall be able to pay its debts as they fall due in the ordinary course of business.

Shares purchased by a company is to be treated as cancelled unless, subject to the memorandum and articles of association of the company, the directors of the company resolve to hold such shares in the name of the company as treasury shares prior to the purchase. Where shares of a company are held as treasury shares, the company shall be entered in the register of members as holding those shares, however, notwithstanding the foregoing, the company is not be treated as a member for any purpose and must not exercise any right in respect of the treasury shares, and any purported exercise of such a right shall be void, and a treasury share must not be voted, directly or indirectly, at any meeting of the company and must not be counted in determining the total number of issued shares at any given time, whether for the purposes of the company’s articles of association or the Companies Law.

A company is not prohibited from purchasing and may purchase its own warrants subject to and in accordance with the terms and conditions of the relevant warrant instrument or certificate. There is no requirement under Cayman Islands law that a company’s memorandum or articles of association contain a specific provision enabling such purchases and the directors of a company may rely upon the general power contained in its memorandum of association to buy and sell and deal in personal property of all kinds.

Under Cayman Islands law, a subsidiary may hold shares in its holding company and, in certain circumstances, may acquire such shares.

(e) Dividends and distributions

The Companies Law permits, subject to a solvency test and the provisions, if any, of the company’s memorandum and articles of association, the payment of dividends and distributions out of the share premium account. With the exception of the foregoing, there are no statutory provisions relating to the payment of dividends. Based upon English case law, which is regarded as persuasive in the Cayman Islands, dividends may be paid only out of profits.

No dividend may be declared or paid, and no other distribution (whether in cash or otherwise) of the company’s assets (including any distribution of assets to members on a winding up) may be made to the company, in respect of a treasury share.

(f) Protection of minorities and shareholders’ suits

The Courts ordinarily would be expected to follow English case law precedents which permit a minority shareholder to commence a representative action against or derivative actions in the name of the company to challenge (a) an act which is ultra vires the company or illegal, (b) an act which constitutes a fraud against the minority and the wrongdoers are themselves in control of the company, and (c) an irregularity in the passing of a resolution which requires a qualified (or special) majority.

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In the case of a company (not being a bank) having a share capital divided into shares, the Court may, on the application of members holding not less than one fifth of the shares of the company in issue, appoint an inspector to examine into the affairs of the company and to report thereon in such manner as the Court shall direct.

Any shareholder of a company may petition the Court which may make a winding up order if the Court is of the opinion that it is just and equitable that the company should be wound up or, as an alternative to a winding up order, (a) an order regulating the conduct of the company’s affairs in the future, (b) an order requiring the company to refrain from doing or continuing an act complained of by the shareholder petitioner or to do an act which the shareholder petitioner has complained it has omitted to do, (c) an order authorising civil proceedings to be brought in the name and on behalf of the company by the shareholder petitioner on such terms as the Court may direct, or (d) an order providing for the purchase of the shares of any shareholders of the company by other shareholders or by the company itself and, in the case of a purchase by the company itself, a reduction of the company’s capital accordingly.

Generally claims against a company by its shareholders must be based on the general laws of contract or tort applicable in the Cayman Islands or their individual rights as shareholders as established by the company’s memorandum and articles of association.

(g) Disposal of assets

The Companies Law contains no specific restrictions on the power of directors to dispose of assets of a company. However, as a matter of general law, every officer of a company, which includes a director, managing director and secretary, in exercising his powers and discharging his duties must do so honestly and in good faith with a view to the best interests of the company and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

(h) Accounting and auditing requirements

A company must cause proper books of account to be kept with respect to (i) all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure takes place; (ii) all sales and purchases of goods by the company; and (iii) the assets and liabilities of the company.

Proper books of account shall not be deemed to be kept if there are not kept such books as are necessary to give a true and fair view of the state of the company’s affairs and to explain its transactions.

An exempted company must make available at its registered office in electronic form or any other medium, copies of its books of account or parts thereof as may be required of it upon service of an order or notice by the Tax Information Authority pursuant to the Tax Information Authority Law of the Cayman Islands.

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(i) Exchange control

There are no exchange control regulations or currency restrictions in the Cayman Islands.

(j) Taxation

Pursuant to the Tax Concessions Law of the Cayman Islands, the Company has obtained an undertaking:

(1) that no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciation shall apply to the Company or its operations; and
(2) that the aforesaid tax or any tax in the nature of estate duty or inheritance tax shall not be payable on or in respect of the shares, debentures or other obligations of the Company.

The undertaking for the Company is for a period of twenty years from 5 December 2017.

The Cayman Islands currently levy no taxes on individuals or corporations based upon profits, income, gains or appreciations and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to the Company levied by the Government of the Cayman Islands save for certain stamp duties which may be applicable, from time to time, on certain instruments executed in or brought within the jurisdiction of the Cayman Islands. The Cayman Islands are a party to a double tax treaty entered into with the United Kingdom in 2010 but otherwise is not party to any double tax treaties.

(k) Stamp duty on transfers

No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman Islands companies except those which hold interests in land in the Cayman Islands.

(l) Loans to directors

There is no express provision in the Companies Law prohibiting the making of loans by a company to any of its directors.

(m) Inspection of corporate records

Members of the Company have no general right under the Companies Law to inspect or obtain copies of the register of members or corporate records of the Company. They will, however, have such rights as may be set out in the Company’s Articles.

(n) Register of members

An exempted company may maintain its principal register of members and any branch registers at such locations, whether within or without the Cayman Islands, as the directors may, from time to time, think fit. A branch register must be kept in the same manner in which a

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principal register is by the Companies Law required or permitted to be kept. The company shall cause to be kept at the place where the company’s principal register is kept a duplicate of any branch register duly entered up from time to time.

There is no requirement under the Companies Law for an exempted company to make any returns of members to the Registrar of Companies of the Cayman Islands. The names and addresses of the members are, accordingly, not a matter of public record and are not available for public inspection. However, an exempted company shall make available at its registered office, in electronic form or any other medium, such register of members, including any branch register of members, as may be required of it upon service of an order or notice by the Tax Information Authority pursuant to the Tax Information Authority Law of the Cayman Islands.

(o) Register of Directors and Officers

The Company is required to maintain at its registered office a register of directors and officers which is not available for inspection by the public. A copy of such register must be filed with the Registrar of Companies in the Cayman Islands and any change must be notified to the Registrar within sixty (60) days of any change in such directors or officers.

(p) Beneficial Ownership Register

An exempted company is required to maintain a beneficial ownership register at its registered office that records details of the persons who ultimately own or control, directly or indirectly, more than 25% of the equity interests or voting rights of the company or have rights to appoint or remove a majority of the directors of the company. The beneficial ownership register is not a public document and is only accessible by a designated competent authority of the Cayman Islands. Such requirement does not, however, apply to an exempted company with its shares listed on an approved stock exchange, which includes the Stock Exchange. Accordingly, for so long as the shares of the Company are listed on the Stock Exchange, the Company is not required to maintain a beneficial ownership register.

(q) Winding up

A company may be wound up (a) compulsorily by order of the Court, (b) voluntarily, or (c) under the supervision of the Court.

The Court has authority to order winding up in a number of specified circumstances including where the members of the company have passed a special resolution requiring the company to be wound up by the Court, or where the company is unable to pay its debts, or where it is, in the opinion of the Court, just and equitable to do so. Where a petition is presented by members of the company as contributories on the ground that it is just and equitable that the company should be wound up, the Court has the jurisdiction to make certain other orders as an alternative to a winding-up order, such as making an order regulating the conduct of the company’s affairs in the future, making an order authorising civil proceedings to be brought in the name and on behalf of the company by the petitioner on such terms as the Court may direct, or making an order providing for the purchase of the shares of any of the members of the company by other members or by the company itself.

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SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

APPENDIX III

A company (save with respect to a limited duration company) may be wound up voluntarily when the company so resolves by special resolution or when the company in general meeting resolves by ordinary resolution that it be wound up voluntarily because it is unable to pay its debts as they fall due. In the case of a voluntary winding up, such company is obliged to cease to carry on its business (except so far as it may be beneficial for its winding up) from the time of passing the resolution for voluntary winding up or upon the expiry of the period or the occurrence of the event referred to above.

For the purpose of conducting the proceedings in winding up a company and assisting the Court therein, there may be appointed an official liquidator or official liquidators; and the court may appoint to such office such person, either provisionally or otherwise, as it thinks fit, and if more persons than one are appointed to such office, the Court must declare whether any act required or authorised to be done by the official liquidator is to be done by all or any one or more of such persons. The Court may also determine whether any and what security is to be given by an official liquidator on his appointment; if no official liquidator is appointed, or during any vacancy in such office, all the property of the company shall be in the custody of the Court.

As soon as the affairs of the company are fully wound up, the liquidator must make a report and an account of the winding up, showing how the winding up has been conducted and how the property of the company has been disposed of, and thereupon call a general meeting of the company for the purposes of laying before it the account and giving an explanation thereof. This final general meeting must be called by at least 21 days’ notice to each contributory in any manner authorised by the company’s articles of association and published in the Gazette.

(r) Reconstructions

There are statutory provisions which facilitate reconstructions and amalgamations approved by a majority in number representing seventy-five per cent. (75%) in value of shareholders or class of shareholders or creditors, as the case may be, as are present at a meeting called for such purpose and thereafter sanctioned by the Court. Whilst a dissenting shareholder would have the right to express to the Court his view that the transaction for which approval is sought would not provide the shareholders with a fair value for their shares, the Court is unlikely to disapprove the transaction on that ground alone in the absence of evidence of fraud or bad faith on behalf of management.

(s) Take-overs

Where an offer is made by a company for the shares of another company and, within four (4) months of the offer, the holders of not less than ninety per cent. (90%) of the shares which are the subject of the offer accept, the offeror may at any time within two (2) months after the expiration of the said four (4) months, by notice in the prescribed manner require the dissenting shareholders to transfer their shares on the terms of the offer. A dissenting shareholder may apply to the Court within one (1) month of the notice objecting to the transfer. The burden is on the dissenting shareholder to show that the Court should exercise its discretion, which it will be unlikely to do unless there is evidence of fraud or bad faith or collusion as between the offeror and the holders of the shares who have accepted the offer as a means of unfairly forcing out minority shareholders.

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APPENDIX III

(t) Indemnification

Cayman Islands law does not limit the extent to which a company’s articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Court to be contrary to public policy (e.g. for purporting to provide indemnification against the consequences of committing a crime).

4. GENERAL

Conyers Dill & Pearman, the Company’s special legal counsel on Cayman Islands law, have sent to the Company a letter of advice summarising certain aspects of Cayman Islands company law. This letter, together with a copy of the Companies Law, is available for inspection as referred to in the section headed ‘‘Documents Delivered to the Registrar of Companies in Hong Kong and Available for Inspection — Documents available for inspection’’ in Appendix V to this prospectus. Any person wishing to have a detailed summary of Cayman Islands company law or advice on the differences between it and the laws of any jurisdiction with which he is more familiar is recommended to seek independent legal advice.

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STATUTORY AND GENERAL INFORMATION

APPENDIX IV

A. FURTHER INFORMATION ABOUT OUR COMPANY AND OUR SUBSIDIARIES

1. Incorporation of our Company

Our Company was incorporated in the Cayman Islands under the Companies Law as an exempted company with limited liability on 8 November 2017. Our Company has established a principal place of business in Hong Kong at Room 2313, 23/F, Hong Kong Plaza, 186–191 Connaught Road West, Hong Kong and was registered as a non-Hong Kong company under Part 16 of the Companies Ordinance on 7 December 2017. In connection with such registration, Mr. John Kwong has been appointed as the authorised representative of our Company for acceptance of service of process and notices on behalf of our Company in Hong Kong.

As our Company was incorporated in the Cayman Islands, it is subject to the Companies Law. The constitution documents comprise its Memorandum of Association and Articles of Association. A summary of certain provisions of its constitution documents and relevant aspects of the Companies Law is set out in Appendix III to this prospectus.

2. Changes in authorised and issued share capital of our Company

(a) Our Company was incorporated in the Cayman Islands on 8 November 2017 as an exempted company with limited liability under the Companies Law. At the time of incorporation, our Company had an authorised share capital of HK$380,000 divided into 38,000,000 Shares of HK$0.01 each, of which one Share was allotted and issued as nil paid to an independent initial subscriber and subsequently transferred to Future More on the same day.
(b) Pursuant to the written resolutions of the sole Shareholder passed on 23 March 2018, the authorised share capital of our Company was increased from HK$380,000 to HK$15,000,000 by the creation of a further 1,462,000,000 Shares.
(c) On 23 March 2018, our Company acquired the entire share capital of MS Restaurant from Future More, in consideration of which our Company (i) allotted and issued 99 new Shares to Future More, credited as fully paid at par; and (ii) credited as fully paid the one nil-paid Share held by Future More.
(d) Immediately following the completion of the Share Offer and the Capitalisation Issue (without taking into account any Shares which may be issued upon the exercise of the Offer Size Adjustment Option and any options which may be granted under the Share Option Scheme), the issued share capital of our Company will be HK$10,000,000 divided into 1,000,000,000 Shares, all fully paid or credited as fully paid, and 500,000,000 Shares will remain unissued. Other than options which may fall to be granted under the Share Option Scheme, issue of Shares under the Offer Size Adjustment Option, or the exercise of the general mandate referred to in ‘‘A. Further information about our Company and our subsidiaries — 3. Written resolutions of the sole Shareholder’’ in this Appendix, our Directors have no present intention to issue any part of the authorised but unissued capital of our Company, and without the prior approval of our Shareholders in general meeting, no issue of Shares will be made which would effectively alter the control of our Company.

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(e) Save as disclosed above, there has been no alteration in the share capital of our Company since its incorporation.
Written resolutions of the sole Shareholder

Pursuant to the written resolutions passed by the sole Shareholder on 23 March 2018, inter

alia:

(a) the authorised share capital of our Company was increased from HK$380,000 divided into 38,000,000 Shares of HK$0.01 each to HK$15,000,000 divided into 1,500,000,000 Shares of HK$0.01 each by the creation of an additional 1,462,000,000 Shares of HK$0.01 each;
(b) our Company approved and adopted the Memorandum of Association with immediate effect and the Articles of Association with effect from the Listing Date;
(c) conditional on the conditions as set out in the section headed ‘‘Structure and Conditions of the Share Offer’’ of this prospectus:
(i) the Share Offer was approved and our Directors were authorised to (aa) allot and issue the Shares under the Share Offer and the Offer Size Adjustment Option; (bb) implement the Share Offer and the listing of Shares on GEM; and (cc) do all things and execute all documents in connection with or incidental to the Share Offer and the Listing with such amendments or modifications (if any) as our Directors may consider necessary or appropriate;
(ii) conditional on the share premium account of our Company being credited as a result of the allotment and issue of the Shares pursuant to the Share Offer, our Directors were authorised to capitalise a maximum amount of HK$7,499,999 standing to the credit of the share premium account of our Company and to apply such amount in paying up in full the nil-paid Share held by Future More and a total of 749,999,900 Shares for allotment and issue, credited as fully paid at par and rank pari passu in all respects with each other and the existing issued Shares (except entitlement to the Capitalisation Issue), to Future More, and our Directors were authorised to give effect to such capitalisation and distribution;
(iii) the rules of the Share Option Scheme, the principal terms of which are set out in ‘‘D. Share Option Scheme’’ in this Appendix, were approved and adopted and our Directors were authorised, subject to the terms and conditions of the Share Option Scheme, to grant options to subscribe for Shares thereunder and to allot, issue and deal with the Shares pursuant to the exercise of options that may be granted under the Share Option Scheme and to take all such steps as may be necessary desirable or expedient to implement the Share Option Scheme;

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APPENDIX IV

(iv) a general unconditional mandate was given to our Directors to exercise all the powers of our Company to allot, issue and deal with, otherwise than by way of rights issues or an issue of Shares upon the exercise of any subscription rights attached to any warrants or convertible securities of our Company or pursuant to the exercise of any options which may be granted under the Share Option Scheme or under any other option scheme or similar arrangement for the time being adopted for the grant or issue to officers and/or employees of our Company and/or any of our subsidiaries of shares or rights to acquire shares or any scrip dividend schemes or similar arrangements providing for the allotment and issue of shares of our Company in lieu of the whole or part of a dividend on Shares in accordance with the Articles of Association or a specific authority granted by our Shareholders in general meeting, Shares with an aggregate number not exceeding (1) 20% of the aggregate number of issued Shares of our Company immediately following completion of the Capitalisation Issue and the Share Offer (without taking into account any Shares which may be allotted and issued upon the exercise of the Offer Size Adjustment Option and any options which may be granted under the Share Option Scheme); and (2) the aggregate number of shares repurchased under the Repurchase Mandate as defined in paragraph (v) below. Such mandate shall remain in effect until whichever is the earliest:
(1) the conclusion of the next annual general meeting of our Company;
(2) the expiration of the period within which the next annual general meeting of our Company is required to be held by the Articles of Association or any other applicable laws of the Cayman Islands; or
(3) the passing of an ordinary resolution of our Shareholders in general meeting revoking, varying or renewing such mandate;
(v) a general unconditional mandate (the ‘‘Repurchase Mandate’’) was given to our Directors to exercise all powers of our Company to repurchase on the Stock Exchange or on any other stock exchange on which the securities of our Company may be listed and which is recognised by the SFC and the Stock Exchange for this purpose, such number of Shares as will represent up to 10% of the aggregate number of issued Shares of our Company immediately following the completion of the Capitalisation Issue and the Share Offer (without taking into account any Shares which may be allotted and issued upon the exercise of the Offer Size Adjustment Option and any options which may be granted under the Share Option Scheme), such mandate shall remain in effect until whichever is the earliest:
(1) the conclusion of the next annual general meeting of our Company;
(2) the expiration of the period within which the next annual general meeting of our Company is required to be held by the Articles of Association or any other applicable laws of the Cayman Islands; or

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APPENDIX IV

(3) the passing of an ordinary resolution of our Shareholders in general meeting revoking, varying or renewing such mandate;
(vi) the general unconditional mandate mentioned in paragraph (iv) above was extended by the addition to the aggregate number of shares of our Company which may be allotted or agreed conditionally or unconditionally to be allotted, issued or dealt with by our Directors pursuant to such general mandate of the aggregate number of issued shares of our Company repurchased by our Company pursuant to the Repurchase Mandate referred to in paragraph (v) above provided that such extended amount shall not exceed 10% of the aggregate number of issued Shares of our Company immediately following the completion of the Share Offer and the Capitalisation Issue (without taking into account any Shares which may be allotted and issued upon exercise of the Offer Size Adjustment Option and any options that may be granted under the Share Option Scheme).

4. Reorganisation

The companies comprising our Group underwent the Reorganisation in preparation for the Listing, details of which are set out in the section headed ‘‘History, Development and Reorganisation — Reorganisation’’ of this prospectus. Following the Reorganisation, our Company became the holding company of our Group.

Diagrams showing our Group’s structure after the Reorganisation and immediately upon completion of the Capitalisation Issue and the Share Offer (without taking into account any Shares which may be allotted and issued upon the exercise of the Offer Size Adjustment Option and any options that may be granted under the Share Option Scheme) are set out in the section headed ‘‘History, Development and Reorganisation — Reorganisation’’ of this prospectus.

5. Changes in share capital of subsidiaries

Our Company’s subsidiaries are referred to in the Accountants’ Report, the text of which is set out in Appendix I to this prospectus.

Save as mentioned in the section headed ‘‘History, Development and Reorganisation’’ of this prospectus, there was no change in the share capital of the major subsidiaries of our Company during the two years preceding the date of this prospectus.

Save for the subsidiaries mentioned in Appendix I to this prospectus, our Company has no other subsidiaries.

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APPENDIX IV

6. Repurchase by our Company of its own securities

This paragraph includes information required by the Stock Exchange to be included in this prospectus concerning the repurchase by our Company of its own securities.

(a) Provisions of the GEM Listing Rules

The GEM Listing Rules permit companies with a primary listing on the Stock Exchange to repurchase their securities on the Stock Exchange subject to certain restrictions, the most important of which are summarised below:

(i) Shareholders’ approval

All proposed repurchases of securities (which must be fully paid up in the case of shares) by a company listed on the Stock Exchange must be approved in advance by an ordinary resolution of the shareholders in a general meeting, either by way of general mandate or by specific approval of a particular transaction.

Note: Pursuant to the written resolutions passed by the sole Shareholder on 23 March 2018, the Repurchase Mandate was given to our Directors authorising our Directors to exercise all powers of our Company to purchase the Shares as described above in the paragraph headed ‘‘3. Written resolutions of the sole Shareholder’’ in Appendix IV to this prospectus.

(ii) Source of funds

Any repurchases must be financed out of funds legally available for such purpose in accordance with the Memorandum of Association and Articles of Association and any applicable laws of the Cayman Islands. A listed company is prohibited from repurchasing its own securities on GEM for a consideration other than cash or for settlement otherwise than in accordance with the trading rules of the Stock Exchange from time to time.

Under the Cayman Islands law, any repurchases by our Company may be made out of profits of our Company or out of the proceeds of a fresh issue of share made for the purpose of the repurchase or from sums standing to the credit of the share premium account of our Company or, if authorised by the Articles of Association and subject to the Companies Law, out of capital and, in case of any premium payable on the repurchase, out of profits of our Company or from sums standing to the credit of the share premium account of our Company, or if authorised by the Articles of Association and subject to the Companies Law, out of capital.

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APPENDIX IV

(iii) Trading restrictions

A company is authorised to repurchase on GEM or on any other stock exchange recognised by the SFC in Hong Kong and the Stock Exchange the total number of shares which represent up to a maximum of 10% of the aggregate number of shares in issue of that company or warrants to subscribe for shares in that company representing up to 10% of the amount of securities then outstanding at the date of the passing of the relevant resolution granting the repurchase mandate. A company may not issue or announce an issue of new securities of the type that have been repurchased for a period of 30 days immediately following a repurchase of securities whether on GEM or otherwise (except pursuant to the exercise of warrants, share options or similar instruments requiring the company to issue securities which were outstanding prior to the repurchase) without the prior approval of the Stock Exchange. A company is also prohibited from making securities repurchase on GEM if the result of the repurchases would be that the number of the listed securities in the hands of the public would be below the relevant prescribed minimum percentage for that company as required and determined by the Stock Exchange. A company shall not purchase its shares on GEM if the purchase price is higher by 5% or more than the average closing market price for the five preceding trading days on which its shares were traded on GEM.

(iv) Status of repurchased securities

The listing of all repurchased securities (whether on GEM or otherwise) is automatically cancelled upon the repurchase and the relevant certificates must be cancelled and destroyed. Under the Cayman Islands law, a company’s repurchased shares if not held by the company as treasury shares, may be treated as cancelled and, if so cancelled, the amount of that company’s issued share capital shall be reduced by the aggregate nominal value of the repurchased shares accordingly although the authorised share capital of the company will not be reduced.

(v) Suspension of repurchase

A listed company shall not make any repurchase of securities at any time after inside information has come to its knowledge until the information is made publicly available. In particular, during the period of one month immediately preceding the earlier of: (i) the date of the board meeting (as such date is first notified to the Stock Exchange in accordance with the GEM Listing Rules) for the approval of a listed company’s results for any year, half-year, quarterly or any other interim period (whether or not required under the GEM Listing Rules); and (ii) the deadline for publication of an announcement of a listed company’s results for any year or half-year under the GEM Listing Rules, or quarterly or any other interim period (whether or not required under the GEM Listing Rules) and ending on the date of the results announcement, the listed company may not repurchase its shares on GEM other than in exceptional circumstances and provided that a waiver on all or any of the restrictions under the GEM Listing Rules has been granted by the Stock Exchange. In addition, the Stock Exchange may prohibit repurchases of securities on GEM if a company has breached the GEM Listing Rules.

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(vi) Reporting requirements

Repurchases of securities on GEM or otherwise must be reported to the Stock Exchange not later than 30 minutes before the earlier of the commencement of the morning trading session or any pre-opening session on the following trading day. In addition, a company’s annual report and accounts are required to include a monthly breakdown of securities repurchases made during the financial year under review, showing the number of securities repurchased each month (whether on GEM or otherwise), the purchase price per share or the highest and lowest prices paid for all such repurchases and the total prices paid. The directors’ report is also required to contain reference to the purchases made during the year and the directors’ reasons for making such purchases. The company shall make arrangements with its broker who effects the purchase to provide the company in a timely fashion the necessary information in relation to the purchase made on behalf of the company to enable the company to report to the Stock Exchange.

(vii) Core connected persons

Under the GEM Listing Rules, a company shall not knowingly repurchase shares from a core connected person (as defined in the GEM Listing Rules) and a core connected person shall not knowingly sell his shares to the company.

(b) Exercise of the Repurchase Mandate

Exercise in full of the Repurchase Mandate, on the basis of 1,000,000,000 Shares in issue immediately after Listing (without taking into account any Shares which may be allotted and issued pursuant to the exercise of the Offer Size Adjustment Option and any options which may be guaranteed under the Share Option Scheme), could accordingly result in up to 100,000,000 Shares being repurchased by our Company during the period in which the Repurchase Mandate remains in force.

(c) Reasons for repurchases

Repurchases of Shares will only be made when our Directors believe that such a repurchase will benefit our Company and Shareholders. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset value and/or earnings per Share.

(d) Funding of repurchases

In repurchasing the Shares, our Company may only apply funds legally available for such purpose in accordance with our Memorandum of Association and Articles of Association and the applicable laws and regulations of the Cayman Islands.

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APPENDIX IV

On the basis of the current financial position of our Group as disclosed in this prospectus and taking into account the current working capital position of our Group, our Directors consider that, if the Repurchase Mandate was to be exercised in full, it might have a material adverse effect on the working capital and/or the gearing position of our Group as compared with the position disclosed in this prospectus. However, our Directors do not propose to exercise the Repurchase Mandate to such an extent as would, in the circumstances, have a material adverse effect on the working capital requirements of our Group or the gearing levels which in the opinion of our Directors are from time to time appropriate for our Group.

(e) General

None of our Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their close associates currently intends to sell any Shares to our Company.

Our Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the Repurchase Mandate in accordance with the GEM Listing Rules, our Memorandum and Articles and the applicable laws of the Cayman Islands.

No core connected person of our Company has notified our Company that he or she has a present intention to sell Shares to our Company, or has undertaken not to do so, in the event that the Repurchase Mandate is exercised.

If as a result of a repurchase of Shares, a Shareholder’s proportionate interest in the voting rights of our Company is increased, such increase will be treated as an acquisition for the purpose of the Takeovers Code. As a result, a Shareholder, or a group of Shareholders acting in concert, depending on the level of increase in the Shareholder’s interest, could obtain or consolidate control of our Company and become(s) obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code. Save as aforesaid, our Directors are not aware of any consequence which would arise under the Takeovers Code due to any repurchase made pursuant to the Repurchase Mandate immediately after the Listing.

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APPENDIX IV

B. FURTHER INFORMATION ABOUT THE BUSINESS OF OUR GROUP

1. Summary of material contracts

The following contracts (not being contracts entered into in the ordinary course of business of our Group) have been entered into by members of our Group within the two years immediately preceding the date of this prospectus and are or may be material:

(a) the sale and purchase agreement relating to the entire issued share capital of Meric Investment dated 1 December 2017 entered into among Mr. John Kwong, Mr. Joseph Kwong, Ms. Melanie Kwong (together as vendors) and Future More (as purchaser) for the transfer of the entire issued share capital of Meric Investment to MS Restaurant (being the nominee of Future More) in consideration of Future More allotting and issuing 13, seven and seven new shares to each of Mr. John Kwong, Mr. Joseph Kwong and Ms. Melanie Kwong respectively, credited as fully paid;
(b) the sale and purchase agreement relating to the entire issued share capital of Lord Master dated 1 December 2017 entered into among Active Wisdom, Mr. Joseph Kwong and Ms. Melanie Kwong (together as vendors) and Future More (as purchaser) for the transfer of the entire issued share capital of Lord Master to MS Restaurant (being the nominee of Future More) in consideration of Future More allotting and issuing 18 new shares to each of Ms. Ingrid Ip, Ms. Kwong Man Yui, Mr. Joseph Kwong and Ms. Melanie Kwong, credited as fully paid;
(c) the sale and purchase agreement dated 23 March 2018 entered into between Future More (as vendor) and our Company (as purchaser) for the transfer of the entire issued share capital of MS Restaurant to our Company in consideration of our Company (i) allotting and issuing 99 new Shares to Future More, credited as fully paid at par; and (ii) crediting as fully paid the one nil-paid Share held by Future More;
(d) the Deed of Indemnity;
(e) the Deed of Non-competition; and
(f) the Public Offer Underwriting Agreement.

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APPENDIX IV

2. Intellectual property rights of our Group

(a) Trademarks

As at the Latest Practicable Date, our Group has registered the following trademark(s) in Hong Kong which we believe are material to our business:

Registrations

		Date of		Registration
Trademark	Registered Owner	Registration	Expiry Date	Number	Class
	Meric Investment	8 April 2009	7 April 2019	301321028	43 (Note 1)
	Meric Investment	8 April 2009	7 April 2019	301321046	43 (Note 1 and 2)
	Meric Investment	11 July 2017	10 July 2027	304202405	35, 43 (Notes 3,
					4 and 5)

Notes:

Class 43 — Restaurant, café, bar and take-away services; all included in Class 43.
This trademark is in red colour.
Class 35 — Retail of food and beverages; delicatessen services (retailing); grocery store retailing services.
Class 43 — Restaurant services; café services; bar services; takeaway services.
This trademark is in black colour.

Applications

			Application
Trademark	Applicant	Date of Application	Number	Class
	(1) Meric Investment	11 December 2017	304363830	43 (Notes 6 and 7)
	(2) Lord Master
	(1) Meric Investment	11 December 2017	304363849	43 (Notes 8 and 9)
	(2) Lord Master

Notes:

Class 43 — Bars and restaurants services; seafood restaurant services; services for providing food and drink.
This is a colour and black and white series trademark.
Class 43 — Restaurant services; Japanese restaurants; providing Japanese cuisine; services for providing food and drink.
This is a colour and black and white series trademark.

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APPENDIX IV

(b) Domain name

As at the Latest Practicable Date, our Group had registered the following domain names which we believe are material to our business:

Domain Name	Registrant	Registration Date	Expiry Date
www.mrsteak.com.hk	Meric Investment	4 December 2000	Nil
www.marbling.com.hk	Lord Master	24 November 2015	24 November 2018
www.bistrobloom.com.hk	Lord Master	24 November 2015	24 November 2018

Save as disclosed herein, there are no other trade or service marks, patents, copyrights, other intellectual or industrial property rights which are or may be material to the business of our Group.

C. FURTHER INFORMATION ABOUT DIRECTORS AND SUBSTANTIAL SHAREHOLDERS

1. Directors

(a) Disclosure of interests of Directors

So far as our Directors are aware, immediately following completion of the Capitalisation Issue and the Share Offer (without taking into account the Shares which may be allotted and issued pursuant to the exercise of the Offer Size Adjustment Option and any options which may be granted under the Share Option Scheme), the interests and short positions of our Directors and chief executive of our Company in the Shares, underlying shares and debentures of our Company or any associated corporation (within the meaning of Part XV of the SFO) which will have to be notified to our Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions in which they are taken or deemed to have taken under such provisions), or which will be required, pursuant to section 352 of the SFO, to be entered in the register referred to therein or which will be required to be notified to our Company and the Stock Exchange pursuant to Rules 5.46 and 5.67 of the GEM Listing Rules, will be as follows:

Long position in the ordinary shares of associated corporation

				Percentage of
	Name of associated		No. of	interest in
Name of Director(s)	corporation	Capacity/Nature	share(s) held	Future More
Mr. John Kwong	Future More	Beneficial Owner	14	100%
(Notes 1, 2)
Ms. Kwong Man Yui	Future More	Beneficial Owner	18	100%
(Notes 1, 2)

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Notes:

These Shares are registered in the name of Future More, a company which is owned as to 14% by Mr. John Kwong, 18% by Ms. Ingrid Ip, 18% by Ms. Kwong Man Yui, 25% by Mr. Joseph Kwong and 25% by Ms. Melanie Kwong, who are considered as a group of Controlling Shareholders that are acting in concert.
On 23 November 2017, Mr. John Kwong, Ms. Ingrid Ip, Ms. Kwong Man Yui, Mr. Joseph Kwong and Ms. Melanie Kwong entered into the Concert Party Deed to acknowledge and confirm, among other things, that each of them has acted and shall continue to act in concert in respect of each of Meric Investment, Lord Master and our Company. Details of the Concert Party Deed are set out in the section headed ‘‘History, Development and Reorganisation — Parties acting in concert’’ in this prospectus. As such, pursuant to the parties acting in concert arrangement, each of Mr. John Kwong, Ms. Ingrid Ip, Ms. Kwong Man Yui, Mr. Joseph Kwong and Ms. Melanie Kwong is deemed to be interested in the Shares registered in the name of Future More (i.e. 75% of the issued share capital of our Company).

(b) Particulars of service contracts

Each of Mr. John Kwong, Ms. Kwong Man Yui and Mr. Lam On Fai, our executive Directors, has entered into a service contract with our Company for an initial fixed term of three years commencing from the Listing Date until terminated by not less than three months’ notice in writing served by either party. Commencing from the Listing Date, each of our executive Directors is entitled to an annual salary set out below, such salary to be reviewed annually by our Board and the remuneration committee of our Company.

In addition, each of our executive Directors may be entitled to, if so recommended by the remuneration committee of our Company and approved by the Board at its absolute discretion, a discretionary bonus, the amount of which is determined with reference to the operating results of our Group and the performance of the executive Director, provided that the relevant executive Director shall abstain from voting and not be counted in the quorum in respect of any resolution of our Board approving the amount of annual salary, discretionary bonus and other benefits payable to him. The current basic annual salary of our executive Directors are as follows:

Name Amount Mr. John Kwong HK$2,400,000 Ms. Kwong Man Yui HK$1,440,000 Mr. Lam On Fai HK$720,000

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Each of Mr. Lai Ming Fai Desmond, Dr. Cheng Lee Lung and Mr. Kwok Yiu Chung, being our independent non-executive Directors, has entered into a letter of appointment with our Company for an initial term of service commencing from the Listing Date and shall continue thereafter subject to a maximum of three years unless terminated by either party giving not less than one month’s notice in writing. Commencing from the Listing Date, the independent non-executive Directors are entitled to an annual director’s fee as set out below:

Name	Amount
Mr. Lai Ming Fai Desmond	HK$168,000
Dr. Cheng Lee Lung	HK$168,000
Mr. Kwok Yiu Chung	HK$168,000

Save as disclosed above, none of our Directors has or is proposed to enter into a service contract or letter of appointment with our Company or any of our subsidiaries (other than contracts expiring or determinable by our Group within one year without the payment of compensation (other than statutory compensation)).

(c) Directors’ remuneration

Our Company’s policies concerning remuneration of executive Directors are:

(i) the amount of remuneration payable to our executive Directors will be determined on a case by case basis depending on the experience, responsibility, workload and the time devoted to our Group by the relevant Director;
(ii) non-cash benefits may be provided to our Directors under their remuneration package; and
(iii) our executive Directors may be granted, at the discretion of our Board, share options of our Company, as part of the remuneration package.

An aggregate sum of approximately HK$685,000, HK$733,000 and HK$505,000 were paid to our Directors as remuneration and benefits in kind in their capacity as Directors by our Group for FY2016, FY2017 and six months ended 30 September 2017.

It is expected that the aggregate emoluments (excluding payment pursuant to any discretionary bonus or granting of share options) payable by our Group to our Directors (including the independent non-executive Directors) for the year ending 31 March 2018 will be approximately HK$1.5 million.

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2. Substantial shareholders

So far as our Directors are aware, immediately following the completion of the Capitalisation Issue and the Share Offer (without taking into account of any Shares which may be allotted and issued upon the exercise of the Offer Size Adjustment Option and any options which may be granted under the Share Option Scheme), the following persons will have an interest or a short position in the Shares or the underlying Shares which would be required to be disclosed to our Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or directly or indirectly, be interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of our Company or any other member of our Group:

			No. of
			share(s) held	Percentage of
Name	of Shareholder	Capacity/Nature	(Note 1)	shareholding
Future	More(Note 2)	Beneficial owner	750,000,000	75%
			Shares (L)

Notes:

1 The letter (L) denotes the person’s long position in our Shares.
Future More will be legally interested in 750,000,000 Shares upon Listing. Future More is owned as to 14% by Mr. John Kwong, 18% by Ms. Ingrid Ip, 18% by Ms. Kwong Man Yui, 25% by Mr. Joseph Kwong and 25% by Ms. Melanie Kwong, who are considered as a group of Controlling Shareholders that are acting in concert.

On 23 November 2017, Mr. John Kwong, Ms. Ingrid Ip, Ms. Kwong Man Yui, Mr. Joseph Kwong and Ms. Melanie Kwong entered into the Concert Party Deed to acknowledge and confirm, among other things, that each of them has acted and shall continue to act in concert in respect of each of Meric Investment, Lord Master and our Company. Details of the Concert Party Deed are set out in the section headed ‘‘History, Development and Reorganisation — Parties acting in concert’’ in this prospectus. As such, pursuant to the parties acting in concert arrangement, each of our Controlling Shareholders, namely, Mr. John Kwong, Ms. Ingrid Ip, Ms. Kwong Man Yui, Mr. Joseph Kwong and Ms. Melanie Kwong is deemed to be interested in 75% of the issued share capital of our Company.

3. Related party transactions

Our Group entered into the related party transactions during the Track Record Period as mentioned in note 29 of the Accountants’ Report set out in Appendix I to this prospectus.

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4. Disclaimers

Save as disclosed in this Appendix and the section headed ‘‘Substantial Shareholders’’ of this prospectus:

(a) our Directors are not aware of any person who immediately following completion of the Capitalisation Issue and the Share Offer (without taking into account any Shares which may be allotted and issued upon the exercise of the Offer Size Adjustment Option and any options which may be granted under the Share Option Scheme) will have an interest or short position in the Shares and underlying Shares which would fall to be disclosed to our Company under the provisions of Divisions 2 and 3 of Part XV of the SFO or who is, either directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at the general meetings of our Company or any other members of our Group;
(b) none of our Directors and chief executive of our Company has for the purposes of Divisions 7 and 8 of Part XV of the SFO or the GEM Listing Rules, nor is any of them taken to or deemed to have under Divisions 7 and 8 of Part XV of the SFO, an interest or short position in the shares, underlying shares and debentures of our Company or any associated corporations (within the meaning of the SFO) or any interests which will have to be entered in the register to be kept by our Company pursuant to section 352 of the SFO or which will be required to be notified to our Company and the Stock Exchange pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules once the Shares are listed on the Stock Exchange;
(c) none of our Directors nor the experts named in ‘‘E. Other information — 7. Qualifications of experts’’ in this Appendix has any direct or indirect interest in the promotion of, or in any assets which have been, within the two years immediately preceding the issue of this prospectus, acquired or disposed of by or leased to, any member of our Group, or are proposed to be acquired or disposed of by or leased to any member of our Group;
(d) none of our Directors is materially interested in any contract or arrangement subsisting at the date of this prospectus which is significant in relation to the business of our Group; and
(e) none of the experts named in ‘‘E. Other information — 7. Qualifications of experts’’ in this Appendix has any shareholding in any member of our Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of our Group.

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D. SHARE OPTION SCHEME

1. Share Option Scheme

The following is a summary of the principal terms of the Share Option Scheme conditionally approved by the sole Shareholder on 23 March 2018.

For the purpose of this section, unless the content otherwise requires:

‘‘Allotment Date’’ means the date on which Shares are allotted and issued to a Participant pursuant to the exercise of rights attaching to an option granted and exercised under the Share Option Scheme;
‘‘Board’’ means our board of Directors from time to time or a duly authorised committee thereof;
‘‘Eligible Person’’ means, among others, any director, employee or officer, consultant, professional, customer, supplier, agent, partner or adviser of or contractor to our Company or any of our subsidiaries;
‘‘Exercise Price’’
means the exercise price for any Share under the Share Option Scheme determined by the Board;
‘‘Option(s)’’ means option(s) to subscribe for Shares granted pursuant to the Share Option Scheme;
‘‘Option Period’’ means, in respect of any particular Option, the period to be determined and notified by our Board to each Participant which the Board may in its absolute discretion determine, save that such period shall not be more than 10 years;
‘‘Other Schemes’’ means any other share option schemes adopted by our Group from time to time pursuant to which options to subscribe for Shares may be granted;
‘‘Participant’’
means any Eligible Person who accepts or is deemed to have accepted the offer of any Option in accordance with the terms of the Share Option Scheme or (where the context so permits) a person entitled to any such Option in consequence of the death of the original Participant;
‘‘Shareholder(s)’’ means shareholder(s) of our Company from time to time;
‘‘Subsidiary’’
means a company which is for the time being and from time to time a subsidiary (within the meaning of the GEM Listing Rules) of our Company, whether incorporated in Hong Kong or elsewhere; and
‘‘Trading Day’’
means a day on which trading of Shares take place on the Stock Exchange.

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(a) Purpose of the Share Option Scheme

The Share Option Scheme enables our Company to grant Options to Eligible Persons as incentives or rewards for their contributions to our Group.

(b) Who may join

The basis of eligibility of any person to the grant of any Option shall be determined by our Board from time to time on the basis of his or her contribution or potential contribution to the development and growth of our Group. Upon acceptance of the Option, the Eligible Person shall remit HK$1.00 to our Company as consideration for the grant. The Option shall be offered for acceptance for a period of not less than 5 business days from the date on which the Option is granted.

(c) Grant of Option

Our Board shall not offer the grant of Options to any Eligible Persons after inside information has come to our Company’s knowledge until we have announced the information in accordance with the requirements of the GEM Listing Rules. In particular, during the period commencing one month immediately preceding the earlier of (a) the date of our Board meeting (as such date is first notified to the Stock Exchange in accordance with the GEM Listing Rules) for the approval of our Company’s results for any year, half-year, quarter-year period or any other interim period (whether or not required under the GEM Listing Rules), and (b) the deadline for our Company to publish an announcement of our results for any year, half-year or quarter-year period under the GEM Listing Rules or any other interim period (whether or not required under the GEM Listing Rules), and ending on the date of the results announcement. The period during which no Option may be granted will cover any period of delay in the publication of a result announcement.

The total number of Shares issued and to be issued upon exercise of the Options granted and to be granted to a Participant under the Share Option Scheme and Other Schemes (including both exercised and outstanding Options) in any 12-month period must not exceed 1% of the Shares from time to time in issue, and provided that if approved by Shareholders in general meeting with such Participant and his or her close associates (or his or her associates if the Participant is a connected person) abstaining from voting, our Company may make a further grant of Options to such Participant (the ‘‘Further Grant’’) notwithstanding that the Further Grant would result in the total number of Shares issued and to be issued upon exercise of the Options granted and to be granted under the Share Option Scheme and Other Schemes to such Participant (including exercised, cancelled and outstanding Options) in the 12-month period up to and including the date of the Further Grant representing in aggregate over 1% of the Shares from time to time in issue. In relation to the Further Grant, our Company must send a circular to our Shareholders, which discloses, amongst other, information from time to time as required by the GEM Listing Rules, the number and the terms of the Options to be granted. The number and terms (including the exercise price) of Options which is the subject of the Further Grant shall be fixed before the relevant Shareholders’ meeting and the date of meeting of our Board for proposing the Further Grant should be taken as the date of grant for the purpose of calculating the Exercise Price.

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(d) Exercise Price

The Exercise Price for any Shares under the Share Option Scheme will be a price determined by our Board and notified to each Participant and shall be at least the highest of (i) the closing price of the Shares as stated in the Stock Exchange’s daily quotations sheet on the date of grant of the Options, which must be a Trading Day; (ii) the average closing price of the Shares as stated in the Stock Exchange’s daily quotations sheets for the five Trading Days immediately preceding the date of grant of the relevant Options; and (iii) the nominal value of a Share on the date of the Grant.

For the purpose of calculating the Exercise Price, in the event that on the date of grant, our Company has been listed for less than five Trading Days, the Offer Price shall be used as the closing price for any Trading Day falling within the said period before the Listing Date.

(e) Maximum number of Shares

(i) The total number of Shares which may be issued upon the exercise of all Options to be granted under the Share Option Scheme and Other Schemes must not in aggregate exceed 10% of the Shares in issue as at the Listing Date (the ‘‘Scheme Mandate Limit’’) unless approved by the Shareholders pursuant to the terms of the Share Option Scheme. Options lapsed in accordance with the terms of the Share Option Scheme or Other Schemes will not be counted for the purpose of calculating the Scheme Mandate Limit. On the basis of 1,000,000,000 Shares in issue on the Listing Date (without taking into account any Shares which may be allotted and issued pursuant to the exercise of the Offer Size Adjustment Option and any options which may be granted under the Share Option Scheme), the Scheme Mandate Limit will be equivalent to 100,000,000 Shares, representing 10% of the Shares in issue as at the Listing Date.
(ii) The Scheme Mandate Limit may be renewed by our Shareholders in general meeting provided always that to the extent that the total number of Shares which may be issued upon exercise of all Options to be granted under the Share Option Scheme and Other Schemes under the Scheme Mandate Limit so renewed must not exceed 10% of the Shares in issue as at the date of such Shareholders’ approval provided that Options previously granted under the Share Option Scheme and Other Schemes (including those exercised, outstanding, cancelled or lapsed in accordance with the terms thereof) shall not be counted for the purpose of calculating the Scheme Mandate Limit as renewed. In relation to the Shareholders’ approval referred to in this paragraph (ii), our Company shall send a circular to our Shareholders containing the information from time to time as required by the GEM Listing Rules.

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(iii) Subject to the terms of the Share Option Scheme and the approval of Shareholders in general meeting, our Company may also grant Options beyond the Scheme Mandate Limit provided that Options in excess of the Scheme Mandate Limit are granted only to Eligible Persons specifically identified by our Company before such Shareholders’ approval is sought. In relation to the Shareholders’ approval referred to in this paragraph (iii), our Company shall send a circular to our Shareholders containing such relevant information from time to time as required by the GEM Listing Rules.
(iv) Notwithstanding the foregoing, no Options may be granted by our Company if the maximum number of Shares which may be issued upon exercise of all outstanding Options granted and yet to be exercised under the Share Option Scheme and Other Schemes in aggregate exceeds 30% of the Shares in issue from time to time.

(f) Time of exercise of Option

An Option may be exercised in accordance with the terms of the Share Option Scheme at any time during the applicable Option Period, provided that, amongst others, the period within which the Option must be exercised shall not be more than 10 years from the date on which that Option is deemed to have been granted. The exercise of an Option may be subject to the achievement of performance target and/or any other conditions to be notified by our Board to each Participant, which our Board may in its absolute discretion determine.

(g) Rights are personal to grantee

An Option shall be personal to the Participant and shall not be assignable or transferable and no Participant shall in any way sell, transfer, charge, mortgage, encumber or create any interest whether legal or beneficial in favour of any third party over or in relation to any Option. Any breach of the foregoing by the Participant shall entitle our Company to cancel any Option or any part thereof granted to such Participant (to the extent not already exercised) without incurring any liability on our Company.

(h) Rights on death

Subject to the terms of the Share Option Scheme, if a Participant dies before exercising the Option(s) in full, his or her personal representative(s) may exercise the Option(s) up to the Participant’s entitlement (to the extent that exercisable as at the date of his or her death and not exercised) within a period of 12 months following his or her death or such longer period as the Board may determine, failing which such Option(s) will lapse.

(i) Changes in capital structure

In the event of any alteration in the capital structure of our Company while an Option remains exercisable, and such event arises from a capitalisation of profits or reserves, rights issue, consolidation, reclassification, subdivision or reduction of share capital of our Company, such corresponding alterations (if any) shall be made in the number or nominal

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amount of Shares subject to the Options so far as unexercised, and/or the Exercise Price, and/ or the method of exercise of the Options, and/or the maximum number of Shares subject to the Share Option Scheme.

Any adjustments required under this paragraph must give a Participant the same proportion of the equity capital as that to which that Participant was previously entitled and shall be made on the basis that the aggregate Exercise Price payable by a Participant on the full exercise of any Option shall remain as nearly as possible the same (but shall not be greater than) as it was before such event, but no such adjustments may be made to the extent that Shares would be issued at less than their nominal value and, unless with the prior approval of the Shareholders in general meeting, no such adjustments may be made to the advantage of the Participant. For the avoidance of doubt, the issue of securities as consideration in a transaction may not be regarded as a circumstance requiring adjustment. In respect of any such adjustments, other than any made on a capitalisation issue, the independent financial adviser appointed by our Company or the auditors of our Company must confirm to our Directors in writing that the adjustments satisfy the requirements of the relevant provisions of the GEM Listing Rules and the supplementary guidance set out in the letter issued by the Stock Exchange dated 5 September 2005 and any further guidance/ interpretation of the GEM Listing Rules issued by the Stock Exchange from time to time.

(j) Rights on take-over

If a general offer (whether by way of takeover offer as defined in the Takeovers Code or scheme of arrangement or otherwise in like manner) is made to all our Shareholders (other than the offeror and/or any persons controlled by the offeror and/or any person acting in concert with the offeror) to acquire all or part of the issued Shares, and such offer, having been approved in accordance with applicable laws and regulatory requirements, becomes or is declared unconditional, the Participant shall be entitled to exercise his or her outstanding Option in full or in part thereof within 14 days after the date on which such offer becomes or is declared unconditional. For the purposes of this sub-paragraph, ‘‘acting in concert’’ shall have the meaning ascribed to it under the Takeovers Code as amended from time to time.

(k) Rights on a compromise or arrangement

(i) In the event of a notice given by our Company to our Shareholders to convene a Shareholders’ meeting for the purpose of considering and approving a resolution to voluntarily wind up our Company, our Company shall forthwith give notice thereof to the Participants and the Participants may, by notice in writing to our Company accompanied by the remittance for the total Exercise Price payable in respect of the exercise of the relevant Options (such notice to be received by our Company not later than two business days (excluding any period(s) of closure of our Company’s share registers) prior to the proposed meeting) exercise the Option either in full or in part and our Company shall, as soon as possible and in any event no later than the business day (excluding any period(s) of closure of our Company’s share registers) immediately prior to the date of the proposed Shareholders’ meeting, allot and issue such number of Shares to the Participants which falls to be issued on such exercise.

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(ii) In the event of a compromise or arrangement between our Company and its members or creditors being proposed in connection with a scheme for the reconstruction or amalgamation of our Company (other than any relocation schemes as contemplated in Rule 10.18(3) of the GEM Listing Rules), our Company shall give notice thereof to all Participants on the same date as it gives notice of the meeting to its members or creditors to consider such a scheme of arrangement, and thereupon the Participants may, by notice in writing to our Company accompanied by the remittance for the total Exercise Price payable in respect of the exercise of the relevant Options (such notice to be received by our Company not later than two business days (excluding any period(s) of closure of our Company’s share registers) prior to the proposed meeting) exercise the Option either in full or in part and our Company shall, as soon as possible and in any event no later than the business day (excluding any period(s) of closure of our Company’s share registers) immediately prior to the date of the proposed meeting, allot and issue such number of Shares to the Participants which falls to be issued on such exercise credited as fully paid and registered the Participants as holders thereof.

(l) Lapse of Option

An Option (to the extent not already exercised) shall lapse and not be exercisable on the earliest of:

(i) the expiry of the Option Period;
(ii) subject to the terms of the Share Option Scheme, the expiry of the Option Period of the Option;
(iii) subject to paragraph (k)(i), the date of commencement of the winding-up of our Company;
(iv) the date when the proposed compromise or arrangement becomes effective in respect of the situation contemplated in paragraph (k)(ii);
(v) in the event that the Participant was an employee or director of any member of our Group on the date of grant of Option to him or her, the date on which such member of our Group terminates the Participant’s employment or removes the Participant from his or her office on the ground that the Participant has been guilty of misconduct, has committed an act of bankruptcy or has become insolvent or has made any arrangements or composition with his or her creditors generally, or has been convicted of any criminal offence involving his or her integrity or honesty. A resolution of our Board or the board of directors of the relevant member of our Group to the effect that such employment or office has or has not been terminated or removed on one or more grounds specified in this subparagraph shall be conclusive;

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(vi) the happening of any of the following events, unless otherwise waived by our Board:
(1) any liquidator, provisional liquidator, receiver or any person carrying out any similar function has been appointed anywhere in the world in respect of the whole or any part of the asset or undertaking of the Participant (being a corporation);
(2) the Participant (being a corporation) has ceased or suspended payment of its debts or otherwise become insolvent or is subject to any winding-up, liquidation or analogous proceedings or has made any arrangement or composition with its creditors generally;
(3) there is unsatisfied judgment, order or award outstanding against the Participant or our Company has reason to believe that the Participant is unable to pay or has no reasonable prospect of being able to pay his/her/its debts;
(4) there are circumstances which entitle any person to take any action, appoint any person, commence proceedings or obtain any order of type mentioned in sub-paragraphs (1), (2) and (3) above;
(5) a bankruptcy order has been made against the Participant or any director of the Participant (being a corporation) in any jurisdiction;
(6) a petition for bankruptcy has been presented against the Participant or any director of the Participant (being a corporation) in any jurisdiction;
(vii) the date on which a situation as contemplated under paragraph (g) arises;
(viii) the date on which the Participant commits a breach of any terms or conditions attached to the grant of the Option, unless otherwise resolved to the contrary by our Board; or
(ix) the date on which our Board resolves that the Participant has failed or otherwise is or has been unable to meet the continuing eligibility criteria as may be prescribed in accordance with the terms of the Share Option Scheme.

(m) Ranking of Shares

Shares allotted upon the exercise of an Option shall be subject to the provisions of our Memorandum and Articles of Association in force as at the Allotment Date and shall rank pari passu in all respects with the existing fully paid Shares in issue on the Allotment Date and accordingly shall entitle the holders to participate in all dividends or other distributions paid or made on or after the Allotment Date other than any dividend or other distribution previously declared or recommended or resolved to be paid or made if the record date

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therefor shall be on or before the Allotment Date. Any Share allotted upon the exercise of an Option shall not carry voting rights until the name of the Participant has been duly entered into the register of members of our Company as the holder thereof.

(n) Cancellation of Options granted

Any cancellation of Options granted in accordance with the Share Option Scheme but not exercised must be approved by the Participant concerned in writing.

In the event that our Board elects to cancel any Options and issue new ones to the same Participant, the issue of such new Options may only be made with available but unissued Shares in the authorised share capital of our Company and available ungranted Options (excluding the cancelled Options) within the Scheme Mandate Limit.

(o) Period of Share Option Scheme

The Share Option Scheme shall be valid and effective for a period of 10 years commencing upon the passing of the resolution of our Shareholders in general meeting to adopt the Share Option Scheme and the Stock Exchange granting approval for the listing of and permission to deal in any Shares of our Company, after which no further Options will be issued but the provisions of the Share Option Scheme shall remain in full force and effect in all other respects and Options granted during the life of the Share Option Scheme may continue to be exercisable in accordance with their terms of issue.

The Board may impose such terms and conditions on the offer of Option(s) either on a case-by-case basis or generally as are not inconsistent with the Share Option Scheme, including but not limited to the minimum period for such an Option must be held, if applicable.

(p) Alteration to and termination of Share Option Scheme

The Share Option Scheme may be altered in any respect by resolution of our Board, except those specific provisions of the Share Option Scheme relating to matters set out in Rule 23.03 of the GEM Listing Rules (or any other relevant provisions of the GEM Listing Rules from time to time applicable) which cannot be altered to the advantage of the Participants or prospective Participants except with the prior approval of our Shareholders in general meeting (with the Eligible Persons, the Participants and their respective close associates abstaining from voting). No alteration shall operate to affect the terms of issue of any Option granted or agreed to be granted prior to such alteration unless with the approval of our Shareholders under our Memorandum and Articles of Association except where such alteration takes effect automatically under the existing terms of the Share Option Scheme.

Any alterations to the terms and conditions of the Share Option Scheme which are of a material nature must be approved by the Shareholders in general meeting, except where such alterations take effect automatically under the existing terms of the Share Option Scheme.

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Our Company by ordinary resolution in general meeting or the Board may at any time terminate the operation of the Share Option Scheme before the end of its life and in such event, no further Options will be offered but the provisions of the Share Option Scheme shall remain in full force and effect in all other respects in respect of Options granted prior thereto but not yet exercised at the time of termination, which shall continue to be exercisable in accordance with their terms of grant. Details of the Options granted, including Options exercised or outstanding, under the Share Option Scheme, and (if applicable) Options that become void or non-exercisable as a result of termination must be disclosed in the circular to our Shareholders seeking approval for the first new scheme to be established after such termination.

(q) Granting of Options to a director, chief executive or substantial shareholder of our Company or any of their respective associates

Any grant of Options to any director, chief executive or substantial shareholder of our Company, or any of their respective associates, must be approved by the independent nonexecutive Directors (excluding any independent non- executive Director who is the proposed Participant).

If a grant of Options to a substantial shareholder of our Company or an independent non-executive Director, or any of their respective associates will result in the total number of the Shares issued and to be issued upon exercise of the Options granted and to be granted (including Options exercised, cancelled and outstanding) to such person in any 12-month period up to and including the date of the grant (i) representing in aggregate over 0.1% (or such other percentage as may from time to time specified by the Stock Exchange) of the Shares in issue, and (ii) having an aggregate value, based on the closing price of the Shares at the date of each grant, in excess of HK$5 million, such further grant of Options must be approved by our Shareholders on a poll in a general meeting. The Participant, his or her associates and all core connected persons of our Company must abstain from voting in favour at such general meeting. Our Company will send a circular to our Shareholders containing the information as required under the GEM Listing Rules.

In addition, Shareholders’ approval as described above will also be required for any change in terms of the Options granted to a Participant who is a substantial shareholder of our Company, an independent non-executive Director or any of their respective associates.

The circular must contain the following:

(i) details of the number and terms of the Options (including the Exercise Price relating thereto) to be granted to each Eligible Person, which must be fixed before the relevant Shareholders’ meeting, and the date of Board meeting for proposing such further grant should be taken as the date of grant for the purpose of calculating the Exercise Price;

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(ii) a recommendation from our independent non-executive Directors (excluding any independent non-executive Direct who is a proposed Participant) to the independent Shareholders as to voting; and
(iii) all the information as required under the GEM Listing Rules from time to time.

For the avoidance of doubt, the requirements for the granting of Options to a Director or chief executive of our Company set out in this paragraph (q) do not apply where the Eligible Person is only a proposed Director or proposed chief executive of our Company.

(r) Conditions of Share Option Scheme

The Share Option Scheme is conditional on (i) the passing of a resolution to adopt the Share Option Scheme by our Shareholders in general meeting; and (ii) the Stock Exchange granting approval for the listing of and permission to deal in the Shares to be issued and allotted pursuant to the exercise of Options.

Application has been made to the Stock Exchange for the listing of and permission to deal in the Shares which fall to be issued pursuant to the exercise of Options that may be granted under Share Option Scheme.

(s) Present status of the Share Option Scheme

As at the Latest Practicable Date, no options had been granted or agreed to be granted by our Company under the Share Option Scheme.

The terms of the Share Option Scheme are in compliance with Chapter 23 of the GEM Listing Rules.

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E. OTHER INFORMATION

1. Tax and other indemnities

Each of our Controlling Shareholders (collectively, the ‘‘Indemnifiers’’) has entered into the Deed of Indemnity (being the material contract referred to in ‘‘B. Further information about the business of our Group — 1. Summary of material contracts — (d) the Deed of Indemnity’’ to this Appendix) with and in favour of our Company (for ourselves and as trustee for each of our subsidiaries) to provide indemnities on a joint and several basis in respect of, among other matters:

(a) any taxation (which includes estate duty) or taxation claim in whatever part of the world which might be payable by any member of our Group resulting from or by reference to any income, profits or gains earned, accrued or received on or up to the date on which the conditions stated in the section headed ‘‘Structure and Conditions of the Share Offer — Conditions of the Share Offer’’ of this prospectus being fulfilled (the ‘‘Effective Date’’) or arising from the Reorganisation of our Group described in the section headed ‘‘History, Development and Reorganisation — Reorganisation’’ of this prospectus on or before the Effective Date whether alone or in conjunction with any circumstances whenever occurring and whether or not such taxation or taxation claim is chargeable against or attributable to any other person, firm or company, save to the extent that:
(i) provision or reserve has been made for such taxation in the audited accounts of our Group for the Track Record Period (the ‘‘Accounts’’) as set out in Appendix I to this prospectus and to the extent that such taxation is incurred or accrued since 1 October 2017 which arises in the ordinary course of business of our Group as described in the section headed ‘‘Business’’ of this prospectus;
(ii) such taxation or taxation claim falls on any member of our Group on or after 1 October 2017 unless such taxation or liability would not have arisen but for some act or omission of, or delay by, or transactions voluntarily effected by, the Indemnifiers, any member of our Group (whether alone or in conjunction with some other act, omission or transaction, whenever occurring) otherwise than in the ordinary course of business or in the ordinary course of acquiring and disposing of capital assets, before the Effective Date;
(iii) such taxation claim or liability for such taxation would not have arisen but for a voluntary act or transaction carried out or effected (other than pursuant to a legally binding commitment created on or before the date of the Deed of Indemnity) by any relevant member of our Group after the date of the Deed of Indemnity;
(iv) such taxation claim or liability for such taxation arises or is incurred as a result of the imposition of taxation as a consequence of any retrospective change in the laws, rules and regulations, or the interpretation or practice thereof by the Inland Revenue Department of Hong Kong or any other relevant authority (whether in Hong Kong, the Cayman Islands, or any other part of the world) coming into force

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after the date of the Deed of Indemnity or to the extent such taxation claim arises or is increased by an increase in rates of taxation after the date of the Deed of Indemnity with retrospective effect; or

(v) any provision or reserve made for taxation in the Accounts and which is finally established to be an over-provision or an excessive reserve in which case the Indemnifiers’ liability (if any) in respect of such taxation shall be reduced by an amount not exceeding such provision or reserve, provided that the amount of any such provision or reserve applied pursuant to the Deed of Indemnity to reduce the Indemnifiers’ liability in respect of taxation shall not be available in respect of any such liability arising thereafter; and
(b) any damages, liabilities, claims, losses including loss of profits or benefits incurred or suffered by any member of our Group directly or indirectly arising from or in connection with any possible or alleged violation or non-compliance with the applicable laws, rules or regulations of Hong Kong, the Cayman Islands or of any part of the world, on all matters on or before the Effective Date including but not limited to the incidents referred to in the section headed ‘‘Business — Legal and regulatory compliance — Non-compliance of our Group’’ in this prospectus; or all actions, claims, demands, proceedings, costs and expenses, damages, losses and liabilities whatsoever which may be made, suffered or incurred by our Group in respect of or arising directly or indirectly from or on the basis of or in connection with any litigation, arbitration, claim and/or legal proceedings, whether of criminal, administrative, contractual, tortuous or otherwise nature instituted or threatened against our Group and/or any act, non-performance, omission or otherwise of our Group accrued or arising on or before the Listing Date, including but not limited to the incidents referred to in the section headed ‘‘Business — Legal and regulatory compliance — Non-compliance of our Group’’ in this prospectus.

Each of the Indemnifiers hereby further agrees and undertakes jointly and severally, unconditionally and irrevocably, to indemnify any member of our Group and each of them and at all times keeps the same indemnified on demand from and against all actions, claims, demands, proceedings, costs and expenses, damages, losses and liabilities whatsoever which may be made, suffered or incurred by any member of our Group in respect of or arising directly or indirectly from or on the basis of or in connection with the intellectual property rights of our Group on or before the Effective Date.

Our Directors have been advised that no material liability for estate duty is likely to fall on our Company or any of its subsidiaries in the Cayman Islands or the BVI or Hong Kong, being jurisdictions in which one or more of the companies comprising our Group were incorporated.

2. Litigation

Save as disclosed in the section headed ‘‘Business — Legal Proceedings’’ in this prospectus, neither our Company nor any of our subsidiaries is engaged in any litigation or claims of material importance and no litigation or claims of material importance is known to our Directors to be pending or threatened by or against our Company or any of our subsidiaries, that would have a material adverse effect on our Group’s results of operations or financial condition.

– IV-27 –

STATUTORY AND GENERAL INFORMATION

APPENDIX IV

3. Sole Sponsor

Our Sole Sponsor has made an application for and on behalf of our Company to the Stock Exchange for the listing of, and permission to deal in, the Shares in issue and to be issued as mentioned in this prospectus, including the Offer Shares and any Shares which may fall to be allotted and issued pursuant to the Capitalisation Issue and the exercise of the Offer Size Adjustment Option and options which may be granted under the Share Option Scheme. The Sole Sponsor satisfies the independence criteria applicable to sponsor as set out in Rule 6A.07 of the GEM Listing Rules.

4. Compliance adviser

In accordance with the requirements of the GEM Listing Rules, our Company has appointed Alliance Capital Partners Limited as compliance adviser to provide advisory services to our Company to ensure compliance with the GEM Listing Rules for a period commencing on the Listing Date and ending on the date on which our Company complies with Rule 18.03 of the GEM Listing Rules in respect of its financial results for the second full financial year commencing after the Listing Date or until the agreement is terminated, whichever is the earlier.

5. Preliminary expenses

The preliminary expenses relating to the incorporation of our Company are approximately HK$44,000 and are payable by our Company.

6. Promoter

Our Company has no promoter for the purpose of the GEM Listing Rules.

7. Qualifications of experts

The qualifications of the experts who have given reports, letter or opinions (as the case may be) in this prospectus are as follows:

Name	Qualification
Alliance Capital Partners Limited	A corporation licensed to carry out type 1 (dealing
	in securities) and type 6 (advising on corporate
	finance) regulated activities under the SFO
HLB Hodgson Impey Cheng Limited	Certified public accountants
Ms. Kennis Tai	Barrister-at-law in Hong Kong
Conyers Dill & Pearman	Legal advisers as to Cayman Islands law
China Insights Consultancy Limited	Independent industry consultant

– IV-28 –

STATUTORY AND GENERAL INFORMATION

APPENDIX IV

8. Consents of experts

Each of the experts referred to above has given and has not withdrawn its written consent to the issue of this prospectus with the inclusion of its reports, letters, opinions or summaries thereof (as the case may be) and the references to its name included in this prospectus in the form and context in which it respectively appears.

9. Sole Sponsor’s fees

Our Sole Sponsor will be paid by our Company a total fee of HK$4,500,000 to act as sponsor to our Company in connection with the Listing.

10. Binding effect

This prospectus shall have the effect, if an application is made in pursuance hereof, of rendering all persons concerned bound by all of the provisions (other than the penal provisions) of sections 44A and 44B of the Companies (Winding Up and Miscellaneous Provisions) Ordinance so far as applicable.

11. Miscellaneous

(a) Any taxation (which includes estate duty) or taxation claim in whatever part of the world which might be payable by any member of our Group resulting from or by reference to any income, profits or gains earned, accrued or received on or up to the date on which the conditions stated in the section headed ‘‘Structure and Conditions of the Share Offer — Conditions of the Share Offer’’ of this prospectus being fulfilled (the ‘‘Effective Date’’) or arising from the reorganisation of our Group described in the section headed ‘‘History, Development and Reorganisation — Reorganisation’’ of this prospectus on or before the Effective Date whether alone or in conjunction with any circumstances whenever occurring and whether or not such taxation or taxation claim is chargeable against or attributable to any other person, firm or company, save to the extent that:
(i) no share or loan capital of our Company or any of our subsidiaries has been issued, agreed to be issued or is proposed to be issued fully or partly paid either for cash or for a consideration other than cash;
(ii) no commissions, discounts, brokerages or other special terms have been granted in connection with the issue or sale of any share or loan capital of our Company or any of our subsidiaries; and
(iii) no commission has been paid or payable (excluding commission payable to subunderwriters) for subscription, agreeing to subscribe, procuring subscription or agreeing to procure subscription of any shares in our Company.
(b) No share or loan capital of our Company or any of our subsidiaries is under option or is agreed conditionally or unconditionally to be put under option.

– IV-29 –

STATUTORY AND GENERAL INFORMATION

APPENDIX IV

(c) No founder, management or deferred shares of our Company or any of our subsidiaries has been issued or agreed to be issued.
(d) Our Directors confirm that, up to the date of this prospectus, save as disclosed in the section headed ‘‘Financial Information — Recent development of our Group subsequent to the Track Record Period’’ of this prospectus, there has been no material adverse change in the financial or trading position or prospects of our Group since 30 September 2017 (being the date to which the latest audited combined financial statements of our Group were made up), and there had been no event since 30 September 2017 which would materially affect the information as shown in the accountants’ report set out in Appendix I to this prospectus.
(e) There has not been any interruption in the business of our Group which has had a material adverse effect on the financial position of our Group in the 24 months preceding the date of this prospectus.
(f) None of the persons named in the paragraph headed ‘‘7. Qualifications of experts’’:
(i) is interested beneficially or non-beneficially in any shares in any member of our Group; or
(ii) has any right or option (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for any shares in any member of our Group.
(g) No company within our Group is presently listed on any stock exchange or traded on any trading system.
(h) Our Company has no outstanding convertible debt securities.
(i) All necessary arrangements have been made to enable the Shares to be admitted into CCASS for clearing and settlement.
(j) There are no arrangements under which future dividends are waived or agreed to be waived.

12. Bilingual Prospectus

The English language and the Chinese language versions of this prospectus are being published separately, in reliance upon the exemption provided by section 4 of the Companies (Exemption of Companies and Prospectuses from Compliance with Provisions) Notice (Chapter 32L of the Laws of Hong Kong).

– IV-30 –

STATUTORY AND GENERAL INFORMATION

APPENDIX IV

13. Taxation of holders of Shares

(a) Hong Kong

Dealings in Shares registered on our Company’s Hong Kong branch register of members will be subject to Hong Kong stamp duty.

Profits from dealings in Shares arising in or derived from Hong Kong may also be subject to Hong Kong profits tax.

(b) Cayman Islands

No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman Islands companies except those which hold interests in land in the Cayman Islands.

(c) Consultation with professional advisers

Intending holders of the Shares are recommended to consult their professional advisers if they are in any doubt as to the taxation implications of subscribing for, purchasing, holding or disposing of or dealing in the Shares. It is emphasised that none of our Company, our Directors or parties involved in the Share Offer accepts responsibility for any tax effect on, or liabilities of holders of Shares resulting from their subscription for, purchase, holding or disposal of or dealing in Shares.

– IV-31 –

DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG KONG AND AVAILABLE FOR INSPECTION

APPENDIX V

DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG KONG

The documents attached to a copy of this prospectus and delivered to the Registrar of Companies in Hong Kong for registration were, among others, copies of the Application Forms, the written consents referred to in the section headed ‘‘E. Other Information — 8. Consents of experts’’ in Appendix IV to this prospectus and certified copies of the material contracts referred to in the section headed ‘‘B. Further Information about the business of our Group — 1. Summary of material contracts’’ in Appendix IV to this prospectus.

DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the offices of Hastings & Co. of 5/F., Gloucester Tower, The Landmark, 11 Pedder Street, Central, Hong Kong, during normal business hours up to and including the date which is 14 days from the date of this prospectus:

the Memorandum and the Articles of Association;
the accountants’ report on financial information of our Group for FY2016, FY2017 and six months ended 30 September 2017 prepared by HLB Hodgson Impey Cheng Limited, the text of which is set out in Appendix I to this prospectus;
the auditors’ report on the combined financial statements of our Group for FY2016, FY2017 and six months ended 30 September 2017 underlying the financial information of our Group incorporated in the accountants’ report;
the report received from HLB Hodgson Impey Cheng Limited on the unaudited pro forma financial information of our Group, the text of which is set out in Appendix II to this prospectus;
the letter of advice prepared by Conyers Dill & Pearman summarising certain aspects of Cayman Islands company law referred to in Appendix III to this prospectus;
the Companies Law;
the service contracts and letters of appointment referred to in the section headed ‘‘C. Further information about Directors and Substantial Shareholders — 1. Directors — (b) Particulars of service contracts’’ in Appendix IV to this prospectus;
copies of material contracts referred to in the section headed ‘‘B. Further information about the business of our Group — 1. Summary of material contracts’’ in Appendix IV to this prospectus;
the written consents referred to in the paragraph headed ‘‘E. Other information — 8. Consents of experts’’ in Appendix IV to this prospectus;
the rules of the Share Option Scheme;
the CIC Report; and
the legal opinion prepared by our Legal Counsel.

– V-1 –

AI assistant

MS Concept Limited — Share Issue/Capital Change 2018

51451_rns_2018-03-28_98d65156-007f-4182-89b0-4271132b3ed3.pdf

MS CONCEPT LIMITED

Stock Code: 8447

SHARE OFFER

MS CONCEPT LIMITED

LISTING ON GEM OF THE STOCK EXCHANGE OF HONG KONG LIMITED BY WAY OF SHARE OFFER

Sole Sponsor

Joint Bookrunners and Joint Lead Managers

EXPECTED TIMETABLE

EXPECTED TIMETABLE

EXPECTED TIMETABLE

OVERVIEW

OUR CUSTOMERS AND SUPPLIERS

SUMMARY AND HIGHLIGHTS

OUR COMPETITIVE STRENGTHS

OUR BUSINESS STRATEGIES

SUMMARY OF FINANCIAL INFORMATION

Highlights of combined statement of cashflow

Comparable restaurant sales

SUMMARY AND HIGHLIGHTS

OPERATIONAL PERFORMANCE OF OUR RESTAURANTS

FY2016

SUMMARY AND HIGHLIGHTS

Six months ended 30 September 2017

KEY FINANCIAL RATIOS

COMPETITION

RECENT DEVELOPMENT

RISK FACTORS

OUR SHAREHOLDERS

DIVIDENDS

REASONS FOR THE LISTING AND USE OF PROCEEDS

LISTING EXPENSES

LEGAL PROCEEDINGS

NON-COMPLIANCE

OFFER STATISTICS

MATERIAL ADVERSE CHANGE

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

RISKS RELATING TO OUR BUSINESS

We experienced net current liabilities during the Track Record Period

The lack of suitable locations on commercially viable terms, the increase in rental expenses and the failure to renew existing leases of the leased properties on terms acceptable to us may adversely affect our results of operations

Elite, our largest supplier and our connected person, accounted for a substantial portion of our purchases

The western casual dining restaurants market may lose popularity and our financial conditions and future growth may be adversely affected

Opening new restaurants may result in fluctuations in our financial performance

We have previously been involved in certain incidents of non-compliance with certain Hong Kong regulatory requirements and may be subject to liabilities

Our overall performance may be affected by temporary suspension of our operation for renovation of certain restaurants

We may not adequately protect our intellectual property, which could confuse, dilute or tarnish our brand appeal

RISK FACTORS

All the liquor licences of our restaurants were held by individuals

Our success counts on our ability to maintain effective quality control

Our success depends on our key personnel and our ability to attract, motivate and retain a sufficient number of qualified employees

Our results of operations are susceptible to periodic fluctuations due to seasonality

We may not be able to detect, deter and prevent all instances of fraud or other misconduct committed by our employees, suppliers or other third parties

Our insurance coverage may be insufficient to protect us against potential liabilities arising in the course of operations

Information technology system failures could interrupt our operations and adversely affect our business

Our historical financial condition and results of operations may not be indicative of our future performance

RISK FACTORS

RISKS RELATING TO OUR INDUSTRY

Any negative publicity relating to the restaurant industry could adversely impact our brands, business and results of operations

The restaurant industry is highly competitive

Our restaurant business involves inherent industrial risks and occupational hazards which, if materialised, may affect our business operations and financial results

The prices and timely supply of food ingredients are subject to continuing fluctuation

Minimum wage requirements in Hong Kong may further increase and impact our staff costs in the future

We are susceptible to incidents of outbreaks of diseases such as contagious diseases of animals, food-borne illnesses and health epidemics

The restaurant operations in Hong Kong may be subject to stringent licensing requirements and hygiene standards

Unforeseeable business interruptions could adversely affect our business

RISKS RELATING TO THE SHARE OFFER AND OUR SHARES

There has been no prior public market for our Shares and the liquidity, market price and trading volume of our Shares may be volatile

Investors may experience dilution if our Group issues additional Shares in the future

Any disposal by our Controlling Shareholders of a substantial number of Shares in the public market could materially and adversely affect the market price of the Shares

Future issues, offers or sale of Shares may adversely affect the prevailing market price of our Shares

MS Concept Limited Share Issue/Capital Change 2018