Condensed Consolidated Interim Financial Information [Condensed Consolidated Statement of Profit or Loss](index=3&type=section&id=簡明綜合收益表) The Group's revenue slightly increased to **HKD 195.07 million** for the six months ended September 30, 2019, with net loss significantly narrowing to **HKD 9.42 million** due to reduced non-cash revaluation loss on public light bus licenses Condensed Consolidated Statement of Profit or Loss | Metric | Six Months Ended September 30 (2019) (Thousand HKD) | Six Months Ended September 30 (2018) (Thousand HKD) | | :--- | :--- | :--- | | Revenue | 195,073 | 194,482 | | Gross Profit | 33,791 | 31,568 | | Operating Profit | 18,904 | 15,140 | | Loss Before Income Tax | (6,914) | (25,576) | | Loss for the Period | (9,422) | (27,643) | | Basic Loss Per Share | (3.47) HK cents | (10.17) HK cents | [Condensed Consolidated Statement of Comprehensive Income](index=4&type=section&id=簡明綜合全面收益表) Total comprehensive expense for the period significantly decreased to **HKD 9.78 million** from **HKD 31.55 million** in the prior period, primarily due to a reduction in public light bus license revaluation loss Condensed Consolidated Statement of Comprehensive Income | Metric | Six Months Ended September 30 (2019) (Thousand HKD) | Six Months Ended September 30 (2018) (Thousand HKD) | | :--- | :--- | :--- | | Loss for the Period | (9,422) | (27,643) | | Revaluation Deficit on Public Light Bus Licenses | (360) | (3,907) | | **Total Comprehensive Expense for the Period** | **(9,782)** | **(31,550)** | [Condensed Consolidated Statement of Financial Position](index=5&type=section&id=簡明綜合資產負債表) As of September 30, 2019, the Group's net assets decreased to **HKD 96.59 million** from **HKD 128 million**, with the adoption of HKFRS 16 leading to new right-of-use assets of **HKD 66.48 million** and lease liabilities of **HKD 66.59 million**, and net current liabilities expanding to **HKD 95.76 million** Condensed Consolidated Statement of Financial Position | Metric | September 30, 2019 (Unaudited) (Thousand HKD) | March 31, 2019 (Audited) (Thousand HKD) | | :--- | :--- | :--- | | **Non-current Assets** | **319,912** | **268,798** | | Of which: Right-of-use Assets | 66,479 | – | | Of which: Public Light Bus Licenses | 174,240 | 198,000 | | **Current Assets** | **39,254** | **45,910** | | **Current Liabilities** | **135,016** | **64,524** | | Of which: Lease Liabilities | 66,585 | – | | **Net Current Liabilities** | **(95,762)** | **(18,614)** | | **Net Assets** | **96,585** | **128,120** | [Condensed Consolidated Statement of Changes in Equity](index=6&type=section&id=簡明綜合權益變動表) As of September 30, 2019, total equity decreased from **HKD 128 million** to **HKD 96.59 million**, primarily due to a **HKD 9.42 million** loss for the period, a **HKD 0.36 million** revaluation loss on public light bus licenses, and a **HKD 21.75 million** special dividend paid - The primary reasons for the decrease in total equity during the period include a **HKD 9.42 million** loss for the period, a **HKD 0.36 million** reduction in public light bus license revaluation reserve, and the payment of a **HKD 21.75 million** special dividend[17](index=17&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=簡明綜合現金流量表) Net cash inflow from operating activities for the period was **HKD 56.85 million**, significantly higher than the prior period, while net cash outflow from financing activities substantially increased to **HKD 53.99 million** due to dividend payments and new lease liability repayments, resulting in a **HKD 3.74 million** decrease in cash and cash equivalents to **HKD 29.09 million** at period-end Condensed Consolidated Statement of Cash Flows | Metric | Six Months Ended September 30 (2019) (Thousand HKD) | Six Months Ended September 30 (2018) (Thousand HKD) | | :--- | :--- | :--- | | Net Cash Inflow from Operating Activities | 56,854 | 17,365 | | Net Cash Outflow from Investing Activities | (6,610) | (7,261) | | Net Cash Outflow from Financing Activities | (53,988) | (20,197) | | Net Decrease in Cash and Cash Equivalents | (3,744) | (10,093) | | Cash and Cash Equivalents at End of Period | 29,085 | 28,137 | Notes to the Financial Statements [Basis of Preparation and Principal Accounting Policies](index=8&type=section&id=2.%20編製基準及主要會計政策) These interim financial statements are prepared in accordance with HKAS 34, and despite **HKD 95.76 million** in net current liabilities, directors deem the going concern basis appropriate due to strong operating cash flows and expected renewal of bank facilities - The financial information is prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting'[24](index=24&type=chunk) - Despite **HKD 95.76 million** in net current liabilities, directors consider the company a going concern based on strong operating cash flows and the renewability of bank facilities[25](index=25&type=chunk) [Changes in Accounting Policies](index=9&type=section&id=3.%20採納新訂及經修訂香港財務報告準則以及會計政策變動) Effective April 1, 2019, the Group first adopted HKFRS 16 'Leases' using the modified retrospective approach, recognizing **HKD 94.63 million** in right-of-use assets and corresponding lease liabilities, adjusting opening equity without restating comparative figures - The Group first applied HKFRS 16 'Leases' during this interim period, opting for the modified retrospective approach without restating comparative information[28](index=28&type=chunk)[29](index=29&type=chunk) Impact of HKFRS 16 Adoption | Impact Item | Amount (Thousand HKD) | | :--- | :--- | | Increase in Right-of-use Assets | 94,633 | | Increase in Current Lease Liabilities | 62,941 | | Increase in Non-current Lease Liabilities | 31,692 | - Adoption of HKFRS 16 resulted in a **HKD 34.45 million** increase in operating cash flow and an equivalent decrease in financing cash flow due to lease liability payments[38](index=38&type=chunk) [Capital Expenditure and Public Light Bus Licenses](index=16&type=section&id=12.%20資本開支) During the period, the fair value of each public light bus license decreased from **HKD 3 million** to **HKD 2.64 million**, resulting in a **HKD 23.76 million** revaluation loss, with **HKD 23.40 million** recognized in profit or loss and **HKD 0.36 million** in revaluation reserve, classified as Level 2 fair value measurement - As of September 30, 2019, the fair value of each public light bus license decreased to **HKD 2,640,000** (from **HKD 3,000,000** at the beginning of the period)[64](index=64&type=chunk) - The decline in license value resulted in a total revaluation loss of **HKD 23.76 million**, with **HKD 23.40 million** deducted in the statement of profit or loss and **HKD 0.36 million** treated in the revaluation reserve[61](index=61&type=chunk) - The fair value measurement of public light bus licenses is classified as Level 2 in the valuation hierarchy, based on market observable data[64](index=64&type=chunk)[67](index=67&type=chunk) [Related Party Transactions](index=22&type=section&id=20.%20關連人士交易) The Group engaged in various transactions with companies controlled by Director Mr. Wong Ling Sun and his associates, primarily involving public light bus lease payments and administrative fees, with total lease payments to related companies amounting to **HKD 33.48 million** during the period, all conducted on mutually agreed terms in the ordinary course of business Related Party Transactions | Related Company | Nature of Transaction | Amount (Thousand HKD) | | :--- | :--- | :--- | | Chung Kong Transport Consultants Limited | Public Light Bus Lease Payments | 10,447 | | Man Shing Transport Company Limited | Public Light Bus Lease Payments | 11,980 | | Tai Sum Company Limited | Public Light Bus Lease Payments | 11,052 | - The related companies involved in the above transactions are controlled by Directors Mr. Wong Ling Sun, Ms. Ng Shui Chun, Ms. Wong Wai Sum, and Ms. Wong Wai Man, who hold directorships and beneficial interests[86](index=86&type=chunk) Management Discussion and Analysis [Results and Dividends](index=23&type=section&id=中期業績及股息) Excluding the non-cash revaluation loss on public light bus licenses, the Group recorded a net profit of **HKD 13.98 million**, a **23.2%** year-on-year increase, primarily due to government subsidies, while the reported net loss was **HKD 9.42 million** after including the revaluation loss, and the Board did not recommend an interim dividend - Excluding the non-cash revaluation deficit on public light bus licenses, the Group's net profit was **HKD 13.98 million**, representing a **23.2%** year-on-year increase[90](index=90&type=chunk) - The Board did not recommend the payment of an interim dividend[91](index=91&type=chunk) [Business and Financial Review](index=23&type=section&id=業務回顧及財務回顧) The Group continued upgrading its fleet to 19-seater minibuses, increasing average seating capacity, but social events since June 2019 led to a **1.5%** drop in passenger volume and a **3.1%** decrease in mileage, prompting successful fare increases for 14 routes, while fuel and maintenance costs declined, labor costs rose due to salary adjustments - The Group continued replacing 16-seater minibuses with 19-seater models, with 19-seater minibuses accounting for **52.7%** of the fleet by period-end, increasing the average seating capacity by **4.2%**[91](index=91&type=chunk) - Affected by social events since June 2019, service disruptions and reduced passenger flow led to a **1.5%** decrease in passenger volume and a **3.1%** decline in total mileage[93](index=93&type=chunk) - During the period, 14 routes received approved fare increases ranging from **2.9%** to **9.7%**, offsetting the impact of declining passenger volume and resulting in a **0.3%** slight increase in revenue[95](index=95&type=chunk) - Direct cost components include a **4.3%** decrease in fuel costs due to lower prices and consumption, a **3.1%** increase in labor costs due to salary adjustments, and a **9.6%** decrease in maintenance costs due to a younger fleet[99](index=99&type=chunk)[100](index=100&type=chunk) [Capital Structure and Liquidity](index=28&type=section&id=資本結構、流動資金、財務資源及政策) Adoption of HKFRS 16 significantly increased current liabilities, reducing the current ratio to **0.29x**, while the debt-to-equity ratio (net debt/equity) substantially rose from **91.2%** to **129.0%** due to reduced shareholders' equity from dividend payments and license value decline, with the Group's working capital primarily sourced from operations and sufficient bank facilities available - Following the adoption of HKFRS 16, net current liabilities increased to **HKD 95.76 million**, and the current ratio decreased to **0.29x**[112](index=112&type=chunk) - The debt-to-equity ratio increased from **91.2%** at the beginning of the period to **129.0%**, primarily due to a **24.6%** reduction in shareholders' equity from dividend payments and license revaluation losses[119](index=119&type=chunk) - At period-end, the Group had total bank facilities of **HKD 163 million**, with **HKD 154 million** utilized, and certain assets pledged as collateral[114](index=114&type=chunk)[119](index=119&type=chunk) [Outlook](index=31&type=section&id=前景) Looking ahead, the US-China trade war, economic weakness, and Hong Kong social unrest create operational uncertainties, expected to impact passenger volume, prompting the Group to continue route restructuring, fleet optimization, and fare increase applications, while government fuel subsidies will help mitigate cost pressures, though public light bus license market values may further decline, continuously impacting reported results - Management anticipates that social events will continue to impact passenger volume, leading to an uncertain operating outlook[129](index=129&type=chunk) - Response strategies include ongoing route restructuring, upgrading the fleet to 19-seater minibuses (targeting an additional 49 replacements by end of 2020), collaborating with other transport operators for interchange discounts, and applying for fare increases when appropriate[129](index=129&type=chunk) - The government's six-month fuel subsidy will help alleviate some cost pressures[130](index=130&type=chunk) - Management warns that the market value of public light bus licenses may further depreciate, and their accounting revaluation losses could continue to adversely affect financial year results[130](index=130&type=chunk) Other Disclosures [Directors' and Chief Executives' Interests in Shares](index=32&type=section&id=董事之股份權益) The report details the shareholdings of directors and major shareholders, with directors Mr. Wong Ling Sun, Ms. Ng Shui Chun, Ms. Wong Wai Sum, and Ms. Wong Wai Man holding significant company shares indirectly through The JetSun Trust, for which HSBC International Trustee Limited acts as trustee and a major shareholder - Several directors indirectly hold **43.27%** of the company's shares through The JetSun Trust, managed by HSBC International Trustee[132](index=132&type=chunk)[145](index=145&type=chunk) [Share Options](index=33&type=section&id=購股權) As of September 30, 2019, the company had **7,497,000** outstanding share options granted under the 2004 and 2013 schemes, with no options granted, exercised, cancelled, or lapsed during the reporting period Outstanding Share Options | Grantee | Number of Outstanding Share Options | | :--- | :--- | | Directors | 1,158,000 | | Other Eligible Employees | 6,339,000 | | **Total** | **7,497,000** | - For the six months ended September 30, 2019, no share options were granted, cancelled, lapsed, or exercised[144](index=144&type=chunk) [Corporate Governance](index=35&type=section&id=企業管治) The company complied with the Listing Rules' Corporate Governance Code during the reporting period, and the Audit Committee, comprising three independent non-executive directors, reviewed the interim financial information and results, providing recommendations to the Board - The company has consistently complied with the code provisions set out in Appendix 14 of the Listing Rules, 'Corporate Governance Code and Corporate Governance Report'[149](index=149&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed consolidated interim financial information and interim results announcement[149](index=149&type=chunk)

[Company Information](index=3&type=section&id=Company%20Information) This section lists key company information including board members, authorized representatives, audit committee, company secretary, and auditors - The Board Chairman is Mr. Wong Ling Sun, and the Chief Executive Officer is Mr. Chan Man Chun[4](index=4&type=chunk) - The Audit Committee comprises Dr. Lee Peng Fee, Dr. Chan Yuen Tak Fai, and Mr. Kwong Ki Chi[4](index=4&type=chunk) - The company's auditor is Grant Thornton Hong Kong Limited[4](index=4&type=chunk) [Group Overview](index=4&type=section&id=Group%20Overview) The Group primarily operates public light bus passenger services in Hong Kong, with over 44 years of experience, and is a leading operator - The Group's main business is operating public light bus passenger services in Hong Kong, with over **44 years of experience**[6](index=6&type=chunk) - As of the reporting period, the Group operates **69 scheduled public light bus routes** (357 minibuses) and **5 resident bus routes** (8 buses)[6](index=6&type=chunk) - The Group launched Hong Kong's first low-floor wheelchair-accessible minibus in January 2018 and partnered with Alipay HK for mobile payment services since January 2019[6](index=6&type=chunk) - The Group's computerized maintenance center has been ISO 9001 quality management system certified since 2011 (upgraded to ISO 9001:2015 in 2017)[6](index=6&type=chunk) [Financial and Business Highlights](index=5&type=section&id=Financial%20and%20Business%20Highlights) This section summarizes key financial and business performance for the year ended March 31, 2019 2019 Fiscal Year Key Financial Data (Year Ended March 31) | Financial Metric (HK$ thousand) | 2019 | 2018 | Change | | :------------------------------ | :------- | :------- | :------- | | Revenue | 392,924 | 383,797 | +2.4% | | Profit for the year excluding public light bus license revaluation loss | 28,235 | 15,897 | +77.6% | | Public light bus license revaluation loss | 71,493 | 45,200 | +58.2% | | Loss attributable to owners of the Company | 43,258 | 29,303 | +47.6% | | Loss per share (HK cents) | 15.91 | 10.79 | +47.5% | | Proposed special dividend per ordinary share (HK cents) | 8.0 | 5.0 | +60.0% | | Profit margin (Loss attributable to owners/Revenue) | -11.0% | -7.6% | -3.4pp | | Return on equity (Loss attributable to owners/Shareholders' equity) | -33.8% | -15.5% | -18.3pp | | Borrowings | 149,667 | 159,444 | -6.1% | | Shareholders' equity | 128,120 | 189,381 | -32.3% | | Current ratio | 0.71 | 1.18 | -0.47 | | Gearing ratio | 145.6% | 101.7% | +43.9pp | 2019 Fiscal Year Key Business Data (Year Ended March 31) | Business Metric | 2019 | 2018 | Change | | :------------------------------ | :----- | :----- | :------- | | Number of public light buses in service at year-end | 358 | 363 | -1.4% | | Number of public buses in service at year-end | 8 | 6 | +33.3% | | Number of scheduled public light bus routes at year-end | 70 | 69 | +1.4% | | Number of resident bus routes at year-end | 5 | 4 | +25.0% | | Passenger volume (million) | 60.1 | 59.7 | +0.7% | | Number of trips (million) | 4.38 | 4.42 | -0.9% | | Total mileage (million km) | 41.1 | 41.4 | -0.7% | | Average fleet age at year-end (years) | 8.2 | 9.1 | -9.9% | | Average accident rate (per million km) | 2.7 | 2.8 | -3.6% | [Chairman's Statement](index=7&type=section&id=Chairman%27s%20Statement) The Chairman's statement reviews the annual results, highlighting significant profit growth before revaluation loss, challenges from MTR expansion, and strategic responses - For the year ended March 31, 2019, profit before public light bus license revaluation loss was **HK$28,235,000**, a significant increase of **77.6%** year-on-year[16](index=16&type=chunk) - Public light bus license revaluation loss increased to **HK$71,493,000**, resulting in a loss attributable to owners of the Company of **HK$43,258,000**[16](index=16&type=chunk) - The Board recommended a special dividend of **8.0 HK cents per ordinary share**, an increase of **60%** from the previous year[17](index=17&type=chunk) - The Group's revenue increased by **2.4% to HK$392,924,000** due to fare increases on 34 routes and a **3.9% increase in total seating capacity** by replacing 16-seater minibuses with 19-seater models (approximately 41% of the fleet)[21](index=21&type=chunk) - The average fleet age was reduced to **8.2 years**, leading to a **10.2% reduction in maintenance costs** and a **1.0% decrease in direct costs**[22](index=22&type=chunk) - The Group partnered with Alipay HK to launch the first mobile payment tool for public transport and plans to expand it to all routes[24](index=24&type=chunk) - Looking ahead, the Group will continue to enhance operational efficiency, optimize cost structure through route restructuring, fleet review, and upgrades, and apply for fare adjustments when appropriate[25](index=25&type=chunk)[27](index=27&type=chunk) [Management Discussion and Analysis](index=9&type=section&id=Management%20Discussion%20and%20Analysis) This section details the Group's business strategies, financial performance, liquidity, and risk management for the 2018/19 fiscal year [Business Review](index=9&type=section&id=Business%20Review) This fiscal year, the Group actively restructured routes, upgraded its fleet, and adjusted fares, leading to revenue growth and improved operational efficiency - The Group completed the restructuring of **7 scheduled public light bus routes** and **1 resident bus route**, increasing the number of public light bus routes to **70** and resident bus routes to **5**[28](index=28&type=chunk) - While the public light bus fleet size decreased by **5 vehicles to 358**, the number of 19-seater public light buses increased to **146** (approximately 41% of the fleet), resulting in a **3.9% actual increase in total seating capacity**[28](index=28&type=chunk)[29](index=29&type=chunk) - Fare increases on **34 routes** (ranging from 2.4% to 14.3%) and a **0.7% increase in passenger volume to 60.1 million** contributed to a **2.4% revenue growth to HK$392,924,000**[30](index=30&type=chunk) - The replacement of **49 older minibuses** with new 19-seater long-wheelbase models reduced the average fleet age to **8.2 years**[31](index=31&type=chunk) [Financial Review](index=10&type=section&id=Financial%20Review) The Group reported a loss attributable to owners of HK$43,258,000, primarily due to a significant public light bus license revaluation loss - The loss attributable to owners for the year was **HK$43,258,000**, mainly due to a public light bus license revaluation loss of **HK$71,493,000**[34](index=34&type=chunk)[35](index=35&type=chunk) - Excluding the public light bus license revaluation loss, profit for the year increased by **77.6% to HK$28,235,000**[34](index=34&type=chunk)[35](index=35&type=chunk) Major Cost Changes (Year Ended March 31) | Cost Item (HK$ thousand) | 2019 | 2018 | Change (HK$ thousand) | Change (%) | | :----------------------- | :------- | :------- | :-------------------- | :--------- | | Fuel costs | 54,162 | 49,809 | +4,353 | +8.7% | | Public light bus rental expenses | 69,523 | 73,439 | -3,916 | -5.3% | | Maintenance costs | 28,008 | 31,188 | -3,180 | -10.2% | | Driver costs | 154,247 | 155,272 | -1,025 | -0.7% | - Income tax expense significantly increased by **69.8% to HK$4,914,000**, with an effective tax rate of **16.2%**[42](index=42&type=chunk) - The fair value of public light bus licenses further decreased by **27.7% to HK$3,000,000 per license**, reducing the total book value to **HK$198,000,000**[43](index=43&type=chunk) [Cash Flow](index=12&type=section&id=Cash%20Flow) Net cash generated from operating activities increased, while cash used in investing activities rose due to asset purchases Cash Flow Summary (Year Ended March 31) | Cash Flow Category (HK$ thousand) | 2019 | 2018 | | :-------------------------------- | :------- | :------- | | Net cash generated from operating activities | 35,074 | 26,846 | | Net cash used in investing activities | (13,624) | (5,489) | | Net cash used in financing activities | (26,851) | (45,198) | | Net decrease in cash and cash equivalents | (5,401) | (23,841) | | Cash and cash equivalents at year-end | 32,829 | 38,230 | - Net cash generated from operating activities increased by **HK$8,228,000 or 30.6% to HK$35,074,000**, primarily due to an increase in operating profit for the year[43](index=43&type=chunk) - Net cash used in investing activities was **HK$13,624,000**, mainly for the purchase of new public light buses (**HK$6,445,000**) and two public bus licenses (**HK$5,900,000**)[43](index=43&type=chunk) [Capital Structure, Liquidity, and Financial Resources](index=13&type=section&id=Capital%20Structure%2C%20Liquidity%2C%20and%20Financial%20Resources) The Group's liquidity deteriorated, with net current liabilities and an increased gearing ratio, necessitating refinancing efforts - Net current liabilities amounted to **HK$18,614,000** (compared to net current assets of HK$7,436,000 last year), and the current ratio decreased to **0.71 times**[45](index=45&type=chunk) - Total borrowings decreased by **6.1% to HK$149,667,000**, but the current portion significantly increased from HK$9,849,000 to **HK$29,674,000**, mainly due to the reclassification of a HK$21,605,000 loan[47](index=47&type=chunk)[48](index=48&type=chunk) - The gearing ratio increased to **145.6%** (from 101.7% last year), primarily due to a **HK$75,900,000 reduction in the book value of public light bus licenses**[48](index=48&type=chunk) Borrowings Maturity Profile (As of March 31) | Maturity Period | 2019 (HK$ thousand) | 2018 (HK$ thousand) | | :-------------- | :------------------ | :------------------ | | Within 1 year | 29,674 | 9,849 | | In the 2nd year | 12,619 | 29,735 | | In the 3rd to 5th year | 23,863 | 28,493 | | After 5 years | 83,511 | 91,367 | | **Total** | **149,667** | **159,444** | [Dividends and Dividend Policy](index=13&type=section&id=Dividends%20and%20Dividend%20Policy) The Board proposed a special dividend for the fiscal year, guided by a policy aimed at stable and sustainable shareholder returns - The Board recommended a special dividend of **8.0 HK cents per ordinary share** (2018: 5.0 HK cents), totaling **HK$21,753,000**[49](index=49&type=chunk) - The company's dividend policy considers the Group's financial performance, working capital requirements, capital expenditure, future expansion plans, liquidity, and overall economic conditions[50](index=50&type=chunk) [Pledge of Assets](index=14&type=section&id=Pledge%20of%20Assets) Certain public light bus licenses and property, plant, and equipment are pledged as security for the Group's bank facilities Pledged Assets (As of March 31) | Asset Category | 2019 (HK$ thousand) | 2018 (HK$ thousand) | | :---------------------- | :------------------ | :------------------ | | Public light bus licenses | 123,000 | 170,150 | | Property, plant and equipment | 9,744 | 5,285 | [Capital Expenditure and Commitments](index=14&type=section&id=Capital%20Expenditure%20and%20Commitments) Total capital expenditure for the year was HK$14,667,000, primarily for new vehicles and bus licenses, with future commitments for new minibuses - Total capital expenditure for the year was **HK$14,667,000**, mainly for the purchase of **9 new public light buses (HK$6,445,000)** and **2 public bus licenses with bodies (HK$6,910,000)**[55](index=55&type=chunk) - As of March 31, 2019, capital commitments amounted to **HK$12,293,000**, primarily for the purchase of new public light buses[55](index=55&type=chunk) [Risk Management](index=14&type=section&id=Risk%20Management) The Group manages various financial risks, including credit, foreign currency, interest rate, and fuel price fluctuations - The Group has **no significant credit risk**, as revenue is primarily received in cash or via Octopus Card Limited and Alipay HK[56](index=56&type=chunk) - The Group has **no significant foreign exchange risk**, as most operating activities, income, expenses, assets, and liabilities are denominated in Hong Kong dollars[57](index=57&type=chunk) - Interest rate risk primarily arises from floating-rate bank borrowings, which management considers **not significant**, with no material impact from reasonable market rate changes[58](index=58&type=chunk) - Fuel price fluctuations have a **significant impact on operations**, but the Group has not adopted a hedging policy and will continue to monitor market conditions closely[59](index=59&type=chunk) [Employees and Remuneration Policy](index=14&type=section&id=Employees%20and%20Remuneration%20Policy) Employee costs represent a major operating expense, with the Group offering competitive remuneration and training to attract and retain talent - Employee costs accounted for **53.1%** of the Group's total operating costs (excluding public light bus license revaluation loss)[61](index=61&type=chunk) - Employee benefit expenses for the year amounted to **HK$198,595,000** (2018: HK$199,853,000)[61](index=61&type=chunk) - The Group provides benefits such as double pay, discretionary bonuses, share option schemes, retirement plans, and training programs[61](index=61&type=chunk) [Environmental, Social and Governance Report](index=15&type=section&id=Environmental%2C%20Social%20and%20Governance%20Report) This report, prepared in accordance with HKEX Listing Rules, details the Group's efforts in environmental protection, operational practices, employment, and community engagement [Reporting Standards and Scope](index=15&type=section&id=Reporting%20Standards%20and%20Scope) This ESG report adheres to HKEX Listing Rules, covering the Group's primary business of public light bus transport services in Hong Kong - The report is prepared in accordance with Appendix 27 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, covering the Group's principal business of providing scheduled public light bus transport services in Hong Kong[63](index=63&type=chunk) - The report focuses on four key performance areas: environmental protection, operating practices, employment practices, and serving the community[63](index=63&type=chunk) [Environmental Protection](index=15&type=section&id=Environmental%20Protection) The Group is committed to environmental protection through fleet upgrades, increased use of LPG minibuses, waste management, and office greening initiatives - The Group's fleet comprises **240 LPG minibuses (approximately 67%)** and **118 diesel minibuses (approximately 33%)**, with average annual greenhouse gas emissions slightly reduced to **61.0 tonnes per vehicle**[63](index=63&type=chunk) - The Group plans to replace approximately **66 older diesel public light buses with new LPG minibuses** by the end of 2019, expecting further reduction in average greenhouse gas emissions next year[63](index=63&type=chunk) - Hazardous waste (spent batteries, waste oil filters, and lubricants) from the maintenance center is handled by licensed collectors, while non-hazardous waste (tires) is collected by agents for recycling[66](index=66&type=chunk) - The Group promotes "green" awareness in offices, encouraging reduced use of paper, water, and electricity, and offers electronic communication options to shareholders, successfully reducing paper consumption[67](index=67&type=chunk) Environmental Metrics Summary (Year Ended March 31) | Environmental Metric (Unit) | 2019 | 2018 | | :-------------------------- | :------- | :------- | | Total greenhouse gas emissions (tonnes) | 22,416 | 22,861 | | Average fleet size (vehicles) | 367.5 | 369.0 | | Average greenhouse gas emissions per vehicle (tonnes) | 61.0 | 62.0 | | Total diesel consumption (thousand litres) | 3,081 | 3,833 | | Total LPG consumption (thousand litres) | 8,369 | 7,466 | | Total lubricant oil used (thousand litres) | 33,125 | 35,447 | | Total spent batteries (units) | 398 | 419 | | Total tires (units) | 4,165 | 4,259 | [Operating Practices](index=17&type=section&id=Operating%20Practices) Passenger and employee safety is paramount, achieved through continuous training, vehicle maintenance, ISO certification, and robust supply chain and anti-corruption measures - The Group enhances operational safety through road safety courses, strict codes of conduct, regular checks of driving licenses and health, periodic inspection of vehicle safety equipment, and replacement of older minibuses[73](index=73&type=chunk)[75](index=75&type=chunk) - The maintenance center is **ISO 9001:2015 quality management system certified**, and the average accident rate decreased to **2.7 cases per million km**[75](index=75&type=chunk)[78](index=78&type=chunk) - The Group engages **63 Hong Kong suppliers** and implements procurement guidelines to ensure product and service quality, timely delivery, and environmental compliance[76](index=76&type=chunk) - The Group has a code of conduct and whistleblowing policy to prevent corruption and protects passenger data and privacy through CCTV systems management[78](index=78&type=chunk) [Employment Practices](index=19&type=section&id=Employment%20Practices) As of March 31, 2019, the Group had 1,300 employees, adhering to fair recruitment, diversity, competitive remuneration, and continuous training - As of March 31, 2019, the Group had **1,300 employees**, adhering to open and fair recruitment principles and adopting a board diversity policy[80](index=80&type=chunk) - The remuneration policy is competitive, including basic salary, double pay, bonuses, annual leave, and allowances, and is reviewed annually[80](index=80&type=chunk) - The Group encourages employees to participate in internal or external training courses covering director responsibilities, legal regulations, occupational safety, driving behavior, and anti-corruption[80](index=80&type=chunk) Human Resources Metrics Summary (Year Ended March 31) | Human Resources Metric | 2019 | 2018 | | :--------------------- | :----- | :----- | | Number of employees at year-end | 1,300 | 1,275 | | Male (%) | 95.2 | 95.1 | | Female (%) | 4.8 | 4.9 | | Under 30 years old (%) | 1.5 | 2.0 | | 30-39 years old (%) | 8.6 | 9.7 | | 40-49 years old (%) | 13.2 | 14.4 | | 50-59 years old (%) | 27.9 | 29.8 | | Over 60 years old (%) | 48.8 | 44.1 | | Employee turnover rate (%) | 21.9 | 28.1 | | Employee training hours | 842 | 1,072 | [Community Engagement](index=20&type=section&id=Community%20Engagement) The Group actively fulfills its corporate social responsibility through community sponsorships, fare concessions, and accessible transport services - The Group actively sponsors various community activities and encourages employee volunteer service, with total donations and sponsorships amounting to **HK$1,158,000** for the year[85](index=85&type=chunk)[86](index=86&type=chunk) - The Group expanded the coverage of its green minibus interchange scheme, offering fare concessions, and participates in government public transport fare concession schemes for the elderly and disabled[85](index=85&type=chunk) - In January 2018, the Group launched Hong Kong's first new low-floor minibus accessible to wheelchair users[85](index=85&type=chunk) [Corporate Governance Report](index=21&type=section&id=Corporate%20Governance%20Report) This report outlines the Group's compliance with the HKEX Corporate Governance Code, ensuring effective risk management, internal control, accountability, and transparency [Board of Directors](index=21&type=section&id=Board%20of%20Directors) The Board comprises executive, non-executive, and independent non-executive directors, responsible for strategy, oversight, and maintaining a balanced composition - The Board of Directors comprises **four executive directors, one non-executive director, and three independent non-executive directors**, with Mr. Wong Ling Sun as Chairman[91](index=91&type=chunk) - The Board is responsible for setting the Group's overall objectives and strategies, overseeing operations and financial performance, and has established an Executive Committee, Remuneration Committee, Audit Committee, and Nomination Committee[91](index=91&type=chunk) - All independent non-executive directors have confirmed their independence, and the Board considers them to be independent[94](index=94&type=chunk) - The Board regularly reviews its composition to ensure a balance of professional knowledge, skills, experience, and diverse perspectives, and encourages directors to participate in continuous professional development[95](index=95&type=chunk) - **Four regular Board meetings** were held during the fiscal year to review and approve interim and annual results, financial statements, and risk management reports[97](index=97&type=chunk) [Chairman and Chief Executive Officer](index=25&type=section&id=Chairman%20and%20Chief%20Executive%20Officer) The roles of Chairman and Chief Executive Officer are segregated to ensure a balance of power and authority within the Group - The functions of the Chairman and Chief Executive Officer are segregated, with Chairman Mr. Wong Ling Sun responsible for chairing Board meetings, ensuring sufficient information, and good corporate governance[103](index=103&type=chunk)[104](index=104&type=chunk) - Chief Executive Officer Mr. Chan Man Chun is responsible for the Group's operations and management, implementing corporate strategies, leading the senior management team, and providing industry expertise to support the Board[104](index=104&type=chunk) [Board Committees](index=25&type=section&id=Board%20Committees) The Board has established Executive, Remuneration, Audit, and Nomination Committees, each with clear terms of reference, reporting to the Board [Executive Committee](index=25&type=section&id=Executive%20Committee) The Executive Committee, chaired by the Chairman, oversees the Group's strategic direction, operational execution, and risk management - The Executive Committee is chaired by the Chairman, with the other four executive directors as members, and meets monthly[104](index=104&type=chunk) - Its main responsibilities include formulating strategic direction, monitoring strategy execution, daily operations and senior management performance, and establishing risk management and internal control systems[104](index=104&type=chunk) [Remuneration Committee](index=26&type=section&id=Remuneration%20Committee) The Remuneration Committee, chaired by an independent non-executive director, recommends and reviews remuneration policies for directors and senior management - The Remuneration Committee is chaired by Independent Non-executive Director Dr. Lee Peng Fee and is responsible for recommending remuneration policies and structures for directors and senior management[108](index=108&type=chunk) - The Committee ensures that remuneration packages are fair and competitive, considering comparable company remuneration, job responsibilities, market conditions, and performance[110](index=110&type=chunk) - During the fiscal year, the Committee reviewed the remuneration policies and structures for non-executive and independent non-executive directors, as well as the remuneration packages for executive directors and senior management[108](index=108&type=chunk) [Audit Committee](index=27&type=section&id=Audit%20Committee) The Audit Committee, composed of independent non-executive directors, oversees financial reporting, internal controls, risk management, and auditor functions - The Audit Committee comprises three independent non-executive directors, with Mr. Kwong Ki Chi as Chairman, and is responsible for reviewing the integrity, accuracy, and fairness of financial statements[110](index=110&type=chunk) - The Committee annually reviews the adequacy and effectiveness of internal control and risk management systems and oversees the work of internal and external auditors[110](index=110&type=chunk)[112](index=112&type=chunk) - The Committee has established a whistleblowing mechanism for employees to raise concerns about potential misconduct[112](index=112&type=chunk) [Nomination Committee](index=28&type=section&id=Nomination%20Committee) The Nomination Committee, chaired by an independent non-executive director, reviews board structure, identifies candidates, assesses independence, and implements the diversity policy - The Nomination Committee is chaired by Independent Non-executive Director Dr. Chan Yuen Tak Fai and is responsible for regularly reviewing the Board's structure, size, and composition[113](index=113&type=chunk) - The Committee identifies qualified director candidates, assesses the independence of independent non-executive directors, and provides recommendations on director appointments, re-election, and succession planning[113](index=113&type=chunk) - The nomination policy considers factors such as candidates' skills, knowledge, experience, diversity (gender, age, education, professional background), character, integrity, and time commitment[116](index=116&type=chunk) - The Board Diversity Policy aims to enhance efficiency and performance quality, ensuring the Board comprises members with diverse talents, skills, geographical, and industry experience[117](index=117&type=chunk)[118](index=118&type=chunk) [Delegation to Management](index=30&type=section&id=Delegation%20to%20Management) The Board delegates daily management and administrative functions to the Executive Committee and senior management team - The Board delegates daily management and administrative functions to the Executive Committee and senior management team[121](index=121&type=chunk) - The senior management team is responsible for executing daily business operations and assisting the Executive Committee in implementing approved strategic plans, policies, and objectives[121](index=121&type=chunk) [Company Secretary](index=30&type=section&id=Company%20Secretary) The Company Secretary reports to the Chairman on governance matters and plays a crucial role in supporting the Board and facilitating communication - The Company Secretary reports to the Chairman on Board governance matters and plays an important role in supporting the Board, ensuring information flow, and facilitating communication between directors and shareholders/management[121](index=121&type=chunk) - During the fiscal year, the Company Secretary completed over **15 hours of relevant professional training**[121](index=121&type=chunk) [External Auditor](index=30&type=section&id=External%20Auditor) The external auditor's primary responsibility is to audit and report on the annual financial statements - The external auditor's primary responsibility is to audit and report on the annual financial statements[121](index=121&type=chunk) - For the fiscal year ended March 31, 2019, total remuneration paid to the external auditor was **HK$626,000**, comprising **HK$543,000 for audit fees** and **HK$83,000 for interim review services**[121](index=121&type=chunk) [Directors' and External Auditor's Responsibilities for Financial Statements](index=30&type=section&id=Directors%27%20and%20External%20Auditor%27s%20Responsibilities%20for%20Financial%20Statements) Directors are responsible for preparing financial statements that fairly reflect the company's financial position, performance, and cash flows - Directors are responsible for preparing financial statements that give a true and fair view of the financial position, performance, and cash flows of the Company and the Group[121](index=121&type=chunk) - The Board members have made reasonable judgments and estimates and adopted applicable accounting policies in preparing the financial statements[121](index=121&type=chunk) [Risk Management, Internal Control, and Internal Audit](index=31&type=section&id=Risk%20Management%2C%20Internal%20Control%2C%20and%20Internal%20Audit) The Board oversees the Group's risk management and internal control systems, with an outsourced internal audit function reporting to the Audit Committee - The Board is collectively responsible for overseeing the risk management and internal control systems and annually reviews their effectiveness, confirming them to be effective and adequate[123](index=123&type=chunk) - The Group has established a comprehensive risk management framework, clearly defining the responsibilities of the Board, management, Group departmental heads, and internal auditors[124](index=124&type=chunk) - The internal control system includes a clear management structure, code of conduct, internal policies, and stringent procedures for financial and business activities[130](index=130&type=chunk) - The Group outsources its internal audit function to accounting professionals; the internal auditor is independent of the Group, conducts annual internal audits, and reports directly to the Audit Committee[134](index=134&type=chunk) - The internal auditor assesses the effectiveness of risk management and internal control systems based on the COSO framework, covering control environment, risk assessment, control activities, information and communication, and monitoring[135](index=135&type=chunk) [Securities Dealing](index=34&type=section&id=Securities%20Dealing) The company has adopted a securities dealing code for directors and relevant employees, including blackout periods before results announcements - The Company has adopted a Securities Dealing Code, whose terms are no less exacting than the Model Code set out in Appendix 10 of the Listing Rules, applicable to directors and relevant employees[141](index=141&type=chunk) - Directors and relevant employees are prohibited from dealing in the Company's securities during the **30-day period** immediately preceding the publication date of interim results and the **60-day period** immediately preceding the publication date of annual results[141](index=141&type=chunk) - All directors confirmed compliance with the Securities Dealing Code and the Model Code throughout the review fiscal year[140](index=140&type=chunk) [Shareholder Communication Policy](index=34&type=section&id=Shareholder%20Communication%20Policy) The company is committed to enhancing investor relations and communication, ensuring timely and equal dissemination of company information - The Company has established a shareholder communication policy to ensure that identical and timely company information is provided to shareholders and potential shareholders, avoiding selective disclosure[141](index=141&type=chunk) - The Company maintains close communication with investors through annual reports, interim reports, its website, interviews, and meetings, and encourages shareholders to attend general meetings for direct interaction with the Board or senior management[141](index=141&type=chunk) [Shareholders' Right to Convene General Meetings](index=35&type=section&id=Shareholders%27%20Right%20to%20Convene%20General%20Meetings) Eligible shareholders holding at least one-tenth of the paid-up share capital can requisition an extraordinary general meeting at any time - Eligible shareholders holding not less than **one-tenth of the paid-up share capital** may at any time requisition the Board or the Company Secretary to convene an extraordinary general meeting to address specified matters[143](index=143&type=chunk) - The requisition must clearly state the shareholders' names, shareholdings, reasons for convening, and proposed agenda, and be signed by all relevant eligible shareholders[143](index=143&type=chunk) - If the Board fails to convene the meeting within **21 days**, the eligible shareholders may convene it themselves, with reasonable expenses reimbursed by the Company[143](index=143&type=chunk) [Profiles of Directors and Senior Management](index=36&type=section&id=Profiles%20of%20Directors%20and%20Senior%20Management) This section provides detailed biographies of the Group's executive, non-executive, independent non-executive directors, and senior management - Executive Directors include Mr. Wong Ling Sun (Chairman), Ms. Ng Shui Chun (Finance Director), Mr. Chan Man Chun (Chief Executive Officer), and Ms. Wong Wai Sum (Deputy Director of Human Resources and Finance)[147](index=147&type=chunk) - The Non-executive Director is Ms. Wong Wai Man, and Independent Non-executive Directors are Dr. Lee Peng Fee, Dr. Chan Yuen Tak Fai, and Mr. Kwong Ki Chi[149](index=149&type=chunk) - Senior management includes Mr. Wong Man Chiu (Engineering Manager), Ms. Wong Ka Yan (Financial Controller and Company Secretary), and Mr. Wong Yu Fung (Operations Manager)[152](index=152&type=chunk)[153](index=153&type=chunk) - Many directors and senior management possess extensive experience and professional qualifications in transportation, finance, accounting, and management[147](index=147&type=chunk)[149](index=149&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk) [Directors' Report](index=39&type=section&id=Directors%27%20Report) The Directors' Report presents the audited financial statements for the year ended March 31, 2019, outlining the Group's principal business, results, and proposed dividend - The Group's principal business is providing scheduled public light bus passenger services in Hong Kong[155](index=155&type=chunk) - The Directors recommended a special dividend of **8.0 HK cents per ordinary share** for the current year[156](index=156&type=chunk) - Total charitable donations for the fiscal year amounted to **HK$156,000** (2018: HK$85,000)[157](index=157&type=chunk) - Executive Directors Mr. Wong Ling Sun, Mr. Chan Man Chun, and Ms. Wong Wai Sum, and Independent Non-executive Director Dr. Chan Yuen Tak Fai, will retire at the upcoming Annual General Meeting and are eligible for re-election[161](index=161&type=chunk) - For the year ended March 31, 2019, the Wong family (Mr. Wong Ling Sun, Ms. Ng Shui Chun, Ms. Wong Wai Sum, and Ms. Wong Wai Man) had indirect interests in minibus lease agreements, constituting continuing connected transactions[167](index=167&type=chunk) - As of March 31, 2019, directors held interests in the Company's shares and related shares, with Mr. Wong Ling Sun, Ms. Ng Shui Chun, Ms. Wong Wai Sum, and Ms. Wong Wai Man holding substantial shares through discretionary trusts[168](index=168&type=chunk) - For the Group's major suppliers, the largest supplier accounted for **7.4%** of purchases, and the top five suppliers collectively accounted for **29.7%**, with members of the Wong family being directors and beneficial owners of the top three suppliers[196](index=196&type=chunk) - In continuing connected transactions, public light bus rental paid to related companies was **HK$65,619,000**, and administrative fee income from related companies was **HK$2,327,000**[199](index=199&type=chunk) - Major shareholders include HSBC International Trustee, JETSUN, Metro Success, and Skyblue, with HSBC International Trustee holding **48.94%** of the Company's shares through a discretionary trust[203](index=203&type=chunk) - The Company maintained sufficient public float as required by the Listing Rules as of the date of this annual report[210](index=210&type=chunk) [Independent Auditor's Report](index=49&type=section&id=Independent%20Auditor%27s%20Report) Grant Thornton Hong Kong Limited issued an unqualified opinion on the consolidated financial statements, highlighting key audit matters regarding public light bus license valuation and goodwill impairment - The auditor issued an **unqualified opinion** on the consolidated financial statements, deeming them to give a true and fair view of the Group's financial position, performance, and cash flows[215](index=215&type=chunk) - Key audit matters include the **valuation of public light bus licenses** (involving significant judgment and estimates) and the **assessment of goodwill impairment** (involving significant management judgment and estimates)[216](index=216&type=chunk)[221](index=221&type=chunk)[236](index=236&type=chunk) - The auditor assessed the competence and independence of the external valuer and examined the valuation methodology and accuracy of input data[222](index=222&type=chunk) - The auditor evaluated the reasonableness of the valuation methodology and key assumptions used in management's goodwill impairment assessment and examined the basis of cash flow forecasts[237](index=237&type=chunk) [Consolidated Financial Statements](index=53&type=section&id=Consolidated%20Financial%20Statements) This section presents the Group's consolidated financial statements for the year ended March 31, 2019, including the income statement, balance sheet, cash flow statement, and detailed notes [Consolidated Income Statement](index=53&type=section&id=Consolidated%20Income%20Statement) For the year ended March 31, 2019, the Group reported revenue of HK$392,924,000 and a net loss of HK$43,258,000, primarily due to public light bus license revaluation loss Consolidated Income Statement Summary (Year Ended March 31) | Metric (HK$ thousand) | 2019 | 2018 | | :------------------------------ | :------- | :------- | | Revenue | 392,924 | 383,797 | | Direct costs | (324,526)| (327,907)| | Gross profit | 68,398 | 55,890 | | Other income | 8,454 | 7,489 | | Other net income/(expenses) | 141 | (143) | | Administrative expenses | (40,065) | (39,675) | | Other operating expenses | (1,048) | (1,615) | | Operating profit | 35,880 | 21,946 | | Public light bus license revaluation loss | (71,493) | (45,200) | | Finance costs | (3,478) | (3,155) | | Share of profit of a joint venture | 747 | – | | Loss before income tax | (38,344) | (26,409) | | Income tax expense | (4,914) | (2,894) | | Loss for the year | (43,258) | (29,303) | | Basic loss per share (HK cents) | (15.91) | (10.79) | [Consolidated Statement of Comprehensive Income](index=54&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) For the year ended March 31, 2019, the Group's loss for the year was HK$43,258,000, with total comprehensive expense of HK$47,665,000 after other comprehensive expenses Consolidated Statement of Comprehensive Income Summary (Year Ended March 31) | Metric (HK$ thousand) | 2019 | 2018 | | :------------------------------ | :------- | :------- | | Loss for the year | (43,258) | (29,303) | | Other comprehensive expenses: Public light bus license revaluation loss | (4,407) | (17,500) | | Total comprehensive expense for the year | (47,665) | (46,803) | [Consolidated Statement of Financial Position](index=55&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of March 31, 2019, the Group's total assets less current liabilities were HK$250,184,000, with net assets of HK$128,120,000 Consolidated Statement of Financial Position Summary (As of March 31) | Metric (HK$ thousand) | 2019 | 2018 | | :------------------------------ | :------- | :------- | | Property, plant and equipment | 30,946 | 25,432 | | Public light bus licenses | 198,000 | 273,900 | | Public bus licenses | 15,184 | 9,284 | | Goodwill | 22,918 | 22,918 | | Total non-current assets | 268,798 | 332,720 | | Total current assets | 45,910 | 49,348 | | Total current liabilities | 64,524 | 41,912 | | Net current (liabilities)/assets | (18,614) | 7,436 | | Total assets less current liabilities | 250,184 | 340,156 | | Total non-current liabilities | 122,064 | 150,775 | | Net assets | 128,120 | 189,381 | | Total equity attributable to owners of the Company | 128,120 | 189,381 | [Consolidated Statement of Changes in Equity](index=56&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) For the year ended March 31, 2019, the Group's total equity decreased from HK$189,381,000 to HK$128,120,000, primarily due to the loss for the year and revaluation losses Consolidated Statement of Changes in Equity Summary (Year Ended March 31) | Equity Item (HK$ thousand) | March 31, 2019 | April 1, 2018 | | :------------------------------ | :------------- | :------------ | | Share capital | 27,191 | 27,191 | | Share premium | 74,612 | 74,612 | | Public light bus license revaluation reserve | 400 | 4,807 | | Share option reserve | 1,666 | 1,666 | | Capital reserve | 19,296 | 19,296 | | Retained profits | 4,955 | 61,809 | | **Total Equity** | **128,120** | **189,381** | | Loss for the year | (43,258) | (29,303) | | Public light bus license revaluation loss | (4,407) | (17,500) | | 2018 Special dividend | (13,596) | – | [Consolidated Statement of Cash Flows](index=57&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) For the year ended March 31, 2019, the Group generated HK$35,074,000 from operating activities, with a net decrease in cash and cash equivalents of HK$5,401,000 Consolidated Statement of Cash Flows Summary (Year Ended March 31) | Cash Flow Category (HK$ thousand) | 2019 | 2018 | | :-------------------------------- | :------- | :------- | | Net cash generated from operating activities | 35,074 | 26,846 | | Net cash used in investing activities | (13,624) | (5,489) | | Net cash used in financing activities | (26,851) | (45,198) | | Net decrease in cash and cash equivalents | (5,401) | (23,841) | | Cash and cash equivalents at beginning of year | 38,230 | 62,071 | | Cash and cash equivalents at end of year | 32,829 | 38,230 | [Notes to the Consolidated Financial Statements](index=58&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of accounting policies, new standards, key estimates, segment information, revenue, and financial risk management [Summary of Principal Accounting Policies](index=58&type=section&id=Summary%20of%20Principal%20Accounting%20Policies) This section outlines the Group's key accounting policies, including the basis of preparation, consolidation, asset valuation, and revenue recognition, with a going concern assessment - The consolidated financial statements are prepared on a historical cost basis, except for public light bus licenses which are stated at fair value[280](index=280&type=chunk) - Despite net current liabilities of **HK$18,614,000**, the directors, based on operating profit, potential renewal of bank facilities, and cash flow forecasts, believe the Group can continue as a going concern[280](index=280&type=chunk) - Public light bus licenses are stated at open market value less accumulated impairment losses and are considered to have an indefinite useful life[300](index=300&type=chunk) - Goodwill is stated at cost less accumulated impairment losses and is tested for impairment annually[307](index=307&type=chunk) - Revenue primarily derives from providing scheduled public light bus and resident bus passenger services, recognized when services are rendered[344](index=344&type=chunk)[349](index=349&type=chunk) [Adoption of New and Revised HKFRSs](index=72&type=section&id=Adoption%20of%20New%20and%20Revised%20HKFRSs) The Group adopted HKFRS 9 and 15 with no significant impact, while HKFRS 16 on leases is expected to significantly affect accounting for public minibuses - The Group first applied HKFRS 9 "Financial Instruments" and HKFRS 15 "Revenue from Contracts with Customers," with no significant impact on the results and financial position for the current and prior periods[380](index=380&type=chunk)[387](index=387&type=chunk) - HKFRS 9 introduced an expected credit loss model, but no significant expected credit losses were recognized as the total expected credit loss was not material[382](index=382&type=chunk)[383](index=383&type=chunk) - HKFRS 16 "Leases," effective January 1, 2019, is expected to primarily impact the Group's accounting for public light buses as a lessee, leading to an increase in assets and liabilities and affecting the timing of expense recognition in the consolidated income statement[391](index=391&type=chunk) - Upon initial adoption of HKFRS 16, the opening balances of lease liabilities and corresponding right-of-use assets are expected to be adjusted to **HK$94,633,000**[392](index=392&type=chunk) [Critical Accounting Estimates and Judgements](index=75&type=section&id=Critical%20Accounting%20Estimates%20and%20Judgements) This section highlights key accounting estimates and judgments, including goodwill impairment, public light bus license fair value, and impairment of receivables - Goodwill impairment assessment (net book value of **HK$22,918,000**) involves value-in-use calculations requiring estimates and assumptions, which may lead to significant future adjustments[396](index=396&type=chunk) - The estimated fair value of public light bus licenses (**HK$198,000,000**) is assessed by an independent valuer, assuming no change in government policy and a continuous open market[397](index=397&type=chunk) - The estimated impairment of public bus licenses (net book value of **HK$15,184,000**) is based on value-in-use calculations, involving estimates of future cash flows[398](index=398&type=chunk) - Impairment estimates for trade and other receivables (under HKFRS 9's expected credit loss model) are based on assumptions regarding default risk and expected loss rates[398](index=398&type=chunk) [Segment Information](index=75&type=section&id=Segment%20Information) The Group's scheduled public light bus and resident bus services are considered a single operating segment, with all revenue and non-current assets derived from Hong Kong - The Group's scheduled public light bus and resident bus services are considered the **sole operating segment**[399](index=399&type=chunk) - All revenue and non-current assets are derived from and located in Hong Kong, with **no single customer accounting for more than 10% of the Group's revenue**[400](index=400&type=chunk)[401](index=401&type=chunk) [Revenue and Other Income](index=76&type=section&id=Revenue%20and%20Other%20Income) Group revenue primarily comes from public light bus and resident bus services in Hong Kong, with other income including government grants - Group revenue primarily derives from scheduled public light bus and resident bus services in Hong Kong, with all service income recognized when services are rendered[404](index=404&type=chunk)[405](index=405&type=chunk) Other Income and Other Net Income/(Expenses) Summary (HK$ thousand) | Item | 2019 | 2018 | | :------------------------------ | :------- | :------- | | Advertising income | 3,978 | 3,978 | | Administrative fee income | 2,468 | 2,495 | | Government grants | 1,548 | 604 | | Interest income | 246 | 159 | | Management fee income | 198 | 238 | | Maintenance service income | 16 | 15 | | **Total Other Income** | **8,454**| **7,489**| | Loss on disposal of property, plant and equipment | (16) | (197) | | Miscellaneous income | 157 | 54 | | **Total Other Net Income/(Expenses)** | **141** | **(143)**| - Government grants primarily relate to the special grant scheme for the disposal of pre-Euro IV diesel commercial vehicles, amounting to **HK$1,548,000** for the fiscal year[406](index=406&type=chunk) [Finance Costs and Income Tax Expense](index=76&type=section&id=Finance%20Costs%20and%20Income%20Tax%20Expense) Bank loan interest expense increased, and income tax expense rose significantly due to higher Hong Kong profits tax and non-deductible revaluation losses - Bank loan interest expense was **HK$3,478,000**, an increase of **10.2%** year-on-year[407](index=407&type=chunk) - Income tax expense significantly increased by **69.8% to HK$4,914,000**, mainly due to higher Hong Kong profits tax for the current period and a reduction in over-provision from prior years[409](index=409&type=chunk) - Hong Kong profits tax operates under a two-tiered system, with the first **HK$2,000,000 of assessable profits taxed at 8.25%** and the remainder at **16.5%**[410](index=410&type=chunk) - The tax effect of non-deductible expenses, such as public light bus license revaluation loss, was a major reconciling item between income tax expense and accounting loss, amounting to **HK$11,858,000** for the fiscal year[412](index=412&type=chunk) [Dividends and Loss Per Share](index=78&type=section&id=Dividends%20and%20Loss%20Per%20Share) The Board proposed a special dividend of 8.0 HK cents per ordinary share, with basic and diluted loss per share of 15.91 HK cents - A special dividend of **8.0 HK cents per ordinary share**, totaling **HK$21,753,000**, is proposed[415](index=415&type=chunk) - Basic loss per share for the year was **15.91 HK cents**, and diluted loss per share was the same as basic loss per share due to the anti-dilutive effect of share options[417](index=417&type=chunk) [Employee Benefit Expense and Highest Paid Individuals](index=78&type=section&id=Employee%20Benefit%20Expense%20and%20Highest%20Paid%20Individuals) Employee benefit expenses totaled HK$198,595,000, with details on directors' emoluments and remuneration of the highest-paid individuals Employee Benefit Expense (HK$ thousand) | Item | 2019 | 2018 | | :------------------------------ | :------- | :------- | | Salaries and allowances | 192,177 | 193,161 | | Contributions to defined contribution plans | 6,418 | 6,692 | | **Total** | **198,595**| **199,853**| Total Directors' Emoluments (HK$ thousand) | Item | 2019 | 2018 | | :------------------------------ | :------- | :------- | | Fees | 4,296 | 4,093 | | Salaries, allowances, and benefits | 4,158 | 4,276 | | Discretionary bonuses | 300 | 300 | | Contributions to retirement benefit schemes | 72 | 72 | | **Total** | **8,826** | **8,741** | - Among the Group's five highest-paid individuals, three were directors, and the remaining two (one of whom is a senior management member) had total emoluments of **HK$2,349,000**[426](index=426&type=chunk) [Property, Plant and Equipment](index=81&type=section&id=Property%2C%20Plant%20and%20Equipment) As of March 31, 2019, the net book value of property, plant, and equipment increased, with additions primarily for public light buses and buses, and some assets pledged as collateral Property, Plant and Equipment Net Book Value (HK$ thousand) | Category | March 31, 2019 | March 31, 2018 | | :------------------------------ | :------------- | :------------- | | Land and buildings | 9,535 | 10,025 | | Leasehold improvements | 907 | 878 | | Furniture, fixtures and equipment | 1,071 | 1,256 | | Public light buses and public buses | 17,098 | 11,258 | | Motor vehicles | 2,335 | 2,015 | | **Total** | **30,946** | **25,432** | - Additions to property, plant, and equipment during the year amounted to **HK$8,767,000**, primarily for public light buses and public buses[429](index=429&type=chunk) - Property, plant, and equipment with a net book value of **HK$9,744,000** were pledged as collateral for bank facilities[429](index=429&type=chunk) [Public Light Bus Licenses](index=82&type=section&id=Public%20Light%20Bus%20Licenses) As of March 31, 2019, the book value of public light bus licenses significantly decreased due to revaluation losses, with some licenses pledged as collateral Public Light Bus License Changes (HK$ thousand) | Item | 2019 | 2018 | | :------------------------------ | :------- | :------- | | At beginning of year | 273,900 | 336,600 | | Revaluation loss charged to consolidated income statement | (71,493) | (45,200) | | Revaluation loss dealt with in revaluation reserve | (4,407) | (17,500) | | **At end of year** | **198,000**| **273,900**| - Public light bus licenses are considered to have an indefinite useful life and are revalued by an independent valuer on an open market basis[432](index=432&type=chunk)[437](index=437&type=chunk) - Public light bus licenses with a total book value of **HK$123,000,000** were pledged as collateral for bank facilities[433](index=433&type=chunk) [Public Bus Licenses](index=83&type=section&id=Public%20Bus%20Licenses) As of March 31, 2019, the net book value of public bus licenses increased due to additions, with their recoverable amount based on value-in-use calculations Public Bus License Changes (HK$ thousand) | Item | 2019 | 2018 | | :------------------------------ | :------- | :------- | | Net book value at beginning of year | 9,284 | 9,284 | | Additions | 5,900 | – | | **Net book value at end of year** | **15,184** | **9,284** | - Public bus licenses are considered to have an indefinite useful life and are stated at cost less accumulated impairment losses[439](index=439&type=chunk) - The recoverable amount is calculated based on value-in-use, using a **five-year financial budget**, an estimated **growth rate of 2.0%**, and a **pre-tax discount rate of 8.4%**[440](index=440&type=chunk) [Interests in Subsidiaries and Joint Ventures](index=84&type=section&id=Interests%20in%20Subsidiaries%20and%20Joint%20Ventures) The Group holds 100% interests in subsidiaries providing transport and maintenance services, and a 50% interest in a joint venture for outdoor advertising - The Group holds **100% interests in several subsidiaries**, primarily providing scheduled public light bus transport services, public light bus leasing, and maintenance services in Hong Kong[443](index=443&type=chunk)[445](index=445&type=chunk) - The Group holds a **50% interest in the joint venture Starlink Media (Group) Limited**, which primarily provides outdoor advertising services[447](index=447&type=chunk) - As of March 31, 2019, the Group's investment in Starlink had a book value of **HK$747,000**, and receivables from the joint venture amounted to **HK$1,500,000**[445](index=445&type=chunk) [Goodwill](index=86&type=section&id=Goodwill) As of March 31, 2019, goodwill had a net book value of HK$22,918,000, allocated to four cash-generating units and tested annually for impairment Goodwill Net Book Value (HK$ thousand) | Item | 2019 | 2018 | | :------------------------------ | :------- | :------- | | Net book value at beginning of year | 22,918 | 22,918 | | **Net book value at end of year** | **22,918** | **22,918** | - Goodwill has a net book value of **HK$22,918,000** and is allocated to **four cash-generating units** for scheduled public light bus services[454](index=454&type=chunk)[455](index=455&type=chunk) - The recoverable amount is calculated based on value-in-use, using a **five-year financial budget**, an estimated **growth rate of 2.0%**, and a **pre-tax discount rate of 10.6%**[454](index=454&type=chunk) [Trade and Other Receivables](index=87&type=section&id=Trade%20and%20Other%20Receivables) As of March 31, 2019, total trade and other receivables amounted to HK$11,209,000, with low expected credit loss under HKFRS 9 Trade and Other Receivables Summary (HK$ thousand) | Item | 2019 | 2018 | | :------------------------------ | :------- | :------- | | Trade receivables – net | 3,795 | 3,039 | | Other receivables – net | 2,662 | 2,260 | | Deposits | 1,038 | 617 | | Prepayments | 3,714 | 3,512 | | **Total** | **11,209** | **9,428** | - Trade receivables primarily arise from scheduled public light bus service income, with credit terms generally ranging from **0 to 30 days**[460](index=460&type=chunk) - Based on the expected credit loss assessment under HKFRS 9, the provision for expected credit losses on trade receivables is **very low**[520](index=520&type=chunk) [Bank Balances and Cash](index=88&type=section&id=Bank%20Balances%20and%20Cash) As of March 31, 2019, total bank balances and cash were HK$32,829,000, including short-term deposits, with negligible credit risk Bank Balances and Cash Summary (HK$ thousand) | Item | 2019 | 2018 | | :------------------------------ | :------- | :------- | | Bank and cash in hand | 22,829 | 22,230 | | Short-term bank deposits | 10,000 | 16,000 | | **Total** | **32,829** | **38,230** | - Short-term bank deposits bear an annual interest rate of **1.70%** and mature in **29 days**[461](index=461&type=chunk) - The credit risk of bank balances and short-term bank deposits is considered **negligible**[523](index=523&type=chunk) [Borrowings and Bank Facilities](index=88&type=section&id=Borrowings%20and%20Bank%20Facilities) As of March 31, 2019, total borrowings were HK$149,667,000, primarily floating-rate, secured by Group assets and company guarantees Borrowings Summary (HK$ thousand) | Item | 2019 | 2018 | | :------------------------------ | :------- | :------- | | Current secured bank loans | 29,674 | 9,849 | | Non-current secured bank loans | 119,993 | 149,595 | | **Total Borrowings** | **149,667**| **159,444**| - Borrowings primarily bear interest at floating rates, ranging from **2.01% to 2.38% per annum**[465](index=465&type=chunk) - The Group's total bank facilities amounted to **HK$158,967,000**, of which **HK$149,667,000** was utilized[468](index=468&type=chunk) - These facilities are secured by certain of the Group's property, plant and equipment (net book value of **HK$9,744,000**), public light bus licenses (book value of **HK$123,000,000**), and a company guarantee (**HK$228,030,000**)[468](index=468&type=chunk) [Trade and Other Payables](index=89&type=section&id=Trade%20and%20Other%20Payables) As of March 31, 2019, total trade and other payables were HK$32,916,000, with trade payables of HK$4,604,000 and typical credit terms of 0 to 30 days Trade and Other Payables Summary (HK$ thousand) | Item | 2019 | 2018 | | :------------------------------ | :------- | :------- | | Trade payables | 4,604 | 4,968 | | Other payables and accrued expenses | 28,312 | 26,938 | | **Total** | **32,916** | **31,906** | - The Group is granted credit terms of **0 to 30 days** by its suppliers[467](index=467&type=chunk) [Share Capital and Share Option Scheme](index=90&type=section&id=Share%20Capital%20and%20Share%20Option%20Scheme) As of March 31, 2019, the Company's issued share capital was HK$27,191,000, with details of the 2013 share option scheme and outstanding options Share Capital Summary (Thousand shares/HK$ thousand) | Item | 2019 | 2018 | | :------------------------------ | :--------- | :--------- | | Authorized ordinary shares (HK$0.10 par value per share) | 1,000,000 | 100,000 | | Issued and fully paid ordinary shares (HK$0.10 par value per share) | 271,913 | 27,191 | - The Group has a 2013 Share Option Scheme designed to reward eligible participants who have contributed to the Group[472](index=472&type=chunk) Outstanding Share Options Summary | Item | Number of Share Options 2019 | Weighted Average Exercise Price 2019 (HK$) | | :------------------------------ | :--------------------------- | :----------------------------------------- | | Outstanding at year-end | 7,497,000 | 1.48 | | Exercisable at year-end | 7,497,000 | 1.48 | - The weighted average remaining contractual life of share options outstanding at the reporting date was **3.9 years**[475](index=475&type=chunk) [Company's Statement of Financial Position and Statement of Changes in Equity](index=91&type=section&id=Company%27s%20Statement%20of%20Financial%20Position%20and%20Statement%20of%20Changes%20in%20Equity) As of March 31, 2019, the Company's net assets were HK$277,788,000, with distributable reserves of HK$248,931,000, and corporate guarantees for subsidiary bank facilities Company's Statement of Financial Position Summary (HK$ thousand) | Item | 2019 | 2018 | | :------------------------------ | :------- | :------- | | Interests in subsidiaries | 99,322 | 99,322 | | Amounts due from subsidiaries | 259,807 | 258,174 | | Bank balances and cash | 119 | 352 | | Net current assets | 178,466 | 191,966 | | **Net Assets** | **277,788**| **291,288**| - The Company's distributable reserves as of March 31, 2019, amounted to **HK$248,931,000**[484](index=484&type=chunk) - The Company has executed corporate guarantees of **HK$228,030,000** for bank facilities granted to its subsidiaries, with no provision made due to immaterial fair value and low probability of default[485](index=485&type=chunk) [Deferred Taxation](index=92&type=section&id=Deferred%20Taxation) As of March 31, 2019, net deferred tax was HK$1,068,000, primarily from accelerated depreciation allowances and tax losses Deferred Taxation Changes (HK$ thousand) | Item | 2019 | 2018 | | :------------------------------ | :------- | :------- | | At beginning of year | (6) | (448) | | Charged to consolidated income statement | 1,074 | 442 | | **At end of year** | **1,068** | **(6)** | Deferred Taxation Assets/Liabilities Composition (HK$ thousand) | Item | 2019 | 2018 | | :------------------------------ | :------- | :------- | | Deferred tax assets | (1,003) | (1,186) | | Deferred tax liabilities | 2,071 | 1,180 | | **Total** | **1,068** | **(6)** | [Operating Lease Commitments and Capital Commitments](index=93&type=section&id=Operating%20Lease%20Commitments%20and%20Capital%20Commitments) The Group has operating lease commitments as a lessee and lessor, and capital commitments primarily for new public light buses - As a lessee, the Group's total future minimum lease payments under non-cancellable operating leases payable within one year amounted to **HK$5,619,000**[489](index=489&type=chunk) - As a lessor, the Group's total future minimum lease receivables within one year amounted to **HK$2,200,000**[492](index=492&type=chunk) - The Group's capital commitments amounted to **HK$12,293,000**, primarily for the purchase of new public light buses[493](index=493&type=chunk) [Related Party Transactions](index=94&type=section&id=Related%20Party%20Transactions) The Group engaged in significant continuing connected transactions with related companies for public light bus leases and administrative fees Related Company Transactions Summary (HK$ thousand) | Related Company Name | Nature of Transaction | 2019 | 2018 | | :------------------------------ | :---------------------- | :------- | :------- | | Chung Kong Transportation Consultants Limited | Public light bus rental paid | 21,161 | 22,265