进智公共交通(00077) - 2020 - 年度财报

Company Information The Board of Directors comprises executive, non-executive, and independent non-executive directors, supported by audit, nomination, and remuneration committees - The Board is composed of Chairman Mr. Wong Ling Sun, CEO Mr. Chan Man Chun, other executive directors, non-executive director Ms. Wong Wai Man, and independent non-executive directors Dr. Chan Yuen Tak Fai, Mr. Kwong Ki Chi, and Mr. Fong Man Kit (appointed June 19, 2020)[7] - The Company has Audit, Nomination, and Remuneration Committees, chaired by Mr. Kwong Ki Chi, Dr. Chan Yuen Tak Fai, and Mr. Fong Man Kit respectively[7] Group Overview The Group is a leading public light bus operator in Hong Kong with over 45 years of experience, operating 71 routes and 5 residential bus routes - The Group's principal business is operating scheduled public light bus passenger services in Hong Kong, with over 45 years of operating experience, making it one of Hong Kong's leading operators[9] - As of the end of the reporting period, the Group operated 71 scheduled public light bus routes (354 vehicles) and 5 residential bus routes (8 vehicles)[9] - The Group is committed to enhancing passenger experience, including launching Hong Kong's first wheelchair-accessible low-floor public light bus and partnering with AlipayHK to provide mobile payment services for public light buses[9] Financial and Business Highlights The Group experienced a revenue decline and net loss in FY2020, primarily due to reduced passenger volume, despite fleet upgrades and route optimization 2020 Financial Highlights (Year ended March 31) | Financial Performance Indicator | Unit | 2020 | 2019 | Change | | :------------------------------ | :--- | :----- | :----- | :------ | | Revenue | HKD thousands | 365,077 | 392,924 | -7.1% | | Profit for the year excluding revaluation loss on PLB licenses and impairment provision | HKD thousands | 11,147 | 28,235 | -60.5% | | Revaluation loss on PLB licenses | HKD thousands | 47,120 | 71,493 | -34.1% | | Loss attributable to owners of the Company | HKD thousands | 36,373 | 43,258 | -15.9% | | Loss per share | HK cents | 13.38 | 15.91 | -15.9% | | Proposed special dividend per ordinary share | HK cents | 3.0 | 8.0 | -62.5% | | Profit margin (loss attributable to owners / revenue) | % | -10.0% | -11.0% | +1.0pp | | Return on equity (loss attributable to owners / shareholders' equity) | % | -52.3% | -33.8% | -18.5pp | 2020 Financial Position (As of March 31) | Financial Position Indicator | Unit | 2020 | 2019 | Change | | :--------------------------- | :--- | :----- | :----- | :------ | | Bank borrowings | HKD thousands | 158,708 | 149,667 | +6.0% | | Shareholders' equity | HKD thousands | 69,594 | 128,120 | -45.7% | | Current ratio (current assets / current liabilities) | times | 0.39 | 0.71 | -0.32 | | Gearing ratio (total bank borrowings less bank balances and cash / shareholders' equity) | % | 197.5% | 91.2% | +106.3pp | 2020 Key Business Data (Year ended March 31) | Business Summary Indicator | Unit | 2020 | 2019 | Change | | :------------------------- | :--- | :----- | :----- | :------ | | Number of PLBs in service at year-end | vehicles | 354 | 358 | -1.1% | | Number of scheduled PLB routes at year-end | routes | 71 | 70 | +1.4% | | Passenger volume | million | 55.3 | 60.1 | -8.0% | | Number of trips | million | 4.12 | 4.38 | -5.9% | | Total mileage | million km | 38.4 | 41.1 | -6.6% | | Average age of fleet at year-end | years | 6.1 | 8.2 | -25.6% | | Average accident rate | per million km | 3.1 | 2.7 | +14.8% | Chairman's Statement The Group's profit before revaluation loss and impairment decreased significantly due to the pandemic and social unrest, despite a reduced net loss from lower license revaluation losses - The Group's profit for the year, excluding revaluation loss on public light bus (PLB) licenses and impairment provision for public bus licenses, decreased by 60.5% to HKD 11.147 million, primarily due to reduced passenger volume from the COVID-19 pandemic and social unrest[20] - The net loss for the year decreased by 15.9%, mainly attributable to a 34.1% reduction in revaluation loss on PLB licenses to HKD 47.120 million[20] - The Board recommended a special dividend of HKD 0.03 per ordinary share (last year: HKD 0.08), with no final dividend declared[21] - To address the sharp decline in passenger traffic, the Group implemented measures to control operating costs and ensure safety, including reducing service frequency, conserving resources, regularly cleaning and disinfecting vehicle compartments, and applying nano photocatalyst antibacterial coating[25] - The Group completed route restructuring during the year, involving four scheduled PLB routes and one residential bus route, and replaced 77 old PLBs with new 19-seater models, increasing the proportion of 19-seater PLBs to approximately 63% of the fleet[25] - The Group received a one-off subsidy of HKD 10.620 million from the Hong Kong Government's Anti-epidemic Fund and is eligible for fuel subsidies and wage subsidies, having received the first installment of HKD 14.332 million from the Employment Support Scheme[25] Management Discussion and Analysis Business Review The Group optimized its fleet and routes by replacing old vehicles with new 19-seater models, but revenue declined due to reduced passenger volume from social unrest and the pandemic - The Group completed route restructuring, involving four scheduled public light bus (PLB) routes and one residential bus route, increasing the number of scheduled PLB routes to 71 and reducing the number of PLBs by four to 354 vehicles[32] - During the year, 77 old public light buses were replaced with new 19-seater public light buses, reducing the average fleet age to 6.1 years and making 19-seater PLBs approximately 63% of the fleet[32] - Passenger volume decreased by approximately 8.0% to 55.3 million, and total mileage decreased by 6.6% to 38.4 million km, primarily due to social unrest and the pandemic[32] - Revenue decreased by 7.1% to HKD 365.077 million, as the impact of approved fare increases on 14 routes was entirely offset by the decline in passenger volume[32] Financial Review The Group reported a loss attributable to owners, primarily due to reduced passenger volume, partially offset by a decrease in PLB license revaluation loss, while other income increased from government grants and finance costs rose due to higher interest rates and HKFRS 16 adoption - The Group recorded a loss attributable to owners of HKD 36.373 million, with profit for the year (excluding non-cash revaluation loss on public light bus (PLB) licenses and impairment provision for public bus licenses) decreasing by 60.5% to HKD 11.147 million[34] - Revenue decreased by 7.1% to HKD 365.077 million, mainly due to reduced passenger volume from the pandemic and social unrest[35] - Other income increased by 26.3% to HKD 10.681 million, primarily due to a 121.7% increase in government grants received after disposing of pre-Euro IV diesel commercial vehicles[36] - Direct costs decreased by 2.3% to HKD 317.123 million, with fuel costs down 6.4%, repair and maintenance costs down 3.2%, and labor costs down 1.3%[36][40] - Finance costs increased by 52.0% to HKD 5.288 million, mainly due to higher average interest rates and HKD 1.704 million in finance expenses for lease liabilities following HKFRS 16 adoption[35][42] - The fair value of public light bus licenses further decreased by 24% to HKD 2.280 million per license, resulting in a revaluation loss of HKD 47.120 million recognized in the consolidated income statement[44] Cash Flow Net cash generated from operating activities significantly increased, but net cash used in financing activities also rose substantially, leading to a net decrease in cash and cash equivalents, influenced by new bank borrowings, lease liability payments, and dividend distributions 2020 Cash Flow Summary | Cash Flow Item | 2020 (HKD thousands) | 2019 (HKD thousands) | | :------------------------- | :------------------- | :------------------- | | Net cash generated from operating activities | 84,815 | 35,074 | | Net cash used in investing activities | (10,983) | (13,624) | | Net cash used in financing activities | (85,398) | (26,851) | | Net decrease in cash and cash equivalents | (11,566) | (5,401) | - Cash payments under lease agreements were reclassified from operating activities to financing activities after adopting Hong Kong Financial Reporting Standard 16[45] - Excluding the impact of Hong Kong Financial Reporting Standard 16, net cash inflow from operating activities would have decreased by 55.2% to HKD 15.713 million, and net cash outflow from financing activities would have decreased by 39.3% to HKD 16.296 million[46][49] Capital Structure, Liquidity and Financial Resources The Group's net current liabilities and gearing ratio significantly increased due to the recognition of lease liabilities under HKFRS 16 and a reduction in shareholders' equity from special dividends and lower license book values, though bank facilities were enhanced to ensure liquidity - As of March 31, 2020, net current liabilities increased to HKD 50.911 million (2019: HKD 18.614 million), and the current ratio decreased to 0.39 times (2019: 0.71 times), primarily due to lease liabilities recognized under Hong Kong Financial Reporting Standard 16[51][54] - Total bank borrowings increased by 6.0% to HKD 158.708 million, mainly for purchasing 19 new public light buses[52] - The gearing ratio increased to 197.5% (2019: 91.2%), primarily due to a 45.7% decrease in shareholders' equity to HKD 69.594 million, resulting from special dividend distribution and lower book value of public light bus licenses[56] - Bank facilities were increased to HKD 206.008 million (2019: HKD 158.967 million), with HKD 158.708 million utilized[51] Pledge of Assets The Group pledged certain public light bus licenses and property, plant, and equipment as collateral for bank facilities, resulting in an increase in total pledged assets Pledged Assets (As of March 31) | Asset Category | 2020 (HKD thousands) | 2019 (HKD thousands) | | :------------------------- | :------------------- | :------------------- | | Public Light Bus Licenses | 100,320 | 123,000 | | Property, Plant and Equipment | 22,228 | 9,744 | Dividends and Dividend Policy The Board recommended a significantly reduced special dividend of HKD 0.03 per ordinary share and no final dividend, with the dividend policy considering financial performance, cash flow, liquidity, and future expansion plans - The Board recommended a special dividend of HKD 0.03 per ordinary share (2019: HKD 0.08) for the year ended March 31, 2020, totaling HKD 8.157 million[59] - The dividend policy considers factors such as the Group's financial performance, future cash flows, liquidity, capital expenditure and expansion plans, retained earnings, and distributable reserves[57][59] Capital Expenditure and Commitments Total capital expenditure for the year was HKD 16.157 million, primarily for new public light buses, with capital commitments increasing to HKD 14.098 million for future vehicle purchases - Total capital expenditure for the year was HKD 16.157 million (2019: HKD 14.667 million), primarily for purchasing 19 new public light buses[61] - As of March 31, 2020, capital commitments amounted to HKD 14.098 million (2019: HKD 12.293 million), mainly for purchasing 23 new public light buses[61] Credit Risk Management The Group faces no significant credit risk as revenue is primarily collected in cash or via third-party payment platforms, and no guarantees are provided to third parties - Revenue from the Group's scheduled public light bus business is collected in cash or through Octopus Card Limited or AlipayHK, and remitted on the next business day[62] - The Group has not provided guarantees to third parties that would result in credit risk, thus facing no significant credit risk[62] Foreign Currency Risk Management The Group faces no significant foreign exchange risk as most operating activities, including revenue, expenses, assets, and liabilities, are denominated in Hong Kong Dollars - Most of the Group's operating activities, including revenue, expenses, monetary assets, and liabilities, are denominated in Hong Kong Dollars, thus facing no significant foreign exchange risk[63] Interest Rate Risk Management The Group's interest rate risk primarily stems from bank balances, bank borrowings, and lease liabilities, all bank borrowings being at floating rates, with management deeming the risk insignificant to warrant hedging - The Group's interest rate risk primarily arises from bank balances, bank borrowings, and lease liabilities, with all bank borrowings denominated in Hong Kong Dollars and bearing floating interest rates[64] - Management believes the Group is not exposed to significant interest rate risk, and any reasonably possible market interest rate changes would not have a significant impact[64] Fuel Price Risk The Group is exposed to fuel price volatility but has not adopted any hedging policy, as hedging contracts were deemed ineffective, and will continue to monitor market conditions closely - The Group faces fuel price risk, but after assessment, it was determined that entering into hedging contracts might not be an effective tool, thus no hedging policy has been adopted[65] - Management will continue to closely monitor market changes to address fuel price risk[65] Contingent Liabilities As of the reporting period end, the Group had no significant contingent liabilities - As of March 31, 2020, and March 31, 2019, the Group had no significant contingent liabilities[66] Employees and Remuneration Policy Employee costs represent a major portion of the Group's operating expenses, totaling HKD 198.716 million for the year, with the Group offering competitive remuneration, bonuses, share option schemes, and training programs to attract and retain talent - Employee benefit expenses for the year were HKD 198.716 million (2019: HKD 198.595 million), accounting for 54.4% of total costs (excluding revaluation loss on licenses and impairment provision)[67] - In addition to basic salary, the Group provides double pay and/or discretionary bonuses to eligible employees, along with benefits such as share option schemes, retirement plans, and training programs[67] Environmental, Social and Governance Report Reporting Standards and Scope This report is prepared in accordance with the HKEX Listing Rules ESG Guide, covering the Group's primary business of providing scheduled public light bus services in Hong Kong, with no significant changes in scope from the previous year - This report is prepared in accordance with Appendix 27 "Environmental, Social and Governance Reporting Guide" 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[69] - The Board is ultimately responsible for the Group's environmental, social, and governance strategy and reporting, while management is responsible for designing and maintaining risk management and internal control systems[69] Environmental Protection The Group is committed to environmental protection by upgrading its fleet to more eco-friendly LPG and Euro V diesel public light buses, reducing greenhouse gas emissions, and implementing comprehensive maintenance and waste management programs to ensure compliance with environmental regulations - The Group replaced 46 old diesel public light buses with new LPG models and 31 with Euro V or newer emission standard diesel engines, making LPG public light buses approximately 79% of the fleet[69] - Average annual greenhouse gas emissions slightly decreased to 59.8 tonnes per vehicle (2019: 61.0 tonnes), with plans to further replace approximately 33 old public light buses with new LPG models by the end of 2021[69] - Hazardous waste (spent batteries, waste oil filters, and lubricants) from maintenance centers is handled by licensed collectors, while non-hazardous waste (tires) is collected by agents for recycling[72][73] 2020 Environmental Metrics | Environmental Indicator | Unit | 2020 | 2019 | | :---------------------- | :--- | :----- | :----- | | Total greenhouse gas emissions | tonnes | 21,769 | 22,416 | | Average greenhouse gas emissions per vehicle | tonnes | 59.8 | 61.0 | | Total diesel consumption | thousand liters | 2,085 | 3,081 | | Total LPG consumption | thousand liters | 9,529 | 8,369 | | Total tires (discarded) | units | 3,390 | 4,165 | Operating Practices The Group prioritizes passenger and employee safety through continuous training, strict codes of conduct, regular inspections, and comprehensive maintenance, while implementing various anti-epidemic measures and procurement guidelines to ensure supply chain transparency and service quality - The Group enhances operational safety through year-round road safety courses, strict codes of conduct, surprise inspections, driver's license and health checks, and regular vehicle inspections[81] - For the year ended March 31, 2020, the average accident rate was 3.1 per million km (2019: 2.7 per million km), with management strengthening training, maintenance, and increasing driver salaries to reduce the rate[85] - To combat the COVID-19 virus, the Group cleans and disinfects vehicle compartments every two hours, applies nano photocatalyst antibacterial coating, provides employees with disinfectants and masks, and implements work-from-home and temperature screening measures[85][86] - The Group introduced procurement guidelines in 2009 to ensure fair competition, transparent accountability, and selection of suppliers with good product and service quality and environmental compliance[87] - The Group has a code of conduct and whistleblowing policy, strictly prohibiting corruption and conflicts of interest, and safeguarding the privacy of CCTV recordings[88][90] Employment Practices The Group values its 1,286 employees, adhering to fair and open recruitment principles free from discrimination, and offers competitive remuneration, benefits, and training opportunities to attract, retain, and motivate its workforce - As of March 31, 2020, the Group had 1,286 employees (2019: 1,300 employees), with recruitment adhering to fair and open competition principles, committed to eliminating discrimination based on race, gender, age, etc[90] - The remuneration policy includes basic salary, double pay, bonuses, annual leave, transport and housing allowances, with annual reviews based on market conditions and employee performance[90] - The Group encourages employees to participate in internal or external training courses, covering topics such as director responsibilities, laws and regulations, occupational safety, driving behavior, and anti-corruption[90] 2020 Human Resources Metrics | Human Resources Indicator | 2020 | 2019 | | :------------------------ | :----- | :----- | | Number of employees at year-end | 1,286 | 1,300 | | By gender (male) | 94.9% | 95.2% | | By age group (over 60) | 52.3% | 48.8% | | Employee turnover rate | 22.7% | 21.9% | | Employee training hours | 1,002 | 842 | Community Service The Group actively fulfills its corporate social responsibility by sponsoring community events, expanding green minibus interchange schemes, offering fare concessions, and participating in government fare concession programs, though total donations decreased due to the pandemic - The Group actively sponsors various activities organized by district organizations and charities, and has been awarded the "Caring Company" logo by The Hong Kong Council of Social Service[95] - The Group serves the community by expanding green minibus interchange schemes, offering fare concessions for long-distance passengers, and participating in government public transport fare concession schemes for the elderly and disabled[95] - Total donations and sponsorships for the year were HKD 589,000 (2019: HKD 1,158,000), with the decrease mainly due to the cancellation of some regular activities due to the pandemic[96] Corporate Governance Report Board of Directors The Board is committed to good corporate governance, ensuring business activities comply with the code, and comprises executive, non-executive, and independent non-executive directors, supported by four committees, though it temporarily fell short of Listing Rules requirements due to an independent non-executive director's passing - The Company has complied with all code provisions and achieved some recommended best practices, including annual board performance evaluations, establishment of a whistleblowing mechanism, and confirmation from management on the effectiveness of risk management and internal control systems[98] - The Board comprises four executive directors, one non-executive director, and three independent non-executive directors, and has an Executive Committee, Remuneration Committee, Audit Committee, and Nomination Committee[100] - The Board temporarily did not comply with Listing Rules 3.10(1), 3.10A, 3.21, and 3.25 from May 15, 2020, to June 19, 2020, due to an insufficient number of independent non-executive directors[99] - The Board regularly reviews its composition to ensure a balance of expertise, skills, experience, and diverse perspectives, and encourages all directors to participate in continuous professional development[105] - Four regular Board meetings were held during the year to review and approve interim and annual results, financial statements, and risk management and internal control reports[107][110] Board Committees The Board delegates certain responsibilities to the Executive, Remuneration, Audit, and Nomination Committees, each with clear terms of reference and reporting to the Board, ensuring effective oversight of Group affairs - The Board delegates certain duties and responsibilities to the Executive Committee, Remuneration Committee, Audit Committee, and Nomination Committee, each with clearly defined terms of reference[107] - The Executive Committee is responsible for formulating the Group's strategic direction, monitoring the implementation of strategic plans, daily operations, and senior management performance, and establishing risk management and internal control systems[113] Chairman and Chief Executive Officer The roles of Chairman and Chief Executive Officer are segregated, with the Chairman leading the Board, setting strategic direction, and overseeing the CEO's performance, while the CEO is ultimately responsible for the Group's operations and management - The functions of the Chairman and Chief Executive Officer are segregated; the Chairman presides over and leads the Board, recommends the Group's direction, strategy, and policies, and monitors the CEO's performance[112][113] - The Chief Executive Officer is ultimately responsible for the Group's operations and management, and supports the Board by providing industry and business expertise[113] Remuneration Committee The Remuneration Committee advises the Board on remuneration policies, structures, and packages for directors and senior management, ensuring fairness and alignment with company and individual performance, with Mr. Fong Man Kit appointed as Chairman during the reporting period to fill a vacancy - The Remuneration Committee is responsible for recommending remuneration policies and structures for all directors and senior management, and reviewing and approving management's remuneration proposals[117] - On June 19, 2020, Independent Non-executive Director Mr. Fong Man Kit was appointed as Chairman of the Remuneration Committee to fill the vacancy left by the passing of former Chairman Dr. Lee Peng Fee[116] - The remuneration policy considers various factors such as comparable company remuneration, job duties, market conditions and practices, financial and non-financial performance, to ensure fair and competitive remuneration packages[120] Audit Committee The Audit Committee reviews the integrity, accuracy, and fairness of financial statements, monitors the effectiveness of internal control and risk management systems, and oversees the work of internal and external auditors, with Mr. Fong Man Kit appointed as a member to fill a vacancy during the reporting period - The Audit Committee is responsible for reviewing the integrity, accuracy, and fairness of the Company's reports and financial statements, and annually reviewing the adequacy and effectiveness of internal control and risk management systems[120] - Key responsibilities include recommending the appointment, reappointment, and removal of external auditors, monitoring their independence and objectivity, and reviewing the Group's financial and accounting policies and practices[120] - On June 19, 2020, Mr. Fong Man Kit was appointed as a member of the Audit Committee to fill a vacancy[120] - Four meetings were held during the year to review and approve interim and annual results, financial statements, and risk management and internal control review reports[126] Nomination Committee The Nomination Committee regularly reviews the Board's structure, size, and composition, identifies qualified director candidates, assesses the independence of independent non-executive directors, and recommends appointments, re-elections, and succession plans, with Mr. Fong Man Kit appointed as a member to fill a vacancy during the reporting period - The Nomination Committee is responsible for reviewing the Board's structure, size, and composition at least annually, identifying suitable candidates for Board membership, and assessing the independence of independent non-executive directors[127] - On June 19, 2020, Mr. Fong Man Kit was appointed as a member of the Nomination Committee to fill a vacancy[127] - One meeting was held during the year to review the Board's structure, size, and composition, and to consider and recommend the re-election of Mr. Wong Ling Sun, Ms. Ng Shui Chun, and Mr. Kwong Ki Chi as directors[135][136] Nomination Policy The Nomination Policy outlines key criteria for selecting director candidates, including skills, knowledge, experience, diversity, character, integrity, and time commitment, emphasizing the independence of independent non-executive directors - Key criteria for selecting director candidates include their skills, knowledge, experience, diversity (gender, age, educational, and professional background), character, integrity, and time commitment[130] - For nominating independent non-executive directors, their independence from the Company and the Group is assessed in accordance with Listing Rules requirements[130] Board Diversity Policy The Company adopted a Board Diversity Policy in 2013 to enhance board effectiveness and performance quality, ensuring members possess diverse talents, skills, regional and industry experience, and achieve a satisfactory gender and age distribution - The Company adopted a Board Diversity Policy on August 30, 2013, aiming to enhance board effectiveness and performance quality, and maintain a high standard of corporate governance[131] - Director appointments are based on ability and performance, considering talent, skills, and experience, and ensuring a balance across various aspects of diversity[132] Board Age Group and Gender Distribution as of March 31, 2020 | Age Group | Male | Female | | :----------- | :--- | :----- | | 41 to 50 years | 1 | 2 | | 51 to 60 years | 1 | – | | Over 60 years | 2 | 2 | | Total | 4 | 4 | Company Secretary Ms. Wong Ka Yan, the Company Secretary, reports to the Chairman on board governance matters, plays a crucial role in supporting the Board, ensuring information flow and good communication between directors, shareholders, and management, and providing advice on regulatory matters - Company Secretary Ms. Wong Ka Yan reports to the Chairman on board governance matters, playing a crucial role in supporting the Board, ensuring proper adherence to board procedures and information flow[137] - The Company Secretary is responsible for advising the Board on regulatory matters through the Chairman, and assisting directors in fulfilling their duties and professional development, completing over 15 hours of relevant professional training during the year[137] External Auditor Grant Thornton Hong Kong Limited, the external auditor, is responsible for auditing the annual financial statements, with total remuneration paid or payable for the year amounting to HKD 644,000, mostly for audit fees - External auditor Grant Thornton Hong Kong Limited is responsible for auditing and reporting on the annual financial statements[138] - For the financial year ended March 31, 2020, total remuneration paid or payable to the external auditor was HKD 644,000, of which HKD 560,000 was for audit fees[138] Directors' and External Auditor's Responsibilities for Financial Statements Directors are responsible for preparing true and fair financial statements and ensuring effective internal controls to prevent material misstatements, while the external auditor's responsibilities are clearly outlined in the independent auditor's report - Directors are responsible for preparing consolidated financial statements that give a true and fair view in accordance with Hong Kong Financial Reporting Standards and the disclosure requirements of the Hong Kong Companies Ordinance, and for internal controls[139] - The responsibilities of the external auditor are clearly stated in the independent auditor's report[139] Risk Management, Internal Control and Internal Audit The Board is ultimately responsible for overseeing risk management and internal control systems, reviewing their effectiveness annually, with the Group having a comprehensive risk management framework and an outsourced internal audit function to an accounting professional for independent review - The Board is ultimately responsible for overseeing sound risk management and internal control systems, and annually reviews their effectiveness, confirming them to be effective and adequate[141] - The Group has established a comprehensive risk management framework, clearly defining the roles and responsibilities of the Board, management, Group department heads, and internal auditors in the risk management process[142] - The risk management process includes risk identification, assessment, prioritization, strategy formulation, and continuous monitoring and reporting[145][146][147] - The Group does not have an internal audit department; the internal audit function is outsourced to an accounting professional selected by the Audit Committee, independent of the Group and reporting directly to the Audit Committee[153] - The internal auditor conducts independent reviews, assessing the adequacy and effectiveness of risk management and internal control systems, referencing the COSO framework[154] Securities Transactions The Company has adopted a code of conduct for securities transactions, no less stringent than the Listing Rules' Model Code, requiring directors and relevant employees to notify the Chairman and obtain permission before trading company securities, and to observe blackout periods - The Company has adopted a code of conduct for securities transactions by directors and relevant employees, with terms no less stringent than the Model Code in Appendix 10 of the Listing Rules[160] - Directors must notify the Chairman and receive dated permission before trading the Company's securities and derivatives, and observe blackout periods of 30 and 60 days immediately preceding the publication dates of interim and annual results, respectively[159][160] Shareholder Communication Policy The Company is committed to enhancing investor relations and communication, having established a shareholder communication policy to ensure equal and timely dissemination of company information to shareholders and potential shareholders, and encouraging attendance at general meetings for direct communication with the Board - The Company has established a shareholder communication policy to ensure equal and timely provision of company information to shareholders and potential shareholders, avoiding selective disclosure[160] - The Company maintains close communication with investors, analysts, fund managers, and the media through annual reports, interim reports, interviews, conferences, and the company website (www.amspt.com)[160](index=160&type=chunk) - The Board welcomes shareholder feedback and encourages shareholders to attend general meetings for direct communication with the Board or senior management[160] Shareholders' Right to Convene General Meetings Qualified shareholders holding at least one-tenth of the paid-up share capital have the right to issue a written request for the Board to convene an extraordinary general meeting to address specified matters, and may convene it themselves if the Board fails to do so within 21 days - Any qualified shareholder holding not less than one-tenth of the paid-up share capital has the right to request the Board to convene an extraordinary general meeting by issuing a written request[163] - The request must clearly state the shareholder's name, shareholding, reasons for convening, proposed agenda, and details of matters, and be signed by all relevant qualified shareholders[163] - If the Board fails to commence the process of convening an extraordinary general meeting within 21 days of the request, the qualified shareholders may convene the meeting themselves in the same manner[163] Profiles of Directors and Senior Management The profiles detail the roles and responsibilities of the Chairman, CEO, Finance Director, Deputy Director of HR and Finance, independent non-executive directors, and key senior management, highlighting their contributions to the Group - Mr. Wong Ling Sun serves as Chairman, responsible for formulating overall business strategy and overseeing corporate development; Mr. Chan Man Chun is Chief Executive Officer, actively involved in the Group's overall business operations and corporate strategy implementation[167] - Ms. Ng Shui Chun is Finance Director and a co-founder of the Group, responsible for finance and management; Ms. Wong Wai Sum is Deputy Director of Human Resources and Finance, responsible for human resources and financial management[167] - Independent Non-executive Directors Dr. Chan Yuen Tak Fai, Mr. Kwong Ki Chi, and Mr. Fong Man Kit (newly appointed) all possess extensive professional backgrounds and experience, providing independent judgment to the Board[169][170] - Senior management includes Mr. Wong Man Chiu, Engineering Manager (responsible for maintenance center management), Ms. Wong Ka Yan, Financial Controller and Company Secretary (responsible for financial control, accounting, and company secretarial duties), and Mr. Wong Yu Fung, Operations Manager (responsible for daily route operation management and route restructuring plans)[173][174] Directors' Report Principal Activities The Company is an investment holding company, with its subsidiaries primarily engaged in providing scheduled public light bus passenger services in Hong Kong - The Company is an investment holding company, and its subsidiaries are principally engaged in providing scheduled public light bus passenger services in Hong Kong[176] Results and Proposed Dividends The Group recorded a loss for the year ended March 31, 2020, with the Board recommending a special dividend of HKD 0.03 per ordinary share but no final dividend - The Group's results for the year ended March 31, 2020, are presented in the consolidated income statement; the Directors recommended a special dividend of HKD 0.03 per ordinary share (2019: HKD 0.08)[177] - The Board did not declare a final dividend for the years ended March 31, 2020, and 2019[177] Business Review The Group's revenue primarily derives from scheduled public light bus passenger services in Hong Kong, with detailed business review provided in the Chairman's Statement, Management Discussion and Analysis, ESG Report, and Corporate Governance Report - The Group's revenue primarily derives from providing scheduled public light bus passenger services in Hong Kong[178] - Details of the Group's business review are elaborated in the Chairman's Statement, Management Discussion and Analysis, Environmental, Social and Governance Report, and Corporate Governance Report[178] Reserves Details of changes in the Group's and the Company's reserves for the year ended March 31, 2020, are presented in the consolidated statement of changes in equity and note 31 to the financial statements - Details of changes in the Group's and the Company's reserves for the year ended March 31, 2020, are presented in the consolidated statement of changes in equity and note 31 to the financial statements, respectively[178] Donations The Group made charitable donations totaling HKD 10,000 for the year ended March 31, 2020, a significant decrease from the previous year - The Group made charitable donations totaling HKD 10,000 for the year ended March 31, 2020 (2019: HKD 156,000)[178] Property, Plant and Equipment Details of changes in the Group's property, plant, and equipment are provided in note 15 to the financial statements - Details of changes in the Group's property, plant and equipment are provided in note 15 to the financial statements[178] Principal Subsidiaries Details of the Company's principal subsidiaries as of March 31, 2020, are provided in note 19 to the financial statements - Details of the Company's principal subsidiaries as of March 31, 2020, are provided in note 19 to the financial statements[178] Bank Borrowings Details of the Group's bank borrowings are presented in note 24 to the financial statements - The Group's bank borrowings are presented in note 24 to the financial statements[178] Share Capital Details of changes in the Company's share capital are provided in note 28 to the financial statements - Details of changes in the Company's share capital are provided in note 28 to the financial statements[178] Distributable Reserves The Company's distributable reserves as of March 31, 2020, amounted to HKD 241.286 million, a decrease from the previous year - The Company's distributable reserves as of March 31, 2020, amounted to HKD 241.286 million (2019: HKD 248.931 million)[178] Five-Year Financial Summary A summary of the Group's results and assets and liabilities for the past five financial years is presented on page 112 - A summary of the Group's results and assets and liabilities for the past five financial years is presented on page 112[179] Directors The Board of Directors saw changes during the reporting period, including the passing of Independent Non-executive Director Dr. Lee Peng Fee and the appointment of Mr. Fong Man Kit, with certain directors retiring by rotation and being eligible for re-election at the upcoming AGM - For the year ended March 31, 2020, and up to the date of this report, the Board of Directors included Executive Directors Mr. Wong Ling Sun, Ms. Ng Shui Chun, Mr. Chan Man Chun, Ms. Wong Wai Sum, Non-executive Director Ms. Wong Wai Man, and Independent Non-executive Directors Dr. Chan Yuen Tak Fai, Mr. Kwong Ki Chi[182] - Independent Non-executive Director Dr. Lee Peng Fee passed away on May 15, 2020, and Mr. Fong Man Kit was appointed as an Independent Non-executive Director on June 19, 2020, to fill the vacancy[182] - Executive Directors Mr. Wong Ling Sun and Ms. Ng Shui Chun, and Independent Non-executive Director Mr. Kwong Ki Chi will retire by rotation at the upcoming Annual General Meeting and are eligible for re-election[182] Biographical Details of Directors and Senior Management Biographical details of the directors and senior management are provided on pages 37 to 39 - Biographical details of the directors and senior management are provided on pages 37 to 39[183] Directors' Service Contracts All executive directors, except Ms. Wong Wai Sum, have initial three-year service contracts that continue thereafter, while all non-executive and independent non-executive directors are appointed for terms not exceeding three years and are subject to re-election - Service contracts for all executive directors (except Ms. Wong Wai Sum) are initially for three years and continue thereafter until terminated by either party with not less than six months' prior written notice[183] - All non-executive directors and independent non-executive directors are appointed for terms not exceeding three years and are subject to re-election in accordance with the Articles of Association[183] Directors' Interests in Transactions, Arrangements or Contracts Mr. Wong Ling Sun, Ms. Ng Shui Chun, Ms. Wong Wai Sum, and Ms. Wong Wai Man (the Wong family) hold indirect interests in public light bus lease agreements entered into by the Company's wholly-owned subsidiary with associated companies - Mr. Wong Ling Sun, Ms. Ng Shui Chun, Ms. Wong Wai Sum, and Ms. Wong Wai Man (the Wong family) hold indirect interests in public light bus lease agreements entered into by the Company's wholly-owned subsidiary Gurnard Holdings Limited with Man Shing Transport Company Limited, Chung Kong Transport Consultants Limited, and Tai Sam Company Limited[186] - Save as disclosed above, no other transactions, arrangements, or contracts significant to the Group's business existed during the year or at any time during the year, in which a director or their connected entities had a direct or indirect material interest[186] Directors' Share Interests As of March 31, 2020, several directors and their family members held long positions 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 indirectly holding substantial shares through a discretionary trust Directors' Long Positions in Shares and Related Shares of the Company (As of March 31, 2020) | Director Name | Capacity/Nature of Interest | Number of Ordinary Shares Held | Number of Underlying Shares of Share Options Held | Total | Approximate % of Shareholding | | :------------------------ | :-------------------------- | :----------------------------- | :------------------------------------------------ | :---------- | :---------------------------- | | Mr. Wong Ling Sun | Beneficiary of discretionary trust | 117,677,000 | – | 117,677,000 | 43.27% | | | Beneficial owner | 25,362,500 | – | 25,362,500 | 9.32% | | Ms. Ng Shui Chun | Beneficiary of discretionary trust | 117,677,000 | – | 117,677,000 | 43.27% | | | Beneficial owner | 10,318,300 | – | 10,318,300 | 3.79% | | Mr. Chan Man Chun | Beneficial owner | 3,539,500 | – | 3,539,500 | 1.30% | | Ms. Wong Wai Sum | Beneficiary of discretionary trust | 117,677,000 | – | 117,677,000 | 43.27% | | | Beneficial owner | 3,357,000 | – | 3,357,000 | 1.24% | | Ms. Wong Wai Man | Beneficiary of discretionary trust | 117,677,000 | – | 117,677,000 | 43.27% | | | Beneficial owner | 1,000,000 | – | 1,000,000 | 0.36% | | Dr. Lee Peng Fee (deceased) | Beneficial owner | 330,000 | 558,000 | 888,000 | 0.33% | | Dr. Chan Yuen Tak Fai | Beneficial owner | 588,000 | 300,000 | 888,000 | 0.33% | | Mr. Kwong Ki Chi | Beneficial owner | 588,000 | 300,000 | 888,000 | 0.33% | - Mr. Wong Ling Sun, Ms. Ng Shui Chun, Ms. Wong Wai Sum, and Ms. Wong Wai Man are beneficiaries of The JetSun Trust, which holds 117,677,000 ordinary shares of the Company through JETSUN UT Company (PTC) Limited, Metro Success Investment Limited, and Skyblue Group Limited[189] Management Contracts No management and administration contracts concerning the whole or any substantial part of the Company's business were entered into or subsisted during the year ended March 31, 2020 - No management and administration contracts concerning the whole or any substantial part of the Company's business were entered into or subsisted during the year ended March 31, 2020[192] Share Option Scheme The Company adopted a new share option scheme in 2013 to reward eligible participants for their contributions to the Group, with 7,497,000 share options outstanding as of March 31, 2020, at a weighted average exercise price of HKD 1.48 - The Company terminated the 2004 Share Option Scheme and adopted a new share option scheme ("2013 Scheme") on August 30, 2013, to grant share options to selected participants as a reward for their contributions to the Group[193][196] - The total number of shares available for issue under the 2013 Scheme shall not exceed 10% of the issued shares on the date of approval, i.e., a maximum of 26,612,500 shares[197] - As of March 31, 2020, the total number of outstanding share options was 7,497,000, with a weighted average exercise price of HKD 1.48, and all share options vested immediately on the grant date[207][482][483] - The subscription price for share options shall not be less than the nominal value of the share, the average closing price for the five consecutive trading days immediately preceding the grant date, and the closing price on the grant date, whichever is highest[204] Major Customers and Suppliers For the year ended March 31, 2020, the Group's top five customers accounted for less than 30% of total revenue, while its top five suppliers accounted for 31.2% of total purchases, with the top three suppliers owned by the Wong family directors and beneficial shareholders - For the year ended March 31, 2020, the Group's top five customers accounted for less than 30% of the Group's total revenue[210] - The top five suppliers accounted for 31.2% of total purchases (2019: 29.7%), with the largest supplier accounting for 7.6% (2019: 7.4%)[211] - Executive Directors Mr. Wong Ling Sun, Ms. Ng Shui Chun, and Ms. Wong Wai Sum, and Non-executive Director Ms. Wong Wai Man are directors and beneficial shareholders of the Group's top three suppliers[211] Connected Transactions The Group engages in continuing connected transactions with associated companies beneficially owned and controlled by the Wong family, primarily involving public light bus lease payments and administrative fee income, which have been reviewed by independent non-executive directors and confirmed to be on normal commercial terms and within annual limits Continuing Connected Transactions (Year ended March 31) | Transaction Nature | 2020 (HKD thousands) | 2019 (HKD thousands) | | :---------------------------------- | :------------------- | :------------------- | | Public light bus lease payments to associated companies | 67,842 | 65,619 | | Administrative fee income from associated companies | 2,389 | 2,327 | - These connected transactions involve Man Shing Transport Company Limited, Chung Kong Transport Consultants Limited, and Tai Sam Company Limited, which are beneficially owned and controlled by the Wong family[214] - Independent non-executive directors have reviewed and confirmed that the continuing connected transactions were entered into in the ordinary and usual course of the Group's business, on normal commercial terms or better, and did not exceed the annual limit of HKD 84.099 million[215][216] Major Shareholders As of March 31, 2020, HSBC International Trustee and its subsidiaries were the Company's major shareholders, holding substantial shares, some of which were beneficially owned by the Wong family through a discretionary trust Major Shareholders' Shareholdings (As of March 31, 2020) | Shareholder Name | Number of Shares/Related Shares Held | Approximate % of Total Issued Shares of the Company | | :--------------------------------------- | :----------------------------------- | :-------------------------------------------------- | | HSBC International Trustee | 133,077,000 | 48.94% | | JETSUN | 117,677,000 | 43.27% | | Metro Success | 117,677,000 | 43.27% | | Skyblue | 117,677,000 | 43.27% | | The Seven International Holdings (L) Limited | 14,850,000 | 5.46% | | The Seven Capital Limited | 14,850,000 | 5.46% | - HSBC International Trustee holds 9,999 units of The JetSun Unit Trust through JETSUN UT Company (PTC) Limited, and Mr. Wong Ling Sun, Ms. Ng Shui Chun, Ms. Wong Wai Sum, and Ms. Wong Wai Man are beneficiaries of The JetSun Trust[218] Model Code for Securities Transactions by Directors The Company has adopted a code of conduct for directors' securities transactions no less stringent than the Listing Rules' Model Code, and all directors confirmed compliance throughout the reviewed financial year - The Company has adopted a code of conduct for securities transactions by directors and relevant employees, with terms no less stringent than the Model Code in Appendix 10 of the Listing Rules[221] - Following specific inquiries, all directors confirmed their compliance with the required standards for directors' securities transactions as set out in the Model Code throughout the reviewed financial year[221] Corporate Governance The Company complied with the Corporate Governance Code provisions for the year ended March 31, 2020, but temporarily fell short of Listing Rules requirements due to an insufficient number of independent non-executive directors - The Company complied with the code provisions set out in the Code for the year ended March 31, 2020[222] - Following the passing of former Independent Non-executive Director Dr. Lee Peng Fee on May 15, 2020, the number of independent non-executive directors on the Board was temporarily insufficient, leading to non-compliance with Listing Rules 3.10(1), 3.10A, 3.21, and 3.25[222] Sufficiency of Public Float The Directors confirm that the Company maintained a sufficient public float as required by the Listing Rules as of the date of this annual report - The Directors confirm that the Company maintained a sufficient public float as required by the Listing Rules as of the date of this annual report[225] Audit Committee The Audit Committee is responsible for reviewing and overseeing the Group's financial reporting process and internal control systems, comprising three independent non-executive directors, and held a meeting on June 26, 2020, to review the annual financial statements - The Audit Committee's primary responsibilities are to review and oversee the Group's financial reporting process and internal control systems, comprising three independent non-executive directors[225] - Mr. Fong Man Kit was appointed as a member of the Audit Committee on June 19, 2020, to fill a vacancy, and the Committee held a meeting on June 26, 2020, to review the annual financial statements[225] Pre-emptive Rights Neither the Articles of Association nor Cayman Islands law contains provisions requiring the Company to offer new shares pro-rata to existing shareholders with pre-emptive rights - The Articles of Association do not contain provisions for pre-emptive rights, and Cayman Islands law does not impose restrictions in this regard, requiring the Company to offer new shares pro-rata to its existing shareholders[226] Permitted Indemnification Each director and other officer of the Company will be indemnified by the Company in accordance with the Articles of Association, and appropriate directors' and officers' liability insurance has been purchased - Each director and other officer of the Company will be indemnified by the Company in accordance with the Articles of Association, and appropriate directors' and officers' liability insurance has been purchased for relevant legal actions against directors[227] Purchase, Sale or Redemption of the Company's Listed Securities For the year ended March 31, 2020, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - For the year ended March 31, 2020, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[227] Auditor The accompanying financial statements have been audited by Grant Thornton Hong Kong Limited, and a resolution will be proposed at the upcoming Annual General Meeting to re-appoint them as the Company's auditor - The accompanying financial statements have been audited by Grant Thornton Hong Kong Limited, and a resolution will be proposed at the upcoming Annual General Meeting to re-appoint them as the Company's auditor[227] Independent Auditor's Report Opinion The auditor issued an unmodified opinion on the Group's consolidated financial statements for the year ended March 31, 2020, deeming them to present a true and fair view of the financial position, performance, and cash flows in accordance with HKFRS - The auditor issued an unmodified opinion on the Group's consolidated financial statements for the year ended March 31, 2020, deeming them to present a true and fair view of the financial position, performance, and cash flows in accordance with Hong Kong Financial Reporting Standards[229] Basis for Opinion The auditor conducted the audit in accordance with Hong Kong Standards on Auditing and ethical codes for professional accountants, maintaining independence from the Group, and believes sufficient and appropriate audit evidence was obtained to form the opinion - The auditor conducted the audit in accordance with Hong Kong Standards on Auditing and ethical codes for professional accountants, maintaining independence from the Group[230] - The auditor believes that sufficient and appropriate audit evidence has been obtained to provide a basis for the audit opinion[230] Key Audit Matters Key audit matters include the valuation of public light bus licenses and the assessment of goodwill impairment, both involving significant judgment and estimation, with the auditor evaluating the reasonableness of management's valuation methods, assumptions, and input data - The valuation of public light bus licenses was identified as a key audit matter due to its materiality to the consolidated financial statements and the significant judgment and estimation involved in determining fair value[233] - The auditor obtained an external valuer's report for public light bus license valuation a