The Kowloon Motor Bus Holdings Limited
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UT kv8 USSW r},,}y kd L_,3z1.v3zb~1zx3/1 3/ ^2x}1-/0 `_O k`_La}~xv|/M k1 iumi n~.|P2}z4.|O uv,3z1OhnM o1-w~ `-xy hmjd c7zx43~5zb~1zx3/1 r}z q3/x+ c7x}v.|z /{f/.|i/.|] SYU LN g.yz0z.yz.3 l/.Pz7zx43~5zb~1zx3/1M [RdO n1~.xz:2 `4~,y~.|O TS a}v3z1 p/vy `,//-wz1|] YUfi az.31v,Of/.|i/.| pz43z12]SSYUQfi :CDL 1HHN<F 8@JIKM DL <FLI <O<DF<=F@ IH INK >IKJIK<M@ P@=LDM@0 CMMJ0//PPP.EG=.>IG.CE/ CONTENTS 1THE KMB BRAND VALUE 2 GROUP PROFILE 3 BUSINESS AT A GLANCE 4-5 FINANCIAL AND OPERATIONAL HIGHLIGHTS 6-7 STRATEGIC LOCATIONS OF THE GROUP 8-9 CORPORATE MILESTONES 12-15 CHAIRMAN’S STATEMENT 16-17 CORPORATE GOVERNANCE 18-21 MANAGING DIRECTOR’S REPORT MANAGEMENT DISCUSSION AND ANALYSIS 26-41 • OPERATIONAL REVIEW 44-59 • CORPORATE CULTURE 62-71 • FINANCIAL REVIEW 72-73 FINANCIAL SUMMARY 74-79 DIRECTORS’ PROFILES 80-81 SENIOR EXECUTIVES 82-126 FINANCIAL REPORTS 127 CORPORATE DIRECTORY THE KMB BRAND VALUE OUR MISSION We aim to be the best public bus operator in the world. Our mission is to contribute to the economic and social development of Hong Kong by providing to residents and visitors an efficient, reliable and user-friendly bus service that gives excellent value for money. Our objective is to make our buses the preferred mode of public transport in Hong Kong, to remain the leader of the public bus industry in Hong Kong and to set trends and standards for the industry. Through effective development and implementation by all staff of a Total Quality Management System that fulfils ISO 9001 : 2000 requirements, we will continuously assess and improve the efficiency, reliability and user-friendliness of our public bus service to meet and, where possible, exceed the needs and expectations of our customers. THE Concern for customer service 5Cs Concern for safety OF OUR Caring for employees CORPORATE CULTURE Concern for the environment THE KMB BRAND VALUE Community outreach 2003 ANNUAL REPORT 1 GROUP PROFILE The Kowloon Motor Bus Holdings Limited (“the Company” and, together with its subsidiaries, “the Group”) is Hong Kong’s largest public transport company in terms of ridership, serving about three million passenger trips daily. The Group comprises six divisions: Franchised Public Bus Operations, Non-Franchised Transport Operations, Mainland Transport Operations, Media Sales Business, Property Holdings and Internal Financial Services. The Kowloon Motor Bus Company (1933) Limited (“KMB”), the Group’s wholly owned flagship subsidiary, was founded 70 years ago and has been providing franchised public bus services in Hong Kong since then. 4,400 franchised public buses KMB’s fleet of about 4,300 buses serve some 400 routes covering Kowloon, the New Territories and, through the cross-harbour tunnels, Hong Kong Island. Another wholly owned subsidiary, Long Win Bus Company Limited (“LWB”) was established in 1996 and operates 145 buses on 15 routes plying between the New Territories and Hong Kong International Airport and North Lantau. The Group also operates non-franchised bus and ferry services in Hong Kong. Through investment in certain joint venture companies established on the Mainland of the People’s Republic of China, the Group also operates public transport services in Beijing, Tianjin, Wuxi and Dalian. RoadShow Holdings Limited (“RoadShow”), a 73.0% owned subsidiary of the Group, is a leading provider of innovative multi-media services in the out-of-home media market in Hong Kong, Macau and major cities on the Mainland. RoadShow markets advertising space on the exteriors and interiors of transit vehicles and bus shelters, out-of-home advertising spaces as well as merchandises commemorative items. It has been separately listed on the Main Board of The Stock Exchange of Hong Kong Limited since 28 June 2001. Lai Chi Kok Properties Investment Limited, a wholly owned subsidiary in the Group’s Property Holdings Division, is the owner of the site adjacent to the KMB Headquarters Building at Lai Chi Kok, Kowloon. It has commenced the redevelopment work on this site, which was formerly used for a bus depot, with a view to building a residential complex with about one million square feet for sale. The Group’s Internal Financial Services Division is responsible for rendering internal support services in relation to finance and treasury management to the members of the Group. 13,700 professional staff The Group employs some 13,700 staff, of whom about 8,900 and 2,300 are bus captains and maintenance staff respectively. KMB is the first public bus company and the fourth corporation in Hong Kong that is ISO certified throughout its entire organisation. The Group’s corporate culture is one of service excellence and total customer satisfaction. BUSINESS AT A GLANCE THE KOWLOON MOTOR BUS HOLDINGS LIMITED FRANCHISED NON-FRANCHISED MAINLAND PUBLIC BUS TRANSPORT TRANSPORT OPERATIONS OPERATIONS OPERATIONS DIVISION DIVISION DIVISION Comprising KMB, the flagship company Operating non-franchised bus services Investing strategically in transportation of the Group, and LWB with about 4,440 for residential and commercial sector businesses in major cities on the franchised public buses running on more on both charter hire and fixed routes Mainland including Beijing, Tianjin, than 400 routes in Hong Kong basis in Hong Kong Dalian and Wuxi, and potentially in Shenzhen MEDIA PROPERTY INTERNAL SALES HOLDINGS FINANCIAL BUSINESS DIVISION SERVICES DIVISION DIVISION Operating proprietary Multi-media Redeveloping the old Lai Chi Kok Depot Managing and administering the On-board on transit vehicles in Hong site into a prestigious residential and Group’s financial resources and Kong, and outdoor multi-media commercial complex which is scheduled treasury functions businesses in Hong Kong and on for completion in mid-2006 A GLANCE BUSINESS AT the Mainland GROUP PROFILE 2003 ANNUAL REPORT 3 FINANCIAL AND OPERATIONAL HIGHLIGHTS for the year ended 31 December Profit attributable to Earnings per share shareholders HK$ million HK$ 2,000 4 1,500 3 1,000 2 500 1 0 0 99 00 01 02 03 99 00 01 02 03 Excluding deemed profit on partial Excluding deemed profit on partial disposal of a subsidiary disposal of a subsidiary Deemed profit on partial disposal Deemed profit on partial disposal of a subsidiary of a subsidiary Profit attributable to shareholders for 2003 Earnings per share for 2003 was HK$1.48 was HK$597.0 million Number of passenger trips Share price of the Company (Franchised public bus operations) and Hang Seng Index at year-end Million trips HK$ Hang Seng Index 1,200 40 20,000 1,100 30 15,000 1,000 20 10,000 900 10 5,000 800 0 0 99 00 01 02 03 99 00 0102 03 KMB Share price of the Company (HK$) LWB Hang Seng Index Number of passenger trips in 2003 was