Smart Auto Australia : Half Yearly Report Audit Review to September 30 2021

Smart Auto Australia Limited

ABN 57 644 257 465

and Its Controlled Entities

Interim Financial Report

For The Half-Year Ended 30 September 2021

Corporate Data

Directors	Michael Pixley (Non-executive Chairman)
	Alyce Wong	(Executive director and Chief Executive Officer)
	Mark Ng	(Executive director)
	Greg Starr	(Non-executive director)
	Francis Man (Non-executive director)
Company secretary	Greg Starr
Registered office/	C/- Tearum Advisors Pty Ltd
principal place of business in Australia	Level 12, 141 Walker Street
	North Sydney
	NSW 2060
Principal place of business in Hong Kong	Unit No.1, 8/F Fu Hang Industrial Building
	No.1 Hok Yuen Street East
	Hung Hom, Kowloon
	Hong Kong
Legal and NSX nominated adviser	Steinepreis Paganin
	Level 4, The Read Buildings
	16 Milligan Street
	Perth WA 6000
Independent auditor	Moore Australia Audit (WA)
	Level 15 Exchange Tower
	2 The Esplanade
	Perth WA 6000
Share registry	Advanced Share Registry
	110 Stirling Hwy Nedlands
	Perth WA 6009
Securities exchange	National Securities Exchange (NSX)
	1 Bligh Street
	Sydney NSW 2000
NSX code	SAL

Contents

	Page
Directors' Report	2
Auditor's Independence Declaration	4
Consolidated Statement of Profit or Loss and Other Comprehensive Income	5
Consolidated Statement of Financial Position	6
Consolidated Statement of Changes in Equity	7
Consolidated Statement of Cash Flows	8
Notes to the Consolidated Financial Statements	9
Directors' Declaration	19
Independent Auditor's Report to the Members	20

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Directors' Report

Directors submit their report on the consolidated entity (referred to hereafter as the "Group") consisting of Smart Auto Australia Limited (the "Company" or "SAL") and the entities it controlled at the end of, or during the half-year ended 30 September 2021 ("1H22").

Directors

The names and details of the Company's directors in office during 1H22 and until the date of this report are as follows:

Michael Pixley	(appointed on 28 October 2020)
Nga Lai Wong (Alyce Wong)	(appointed on 28 October 2020)
Cheuk Lun Ng (Mark Ng)	(appointed on 28 October 2020)
Greg Starr	(appointed on 28 October 2020)
Man Chi Fat (Francis Man)	(appointed on 12 November 2020)

Principal Activities and Business Overview

The Group has been operational in the bus fleet rental and management sector since its main operating subsidiary, Grand Tour Bus Services Limited ("GTB") was incorporated in Hong Kong in June 2010. The Group is principally engaged in i) provision of bus rental and management services and ii) bus trading in Hong Kong via GTB. The Group is one of the leading bus leasing, management and trading service providers in Hong Kong.

As at the date of this Report, there are around 60 vehicles currently under the Group's management.

In addition to its core business offerings mentioned above, other Group revenues and profits are generated from the trading of associated bus and coach licenses; the distributorship of coaches, buses and e-CV products; vehicle inspections and maintenance (awarded as distributor in Hong Kong and Australia for one of the major suppliers in e-CV products industry).

Review of Operations

Group overall Revenue from Rental, Trading and Commission income increased 20% in the current half-year ended 30 September 2020 ("1H22") compared to previous corresponding half-year year 30 September 2020 ("1H21") despite the continued COVID-19 impact on global and regional economies. Revenue in 1H22 was $1,700,838 compared to 1H21 of $1,416,843.

Rental income

The Group's gross rental income decreased from approximately $521,198 for the half-year ended 30 September 2020 ("1H21") to $436,687 for 1H22 as contracted customers/vehicles decreased. The Group acquired three additional buses in July 2021 in order to capture the market demand for school resumption in September 2021.

The depreciation charges associated with these buses were reflected the full period in the costs of services rendered in 1H22, however rental income was only recognised from September 2021 onward. Thus, gross profit margin for 1H22 was negatively affected.

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