<table><tr><td rowspan="3"></td><td>2018</td><td>2017</td></tr><tr><td>HK$’000</td><td>HK$’000</td></tr><tr><td></td><td>(Restated)</td></tr><tr><td>INVESTING ACTIVITIES</td><td></td><td></td></tr><tr><td>Purchases of property, plant and equipment</td><td>(8,274)</td><td>(36,561)</td></tr><tr><td>Proceeds from disposal of property, plant and equipment</td><td>3,461</td><td>2,040</td></tr><tr><td>Placement of pledged bank deposits</td><td>(127,622)</td><td>(319,075)</td></tr><tr><td>Withdrawal of pledged bank deposits</td><td>174,310</td><td>327,771</td></tr><tr><td>Advance to associates</td><td>(5,000)</td><td>–</td></tr><tr><td>Interest received</td><td>261</td><td>169</td></tr><tr><td>Acquisition of investment in an associate</td><td>–</td><td>(3,000)</td></tr><tr><td>NET CASH GENERATED FROM (USED IN) INVESTING 
ACTIVITIES</td><td>37,136</td><td>(28,656)</td></tr><tr><td>FINANCING ACTIVITIES</td><td></td><td></td></tr><tr><td>New bank loans raised</td><td>194,544</td><td>364,300</td></tr><tr><td>Repayment of bank borrowings</td><td>(247,311)</td><td>(362,839)</td></tr><tr><td>Advances from a director</td><td>–</td><td>95,000</td></tr><tr><td>Repayment to a director</td><td>(50,000)</td><td>–</td></tr><tr><td>Repayment to an ex-director (included in other payable)</td><td>(20,000)</td><td>–</td></tr><tr><td>Repayment of finance lease payables</td><td>–</td><td>(115)</td></tr><tr><td>Interest paid</td><td>(2,707)</td><td>(2,630)</td></tr><tr><td>Distribution paid to non-controlling interests</td><td>(3,930)</td><td>(1,400)</td></tr><tr><td>Expenses on issue of shares</td><td>(725)</td><td>–</td></tr><tr><td>Proceeds from issue of shares</td><td>182,000</td><td>–</td></tr><tr><td>NET CASH FROM FINANCING ACTIVITIES</td><td>51,871</td><td>92,316</td></tr><tr><td>NET (DECREASE) INCREASE IN CASH AND CASH 
EQUIVALENTS</td><td>(23,913)</td><td>87,218</td></tr><tr><td>CASH AND CASH EQUIVALENTS AT BEGINNING 
OF THE YEAR</td><td>194,368</td><td>107,150</td></tr><tr><td>CASH AND CASH EQUIVALENTS AT END OF THE YEAR,</td><td></td><td></td></tr><tr><td>represented by bank balances and cash</td><td>170,455</td><td>194,368</td></tr></table>

# 1. GENERAL INFORMATION

Kwan On Holdings Limited (the “Company”) was incorporated in the Cayman Islands on 6 December 2012 as an exempted company with limited liability under the Companies Law (2004 revision) Chapter 22 of the Cayman Islands and its shares are listed on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”).

The registered office of the Company is located at the offices of Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, the Cayman Islands. The principal place of business is Unit 2801, 118 Connaught Road West, Hong Kong.

The consolidated financial statements are presented in Hong Kong dollars (“HK\$”), which is also the functional currency of the Company, and all values are rounded to the nearest thousands, except when otherwise indicated.

The Company is an investment holding company and its subsidiaries (together referred to as the “Group”) are principally engaged in the provision of construction and maintenance works on civil engineering contracts in respect of buildings, waterworks, site formation, road works and drainage and slope upgrading in Hong Kong.

# 2. APPLICATION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS (“HKFRSs”)

In the current year, the Group has adopted the following new and revised HKFRSs, which include HKFRSs, Hong Kong Accounting Standards (“HKAS(s)”), amendments and Interpretations (“Int(s)”) issued by the HKICPA.

<table><tr><td>Amendments to HKFRSs</td><td>Annual Improvements to HKFRS 2014–2016 Cycle: 
Amendments to HKFRS 12</td></tr><tr><td>Amendments to HKAS 7</td><td>Disclosure Initiative</td></tr><tr><td>Amendments to HKAS 12</td><td>Recognition of Deferred Tax Assets for Unrealised 
Losses</td></tr></table>

Except as described below, the application of the new and revised HKFRSs in the current year has had no material impact on the Group’s financial performance and positions for the current and prior years and/or on the disclosures set out in these consolidated financial statements.