Annual Report 2019-2020 Annual Report 2019-2020

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Annual Report 2019-2020 Annual Report 2019-2020 eSun Holdings Limited (Incorporated in Bermuda with limited liability 於百慕達註冊成立之有限公司) Stock Code 股份代號: 571 豐德麗控股有限公司 eSun Holdings Limited 豐德麗控股有限公司 (Incorporated in Bermuda with limited liability) (於百慕達註冊成立之有限公司) 11/F., Lai Sun Commercial Centre, 680 Cheung Sha Wan Road Kowloon, Hong Kong 香港九龍長沙灣道六百八十號麗新商業中心十一樓 Tel 電話 : (852) 2741 0391 Fax 傳真 : (852) 2785 2775 Website 網址 : http://www.esun.com E-mail 電子郵件 : [email protected] Stock Code on Hong Kong Stock Exchange: 571 於香港聯合交易所股份代號: 571 Annual Report 2019-2020 ANNUAL REPORT 年報 Year ended 31 July 2020 二零二零年七月三十一日止 年度報告 CONTENTS 2 Corporate Information 3 Corporate Profile 4 Chairman’s Statement 10 Financial Summary and Highlights 14 Management Discussion and Analysis 17 Environmental, Social and Governance Report 29 Corporate Governance Report 44 Biographical Details of Directors 47 Report of the Directors 68 Shareholders’ Information 69 Independent Auditor’s Report 74 Consolidated Income Statement 75 Consolidated Statement of Comprehensive Income 76 Consolidated Statement of Financial Position 78 Consolidated Statement of Changes in Equity 80 Consolidated Statement of Cash Flows 83 Notes to Financial Statements CORPORATE INFORMATION PLACE OF INCORPORATION SHARE REGISTRAR AND Bermuda TRANSFER OFFICE IN BERMUDA MUFG Fund Services (Bermuda) Limited BOARD OF DIRECTORS 4th Floor North Cedar House Executive Directors 41 Cedar Avenue Hamilton HM 12 Lui Siu Tsuen, Richard (Chief Executive Officer) Chew Fook Aun Bermuda Lam Hau Yin, Lester (also alternate director to U Po Chu) Yip Chai Tuck BRANCH SHARE REGISTRAR AND Non-executive Director TRANSFER OFFICE IN HONG KONG U Po Chu Tricor Tengis Limited Level 54, Hopewell Centre Independent Non-executive Directors 183 Queen’s Road East Hong Kong Low Chee Keong (Chairman) Lo Kwok Kwei, David Ng Lai Man, Carmen Alfred Donald Yap INDEPENDENT AUDITOR Ernst & Young AUDIT COMMITTEE Certified Public Accountants Ng Lai Man, Carmen (Chairwoman) Low Chee Keong Alfred Donald Yap PRINCIPAL BANKERS REMUNERATION COMMITTEE Bank of China (Hong Kong) Limited DBS Bank (Hong Kong) Limited Low Chee Keong (Chairman) Chew Fook Aun Hang Seng Bank Limited Lui Siu Tsuen, Richard Ng Lai Man, Carmen Alfred Donald Yap LISTING INFORMATION AUTHORISED REPRESENTATIVES Shares Chew Fook Aun The issued shares of the Company are listed and traded on Lui Siu Tsuen, Richard the Main Board of The Stock Exchange of Hong Kong Limited COMPANY SECRETARY Wong Lai Chun Stock Code/Board Lot REGISTERED OFFICE 571/2,000 shares Clarendon House 2 Church Street Hamilton HM 11 Bermuda WEBSITE www.esun.com PRINCIPAL OFFICE 11th Floor, Lai Sun Commercial Centre 680 Cheung Sha Wan Road INVESTOR RELATIONS Kowloon, Hong Kong Tel: (852) 2853 6116 Tel: (852) 2741 0391 Fax: (852) 2853 6651 Fax: (852) 2785 2775 E-mail: [email protected] 2 eSun Holdings Limited CORPORATE PROFILE Lai Sun Garment (International) Limited* 56.13% Lai Sun Development Company Limited* 74.62% 54.56% eSun Holdings Limited* Lai Fung Holdings Limited* Cinema Operation Media and Entertainment (Hong Kong & Mainland China) 67.56% Media Asia Group Holdings Limited# Film Music Television Artiste Events Production and Production Programs Management Management Others Distribution and Production and Publishing Distribution * Listed on the Main Board of The Stock Exchange of Hong Kong Limited # Listed on GEM of The Stock Exchange of Hong Kong Limited Corporate Structure as at 20 October 2020 eSun Holdings Limited (“Company”) is a member of the Lai Sun Group which was established in Hong Kong in 1947. The Company acted as an investment holding company and the principal activities of its subsidiaries include the development, operation of and investment in media and entertainment, music production and distribution, the investment in and production and distribution of television programs, films and video format products and cinema operation. Since 9 June 2011, Media Asia Group Holdings Limited (“MAGHL”, formerly known as “Rojam Entertainment Holdings Limited”) has become a subsidiary of the Company, the issued shares of which are traded and listed on GEM of The Stock Exchange of Hong Kong Limited (Stock Code: 8075). The Company currently holds about 67.56% of the total issued shares in MAGHL and the principal activities of MAGHL and its subsidiaries include film production and distribution; organisation, management and production of concerts and live performances; artiste management; production and distribution of television programs; music production and publishing; licensing of media contents; provision of consultancy services in planning and management of cultural, entertainment and live performance projects. Since November 2018, Intercontinental Group Holdings Limited (“IGHL”, formerly known as “Kadokawa Intercontinental Group Holdings Limited”) has become a 95%-owned subsidiary of the Company. IGHL is one of the leading film and video distribution companies in Hong Kong, releasing around 30 films every year and distributing a variety of video products. IGHL is also one of the leading multiplex cinema operators in Hong Kong, operating a total of 14 cinemas in Hong Kong and Mainland China. ANNUAL REPORT 2019-2020 3 CHAIRMAN’S STATEMENT Low Chee Keong Chairman I am pleased to present the audited consolidated results of eSun Holdings Limited (“Company”) and its subsidiaries (together, “Group”) for the year ended 31 July 2020. OVERVIEW OF ANNUAL RESULTS Upon completion of the LF Disposal (as defined below) in May 2020, the Group no longer held any interest in Lai Fung Holdings Limited (“Lai Fung”) and its subsidiaries (together, “Lai Fung Group”) which is principally engaged in property investment and property development for sale as well as the development and operation of and investment in cultural, leisure, entertainment and related facilities in Mainland China. Accordingly, financial results of Lai Fung Group ceased to be consolidated into the consolidated financial statements of the Group. The Group’s continuing operations include development, operation of and investment in media and entertainment, music production and distribution, the investment in and production and distribution of television programs, films and video format products and cinema operation in Hong Kong and Mainland China. For the year ended 31 July 2020, the continuing operations of the Group recorded a turnover of HK$929.2 million, representing a decrease of approximately 35.9% from the restated figure of HK$1,450.2 million for last year. The gross profit dropped by approximately 37.0% to HK$301.9 million (2019 (restated): HK$478.9 million). The net loss attributable to owners of the Company from continuing operations of the Group for the year ended 31 July 2020 was approximately HK$926.4 million (2019 (restated): net loss of HK$293.9 million). Net loss per share attributable to owners of the Company from continuing operations of the Group was HK$0.621 (2019: HK$0.197 per share). The substantial increase in consolidated loss from continuing operations of the Group is primarily due to the increase in other operating expenses as a result of (i) an impairment of right-of-use assets in relation to leases of certain cinemas of the Group and (ii) an impairment of certain property, plant and equipment during the year under review. The Group recorded an aggregated net loss of HK$7,259.0 million from the LF Disposal (as defined below) during the year under review. In respect of the discontinued operations, net loss for the year amounted to HK$8,150.4 million (2019: net profit of HK$365.8 million). 4 eSun Holdings Limited CHAIRMAN’S STATEMENT Net loss attributable to owners of the Company for the year ended 31 July 2020 was approximately HK$8,585.4 million (2019: HK$77.6 million). Net loss per share attributable to owners of the Company was HK$5.755 per share (2019: HK$0.052 per share). Equity attributable to owners of the Company as at 31 July 2020 amounted to HK$1,597.4 million (2019: HK$9,098.6 million). Net asset value per share attributable to owners of the Company as at 31 July 2020 was HK$1.071 per share (2019: HK$6.099 per share). FINAL DIVIDEND The board of directors of the Company (“Board” and “Directors”, respectively) does not recommend the payment of a dividend for the year ended 31 July 2020 (2019: Nil). BUSINESS REVIEW AND OUTLOOK Upon completion of the conditional voluntary general cash offers (“LF Offers”) made by Holy Unicorn Limited (“Offeror”), a wholly-owned subsidiary of Lai Sun Development Company Limited (“LSD”, the intermediate holding company of the Company), to acquire all issued shares of Lai Fung (other than those already owned or agreed to be acquired by LSD, the Offeror or the other wholly-owned subsidiaries of LSD) and to cancel all the outstanding share options of Lai Fung in May 2020, Lai Fung has ceased to become a subsidiary of the Company. The disposal of all Lai Fung shares owned by the Company (“LF Disposal”) as a result of its acceptance of the LF Offers as approved by the independent shareholders of the Company has not only generated net proceeds of approximately HK$1,515.9 million, but also enabled the remaining group to become a pure-play cinema, media and entertainment group. ANNUAL REPORT 2019-2020 5 CHAIRMAN’S STATEMENT The year ended 31 July 2020 has been one of the toughest years in the history of the Hong Kong entertainment industry marked by the social unrest in the city emerging in mid-2019 and the outbreak of the novel coronavirus (COVID-19) since early 2020. The Group’s cinema operation was disrupted as certain cinemas had to shut down temporarily amid the prolonged social unrest in Hong Kong. The outbreak of COVID-19 since early 2020 is compounding the challenges as admissions had been affected by the delay in releases of certain high profile movies during the year under review. Hong Kong’s cinemas were requested to close between 28 March 2020 and 8 May 2020 during the second wave of COVID-19 and then closed for a second time from 15 July 2020 to 27 August 2020 when the third wave emerged.
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