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CHARACTERISTICS OF THE GR STOCK EXCHANGE OF HONG KO
GEM HAS BEEN ESTABLISHED COMPANIES TO WHICH A HIG PARTICULAR, COMPANIES MAY PROFITABILITY NOR ANY OBL FURTHERMORE, THERE MAY BE
鳳凰衛視控股有限公司 OF COMPANIES LISTED ON GEM WHICH THE COMPANIES OPERA OF THE POTENTIAL RISKS OF MAKE THE DECISION TO INVEST THE GREATER RISK PROFILE AN IT IS A MARKET MORE SUITED INVESTORS.
GIVEN THE EMERGING NATURE THAT SECURITIES TRADED ON MARKET VOLATILITY THAN SEC ASSURANCE IS GIVEN THAT SECURITIES TRADED ON GEM.
THE PRINCIPAL MEANS OF INFOR ON THE INTERNET WEBSITE OP ARE NOT GENERALLY REQUIRED NEWSPAPERS. ACCORDINGLY, THEY NEED TO HAVE ACCESS UP-TO-DATE INFORMATION ON G
THE EXCHANGE TAKES NO R
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2006 AND (III) OPINIONS EXPRESSED DUE AND CAREFUL CONSIDER phoenix satellite television holdings limited 鳳凰衛視控股有限公司 REASONABLENESS AND FAIRNE
thegraphis scale: 1 : 1 page: CoverFront print size: 100% file name: N997_Phoenix_AR06_CoverFront.ai trim size: 628mm(W) x 285mm(H) production: ming remarks: 4C + Pantone 873C 30% rev: (02)-19-Mar-2007 finish size: 210mm(W) x 285mm(H) ad/design/as: Ida / Jenny / Simon remarks: +HotStamp Gold HotStamp (Gold)
CHARACTERISTICS OF THE GROWTH ENTERPRISE MARKET (“GEM”) OF THE 香港聯合交易所有限公司（「聯交所」）創業板 STOCK EXCHANGE OF HONG KONG LIMITED (THE “EXCHANGE”) （「創業板」）的特色
GEM HAS BEEN ESTABLISHED AS A MARKET DESIGNED TO ACCOMMODATE 創業板乃為帶有高投資風險的公司提供一個上市 COMPANIES TO WHICH A HIGH INVESTMENT RISK MAY BE ATTACHED. IN 的市場。尤其在創業板上市的公司毋須有過往溢 PARTICULAR, COMPANIES MAY LIST ON GEM WITH NEITHER A TRACK RECORD OF 利記錄，亦毋須預測未來溢利。此外，在創業板 PROFITABILITY NOR ANY OBLIGATION TO FORECAST FUTURE PROFITABILITY. 上市的公司可因其新興性質及該等公司經營業務 FURTHERMORE, THERE MAY BE RISKS ARISING OUT OF THE EMERGING NATURE 的行業或國家而帶有風險。有意投資的人士應了 OF COMPANIES LISTED ON GEM AND THE BUSINESS SECTORS OR COUNTRIES IN 解投資於該等公司的潛在風險，並應經過審慎周 WHICH THE COMPANIES OPERATE. PROSPECTIVE INVESTORS SHOULD BE AWARE 詳的考慮後方作出投資決定。創業板的較高風險 OF THE POTENTIAL RISKS OF INVESTING IN SUCH COMPANIES AND SHOULD 及其他特色表示創業板較適合專業及其他老練投 MAKE THE DECISION TO INVEST ONLY AFTER DUE AND CAREFUL CONSIDERATION. 資者。 THE GREATER RISK PROFILE AND OTHER CHARACTERISTICS OF GEM MEAN THAT IT IS A MARKET MORE SUITED TO PROFESSIONAL AND OTHER SOPHISTICATED INVESTORS.
GIVEN THE EMERGING NATURE OF COMPANIES LISTED ON GEM, THERE IS A RISK 由於創業板上市公司新興的性質所然，在創業板 THAT SECURITIES TRADED ON GEM MAY BE MORE SUSCEPTIBLE TO HIGH 買賣的證券可能會較於主板買賣之證券承受較大 MARKET VOLATILITY THAN SECURITIES TRADED ON THE MAIN BOARD AND NO 的市場波動風險，同時無法保證在創業板買賣的 ASSURANCE IS GIVEN THAT THERE WILL BE A LIQUID MARKET IN THE 證券會有高流通量的市場。 SECURITIES TRADED ON GEM.
THE PRINCIPAL MEANS OF INFORMATION DISSEMINATION ON GEM IS PUBLICATION 創業板所發佈的資料的主要方法為在交易所為創 ON THE INTERNET WEBSITE OPERATED BY THE EXCHANGE. LISTED COMPANIES 業板而設的互聯網網頁刊登。上市公司毋須在憲 ARE NOT GENERALLY REQUIRED TO ISSUE PAID ANNOUNCEMENTS IN GAZETTED 報指定報章刊登付款公佈披露資料。因此，有意 NEWSPAPERS. ACCORDINGLY, PROSPECTIVE INVESTORS SHOULD NOTE THAT 投資的人士應注意彼能閱覽創業板網頁，以便取 THEY NEED TO HAVE ACCESS TO THE GEM WEBSITE IN ORDER TO OBTAIN 得創業板上市發行人的最新資料。 UP-TO-DATE INFORMATION ON GEM-LISTED ISSUERS.
THE EXCHANGE TAKES NO RESPONSIBILITY FOR THE CONTENTS OF THE 聯交所對本報告人之內容概不負責，對其準確性或 REPORT, MAKES NO REPRESENTATION AS TO ITS ACCURACY OR COMPLETENESS 完整性亦不發表任何聲明，並明確表示概不就因本 AND EXPRESSLY DISCLAIMS ANY LIABILITY WHATSOEVER FOR ANY LOSS 報告全部或任何部份內容而產生或因倚賴該等內容 HOWSOEVER ARISING FROM OR IN RELIANCE UPON THE WHOLE OR ANY PART OF 而引致之任何損失承擔任何責任。本報告乃遵照創 THE CONTENTS OF THIS REPORT. 業板上市規則之規定提供有關本公司之資料。本公 司各董事對上述資料共同及個別承擔全部責任。
THE DIRECTORS COLLECTIVELY AND INDIVIDUALLY ACCEPT FULL RESPONSIBILITY 本公司各董事在作出一切合理查詢後確認，就彼 FOR THIS REPORT WHICH IS GIVEN IN COMPLIANCE WITH THE REQUIREMENTS 等所深知及確信，(I)本報告所載資料在各主要方 (RULES GOVERNING THE LISTING OF SECURITIES ON THE GEM) OF THE 面均為準確及完整，且無誤導成份；(II)本報告並 EXCHANGE. THE DIRECTORS CONFIRM, HAVING MADE ALL REASONABLE 無遺漏其他事項致使本報告內容有所誤導；及 ENQUIRES, THAT TO THE BEST OF THEIR KNOWLEDGE AND BELIEF, (I) THE (III)本報告所載一切意見已經審慎周詳考慮，並 INFORMATION CONTAINED IN THE REPORT ARE ACCURATE AND COMPLETE IN 以公平及合理之準則與假設為基礎。 ALL MATERIAL ASPESTS AND NOT MISLEADING; (II) THERE ARE NO OTHER FACTS THE OMISSION OF WHICH WOULD MAKE ANY STATEMENT HEREIN MISLEADING; AND (III) OPINIONS EXPRESSED IN THIS REPORT HAVE BEEN ARRIVED AT AFTER DUE AND CAREFUL CONSIDERATION ON THE BASIS AND ASSUMPTIONS OF 鳳凰衛視控股有限公司 REASONABLENESS AND FAIRNESS.
Front print size: 100% remarks: 4C + Pantone 873C Jenny / Simon remarks: +HotStamp Gold thegraphis sc file name: N997_Phoenix_AR06_CoverInside.ai tri Pantone 873C (Gold) 100% rev: (01)-13-Mar-2007 fin CAPITAL FINANCIAL PRESS LIMITED FINANCIAL PRESS CAPITAL : THE GRAPHIS COMPANY LIMITED PRINTING THE GRAPHIS COMPANY : DESIGN
thegraphis scale: 1 : 1 page: CoverInside print size: 100% file name: N997_Phoenix_AR06_CoverInside.ai trim size: 633mm(W) x 285mm(H) production: ming remarks: 1C (Pantone 873C) Gold) 100% rev: (01)-13-Mar-2007 finish size: 210mm(W) x 285mm(H) ad/design/as: Ida / Jenny / Simon Panton Contents {02} Mission Statement 公司使命 目錄 {04} 2006 Annual Highlights 全年大事概要 {06} Chairman’s Statement 主席報告書
{12} A Global Media Organisation 建基全球
{14} Global Outlook 全球視野
{16} A Global Team 我們的全球團隊
{22} The Chinese Gateway 中國門戶
{24} Financial Information 財務資料
Phoenix Annual Report 2006 01 Mission Statement 公司使命
Expanding 張開
02 鳳凰衛視年報 2006 Phoenix provides Chinese communities around the world with a continuous stream of Chinese-language programming, ranging from entertainment and talk shows through to balanced, accurate and up-to-the-minute news and information about developments around the globe. By performing this mission, Phoenix brings China closer to the world and the world closer to China.
鳳凰與世界各地的華語社群分享無間的華語節目，包括 娛樂、客觀的評論節目、準確即時新聞及世界資訊等。透 過擔任該角色，鳳凰不單令世界逐漸走向中國，同時亦令 中國逐漸走向世界。
視野 Horizon
Phoenix Annual Report 2006 03 Annual Highlights 全年大事概要 2006
February March May July
Phoenix marked the entry The tenth anniversary of Phoenix Phoenix reached an agreement Phoenix mounted an exhibition of Phoenix North American was celebrated in spectacular with Quincy Jones, the famous illustrating key events in its Channel into the Canadian style at the Hong Kong American jazz musician and fi rst decade of operations at market with a reception in AsiaWorld-Expo and attended by composer, to work together on a the Beijing Capital Museum to Vancouver. a wide array of political fi gures number of creative projects. mark its tenth anniversary and and celebrities. the Chinese Foreign Minister Li 二月 五月 Zhaoxing was among those who 鳳凰衛視旗下的鳳凰衛視美 三月 鳳凰衛視與美國著名的音樂 attended. 洲台獲准在加拿大落地，並在 鳳凰衛視在香港亞洲博覽館 製作人及作曲家昆西 • 瓊斯 溫哥華舉行了開播慶祝酒會。 舉行盛大的「鳳凰因你而美 (Quincy Jones) 達成協議，將 七月 麗－鳳凰衛視十週年慶典晚 共同開展連串創作計劃。 鳳凰衛視在北京首都博物館 會」，各 界 政 要 及社 會 名 流 參 舉辦了「鳳凰，一個美麗的傳 加了此次慶祝活動。 說」鳳凰衛視十年成就展覽， 展示了鳳凰衛視十年來的重要 行動及歷史大事件的珍貴實 物，李 肇 星 外 長 亦 參 觀了此 次 展覽活動。
04 鳳凰衛視年報 2006 July October October November
Phoenix dispatched a team of Phoenix staged a performance The fi nal of the Phoenix Miss Chairman and CEO of Phoenix reporters to Lebanon after the in Beijing by the world-famous, Chinese Cosmos pageant Liu Changle co-chaired the Israeli invasion of southern U.S.-based Chinese classical was held in the Hong Kong International Emmy Awards Gala Lebanon to cover the fi ghting pianist Lang Lang. AsiaWorld-Expo on 28 October. in New York. The evening was and the impact of the confl ict attended by many famous fi lm on the region. 十月 十月 and television fi gures, including 鳳凰衛視策劃籌辦了由享譽 鳳凰衛視「中華小姐環球大 the renowned director Stephen 七月 世界樂壇的青年鋼琴家郎朗 賽」總決賽於十月二十八日在 Spielberg. 鳳凰衛視派送一支記者隊伍 在北京舉行的演奏會。 香港國際博覽館舉行。 到黎巴嫩，對以色列入侵黎巴 十一月 嫩南部的戰爭進程及地區衝 鳳凰衛視董事局主席兼行政 突進行了即時報道。 總裁劉長樂擔任在紐約舉行 的國際艾美獎頒獎晚會的 聯合主席。眾多影視名星包括 著名導演史蒂文 •斯皮爾伯格 (Stephen Spielberg)在內均參 加了此次頒獎晚會。
Phoenix Annual Report 2006 05 The Group’s revenue for the year ended 31 December 2006 was approximately HK$1,057,667,000, which represented a moderate growth of 2.2% compared with 2005. 本集團截至二零零六年十二月三十一日 止年度的收入約為1,057,667,000港元， 較二零零五年溫和增長2.2%。
Chairman’s Statement 主席報告書
Financial Summary • Revenue for the year ended 31 December 2006 was 2.2% higher than the previous year, reaching approximately HK$1,057,667,000. • The increase in revenue generated an annual profi t attributable to equity holders of approximately HK$212,385,000, which was an 17.0% improvement over the profi t achieved in 2005. • The performance of InfoNews remained relatively stable, with a marginal increase in revenue being offset by a rise in operating costs. • The Board recommended a fi nal dividend of HK$0.014 per share.
財務概要 • 截至二零零六年十二月三十一日止年度的收入錄得約1,057,667,000港元， 較去年高出2.2%。 • 收入增長帶來權益持有人應佔年度溢利約212,385,000港元，較二零零五年 所取得溢利上升17.0%。 • 鳳凰衛視資訊台的表現乃保持相對穩定，收入略有增長，惟其效益因經營 成本上升而抵銷。 • 董事會建議派發末期股息每股0.014港元。
06 鳳凰衛視年報 2006 chairman’s statement 主席報告書
RESULTS 業績
The Group’s revenue for 2006 increased 2.2% over that of 2005, which in 本集團二零零六年所錄得收入較二零零五年上 fact consolidated the major turn-around that the Group achieved in 2004 升2.2%，而事實上二零零五年乃鞏固了本集團 after several loss-making years. Profi t attributable to equity holders reached 在經歷數年虧損後於二零零四年實現業績顯著 a record high. 改善的一年。權益持有人應佔溢利創出新高。
The Group’s revenue for the year ended 31 December 2006 was 本集團截至二零零六年十二月三十一日止年度 approximately HK$1,057,667,000, which represented a moderate growth 的收入約為1,057,667,000港元，較二零零五年 of 2.2% as compared with 2005. Total operating costs remained at a steady 溫和增長2.2%。經營總成本輕微減少1.1%至約 level, with a marginal decrease of 1.1% to approximately HK$866,813,000. 866,813,000港元，維持在穩定的水平。經營成 The major fl uctuation in the operating costs was the increase of programming 本之主要波動乃源於節目成本上升，但上升又被 costs, but this was offset by the reduction of doubtful debt provision. 呆壞賬撥備減少所抵銷。
The Group’s profi t from operations and profi t attributable to equity holders 本集團二零零六年財政年度的經營溢利及權 for the 2006 fi nancial year were approximately HK$190,854,000 and 益持有人應佔溢利分別約為190,854,000港 HK$212,385,000 respectively. These fi gures represented improvements 元及212,385,000港元。此兩項溢利分別較二 of approximately HK$32,169,000 and HK$30,903,000 respectively over 零零五年財政年度增加約32,169,000港元及 the 2005 fi nancial year. During 2006 the Group recognized a deferred tax 30,903,000港元。於二零零六年內，本集團確認 asset amounting to approximately HK$13,900,000, which provided a one- 遞延稅項資產約13,900,000港元，為本集團帶 off boost to the Group’s income. 來大幅一筆過收益。
The chart presented below compares the Group’s performance for the year 以下呈列的圖表乃比較本集團截至二零零六年 ended 31 December 2006 with that for the 2005 fi nancial year in order to 十二月三十一日止年度與二零零五年財政年度的 give a clearer picture of the overall trend of the Group’s operations. 業績表現，以便更清楚地顯示本集團業務的整 體發展趨勢。
Year ended 31 December 截至十二月三十一日止年度
2006 2005 二零零六年 二零零五年 HK$’000 HK$’000 千港元 千港元
Phoenix Chinese Channel 鳳凰衛視中文台 722,697 749,650 Phoenix InfoNews Channel 鳳凰衛視資訊台 223,550 165,186 Phoenix Movies Channel, 鳳凰衛視電影台、 Phoenix North America Chinese Channel & 鳳凰衛視美洲台及 Phoenix Chinese News and Entertainment Channel 鳳凰衛視歐洲台 68,575 61,962 Other businesses 其他業務 42,845 57,970 Group’s total revenue 本集團總收入 1,057,667 1,034,768 Operating costs 經營成本 (866,813 ) (876,083) Profi t from operations 經營溢利 190,854 158,685 Profi t attributable to equity holders of the Company 本公司權益持有人應佔溢利 212,385 181,482* Earnings per share, Hong Kong cents 每股盈利，港仙 4.30 3.67
* This fi gure included the one-off gain from the disposal of 50% of Phoenix’s interest in the property in Shenzhen, which amounted to approximately HK$12,000,000 in the second quarter of 2005, and an unexpected increase in other revenue of approximately HK$10,000,000 in the third quarter of 2005 that resulted from the upward movement of the Renminbi against the Hong Kong dollar in July 2005. * 此數額包括於二零零五年第二季度出讓鳳凰衛視於深圳物業的50%權益而取得一筆過收益約12,000,000港元，以及於二零零五年七月人民幣兌港元的匯價 上升令二零零五年第三季度的其他收入意外增加約10,000,000港元。
Phoenix Annual Report 2006 07 business overview and prospects 業務回顧及前景
The Phoenix Group’s basic television business continued to perform well. The 鳳凰集團的基本電視業務繼續表現理想。鳳凰 Phoenix Chinese Channel, which is still the core component of the Group, 衛視中文台仍然為本集團的核心業務，並保持其 has maintained its position by featuring a wide array of entertainment and 領先地位，一如既往提供多樣化的娛樂及資訊 information programmes, ranging from talk shows and interviews through 節目，從 脫 口 秀及 訪 談 到 關 於 個 人奮 鬥 歷 程 的 人 to human-interest stories about the personal hardships people can face in 情世故，為廣大電視觀眾展現了一幅幅在這個社 a time of very rapid economic and social change, that cater to the tastes of 會經濟急速發展的時代各等人群的人生百態，這 the Chinese-speaking audience in mainland China and beyond. Phoenix 些節目都能迎合中國內地及其他地區華語觀眾 Chinese Channel revenue decreased slightly compared with the previous 的口味。雖然鳳凰衛視中文台的收入較去年輕微 year, but this decrease was more than compensated by a signifi cant jump 下降，但資訊台的收入增幅超過了該項收入的 in the income of InfoNews, which achieved a record high in 2006. 減少，資訊台的收入於二零零六年創出新高。
InfoNews continues to be the outstanding broadcaster of international 資訊台繼續成為在華語市場報道國際新聞的突 news in the Chinese-language market, and makes a major contribution to 出電視台，並為鳳凰衛視品牌作出重要貢獻，秉 the Phoenix brand name, underscoring Phoenix’s reputation for a global 承鳳凰衛視以提供全球視野及即時資訊為己任 outlook and real-time information. 的使命。
08 鳳凰衛視年報 2006 chairman’s statement 主席報告書
During this period, InfoNews provided comprehensive coverage of breaking 於本期間內，資訊台提供全面而廣泛的突發國 international news, including real-time coverage of the continuing violence 際新聞報道，包括即時報道伊拉克持續暴力、 in Iraq, the Israeli incursion into Lebanon, where a team of Phoenix reporters 以色列入侵黎巴嫩（其中鳳凰衛視更派送一支 did on-the-spot reports on the fi ghting, the Iranian nuclear programme, 記者隊伍對以色列入侵黎巴嫩的戰爭進程作 and the North Korean missile launches and nuclear test. Phoenix also 了現場報道）、伊 朗 核 計 劃 以 及 北 韓 導 彈 試 射 followed key China-related stories, such as President Hu Jintao’s visit to 及核試驗等。鳳凰衛視亦追蹤報道與中國相關 the United States, the meeting of the Shanghai Cooperation Organisation, 的重要時事新聞，例如國家主席胡錦濤訪問美 which brings together China, Russia and the four main countries of 國、上海合作組織峰會（成員包括中國、俄羅斯 Central Asia, and Kim Jong-il’s unpublicised visit to China. Phoenix did 及中亞四個主要國家）以及金正日秘密訪問中 extensive reporting on Taiwan, including on the mass protests aimed at 國等。鳳凰衛視亦對台灣（包括民眾發起的大 removing Chen Shui-bian from offi ce, which were rarely mentioned by any 規模倒扁反貪腐運動）進行了廣泛報道，而其 other Chinese-language television services broadcasting to the mainland 他中文電視服務廣播機構對此卻鮮有向中國內 Chinese audience. 地觀眾作出報道。
Phoenix placed special emphasis on China/United States relations at the 鳳凰衛視特別關注國家主席胡錦濤訪問美國時 time of President Hu Jintao’s visit to the United States. Phoenix interviewed 的中美關係。鳳凰衛視曾採訪時任美國副國務 the then Deputy-Secretary of State Robert Zoellick, held discussion 卿的羅伯特•佐力克（Robert Zoellick）、與 若 干 programmes with a number of American commentators including former 美國時事評論員包括美國前國務卿亨利• 基辛 Secretary of State Henry Kissinger, and together with the Brookings 格（Henry Kissinger）一道舉行政論節目，以 及 與 Institution organised a forum on China/U.S relations that featured a range 布魯金斯學會（Brookings Institution）聯合組織 of experts on China/U.S. relations. 中美關係論壇，並特邀多名從事中美關係研究 的專家學者出席。
Phoenix celebrated its tenth anniversary on 31 March 2006 with a 鳳凰衛視於二零零六年三月三十一日在香港亞 spectacular event at Hong Kong AsiaWorld-Expo. This occasion provided 洲國際博覽館舉行大型活動慶祝其十週歲生 an opportunity to showcase both Phoenix’s capacity for entertainment, and 日。此 項 活 動 為 鳳 凰 衛 視 提 供了一 個 展 示 其 公 its concern with social issues and international developments. A number 共娛樂地位及其密切關注社會問題及國際發展 of Hong Kong celebrities, including Jackie Chan, Andy Lau and Eric Tseng, 的機會。許多香港社會名流如成龍、劉德華及曾 took part, as did a range of government and religious fi gures, along with 志偉連同多位政府政要及宗教名人均參加了此 people who had witnessed some of the worst events of recent years, 次慶祝活動，並邀請了近年災難事件（包括紐約 including the terrorist attack on New York’s World Trade Center and the 世界貿易中心恐怖襲擊及俄羅斯南部別斯蘭人 Biselan massacre in southern Russia. 質事件）的親歷者參與。
Phoenix Annual Report 2006 09 Phoenix further consolidated its global reach in 2006, and began 鳳凰衛視於二零零六年進一步擴大了其全球落 broadcasting to the two major regions that previously had no access 地範圍，開始向先前無法接收到鳳凰衛視節目的 to Phoenix programming. The North American Channel and InfoNews 兩個主要地區進行廣播。美洲台及資訊台均於 both began to broadcast across South America on the SATMEX-6 四月開始透過 SATMEX-6號衛星向南美洲地區 satellite in April, and InfoNews began to be carried on TELSTAR-12 in 播送節目，及資訊台於五月開始透過TELSTAR- May, which enabled it to reach South Africa, where a sizeable Chinese 12號衛星進行廣播，可使資訊台覆蓋範圍擴至 minority had previously been unable to receive Phoenix. The Group 南非，在此之前，當地大量的華人一直無法收看 strengthened its already well-established position in South-East Asia, 到鳳凰衛視節目。本集團與菲律賓最大的有線 reaching an agreement with the largest Philippines cable operator, Sky 電視營運商Sky Cable訂立協議，由今年五月開 Cable, to begin carrying both the Chinese Channel and InfoNews in 始傳送中文台及資訊台兩個頻道，從而進一步鞏 May this year. 固其在東南亞地區已建立的良好業務。
The unique position that Phoenix occupies in the global Chinese-speaking 鳳凰衛視曾於八月贊助及協辦在北京舉行的由 world was exemplifi ed by Phoenix Satellite Television’s sponsorship and hosting 紐約國際電視藝術及科學學院主辦的「國際學 of the International Academy Day in Beijing in August, which was held by the 院中國日」，彰 顯 了鳳 凰 衛 視 在 全 球 華 語 界 的 New York-based International Academy of Television Arts and Sciences. 獨特地位。
In September, the Group entered into an agreement with Freescale 於九月，本集團與飛思卡爾半導體香港有限公司 Semiconductor Hong Kong Limited to acquire a site in Tai Po, Hong 訂立協議，購入一幢位於香港大埔的物業，該物 Kong, in order to provide more spacious premises to cope with the 業可提供更寬敞的辦公場地，以配合本集團將來 future expansion of the Group’s business and operational activities. 的業務及運作活動的發展。本集團將於二零零七 The Group will take over the Tai Po site in late May 2007 and plans to 年五月下旬接管大埔物業，並計劃於二零零七年 move in after the refitting is completed in late 2007 or early 2008. The 後期或二零零八年初完成裝修工程後遷入該物 transaction is not expected to have any material impact on the liquidity 業。預 期 是 項 交易 將 不 會 對 本 集 團 的 流 動 資 金 of the Group. 造成任何重大影響。
While the Group’s television business continued to generate a profi t it has 在本集團電視業務繼續帶來溢利的同時，本集 also been exploring ways to expand its access to the Chinese market. 團亦一直在尋求可拓展其中國市場的渠道。故 As a consequence the Group’s shareholding changed in August, when 此，本集團股權於八月有所改變，中國移動（香 China Mobile (Hong Kong) Group Limited acquired a 19.9% interest in 港）集團有限公司自Xing Kong Chuan Mei the Group from Xing Kong Chuan Mei Group Co., Ltd., and China Mobile Group Co., Ltd.購入本集團的19.9%權益，而 Limited entered into a strategic agreement with Phoenix to jointly develop, 中國移動有限公司與本集團訂立戰略協議，旨 market and distribute wireless content, products, services and new media 在共同開發、行銷及分銷無線內容、產品、服 applications. This agreement creates a framework for Phoenix to cooperate 務及新媒體應用。此協議為鳳凰衛視帶來與中 with China’s largest telecommunications operator, thereby enabling the 國最大通信營運商進行合作的契機，從而令本 Group to have direct access to China Mobile’s network and provide content 集團可直接使用中國移動網絡，以及當內地通 for China Mobile once mainland telecommunications companies begin to 信公司開始提供3G服務時即可為中國移動提 provide 3G services. 供內容服務。
10 鳳凰衛視年報 2006 chairman’s statement 主席報告書
The Chinese television market continues to undergo many changes, as 華語電視市場繼續處於不斷變革之中，如內地 mainland television companies increasingly compete for the Chinese market 電視公司亦透過開發新穎節目積極爭奪華語 by developing innovative programming, but the Group’s management remains 市場，但本集團管理層有充分信心集團能夠 confi dent that it can maintain its position as the main Mandarin Chinese- 保持其作為中國內地以外的主要普通話電視 language television broadcaster that is based outside mainland China. 台的地位。
The Group’s performance throughout 2006 has shown improvement over 本集團於整個二零零六年的業績表現較去年 the previous year, providing evidence to support the assessment that the 有所改善，證明鳳凰衛視於二零零四年商業業 major turn-around in commercial results that Phoenix achieved in 2004 績實現盈利顯著改善及於二零零五年持續向好 and continued to enjoy in 2005 will persist. The Chinese economy remains 的情況會繼續下去。蓬勃發展的中國經濟可繼 buoyant, and should remain a steady source of advertising revenue. At the 續成為廣告收入的穩定來源。同時，鳳凰衛視 same time Phoenix is exploring other outlets for its content in order to ensure 積極為其內容服務物色其他機會，以確保其於 that the effort it invests in producing new and innovative programming 製作新穎節目方面的投資努力能盡量帶來最高 generates the maximum fi nancial returns possible. The management believes 業績回報。管理層相信在可見將來本集團業務 that the Group’s business will remain solid for the foreseeable future. 將會持續穩定發展。
LIU Changle 主席 Chairman 劉長樂 Hong Kong, 8 March 2007 香港，二零零七年三月八日
Phoenix Annual Report 2006 11 A Global Media Organisation 建基全球
Asia Pacifi c 亞太區 As a satellite broadcaster Phoenix is primarily distributed by AsiaSat, which has a footprint covering the Asia-Pacifi c region. On the Chinese mainland Phoenix is downloaded to many regional cable networks by Sinosat, and in Hong Kong it is on all major distribution systems. In many other countries and regions Phoenix is North America 北美洲 New York also carried by local operators. 紐約 Washington 作為一個全球華人的衛星頻道，鳳凰衛視透過 華盛頓
亞衛三號S覆蓋整個亞太地區。在中國大陸， Los Angeles 鳳凰衛視通過鑫諾衛星進入全國有線網絡系 洛杉磯 統。香港及其他城市，鳳凰衛視也透過當地有 線系統全頻落地。
Malaysia 馬來西亞 New Zealand 紐西蘭 Phoenix Is distributed by ASTRO, the major DTH Phoenix is carried by WorldTV in New Zealand. operator, in Malaysia. 鳳凰衛視進入新西蘭中華電視網(WorldTV)系統。 鳳凰衛視通過馬來西亞ASTRO，以直接到戶 DTH ( )技術全頻廣播。 Africa 非洲 Phoenix is carried by the TELSTAR-12 satellite. Singapore 新加坡 鳳凰衛視透過TELSTAR-12號衛星進行廣播。 Phoenix is carried by Starhub in Singapore. Starhub 鳳凰衛視進入新加坡星和視界( )。 South Africa 南非 Phoenix is now carried on the SATMEX-6 satellite. Indonesia 印尼 鳳凰衛視現時透過SATMEX-6號衛星廣播。 Phoenix is carried by Kabelvision and DirectVision in Indonesia. North America 北美洲 鳳凰衛視進入印尼Kabelvision及DirectVision 系統。 Phoenix North America Chinese Channel is carried by DirecTV and EchoStar in the United States and by Rogers in Canada. Japan 日本 鳳凰衛視美洲台在美國透過DirecTV及 EchoStar Phoenix is carried by Rakuraku Communications 及在加拿大透過Rogers廣播。 in Japan. Rakuraku 鳳凰衛視進入日本樂樂中( Europe 歐洲 Communications)。 Phoenix Chinese News and Entertainment, the Phoenix European Channel, is carried by Sky Digital, Eurobird 6, Australia 澳洲 and a number of other national cable systems in Europe. Phoenix is available from ASIASAT. 鳳凰衛視歐洲台成功進入歐洲的主流衛星電視網 鳳凰衛視透過亞洲衛星(ASIASAT)廣播。 Sky Digital、Eurobird 6以及多個國家有線電視網絡。
12 鳳凰衛視年報 2006 a global media organisation 建基全球
Phoenix global reach 鳳凰全球網絡
Phoenix news bureaux and reporters worldwide 鳳凰全球新聞辦事處及記者站
Moscow London 莫斯科 倫敦
Paris 巴黎 Europe 歐洲 Beijing 北京 Japan 日本 Tokyo 東京 Shanghai 上海
Shenzhen Taipei 深圳 台北 Hong Kong Africa 非洲 香港 Asia Pacifi c 亞太區 Malaysia 馬來西亞
Singapore 新加坡
Indonesia 印尼
South Africa 南非 Australia 澳洲
Sydney 雪梨
New Zealand 紐西蘭
鳳凰衛視 美洲台 歐洲台 Phoenix Chinese Channel Phoenix InfoNews Channel Phoenix NA Chinese Channel Phoenix CNE Channel
Phoenix Movies Channel Phoenix Website Phoenix Magazine
Phoenix Annual Report 2006 13 Global Outlook 全球視野
Phoenix has a global outlook, and in its approach to covering news it seeks to provide the Chinese audience with up-to-the-minute information about the major events and developments happening around the globe. Underlying this approach is the belief that no one is isolated from global developments and that the Phoenix audience needs to have access to information about the key international events at any particular time.
鳳凰衛視極具全球視野，而在其新聞報道中一直致力於向華語觀眾提供全球各地 發生的重大事件及發展事態的最新資訊，如此是堅信並無任何人可孤立於全球 事態發展，而鳳凰衛視觀眾亦需隨時隨地知悉國際重大事件。
14 鳳凰衛視年報 2006 Phoenix Annual Report 2006 15 a global team THE MAINLAND 全球團隊 中國大陸
To fulfi ll its role as a global broadcaster, Phoenix has a team of presenters and reporters drawn from mainland China, Taiwan, and Hong Kong, as well as from the global Chinese community.
The core of the Phoenix team is drawn from the four corners of the Chinese mainland, from regional centers such as Lanzhou, Fuzhou and Xiamen as well as from cities like Beijing, Shanghai and Guangzhou.
為了實現鳳凰衛視擔任全球廣播服務機構的角色，鳳凰衛視在中國大陸、台灣、 香港及全球華語社群中組成其主播及記者隊伍。
鳳凰衛視團隊的核心隊員來自中國大陸各省市，例如蘭州、福州及廈門等區域 中心以及北京、上海及廣州等城市。
16 鳳凰衛視年報 2006 1 Dong Jiayao 董嘉耀 2 Li Hui 5678 李輝 3 Chen Luyu 陳魯豫 1234 91011 12 4 Chen Xiaonan 陳曉楠 5 Zeng Zimo 曾子墨 6 Yuchi Linjia 尉遲琳嘉 7 Olivia Xu 許戈輝 8 Shen Xing 沈星 9 Jiang Xinrong 江欣榮 10 Dou Wentao 竇文濤 11 Cao Jingxing 曹景行 12 Li Wai 李慧
Phoenix Annual Report 2006 17 a global team TAIWAN 全球團隊 台灣
1 Shi Chiping 石齊平 2 Vie Tseng 曾 漪 3 Jason Chien 簡福疆 56 7 4 Sally Wu 吳小莉 1234 5 Alice Wang 王菁 8910 6 Avon Hsieh 謝亞芳 7 Tiger Hu 胡一虎 8 Chiang Shengyang 薑聲揚 9 Chen Yuchia 陳玉佳 10 Shannon Liu 劉珊玲
18 鳳凰衛視年報 2006 Some of the most popular Phoenix presenters come from taiwan, bringing a distinctive style that appeals to the mainland Chinese audience.
鳳凰衛視有多名深受歡迎的主播來自台灣，他們與眾不同的風格亦深深吸引 中國大陸觀眾。
Phoenix Annual Report 2006 19 a global team HONG KONG & THE REST OF THE WORLD 全球團隊 香港與國際
With its headquarters in Hong Kong, Phoenix has a strong contingent of reporters, presenters and cameramen who originate from Hong Kong, and who bring a high level of professional and technical competence to Phoenix.
The Phoenix team also includes key players who have close ties with the rest of the world, having worked, studied or acquired citizenship in many countries, including Australia, Canada, and the United States.
以香港為基地的鳳凰衛視擁有陣容強大的來自香港的記者、主播及攝影師， 他們為鳳凰衛視帶來高水平的專業及技術優勢。
鳳凰衛視團隊的主要成員亦包括與世界各地有密切聯繫的人士，他們曾在多 個國家如澳洲、加拿大及美國工作、進修或取得公民資格。
20 鳳凰衛視年報 2006
1 Ada Lau 劉芳 5 6 2 Yang Jinlin 楊錦麟 3 Anthony Yuen 阮次山 123 4789 4 Jonathan Sa 薩文 5 Lawrence Ho 何亮亮 6 Leung Mantao 梁文道 7 Angela Chow 周瑛琦 8 Ma Dingsheng 馬鼎盛 9 Peter Qiu 邱震海
Phoenix Annual Report 2006 21 The Chinese gateway 中國門戶
According to the second half-year of 2006 “Audience Appreciation Survey 根據於二零零六年下半年進行的「鳳凰衛視觀 of Phoenix TV”, Phoenix Chinese Channel continued to surpass other 眾滿意度調查報告」顯示，鳳凰衛視中文台繼續 satellite channels in China by securing the No.1 position in the Audience 超越中國內地的其他衛星頻道，穩居觀眾滿意 Satisfaction Index. This is the fi fth consecutive time since the second half- 度指數第一位。此為自二零零四年下半年以來 year of 2004 that Phoenix has ranked at the top of the list. 鳳凰衛視連續五次位列排行榜首位。
Phoenix Chinese is outstanding among foreign broadcasters operating 鳳凰衛視中文台在眾多境外頻道中鶴立雞群， in China, with an audience comprising 82.4% of those watching foreign 受關注度高達82.4%，遠 過 超 過 其 他 電 視 頻 道， channels, far surpassing the viewership of any other channels, and is also 是贏得最多關注的辦公室電視媒体。鳳凰衛視 the television media most watched in offi ces. 在辦公室裡掌握了輿論引導的主動權，拿到發揮 媒體影響力的先手。
Phoenix Chinese is the third most popular nationwide channel among 鳳凰衛視為第三大最受中國商務人士歡迎的全 Affl uent Business Executives, outperforming CCTV News, CCTV-2, Hunan 國性電視頻道，超過央視新聞頻道、央視二套、 Satellite, Dragon TV, etc. This demonstrates that Phoenix Chinese Channel 湖南衛視、東方衛視等頻道，表明鳳凰衛視中文 has a comparatively strong infl uence among Chinese business executives. 台在中國商務人士群體中有較強的影響力。
general satisfaction index 滿意度綜合指數
81.8 75.8 73.4 73.0 70.6 70.1 69.7 66.8 64.5 64.3
Phoenix Chinese Channel CCTV-3 Phoenix InfoNews Channel CCTV-10 CCTV News 鳳凰衛視中文台 中央台三套 鳳凰衛視資訊台 中央台十套 中央台新聞頻道 CCTV General CCTV-5 Phoenix Movies Channel Hunan Satellite CCTV-12 中央台一套 中央台五套 鳳凰衛視電影台 湖南衛視 中央台十二套
22 鳳凰衛視年報 2006 the chinese gateway 中國門戶
audience appreciation survey – viewing in the office 辦公室電視媒體滿意度調查
Phoenix Chinese Channel 82.4 鳳凰衛視中文台
CETV 28.2 華娛衛視
Phoenix InfoNews Channel 27.1 鳳凰衛視資訊台
Xing Kong Satellite 20.0 星空衛視
Phoenix Movies Channel 7.1 鳳凰衛視電影台
NGC 2.4 國家地理頻道
Asia Plus 2.4 東風衛視 Phoenix Chinese Channel stands Sun Satellite 1.2 陽光衛視 out as the most watched of all foreign broadcasters. In offi ces Macau Five Star Satellite TV 1.2 澳門五星衛視 Phoenix Chinese Channel is also Channel [V] 1.2 the most watched television media. 鳳凰衛視中文台在所有外國電視台 ESPN 1.2 中表現最出色。在辦公室，鳳凰衛 視中文台亦是最多人觀看的媒體。 HBO 1.2 HBO電影頻道
2006 china Business executive Survey 中國商務人士調查
CCTV-1 49.4 中央台一套
CCTV-5 39.7 中央台五套
Phoenix Chinese Channel 17.8 鳳凰衛視中文台
CCTV-News 17.4 中央台新聞頻道
Phoenix InfoNews Channel 15.4 鳳凰衛視資訊台
Hunan Satellite 13.8 湖南衛視
CCTV-2 11.8 中央台二套 The daily reach of Phoenix Chinese Dragon TV 8.4 Channel among Chinese business 上海東方衛視 executives is in the top 10. CCTV-3 8.0 中央台三套 鳳凰衛視中文台在商務人士中的 Travel Satellite 7.7 覆蓋率位居十強。 旅遊衛視
Phoenix Annual Report 2006 23 {25} Corporate Information ʔ̇༅ࢿ
Management Discussion and Analysis ဳଉᄙদሃʥʗ {27}
{31} Directors and Senior Management Profi le ໎ԑʥঢ়ज़ဳଉɁࡗᓯʍ
Corporate Governance Report ͬพဳ؝ంй {40}
{46} Report of the Directors ໎ԑผంй࣊
{73} Independent Auditor’s Report ዟ͓࣏ᅕంй࣊
ٲFinancial Statements ল৻ం {75}
ഽڃٲNotes to the Financial Statements ল৻ం {81}
{155} Financial Summary ল৻ล߬
24 უ৷ᇯ഼αం2006 24 უ৷ᇯ഼αం2006 CORPORATE INFORMATION ʔ̇༅ࢿ
Board of Directors ໎ԑѫ
Executive Directors ਨϷ໎ԑ ᅥ˚ٽLIU Changle (Chairman) ჳ CHUI Keung ੌੜ WANG Jiyan ˔Ӱ
ਨϷ໎ԑڈ Non-Executive Directors LU Xiangdong ቧΉ GAO Nianshu ঢ়֨࣊ Paul Francis AIELLO Paul Francis AIELLO ڋLAU Yu Leung, John ჳީ ɻۺGONG Jianzhong ᛛ
ਨϷ໎ԑڈIndependent Non-executive Directors ዟ͓ LO Ka Shui ᖓཽ LEUNG Hok Lim ષነዅ Thaddeus Thomas BECZAK Thaddeus Thomas BECZAK
Compliance Officer ဟྦ˚ͨ CHUI Keung ੌੜ
Company Secretary ʔ̇ो࣊ YEUNG Ka Keung, A.C.A. ฦࡼੜcA.C.A.
Cayman Islands Assistant Secretary ਅະࢌХଉो࣊ Codan Trust Company (Cayman) Limited Codan Trust Company (Cayman) Limited
Qualified Accountant ༅ࣟผ߮ YEUNG Ka Keung, A.C.A. ฦࡼੜcA.C.A.
Audit Committee ᄗ࣏կࡗผ Thaddeus Thomas BECZAK (Chairman) Thaddeus Thomas BECZAK˚ LO Ka Shui ᖓཽ LEUNG Hok Lim ષነዅ ڋLAU Yu Leung, John ჳީ
Remuneration Committee ᑀ༭կࡗผ Thaddeus Thomas BECZAK Thaddeus Thomas BECZAK LO Ka Shui ᖓཽ LEUNG Hok Lim ષነዅ ڋLAU Yu Leung, John ჳީ GAO Nianshu ঢ়֨࣊
Auditors ࣏ᅕ ༞ผ߮ԑ৻̷ֺڻPricewaterhouseCoopers ᖓМ
Phoenix Annual Report 2006 25 CORPORATE INFORMATION ʔ̇༅ࢿ
Head Office and Principal Place of Business ᐢʥ˚߬ᏪพΔᒨ 9th Floor ࠗಋ One Harbourfront Ⱦ᎘ 18 Tak Fung Street Hunghom ᄨᔔഷɊɄ໔ Kowloon ࣵᏛᄤȹ Hong Kong Ⱦᅢ
Registered Office ഽ˫ፒԑ୮ Cricket Square Cricket Square Hutchins Drive Hutchins Drive P.O. Box 2681 P.O. Box 2681 Grand Cayman KY1-1111 Grand Cayman KY1-1111 Cayman Islands Cayman Islands
Principal Share Registrar ˚ٖ߬ͫ༦ʸত୮ Butterfi eld Fund Services (Cayman) Ltd. Butterfi eld Fund Services (Cayman) Ltd. P.O. Box 705 P.O. Box 705 Butterfi eld House Butterfi eld House 68 Fort Street 68 Fort Street George Town George Town Grand Cayman, Cayman Islands Grand Cayman, Cayman Islands
Hong Kong Branch Share Registrar ࠗಋٖͫ༦ʸত୮ʗ୮ Hong Kong Registrars Limited ࠗಋᖬԴতτࠉʔ̇ Shops 1712-1716 ࠗಋ ɣ༞183໔ޒ F., Hopewell Centre/17 183 Queen’s Road East ɻʶ17ᅢ1712-1716໔⭕ Wanchai, Hong Kong
Principal Bankers ˚߬֡ԞႺϷ Hongkong and Shanghai Banking Corporation Limited ࠗಋɐࣵ㟱ᔔႺϷτࠉʔ̇ Bank of Communications ͚ႺϷ Industrial and Commercial Bank of China (Asia) Limited ɻਝɮਆႺϷԓݘτࠉʔ̇ ജႺϷཽڌCitic Ka Wah Bank Limited ɻ
Website Address ၉э www.phoenixtv.com www.phoenixtv.com www.irasia.com/listco/hk/phoenixtv/index.htm www.irasia.com/listco/hk/phoenixtv/index.htm
GEM Stock Code พٖͫˤ໔ 8002 8002
2006 26 უ৷ᇯ഼αం MANAGEMENT DISCUSSION & ANALYSIS ဳଉᄙদሃʥʗ
COMMENTS ON SEGMENTAL ʗᗘ༅ࢿിሃ INFORMATION
එ྆พ৻ʗᗘˈ༖࿀ϭɀཌྷཌྷʒαʥ̯ܘᛷ͐ٲThe table below shows the comparison of operating results of the Group’s Ɏ businesses for the year ended 31 December 2006 and 2005 respectively. ɀཌྷཌྷʄαɊɀ˂ɍɊȹˀ˅α۹ؿ̯එ྆พ৻ Ꮺพᐜe
Year ended 31 December ࿀ϭɊɀ˂ɍɊȹˀ˅α۹ 2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα HK$’000 HK$’000 ɝಋʏ ɝಋʏ
Phoenix Chinese Channel უ৷ᇯ഼ɻʼ̎ 370,715 353,569 Phoenix InfoNews Channel უ৷ᇯ഼༅̎ 33,245 (12,573) Phoenix Movies Channel, Phoenix North America უ৷ᇯ഼ཋᄧ̎d Chinese Channel & Phoenix Chinese News and უ৷ᇯ഼ݘ̎ʥ (Entertainment Channel უ৷ᇯ഼ᅩݘ̎ (58,612 ) (60,495 Other businesses ԯˢพ৻ (8,887 ) (3,760) Corporate overheads එ྆Ϸܧʻˮ (145,607 ) (118,056)**
Profi t from operations ᏪึС 190,854 158,685
͂൚ᔾᅆټЏܢ˳ʻˮܧɀཌྷཌྷʄαؿඑ྆Ϸכ ** Corporate overheads in 2005 included a non-recurring write back of an ** ֲᅆΑݯ 8,000,000ಋʏeڈover-provision for commission expenses which amounted to approximately ௐɾ HK$8,000,000.
ᄤйʥν഼νɃɐʠܢ˳Revenues from television broadcasting, comprising both advertising and ԞϬཋ഼ᄤᅌؿνɃ subscription revenues, which accounted for 95.9% of the Group’s total 3.9%ϭ1,014,822,000ಋʏ࿀ϭɀཌྷཌྷʄαɊɀ revenue for the year ended 31 December 2006, increased by 3.9% to ˂ɍɊȹˀ˅α۹i976,797,000ಋʏcЌ࿀ϭ approximately HK$1,014,822,000 (year ended 31 December 2005: ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹̯එ྆ᐢνɃؿ HK$976,797,000). The segmental result for television broadcasting 95.9%e࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹cཋ recorded a profit of approximately HK$351,549,000 for the year ended ഼ᄤᅌʗᗘพᐜ፣ึС351,549,000ಋʏ࿀ϭ December 2006 (year ended 31 December 2005: 281,610,000). ɀཌྷཌྷʄαɊɀ˂ɍɊȹˀ˅α۹i281,610,000ಋ 31 ʏe
Revenue from the Group’s flagship channel, Phoenix Chinese Channel, ԞϬ̯එ྆ؿ࿏ᘜ፼༞Ðუ৷ᇯ഼ɻʼ̎ؿνɃႦ which accounted for 68.3% of the Group’s total revenue for the year ended ෬Ɏࠌ3.6%ϭ722,697,000ಋʏ࿀ϭɀཌྷཌྷʄα December 2006, marginally decreased by 3.6% to approximately Ɋɀ˂ɍɊȹˀ˅α۹i749,650,000ಋʏcЌ࿀ 31 HK$722,697,000 (year ended 31 December 2005: H$749,650,000). ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹̯එ྆ᐢνɃ ؿ68.3%e
Phoenix InfoNews Channel’s revenue accounted for 21.1% of the ࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹cუ৷ᇯ Group’s total revenue for the year ended 31 December 2006, and ഼༅̎ؿνɃЌ̯එ྆ᐢνɃؿ21.1%cɐʠ increased by 35.3% to approximately HK$223,550,000 (year ended 35.3%ϭ223,550,000ಋʏ࿀ϭɀཌྷཌྷʄαɊɀ December 2005: HK$165,186,000). ˂ɍɊȹˀ˅α۹i165,186,000ಋʏe 31
The cumulative revenues of Phoenix Movies Channel, Phoenix North უ৷ᇯ഼ཋᄧ̎dუ৷ᇯ഼ݘ̎ʥუ৷ᇯ഼ᅩݘ ˅America Chinese Channel and Phoenix Chinese News and Entertainment ̎ؿୃዶνɃ༖࿀ϭɀཌྷཌྷʄαɊɀ˂ɍɊȹˀ Channel, increased 10.7% as compared to the year ended 31 December α۹ɐʠ10.7%ϭ68,575,000ಋʏe 2005 to approximately HK$68,575,000.
Phoenix Annual Report 2006 27 MANAGEMENT DISCUSSION & ANALYSIS ဳଉᄙদሃʥʗ
COMMENTS ON SEGMENTAL ʗᗘ༅ࢿിሃᙩ INFORMATION (CONTINUED)
Revenue from programme production and ancillary services decreased ࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹cຝ͌ႇА එܢ˳৻ؿνɃಕʭϭ26,498,000ಋʏרto approximately HK$26,498,000, which included intra-group sales of ʥʻ approximately HK$24,584,000, for the year ended 31 December 2006 ྆ʑʔ̇ංሻਕ24,584,000ಋʏ࿀ϭɀཌྷཌྷʄ year ended 31 December 2005: total revenue HK$32,799,000; intra- αɊɀ˂ɍɊȹˀ˅α۹iᐢνɃÐ 32,799,000ಋ) group sales – HK$28,808,000). ʏhඑ྆ʑʔ̇ංሻਕÐ 28,808,000ಋʏe
৻ؿνɃɐʠϭ13,490,000ಋʏcϤʗᗘרThe revenue of the internet services increase to HK$13,490,000 with a ʃᐲ၉ segmental profi t of HK$894,000. ึСݯ894,000ಋʏe
ԞϬუ৷൪˰ؿᄤйʥ߯ᑪνɃܢ˳Other activities, which included advertising and subscription revenue ԯˢพ৻ ࿀ϭɀཌྷཌྷʒαɊɀכfrom the Phoenix Weekly magazine and handling income from television ˞ʥνཋ഼ؿʹᙩνɃ Сᘆeޔsubscriptions, contributed marginally to the Group for the year ended ˂ɍɊȹˀα۹ᘗᙩྦྷ̯එ྆Аˮʭ൴ 31 December 2006.
αξ౨ᄪूუ৷ᇯ˾כʻˮᄈ˱˚߬ܰͅܧThe increase in corporate overheads was mainly attributable to the එ྆Ϸ advertising and promotional costs incurred in celebrating the 10th ഼Ɋ൪αϤଐ́ؿᄤйۧඨֺ͂ߎe anniversary of Phoenix earlier last year.
˞ഽ5τᗐʗᗘ༅ࢿؿୀʗcڃٲPlease refer to note 5 of the notes to the fi nancial statements for a detailed ᇼቇল৻ం analysis of segmental information and the “Business Overview” in this ʥ̯ంйพ৻Αᚋτᗐ̯එ࣏྆ʶพ৻ؿിሃe report for commentary on our core business.
DIVIDEND ٖࢠ
ᘪݢೕ࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹۺThe Board has decided to recommend a fi nal dividend of HK$0.014 per ໎ԑผ༦ ordinary share for the year ended 31 December 2006 (2005: HK$0.012 ˀ˅α۹ؿ̱౨ٖࢠҰٖౝٖ0.014ಋʏɀཌྷཌྷ c̱܃ғٖۿper ordinary share). Upon approval by the shareholders, the fi nal dividend ʄαiҰٖౝٖ0.012ಋʏe ݢೕ܃کɀཌྷཌྷȼαʒ˂ɍɊˀֶˀכwill be paid on or about 30 June 2007 to shareholders whose names ౨ٖࢠੀ ɀཌྷཌྷȼαʒ˂ɀɊȹˀΊͶ̯ʔٖ̇তכappear on the register of members of the Company on 21 June 2007. ʀ ؿٖe˫
ᙔʔ̇ʥᐲᙔʔ̇ؿνᑪʥˮਕڃ ACQUISITIONS AND DISPOSALS OF SUBSIDIARIES AND AFFILIATED COMPANIES
࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹ʑc̯එכ The Group had no material acquisitions or disposals of subsidiaries and ᙔʔ̇ʥᐲᙔʔ̇ؿࠇɣνᑪֶˮਕԑڃaffi liated companies during the year ended 31 December 2006. ྆ลಲ փe
ʥল৻༅ټLIQUIDITY AND FINANCIAL RESOURCES ݚ৽༅
ʥټɀཌྷཌྷʒαɊɀ˂ɍɊȹˀؿݚ৽༅כThe liquidity and fi nancial resources of the Group as at 31 December 2006 ̯එ྆ ᙩҝܛɀཌྷཌྷʄαɊɀ˂ɍɊȹˀّכgradually improved compared to those of the Group as at 31 December ল৻༅༖ ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀؿֆ̰כThe aggregate outstanding borrowings of the Group as at 31 ഁe̯එ྆ .2005 ˂December 2006 were approximately HK$4,743,000, representing current ᑹࠥ൘ᐢᔾݯ4,743,000ಋʏɀཌྷཌྷʄαɊɀ אaccounts with related companies which were unsecured and non-interest ɍɊȹˀi4,900,000ಋʏcݯᗐடʔ̇ؿಲ එ྆ؿ̳༜Аᅡ̯כbearing (as at 31 December 2005: HK$4,900,000). Such fl uctuation was Лࢠ֡Ԟሏಁeඖؐ৽ᙔ within the normal pattern of operations of the Group. βe
28 უ৷ᇯ഼αం2006 ʥল৻༅ᙩټLiquidity and Financial resources ݚ৽༅ (CONTINUED)
˸ဍ˺܆ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀc࣓ኣၤࠔכ As at 31 December 2006, the Group had an outstanding purchase price of approximately HK$96,720,000 payable under a sale and purchase ኒࠗಋτࠉʔ͓̇߯ؿൕሒԾᘪc̯එ྆τֆ̰ agreement with Freescale Semiconductor Hong Kong Limited whereby the ᑹᑪൕძݯ96,720,000ಋʏcϤ࣓ኣൕሒԾ Group agreed to purchase a property located in the Tai Po Industrial Estate ᘪc̯එ྆෮Ήɐ߸ࠔ܆˺ဍ˸ኒࠗಋτࠉʔ พe࣓ኣࠗಋذࠗಋɣࡣɮพ㢏ؿכin Hong Kong from the said Freescale Semiconductor Hong Kong Limited. ̇ᑪൕȹඖϽ In accordance with the requirements of the Hong Kong Science and ޫҌ්ʔ̇ԯᏪʥဳଉɣࡣɮพ㢏ؿஃցc̯ כTechnology Parks Corporation, which operates and manages the Tai Po එ྆Ϭɀཌྷཌྷȼαʄ˂ɍɊȹˀ48˂ʑc 105,000,000ಋʏؿณכพɻѧιΪძࠤɺʭذIndustrial Estate, the Group shall complete installation of new machinery and equipment with a value of not less than HK$105,000,000 at the ዀኂʥஉௐe property within 48 months from 31 May 2007.
The gearing ratio of the Group, based on total liabilities to equity attributable ܘᐢ߲ඦޚྦྷ̯ʔ̇ᚬऩܛτɁᎶЌᚬऩ့߮c̯ ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀؿ༅̯߲ඦˈଅכto equity holders of the Company, was 23.0% as at 31 December 2006 (as එ྆ at 31 December 2005: 15.5%). Accordingly, the fi nancial position of the ݯ 23.0%ɀཌྷཌྷʄαɊɀ˂ɍɊȹˀi15.5%e Ԯݚ৽ֲeڈؗʋرGroup has remained very liquid. ԗϊc̯එ྆ؿল৻
එ྆ɣͫஒྫྷ༅ଐȽ˞ಋʏdʏʥɁ̵̯כͅ As most of the Group’s monetary assets are denominated in Hong Kong එ྆ႏݯ̯ܨdollars, US dollars and Renminbi, with minimal balances in UK pounds ྫྷ߮ძcϤʭᅕ˞ߜᔦʥ̎ྫྷ߮ძc and Taiwan dollars, the exchange rate risks of the Group are considered to ԯֺֻՇؿමଅࠓ፮รГe be minimal.
אCHARGE ON ASSETS ༅ଐ
ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀc3,907,000ಋʏɀכ As at 31 December 2006, deposits of approximately HK$3,907,000 (as at December 2005: HK$3,407,000) were pledged with a bank to secure a ཌྷཌྷʄαɊɀ˂ɍɊȹˀi3,407,000ಋʏؿΦಁ 31 ొ˚ᙔʔ̇ؿพڃʀȹංႺϷcАݯΉȹංאguarantee given to the landlord of a subsidiary. ɰ eۂאؿړԜኪ
ɀཌྷཌྷʒαɊɀ˂ɍɊȹכOther than the above, the Group did not have any charge on its assets as ɐʼֺ߸̔c̯එ྆ ԯͨЄ༅אat 31 December 2006 and 31 December 2005. ˀʥɀཌྷཌྷʄαɊɀ˂ɍɊȹˀԎಲ ଐe
CAPITAL STRUCTURE ༅̯ܼ࿚
࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹ʑcϷכ During the year ended 31 December 2006, other than the exercise of ഽ27cڃٲল৻ంכshare options granted (detail as per note 27 to the fi nancial statements), Ԛɰˮؿᑪٖᚬ̔ੱ༗ ɀཌྷཌྷʒαɊɀ˂ɍɊȹכthere was no change in the Company’s share capital. As at 31 December ̯ʔٖ̯̇Ԏಲᛰ৽e τɁؿᚬऩܛthe Group’s operations were mainly by equity holders’ equity. ˀc̯එ྆ؿพ৻༜А˚߬༦ᚬऩ ,2006 eټԜ༅ొ
Phoenix Annual Report 2006 29 MANAGEMENT DISCUSSION & ANALYSIS ဳଉᄙদሃʥʗ
STAFF ࡗɮ
ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀc̯එ྆͂742ΊͲכ As at 31 December 2006, the Group employed 742 full-time staff (31 December 2005: 710), at market remuneration with employee benefi ts ᓻࡗɮɀཌྷཌྷʄαɊɀ˂ɍɊȹˀi710cࡗɮ Ͳࠍᔢᏻܢ˳such as comprehensive medical coverage, insurance plan, defined ֺᏵؿᑀ༭ଲ̟ˋ̡cࡗɮါС ི߮ʥࡗᑪٖټ፮ི߮dցᔾԜಁঽͤړdړ contribution pension schemes and an employee share option scheme. Staff costs for the year ended 31 December 2006 increased to approximately ᚬི߮e࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹ؿ HK$263,418,000 (year ended 31 December 2005: HK$242,207,000). ࡗɮι̯ʠϭ263,418,000ಋʏ࿀ϭɀཌྷཌྷʄα Ɋɀ˂ɍɊȹˀ˅α۹i242,207,000ಋʏe
The Group did not experience any signifi cant labour disputes or substantial ̯එ྆ԎӀτዃ༦ͨЄኒߎᄧᚊԯ̳พ৻༜А change in the number of its employees that led to any disruption of normal ؿࠇɣ༅ٍय़ֶࡗᅕ͌ࠇɣҝᛰe໎ԑႏݯ̯ ӪΡeڝbusiness operations. The Directors consider the Group’s relationship with එ྆ၤԯࡗؿᗐ its employees to be good.
τؿࠇɣҙ༅ܛSIGNIFICANT INVESTMENTS HELD ֺ
ߗכɀཌྷཌྷʒαɊɀ˂ɍɊȹˀc̯එ྆ҙ༅כ As at 31 December 2006, the Group invested in certain unlisted security ɐ̟ᖬԴҙ༅ඖ͌cԯЅ߮ʔ̡̟ࠤݯڈinvestments with an estimated fair market value of approximately ɳ HK$141,300,000 (as at 31 December 2005: HK$89,729,000). Save as 141,300,000ಋʏɀཌྷཌྷʄαɊɀ˂ɍɊȹˀi ࿀כdisclosed above, the Group has not held any signifi cant investment for the 89,729,000ಋʏeɐʼֺׄᚉّ̔c̯එ྆ τͨЄܛyear ended 31 December 2006. ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹Ԏಲ ࠇɣҙ༅e
ԞټFUTURE PLANS FOR MATERIAL ̰Ԟࠇɣҙ༅ི߮ʥད౨༅ INVESTMENTS AND EXPECTED SOURCE OF FUNDING
˨ϳ˿ذThe Group will continue to consolidate its existing businesses while ̯එ྆ੀᘗᙩኬԯଊτพ৻cԎࣂ exploring new business opportunities that will complement and enhance ʥ˱ੜԯଊτพ৻ؿณਆዀe its existing businesses.
ΕϣᄬقɀཌྷཌྷʒαɊɀ˂ɍɊȹˀc̯එ྆ȹכ As at 31 December 2006, the Group was considering various investment projects and options but had not made any solid plan for pursuing the Λҙ༅ඖ͌ʥፕእcЎԎಲగׅࢄ೩ඖ͌ϤԹ same. ցͨЄԮི߮e
CONTINGENT LIABILITIES ֶτ߲ඦ
ɀཌྷཌྷʒכഽ32ֺׄᚉّ̔c̯එ྆ڃٲOther than disclosed in note 32 to the financial statements, the Group ল৻ం had no material contingent liabilities as at 31 December 2006 and αɊɀ˂ɍɊȹˀʥɀཌྷཌྷʄαɊɀ˂ɍɊȹˀя December 2005. ಲࠇɣֶτ߲ඦe 31
30 უ৷ᇯ഼αం2006 DIRECTORS AND SENIOR MANAGEMENT PROFILE ໎ԑʥঢ়ज़ဳଉɁࡗᓯʍ
DIRECTORS ໎ԑ
Executive Directors ਨϷ໎ԑ ɀཌྷཌྷཌྷαɀ˂ɀˀᏵկͨcכᅥͱ́c55ัcٽMr. LIU Changle, aged 55, appointed on 2 February 2000, is the chairman ჳ ᐢസeܧand chief executive offi cer of Phoenix Satellite Television Holdings Limited. ଊͨუ৷ᇯ഼ઁٖτࠉʔ̇˚࠹Ϸ
ɻਝඨఌɣነcԎ˱ɃɻכଓพٱMr. LIU graduated from Communication University of China in the early ჳͱ́ɄɊαˤ তّdᇁፎdณၘിͨ܃1980s, and joined the China Central People’s Radio Station, with which he ਝɻ̕Ɂ̵ᄤᅌཋ̎cͱ has held over the years the positions of reporter, editor, news commentator ሃࡗʥঢ়ज़ဳଉɁࡗΛαcΛωၤࠇ߬ਝԑʥࠇ and senior management, and participated in the reporting and commentary ɣԑͧؿంኒിሃe of a number of important national occasions and events.
ᄤᅌd͏ؖdܢ˳Mr. LIU’s PRC domestic and overseas investments include broadcasting, ჳͱ́Εਝʑʥࣵ̔ؿҙ༅ඖ͌ ʥʼʝԑพeמพೕࢄdൗذdۺpetroleum, infrastructure construction, real estate development, trading ਥ and cultural businesses.
On 31 March 1996, Mr. LIU, through Today’s Asia Limited, which is 93.3% ȹȾȾʒαɍ˂ɍɊȹˀcჳͱ́༦ԯኟτ93.3% owned by him, together with Satellite Television Asian Region Limited ٖᚬؿʌˀԓݘτࠉʔ̇ᐲᇯܱཋ഼τࠉʔ̇ʥ and China Wise International Limited, jointly founded Phoenix Satellite ജዷਝτࠉʔ͓̇უ৷ᇯ഼τࠉʔ̇უ৷ࠗ ᐢܧTelevision Company Limited (“Phoenix HK”). He became and remains the ಋe֤Ϭϊιݯუ৷එ྆ؿ໎ԑผ˚࠹Ϸ chairman of the Board and the chief executive offi cer of Phoenix. സe
ᅥͱ́ྦྷඨఌԑพؿᆅྡྷሚᏵࣵʑ̔ΈٽMr. LIU Changle gained widespread accreditations from local and overseas ჳ ɾီஈeԒαԞֺᏵᆉඖੱؗΣɎi؟ᄤވ for his enthusiasm and achievement in the media industry. In the recent years, he received the awards and honours as follows:
ంၤࠗעIn August 2000, The Journalist of Taiwan, Ming Pao of Hong Kong and ɀཌྷཌྷཌྷαɄ˂c̎ᜪณณၘ՚ంdࠗಋ ᄤᅌτࠉʔ̇ᐲᐾፒȿɀཌྷཌྷཌྷαPowerےHong Kong Metro Broadcast Corporation Limited jointly held a survey of ಋณ Power 50 year 2000”. Mr. LIU ranked 78 among the 150 nominated 50ሁ݅ݠ৽cΕొΊؿ150 Ͻɻಋ̎࠰ፕɁɻc“ candidates in the Greater China region. ჳͱ́ֈ78 Ͻe
In December 2000, Mr. LIU was selected as “Intellect of the Media” in the ɀཌྷཌྷཌྷαɊɀ˂cɻਝณቀࣂԑ൪˰ɻਝณၘ൪ ɊذᏪፒઐˮ2000αณၘɁمTop Ten Pairs in Focus 2000” election organized by China Newsweek (ɻ ˰ͅɻਝณၘ“ ਝณၘ൪˰), which is an emerging weekly for current China events that ɣݢྦྷcჳͱ́ിݯඨఌౣّe .(مoperates by China News Services (ɻਝณၘ
In June 2001, Mr. LIU was ranked 17th of Asia’s most influential ɀཌྷཌྷȹαʒ˂cԓݘณၘ൪˰ിˮPower communicators in “The Power 50 2001” survey organized by Asia Week. 50cჳͱ́ϽֈɊȼhΕͅᐲਝೕི߮ອd Mr. LIU was also listed in the “Man of the Cover in the 21st Century Award” ਝ৻ҍஔፒʥࠗಋਆంᐲ˚ፒؿ21 ˖۬ࠍ ᅥͱ́Ɍ࿔ɐτΊeٽཕᆉݠ৽ɻcჳذjointly organized by United Nations Development Ɂ (ذ۬ࠍɁ˖ 21) Programme, Poverty Reduction Offi ce of the State Council (ਝ৻ҍஔፒ) and Hong Kong Commercial Daily.
Phoenix Annual Report 2006 31 DIRECTORS AND SENIOR MANAGEMENT PROFILE ໎ԑʥঢ়ज़ဳଉɁࡗᓯʍ
DIRECTORS CONTINUED ໎ԑᙩ
Executive Directors (Continued) ਨϷ໎ԑᙩ In May 2004, Mr. LIU Changle received the Robert Mundell Successful ɀཌྷཌྷ̒αʄ˂cΕ˞ጻӴဍᏜነᆉ˚cᅩᖓ ଉɁιగᆉിވ˖World CEO Award, an award named after the Nobel Prize winning ɾˎᖓВऋၬˤဍઠ՜Ίؿ economist, Professor Robert Mundell, “Father of Euro”, by “leaders of the ፕɻcჳͱ́˞Ͳଈജႍཋ഼ຝ͌ొԜਆؿეኒ ଉɁ CEO ιగᆉhʒވ˖global Chinese television program providers”( Ͳଈജႍཋ഼ຝ͌ొԜਆ ّᏵᖓВऋၬˤဍ ᅥͱ́dٽؿეኒّ). At the Singapore Asia-Pacifi c Overseas Chinese Commercial ˂cΕณ˱գԓʪജਆეിፕɻcჳ Leaders Forum in June 2004, Mr. LIU Changle together with Mr. LI Ka- ңཽͱ́dᚘαͱ́dਜ਼ણͱ́೩ 30 Ͻജਆ Shing, Mr. KUOK Hock Mien and Mr. ZHANG Ruimin were amongst the 30 ეͳɃፕcᏵ2004 ԓʪԮɈɾജਆე short-listed Chinese leaders and they were also honoured with the “2004 ɾ࿘ᙷe Most Creative Asia-Pacifi c Overseas Chinese Business Leader Award”.
In January 2005, Mr. LIU was listed in the “Man of Year in China New ɀཌྷཌྷʄαȹ˂cΕʃᐲ၉՚˰˚ፒd ിፕذEconomy 2004” election organized by China Internet Weekly and co- ณ࣯၉Ծፒؿ2004 ɻਝณᏜα۹Ɂ organized by Sina.com. In the most outstanding CEO and outstanding ɻcჳͱ́࿔ɐτΊhɍ˂cΕͲଈֲؿଉɁୂ enterprise in China region 2004 campaign, organized by an association ᓱਝଉɁԾผୂᓱിፕؿ 2004 αɻਝΔ of the world CEO “Association of International CEOs” in March 2005, Mr. ਂˮଉɁˮͬพᘆᆉݠ৽ɻcჳͱ LIU Changle was awarded as “CEO of Outstanding Enterprise Award”. In ́ᏵፕˮͬพᘆᆉhɊɀ˂cMangazine • December 2005, Mr. LIU was selected as “Top 10 Men of Elite in China” Ίಶᔵႌിፕჳͱ́ݯ2005 αɻਝɊɣ၀ߜӘ organized by Mangazine• Brand (Mangazine •Ίಶ). ֲe
ၤ˵ԕɣمAt 2006 Enterprising China Summit Forum jointly hosted by the ɀཌྷཌྷʒαʄ˂cΕˤଉɁᔵႌ Contemporary Manager and Peking University in May 2006, Mr. LIU was ነ˚ፒؿ 2006 พɻਝঢ়ࢋሃኋɻɃፕɊɣพ selected as one of “Top 10 Enterprising Leader Candidates”. Mr. LIU ე࠰ፕɁhɄ˂cณ՚˰˚ፒ1996-2006 Ɋ appeared in “List of New Talents for Ten Years in 1996-2006” organized by αณቀͮ࿘࿔cჳͱ́ɐ࿔hȾ˂cԓݘਝΊ ಶႏᖬဟဳଉɻʶʥᏜˀంɻਝᏜ༅ᔵۂ New Weekly in August 2006. At “Top 500 Asia Brand” jointly organized by ಶ 500 ੜખϷ࿔cჳͱ́ۂ೩ͳᐾፒԓݘمthe Certifi cation & Supervision & Management Center for Asia International ႌ ɣᆉhɊ˂cჳͱ́ذಶณα۹ɁۂReputed Brand and the China Economy Information under Economy Daily Ᏽཕԓݘ ಶఌᐲཕೕۂಶఌঢ়ࢋሃኋ࿒ۂin September 2006, Mr. LIU was awarded as “Man of Year for Asia Brand Ᏽࠖ։ɻਝ ᆉඖhɊȹ˂cΕɻذಶˮɁۂInnovation Award”. In October 2006, Mr. LIU was awarded as “Prominent 2006 ఌ ˮވ˖ʥ֚ܧPerson for Sculpturing Media Brand ”, by the first China Brand Media ജɁ̵ͳਝਆ৻d˵ԕ̟Ɂ̵ ˮജਆɣผވ˖Summit Forum & Brand Media Union. In November 2006, at “The Second ജਆผ೩ᐲ˚ፒؿɀ։ World Prominent Chinese Businessman Convention” jointly hosted by the ɐcჳͱ́࿘Ᏽ2006 ͲଈജਆᄧᚊɈ 100 ੜؿ ᐾፒؿمMinistry of Commerce of the People’s Republic of China, Beijing Municipal ီ໔hɊɀ˂cΕɻਝͬพࡼᔵႌ Government and the World Prominent Chinese Businessman Association, ̒։ 25 ϽԮᄧᚊɈͬพეખϷ࿔ിፕɻcჳ Mr. LIU was awarded as “Top 100 Most Infl uential Chinese Businessman”. ͱ́࿔ɐτΊe In December 2006, Mr. LIU was also listed in “the 4th Top 25 Most Infl uential Business Leader” election organized by China Entrepreneur.
ᅥͱ́࿘Ᏽɻജ෯ഁԑพޯٽIn January 2007, Mr. LIU was awarded as “Prominent Achievement for ɀཌྷཌྷȼαȹ˂cჳ d2006ɻਝඨఌα۹ذChinese Philanthropy”, “Persons of Chinese Charity Award”, “Person of ˮᘆᆉdɻജ෯ഁɁ ɊɣԮɻਝਆพ၀ुͬพࡼ೩ɣᆉhذYear in China Media Industry Award 2006” and “Top 10 Entrepreneur Ɂ with Most Chinese Business Spirit Award”. Mr. LIU was awarded as ɀ˂cჳͱ́ᏵͅΪ̷ผ߮ԑ৻ֺཕೕؿΪ̷ “Entrepreneur in Media Industry Award” in “Ernst & Young’s China ͬพࡼᆉɻਝ2006ɾඨఌพͬพࡼᆉe Entrepreneur 2006” organized by Ernst & Young in February 2007.
32 უ৷ᇯ഼αం2006 DIRECTORS CONTINUED ໎ԑᙩ
Executive Directors (Continued) ਨϷ໎ԑᙩ ԕɣڲᅥͱ́ɰடᙩԭ։ٽMr. LIU Changle was appointed twice to the board of directors of Nanjing Ϭɀཌྷཌྷɍαնcჳ ɣነʥڲUniversity since 2003, and is an honorary visiting professor at the ነາݯ࣎໎cˢᑹኪͨɻਝඨఌɣነd Communication University of China, at Nankai University and at Sun Yat- ɻɬɣነؿ࿘ᙷ۪ઠhɀཌྷཌྷʒαɊȹ˂cჳ ྴٲɣነཕೕ࿘ᙷʼነɡነϽc̟ےSen University. In November 2006, Mr. LIU Changle was conferred a ͱ́Ᏽࠗಋ ผါަؿᘆeمhonorary doctoral degree by City University of Hong Kong in recognition of ˢྦྷઠөʥ his signifi cant contribution to learning and the well-being of society.
ᅥͱ́ܰࠗಋԓݘཋ഼τࠉʔ̇ؿ˚ٖ߬ɾٽMr. LIU Changle is one of the substantial shareholders of Asia Television ჳ Limited in Hong Kong , and he is also a member of the International Board ȹcˢᑹኪͨਝਝࡼཋ഼ᖚၤޫነነ໎ԑe of the US National Academy of Television Arts and Sciences. He was ɀཌྷཌྷ̒αɊȹ˂ɀɊɀˀcਝϴᆉ˚ፒዀ࿚ ᅥͱ́ኪͨɀཌྷٽappointed the chairman of both the 2005 and 2006 iEMMYs Festival by ਝཋ഼ᖚၤޫነነկͨჳ the International Academy of Television Arts & Sciences on 22 November ཌྷʄαʥɀཌྷཌྷʒαɾਝϴᆉཋ഼ຝ˚hɀ 2004. In November 2006, Mr. LIU was awarded a medal by National ཌྷཌྷʒαɊȹ˂cਝཋ഼ᖚʥޫነነཕೕᆉ ɀཌྷཌྷʒכAcademy of Television Arts and Sciences in recognition of Phoenix Satellite ಶʀჳͱ́cٛցˢֺეኒؿუ৷ᇯ഼ TV’s outstanding achievement for which it sponsored and hosted the αɄ˂Ε˵ԕԾፒਝϴᆉɻਝˀؿޯˮᘆe International Academy Day in Beijing in August 2006.
կ֚ܧਂܧMr. LIU was appointed a Justice of the Peace by the government of the ɀཌྷཌྷ̒αȼ˂cჳͱ́ᏵࠗಋऋПϷ Hong Kong Special Administrative Region in July 2004. On 1 March 2005, ͨݯʪ̡ୁɡhɀཌྷཌྷʄαɍ˂ȹˀc࿘ͨɻਝɁ ؝ԾਆผᘪɊ։Ͳਝկࡗผկࡗhɀཌྷཌྷʄܧ̵ Mr. LIU was appointed as Member of the Tenth National Committee of կͨჳͱ́ݯࠗಋ֚ܧਂܧ؝Ծਆ αɊȹ˂cࠗಋऋПϷܧChinese People’s Political Consultative Conference ( ɻਝɁ̵ ผᘪɊ։Ͳਝկࡗผ). In November 2005, Mr. LIU was appointed a ೪ೕࢄկࡗผկࡗe member of Hong Kong Strategy Development Committee by the Hong Kong Special Administrative Region.
ɀཌྷཌྷཌྷαʒ˂ʄˀᏵկͨcݯכMr. CHUI Keung, aged 55, appointed on 5 June 2000, is the executive ੌੜͱ́c55ัc כᐢസeੌͱ́ଓพܧdirector and deputy chief executive officer of the Company. Mr. CHUI ̯ʔ̇ਨϷ໎ԑʥ৻৹Ϸ graduated from the department of journalism of Fudan University in ɐࣵన̭ɣነณၘӡcΕɻਝɻ̕Ɂ̵ᄤᅌཋ̎ͨ ȹȾȾʒαɍ˂ɍɊȹˀכShanghai and served in the China Central People’s Radio Station for over ᓻ༩ɊαeϬუ৷එ྆ ߲ஐუ৷එ྆ኬؿˀ༜Аdྦྷقc֤ȹ܃years. Since the establishment of Phoenix on 31 March 1996, he has ι͓ 10 eڝዀ࿚ؿᗐ֚ܧbeen in charge of the overall daily operations, the public relations and ̔ʔᗐʥۧඨ೪cԎԾሁၤਝʑ ʥਨϷ̯ʔ̇ؿೕࢄ೪e͓ۺpromotion strategies of Phoenix, and the coordination of the relationships ֤͛ԾХ with PRC government entities. He also assists in establishing and implementing the corporate development strategies of the Company.
Throughout the term of office with the Phoenix Group, Mr. CHUI has ੌͱ́ͨᓻუ৷එ྆౨ං౦߲ஐუ৷එ྆ؿਝ been instrumental in Phoenix’s PRC domestic business development, ʑพ৻ೕࢄdຝ͌ႇАdᄤйᏪd̟၉ programme production, advertising operation, marketing network and dʔᗐඨఌ೩ɮАeȹȾȾʒαc֤ኪͨუ৷එ يcՅܞཋ഼ຝ͌ࠔ൙ඡ،ᐢێpublic relations. In 1996, he was in charge of the production of “Flying ྆ؿȹɣ ผᐰᙷˀඊeمι˲cԚუ৷එ྆Εਝʑ̔ജɁک over the Yellow River”, a major television programme of Phoenix, which achieved popular success and heightened the popularity of Phoenix in the PRC and overseas Chinese communities. cੌͱ́౦ͨ˵ԕʨജਝʼʝکPrior to joining Phoenix, Mr. CHUI was a director and the general manager Ε˱უ৷එ྆ of Tianhua International Culture and Art Company Limited in Beijing ᖚτࠉʔ̇໎ԑ࠹ᐢଉc˚ɈׅΈඖʼʝᖚ ೩ԑพeخfocusing on developing various cultural, arts and publication businesses. ʥˮ
Phoenix Annual Report 2006 33 DIRECTORS AND SENIOR MANAGEMENT PROFILE ໎ԑʥঢ়ज़ဳଉɁࡗᓯʍ
DIRECTORS CONTINUED ໎ԑᙩ
Executive Directors (Continued) ਨϷ໎ԑᙩ ɀཌྷཌྷʒαȾ˂ɀɊȾˀᏵկכMr. WANG Jiyan, aged 58, appointed on 29 September 2006. Mr. WANG ˔Ӱͱ́c58ัc ȹȾȾʒαɍ˂˱Ƀუ৷ࠗಋcଊͨכjoined Phoenix HK in March 1996 and is currently the executive vice ͨe˔ͱ́ president of Phoenix HK and the Company and Head of the Phoenix უ৷ࠗಋʥ̯ʔ̇ؿਨϷ৹ᐢസ࠹უ৷ᇯ഼ɻʼ̎ e˔ͱ́౦Ε˵ԕᄤᅌነͨઠ൚༦ɀɊαeٽ̎ Chinese Channel. Mr. WANG has taught in Beijing Broadcasting Institute for more than twenty years.
Mr. WANG is one of the leading television programme producers in China ˔ͱ́ܰɻਝടΊؿཋ഼ຝ͌ԹАɁɾȹcξ౨ ኒʥႇАȿɣ൴ཋ഼ຝ͌cԯႇАؿཋ഼ຝ͌ܞand participated in the direction and production of a number of television ၤ programmes in early years. His television programme productions have ౦࿘ᏵΛਝʑ̔ᆉඖe won numerous domestic and overseas awards.
Mr. WANG is also a scholar in the television industry and has been the ˔ͱ́͛ݯཋ഼พʑؿਿࡼነّc౦ኪͨΈᗘਝ ΊඨఌઠөࡼʥԔτઠكpanelist of various international television festivals. He is also a renowned ཋ഼ຝؿിկe֤͛ݯ ԕᄤᅌነઠነɀɊα౨ංc֤౦ኪͨ˵כmedia educator and enjoys a professor title. During the two decades of ༅ࣟe ٽteaching in the Beijing Broadcasting Institute, he was the head of the ཋ഼ӡ˚ͨ༩ɊαcԎ౦ኪͨ˵ԕᄤᅌነ৹ television department for over ten years and was the deputy dean of the ʒαe Beijing Broadcasting Institute for six years.
ਨϷ໎ԑڈ Non-Executive Directors ɀཌྷཌྷʒαȾ˂ɀɊȾˀᏵկכMr. LU Xiangdong, aged 46, appointed on 29 September 2006, is ቧΉͱ́c46ัc currently a director of China Mobile (Hong Kong) Group Limited. Mr. LU ͨcଊͨɻਝଫ৽ࠗಋඑ྆τࠉʔ̇໎ԑeቧͱ is also the executive director and vice president of China Mobile Limited. ́͛ݯɻਝଫ৽τࠉʔ̇ਨϷ໎ԑ࠹৹ᐢଉeቧ එ྆ڌMr. LU has also been holding the post of vice president of China Mobile ͱ́͛Ϭɀཌྷཌྷཌྷα̒˂ኪͨɻਝଫ৽ ৹ᐢസeቧͱ́͛ኪͨɻਝଫڌCommunications Corporation (“CMCC”) since April 2000. Mr. LU is also a ʔ̇ɻଫ৽ eٽτࠉʔ̇໎ԑʥԿ൙ઁٖτࠉʔ̇໎ԑڌdirector of China Mobile Communication Co., Ltd. and chairman of Aspire ৽ ѫڌʥ൯ཋଫ৽ٽѫѫڌಲᇃޘۺHoldings Limited. He previously served as the director general of the Fujian ֤౦ͨါ eٽWireless Telecommunications Administration and the deputy director ৹ѫ general of the Mobile Telecommunications Bureau of the Ministry of Posts and Telecommunications.
ӠԎᏵޢ൯ཋ൯ཋכȹȾɄʄαଓพכMr. LU graduated from the Academy of Posts and Telecommunications ቧͱ́ ɀཌྷཌྷ̒αᏵ˵ԕכਿพဨɡነϽcԎڌof the Ministry of Posts and Telecommunications with a Master’s degree ಲᇃ 24αٶϷพኟτڌཋכin wireless communications in 1985 and received a doctoral degree in ɣነᏜነӡɡነϽe֤ Economics from Peking University in 2004. He has nearly 24 years of ဳଉe management experience in the telecommunications industry.
ɀཌྷཌྷʒαȾ˂ɀɊȾˀᏵկכMr. GAO Nianshu, aged 43, appointed on 29 September 2006, is currently ঢ়֨࣊ͱ́c43ัc ᅕኣ৹ᐢଉeঢ়ͱ́౦ͱڌthe deputy general manager of data service department of CMCC. ͨcଊͨɻଫ৽ τࠉஐͨʔ̇ᐢଉХଉd߮ڌኪͨ˵ԕଫ৽܃ Mr. GAO previously served as assistant to president of Beijing Mobile Communication Company Limited, deputy general manager and general พ৻ɻʶ৹ᐢଉʥᐢଉ˞ʥ̟Ꮺ৹ᐢ manager of business supporting system department and deputy general ଉe manager of marketing department of Beijing Mobile Communication Company Limited.
ɣነcԎᏵɻਝޫነ့߮Ҍ׳כMr. GAO graduated from Jilin University and received a Master’s degree in ঢ়ͱ́ଓพ ӠֺɮነဨɡነϽʥ˵ԕɣነঢ়ज़ဳଉɁࡗɮਆޢ engineering from Institute of Computing Technology, Chinese Academy of ϷพኟτΛαڌཋכScience and an EMBA degree from Peking University. Mr. GAO has many ဳଉဨɡ(EMBA)ነϽeঢ়ͱ́ years of experience in the telecommunications industry. He has also been ᔔఒe֤͛Ᏽկͨݯუ৷ࠗಋ໎ԑcϬɀཌྷཌྷ appointed as a director of Phoenix HK with effect from 29 September ʒαȾ˂ɀɊȾˀ́ࢽe 2006.
34 უ৷ᇯ഼αం2006 DIRECTORS CONTINUED ໎ԑᙩ
ਨϷ໎ԑᙩڈ (Non-Executive Directors (Continued ɀཌྷཌྷʒαȾכMr. Paul Francis AIELLO, aged 42, appointed on 29 September 2006, Paul Francis AIELLO ͱ́c42ัc ᐢസeܧඨఌඑ྆Ϸيis the chief executive officer of STAR. Mr. AIELLO is also acting chief ˂ɀɊȾˀᏵկͨeଊܱͨ ᐢܧඨఌඑ྆Ϳ۹ʔ̇ؿϷيexecutive offi cer of STAR India. He joined STAR as president in July 2006 Aielloͱ́ଊ͛ኪܱͨ ඨఌඑ྆c߲ஐيɀཌྷཌྷʒαȼ˂˱Ƀܱכand is responsible for developing strategic and business directions for സe֤ ඨఌඑ྆ؿೕࢄ೪ʥพ৻ʿৌcԎࣂဟيܱ .STAR while overseeing overall corporate functions ኬͬพᓻॶe
ᄾ࣓ɡɽСכcAIELLOͱ́کඨఌඑ྆يɃܱ˱כ Prior to joining STAR, Mr. AIELLO worked for Morgan Stanley for more ȹȾȾȼα˱Ƀᄾ࣓ɡɽСኪכthan nine years. He joined Morgan Stanley as vice president in 1997 ͨᓻ൚༦Ⱦαe֤ and subsequently advanced his career to executive director, mergers ͨ৹ᐢസcԎ፭܃ʠͨԓʪਂԡᑪࠖᐢဟȹᓻh ɀཌྷཌྷཌྷαכ܃and acquisitions of Asia Pacific; chief operating officer of Asia Pacific ԓʪਂҙ༅ႺϷᏪ༜ᐢဟcʥ dఌʥޫҌ˚ဳeڌinvestment banking and finally, managing director and head of telecom, ኪͨ໎ԑᐢଉ࠹ԓʪਂཋ media and technology group, Asia Pacifi c in 2000.
൘ȹڌcAIELLO ͱ́ݯɡکɃᄾ࣓ɡɽС˱כ Before joining Morgan Stanley, Mr. AIELLO was vice president, mergers and acquisitions, investment banking department of CS First Boston Limited, ؐɡནࠗಋτࠉʔ̇ԡᑪʥҙ༅ႺϷ৹ᐢസe ਝࡐ࠷ˈԓऋਂജଞכႺϷϽވ˖Hong Kong. He has also worked as a senior consultant, Central and East ֤͛౦ኪͨ අ(Central and East European྆ڌEuropean Telecom Group of the World Bank, Washington, DC and was ནɻdᅩཋ the assistant to the chief fi nancial offi cer at the Beijing Jeep Corp, Beijing, Telecom Group)ؿঢ়ज़ᚋਐc˞ʥɻਝ˵ԕؿ˵ԕ China. ౝӁӹτࠉʔ̇ল৻ᐢဟХଉe
Mr. AIELLO has a Ph. D. degree in Economics from the University of AIELLOͱ́ኟτჴኽɣነᏜነɡነϽʥͿѺΪ Cambridge and a B.A. degree in Economics and International Relations ढ़ັ̴ɣነ(University of Notre Dame, Indiana)Ꮬ ነነɡነϽeڝfrom the University of Notre Dame, Indiana. ၤਝᗐ
ɀཌྷཌྷཌྷαʒ˂ʄˀᏵາcଊכͱ́c44ัcڋMr. LAU Yu Leung, John, aged 44, appointed on 5 June 2000, holds ჳީ يඨఌඑ྆ɾඑ྆ল৻ᐢဟeჳͱ߲́ஐܱيܱͨ the position of group chief financial officer of STAR. Mr. LAU oversees ඨఌඑيall fi nancial operations of STAR. He is responsible for developing STAR’s ඨఌඑ྆ؿȹʘল৻ԑඖe֤߲ஐೕࢄܱ fi nancial strategies, spearheading fi nancial planning and reporting, internal ྆ɾল৻೪dʵეল৻ི߮ʥ͇ంdʑᄗ࣏d audit, treasury and taxation. ৻ʥೢ৻e
ࠗಋ́Ɉਓৈਝכcჳͱ́کඨఌඑ྆يPrior to joining STAR, Mr. LAU was the chief financial officer of San ˱Ƀܱ Miguel Brewing International Ltd, responsible for the company’s fi nancial τࠉʔ̇ͨᓻল৻ᐢဟc߲ஐʔ̇ԓʪਂؿল৻ operations throughout Asia Pacifi c. ༜Аe
Λࡼʔ̇ኪͨল৻߬ᓻcכcჳͱ́౦کBefore this role, Mr. LAU also held senior financial positions at GE Εϊɾ ৻ʔ̇dഥСౝୣԈרਝ͂ཋࣩ༅ܢ˳Information Services, Philip Morris Asia Inc and Deloitte & Touche in Los ɻ ݤҪᐈؿᄨඵผ߮ϷeכAngeles, USA. ԓݘඑ྆Ͻ
ਝಹˢήBrighamכȹȾɄɄαɄ˂ଓพכMr. LAU graduated from Brigham Young University in Utah in August ჳͱ́ 1988, with a Master’s degree in Accountancy and Information Systems Young ɣነcᏵ༅ӡผ߮ነဨɡነϽʥผ߮ነነ and a Bachelor of Science degree in Accounting. He is a member of the ɡነϽe֤ଊݯCalifornia Institute of Certifi ed Public California Institute of Certifi ed Public Accountants. Accountantsผࡗe
Phoenix Annual Report 2006 35 DIRECTORS AND SENIOR MANAGEMENT PROFILE ໎ԑʥঢ়ज़ဳଉɁࡗᓯʍ
DIRECTORS CONTINUED ໎ԑᙩ
ਨϷ໎ԑᙩڈ (Non-Executive Directors (Continued ɀཌྷཌྷȼαȹ˂ɊɀˀᏵכɻͱ́c44ัcۺMr. GONG Jianzhong, aged 44, appointed on 12 January 2007, is ᛛ ׃ᙔʔ̇໎ԑeᛛͱ́ݯڃcurrently a director of certain of the Company’s subsidiaries. Mr. GONG կͨcଊ̯ͨʔ̇ߗɳ թ׳ਨϷ໎ԑc˞ʥڈτࠉʔ̇ؿټis a non-executive director of China Merchants China Direct Investments ਆѫɻਝਥ e֤ٽਨϷ໎ԑ࠹৹໎ԑڈLimited, and a non-executive director and vice-chairman of the board of ࢋʝᛪٖͫτࠉʔ̇ؿ eϊ̔cٽτࠉʔ̇໎ԑ࠹৹໎ԑٖͫيdirectors of Jilin Qifeng Chemical Fiber Co., Ltd. He is also a director and ͛ݯɐࣵॾ vice-chairman of the board of directors of Shanghai Airlines Co., Ltd. In ᛛͱ́ଊͨɻႺඑ྆ҙ༅τࠉʔ̇ɻႺҙ༅໎ addition, Mr. GONG is a director and chief executive officer of Bank of ԑ࠹ਨϷᐢസcʥɻႺҙ༅ֺઁԹֶɻႺҙ༅ኟτ China Group Investment Limited (“BOCGI”) and a director of a number of ᚬऩؿΛࡼʔ̇໎ԑe companies controlled by BOCGI or in which BOCGI has an interest.
From 2002 to 2005, Mr. GONG was an alternate director and deputy chief ͅɀཌྷཌྷɀαϭɀཌྷཌྷʄα౨ංcᛛͱ́౦ኪͨɻ ႺϷdכexecutive offi cer of BOCGI. Mr. GONG has over 15 years of experience in Ⴚҙ༅ؿ౧ͨ໎ԑʥ৹ਨϷᐢസeᛛͱ́ ȹȾȾȹαכʥဳଉʿࠍኟτ༩15αe֤ܧbanking, administration and management. He graduated from Dongbei Ϸ University of Finance and Economics in the PRC in April 1991 with a ̒˂Εɻਝ˵লɣነଓพcᏵᏜဨɡነϽe master degree in economics.
ਨϷ໎ԑڈIndependent Non-Executive Directors ዟ͓ ɀཌྷཌྷཌྷαʒ˂ʄˀᏵկͨcכDr. LO Ka Shui, aged 60, appointed on 5 June 2000, is the chairman and ᖓཽᔢ́c60ัc managing director of Great Eagle Holdings Limited and the non-executive ଊͨᜡзඑ྆τࠉʔ̇˚࠹໎ԑᐢଉʥᜡз༅ পဳଉɁڌзଐพڥзτࠉʔ̇ݯڥchairman of Eagle Asset Management (CP) Limited (Manager of Champion ଐဳଉ ਨϷ໎ԑe֤ݯࠗಋɐࣵමᔔႺϷτࠉʔ̇dɐڈ Real Estate Investment Trust). He is a non-executive director of The Hongkong and Shanghai Banking Corporation Limited, Shanghai Industrial ࣵྡྷพઁٖτࠉʔ̇dɻਝଫ৽τࠉʔ̇ʥߗɳԯ ਨϷ໎ԑcʥ౦ݯࠗಋڈࠗಋʔɐ̟ʔ̇ɾכHoldings Limited, China Mobile Limited and some other publicly listed ˢ ਨϷ໎ԑc֤͛ݯࠗಋΔڈʥ့ֺτࠉʔ̇מcompanies in Hong Kong and was non-executive director of Hong Kong ͚ Ӡɻʶ໎ԑʥዀޢஉਆผ৹˚dࠗಋᏜۺExchanges and Clearing Limited. He is also a vice president of The Real ଐ ࢬɣோဍɣነݯଉ˱כEstate Developers Association of Hong Kong, a Trustee of the Hong Kong ဳଉѫιࡗeᖓᔢ́ଓพ τʶܛCentre for Economic Research and a member of the Airport Authority. ነɡcʥݯਝժဍɣነᔢነɡc֤Ԏ พၤৈ֙ೕࢄذHe graduated with a Bachelor of Science degree from McGill University ᚺਿޫᖬ࣊e֤Εࠗಋʥࣵ̔ԑ and M.D. from Cornell University. He is certified in Cardiology. He has ʥҙ༅พ৻༩ɀɊȼαe more than 27 years’ experience in property and hotel development and investment both in Hong Kong and overseas.
ɀཌྷཌྷʄαȹ˂ɀɊȹˀᏵկכMr. LEUNG Hok Lim, aged 71, appointed on 21 January 2005, is a fellow ષነዅͱ́c71ัc ࣏ᅕʔผپmember of CPA Australia, a member of the Macau Society of Certified ͨcݯዌݘผ߮ʔผ༅૯ผࡗdዌ Practising Accountants, a fellow member of the Hong Kong Institute of ผࡗdࠗಋผ߮ʔผ༅૯ผࡗʥࠗಋೢ৻ነผ༅ Certifi ed Public Accountants and a fellow member of The Taxation Institute ૯ผࡗeષͱ́ݯPKF ષነዅผ߮ԑ৻ֺɾፒ ȹȾȼɍαՅࠗಋผכof Hong Kong. Mr. LEUNG is the founding and senior partner of PKF, Ɂʥঢ়ज़ྑɁeષͱ́ Accountants and Business Advisers. Mr. LEUNG obtained his fellowship ߮ʔผ༅૯ผࡗ༅ࣟe֤ݯԕಋɁɷ͚ݚɻʶτ ਨϷ໎ԑeષͱ́ݯΛංɐ̟ʔ̇cЩڈwith Hong Kong Institute of Certifi ed Public Accountants in 1973. He is a ࠉʔ̇ɾ ٖઁھˍτࠉʔ̇dמϐႇϸτࠉʔ̇dYGMൗٽ non-executive director of Beijing Hong Kong Exchange of Personnel Centre Limited. Mr. LEUNG is the independent non-executive director of a number τࠉʔ̇dᆋሣඑ྆τࠉʔ̇dಋઁٖτࠉʔ̇ ਨϷ໎ԑeڈof listed companies namely Yangtzekiang Garment Limited, YGM Trading ʥ༠Сਝඑ྆τࠉʔ̇ɾዟ͓ Limited, S E A Holdings Limited, Bright International Group Limited, Fujian Holdings Limited and High Fashion International Limited.
36 უ৷ᇯ഼αం2006 DIRECTORS CONTINUED ໎ԑᙩ
ਨϷ໎ԑᙩڈIndependent Non-Executive Directors (Continued) ዟ͓ Mr. Thaddeus Thomas BECZAK, aged 56, is the independent non- Thaddeus Thomas BECZAK͉࣮ᄨͱ́c56ัc ਨڈɀཌྷཌྷʄαɍ˂Ɋȹˀˮ̯ͨʔ̇ؿዟ͓כ executive director and a member of the audit committee of the Company since 11 March 2005. Mr. BECZAK is currently a senior advisor to Nomura Ϸ໎ԑʥᄗ࣏կࡗผιࡗeBECZAK ͱ́ଊݯயҦ International (Hong Kong) Limited and non-executive chairman of Nomura ਝࠗಋτࠉʔ̇ؿঢ়ज़ᚋਐʥNomura Asia ਨϷ˚ʥNam Tai Electronic andڈAsia Holding N.V., an independent non-executive director and member of Holding N.V.ɾ ਨϷ໎ԑʥᄗڈthe audit committee of Nam Tai Electronic and Electrical Products Limited Electrical Products Limited ɾዟ͓ as well as an independent non-executive director of Arnhold Holdings ࣏կࡗผιࡗc˞ʥΪСઁٖτࠉʔ̇ᐲֺ͚ɐ .ਨϷ໎ԑe֤͛ݯACR Capital PteڈLimited (companies listed on the Stock Exchange). He is also the non- ̟ʔ̇ዟ͓ ਨϷ˚eڈexecutive chairman of ACR Capital Pte. Limited and Latitude Capital Group. Limitedʥᅥҙ༅එ྆ɾ
˂ȹȾȾȼαȾ˂ϭɀཌྷཌྷɍαɊɀכFrom September 1997 until December 2003, Mr. BECZAK was a director BECZAKͱ́ of Kerry Holdings Limited. During this time he also held various board ౨ංˮཽͨԈઁٖτࠉʔ̇ؿ໎ԑc౨ኪͨඑ ౨cBECZAKͱٶand operating positions within the group. Most recently, he was deputy ྆ʑؿΛ໎ԑѫʥ༜АɾᓻϽe ജξంˮڲchairman of SCMP Holdings Limited and publisher of South China Morning ́౦ኪͨSCMPඑ྆τࠉʔ̇ؿ৹˚ʥ cˢ౦ኪͨࠗࣟԈּԓکɁeɾخτࠉʔ̇ؿˮخ Post Publishers Limited. Previously, he had been deputy chairman of ႝΔଐؿ৹˚d܁Shangri-La Asia Limited, deputy chairman of Kuok Philippines Properties, ݘτࠉʔ̇ؿ৹˚dˊഥ ɻʶτࠉʔ̇໎ԑʥཽԈඑ྆τࠉʔמ͚ވ˖a director of China World Trade Center Limited and a director of Kerry ɻਝ Properties Limited. ̇໎ԑe
From November 1997 until December 2002, Mr. BECZAK was chairman BECZAK ͱ́ȹȾȾȼαɊȹ˂ϭɀཌྷཌྷɀα of the Listing Committee of the Stock Exchange and a member of the Stock Ɋɀ˂ݯᐲֺ͚ɐ̟կࡗผɾ˚cԎȹȾȾɄ Exchange and a member of board of directors of the Stock Exchange from αϭɀཌྷཌྷȹαݯᐲֺ͚ɾιࡗ˞ʥᐲֺ͚໎ԑผ until 2001. Currently, he is a member of the Advisory Committee of ɾιࡗeଊࣂc֤ݯࠗಋᖬԴʥ౨ஒԑ৻ဟྦկࡗ 1998 the Securities and Futures Commission in Hong Kong and a member of ผɾጺկࡗผկࡗʥɻਝᖬԴဟဳଉկࡗผɾ the international advisory committee of the China Securities Regulatory ਝጺկࡗผկࡗe Commission (CSRC). cȹȾȾཌྷαϭȹȾȾȼαcکPrior to joining the Kerry group, Mr. BECZAK was a managing director ˱ཽԈඑ྆ of J.P. Morgan Inc., and president of J.P. Morgan Inc., and president of BECZAK ͱ́ݯJ.P. Morgan Inc. ɾ໎ԑᐢଉʥᐢ J.P. Morgan Securities Asia from 1990 until 1997. While at J.P. Morgan, സc˞ʥJ.P. Morgan Securities AsiaɾᐢസeΕͨᓻ ႝະࢌႺϷɾ໎ԑ܁Hong Kong, he was a director of the Bank of the Philippine Islands and a ࠗಋJ.P. Morgan౨ංc֤ݯഥ ˱ȹȾȼ̒αכcommittee member of the Hong Kong Association of Banks. He joined J.P. ʥࠗಋႺϷԾผɾկࡗผιࡗe֤ Morgan in 1974. Mr. Beczak has over 20 years of experience in Asia. ɃJ.P. MorganeBECZAKͱ́ኟτ൚༦ɀɊαΕԓݘ ɾe
(.Georgetown University (B.S.F.SכMr. BECZAK is a graduate of Georgetown University (B.S.F.S.) and BECZAKͱ́ଓพ Columbia University (M.B.A.). He is a member of the Board of Advisors of ʥColumbia University (M.B.A.)e֤ݯGeorgetownɾ the School of Foreign Service at Georgetown. School of Foreign Serviceɾᚋਐผιࡗe
Phoenix Annual Report 2006 37 DIRECTORS AND SENIOR MANAGEMENT PROFILE ໎ԑʥঢ়ज़ဳଉɁࡗᓯʍ
DIRECTORS CONTINUED ໎ԑᙩ
Senior Management ঢ়ज़ဳଉɁࡗ ᐢܧMr. LEUNG Noong Kong, aged 58, currently holds the position of deputy ષወࡄͱ́c58ัcଊ̯ͨʔ̇ؿ৻৹Ϸ chief executive offi cer of the Company. Mr. LEUNG had been instrumental സeΕਆᇹι͓უ৷ᇯ഼ඖ͌ؿ༦ೡɻcષͱ in the setting up of the Phoenix Group and has been part of its senior ́Ҙȿࠇ߬ؿӯϳcϤუ৷එ྆ι͓ԷଊΕc ܰঢ়ဳଉᄙؿιࡗɾȹeԯ˚߬ؿقmanagement team ever since its inception. His primary responsibilities ષͱ́ȹ უ৷එ྆ؿˀᏪ༜ؿဳଉcగუ৷එྦྷܢ˳include the supervision of the day-to-day operations of the Phoenix ᓻஐ ˘Ꮆؿဳଉ࿚cԎྦྷޚGroup, the establishing of management structures pertaining to the ྆พ৻ؿೕࢄϤԾХԹց ᐢസԹցუ৷එ྆พ৻ೕࢄؿ೪ܧevolving operations of the Phoenix Group, as well as the mapping out of ႤХ̯ʔ̇ؿϷ ȹȾȾȹα˱ᇯܱཋ഼τࠉʔ̇eכstrategies, in conjunction with the chief executive Offi cer of the Company, eષͱ́ for the business development of the Phoenix group. Mr. LEUNG joined ȹȾȾȹϭȹȾȾʄαcˢၤȿᇯ഼Εɣɻജ Satellite Television Asian Region Limited in 1991. From 1991 to 1995, ΔਂଠΛؿพ৻ೕࢄɮАeᇯ഼ɻʼ̎ᇯ഼ཋᄧ ȹȾȾȹαȹȾȾɍαઢᅌؿԭඖɮכhe was involved in various tasks relating to the development of STAR’s ̎ʗП business in the Greater China region. He also played a pivotal role in the Аcષͱ́ܰ˚߬ؿၤɁࡗeΕუ৷ࠗಋʔ̇ launching of STAR Chinese Channel and STAR Movies Channel in 1991 ι͓ɾ܃cષͱ́ᅚΕፒუ৷ᇯ഼ɻʼ̎dუ and 1993 respectively. Following the formation of Phoenix Satellite TV, Mr. ৷ᇯ഼ཋᄧ̎ʥઅဳუ৷ᇯ഼ᅩݘ̎ʿࠍȿ˚߬ LEUNG was again instrumental in the launching of the Phoenix Chinese ؿА͂e Channel and the Phoenix Movies Channel and the taking control in the management of the Phoenix CNE Channel.
ΊɁɡeΕȹȾʒكMr. LEUNG is a well-known figure in the Hong Kong media and ષͱ́ΕࠗಋؿඨఌϷพܰȹϽ broadcasting field. He hosted a film magazine programme for the Jade ཌྷαˤ̱౨cષͱ́౦Εཋ഼ᄤᅌτࠉʔ̇ಲ Channel of Television Broadcasting Limited (“TVB”) in the late 1960s. ᇃၖၕ̎˚ܛȹཋᄧᔵႌຝ͌eȹȾʒȾα ంયంעFrom 1969 to 1972, he then worked as a translator and editor for one of ϭȹȾȼɀαcˢΕࠗಋȹͫলంफ़ Hong Kong’s first finance newspapers, Ming Pao Evening News. From ኪͨᓺᘭʥᇁፎɮАeȹȾȼȹϭȹȾȼɄαc Εࠗಋؿਝณၘ୮ʥΕ࠷ؿߜਝᄤ܃to 1978, he worked respectively for the United States Information ષͱ́ͱ 1971 Service in Hong Kong and the BBC External Services in London as editor, ᅌʔ̇ኪͨᇁፎdᄤᅌᇁኒʥณၘᄤᅌࡗeԯ܃c क̎ຝ͌ဳଉʿࠍୃעಲᇃcΕԯၖၕ̎ʥٵprogramme producer and news announcer. Thereafter, he spent 10 years ˢࠇ with TVB, programming for its Jade Channel and Pearl Channel at different ዶȿɊαeϊ̔cષͱ́ɖΕԓ഼ɮАȿȹݒ ɮА༦ؿಲᇃdԓ഼ʥᇯ܃times. He had also been with ATV for a short period. While at TVB and ATV, ࣂංeષͱ́Εԯͱ cپဟဳڬand subsequently at STAR, he set up the internal standards and practices ഼cя߲ஐ͓ʔ̇ʑؿཋ഼ᄤᅌΨ ᆃڈdepartments for all three and he was well versed in all the regulatory issues ྦྷࠗಋʥɣɻജΔਂʑؿཋ഼ᄤᅌဟဳૈԝ involved in television broadcasting in Greater China region. ੪e
Apart from being an experienced personality in the media fi eld, Mr. LEUNG ȿܰඨᅌఌʍʿࠍؿ༅૯Ɂɡ̔cષͱ́ࣂܰ Ίؿཋᄧിሃࡼʥʼʝଉሃࡼc౦ೕكis also a renowned writer on the cinema and on cultural studies in Hong ࠗಋd̎ᜪ ༦ɺʭʿࠍؿട߸eષͱ́౦ˮͨɺʭخdˮٲ Kong and Taiwan, as well as a published author of several books in these ࠗಋ̯Ӹؿਝཋᄧຝؿຝ͌ܢ˳fields. He had also been a programme consultant to many international ؿਝཋᄧຝc ኪͨ༦ᇁፎᚋਐeذ˰film festivals, including the Hong Kong International Film Festival, and ᚋਐcԎ˘౧ɺʭ had sat on the editorial boards for many prestigious publications at various times.
38 უ৷ᇯ഼αం2006 DIRECTORS CONTINUED ໎ԑᙩ
Senior Management (Continued) ঢ়ज़ဳଉɁࡗᙩ Mr. YEUNG Ka Keung, aged 47, is the executive vice president and chief ฦࡼੜͱ́c47ัcଊͨუ৷ࠗಋʥ̯ʔ̇ؿਨϷ৹ fi nancial offi cer of Phoenix HK and the Company in charge of corporate ᐢസ࠹එ྆ল৻ᐢဟc߲ஐʔ̇ল৻ʥϷܧԑ৻e ȹȾȾʒαɍ˂˱უ৷එ྆cుဳუ৷כfinance and administration. Mr. YEUNG joined Phoenix in March 1996 ฦͱ́ and has been in charge of all of Phoenix’s internal and external fi nancial එ྆ȹʘྦྷʑʥྦྷ̔ؿল৻ဳଉʥΪખcԎဟྦϷ management and arrangements as well as the supervision of administration ܧʥɁԑԑփe and personnel matters.
ɣነcϣᏵߜਝऋஈผ߮עߜਝВכMr. YEUNG graduated from the University of Birmingham and remained ฦͱ́ଓพ in the United Kingdom until 1992 after obtaining his qualification as ༅ࣟ܃जֈߜਝcϭȹȾȾɀαΑᓊࠗಋcΑಋ a chartered accountant. Upon returning to Hong Kong, he worked at ܃Εতཋʥᇯ഼ኪͨল৻ʥพ৻ೕࢄɮАe Hutchison Telecommunications and STAR in the field of finance and business development.
כMr. CHAU Kwan, aged 51, is the executive vice president of Phoenix HK. ՚߶ͱ́c51ัcଊͨუ৷ࠗಋਨϷ৹ᐢസc֤ ԕᄤᅌነཋ഼ӡᇁኒਿ˵כHe graduated from the Beijing Broadcasting Institute in July 1990 with a ȹȾȾཌྷαȼ˂ଓพ major in Editing Studies in School of Television. พe
უ৷ᇯ഼ཋͨ܃ȹȾȾɄα˱უ৷cͱכMr. CHAU joined Phoenix in 1998. He has been the head of Phoenix ՚ͱ́ dუ৷ᄧ഼૯Γτࠉʔ̇ᐢଉdუ৷ٽMovies Channel, general manager of Phoenix Film and Television ᄧ̎̎ ʗဳᄤйʥ̟کShenzhen) Co. Limited (უ৷ᄧ഼૯Γτࠉʔ̇), vice president and ࠗಋ৹ᐢസʥຝ͌৹ᐢസc֤͌) deputy director of programming of Phoenix HK. He is currently responsible ၉ɮАe for advertising and marketing networks.
Phoenix Annual Report 2006 39 CORPORATE GOVERNANCE REPORT ͬพဳ؝ంй
༠ߎঢ়ˋๅؿͬพဳ؝c˞ଲუړThe Company is committed to ensuring high standards of corporate ̯ʔֻ̇ጻᆢ governance in the interests of the shareholders of Phoenix Satellite ৷ᇯ഼ઁٖτࠉʔ̯̇ʔٖ̇ؿСऩcԎေ Television Holdings Limited (the “Company”) and devote considerable ɈᆢցʥԹցԙஃe effort to identifying and formalising best practices.
CORPORATE GOVERNANCE PRACTICES ͬพဳ؝ஃ
ɀཌྷཌྷʄαɊɀ˂ɀɊʒˀc̯ʔ̇ઔढ़ԯ̯Ӹכ On 26 December 2005, the Company has adopted its own Code on ʥஃၤࠗಋᐲڬcԎੀԯଊτࡈڬCorporate Governance which combined its existing principles and ؿͬพဳ؝Ψ Ψ ڬֺτࠉʔ̇ཕЗؿͬพဳ؝ஃΨמpractices with most of the mandatory provisions of the Code on Corporate ͚ უۺؿɣͫੜԹֲૈʼԡ Ð ȹʘοΕ࿚ڬ Governance Practices issued by The Stock Exchange of Hong Kong ˞Limited (the “Code”) – all with the objective of taking forward a corporate ৷ᇯ഼̯Ӹؿᅟๅʥؿͬพဳ؝ܼ࿚cࣂ ֺ༗ਥๅݯๅeڬgovernance structure which builds on Phoenix’s own standards and Ψ experience, whilst respecting the benchmarks set in the Code.
We will explain in this Corporate Governance Report where our approach Ю೩ੀΕ̯ͬพဳ؝ంйɻᘻᘷЮ೩ؿ୮ଉʿؒ ؿΔʿe̯ʼ̊τׄᚉ̔c̯ʔ̇ڬdeviates from the Code. Unless otherwise disclosed herein, the Company τৱᔴΨ ࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅ኬα۹ʑяכ has, throughout the year ended 31 December 2006, complied with the eڬፓΨΨقCode. ȹ
ᐢസؿዟτӯϳܧDISTINCTIVE ROLES OF CHAIRMAN ˚ʥϷ AND CHIEF EXECUTIVE OFFICER
ʼૈڬCode Provisions Ψ ᐢസؿӯϳᎶτਂʗ˘ɺܧc˚ʥϷڬUnder the Code, the roles of chairman and chief executive offi cer should ࣓ኣΨ ᐢസɾංؿᓻஐʗɮܧbe separate and should not be performed by the same individual. The ᎶͅȹɁ࠹ͨe˚ၤϷ Ԏ˞࣊ࠍѼβͶ༗eעdivision of responsibilities between the chairman and chief executive offi cer ߯ should be clearly established and set out in writing.
Deviation and its Reasons ৱᔴʥԯࡈΐ ᐢസc߲ஐဳଉ໎ܧᅥͱ́ݯ̯ʔ̇˚࠹ϷٽMr. LIU Changle is both the chairman and chief executive officer of ჳ ᙔʔ̇ီݯڃthe Company who is responsible for managing the board of directors ԑผ໎ԑผၤ̯ʔ̇ʥԯ the “Board”) and the businesses of the Company and its subsidiaries ̯එ྆ؿพ৻eჳͱ́Ϭ̯ʔ̇ഽ˫ι͓˞ԞЩ) ᐢസeဳଉᄙႏݯԎܧኪ̯ͨʔ̇ؿ˚࠹Ϸقcollective, the “Group”). He has been both chairman and chief executive ȹ) offi cer of the Company since its incorporation. The management considers ಲЩࣂ߬ҝᛰΪખe that there is no imminent need to change the arrangement.
APPOINTMENTS, REELECTION AND կͨdࠇፕʥЛᓻ REMOVAL
ʼૈڬCode Provisions Ψ ցͨ౨˿ʀࠇܞਨϷ໎ԑᎶτڈ (c(iڬUnder the Code, (i) non-executive directors should be appointed for a ࣓ኣΨ ॠϤᏵկͨؿ໎ԑᎶيspecifi c term, subject to re-election; and (ii) all directors appointed to fi ll a ፕhʥ(ii) ֺτݯිᐽࣂ ؿࠖωٖɣผɐઅՇٖፕᐾeҰϽ܃casual vacancy should be subject to election by shareholders at the fi rst ΕᏵկͨ ցͨ౨ᏵկّͨϭʭҰɍαረࠤܞܘܢ˳general meeting after their appointment. Every director, including those ໎ԑ appointed for a specifi c term, should be subject to retirement by rotation at йঽȹωe least once every three years.
40 უ৷ᇯ഼αం2006 APPOINTMENTS, REELECTION AND կͨdࠇፕʥЛᓻᙩ REMOVAL CONTINUED
Deviation and its Reasons ৱᔴʥԯࡈΐ Apart from two executive directors, no other directors of the Company (the ଊࣂȿԭϽਨϷ໎ԑɾ̔cԯˢ̯ʔ̇໎ԑ໎ Έכcڬցͨ౨e࣓ኣ̯ʔ̇ೡୀܞDirectors”) are currently appointed with specifi c terms. According to the ԑяӀτ“ articles of association of the Company, at each annual general meeting ٖ൪αɣผɐcࣂؿɍʗɾȹ໎ԑֶߗԯᅕ͌ Ўɺ൚༦ɍʗɾȹّٶݯઅڬɍ(3)ؿࠛᅕcڈone-third of the Directors for the time being (or, if their number is not a Ԏ multiple of three (3), the number nearest to but not greater than one- ረࠤйঽc໎ԑผ˚ʥʼnֶ໎ԑᐢଉΕͨ third) shall retire from office by rotation, but the chairman of the Board ᓻ౨ංˇረࠤйঽc͛ˇ߮ɃҰαйঽؿ໎ and/or the managing director shall not, whilst holding such office, be ԑɁᅕʑeΐϊc˚̔cֺτ໎ԑяረࠤйঽe eڬsubject to retirement by rotation or be taken into account in determining ဳଉᄙႏݯԎಲЩࣂ߬࠳̯߯ʔ̇ೡୀ the number of Directors to retire in each year. As such, with the exception of the chairman, all Directors are subject to retirement by rotation. The management considers that there is no imminent need to amend the articles of association of the Company.
מDIRECTORS’ SECURITIES TRANSACTIONS ໎ԑؿᖬԴ͚
5.48 ૈϭ5.67ૈڬThe Company has adopted the required standard of dealings as set out ̯ʔ̇ɰઔढ़พɐ̟ஃ ؿኧמin rules 5.48 to 5.67 of the GEM Listing Rules as the code of conduct ֺ༗ؿஃցൕሒᅟๅcАݯ໎ԑ൬ϷᖬԴ͚ regarding securities transactions by the Directors. Ψܞʵe
࿀ϭɀཌྷཌྷכc໎ԑ܃Having made specifi c enquiry of all Directors, the Directors have complied Ήֺτ໎ԑАˮऋց݅ ፓΨτᗐ໎قwith the required standard of dealings regarding directors’ securities ʒαɊɀ˂ɍɊȹˀ˅ኬα۹ʑȹ ؿஃցൕሒᅟๅeמtransactions throughout the year ended 31 December 2006. ԑ൬ϷᖬԴ͚
BOARD OF DIRECTORS ໎ԑผ
The Board is responsible for leadership and control of the Company and ໎ԑผ߲ஐეኒʥဟઁ̯ʔ̇cԎͳ߲ஐܞኒʥ Ԛ̯ʔ̇ᘗᙩι˲ೕࢄeڔ˞is collectively responsible for promoting the success of the Company by ဟ̯ʔ̇ԑ৻ directing and supervising the Company affairs.
ਨϷ໎ԑʥɍϽڈThe Board currently comprises three executive Directors, five non- ໎ԑผଊͅɍϽਨϷ໎ԑdʄϽ ਨϷ໎ԑୂιe໎ԑผΈϽιࡗؿᄚዃᓯʍڈexecutive Directors and three independent non-executive Directors. Their ዟ͓ αంeכbrief biographical details are described in the annual report. ༗
5.09ૈc̯ʔ̇ɰνԷΈϽڬThe Company has received, from each of the independent non-executive ࣓ኣพɐ̟ஃ ਨϷ໎ԑೕˮؿα۹ዟ͓ᆢႏ࣊e̯ʔ̇ႏڈDirectors, an annual confirmation of his independence pursuant to ዟ͓ ਨϷ໎ԑяݯዟ͓eڈrules 5.09 of the GEM Listing Rules. The Company considers all of the ݯֺτዟ͓ independent non-executive Directors to be independent.
The Board meets at least four times a year to review the financial and ໎ԑผҰαϭʭผᐾϷ̒ωผᘪc˞Ꮞদ̯එ྆ؿ ଊeٲʥᏪܧoperating performance of the Group. ল
Phoenix Annual Report 2006 41 CORPORATE GOVERNANCE REPORT ͬพဳ؝ంй
BOARD OF DIRECTORS CONTINUED ໎ԑผᙩ
ܧ࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅লכThere were four Board meetings held in the financial year ended 31 ̯ʔ̇ɰ כDecember 2006. Individual attendance of each Board member at these α۹ʑᐾϷȿ̒ω໎ԑผผᘪeΈϽ໎ԑผιࡗ meetings is as follows: ೩ผᘪɐؿɁͶੱؗΣɎi
Attended/ Eligible to attend Name of Director ໎ԑշΊ ɰͶʼn༅ࣟͶ
Executive Directors ਨϷ໎ԑ ᐢസ 4/4ܧᅥͱ́˚࠹ϷٽMr. LIU Changle (Chairman & CEO) ჳ Mr. CHUI Keung ੌੜͱ́ 4/4 Mr. WANG Jiyan ˔Ӱͱ́ 1/1 ɀཌྷཌྷʒαȾ˂ɀɊȾˀᏵկͨכ (appointed on 29 September 2006)
ਨϷ໎ԑڈ Non-executive Directors Ms. Michelle Lee GUTHRIE Michelle Lee GUTHRIEɤɡ 3/3 ɀཌྷཌྷʒαȾ˂ɀɊȾˀᖽͨכ (resigned on 29 September 2006) ͱ́ 3/4ڋMr. LAU Yu Leung, John ჳީ Mr. CHEUNG Chun On, Daniel ਜ਼ᔪΪͱ́ 3/3 ɀཌྷཌྷʒαȾ˂ɀɊȾˀᖽͨכ (resigned on 29 September 2006) Mr. XU Gang ஈࡄͱ́ 0/4 ɀཌྷཌྷȼαȹ˂Ɋɀˀᖽͨכ (resigned on 12 January 2007) Mr. CHEUNG San Ping ਜ਼ณМͱ́ 0/3 ɀཌྷཌྷʒαȾ˂ɀɊȾˀᖽͨכ (resigned on 29 September 2006) Mr. LU Xiangdong ቧΉͱ́ 0/1 ɀཌྷཌྷʒαȾ˂ɀɊȾˀᏵկͨכ (appointed on 29 September 2006) Mr. GAO Nianshu ঢ়֨࣊ͱ́ 1/1 ɀཌྷཌྷʒαȾ˂ɀɊȾˀᏵկͨכ (appointed on 29 September 2006) Mr. Paul Francis AIELLO Paul Francis AIELLOͱ́ 0/1 ɀཌྷཌྷʒαȾ˂ɀɊȾˀᏵկͨכ (appointed on 29 September 2006)
ਨϷ໎ԑڈIndependent Non-executive Directors ዟ͓ Dr. LO Ka Shui ᖓཽᔢ́ 3/4 Mr. LEUNG Hok Lim ષነዅͱ́ 4/4 Mr. Thaddeus Thomas BECZAK Thaddeus Thomas BECZAKͱ́ 3/4
During regular meetings of the Board, the Directors discuss and formulate Ε໎ԑผؿց౨ผᘪ౨ංc໎ԑผਆদԎԹց̯එ ଊcٲܧthe overall strategies of the Group, review and monitor the business and ྆ؿኬ೪cᏎদʥဟྦτᗐพ৻ʥল fi nancial performances and discuss the quarterly, half-yearly and annual Ԏদሃտ۹d˸α۹ʥα۹พᐜc˞ʥਆদҺցԯ results, as well as discuss and decide on other signifi cant matters. ˢࠇɣԑփe
໎ԑผֺכThe management is responsible for the day-to-day operations of the Group. ဳଉᄙ߲ஐ̯එ྆ؿˀᏪพ৻eϭ එ྆АˮҺց̯ٲؿࠇɣԑփcဳଉᄙΕˤܞFor significant matters that are specifically delegated by the Board, the ऋ ͱϷΉ໎ԑผంйԎՅ໎ԑผکmanagement must report back to and obtain prior approval from the Board ֶ͓߯ͨЄۖ before making decisions or entering into any commitments on behalf of the ؿԑͱғe Group.
42 უ৷ᇯ഼αం2006 BOARD COMMITTEES ໎ԑկࡗผ
Audit Committee ᄗ࣏կࡗผ The Company has established an audit committee with written terms of ̯ʔ̇ɰι͓ᄗ࣏կࡗผcԯᓻᚬᆲ࣓ܰኣࠗಋ ֺ༗ؿੜԹֲૈʼڬʵʥΨܞᘪؿۺreference based upon the guidelines recommended by the Hong Kong ผ߮ʔผ Institute of Certifi ed Public Accountants and the mandatory provisions set ˞࣊ࠍʿβᔤցe out in the Code.
˸The primary duties of the audit committee are to review the Company’s ᄗ࣏կࡗผ˚߲߬ஐᄗᘪ̯ʔ̇ؿαంʥሏ͌d annual report and accounts, half-yearly report and quarterly reports and to α۹พᐜంйʥտ۹พᐜంйc˞ʥగϊΉ໎ԑผ ᘪeᄗ࣏կࡗผҰαϭʭᐾϷ̒ωผۺprovide advices and comments thereon to the Board. The audit committee ొԜ෮Ӯʥ ʥڬmeets at least four times a year with management to review the accounting ᘪcၤဳଉᄙȹᄗᘪ̯එֺ྆ઔढ़ؿผ߮ࡈ principles and practices adopted by the Group and to discuss auditing, ྻԝcԎਆদᄗ࣏dʑဟઁল৻͇ంԑփe internal control and fi nancial reporting matters.
ͱ́ʥɍΊڋਨϷ໎ԑჳީڈThe audit committee currently comprises one non-executive Director, ᄗ࣏կࡗผଊͅȹΊ -ਨϷ໎ԑᖓཽᔢ́dષነዅͱ́ʥThadڈnamely Mr. LAU Yu Leung, John and three independent non-executive ዟ͓ Directors, namely Dr. LO Ka Shui, Mr. LEUNG Hok Lim and Mr. Thaddeus deus Thomas BECZAKͱ́ୂιe Thomas BECZAK.
ɀཌྷཌྷʒαᐾϷȿ̒ωผᘪeΈϽկכThe audit committee met four times in 2006. Individual attendance of each ᄗ࣏կࡗผ ೩ผᘪɐؿɁͶੱؗΣɎiכcommittee member at these meetings is as follows: ࡗผιࡗ
Attended/ Eligible to attend Name of Director ໎ԑշΊ ɰͶʼn༅ࣟͶ
ਨϷ໎ԑڈIndependent Non-executive Directors ዟ͓ Mr. Thaddeus Thomas BECZAK (Chairman) Thaddeus Thomas BECZAKͱ́˚ 4/4 Dr. LO Ka Shui ᖓཽᔢ́ 4/4 Mr. LEUNG Hok Lim ષነዅͱ́ 4/4
ਨϷ໎ԑڈ Non-executive Director ͱ́ 3/4ڋMr. LAU Yu Leung, John ჳީ
The audit committee reviewed the Group’s audited results for the year ᄗ࣏կࡗผɰၤဳଉᄙʥ̯ʔ̇ؿ̔າ࣏ᅕȹ ended 31 December 2006 with management and the Company’s external ᄗᘪȿ̯එ྆࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α ᘪ໎ԑผઔढ़eۺauditors and recommended its adoption by the Board. ۹ؿᄗ࣏พᐜcԎ
Remuneration Committee ᑀ༭կࡗผ ɀཌྷཌྷʄכɀཌྷཌྷɍαι͓ᑀ༭կࡗผeכThe Company established the remuneration committee in 2003. On ̯ʔ̇ December 2005, the Board adopted the new terms of reference of the αɊɀ˂ɀɊʒˀc໎ԑผઔढ़ณؿᑀ༭կࡗผᓻ 26 ֺ༗ؿੜԹֲૈʼeڬRemuneration Committee in alignment with the mandatory provisions set ᚬᆲc˞ଲΨ out in the Code.
Ή໎ԑผొԜτᗐ̯ʔܢ˳The principal responsibilities of the remuneration committee include ᑀ༭կࡗผؿ˚߬ᓻஐ ۺ೪ʥܼ࿚ؿܧmaking recommendations to the Board on the Company’s policy and ֺ̇τ໎ԑʥঢ়ज़ဳଉɁࡗᑀ༭ؿ structure for all remuneration of Directors and senior management and ᘪcԎᏎদ̯ʔ̇ͲਨϷ໎ԑʥঢ়ज़ဳଉɁࡗؿ eୂټreviewing the specifi c remuneration packages of all executive Directors and ऋց༭ senior management staff of the Company.
Phoenix Annual Report 2006 43 CORPORATE GOVERNANCE REPORT ͬพဳ؝ంй
BOARD COMMITTEES CONTINUED ໎ԑկࡗผᙩ
Remuneration Committee (Continued) ᑀ༭կࡗผᙩ ਨϷ໎ԑঢ়֨࣊ͱڈԭΊܢ˳The remuneration committee now comprises two non-executive Directors, ᑀ༭կࡗผଊ ਨϷ໎ԑᖓڈͱ́˞ʥɍΊዟ͓ڋnamely Mr. GAO Nianshu and Mr. LAU Yu Leung John and three ́ʥჳީ independent non-executive Directors, namely Dr. LO Ka Shui, Mr. LEUNG ཽᔢ́dષነዅͱ́ʥThaddeus Thomas Hok Lim and Mr. Thaddeus Thomas BECZAK. BECZAKͱ́e
ɀཌྷཌྷʒαcᑀ༭կࡗผ˞Ͳկࡗผιࡗ༦כ In 2006, the remuneration committee recommended to the Board the ᘪτᗐਨϷ໎ԑʥঢ়ज़ۺbonus payments and increment in salary and housing allowance (if any) ࣊ࠍҺᘪ࣐ʿβΉ໎ԑผ ʥָ۰ݛൎΣτeټfor the executive Directors and senior management staff by way of written ဳଉɁࡗؿ٦ʥᄈ˱ᑀ resolutions passed by all the committee members.
Ad Hoc Committee ऋПկࡗผ ɀཌྷཌྷɍαઔढ़ऋПկࡗผؿᓻᚬᆲԯכThe Company adopted the terms of reference of the ad hoc Committee ̯ʔ̇ c˞୮ଉऋ͐ܞin 2003 to deal with ad hoc matters, which set out detailed directions as ༗τᗐʀऋПկࡗผᚬɈؿသ ؿؒցɁמto the powers delegated to the ad hoc Committee. Any two Directors shall ПԑփeͨЄԭΊ໎ԑ࿚ιτᗐพ৻͚ form a quorum for the transaction of business. ᅕe
ஐͨٲDIRECTORS’ AND AUDITORS’ ໎ԑʥ࣏ᅕؿল৻ం RESPONSIBILITIES FOR THE FINANCIAL STATEMENTS eٲThe Directors acknowledge their responsibilities for preparing the fi nancial ໎ԑᆢႏ֤೩߲ஐᇁႇ̯එ྆ؿল৻ం statements of the Group.
࣏ᅕכؿஐͨʥ࣏ᅕஐͨя༗ٲThe Directors’ responsibilities in the preparation of the fi nancial statements ໎ԑᇁႇল৻ం and the auditors’ responsibilities are set out in the Auditors’ Report. ంйʑe
Internal Control ʑဟઁ dၐᙶʥᏎদ̯එ྆ؿʑဟ͓ۺThe Board has overall responsibility for the establishment, maintenance ໎ԑผͲࠍ߲ஐ ɀཌྷཌྷʒαc໎ԑผɰၤဳଉᄙȹ༞ྦྷכand review of the Group’s system of internal control. In 2006, the Board ઁԹ۹e ᙔʔ̇ؿʑဟઁԹ۹ؿࢽɈ൬Ϸȿڃhas conducted a review with the management of the effectiveness of ̯ʔ̇ʥԯ the system of internal control of the Company and its subsidiaries and ᏎদcԎႏݯʑဟઁԹ۹ʋτࢽe considered that the internal control system is effective.
External Auditors ̔າ࣏ᅕ ٖכ༞ɰ̷ڻ༞ผ߮ԑ৻ֺᖓМ̷ڻPricewaterhouseCoopers (“PwC”) has been appointed as the external ᖓМ auditors of the Company by shareholders at the annual general meeting. ൪αɣผɐᏵٖկͨݯ̯ʔ̇ؿ̔າ࣏ᅕe
ʗΣɎiټ৻ؿ༭ר༞ݯ̯එֺ྆ొԜ̷ڻThe remuneration in respect of services provided by PwC for the Group is ᖓМ analysed as follows:
31 December 31 December 2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα Ɋɀ˂ɍɊȹˀ Ɋɀ˂ɍɊȹˀ HK$ HK$ ಋʏ ಋʏ
৻ 2,410,000 2,230,000רAudit Service ᄗ࣏ ৻ 186,000 458,000רTax Service ೢ৻
Total ᐢ߮ 2,596,000 2,688,000
44 უ৷ᇯ഼αం2006 ڝINVESTOR RELATIONS ҙ༅ّᗐ
˂ɀཌྷཌྷʒαʒכThe chairman of the Company and the chairman of the audit committee ̯ʔ̇˚ʥᄗ࣏կࡗผ˚ɰ were available at the annual general meeting held on 22 June 2006 ɀɊɀˀᐾϷؿٖ൪αɣผٖ൪αɣผ כAGM”) to answer questions raised by shareholders of the Company. A ɐc೮̯ʔֺٖ̇ొˮؿਐᕀe̯ʔ̇͛ɰ“) c˞ᇁɃณڬnew set of articles of association of the Company has also been adopted at ٖ൪αɣผɐઔढ़ȹࡨณؿೡୀ ֺཕЗؿΈඖᛰҡeڬthe AGM to incorporate the changes promulgated by the new GEM Listing พɐ̟ஃ Rules.
ଊٲcऋПܰྦྷ̯එ྆ڝThe Board puts a high regard on investor relationship in particular, fair ໎ԑผঢ়۹ࠇ഼ҙ༅ّᗐ ۹ؿంйeעdisclosure and comprehensive and transparent reporting of the Group’s ʥพ৻Аˮʔ̡ׄᚉ˞ʥͲࠍϤԮ performance and activities.
.ɀཌྷཌྷʒαc̯ʔ̇ဳଉᄙ༦̯ʔ̇၉ॎwwwכ In 2006, the management of the Company has enhanced communications .၉ॎwww.irasiaڝand relations with the investors and potential investors through the phoenixtv.com ʥਿพҙ༅ّᗐ Company’s website at www.phoenixtv.com and a professional investor com/listco/hk/phoenixtv/index.htmᄈ൬ȿၤҙ༅ّʥ eڝrelation website at www.irasia.com/listco/hk/phoenixtv/index.htm. ᅶΕҙ༅ّؿʥᗐ
CONCLUSION ሃ
༅ؿτࢽʗړ˿cӪΡؿͬพဳ؝ڌThe Company strongly believes that good corporate governance can ̯ʔ̇ਠ d˱ੜܛsafeguard the effective allocation of resources and protect shareholders’ ʥၐᙶٖСऩcϤဳଉᄙੀผသɈၐ interest and the management tries to maintain, strengthen and improve ʥҝഁ̯එ྆ͬพဳ؝ؿᅟๅʥሔॖe the standard and quality of the Group’s corporate governance.
Phoenix Annual Report 2006 45 REPORT OF THE DIRECTORS ໎ԑผంй࣊
The directors (the “Directors”) submit their report together with the audited ໎ԑ໎ԑొеუ৷ᇯ഼ઁٖτࠉʔ̯̇ʔ ᙔʔ̇ီݯ̯එ྆࿀ϭɀཌྷཌྷڃfi nancial statements of Phoenix Satellite Television Holdings Limited (the ̇ʥԯ Company”) and its subsidiaries (collectively referred to as the “Group”) ʒαɊɀ˂ɍɊȹˀ˅α۹ؿంйʥᄗ࣏ল৻ం“ eٲ .for the year ended 31 December 2006
PRINCIPAL ACTIVITY AND ˚߬พ৻ʥᏪ༜Δਂʗ GEOGRAPHICAL ANALYSIS OF OPERATIONS
ᙔʔ̇ؿ˚߬ڃThe principal activity of the Company is investment holding. The ̯ʔ̇ؿ˚߬พ৻ݯҙ༅ઁٖcԯ ഽ23eڃٲল৻ంכprincipal activities of its subsidiaries are set out in note 23 to the fi nancial พ৻༗ statements.
ٲল৻ంכଊʗ༗ٲพ৻ʥΔਂʗᗘؿܘAn analysis of the Group’s performance for the year by business and ̯එ྆ ഽ5eڃ .geographical segments is set out in note 5 to the fi nancial statements
RESULTS AND APPROPRIATIONS พᐜʥʗ
ʑeٲ75ࠒؿ၃νऩכThe results of the Group for the year are set out in the consolidated income ̯එ྆ؿαʑพᐜ༗ statement on page 75.
ɀཌྷཌྷȼαʒ˂ɀɊȹˀΊͶ̯ʔ̇כᘪΉۺThe Directors recommend the payment of a final dividend of HK$0.014 ໎ԑ per ordinary share, totaling HK$69,190,000, to be payable to shareholders ٖত˫ؿٖݢೕ̱౨ٖࢠҰٖౝٖ0.014ಋ whose names appear on the register of members of the Company on 21 ʏcᐢ߮69,190,000ಋʏe June 2007.
RESERVES ௐ e̯ʔٲ၃ᚬऩᛰ৽כMovements in the reserves of the Group during the year are set out in the ̯එ྆αʑௐؿᛰ৽༗ ഽ29eڃٲল৻ంכconsolidated statement of changes in equity. Movements in the reserves ̇αʑௐؿᛰ৽༗ of the Company during the year are set out in note 29 to the financial statements.
DONATIONS ࢶಁ
Charitable donations made by the Group during the year amounted to ̯එ྆αʑАˮؿ෯ഁࢶಁݯ8,000ಋʏɀཌྷཌྷʄ HK$8,000 (2005: HK$1,249,000). αi1,249,000ಋʏe
พdᄥָʥஉௐذ PROPERTY, PLANT AND EQUIPMENT
ٲল৻ంכพdᄥָʥஉௐᛰ৽ؿੱ༗ذDetails of the movements in property, plant and equipment of the Group ̯එ྆ ഽ18eڃ .are set out in note 18 to the fi nancial statements
SHARE CAPITAL AND SHARE OPTIONS ٖ̯ʥᑪٖᚬ
ٲল৻ంכDetails of the movements in share capital and share options of the ̯ʔٖ̯̇ʥᑪٖᚬᛰ৽ؿੱʗП༗ ഽ28eڃഽ27ʥڃ Company are set out in note 27 and note 28, respectively, to the fi nancial statements.
46 უ৷ᇯ഼αం2006 PRE-EMPTIVE RIGHTS ͱᑪൕᚬ
τᗐೕעʥਅະࢌؒԝԎಲ߯ڬNo pre-emptive rights exist under the Company’s articles of association ̯ʔ̇ؿೡୀ and the law in the Cayman Islands in relation to the issue of new shares by Ϸ̯ʔ̇ณٖͫͱᑪൕᚬؿૈʼe the Company.
DISTRIBUTABLE RESERVES ˿Ԝʗݢௐ
ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀؿ˿ԜʗݢכDistributable reserves of the Company as at 31 December 2006, ̯ʔ̇ calculated under the Companies Law (Revised) of the Cayman Islands, ௐ࣓ኣਅະࢌʔ̇ؒ࠳့߯߮ ɀཌྷཌྷʄαɊɀ˂ɍɊȹˀiכamounted to approximately HK$683,307,000 (as at 31 December 2005: 683,307,000ಋʏ HK$740,494,000). 740,494,000ಋʏe
FIVE PERIOD/YEARS FINANCIAL ʄ౨ංʼnα۹ল৻ล߬ SUMMARY
౨ංʼnα۹ؿพᐜʥ༅ଐၤ߲ܧʄলٶA summary of the results and of the assets and liabilities of the Group for ̯එ྆ 156ϭ157ࠒeכthe last fi ve fi nancial period/years is set out on pages 156 to 157. ඦล߬༗
PURCHASE, SALE OR REDEMPTION OF ᑪൕdˮਕֶᚿΑᖬԴ SECURITIES
αʑลಲᚿΑͨЄٖͫe̯ʔֶ̇ԯͨЄכThe Company has not redeemed any of its shares during the year. Neither ̯ʔ̇ ᙔʔ̇Εαʑลಲᑪൕֶˮਕ̯ʔ̇ͨЄٖͫeڃ the Company nor any of its subsidiaries has purchased or sold any of the Company’s shares during the year.
SHARE OPTION SCHEMES ᑪٖᚬི߮
$ ̯ʔ̇ؿᑪٖᚬི߮ A) Share option schemes of the Company) ɀཌྷཌྷཌྷαʒ˂ȼˀc̯ʔٖٖ̇כ On 7 June 2000, two share option schemes of the Company were approved by the shareholders of the Company (“Shareholders”), ғԭඖ̯ʔ̇ؿᑪٖᚬི߮c߮τࠖωʔ ᑪٖᚬ߮܃ٖ׃ᑪٖᚬི߮ʥࠖωʔکٖ׃ namely Pre-IPO Share Option Scheme and Post-IPO Share Option ᑪٖᚬི߮کٖ׃Scheme. In order to enhance the fl exibility in the implementation of ིeݯȿొঢ়ਨϷࠖωʔ ᑪٖᚬི߮ࣂؿݠֲcగ܃ٖ׃the Pre-IPO Share Option Scheme and the Post-IPO Share Option ʥࠖωʔ Scheme, the committee of two and four Directors established for the ဳଉҰඖᑪٖᚬི߮ϤͅԭΊʥ̒Ί໎ԑୂι ɀཌྷཌྷȹαɀ˂Ɋ̒כadministration of each of the share option schemes (the “Committee”) ؿկࡗผկࡗผɰ ׃approved certain amendments to the terms of the Pre-IPO Share ˀʥɀཌྷཌྷ̒αɊɀ˂Ɋˀғྦྷࠖωʔ ɀכᑪٖᚬི߮ؿૈಁАˮߗɳ࠳߯d̊کٖ Option Scheme on 14 February 2001 and 10 December 2004 and the Post-IPO Share Option Scheme on 14 February 2001, 6 August 2002 ཌྷཌྷȹαɀ˂Ɋ̒ˀdɀཌྷཌྷɀαɄ˂ʒˀʥ ׃and 10 December 2004, respectively. ɀཌྷཌྷ̒αɊɀ˂ɊˀʗПғྦྷࠖωʔ ᑪٖᚬི߮ؿૈಁАˮߗɳ࠳߯e܃ٖ
ᑪٖᚬི߮کٖ׃ ࠖωʔ Pre-IPO Share Option Scheme (1) ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀؿࠖωכThe following is a summary of the principal terms of the Pre-IPO ˞Ɏݯ ᑪٖᚬི߮ؿ˚߬ૈಁล߬iکٖ׃Share Option Scheme as at 31 December 2006: ʔ
Purpose of the scheme ི߮ؿ͌ؿ ܞᆢעི߮ʼͧʑכThe purpose of the scheme, though not explicitly stated in the ི߮ؿ͌ؿЩԚԎಲ ߗɳࡗྦྷ̯එ྆ೕࢄʥʼnֶྦྷٲscheme document, is to recognise the contribution of certain ˮݯ ᐲֺ͚พכemployees to the growth of the Group and/or to the listing of ̯ʔٖٖ̇ͫͫ shares of the Company (“Shares”) on the Growth Enterprise พɐ̟ؿᘆe Market of the Stock Exchange (“GEM”).
Phoenix Annual Report 2006 47 REPORT OF THE DIRECTORS ໎ԑผంй࣊
SHARE OPTION SCHEMES (CONTINUED) ᑪٖᚬི߮ᙩ
$ ̯ʔ̇ؿᑪٖᚬི߮ᙩ A) Share option schemes of the Company (Continued)) ᑪٖᚬི߮ᙩکٖ׃ ࠖωʔ Pre-IPO Share Option Scheme (Continued) (1) The participants of the scheme ི߮ؿၤّ ˮᑪכܢ˳Employees of any member of the Company, including any ̯ʔ̇ͨЄιࡗʔ̇ؿࡗ එ̯྆כȹ˂նͨᓻכɺʭکexecutive directors of any member of the Group who have ٖᚬˀ౨ ɀɊɩࣂؿ̯එכ৻̯එ྆ɺʭרcommenced working for the Group for not less than one month ʥҰܱ౨ ˿prior to the date of grant of an option and spent not less than ྆ͨЄιࡗʔ̇ؿͨЄਨϷ໎ԑ˿અढ़ twenty hours per week in providing services to the Group may ႏᑪٖͫؿᑪٖᚬe take up options to subscribe for Shares.
The total number of securities available for issue ˿ԜೕϷؿᖬԴᐢᅕ ᑪٖᚬི߮ʥͨЄԯˢکٖ׃The total number of Shares available for issue under options ࣓ኣࠖωʔ which may be granted under the Pre-IPO Share Option Scheme ི߮ˮؿᑪٖᚬϤ˿ԜೕϷؿٖͫᐢᅕ ɀཌྷཌྷཌྷαʒ˂ɍɊˀΕכand any other schemes must not in aggregate exceed 10% of the ߮ɺ൚༦ٖͫ issued share capital of the Company as at the date of listing of the พɐ̟ˀɐ̟ˀ౨̯ʔ̇ɰೕ Shares on GEM on 30 June 2000 (the “Listing Date”). Ϸٖ̯ؿ10%e
The total number of Shares in respect of which options are ࣓ኣི߮˿ʀೕϷؿᑪٖᚬࣹʥؿٖͫᐢᅕ ɐ̟ˀ౨כissuable under the scheme is 484,706,000 shares, representing ݯ484,706,000ٖٖͫcʗПЌ ంйˀ౨̯ʔ̇ɰೕϷٖ̯ؿ10%̯כand 9.8%, respectively, of the issued share capital of the ʥ 10% Company as at the Listing Date and as at the date of this report. ʥ9.8%e
The maximum entitlement of each participant under the scheme ࣓ኣི߮Έၤّؿɣᔾ τᗐࣂංͲࠍϷԚכNo option may be granted to any eligible person which, if at the ࠱ͨЄȹΊ༅ࣟɁɡ relevant time exercised in full, would result in the total number of Ᏽʀؿᑪٖᚬc˿ኒߎ༅ࣟɁɡ˿ႏ Shares the subject of such option, when added to the number of ᑪᑪٖᚬࣹʥؿٖͫᐢᅕc˱ɐ༅ࣟ Shares which may be subscribed by that eligible person under Ɂɡ࣓ኣᏵʀؿͨЄ̰ϷԚᑪٖᚬ˿ႏᑪ Ᏽکany outstanding options granted to that eligible person and ؿٖͫᅕ͌ʥ༅ࣟɁɡ࣓ኣི߮ͱ to the number of Shares previously subscribed by the eligible ʀؿͨЄᑪٖᚬႏᑪؿٖͫᅕ͌c൚༦࣓ ڬperson under any options granted to the eligible person under ኣི߮ࣂ˿Ԝႏᑪٖͫᐢᅕؿ25%c the scheme exceeding 25% of the aggregate number of Shares ɺΉ༅ࣟɁɡʀᑪٖᚬe available for subscription under the scheme at that time.
48 უ৷ᇯ഼αం2006 SHARE OPTION SCHEMES (CONTINUED) ᑪٖᚬི߮ᙩ
$ ̯ʔ̇ؿᑪٖᚬི߮ᙩ A) Share option schemes of the Company (Continued)) ᑪٖᚬི߮ᙩکٖ׃ ࠖωʔ Pre-IPO Share Option Scheme (Continued) (1) Time of exercise of option ϷԚᑪٖᚬ౨ࠉ ˮᑪٖᚬˀ߮ȹαכ˿An option may be exercised in accordance with the terms of the ᑪٖᚬ Ɋα։ؿ܃scheme at any time during the period commencing one year from նϭˮᑪٖᚬˀ౨ ܘthe date of grant of the option and expiring ten years after the date ౨ංʑͨЄࣂං࣓ኣི߮ؿૈಁc ʀ˞ϷԚiٲof grant of the option in accordance with the following schedule: ๑˞Ɏࣂං
Percentage of Shares comprised in options which is exercisable Date of exercise of an option ˿ʀϷԚؿᑪٖᚬ ϷԚᑪٖᚬˀ౨ ֺЌٖͫˈԝ
Between the date of grant of an option and less than 12 months following the date of grant of an option zero 12˂ʑ ཌྷכʭ܃ˮᑪٖᚬˀϭˮᑪٖᚬˀ
Between the period falling 12 months or more but less than 24 months from the date of grant of an option up to 25% 24˂ؿ౨ංʑ Λ25%כcЎʭ܃ؿ12˂ֶɾ܃ˮᑪٖᚬˀ
Between the period falling 24 months or more but less than 36 months from the date of grant of an option up to 50% 36˂ؿ౨ංʑ Λ50%כcЎʭ܃ؿ24˂ֶɾ܃ˮᑪٖᚬˀ
Between the period falling 36 months or more but less than 48 months from the date of grant of an option up to 75% 48˂ؿ౨ංʑ Λ75%כcЎʭ܃ؿ36˂ֶɾ܃ˮᑪٖᚬˀ
Any time falling 48 months from the date of grant of an option and thereafter 100% Єࣂං 100%ͨ܃ؿ48˂ʥԯ܃ˮᑪٖᚬˀ
Minimum holding period ܛτ౨ං ˮᑪٖᚬכ˿As stated above, no option can be exercised within the fi rst twelve ΣɐʼֺͶcԎಲᑪٖᚬ months following the date of grant of an option. ˀ܃ࠖɊɀ˂ʑϷԚe
The amount payable on acceptance of the option અढ़ᑪٖᚬᎶ˟ؿಁඖ The date by which the option must be applied for being a date not ͇ᇼᑪٖᚬؿˀ౨̦ݯ̯ʔ̇ೕˮొе ܢ˳more than three days from (and including) the date on which the ʀᑪٖᚬԲͧˀ౨ొеˀ౨ અढ़ᑪٖᚬࣂcכletter of offer of the grant of option is issued by the Company (“Offer ˀ߮ɺ൚༦ɍʨʑe τɁʻ˟1ಋʏʀ̯ʔ̇cАݯܛDate”). Upon acceptance of the option, the option holder shall ᑪٖᚬ pay HK$1 to the Company as consideration of the grant. ʀؿˤძe
The basis of determining the exercise price ᔤցϷԚძؿਥๅ ɀཌྷཌྷཌྷαʒ˂ɀɊȹˀ˰ೕؿכSame as the offer price for the Shares as set out in the prospectus ၤ̯ʔ̇ eޚೡ༗Ͷؿٖͫೕਕძٖ׃ .of the Company dated 21 June 2000
Phoenix Annual Report 2006 49 REPORT OF THE DIRECTORS ໎ԑผంй࣊
SHARE OPTION SCHEMES (CONTINUED) ᑪٖᚬི߮ᙩ
$ ̯ʔ̇ؿᑪٖᚬི߮ᙩ A) Share option schemes of the Company (Continued)) ᑪٖᚬི߮ᙩکٖ׃ ࠖωʔ Pre-IPO Share Option Scheme (Continued) (1) The remaining life of the scheme ི߮Ɏα౨ ʔ̇Εพɐ̟ࣂ։cτ̯כThe scheme period expires upon the listing of the Company on ི߮౨ං ᓊᙔ౨ංҢࣂ։eכthe GEM, for which the option expires when the vesting period ᗐᑪٖᚬ ends.
ᑪٖᚬི߮Ή̯کٖ׃The details of share options granted by the Company under the ̯ʔ࣓̇ኣࠖωʔ Pre-IPO Share Option Scheme to the Directors of the Company ʔ̇໎ԑʥ̯එ྆ࡗˮ˿ႏᑪٖͫؿᑪ and the employees of the Group to acquire shares were as follows: ٖᚬੱΣɎi
Number of share options ᑪٖᚬᅕ͌ Balance Balance Exercise as at Lapsed Exercised as at Type and number of price 1 January during during 31 December remaining grantees Date of grant Vesting period Exercise period per share 2006 the year the year 2006 ɀཌྷཌྷʒαכ ɀཌྷཌྷʒαכ αʑ Ɋɀ˂ɍɊȹˀכ αʑכ ɎֻɁ Ұٖ ȹ˂ȹˀ ؿᗘПʥᅕ͌ ˮˀ౨ ᓊᙔ౨ ϷԚ౨ං ϷԚძ ̖ࢽ ϷԚ HK$ ಋʏ
3 Executive Directors: 3ΊਨϷ໎ԑi LIU Changle 14 June 2000 14 June 2000 to 14 June 2001 to 1.08 5,320,000 – – 5,320,000 13 June 2004 13 June 2010 ᅥ ɀཌྷཌྷཌྷα ɀཌྷཌྷཌྷα ɀཌྷཌྷȹαٽჳ ʒ˂Ɋ̒ˀ ʒ˂Ɋ̒ˀϭ ʒ˂Ɋ̒ˀϭ ɀཌྷཌྷ̒α ɀཌྷȹཌྷα ʒ˂Ɋɍˀ ʒ˂Ɋɍˀ
CHUI Keung 14 June 2000 14 June 2000 to 14 June 2001 to 1.08 3,990,000 – – 3,990,000 13 June 2004 13 June 2010 ੌੜ ɀཌྷཌྷཌྷα ɀཌྷཌྷཌྷα ɀཌྷཌྷȹα ʒ˂Ɋ̒ˀ ʒ˂Ɋ̒ˀϭ ʒ˂Ɋ̒ˀϭ ɀཌྷཌྷ̒α ɀཌྷȹཌྷα ʒ˂Ɋɍˀ ʒ˂Ɋɍˀ
WANG Jiyan (Note) 14 June 2000 14 June 2000 to 14 June 2001 to 1.08 3,990,000 – – 3,990,000 13 June 2004 13 June 2010 ഽ ɀཌྷཌྷཌྷα ɀཌྷཌྷཌྷα ɀཌྷཌྷȹαڃӰ˔ ʒ˂Ɋ̒ˀ ʒ˂Ɋ̒ˀϭ ʒ˂Ɋ̒ˀϭ ɀཌྷཌྷ̒α ɀཌྷȹཌྷα ʒ˂Ɋɍˀ ʒ˂Ɋɍˀ
71 other employees 14 June 2000 14 June 2000 to 14 June 2001 to 1.08 27,058,000 (1,084,000 ) (2,134,000 ) 23,840,000 13 June 2004 13 June 2010 71Ίԯˢࡗ ɀཌྷཌྷཌྷα ɀཌྷཌྷཌྷα ɀཌྷཌྷȹα ʒ˂Ɋ̒ˀ ʒ˂Ɋ̒ˀϭ ʒ˂Ɋ̒ˀϭ ɀཌྷཌྷ̒α ɀཌྷȹཌྷα ʒ˂Ɋɍˀ ʒ˂Ɋɍˀ
Total: ߮i 74 employees 74Ίࡗ 40,358,000 (1,084,000 ) (2,134,000 ) 37,140,000
ഽi ˔Ӱͱ́ɰᏵկͨݯ̯ʔ̇ؿਨϷ໎ڃ Note: Mr. WANG Jiyan was appointed as an executive director of the Company with effect from 29 September 2006. ԑc Ϭɀཌྷ ཌྷ ʒ αȾ ˂ɀɊȾˀ ́ ࢽe
50 უ৷ᇯ഼αం2006 SHARE OPTION SCHEMES (CONTINUED) ᑪٖᚬི߮ᙩ
$ ̯ʔ̇ؿᑪٖᚬི߮ᙩ A) Share option schemes of the Company (Continued)) ᑪٖᚬི߮ᙩکٖ׃ ࠖωʔ Pre-IPO Share Option Scheme (Continued) (1) The remaining life of the scheme (Continued) ི߮Ɏα౨ᙩ ࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹כ During the year ended 31 December 2006, 2,134,000 options granted to employees were exercised. At the date before the ʑcʀࡗؿ 2,134,000 ͫᑪٖᚬɰᏵϷ ˀ౨cҰٖ˱ᚬ̡яکᑪٖᚬᏵϷԚכoptions were exercised, the weighted average closing price per Ԛe share was HK$1.29. ν̟ძݯ 1.29 ಋʏe
࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹כ During the year ended 31 December 2006, 1,084,000 options granted to two employees lapsed when they ceased their ʑcʀԭΊࡗؿ1,084,000ٖͫᚬΐԯ එ྆Ϥ̖ࢽe̯כemployments with the Group. ɺʹՇ
αʑᏵכSave as disclosed above, no other option has been cancelled ɐʼׄᚉّ̔cԎಲԯˢᑪٖᚬ during the year. ഽሻe
ᑪٖᚬ߮کٖ׃No option has been granted to the Directors, chief executive, ลಲᑪٖᚬ౦࣓ኣࠖωʔ ˚ᐢസdဳଉᄙٖdܧmanagement shareholders, substantial shareholders, or their ིϤʀ໎ԑdϷ ֶۂrespective associates, or to the suppliers of goods or services ٖ߬dֶ֤೩ΈϬؿᐲᖎɁɡdֶஒ ৻ؿԜᎶਆeลಲၤّᏵˮؿᑪٖᚬר under the Pre-IPO Share Option Scheme. No participant was ֺ༗Ͷֶ࣓ኣࠖωʔڬgranted any option in excess of the individual limit as set out ൚༦พɐ̟ஃ ᑪٖᚬི߮ؿɁࠉᔾeکٖ׃ in the GEM Listing Rules or under the Pre-IPO Share Option Scheme.
ᑪٖᚬི߮܃ٖ׃ ࠖωʔ Post-IPO Share Option Scheme (2) ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀؿࠖωכThe following is a summary of the principal terms of the Post-IPO ˞Ɏݯ ᑪٖᚬི߮ؿ˚߬ૈಁล߬i܃ٖ׃Share Option Scheme as at 31 December 2006: ʔ
Purpose of the scheme ི߮ؿ͌ؿ ᑪٖᚬི߮ؿ͌ؿݯࢷजʥ܃ٖ׃The purpose of the Post-IPO Share Option Scheme is to retain ࠖωʔ and provide incentives to the employees of the Group to achieve ొԜᆉʀ̯එ྆ࡗ˞༠ιԯพ৻͌ᅟe its business objectives.
The participants of the scheme ི߮ؿၤّ ᙔʔ̇ͲᓻɮАؿ̯ʔڃEmployees of any member of the Company, including any Ε̯ʔֶ̇ԯ එ྆ͨЄι̯ܢ˳executive directors of any member of the Group, in full-time ̇ͨЄιࡗʔ̇ؿࡗ employment with the Company (or its subsidiaries) may take up ࡗʔ̇ؿͨЄਨϷ໎ԑ˿અढ़˿ႏᑪٖͫ options to subscribe for Shares. ؿᑪٖᚬe
Phoenix Annual Report 2006 51 REPORT OF THE DIRECTORS ໎ԑผంй࣊
SHARE OPTION SCHEMES (CONTINUED) ᑪٖᚬི߮ᙩ
$ ̯ʔ̇ؿᑪٖᚬི߮ᙩ A) Share option schemes of the Company (Continued)) ᑪٖᚬི߮ᙩ܃ٖ׃ ࠖωʔ Post-IPO Share Option Scheme (Continued) (2) The total number of securities available for issue ˿ԜೕϷؿᖬԴᐢᅕ ᑪٖᚬི߮ʥͨЄ܃ٖ׃a) The total number of Shares available for issue under options (a) ࣓ኣࠖωʔ) which may be granted under the Post-IPO Share Option ԯˢི߮ˮؿᑪٖᚬϤ˿ԜೕϷؿٖ ғི߮כScheme and any other schemes must not in aggregate ͫᐢᅕ߮ɺ൚༦̯ʔ̇ exceed 10% (or such higher percentage as may be allowed ˀɰೕϷٖ̯ؿ10%ֶพɐ̟ ʐஈؿҡঢ়ϛʗˈc࣓ኣɎʼڬunder the GEM Listing Rules) of the issued share capital ஃ of the Company in issue as at the date of approval of the (b)ʥ(c)ݒՅٖғ̔e scheme unless Shareholders’ approval has been obtained pursuant to paragraphs (b) and (c) below.
ɣผɐఖұٖғҡٖכ˿b) The Company may seek approval by Shareholders in general (b) ̯ʔ̇) meeting to refresh the limit as referred to in the above ณɐʼ(a)ݒֺ߸ؿࠉԹe paragraph (a).
ɣผɐ̊Ϸఖұٖғٖכ˿c) The Company may seek separate Shareholders’ approval in a (c) ̯ʔ̇) general meeting to grant options beyond the limit as referred ʀ൚ˮɐʼ(a) ݒֺ߸ࠉԹؿᑪٖ to in the above paragraph (a) provided that the total number ᚬcི߮ʥͨЄԯˢིࣹ߮ʥؿٖͫ of Shares subject to the scheme and any other schemes ᐢᅕɺ൚༦̯ʔ̇ɺࣂɰೕϷτᗐᗘ does not in aggregate exceed 30% of the relevant class of ПᖬԴؿ30%e securities of the Company in issue from time to time.
ɀཌྷཌྷɀαɄ˂ʒˀғҡכd) Shareholders’ approval has been obtained on 6 August 2002 (d) ٖ) to refresh the 10% limit. The Directors may grant options ณ 10% ࠉԹe໎ԑ˿ˮႏᑪΛ ֆ̰ϷԚdܢ˳for subscription of up to 493,173,000 Shares (which do 493,173,000ٖٖͫɺ not include those options that are outstanding, cancelled or ɰഽሻֶɰ̖ࢽؿ೩ᑪٖᚬؿᑪ ంйˀ౨ɰೕϷٖ̯ؿ̯כlapsed), representing 9.98% of the issued share capital as at ٖᚬcЌ the date of this report. 9.98%e
The maximum entitlement of each participant under the scheme ࣓ኣི߮Έၤّؿɣᔾ ЄɊɀ˂౨ංʑΉͨכUnless approved by Shareholders, the total number of securities ٖғ̔c ɰϷԚʥ̰Ϸܢ˳issued and to be issued upon exercise of the options granted Έၤّʀؿᑪٖᚬ to each participant (including both exercised and outstanding ԚؿᑪٖᚬᏵϷԚࣂɰೕϷʥੀʀೕϷؿ options) in any 12-month period must not exceed 1% of the ᖬԴᐢᅕɺ൚༦̯ʔ̇ɰೕϷτᗐᗘПᖬ relevant class of securities of the Company in issue. Դؿ1%e
52 უ৷ᇯ഼αం2006 SHARE OPTION SCHEMES (CONTINUED) ᑪٖᚬི߮ᙩ
$ ̯ʔ̇ؿᑪٖᚬི߮ᙩ A) Share option schemes of the Company (Continued)) ᑪٖᚬི߮ᙩ܃ٖ׃ ࠖωʔ Post-IPO Share Option Scheme (Continued) (2) Time of exercise of option ϷԚᑪٖᚬ౨ࠉ ˮᑪٖᚬˀ߮ȹαնϭכ˿An option may be exercised in accordance with the terms of the ᑪٖᚬ Ɋα։ؿ౨ංʑͨЄࣂ܃scheme at any time during the period commencing one year from ˮᑪٖᚬˀ౨ ʀ˞Ϸٲ๑˞Ɏࣂංܘthe date of grant of the option and expiring ten years after the date ං࣓ኣི߮ؿૈಁc of grant of the option in accordance with the following schedule: Ԛi
Percentage of Shares comprised in options which is exercisable Date of exercise of an option ˿ʀϷԚؿᑪٖᚬ ϷԚᑪٖᚬˀ౨ ֺЌٖͫˈԝ
Between the date of grant of an option and less than 12 months following the date of grant of an option zero 12˂ʑ ཌྷכʭ܃ˮᑪٖᚬˀϭˮᑪٖᚬˀ
Between the period falling 12 months or more but less than 24 months from the date of grant of an option up to 25% 24˂ؿ౨ංʑ Λ25%כcЎʭ܃ؿ12˂ֶɾ܃ˮᑪٖᚬˀ
Between the period falling 24 months or more but less than 36 months from the date of grant of an option up to 50% 36˂ؿ౨ංʑ Λ50%כcЎʭ܃ؿ24˂ֶɾ܃ˮᑪٖᚬˀ
Between the period falling 36 months or more but less than 48 months from the date of grant of an option up to 75% 48˂ؿ౨ංʑ Λ75%כcЎʭ܃ؿ36˂ֶɾ܃ˮᑪٖᚬˀ
Any time falling 48 months from the date of grant of an option and thereafter 100% Єࣂං 100%ͨ܃ؿ48˂ʥԯ܃ˮᑪٖᚬˀ
Minimum holding period ܛτ౨ං ˮᑪٖᚬכ˿As stated above, no option can be exercised within the fi rst twelve ΣɐʼֺͶcԎಲᑪٖᚬ months following the date of grant of an option. ˀ܃ࠖɊɀ˂ʑϷԚe
The amount payable on acceptance of the option અढ़ᑪٖᚬᎶ˟ؿಁඖ ܢ˳The date by which the option must be applied for being a date not ͇ᇼᑪٖᚬؿˀ౨̦ݯొеˀ౨ અढ़ᑪٖᚬכmore than twenty one days from (and including) the Offer Date. ˀ߮ɺ൚༦ɀɊȹʨʑe τɁʻ˟1ಋʏʀ̯ʔ̇cܛUpon acceptance of the option, the option holder shall pay HK$1 ࣂcᑪٖᚬ to the Company as consideration of the grant. Аݯʀؿˤძe
The basis of determining the exercise price ᔤցϷԚძؿਥๅ The subscription price for the Shares under the scheme shall ࣓ኣི߮ؿٖͫႏᑪძͅկࡗผᔤցcԎ еొכٖͫ(Ɏɍّɻؿঢ়ّ(a˞כbe determined by the Committee and will be no less than the ɺʭ ֺٲhighest of (a) the closing price of Shares as stated in the Stock ˀ౨ݯᏪพˀΕᐲֺ͚Ұˀంძ ʄک၇અొеˀ౨כٖͫ (Exchange’s daily quotation sheets on the Offer Date which must Ͷؿν̟ძd(b ֺͶؿ̡яνٲbe a business day, (b) the average closing price per Share as ᏪพˀΕᐲֺ͚Ұˀంძ stated in the Stock Exchange’s daily quotation sheets for the fi ve ̟ძʥ(c)ٖͫࠍࠤe business days immediately preceding the Offer Date and (c) the nominal value of the Share.
Phoenix Annual Report 2006 53 REPORT OF THE DIRECTORS ໎ԑผంй࣊
SHARE OPTION SCHEMES (CONTINUED) ᑪٖᚬི߮ᙩ
$ ̯ʔ̇ؿᑪٖᚬི߮ᙩ A) Share option schemes of the Company (Continued)) ᑪٖᚬི߮ᙩ܃ٖ׃ ࠖωʔ Post-IPO Share Option Scheme (Continued) (2) The remaining life of the scheme ི߮Ɏα౨ τࢽeܛړThe scheme will remain in force for a period of ten years ི߮ͅઔढ़ི߮ˀ౨߮Ɋαʑ ୄ˅ࣂcɺ˿ʹ࣓ኣི߮ʀᑪٖᚬeכ commencing on the date of the adoption of the scheme. Upon termination, no further options may be granted under the scheme.
ᑪٖᚬི߮Ή̯܃ٖ׃The details of share options granted by the Company under the ̯ʔ࣓̇ኣࠖωʔ Post-IPO Share Option Scheme to the employees of the Group to එ྆ࡗˮ˿ႏᑪٖͫؿᑪٖᚬؿੱΣ acquire Shares were as follows: Ɏi
Number of share options ᑪٖᚬᅕ͌ Balance Balance Exercise as at Lapsed Exercised as at Type and number of Date of price per 1 January during during 31 December remaining grantees grant Vesting period Exercise period share 2006 the year the year 2006 ɀཌྷཌྷʒαכ ɀཌྷཌྷʒαכ ɎֻɁ Ұٖ ȹ˂ȹˀ Ɋɀ˂ɍɊȹˀ ؿᗘПʥᅕ͌ ˮˀ౨ ᓊᙔ౨ ϷԚ౨ං ϷԚძ αʑ̖ࢽ αʑϷԚ HK$ ಋʏ
1 employee 15 February 15 February 2001 to 15 February 2002 to 1.99 1,700,000 (1,200,000 ) – 500,000 2001 14 February 2005 14 February 2011 1Ίࡗ ɀཌྷཌྷȹα ɀཌྷཌྷȹα ɀཌྷཌྷɀα ɀ˂Ɋʄˀ ɀ˂Ɋʄˀϭ ɀ˂Ɋʄˀϭ ɀཌྷཌྷʄα ɀཌྷȹȹα ɀ˂Ɋ̒ˀ ɀ˂Ɋ̒ˀ
15 employees 10 August 10 August 2001 to 10 August 2002 to 1.13 10,588,000 (398,000 ) (1,066,000 ) 9,124,000 2001 9 August 2005 9 August 2011 15Ίࡗ ɀཌྷཌྷȹα ɀཌྷཌྷȹα ɀཌྷཌྷɀα Ʉ˂Ɋˀ Ʉ˂Ɋˀϭ Ʉ˂Ɋˀϭ ɀཌྷཌྷʄα ɀཌྷȹȹα Ʉ˂Ⱦˀ Ʉ˂Ⱦˀ
4 employees 20 December 20 December 2002 to 20 December 2003 to 0.79 1,732,000 – (260,000 ) 1,472,000 2002 19 December 2006 19 December 2012 4Ίࡗ ɀཌྷཌྷɀα ɀཌྷཌྷɀα ɀཌྷཌྷɍα Ɋɀ˂ɀɊˀ Ɋɀ˂ɀɊˀϭ Ɋɀ˂ɀɊˀϭ ɀཌྷཌྷʒα ɀཌྷȹɀα Ɋɀ˂ɊȾˀ Ɋɀ˂ɊȾˀ
Total: ߮i 20 employees 20Ίࡗ 14,020,000 (1,598,000 ) (1,326,000 ) 11,096,000
54 უ৷ᇯ഼αం2006 SHARE OPTION SCHEMES (CONTINUED) ᑪٖᚬི߮ᙩ
$ ̯ʔ̇ؿᑪٖᚬི߮ᙩ A) Share option schemes of the Company (Continued)) ᑪٖᚬི߮ᙩ܃ٖ׃ ࠖωʔ Post-IPO Share Option Scheme (Continued) (2) The remaining life of the scheme (Continued) ི߮Ɏα౨ᙩ ࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹כ During the year ended 31 December 2006, 1,326,000 options granted to employees were exercised. At the date before the ʑcʀࡗؿ 1,326,000 ͫᑪٖᚬɰᏵϷ ˀ౨cҰٖ˱ᚬ̡яکᑪٖᚬᏵϷԚכoptions were exercised, the weighted average closing price per Ԛe share was HK$1.22. ν̟ძݯ 1.22 ಋʏe
࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹כ During the year ended 31 December 2006, 1,598,000 options granted to two employees lapsed when the employees ceased ʑcʀԭΊࡗؿ1,598,000ͫᑪٖᚬΐ එ྆Ϥ̖ࢽe̯כemployment with the Group. ֤೩ɺʹՇ
αʑᏵഽכSave as disclosed above, no option has been cancelled during the ɐʼֺׄᚉّ̔cԎಲᑪٖᚬ period. ሻe
ᐢസdဳଉᄙٖd˚ٖ߬ܧNo option had been granted to the Directors, chief executive, ลಲ໎ԑdϷ ৻Ԝרֶۂmanagement shareholders, substantial shareholders, or their ֶ֤೩ΈϬؿᐲᖎɁɡdֶஒ ᑪٖᚬི߮Ᏽʀ܃ٖ׃respective associates, or to the suppliers of goods or services Ꮆਆ࣓ኣࠖωʔ under the Post-IPO Share Option Scheme. No participant was ͨЄᑪٖᚬeลಲၤّᏵʀؿᑪٖᚬ൚ ׃ֺ༗Ͷֶ࣓ኣࠖωʔڬgranted any option in excess of the individual limit as set out ༦พɐ̟ஃ ᑪٖᚬི߮ؿɁࠉᔾe܃ٖ in the GEM Listing Rules or under the Post-IPO Share Option Scheme.
ᙔʔ̇ؿᑪٖᚬི߮ڃ% ̯ʔ̇ȹࡼ B) Share option scheme of a subsidiary of the Company) PHOENIXi PLAN 3+2(1,;Lི߮ ɀཌྷཌྷཌྷαʒ˂ȼˀc̯එ྆ؿιࡗʔ̇כ On 7 June 2000, PHOENIXi Investment Limited (“PHOENIXi”), a member of the Group, adopted the PHOENIXi 2000 Stock Incentive PHOENIXi Investment Limited PHOENIXi Plan (the “PHOENIXi Plan”). The following is a summary of the ઔढ़PHOENIXi ɀཌྷཌྷཌྷαٖͫᆉི߮ ɀཌྷཌྷʒαכprincipal terms of the PHOENIXi Plan as at 31 December 2006: PHOENIXi ི߮e˞Ɏݯ Ɋɀ˂ɍɊȹˀؿPHOENIXiི߮ؿ˚߬ૈಁล ߬i
Purpose of the scheme ི߮ؿ͌ؿ ᜇʥࢷजӞࡗɮc׃The purposes of the PHOENIXi Plan are to attract and retain the best PHOENIXiི߮ؿ͌ؿݯ ൬ԯڔavailable personnel, to provide additional incentive to its employees ԎݯԯࡗʥਨϷ໎ԑొԜᔾ̔ᆉʥ and executive directors and to promote the success of its business. พ৻ιగe
The participants of the scheme ི߮ؿၤّ ΕPHOENIXiֶPHOENIXiܢ˳The employees of PHOENIXi, including any executive directors, in the PHOENIXiؿࡗc ᙔʔֶ̯̇ʔ̇ͲᓻɮАؿͨЄਨϷ໎ڃfull-time employment of PHOENIXi (or the subsidiaries of PHOENIXi) ؿ or the Company are eligible to take up options to subscribe for shares ԑc༅ࣟઅढ़˿ႏᑪPHOENIXi ٖͫؿᑪٖ PHOENIXi ؿઁٖʔֶ̇כin PHOENIXi. In addition, to be classifi ed as an eligible person, where ᚬeϊ̔c࠱Շ ցݯ༅ࣟɁވᙔʔ̇ؿࡗ߬ڃthe employee is employed by a holding company of PHOENIXi or a PHOENIXiؿ ᓻஐeܧsubsidiary of PHOENIXi, the employee must perform an executive role ɡcࡗݯPHOENIXiᄚϷϷ for PHOENIXi.
Phoenix Annual Report 2006 55 REPORT OF THE DIRECTORS ໎ԑผంй࣊
SHARE OPTION SCHEMES (CONTINUED) ᑪٖᚬི߮ᙩ
ᙔʔ̇ؿᑪٖᚬི߮ᙩڃ% ̯ʔ̇ȹࡼ B) Share option scheme of a subsidiary of the Company (Continued)) The total number of securities available for issue ˿ԜೕϷؿᖬԴᐢᅕ (a) The total number of shares available for issue under options (a) ࣓ኣPHOENIXi ི߮ʥPHOENIXi ͨЄ which may be granted under the PHOENIXi Plan and any other ԯˢི߮ˮؿᑪٖᚬϤ˿ԜೕϷؿٖ ɐ̟ˀ౨PHOENIXiכschemes of PHOENIXi, must not in aggregate exceed 10% of the ͫᐢᅕ߮ɺ൚༦ issued share capital of PHOENIXi as at the Listing Date unless ɰೕϷٖ̯ؿ10%c࣓ኣɎʼ(b)ʥ(c)ݒ approvals of the shareholders of the Company and PHOENIXi Յ̯ʔ̇ʥPHOENIXiؿٖғ̔e have been obtained pursuant to paragraphs (b) and (c) below.
ɣผɐఖұ̯ʔ̇ʥٖכ˿ b) PHOENIXi may seek approval by the shareholders of the Company (b) PHOENIXi) and PHOENIXi in a general meeting to refresh the 10% limit. PHOENIXi ٖғҡณ10% ࠉԹeಳ ϊ೩ੱؗɎ࣓ኣPHOENIXi ི߮ʥכHowever, the total number of shares available for issue under Ϥc ˿options which may be granted under the PHOENIXi Plan and any PHOENIXiͨЄԯˢི߮ˮؿᑪٖᚬϤ ғҡณࠉԹכother schemes of PHOENIXi in these circumstances must not ԜೕϷؿٖͫᐢᅕɺ൚༦ exceed 10% of the issued share capital of PHOENIXi at the date ˀ౨PHOENIXiɰೕϷٖ̯ؿ10%e of approval of the refreshing of the limit.
ɣผɐ̊Ϸఖұ̯ʔٖ̇כ˿c) PHOENIXi may seek separate approval of the shareholders (c) PHOENIXi) of the Company and PHOENIXi in a general meeting to grant ʥPHOENIXiٖғʀ൚ˮ10%ࠉԹؿ options beyond the 10% limit provided that (i) the total number of ᑪٖᚬc(i)PHOENIXi ི߮ʥPHOENIXi shares subject to the PHOENIXi Plan and any other schemes of ͨЄԯˢིࣹ߮ʥؿٖͫᐢᅕɺ൚༦ PHOENIXi does not in aggregate exceed 30% of the total issued PHOENIXiɰೕϷٖ̯ᐢᔾؿ30%ʥ(ii)൚༦ کఖұғכshare capital of PHOENIXi and (ii) the options in excess of the 10% ࠉԹؿᑪٖᚬඩʀ ցؿၤّeܞlimit are granted only to participants specifi ed by PHOENIXi ͅPHOENIXi 10% before such approval is sought.
The maximum entitlement of each participant under the scheme ࣓ኣི߮Έၤّؿɣᔾ τᗐࣂංͲࠍϷԚᏵכNo options may be granted to any eligible person which, if at the ࠱ͨЄȹΊ༅ࣟɁɡ relevant time exercised in full, would result in the total number of ʀؿᑪٖᚬc˿ኒߎ༅ࣟɁɡ˿ႏᑪ shares of PHOENIXi the subject of such option, when added to the ᑪٖᚬࣹʥؿPHOENIXiٖͫᐢᅕc˱ɐ༅ number of shares already issued and/or issuable to him/her under the ࣟɁɡ࣓ኣPHOENIXiི߮ᏵೕϷʥʼnֶᏵ˿ʀ PHOENIXi Plan exceeding 25% of the aggregate number of shares ೕϷؿٖͫᅕ͌c൚༦࣓ኣPHOENIXiི߮˿ʀ ɺڬof PHOENIXi in respect of which options are issuable under the ೕϷؿᑪٖᚬֺࣹʥٖͫᐢᅕؿ25%c PHOENIXi Plan. Ή༅ࣟɁɡʀᑪٖᚬe
Time of exercise of option ϷԚᑪٖᚬ౨ࠉ Ɋα౨ٽʀˀ߮כ˿Generally, an option may be exercised at any time during a period of ȹঁϤӰcᑪٖᚬ no more than ten years commencing from the date of grant. However, ංʑͨЄࣂංϷԚeಳϤc࠱Ᏽʀᆉֲᑪٖ ʀࣂኟτؿPHOENIXiכin the case of an Incentive Stock Option (“ISO”) granted to a person, ᚬ ISOɾɁɡc ڃPHOENIXid̯ʔֶ̯̇ʔ̇ͨЄכ೩ޚٖͫ who at the time of the grant, owns shares in PHOENIXi representing ᑪٖᚬ౨ංੀݯڬmore than 10% of the voting power of PHOENIXi, the Company or any ᙔʔ̇ؿҙᚬ10% ˞ɐc subsidiary of the Company, the option period will be fi ve years from ԯʀˀ౨߮ʄαe the date of grant thereof.
Minimum holding period ܛτ౨ං ଲکϷԚכAs stated above, there is no minimum holding period for which an ΣɐʼֺͶcԎಲஃցᑪٖᚬ option can be exercised. ܛτ౨ංe
56 უ৷ᇯ഼αం2006 SHARE OPTION SCHEMES (CONTINUED) ᑪٖᚬི߮ᙩ
ᙔʔ̇ؿᑪٖᚬི߮ᙩڃ% ̯ʔ̇ȹࡼ B) Share option scheme of a subsidiary of the Company (Continued)) The amount payable on acceptance of the option અढ़ᑪٖᚬᎶ˟ؿಁඖ ˀܢ˳The date by which the option must be applied for being a date not ͇ᇼᑪٖᚬؿˀ౨̦ݯొеˀ౨ અढ़ᑪٖᚬࣂcᑪכmore than twenty one days from (and including) the Offer Date. Upon ߮ɺ൚༦ɀɊȹʨʑe τɁʻ˟1ʏʀ̯ʔ̇cАݯʀؿܛacceptance of the option, the option holder shall pay US$1 to the ٖᚬ Company as consideration of the grant. ˤძe
The basis of determining the exercise price ᔤցϷԚძؿਥๅ ࣓ኣPHOENIXi ི߮ϷԚᑪٖᚬࣂPHOENIXiכ The price for the shares of PHOENIXi upon the exercise of an option under the PHOENIXi Plan will, in the case of: ٖͫؿძࣟi
ࠉցᑪٖᚬNQSϤ Ӱ c ߗڈֶ a) an ISO or a Non-Qualified Stock Option (“NQS”), where the (a) గ ISO) ᙔʔڃgrantee owns more than 10% of the shares of the Company, ֻɁኟτ̯ʔ̇dPHOENIXi ֶԯ ᗐྡྷ൚ ༦ 10% ؿٖͫcޚPHOENIXi or its subsidiaries (each a “Related Entity”), be equal ̇Έီ ҰٖPHOENIXi ٖͫΕכძࣟੀɺГڬ to not less than 110% of the Fair Market Value (as referred to below) per share of PHOENIXi on the date of the grant. ˮˀؿʔ̡̟ძࠤΣɎʼֺ߸ؿ 110%e b) an ISO or NQS, where the grantee does not own more than 10% (b) గ ISO ֶ NQS ϤӰcߗֻɁኟτ) ᗐྡྷɺ൚༦10%ؿٖͫcޚof the shares of PHOENIXi or a Related Entity, be equal to not less PHOENIXiֶ ҰٖPHOENIXiٖͫΕˮכძࣟੀɺГڬ than the Fair Market Value per share of PHOENIXi on the date of the grant. ˀؿʔ̡̟ძࠤe c) an option which is neither an ISO nor an NQS but where the (c) గ ISO ֶ NQS ˞̔ؿᑪٖᚬϤӰcߗֻ) ᗐྡྷ൚༦10%ؿٖޚgrantee owns more than 10% of the shares of PHOENIXi or a ɁኟτPHOENIXiֶ ҰٖPHOENIXiٖͫΕכძࣟੀɺГڬRelated Entity, be equal to not less than the Fair Market Value per ͫc share of PHOENIXi on the date of the grant. ˮˀؿʔ̡̟ძࠤe d) an option which is neither an ISO nor an NQS but where the (d) గ ISO ֶ NQS ˞̔ؿᑪٖᚬϤӰcߗֻ) ᗐྡྷɺ൚༦10%ޚֶ grantee does not own more than 10% of the shares of PHOENIXi ɁኟτPHOENIXi ҰٖPHOENIXiכძࣟੀɺГڬor a Related Entity, be equal to not less than 85% of the Fair ؿٖͫc Market Value per share of PHOENIXi on the date of the grant, ٖͫΕˮˀؿʔ̡̟ძࠤؿ85%h but if the shares of PHOENIXi are listed or if a director of the ߗPHOENIXi ٖͫɰɐֶ̟ߗ̯ʔֶ̇ Company or PHOENIXi or their associates participates in the PHOENIXiؿ໎ԑֶ֤೩ؿᐲᖎɁɡτͫ ҰכҰٖძࣟɺГڬPHOENIXi Plan, the per share price must not be less than the Fair ၤ PHOENIXiི߮c Market Value per share of PHOENIXi on the date of the grant. ٖPHOENIXiٖͫΕˮˀؿʔ̡̟ძ ࠤe
Phoenix Annual Report 2006 57 REPORT OF THE DIRECTORS ໎ԑผంй࣊
SHARE OPTION SCHEMES (CONTINUED) ᑪٖᚬི߮ᙩ
ᙔʔ̇ؿᑪٖᚬི߮ᙩڃ% ̯ʔ̇ȹࡼ B) Share option scheme of a subsidiary of the Company (Continued)) The basis of determining the exercise price (Continued) ᔤցϷԚძؿਥๅᙩ ΕͨЄˀܞFor the purpose of the above “Fair Market Value” means as of any గ˞ɐ͌ؿϤӰcʔ̡̟ძࠤ ᙔڃdate, the value of shares of the Company, PHOENIXi or any subsidiary ౨c̯ʔ̇dPHOENIXi ֶ PHOENIXi ͨЄ Ɏᔤցؿძࠤi˞ܘof PHOENIXi (as the case may be) determined as follows: ʔ഼̇ੱؗϤցؿٖͫ
ֺɐ̟cמi) where the shares of PHOENIXi are listed on any stock exchange, (i) ߗ PHOENIXiٖͫΕͨЄᖬԴ͚) Εˮᑪٖͫכʔ̡̟ძࠤݯ(a)ɺʭڬ the Fair Market Value shall be (a) no less than the higher of the ٖ(closing price for a share on the date of the grant of an option ٖᚬˀݯᏪพˀؿν̟ძdֶ(b ʄᏪพˀؿ̡яν̟ک၇અˮˀ౨כͫ which must be a business day, or (b) the average closing price of the share for the five business days immediately preceding the ძν̟ძݯΕPHOENIXi ٖͫɐֺ̟Ε ֺؿძֶࣟ(c) ٖͫࠍࠤɍّɻמdate of grant (the closing price shall be the price on the stock ᖬԴ͚ exchange on which the shares of PHOENIXi are listed) or (c) the ؿঢ়ّhֶ nominal value of a share; or
ؿ̟c͓ۺii) in the absence of an established market for the shares of the (ii) ߗɐʼ(i)ֺ߸ᗘПٖͫԎಲɰ) ʔܘʔ̡̟ძࠤͅկࡗผ˞֦ʥڬ type described in (i) above, the Fair Market Value thereof shall be determined by the Committee in good faith on a fair ̡ଉਥๅcԎ˞ྵSection 260.140.50 and reasonable basis but in a manner consistent with Section of Title 10 of California Code of Regulations Ұٖכof Title 10 of the California Code of Regulations but ؿʿβᔤցcಲሃΣЄɺГ 260.140.50 ૱౨ᄗ࣏τѼ༅ଐٶin any event must in no circumstances be less than the latest PHOENIXiٖͫؿ PHOENIXiֶ̯ʔ̇ؿ໎ԑֶ֤೩ڈaudited net tangible assets per share of PHOENIXi unless none ࠤe of the directors or their associates of PHOENIXi or the Company ؿᐲᖎɁɡͲಲၤི߮cΕϊੱؗɎcٖ participate in the Plan, in which event, reference does not need ͫؿʔ̡̟ძࠤˇϣҰٖPHOENIXi ౨ᄗ࣏τѼ༅ଐ૱ࠤϤᔤցeٶto be made to the latest audited net tangible asset per share of ٖͫؿ PHOENIXi for the purpose of determining the Fair Market Value of the shares.
The remaining life of the scheme ི߮Ɏα౨ כτࢽeܛړThe scheme will remain in force for a period of ten years commencing ི߮ͅઔढ़ི߮ˀ౨߮Ɋαʑ on the date of the adoption of the scheme. Upon termination, no ୄ˅ࣂcɺ˿ʹ࣓ኣི߮ʀᑪٖᚬe further options may be granted under the scheme.
ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀcԎಲ࣓ኣכ As at 31 December 2006, no options had been granted under the PHOENIXi Plan. PHOENIXiི߮ˮᑪٖᚬe
58 უ৷ᇯ഼αం2006 DIRECTORS ໎ԑ
The Directors during the year and up to the date of this report are: αʑʥ࿀ϭ̯ంйˀ౨˅ؿ໎ԑΣɎi
Executive Directors: ਨϷ໎ԑi ᅥ ݯੌੜؿ౧ͨ໎ԑٽLIU Changle (alternate director to CHUI Keung) ჳ ᅥؿ౧ͨ໎ԑٽCHUI Keung (alternate director to LIU Changle) ੌੜ ݯჳ כᅥʥੌੜؿ౧ͨ໎ԑԎٽWANG Jiyan (alternate director to LIU Changle and ˔Ӱ ݯჳ CHUI Keung and appointed on ɀཌྷཌྷʒαȾ˂ɀɊȾˀᏵկͨ 29 September 2006)
ਨϷ໎ԑiڈ :Non-Executive Directors ɀཌྷཌྷʒαȾ˂ɀɊȾˀᖽͨכ Michelle Lee GUTHRIE (resigned on 29 September 2006) Michelle Lee GUTHRIE ɀཌྷཌྷʒαȾ˂ɀɊȾˀᏵկͨכ LU Xiangdong (appointed on 29 September 2006) ቧΉ ɀཌྷཌྷʒαȾ˂ɀɊȾˀᏵկͨכ GAO Nianshu (appointed on 29 September 2006) ঢ়֨࣊ כؿ౧ͨ໎ԑԎڋPaul Francis AIELLO (alternate director to LAU Yu Leung, Paul Francis ݯჳީ John and appointed on AIELLO ɀཌྷཌྷʒαȾ˂ɀɊȾˀᏵկͨ 29 September 2006) ݯPaul Francis AIELLOؿ౧ͨ໎ԑ ڋLAU Yu Leung, John (alternate director to Paul Francis AIELLO) ჳީ ɀཌྷཌྷʒαȾ˂ɀɊȾˀᖽͨכ CHEUNG Chun On, Daniel (resigned on 29 September 2006) ਜ਼ᔪΪ ɀཌྷཌྷʒαȾ˂ɀɊȾˀᖽͨכ CHEUNG San Ping (resigned on 29 September 2006) ਜ਼ณМ ɀཌྷཌྷȼαȹ˂Ɋɀˀᖽͨכ XU Gang (resigned on 12 January 2007) ஈࡄ ɀཌྷཌྷȼαȹ˂ɊɀˀᏵկͨʥכ ɻۺGONG Jianzhong (resigned as alternate director to XU Gong ᛛ and appointed on 12 January 2007) ᖽͨஈࡄؿ౧ͨ໎ԑ
ਨϷ໎ԑiڈIndependent Non-Executive Directors: ዟ͓ LO Ka Shui ᖓཽ LEUNG Hok Lim ષነዅ Thaddeus Thomas BECZAK Thaddeus Thomas BECZAK
87(1)ૈcੌੜͱ́ʥષነڬIn accordance with Article 87(1) of the Company’s articles of association, ࣓ኣ̯ʔ̇ؿೡୀ ʔ̇Ꮆ։ٖ൪αɣผɐঽͨԎଲ̯כMr. CHUI Keung and Mr. LEUNG Hok Lim will retire and, being eligible, ዅͱ́ੀ offer themselves for re-election at the forthcoming annual general meeting ༅ࣟʥᗙᐶፕடͨe of the Company.
The Company has received annual confirmations of independence from ̯ʔ̇ɰϬᖓཽᔢ́dષነዅͱ́ʥThaddeus ం̯כDr. LO Ka Shui, Mr. LEUNG Hok Lim and Mr. Thaddeus Thomas BECZAK, Thomas BECZAKͱ́νԷα۹ዟ͓ᆢႏ࣊c and as the date of this report still considers them to be independent. йˀ౨c̯ʔ̇ʋႏݯ֤೩ዟ͓e
Phoenix Annual Report 2006 59 REPORT OF THE DIRECTORS ໎ԑผంй࣊
৻רDIRECTORS’ SERVICE CONTRACTS ໎ԑؿ
ᅥͱ́ʥੌੜͱٽɀཌྷཌྷʒαʒ˂ɀɊȾˀcჳכ On 29 June 2006, Mr. LIU Changle and Mr. CHUI Keung entered into a ৻ͅɀר৻cҰඖרnew service contract with the Company commencing from 1 July 2006. ́яၤ̯ʔ͓̇߯ณ The term of each contract will be for a term of three years commencing ཌྷཌྷʒαȼ˂ȹˀ́ࢽeτࢽ౨ͅɀཌྷཌྷʒαȼ כΈʿ˿ྦྷ̊ȹʿೕˮɺʭ܃from 1 July 2006 and thereafter may be terminated by either party giving ˂ȹˀ߮ɍαcԯ ୄ˅e˞كto the other not less than three months’ written notice. ɍ˂ؿ࣊ࠍ
Save as disclosed above, none of the Directors who are proposed for re- ɐʼֺׄᚉّ̔cᏃΕᎶ։ٖ൪αɣผɐᐶፕ election at the forthcoming annual general meeting has a service contract டͨؿ໎ԑลಲၤ̯ʔ͓̇߯ͨЄАؒցላ ৻eרȹαʑୄ˅ؿכ˿with the Company which is not terminable within one year without payment ̔ʿ of compensation, other than statutory compensation.
ਨϷ໎ԑڈThe terms of office of each of the executive directors (other than the ̯ʔ̇ΈਨϷ໎ԑ໎ԑผ˚̔d ਨϷ໎ԑؿͨ౨ϭԯ࣓ኣ̯ʔ̇ؿೡୀڈchairman of the board of Directors), non-executive directors and ʥዟ͓ ረࠤঽͨࣂݯ˅eڬ independent non-executive directors of the Company are subject to retirement by rotation in accordance with the Company’s articles of association.
DIRECTORS’ INTERESTS IN CONTRACTS ໎ԑؿᚬऩ
ᙔڃᙔʔ̇dӡڃNo contracts of signifi cance in relation to the Group’s business to which ̯ʔ̇໎ԑΕ̯ʔֶ̇ԯͨЄ the Company, or any of its subsidiaries, fellow subsidiaries or its parent ʔֶ̇ԯ̴ʔ̇ၤ͓߯ʥၤ̯එ྆พ৻τࠇɣᗐ α۹ҢࣂֶαʑͨЄࣂංʋಳτࢽؿ̯כ˘cڝ ,company was a party and in which a Director had a material interest અֶංઅኟτͨЄࠇɣᚬऩeقwhether directly or indirectly, subsisted at the end of the year or at any ɻcลಲ time during the year.
60 უ৷ᇯ഼αం2006 ᗐޚʔֶ̇ͨЄ̯כᐢസܧDIRECTORS’ AND CHIEF EXECUTIVES’ ໎ԑʥϷ ᗐٖͫʥඦᚬᖬؿᚬޚINTERESTS AND/OR SHORT POSITIONS ؒ྆ؿٖͫd IN THE SHARES, UNDERLYING SHARES ऩʥĀֶ࠸ AND DEBENTURES OF THE COMPANY OR ANY ASSOCIATED CORPORATION
ܧɀཌྷཌྷʒαɊɀ˂ɍɊȹˀc̯ʔ̇໎ԑʥϷכ As at 31 December 2006, the interests of the Directors and chief ᐲؒ྆Ԯτࠗಋؒԝ571ޚʔ̇ʥԯ̯כexecutives in the shares of the Company and its associated corporations ᐢസ (within the meaning of Part XV of the Securities and Futures Ordinance ᖬԴʥ౨ஒૈԝᖬԴʥ౨ஒૈԝ XVልʀ Cap. 571 of the Laws of Hong Kong) (the “SFO”)) which were notifi ed to ؿ૪ຮؿٖͫɻኟτ࣓ኣᖬԴʥ౨ஒૈԝXV) ֺτמผ̯ʔ̇ʥࠗಋᐲ͚كthe Company and The Stock Exchange of Hong Kong Limited (the “Stock ؿ7ʥ8ʗ ࣓ኣᖬԴʥ౨ஒૈܢ˳Exchange”) pursuant to Divisions 7 and 8 of Part XV of the SFO (including ࠉʔ̇ᐲֺ͚ؿᚬऩ ᐢസА഼ֶАኟτܧinterests or short positions which such Directors or chief executives are ԝτᗐૈʼτᗐ໎ԑֶϷ taken or deemed to have under such provisions of the SFO) or were ؿᚬऩֶ࠸hֶ࣓ኣᖬԴʥ౨ஒૈԝ352ૈ required pursuant to Section 352 of the SFO, to be entered in the register তɃૈʼֺ߸ؿত˫hֶ࣓ኣᐲֺ͚พᖬ 5.46ϭ5.67ڬพɐ̟ஃڬreferred to therein; or were required pursuant to Rules 5.46 to 5.67 of the Դɐ̟ஃ ผ̯ʔ̇ʥكɾஃցϤמRules Governing the Listing of Securities on the Growth Enterprise Market ૈτᗐ໎ԑ൬ϷᖬԴ͚ of the Stock Exchange (the “GEM Listing Rules”) relating to securities ᐲֺ͚ؿᚬऩΣɎi transactions by Directors to be notified to the Company and the Stock Exchange, were as follows:
Number of ordinary shares held ౝٖᅕ͌ܛֺ
Total Personal Family Corporate Other number Percentage of Name interest interest interest interest of shares shareholding ˈշΊ Ɂᚬऩ ࡼપᚬऩ ʔ̇ᚬऩ ԯˢᚬऩ ٖͫᐢᅕ ٖᚬϛʗ
LIU Changle1 – – 1,854,000,000 – 1,854,000,000 37.51% ᅥ1ٽჳ LO Ka Shui2 4,630,000 – – – 4,630,000 0.09% ᖓཽ2
ᅥͱ́ݯʌˀԓݘτࠉʔ̇93.3%ɰೕϷٽഽi ჳڃ Note: Mr. LIU Changle is the beneficial owner of approximately 93.3% of the ˂ɀཌྷཌྷʒαɊɀכissued share capital of Today’s Asia Limited, which in turn has an interest ٖ̯ؿྡྷऩኟτɁcϤʔ̇ ኟτ37.51%ؿ̯ʔ̇ɰೕϷٖ̯ᚬڬin approximately 37.51% of the issued share capital of the Company as at ɍɊȹˀ 31 December 2006. ऩe
Being an executive director of the Company 1 ݯ̯ʔ̇ؿਨϷ໎ԑe 1
ਨϷ໎ԑeڈBeing an independent non-executive director of the Company 2 ݯ̯ʔ̇ؿዟ͓ 2
ɀཌྷཌྷʒαכcكSave as disclosed herein, so far as the Directors are aware, as at 31 ̯ʼֺׄᚉّ̔cగ໎ԑֺ ̯כᐢസลಲܧDecember 2006, none of the Directors and chief executives of the Ɋɀ˂ɍɊȹˀc̯ʔ̇໎ԑʥϷ ᐲؒ྆ԮτᖬԴʥ౨ஒૈԝXVޚCompany had any interest or short positions in any shares, underlying ʔֶ̇ͨЄ ᗐٖͫʥඦᚬᖬɻኟτޚshares and debentures of the Company or any associated corporation ልʀؿ૪ຮؿͨЄٖͫd ผكwithin the meaning of Part XV of the SFO) which were required to be ࣓ኣᖬԴʥ౨ஒૈԝXVؿ7ʥ8ʗ) ࣓ኣᖬԴʥܢ˳notifi ed to the Company and the Stock Exchange pursuant to Divisions 7 ̯ʔ̇ʥᐲֺ͚ؿͨЄᚬऩֶ࠸ ᐢസА഼ֶАኟܧand 8 of Part XV of the SFO (including interests or short positions which ౨ஒૈԝτᗐૈʼ໎ԑֶϷ the Directors or chief executives are taken or deemed to have under τؿᚬऩֶ࠸hֶ࣓ኣᖬԴʥ౨ஒૈԝ352ૈ such provisions of the SFO), or were required, pursuant to Section 352 of তɃૈʼֺ߸ؿত˫hֶ࣓ኣพɐ̟ஃ ผ̯ʔ̇ʥᐲֺ͚ؿͨك5.46ϭ5.67ૈϤڬ the SFO, to be entered in the register referred to therein, or which were required, pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules to be Єᚬऩֶ࠸e notifi ed to the Company and the Stock Exchange.
Phoenix Annual Report 2006 61 REPORT OF THE DIRECTORS ໎ԑผంй࣊
DIRECTORS’ RIGHTS TO ACQUIRE ໎ԑᑪɃֶٖͫඦᚬᖬؿᚬС SHARES OR DEBENTURES
ɀཌྷཌྷཌྷαʒ˂ȼˀғؿ̯ʔ̇ᑪٖכUnder the terms of the Company’s share option schemes approved by ࣓ኣٖ the Shareholders on 7 June 2000, the Committee may, at their discretion, ᚬི߮ؿૈಁcկࡗผ˿ੱᑼᇼ̯ʔֶ̯̇එ྆ invite any employee of the Company or any of the Group companies, ͨЄιࡗʔ̇࿏ɎͨЄࡗ˳ܢͨЄਨϷ໎ԑ including any executive directors, to take up options to subscribe for અढ़˿ႏᑪٖͫؿᑪٖᚬe࣓ኣᑪٖᚬི߮ˮؿ Shares. The maximum number of Shares in respect of which options may ᑪٖᚬࣹʥؿٖͫᅕ͌cঢ়ɺ˿൚༦̯ʔ̇ɰೕ ᑪٖᚬི߮ؿૈಁکٖ׃be granted under the share option schemes must not exceed 10% of Ϸٖ̯ؿ10%eࠖωʔ ɀཌྷཌྷȹαɀ˂Ɋ̒ˀʥɀཌྷཌྷ̒αɊɀכthe issued share capital of the Company. The terms of the Pre-IPO Share ɰʗП ᑪٖᚬི߮ؿ܃ٖ׃Option Scheme were amended on 14 February 2001 and 10 December ˂ɊˀАˮ࠳߯cϤࠖωʔ ɀཌྷཌྷȹαɀ˂Ɋ̒ˀʥɀཌྷཌྷ̒αכand the terms of the Post-IPO Share Option Scheme were amended ૈಁɰʗП 2004 on 14 February 2001 and 10 December 2004, respectively. A summary of Ɋɀ˂ɊˀАˮ࠳߯e࠳߯ؿᑪٖᚬི߮ล߬༗ ంйᑪٖᚬི߮ȹຝe̯כ the amended share option schemes is set out in the section headed “Share Option Schemes” of this report.
ֺ൬Ϸؿ̯کSave as disclosed herein, and other than those in connection with the ̯ʼֺׄᚉʥ૾ࣹ̯ʔٖ̇ͫɐ̟ Group reorganisation scheme prior to the Company’s listing of Shares, එ྆ࠇୂّི߮̔c̯ʔֶ̯̇එ྆࿏ɎͨЄιࡗ αʑͨЄࣂංลಲၤ͓߯ͨЄΪખcߎԚכat no time during the year was the Company or any of the companies ʔ̇ comprising the Group a party to any arrangement to enable the Company’s ̯ʔ̇໎ԑֶ֤೩ؿᐲᖎɁɡ˿༦ᑪɃ̯ʔֶ̇ Directors or their associates to acquire benefi ts by means of the acquisition ͨЄԯˢʔ̇ዀ࿚ؿֶٖͫඦᚬᖬϤᏵऩe of Shares in or debentures of the Company or any other body corporate.
ᗐٖͫؿޚʔٖ̇ͫʥ̯כSUBSTANTIAL SHAREHOLDERS’ ˚ٖ߬ INTERESTS AND SHORT POSITIONS IN ᚬऩʥ࠸ THE SHARES AND UNDERLYING SHARES OF THE COMPANY
໎ԑʥ̯ڈɀཌྷཌྷʒαɊɀ˂ɍɊȹˀcٖԎכ As at 31 December 2006, the interest of the shareholders (not being ᐲؒ྆Ԯτᖬޚʔֶ̇ԯͨЄ̯כᐢസܧDirectors and the chief executive of the Company) in the shares and ʔ̇Ϸ ᗐٖޚunderlying shares of the Company or any of its associated corporations Դʥ౨ஒૈԝXVልʀؿ૪ຮؿٖͫʥ within the meaning of Part XV of the SFO) which were notified to the ͫɻኟτ࣓ኣᖬԴʥ౨ஒૈԝXVؿ2ʥ3ʗ) ผ̯ʔ̇ʥᐲֺ͚c˞ʥতɃ̯ʔ࣓̇ኣᖬكCompany and the Stock Exchange pursuant to Divisions 2 and 3 of Part XV of the SFO and required to be entered in the register maintained by the Դʥ౨ஒૈԝ336ૈΦສؿত˫ֶতɃ̯ʔ࣓̇ Company pursuant to Section 336 of the SFO or entered in the register ኣᖬԴʥ౨ஒૈԝ352ૈजΦؿত˫ʑؿᚬऩΣ kept by the Company pursuant to Section 352 of the SFO, were as follows: Ɏi
ʔ̇ౝٖɻؿΡ࠸̯כL ˚ٖ߬ i) Long positions of substantial shareholders in the ordinary shares of) the Company Number of Percentage Name of substantial shareholders shares of shareholding ˈٖ߬Ίီ ٖͫᅕ͌ ٖᚬϛʗ˚
Today’s Asia Limited (Note 1) 1,854,000,000 37.51% ഽ1ڃʌˀԓݘτࠉʔ̇ ഽ2 983,000,000 19.89%ڃ(Extra Step Investments Limited (Note 2 ഽ3 871,000,000 17.62%ڃ(Xing Kong Chuan Mei Group Co., Ltd. (Note 3
62 უ৷ᇯ഼αం2006 ᗐٖͫؿޚʔٖ̇ͫʥ̯כSUBSTANTIAL SHAREHOLDERS’ ˚ٖ߬ INTERESTS AND SHORT POSITIONS IN ᚬऩʥ࠸ᙩ THE SHARES AND UNDERLYING SHARES OF THE COMPANY (CONTINUED)
ʔ̇ౝٖɻؿΡ࠸ᙩ̯כL ˚ٖ߬ i) Long positions of substantial shareholders in the ordinary shares of) the Company (Continued) ഽiڃ :Notes
ᅥͱ́ʥஹ̷౸ͱ́ྡྷٽToday’s Asia Limited is beneficially owned by Mr. LIU Changle and 1. ʌˀԓݘτࠉʔ̇ͅჳ .1 Mr. CHAN Wing Kee as to approximately 93.3% and 6.7% interests, ऩኟτcԭɁʗПЌ 93.3%ʥ6.7%ؿᚬऩe respectively.
Extra Step Investments Limited is a wholly-owned subsidiary of China 2. Extra Step Investments Limited ݯɻਝଫ৽ࠗ .2 ᙔʔ̇cϤɻਝଫ৽ڃMobile (Hong Kong) Group Limited which in turn is a subsidiary of China ಋඑ྆τࠉʔ̇ؿͲ༅ එ྆ʔ̇ؿڌMobile Communications Corporation. By virtue of the SFO, China Mobile ࠗಋඑ྆τࠉʔ̇ݯɻਝଫ৽ ڌᙔʔ̇e࣓ኣᖬԴʥ౨ஒૈԝcɻਝଫ৽ڃ Communications Corporation and China Mobile (Hong Kong) Group Limited are deemed to be interested in the 983,000,000 shares held by එ྆ʔ̇ʥɻਝଫ৽ࠗಋඑ྆τࠉʔ഼̇ݯ τؿܛExtra Step Investments Limited. ኟτͅ Extra Step Investments Limited ֺ ؿᚬऩeٖٖͫ 983,000,000
ඨيXing Kong Chuan Mei Group Co., Ltd. is a subsidiary of STAR Group 3. Xing Kong Chuan Mei Group Co., Ltd.ݯܱ .3 ඨఌඑ྆يᙔʔ̇cϤܱڃLimited. News Cayman Holdings Limited holds 100% of the ordinary ఌඑ྆τࠉʔ̇ؿ News Cayman Holdings Limitedͅڬvoting shares of STAR Group Limited. News Publishers Investments τࠉʔ̇ τԯ100% ౝ˿ҙٖͫᚬऩeNewsܛ Pty, Limited holds 100% of the ordinary voting shares of News Cayman Holdings Limited. News Publishers Investments Pty, Limited is a wholly- Publishers Investments Pty, LimitedܛτNews owned subsidiary of STAR LLC Australia Pty Limited, which in turn is a Cayman Holdings Limited ؿ 100% ౝ˿ҙ wholly-owned subsidiary of New STAR US Holdings Subsidiary, LLC. New ٖͫᚬऩeNews Publishers Investments STAR US Holdings Subsidiary, LLC is a wholly-owned subsidiary of STAR Pty, Limitedݯ STAR LLC Australia Pty Limited ᙔʔ̇cϤSTAR LLC Australia PtyڃUS Holdings Subsidiary, LLC, which in turn is a wholly-owned subsidiary ؿͲ༅ ,of STAR US Holdings, Inc.. STAR US Holdings, Inc. is a wholly-owned Limited ݯ New STAR US Holdings Subsidiary ᙔʔ̇eNew STAR US Holdingsڃsubsidiary of News Publishing Australia Limited, which is an indirect LLCؿͲ༅ wholly-owned subsidiary of News Corporation. Subsidiary, LLC ݯ STAR US Holdings ᙔʔ̇cϤSTAR USڃSubsidiary, LLC ؿͲ༅ ,Holdings Subsidiary LLCݯ STAR US Holdings ᙔʔ̇eSTAR US Holdings, IncڃInc. ؿͲ༅ ڃݯ News Publishing Australia LimitedؿͲ༅ ᙔʔ̇cϤNews Publishing Australia Limited ᙔʔ̇eڃݯ News CorporationؿංઅͲ༅
By virtue of the SFO, News Corporation, News Publishing Australia ࣓ኣᖬԴʥ౨ஒૈԝcNews Corporationd Limited, STAR US Holdings, Inc., STAR US Holdings Subsidiary, LLC, New News Publishing Australia LimiteddSTAR US STAR US Holdings Subsidiary, LLC, STAR LLC Australia Pty Limited, News Holdings, Inc.dSTAR US Holdings Subsidiary, Publishers Investments Pty, Limited, News Cayman Holdings Limited and LLCdNew STAR US Holdings Subsidiary, LLCd STAR Group Limited are all deemed to be interested in the 871,000,000 STAR LLC Australia Pty LimiteddNews Publishers shares held by Xing Kong Chuan Mei Group Co., Ltd. Investments Pty, LimiteddNews Cayman Holdings ඨఌඑ྆τࠉʔ̇cя഼ݯኟτيLimitedʥܱ τؿܛXing Kong Chuan Mei Group Co., Ltd.ֺͅ 871,000,000ٖٖͫؿᚬऩe
Phoenix Annual Report 2006 63 REPORT OF THE DIRECTORS ໎ԑผంй࣊
ᗐٖͫؿޚʔٖ̇ͫʥ̯כSUBSTANTIAL SHAREHOLDERS’ ˚ٖ߬ INTERESTS AND SHORT POSITIONS IN ᚬऩʥ࠸ᙩ THE SHARES AND UNDERLYING SHARES OF THE COMPANY (CONTINUED)
ʔ̇ౝٖɻؿΡ࠸̯כLL ԯˢɁɡ ii) Long position of other person in the ordinary shares of the Company)
Name of other person who has Number of Percentage more than 5% interest shares of shareholding ˈτ൚༦ᚬऩؿԯˢɁɡΊီ ٖͫᅕ͌ ٖᚬϛʗܛ
China Wise International Limited (Note) 412,000,000 8.34% ഽڃജዷਝτࠉʔ̇
ഽi ജዷਝτࠉʔ̇ȽCultural Developmentsڃ Note: China Wise International Limited is a wholly-owned subsidiary of ᙔʔ̇cϤCulturalڃCultural Developments Limited, which in turn is a wholly-owned Limited ؿͲ༅ subsidiary of Bank of China Group Investment Limited. Bank of China Developments Limited ݯɻႺඑ྆ҙ༅τࠉ ᙔʔ̇eɻႺඑ྆ҙ༅τࠉʔڃGroup Investment Limited is a wholly-owned subsidiary of Bank of China ʔ̇ؿͲ༅ ᙔʔڃLimited, which in turn is a subsidiary of Central SAFE Investments ̇ȽɻਝႺϷٖͫτࠉʔ̇ؿͲ༅ ҙټLimited. By virtue of the SFO, Central SAFE Investments Limited, ̇cϤɻਝႺϷٖͫτࠉʔ̇ݯɻ̕ම ᙔʔ̇e࣓ኣᖬԴʥ౨ڃBank of China Limited, Bank of China Group Investment Limited and ༅τࠉஐͨʔ̇ؿ ҙ༅τࠉஐͨʔ̇dɻਝټCultural Developments Limited are all deemed to be interested in the ஒૈԝcɻ̕ම shares held by China Wise International Limited. ႺϷٖͫτࠉʔ̇dɻႺඑ྆ҙ༅τࠉʔ 412,000,000 ʥCultural Developments Limitedя഼ݯኟ̇ τؿ412,000,000ܛτͅജዷਝτࠉʔֺ̇ ؿᚬऩeٖٖͫ
̯כSave as disclosed above, no other shareholders or other persons had ɐʼֺׄᚉّ̔cԎಲԯˢֶٖԯˢɁɡ ᗐٖͫɻኟτ࣓ኣᖬԴʥ౨ஒૈԝޚinterest or short position in the shares and underlying shares of the ʔٖ̇ͫʥ Company which would fall to be disclosed to the Company and the Stock XVؿ2ʥ3ʗؿૈʼΉ̯ʔ̇ʥᐲֺ͚ׄ ̯כ˿ڃτܛઅֶංઅقExchange under the provisions of Divisions 2 and 3 of Part XV of the SFO ᚉؿᚬऩֶ࠸c͛ಲ or, was directly or indirectly, interested in 5% or more of the nominal value එ྆ͨЄԯˢιࡗʔ̇ؿٖɣผɐؿֺτੱؗɎ of the issued share capital carrying rights to vote in all circumstances ҙᚬؿɰೕϷٖ̯ࠍࠤֶగτᗐٖ̯ؿͨЄᑪٖ at general meeting of any other member of the Group, or any options in ᚬؿ5%ֶ˞ɐᚬऩe respect of such capital.
DIRECTORS’ INTERESTS IN CONTRACTS ໎ԑؿᚬऩ
ᙔʔֶ̇ԯ̴ڃNo contracts of signifi cance in relation to the Group’s business to which the ̯ʔ̇໎ԑΕ̯ʔֶ̇ԯͨЄӡ ̯כ˘cڝCompany, any of its fellow subsidiaries or its parent company was a party ʔ̇ၤ͓߯ʥၤ̯එ྆พ৻τࠇɣᗐ and in which a Director of the Company had a material interest, whether α۹ҢࣂֶαʑͨЄࣂංʋಳτࢽؿɻcล અֶංઅኟτͨЄࠇɣᚬऩeقdirectly or indirectly, subsisted at the end of the year or at any time during ಲ the year.
MANAGEMENT CONTRACTS ဳଉᄙ
αʑԎಲֶ͓߯ΦΕࣹʥ̯ʔ̇พ৻ؿͲכNo contracts concerning the management and administration of the whole ̯ʔ̇ or any substantial part of the business of the Company were entered into ֶͨЄࠇɣͫؿဳଉʥဟဳؿe or existed during the year.
64 უ৷ᇯ഼αం2006 MAJOR SUPPLIERS AND CUSTOMERS ˚߬ԜᎶਆʥ۪ʸ
The percentages of programme purchases and sales for the year ̯එ྆˚߬ԜᎶਆʥᄤйୄ۪ʸᎶЌαʑຝ͌ઔ attributable to the Group’s major suppliers and advertising end-customers ᑪʥሻਕϛʗˈΣɎi are as follows:
Year 2006 Year 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα
Programme purchases ຝ͌ઔᑪ – the largest supplier Ð ɣԜᎶਆ 17% 18% – fi ve largest suppliers Ð ʄɣԜᎶਆ 48% 55%
Sales ሻਕ the largest advertising end-customer Ð ɣᄤйୄ۪ʸ 3% 2% – fi ve largest advertising end-customers Ð ʄɣᄤйୄ۪ʸ 11% 8% –
The film license fees paid/payable to STAR TV Filmed Entertainment ɰ˟ʼnᎶ˟ʀ STAR TV Filmed Entertainment Limited ຝٲɐכLimited (“STAR Filmed”) is not included in the above list of programme STAR Filmedɾཋᄧஈ˿Ԏ̰˳ф מpurchases suppliers. Details of the transactions between the Group and ͌ઔᑪԜᎶਆʑe̯එ྆ၤ Star Filmed ൬Ϸؿ͚ ඨఌيഽ 34eStar Filmed ݯܱڃٲল৻ంכSTAR Filmed are set out in note 34 to the financial statements. STAR ੱ༗ τ̯ʔܛّ܃ᙔʔ̇cڃFilmed is an indirect wholly-owned subsidiary of STAR Group Limited, එ྆τࠉʔ̇ؿංઅͲ༅ which holds 100% of Xing Kong Chuan Mei Group Co., Ltd., a substantial ̇˚ٖ߬ Xing Kong Chuan Mei Group Co., Ltd. ؿ shareholder of the Company. 100% ᚬऩe
ؿૈಁɺ༖ዟ͓ɍʿמIn the opinion of the Directors, such transactions were carried out on terms ໎ԑႏݯc൬Ϸ೩͚ no more favourable than terms available to independent third parties. యe
Save as disclosed above, none of the Directors, their associates, or any ɐʼֺׄᚉّ̔c໎ԑd֤೩ؿᐲᖎɁɡֶగ໎ ኟτ5% ˞ɐ̯ʔٖ̯̇ؿͨЄٖลಲኟكshareholder (which to the best knowledge of the Directors owns more than ԑֺ of the Company’s issued share capital) had any benefi cial interest in τ̯එ྆˚߬ԜᎶਆֶ۪ʸԯɻͨЄȹࡼɾྡྷऩᚬ 5% the major suppliers or customers mentioned above. ऩe
מCONNECTED TRANSACTIONS ᗐட͚
ഽ34ֺׄᚉؿߗɳᗐڃٲcΣল৻ంڬCertain related party transactions as disclosed in note 34 to the fi nancial ࣓ኣɐ̟ஃ cמؿᗐட͚ڬ͛࿚ιพɐ̟ஃמstatements also constituted connected transactions under the Listing டɁɡ͚ Ƚמ20൬ϷׄᚉeɎͶ͚ڬ๑พɐ̟ஃܘ Rules, are required to be disclosed in accordance with Chapter 20 of the ؿցຮၤ̯ʔ̇ڬGEM Listing Rules. The following transactions between certain connected ߗɳᗐடɁɡΣพɐ̟ஃ c̯ʔ̇ɰ࣓ኣɐמparties (as defined in the GEM Listing Rules) and the Company have ɰ͓߯ʥʼnֶ̳Ε൬Ϸؿ͚ τᗐʔЗΣ̦߬eٲؿஃցೕڬbeen entered into and/or are ongoing for which relevant announcements, ̟ஃ if necessary, had been made by the Company in accordance with the requirements of the Listing Rules.
1. The connected transactions with Satellite Television Asian Region 1. ၤᇯܱཋ഼τࠉʔ̇STARLdStar Filmedd Limited (“STARL”) and STAR Filmed, ATV Enterprises Limited (“ATVE”) ԓݘཋ഼ͬพτࠉʔ̇ԓ഼ͬพʥԓݘཋ ɰ༦מand Asia Television Limited (“ATV”) have been approved by resolutions ഼τࠉʔ̇ԓݘཋ഼ංؿᗐட͚ ɀཌྷཌྷɍαכof independent shareholders of the Company (“Independent ̯ʔ̇ؿዟ͓ٖዟ͓ٖ Shareholders”) passed on 26 June 2003. ʒ˂ɀɊʒˀ༦ؿҺᘪ࣐ϤᏵғe
ɀཌྷཌྷʒαɄ˂ɊɄˀcዟ͓ٖɰғҡכ On 18 August 2006, the Independent Shareholders have approved eמthe renewal of connected transactions with STARL and STAR Filmed. ณၤSTARLʥStar Filmed൬Ϸؿᗐட͚
Phoenix Annual Report 2006 65 REPORT OF THE DIRECTORS ໎ԑผంй࣊
ᙩמCONNECTED TRANSACTIONS (CONTINUED) ᗐட͚
a) STARL is a subsidiary of Xing Kong Chuan Mei Group Co., (a) STARL ݯ̯ʔ̇˚ٖ߬Xing Kong Chuan) מᙔʔ̇eᗐட͚ڃLtd., a substantial shareholder of the Company. The connected Mei Group Co., Ltd.ؿ transactions are: ΣɎi i) STARL provides technical and administrative services for (i) STARLݯუ৷ᇯ഼ɻʼ̎dუ৷ᇯ഼ཋ) the operations of the Phoenix Chinese Channel, Phoenix ᄧ̎dუ৷ᇯ഼༅̎dუ৷ᇯ഼ Movies Channel, Phoenix InfoNews Channel, Phoenix North ݘ̎ʥუ৷ᇯ഼ᅩݘ̎ؿᏪ༜ొԜҌ ˂৻e࿀ϭɀཌྷཌྷʒαɊɀרܧAmerica Chinese Channel and Phoenix Chinese News and ʥϷ ˟Entertainment Channel. For the year ended 31 December ɍɊȹˀ˅α۹cΉSTARLʻ˟ʼnᎶ ৻53,416,000ಋʏɀཌྷཌྷʄרthe service charges paid/payable to STARL amounted ؿ ,2006 to approximately HK$53,416,000 (2005: HK$54,174,000), αi54,174,000ಋʏcȽ࣓ኣ̯ʔ̇ ৻Ծᘪרᙔʔ̇ၤSTARLɰ͓߯ؿڃwhich were calculated under the terms of the executed ؿ service agreement between a subsidiary of the Company ૈಁ့߮eಁᔾԎಲ൚༦࣓ኣτᗐҺ ࿀ϭɀཌྷཌྷʒαʒ˂ɍɊˀכand STARL. Such amount did not exceed the annual cap of ᘪ࣐ғ HK$80,000,000 for each of the two years ending 30 June ˅ԭα۹ΈαؿҰαɐࠉ80,000,000 2006 and cap of HK$29,500,000 for the period from 1 July ಋʏʥͅɀཌྷཌྷʒαȼ˂ȹˀϭɀཌྷ to 31 December 2006, approved under the relevant ཌྷʒαɊɀ˂ɍɊȹˀ˅౨ංؿɐࠉ 2006 resolutions. 29,500,000ಋʏe ii) STARL acts as an agent to promote international subscription (ii) STARLˮ̯ͨඑ྆ؿਝ߯ʸሻਕʥ̟) ৻ˤଉe࿀ϭɀཌྷཌྷʒαɊɀרsales and marketing services for the Group. For the year ઐᄤ ended 31 December 2006, commission for international ˂ɍɊȹˀ˅α۹cΉSTARL ʻ˟ʼn ৻רsubscription sales and marketing services paid/payable Ꮆ˟ؿਝ߯ʸሻਕʥ̟ઐᄤ 3,201,000ಋʏɀཌྷཌྷʄαiټto STARL amounted to approximately HK$3,201,000 Џ (2005: HK$2,864,000), which was calculated based on 2,864,000ಋʏcȽ࣓ኣუ৷ᇯ഼τࠉ 15% of the gross subscription fees received by Phoenix ʔ̇უ৷ࠗಋ ༦ STARLΉუ৷ Satellite Television Company Limited (“Phoenix HK”) ࠗಋɾ߯ʸֺνՅ߯ᑪ͂ᐢᔾؿ15% attributable to the subscribers referred to Phoenix HK by ့߮eಁᔾԎಲ൚༦࣓ኣτᗐҺᘪ࣐ STARL. Such amount did not exceed the annual caps of ғʗП࿀ϭɀཌྷཌྷʒαʒ˂ɍɊˀ˅ HK$10,000,000 for the year ended 30 June 2006 and the α۹ؿҰαɐࠉ10,000,000ಋʏʥͅɀ cap of HK$2,000,000 for the period from 1 July 2006 and ཌྷཌྷʒαȼ˂ȹˀϭɀཌྷཌྷʒαɊɀ December 2006 respectively, approved under the relevant ˂ɍɊȹˀ˅౨ංؿɐࠉ2,000,000ಋ 31 resolutions. ʏe
(iii) STARL acts as an exclusive advertising agent for the Group at (iii) STARL ΕɻജɁ̵ͳਝɻਝ˞ all territories outside the People’s Republic of China (“PRC”). ֺ̔τΔਂˮ̯ͨඑ྆ؿዟࡼᄤйˤ For the year ended 31 December 2006, no commission for ଉe࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ advertising sales and marketing services were paid/payable to ˅α۹cԎಲΉ STARL ʻ˟ʼnᎶ˟ᄤ ɀཌྷཌྷʄټ৻ЏרSTARL (2005: HK$51,000), calculated based on 4%-15% of йሻਕʥ̟ઐᄤ the net advertising income generated and received by STARL αi51,000 ಋʏcȽ࣓ኣSTARL ˤ එ྆ᑨʥνՅɾᄤйνɃ૱ᔾؿ̯ٲ on behalf of the Group after deducting the relevant amount of the third party agency fees incurred by it. Such amount did 4% ϭ 15% ့߮cԎɰκԯᎶ˟ؿ not exceed the annual cap of HK$20,000,000 for each of the ɍʿˤଉؿτᗐಁᔾeಁᔾԎಲ൚ two years ending 30 June 2006 approved under the relevant ༦࣓ኣτᗐҺᘪ࣐ғ࿀ϭɀཌྷཌྷʒα resolutions. Pursuant to a letter of termination dated 18 ʒ˂ɍɊˀ˅ԭα۹ΈαؿҰαɐࠉ ɀཌྷཌྷ̒αכOctober 2004, STARL ceased to act as the advertising sales 20,000,000 ಋʏe࣓ኣ agent for the Group with effect from 30 September 2004 but Ɋ˂ɊɄˀɾୄ˅ԲͧcSTARL ɺʹˮ will continue to provide services and receive commission in ̯ͨඑ྆ؿᄤйሻਕˤଉcԎϬɀཌྷཌྷ respect of advertising sales contracts concluded by STARL ̒αȾ˂ɍɊˀ́ࢽc STARL ੀ එ྆ᖋ߯ɾᄤй̯ٲˤک˅ୄכon behalf of the Group prior to its cessation or as specifi cally ˿గԯ ߯ΈʿؿऋПԾցcᘗܘagreed by the parties. ሻਕֶ eټ৻ԎνՅЏרᙩొԜ
66 უ৷ᇯ഼αం2006 ᙩמCONNECTED TRANSACTIONS (CONTINUED) ᗐட͚
b) STAR Filmed is an indirect wholly-owned subsidiary of The (b) Star Filmed ݯ The News Corporation) ᙔʔ̇cϤThe NewsڃNews Corporation Limited, which is the ultimate holding LimitedؿංઅͲ༅ ݯ̯ʔ̇˚ٖ߬ڬ company of Xing Kong Chuan Mei Group Co., Ltd., a substantial Corporation Limited shareholder of the Company. The connected transaction relates Xing Kong Chuan Mei Group Co., Ltd. ؿ ዟࡼཋᄧڈࣹʥˮמto the granting of a non-exclusive license to exhibit a selection ୄઁٖʔ̇eᗐட͚ ȹȾȾɄαכ˿ஈ˿cუ৷ᇯ഼ཋᄧ̎יof movies on Phoenix Movies Channel in the PRC for a term ᅌ ȹיof 10 years commencing from 28 August 1998. For the year Ʉ˂ɀɊɄˀ߮ɊαʑΕɻਝྊʑᅌ ended 31 December 2006, the film license fees paid/payable ӡͶཋᄧe࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹ to STAR Filmed amounted to approximately HK$20,326,000 ˀ˅α۹cΉStar Filmed ʻ˟ʼnᎶ˟ؿཋ (2005: HK$20,355,000), which were charged according to the ᄧஈ˿20,326,000ಋʏɀཌྷཌྷʄαi ᙔʔڃexecuted film rights license agreement between a subsidiary of 20,355,000ಋʏcȽ࣓ኣ̯ʔ̇ؿ the Company and STAR Filmed. Such amount did not exceed the ̇ၤStar Filmed͓߯ؿཋᄧஈ˿ԾᘪνՅe annual cap of HK$23,000,000 for each of the two years ending ಁᔾԎಲ൚༦࣓ኣτᗐҺᘪ࣐ғ࿀ϭɀ June 2006 and the cap of HK$11,000,000 for the period from ཌྷཌྷʒαʒ˂ɍɊˀ˅ԭα۹ΈαؿҰα 30 1 July 2006 to 31 December 2006 respectively, approved under ɐࠉ23,000,000ಋʏʥͅɀཌྷཌྷʒαȼ˂ the relevant resolutions. ȹˀϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅౨ං ؿɐࠉ11,000,000ಋʏe
ᅥͱ́ʥஹ̷౸ͱ́ʗПྡྷऩኟٽჳכͅ (c) ATVE, a wholly-owned subsidiary of ATV, is a connected party by (c) virtue of the fact that Mr. LIU Changle and Mr. CHAN Wing Kee τʌˀԓݘτࠉʔ̇ؿ 93.3% ʥ 6.7% ᚬ τ Vital Mediaܛڬbeneficially own 93.3% and 6.7% respectively, of Today’s Asia ऩcϤʌˀԓݘτࠉʔ̇ Limited, which holds 100% of Vital Media Holdings Limited, which Holdings Limited ؿ 100% ᚬऩcϤVital τԓݘཋ഼ؿܛڬ in turn holds 46% indirect interest in ATV. Mr. CHAN Wing Kee Media Holdings Limited ᙔʔڃԓݘཋ഼ؿͲ༅ܨalso owns 95% of Dragon Sheen Holdings Limited which holds 46% ංઅᚬऩc ɀཌྷཌྷʒαɊɀכindirect interest in ATV as at 31 December 2006. He ̇ԓ഼ͬพݯᗐடɁɡe 16.25% also owns 80% of Dragon Goodwill International Limited, which ˂ɍɊȹˀcஹ̷౸ͱ́͛ኟτ᎘ଞඑ྆τ ڬhas completed its acquisition of 32.75% interests in ATV on 25 ࠉʔ̇ؿ 95% ᚬऩc᎘ଞඑ྆τࠉʔ̇ τԓݘཋ഼ؿ 16.25% ංઅᚬऩe֤͛ኟܛ July 2003. The connected transaction relates to the acquisition of certain television programme licenses from ATVE. For the year τ Dragon Goodwill International Limited ؿ ended 31 December 2006, programme license fees paid/payable 80% ᚬऩcϤ Dragon Goodwill International ɀཌྷཌྷɍαȼ˂ɀɊʄˀѧινכ to ATVE amounted to approximately HK$428,000 (2005: Nil), Limited ࣹמwhich were charged according to the executed license agreement ᑪԓݘཋ഼ؿ 32.75% ᚬऩeᗐட͚ ஈיbetween a subsidiary of the Company and ATVE. Therefore, the ʥΉԓ഼ͬพᑪɃߗɳཋ഼ຝ͌ؿᅌ annual cap of HK$15,000,000 for each of the two years ending ˿e࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α June 2006 approved under the relevant resolutions was not ۹cɰ˟ʼnᎶ˟ԓ഼ͬพؿຝ͌ஈ˿ݯ 30 exceeded. 428,000 ಋʏɀཌྷཌྷʄαiಲcȽ࣓ኣ ˿ᙔʔ̇ၤԓ഼ͬพɰ͓߯ؿஈڃʔ̇ؿ̯ ԾᘪνՅeΐϊcಁᔾԎಲ൚༦࣓ኣτᗐ Һᘪ࣐ғ࿀ϭɀཌྷཌྷʒαʒ˂ɍɊˀ˅ԭ α۹ΈαؿҰαɐࠉ 15,000,000 ಋʏe
Phoenix Annual Report 2006 67 REPORT OF THE DIRECTORS ໎ԑผంй࣊
ᙩמCONNECTED TRANSACTIONS (CONTINUED) ᗐட͚
ᙔʔ̇ɰ͓߯ԾᘪcΉԓݘཋڃd) A subsidiary of the Company entered into an agreement to (d) ̯ʔ̇ؿ) ৻ʥஉௐc͂А༦רprovide technical support services and equipment to ATV for the ഼ొԜҌʻ ༠ࡼֈᇯܱཋ഼ᏪፒਆÐ EchoStarقoperation of the ATV Home Channel (U.S. version) via EchoStar ਝؿ Satellite Corporation, a direct-to-home satellite television operator Satellite Corporation Ꮺԓݘཋ഼̯ಋ̎ ˂e࿀ϭɀཌྷཌྷʒαɊɀخin the United States. For the year ended 31 December 2006, the ፼༞ਝ service fees received/receivable from the provision of technical ɍɊȹˀ˅α۹cΉԓݘཋ഼ొԜҌʻ ৻ר৻ʥஉௐϤɰνʼnᎶνؿרsupport services and equipment to ATV were approximately HK$1,276,000 (2005: HK$1,278,000), which were charged 1,276,000ಋʏɀཌྷཌྷʄαi1,278,000ಋ ᙔʔ̇ၤԓݘཋ഼͓߯ؿڃaccording to the executed service agreement between this ʏcȽ࣓ኣϊ ৻ԾᘪνՅeಁᔾԎಲ൚༦࣓ኣτᗐҺר subsidiary and ATV. Such amount did not exceed the annual cap of HK$2,000,000 for each of the two years ending 30 June 2006 ᘪ࣐ғ࿀ϭɀཌྷཌྷʒαʒ˂ɍɊˀ˅ԭ approved under the relevant resolutions. α۹ΈαؿҰαɐࠉ2,000,000ಋʏe
ᙔʔ̇ၤFox News NetworkڃA subsidiary of the Company entered into an agreement with Fox 2. ̯ʔ̇࿏Ɏؿȹං .2 News Network L.L.C. (“Fox”), an associate of Xing Kong Chuan Mei L.L.C. Foxᖋ߯ԾᘪeFox ݯ Xing Kong Group Co., Ltd., a substantial shareholder of the Company. The Chuan Mei Group Co., Ltd.̯ʔ̇˚ٖ߬ ࣹʥiמconnected transactions relate to: ؿᐲᏪʔ̇eᗐட͚
ዟࡼʥɺ˿ᔝᜑڈ৻ؿרa) granting of non-exclusive and non-transferable license to (a) ˮ߯ᑪFoxณၘ) subscribe for Fox’s news service; ஈ˿ᚬh b) leasing of office space and access to workspace, subject to (b) ፒʔ۩ै༉ʥԚ͂ɮА۩c഼˝ԯԜᎶϤ) availability; and ցhʥ
ᐲਝؿᙘᄧ౾dͲΈΔؿכc) accessing Fox’s camera hook up at the United Nations, interview (c) Ԛ͂FoxϽ) ᅌӹϽສՅقpositions in various places in the United States and live shots ઔΔ˞ʥͅFox ᇯܱ from Fox’s satellite truck positions for events that Fox is already Foxɰ൬Ϸంኒؿԑͧؿଊೋࠍc഼˝ԯ covering, subject to availability. ԜᎶϤցe
For the year ended 31 December 2006, the service charges paid/ ࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹cΉFox ৻3,689,000ಋʏɀཌྷཌྷרpayable to Fox amounted to approximately HK$3,689,000 (2005: ʻ˟ʼnᎶ˟ؿ ᙔʔ̇ၤڃHK$3,782,000), which were charged under the license agreement ʄαi3,782,000ಋʏcȽ࣓ኣϊ between this subsidiary and Fox. Such amount did not exceed the Fox͓߯ؿᚬԾᘪνՅeಁᔾԎಲ൚༦࣓ኣ annual cap of HK$4,314,000 for the year ended 31 December 2006 τᗐҺᘪ࣐ғ࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹ approved under the relevant resolutions. ˀ˅α۹ؿҰαɐࠉ4,314,000ಋʏe
ᙔʔ̇ၤXingڃA 70% owned subsidiary of the Company entered into an electronic 3. ȹං̯ʔ̇ኟτ70% ᚬऩؿ .3 programme guide (“EPG”) services agreement with BSkyB, an Kong Chuan Mei Group Co., Ltd.̯ʔ̇˚߬ רʵܞassociate of Xing Kong Chuan Mei Group Co., Ltd., a substantial ٖؿᐲᏪʔ̇BSkyB ᖋ߯ཋɥຝ͌ ࣹʥΉუ৷ᇯ഼ᅩݘ̎מshareholder of the Company. This connected transaction relates to the ৻Ծᘪeϊඖᗐட͚ ৻e࿀ϭɀཌྷཌྷʒαɊɀרʵܞprovision of EPG services for Phoenix Chinese News and Entertainment ొԜཋɥຝ͌ Channel. For the year ended 31 December 2006, the costs paid/ ˂ɍɊȹˀ˅α۹cΉBSkyB ʻ˟ʼnᎶ˟ؿ payable to BSkyB amounted to approximately HK$1,120,000 (2005: ͂1,120,000ಋʏɀཌྷཌྷʄαi393,000ಋ ৻ԾᘪνՅeרHK$393,000), which was charged in accordance with the service ʏcȽ࣓ኣၤBSkyBᖋ߯ؿ agreement with BSkyB. Such amount did not exceed the annual cap ಁᔾԎಲ൚༦࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ of HK$1,300,000 for the year ended 31 December 2006. ˅α۹ؿҰαɐࠉ1,300,000ಋʏe
68 უ৷ᇯ഼αం2006 ᙩמCONNECTED TRANSACTIONS (CONTINUED) ᗐட͚
ᙔʔڃɀཌྷཌྷཌྷαɊ˂ɍɊˀc̯ʔ̇ȹංכ .On 30 October 2000, a subsidiary of the Company had entered into 4 .4 a license agreement with DIRECTV Inc. (“DIRECTV”) for the non- ̇ၤDIRECTV Inc. DIRECTV͓߯ஈ˿Ծ כexclusive distribution of Phoenix North America Chinese Channel via ᘪஈ˿Ծᘪcஈ˿ԾᘪȽτᗐ༦ԯ અᄤᅌᇯܱ Ð ᅌཋ഼ӡcᅌقits direct broadcast service satellite - delivered television system in ˵ݘؿ ዟࡼʗሻᚬcԯ౨ࠉɰڈუ৷ᇯ഼ݘ̎ؿי North America (“License Agreement”), which term had been extended ϭɀཌྷཌྷ̒α֛ݯ˅eقby various letters until the end of 2004. DIRECTV is approximately ༦ΛͫԲͧϤ֝౨ owned by News Corporation, the ultimate holding company of News Corporation̯ʔ̇˚ٖ߬Xing Kong 34% ܛXing Kong Chuan Mei Group Co. Ltd., a substantial shareholder of Chuan Mei Group Co., Ltd.ؿୄઁٖʔ̇ ˂ɀཌྷཌྷʄαɍכthe Company. On 1 March 2005, a subsidiary of the Company and τ DIRECTV ؿ34% ᚬऩe ᙔʔ̇ၤDIRECTV ᖋອȹڃDIRECTV signed a letter which extended the term of the License ȹˀc̯ʔ̇ȹං ˂Agreement for four months from 1 January 2005 or until the First ͫԲͧc˞ੀஈ˿Ծᘪؿ౨ࠉϬɀཌྷཌྷʄαȹ ϭȹω࠳߯Ծᘪցقֶ˂̒ٽ֝ʹAmendment (as defined below) became effective, whichever is the ȹˀ earlier. Also on 1 March 2005, a subsidiary of the Company entered ຮӮɎʼ́ࢽݯ˅˞༖ξّݯๅe̊̔c ᙔʔ̇ڃɀཌྷཌྷʄαɍ˂ȹˀc̯ʔ̇ȹංכ into an amendment agreement with DIRECTV (“First Amendment Agreement”) pursuant to which the Group further granted DIRECTV ၤDIRECTV͓߯ȹͫ࠳߯Ծᘪȹω࠳߯Ծ ዟڈ the non-exclusive right to distribute Phoenix InfoNews Channel in ᘪcኣϊc̯එ྆൬ȹүʀDIRECTV ʗሻუ৷ᇯ഼ݘ̎˞̔͛ʗሻڏ˞addition to the Phoenix North America Chinese Channel and that the ࡼᚬc Ϭɀཌྷཌྷڬterm of the License Agreement was further extended for another six უ৷ᇯ഼༅̎cϤஈ˿Ծᘪ౨ࠉ ʒ˂eDIRECTVԯٽmonths commencing from 5 March 2005. DIRECTV, which has the ʄαɍ˂ʄˀʹω֝ ȹαٽੀԾᘪ֝܃right to extend for a year after the expiry of the First Amendment, τᚬΕȹω࠳߯ԾᘪԷ౨ ஈ˿ԾᘪcԎϣᄬၤ̯එ྆ᆺٽ֝˂ܘhad chosen to extend the License Agreement on a monthly basis ɰፕእ ɀཌྷཌྷʒαȹ˂ɀɊʄˀc̯ʔכwith the view to conclude new terms with the Group. On 25 January ณૈಁe ᙔʔ̇ၤDIRECTV ͓߯̊ȹͫ࠳߯Ծڃa subsidiary of the Company entered into another amendment ̇ȹං ,2006 agreement with DIRECTV (“Second Amendment Agreement”) ᘪɀω࠳߯Ծᘪcኣϊcஈ˿Ծᘪؿ pursuant to which certain material terms of the License Agreement ߗɳࠇ߬ૈಁɰᏵ˨ʥʼnֶ࠳߯cϤஈ˿Ծ ɍαe̯ٽhave been supplemented and/or amended and the term of the License ᘪϬɀཌྷཌྷʒαȹ˂ɀɊʄˀ֝ ɀཌྷཌྷʒαɀ˂ȼˀగၤDIRECTV ൬כAgreement has been extended for 3 years commencing from 25 ʔ̇ɰ ʔЗeٲೕמJanuary 2006. The Company has made an announcement in respect Ϸؿ೩ᗐட͚ of these connected transactions with DIRECTV on 7 February 2006.
For the year ended 31 December 2006, the license fee received/ ࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹cɰνʼn receivable from DIRECTV amounted to approximately HK$1,954,000 ᎶνDIRECTVؿஈ˿͂ݯ1,954,000ಋʏɀ (2005: HK$1,751,000), which were charged in accordance with ཌྷཌྷʄαi1,751,000ಋʏcȽ࣓ኣஈ˿Ծᘪ ؿ࠳߯Ծᘪֺ࠳߯νՅeಁᔾԎಲ൚܃the License Agreement as amended by its subsequent amendment ԯ፭ agreements. Such amount did not exceed the annual cap of ༦࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹ؿҰ HK$4,000,000 for the year ended 31 December 2006. αɐࠉ4,000,000ಋʏe
ᙔʔ̇ၤSGL EntertainmentڃA subsidiary of the Company entered into a sub-license agreement 5. ̯ʔ̇ȹං .5 for the sub-licensing of certain programmes and a license agreement Limited SGL̯ʔ̇˚ٖ߬Xing Kong ᙔʔ̇߯ڃfor the licensing of a television series with SGL Entertainment Limited Chuan Mei Group Co., Ltd.ؿͲ༅ SGL”), a wholly-owned subsidiary of Xing Kong Chuan Mei Group ͓ᔝஈ˿Ծᘪ˞ᔝߗɳຝ͌ؿஈ˿c˞ʥ“) ᚬeخCo. Ltd., a substantial shareholder of the Company. For the year ͓߯ஈ˿Ծᘪ˞ᔝȹࡨཋ഼டᙩჱؿ ended 31 December 2006, the license fees paid/payable to SGL ࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹cΉSGL amounted to approximately HK$210,000 (2005: HK$546,000), ʻ˟ʼnᎶ˟ؿஈ˿͂ݯ210,000ಋʏɀཌྷ which were charged in accordance with the license agreement ཌྷʄαi546,000ಋʏcȽ࣓ኣၤSGL ͓߯ؿ ᙔܨcמwith SGL. These are connected transactions but fall within Rule ஈ˿ԾᘪνՅeϊ೩Ծᘪяᙔᗐட͚ מ20.34ૈֺ߸ᗘПeτᗐ͚ڬof GEM Listing Rules. Such transaction is exempted from the พɐ̟ஃ 20.34 20ؿ͇ంdʔڬreporting, announcement and Shareholders’ approval requirements ᏵᑥЛፓΨพɐ̟ஃ ɀཌྷཌྷ̒αȾכof Chapter 20 of the GEM Listing Rules. The Company had made an Зʥٖғஃցe̯ʔ̇ɰ ʔЗeٲೕמannouncement on 27 September 2004 in respect of the connected ˂ɀɊȼˀగၤSGL൬Ϸؿᗐடᗐ transactions with SGL.
Phoenix Annual Report 2006 69 REPORT OF THE DIRECTORS ໎ԑผంй࣊
ᙩמCONNECTED TRANSACTIONS (CONTINUED) ᗐட͚
ɀཌྷཌྷʄαɊɀ˂Ɋɀˀc̯ʔ̇࿏Ɏȹංכ .A subsidiary of the Company, through its PRC advertising agent, 6 .6 ᙔʔ̇༦ԯɻਝᄤйˤଉुήཋ഼τࠉʔڃ Shenzhou Television Company Limited, entered into an advertising ؿڌඑ྆ʔ̇ɻଫ৽ڌcontract with CNHK Media Limited (“CNHK Media”), the PRC ̇ၤɻਝଫ৽ advertising agent of China Mobile Communications Corporation ɻਝᄤйˤଉɻಋඨఌτࠉʔ̇ɻಋඨఌ ɀཌྷཌྷʒαɄ˂ɀɊʄכCMCC”) on 12 December 2005. On 25 August 2006, China Mobile ͓߯ȹͫᄤйe“) (Hong Kong) Group Limited (“CMHKG”), through its wholly-owned ˀcɻਝଫ৽ࠗಋඑ྆τࠉʔ̇ɻଫ৽ ᙔʔ̇ιݯ̯ʔ̇ؿ˚߬ڃsubsidiary, has become a substantial shareholder of the Company, ࠗಋ༦ԯͲ༅ τ̯ʔ̇ 19.9% ؿɰೕϷٖ̯eΐܛholding approximately 19.9% of the issued share capital of the ٖc Аݯɻڌcɻଫ৽ڬCompany. Accordingly, CMCC being the ultimate holding company ϊc࣓ኣพɐ̟ஃ ˂of CMHKG, has become a connected person of the Company under ଫ৽ࠗಋؿୄઁٖʔ̇ϬɀཌྷཌྷʒαɄ the GEM Listing Rules since 25 August 2006. The Company has ɀɊʄˀιݯ̯ʔ̇ؿᗐடɁɡe̯ʔ̇ɰ ʔٲೕמɀཌྷཌྷʒαȾ˂Ʉˀగϊඖᗐட͚כ made an announcement in respect of this connected transaction on 8 September 2006. For the year ended 31 December 2006, Зe࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹c ᙔʔ̇ؿᄤйሻਕᔾݯڃʥԯڌthe advertising sales to CMCC and its subsidiary amounted to ྦྷɻଫ৽ approximately HK$8,912,000 (2005: Nil), which were charged in 8,912,000 ಋʏɀཌྷཌྷʄαiಲcȽ࣓ኣၤɻ accordance with the advertising contract with CNHK Media. ಋඨఌ͓߯ؿᄤйνՅe
ʥϣמਨϷ໎ԑΕᄗቇɐ߸͚ڈThe independent non-executive directors of the Company have ̯ʔ̇ؿዟ͓ c܃ࣂؿೡѵמreviewed the above transactions and have considered the procedures ᄬ̯ʔ࣏̇ᅕྦྷᄗቇ೩͚ ൬Ϸࣂiמperformed by the auditors of the Company in reviewing them and ᆢႏΕτᗐ͚ confi rmed that at the time of the transactions:
ݯ̯එ྆࿏Ɏτᗐιࡗʔ̇Εˀמa) the transactions have been entered into by the relevant member (a) ೩͚) of the Group in the ordinary and usual course of its business; and ʥȹঁพ৻༦ೡɻֺ͓߯hʥ
๑ʔ̡ਥๅʥȹঁਆ৻ૈಁ൬ܘȽמb) the transactions have been entered into on an arm’s length basis (b) ೩͚) cֶߗ˿Ԝˈ༖מand on normal commercial terms (to the extent that there are Ϸ࠱τ˿Ԝˈ༖ؿ͚ ؿૈಁܰЯᙔȹמɺӷ˞Рᒾ೩͚מcomparable transactions) or, if there are not suffi cient comparable ؿ͚ ؿמඑ྆ϤӰc೩͚̯ྦྷڬtransactions to judge whether they are on normal commercial ঁਆ৻ૈಁc ዟ͓ɍʿ˿ՅֶొԜ഼ੱכterms, on terms no less favourable to the Group than terms ૈಁɺႫ available to or from (as the case may be) independent third ؗϤցؿૈಁֺ͓߯hʥ parties; and
ૈמ࣓ኣτᗐԾᘪؿஃցcΕ͚ܰמc) the transactions have been entered into in accordance with (c) ೩͚) the relevant agreement governing them on terms that are fair ಁᙔʔ̡ଉԎଲ̯ʔٖ̇ؿኬСऩ and reasonable and in the interests of the shareholders of the ؿੱؗɎ͓߯e Company as a whole.
70 უ৷ᇯ഼αం2006 พ৻جCOMPETING BUSINESS ᘏ
Today’s Asia Limited has interests in approximately 37.5%, of the share ʌˀԓݘτࠉʔ̇ኟτ̯ʔ̇37.5%ؿٖ̯ᚬऩe ᅥͱ́я഼ݯٽcapital of the Company. Today’s Asia Limited, together with its shareholder, ʌˀԓݘτࠉʔ̇டԯٖჳ eڬMr. LIU Changle, are deemed to be the management shareholders of the ̯ʔ̇ؿဳଉᄙٖցຮӮพɐ̟ஃ Company as defi ned under the GEM Listing Rules.
ᅥͱ́ʥஹ̷౸ͱ́ʗПྡྷऩኟτʌˀԓٽMr. LIU Changle and Mr. CHAN Wing Kee beneficially own 93.3% and ჳ respectively of Today’s Asia Limited, which holds 100% of Vital ݘτࠉʔ̇ؿ93.3% ʥ 6.7% ᚬऩcʌˀԓݘτ 6.7% τVital Media Holdings Limited ؿ 100%ܛMedia Holdings Limited, which in turn holds 46% indirect interest in Asia ࠉʔ̇ τࠗಋȹܛڬTelevision Limited (“ATV”), a Hong Kong based television broadcasting ᚬऩcϤVital Media Holdings Limited company. Mr. CHAN Wing Kee also owns 95% of Dragon Sheen Holdings ࡼཋ഼ᄤᅌʔ̇Ðԓݘཋ഼τࠉʔ̇ԓݘཋ഼ ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀcכLimited which holds 16.25% indirect interest in ATV as at 31 December ؿ46%ංઅᚬऩe He also owns 80% of Dragon Goodwill International Limited, which ஹ̷౸ͱ́͛ኟτ᎘ଞඑ྆τࠉʔ̇ؿ95%ᚬऩc .2006 τԓݘཋ഼ؿ16.25%ංઅᚬܛڬcompleted its acquisition of 32.75% interests in ATV on 25 July 2003. ATV ᎘ଞඑ྆τࠉʔ̇ is deemed to be a connected person of the Company pursuant to the GEM ऩe֤͛ኟτDragon Goodwill International Limited כListing Rules. Primarily aiming at audiences in Hong Kong, ATV broadcasts ؿ80%ᚬऩcϤDragon Goodwill International Limitedɰ its programmes via terrestrial transmission through two channels, one in ɀཌྷཌྷɍαȼ˂ɀɊʄˀѧινᑪԓݘཋ഼ؿ32.75% ؿஃցcԓݘཋ഼഼ڬCantonese and the other in English. Signals of such two channels can ᚬऩe࣓ኣพɐ̟ஃ also be received in certain parts of Guangdong Province of the PRC. А̯ʔ̇ؿᗐடɁɡeԓݘཋ഼˞ࠗಋᜮଠݯ˚߬ ATV announced in August 2002 that it received the approval from the ྦྷോc༦ຣႍʥߜႍԭ፼༞Δࠍඨᄤᅌຝ Λ୮Δʿޘauthorities in China to broadcast its Cantonese and English channels ͌eԭ፼༞ؿ໔͛˿Εɻਝᄤ ɀཌྷཌྷɀαɄ˂ۧЗcɰνԷכthrough the cable system in Guangdong. ATV is also granted a non- અνԷeԓݘཋ഼ ᄤؿτᇃཋ഼ӡכdomestic television programme service license in May 2004, in addition to ɻਝτᗐѫؿғc˿༦ ԯຣႍʥߜႍ፼༞eଊτؿ̯ΔЛཋיits existing domestic free television programme service license. cᅌ ˂ɀཌྷཌྷ̒αʄכ৻ಶ๑̔cԓݘཋ഼͛ר഼ຝ͌ ৻ಶ๑eרΔཋ഼ຝ̯͌ڈᏵȹ
Save as disclosed above, none of the Directors, the management ɐʼֺׄᚉّ̔cลಲ໎ԑd̯ʔ̇ဳଉᄙٖ כڬshareholders of the Company or their respective associates (as defined ֶ֤೩ΈϬؿᐲᖎɁɡցຮӮพɐ̟ஃ ؿพ৻ɻኟجॶΦΕᘏ˿ֶجunder the GEM Listing Rules) has any interests in a business which ၤ̯එ྆พ৻ΦΕᘏ competes or may compete with the business of the Group. τͨЄᚬऩe
ᔈɁᚬऩړ SPONSORS’ INTERESTS
৻։ࣂcרɀཌྷཌྷɀαʒ˂ɍɊˀcԭαכ As at 30 June 2002, BOCI Asia Limited and Merrill Lynch Far East Limited Ⴉτࠉʔ̇ɺʹݯ׳ceased to be the sponsors of the Company upon expiration of the terms of ɻႺਝԓݘτࠉʔ̇ʥ ᔈɁeϬɀཌྷཌྷɀαȼ˂ȹˀc̯ʔړcontract after two years of service. The Company has no sponsor since 1 ̯ʔ̇ؿ ᔈɁcΐϊˇАˮᔾ̔ׄᚉeړJuly 2002. Accordingly, no additional disclosure is made. ̇Ԏಲ
ADVANCES TO AN ENTITY ΉȹࡼྡྷొԜྌಁ
Details of the relevant advance to an entity from the Group which exceeds τᗐ̯එ྆ΉȹࡼྡྷొԜ൚༦̯එ྆༅ଐ૱ࠤ8% 17.14ૈؿڬof the Group’s total assets, as defi ned in rules 17.14 of the GEM Listing ؿτᗐྌಁցຮӮพɐ̟ஃ 8% ഽ13eڃٲল৻ంכRules, are set out in note 13 to the fi nancial statements. ੱc༗
Phoenix Annual Report 2006 71 REPORT OF THE DIRECTORS ໎ԑผంй࣊
AUDIT COMMITTEE ᄗ࣏կࡗผ
The audit committee had reviewed the Group’s annual results for the year ᄗ࣏կࡗผɰᄗቇ̯එ྆࿀ϭɀཌྷཌྷʒαɊɀ˂ ۺended 31 December 2006 and provided advice and comments thereon. ɍɊȹˀ˅α۹ؿα۹พᐜcԎኣϊొԜ෮Ӯʥ ᘪe
AUDITORS ࣏ᅕ
༞ผ߮ԑ৻ֺᄗ࣏eᖓМ̷ڻɰͅᖓМٲThe fi nancial statements have been audited by PricewaterhouseCoopers ল৻ం ༞ผ߮ԑ৻ֺੀঽͨԎଲ༅ࣟᐶፕடͨe̷ڻ .who retire and, being eligible, offer themselves for re-appointment
໎ԑผٲOn behalf of the Board ˤ
LIU Changle ˚ ᅥٽChairman ჳ
Hong Kong, 8 March 2007 ࠗಋcɀཌྷཌྷȼαɍ˂Ʉˀ
72 უ৷ᇯ഼αం2006 INDEPENDENT AUDITOR’S REPORT ዟ͓࣏ᅕంй࣊
INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF ዟ͓࣏ᅕంй PHOENIX SATELLITE TELEVISION HOLDINGS LIMITED ߎუ৷ᇯ഼ઁٖτࠉʔ̇ ਅະࢌഽ˫ι͓ɾτࠉʔ̇כ (Incorporated in the Cayman Islands with limited liability) Ͳٖ
We have audited the consolidated fi nancial statements of Phoenix Satellite ̯࣏ᅕɰѧιᄗ࣏75ࠒϭ154ࠒֺ༗ɾუ৷ cԯٲTelevision Holdings Limited (the “Company”) set out on pages 75 to 154, ᇯ഼ઁٖτࠉʔ̇ൔʔ̇ɾ၃ল৻ం ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀɾ၃ʥʔ̇כܢ˳which comprise the consolidated and company balance sheets as at 31 ɻ dٲc˞ʥ࿀ϭˀ˅α۹ɾ၃νऩٲDecember 2006, and the consolidated income statement, the consolidated ༅ଐ߲ඦ c˞ʥࠇ߬ผ߮ٲݚ൴ټʥ၃ଊٲstatement of changes in equity and the consolidated cash fl ow statement ၃ᚬऩᛰ৽ ഽeڃע೪ล߬ʥԯˢ႓ܧ for the year then ended, and a summary of signifi cant accounting policies and other explanatory notes.
ɾஐͨٲDIRECTORS’ RESPONSIBILITY FOR THE ໎ԑᇁႇল৻ం FINANCIAL STATEMENTS
The Directors are responsible for the preparation and the true and fair ໎ԑፓ๑ࠗಋผ߮ʔผཕЗɾࠗಋল৻ంйๅ ʥࠗಋʔ̇ૈԝɾׄᚉஃցc߲ஐᇁႇԎभྡྷ࠹ڬ presentation of these consolidated financial statements in accordance உ߮dܢ˳eϊஐͨٲwith Hong Kong Financial Reporting Standards issued by the Hong Kong ʔ̡ΔеͶϊ೩၃ল৻ం τٲၤᇁႇԎभྡྷ࠹ʔ̡ΔеͶল৻ంܛInstitute of Certifi ed Public Accountants and the disclosure requirements ྡྷϷʥၐ ԯԎಲࠇɣ፟႒ஹ߸ɺሃԯړof the Hong Kong Companies Ordinance. This responsibility includes: ᗐɾʑဟઁc˞ᆢ ೪hʥܧdesigning, implementing and maintaining internal control relevant to the ͅಂֶ፟႒ʵhፕእԎᎶ͂ሬผ߮ ؗАˮଉɾผ߮Ѕ့eੱܘ preparation and the true and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
AUDITOR’S RESPONSIBILITY ࣏ᅕɾஐͨ
Our responsibility is to express an opinion on these consolidated fi nancial ̯࣏ᅕɾஐ࣓ͨܰኣᄗ࣏ɮАɾྦྷϊ೩၃ Аˮ෮ӮcԎඩΉ ჇɎමం̯࣏ᅕɾ෮ٲstatements based on our audit and to report our opinion solely to you, as a ল৻ం body, and for no other purpose. We do not assume responsibility towards ӮcϤПಲԯˢ͌ؿe̯࣏ᅕลɺผగ̯ంйɾ or accept liability to any other person for the contents of this report. ʑࢀΉͨЄԯˢɁɡ߲ஐֶֻኪஐͨe
We conducted our audit in accordance with Hong Kong Standards on ̯࣏ᅕɾᄗ࣏ɮАܘ๑ࠗಋผ߮ʔผཕЗɾࠗ ߬ұ̯࣏ᅕፓΨኧΨڬ൬Ϸe೩ๅڬAuditing issued by the Hong Kong Institute of Certifi ed Public Accountants. ಋᄗ߮ๅ ٲᖬϊ೩ল৻ంړThose standards require that we comply with ethical requirements and ஃց˞ʥི߮ʥ൬Ϸᄗ࣏˞ଉ plan and perform the audit to obtain reasonable assurance as to whether ܰЯɺΦΕࠇɣɾ፟႒ஹ߸e the fi nancial statements are free from material misstatement.
Phoenix Annual Report 2006 73 INDEPENDENT AUDITOR’S REPORT ዟ͓࣏ᅕంй࣊
AUDITOR’S RESPONSIBILITY CONTINUED ࣏ᅕɾஐͨᙩ
ᔾټֺ༗ٲAn audit involves performing procedures to obtain audit evidence about ᄗ࣏ɮАࣹʥਨϷೡѵ˞Յၤল৻ం the amounts and disclosures in the fi nancial statements. The procedures ʥׄᚉԑඖτᗐɾᄗ࣏ንᖬeፕՅɾ೩ೡѵ഼ ɾࠇɣ፟႒ஹٲിЅল৻ంܢ˳selected depend on the auditor’s judgment, including the assessment of ˝࣏ᅕɾРᒾc the risks of material misstatement of the fi nancial statements, whether due ߸ɺሃܰЯΐಂֶ፟႒ʵɾࠓ፮eΕАˮ to fraud or error. In making those risk assessments, the auditor considers ೩ࠓ፮ിЅࣂc࣏ᅕผϣᄬၤྡྷᇁႇԎभྡྷ࠹ உ߮ሬڏ˞τᗐɾʑဟઁcٲinternal control relevant to the entity’s preparation and true and fair ʔ̡еͶল৻ం ݯྦྷྡྷɾʑဟઁܰЯτࢽڈpresentation of the fi nancial statements in order to design audit procedures ɾᄗ࣏ೡѵcЎԎ ിძ໎ԑֺઔ͂ɾผ߮ܢ˳༠෮Ӯeᄗ࣏ɮА͛ٲ that are appropriate in the circumstances, but not for the purpose of ʥֺАผ߮Ѕ့ܰЯଉc˞ʥിძ܌೪ܰЯܧ .expressing an opinion on the effectiveness of the entity’s internal control ɾኬеͶʿβeٲAn audit also includes evaluating the appropriateness of accounting ল৻ం policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the fi nancial statements.
ɾᄗ࣏ን܌c̯࣏ᅕɰՅ˨ʗڌޚWe believe that the audit evidence we have obtained is sufficient and ̯࣏ᅕ appropriate to provide a basis for our audit opinion. ᖬcݯ̯࣏ᅕɾᄗ࣏෮ӮొԜਥᓣe
OPINION ෮Ӯ
࣓ኣࠗಋল৻ంйๅٲIn our opinion, the consolidated financial statements give a true and ̯࣏ᅕႏݯc၃ল৻ం ɀכӷ˞भྡྷ࠹ʔ̡Δᛷ͐bൔʔ̇ʥbൔඑ྆ڬ fair view of the state of affairs of the Company and the Group as at 31 ؗʥbൔඑ྆࿀رDecember 2006 and of the Group’s profit and cash flows for the year ཌྷཌྷʒαɊɀ˂ɍɊȹˀɾল৻ ๑ࠗಋʔ̇ܘݚ൴cԎټthen ended in accordance with Hong Kong Financial Reporting Standards ϭˀ˅α۹ɾึСʥଊ and have been properly prepared in accordance with the disclosure ૈԝɾׄᚉஃցѢݯᇁႇe requirements of the Hong Kong Companies Ordinance.
༞ผ߮ԑ৻̷ֺڻPricewaterhouseCoopers ᖓМ Certifi ed Public Accountants ਨพผ߮
Hong Kong, 8 March 2007 ࠗಋcɀཌྷཌྷȼαɍ˂Ʉˀ
74 უ৷ᇯ഼αం2006 ٲFINANCIAL STATEMENTS ল৻ం
ٲCONSOLIDATED INCOME STATEMENT ၃νऩ
For the year ended 31 December 2006 ࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹ ᔾ˞ಋʏͶࠤټ (Amounts expressed in Hong Kong dollars)
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα Note(s) $’000 $’000 ഽ ɝʏ ɝʏڃ (Note 35) ഽ35ڃ
Revenue νɃ 5 1,057,667 1,034,768
Operating expenses Ꮺ͂ 6, 34(i) (729,483 ) (653,654)
Selling, general and administrative expenses ሻਕdȹঁʥϷܧ͂ 6, 34(i) (137,330 ) (222,429)
Other revenue ԯˢνɃ Exchange gain, net මЙνऩ૱ᔾ 5 15,124 13,997 Interest income, net bСࢠνɃ૱ᔾ 5 23,118 13,937 Other income, net bԯˢνɃ૱ᔾ 5 18,247 19,178
Provision for impairment loss in a jointly ͳઁԹྡྷಕࠤᑋฌ controlled entity ᅆௐ 20 – (472 )
Share of losses of jointly controlled entities ᚫЌͳઁԹྡྷᑋฌ 20 (1,518 ) (1,906 )
С 245,825 203,419ึکProfi t before income tax ֺೢ
(Income tax expense ֺೢ͂ 7 (34,938 ) (20,755
Profi t for the year α۹ึС 210,887 182,664
Attributable to: ɎͶΈඖᎶЌึСi Equity holders of the Company ̯ʔ̇ᚬऩܛτɁ 212,385 181,482 Minority interests ʭᅕٖᚬऩ (1,498 ) 1,182
210,887 182,664
Earnings per share for profi t attributable గαʑ̯ʔ̇ᚬऩܛτɁ Сޔto the equity holders of the Company ᎶЌึСؿҰٖ during the year
Сcಋ˦ 10 4.30 3.67ޔBasic earnings per share, Hong Kong cents ਥ̯Ұٖ
Сcಋ˦ 10 4.29 3.67ޔҰٖ܃Diluted earnings per share, Hong Kong cents ᚫᑁ
Dividends ٖࢠ 9 69,190 59,278
Phoenix Annual Report 2006 75 ٲFINANCIAL STATEMENTS ল৻ం
ٲCONSOLIDATED BALANCE SHEET ၃༅ଐ߲ඦ
ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀכ As at 31 December 2006 ᔾ˞ಋʏͶࠤټ (Amounts expressed in Hong Kong dollars)
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα Note(s) $’000 $’000 ഽ ɝʏ ɝʏڃ
ASSETS ༅ଐ ݚ৽༅ଐڈ Non-current assets ᚬ૱ᔾ 16 13,915 14,968خPurchased programme and fi lm rights, net ᑪɃຝ͌ʥཋᄧ Lease premium for land ɠΔै༉͂ 17 74,696 – พdᄥָʥஉௐ૱ᔾ 18 106,950 44,518ذ Property, plant and equipment, net ʥೕࢄι̯ 19 – 30,560ټܘพذ Property deposit and development costs ͳઁԹྡྷؿҙ༅ 20 9,350 9,594כ Investments in jointly controlled entities Available-for-sale fi nancial assets ˿Ԝሻਕল৻༅ଐ 962 – Financial assets at fair value through ܘʔ̡ࠤͶሏԎΕฌऩሏ profi t or loss ୮ଉؿল৻༅ଐ 21 80,027 65,971 – ౨༅ଐད˟ಁඖ 22 24,393ٽ Prepayment for long-term assets Loans and receivables ൘ಁʥᎶνಁඖ 26 – 31,018 Deferred income tax assets Ⴎֺ֝ೢ༅ଐ 30 12,233 963
322,526 197,592
Current assets ݚ৽༅ଐ Accounts receivable, net Ꮆνሏಁ૱ᔾ 12 56,159 43,254 ʥԯˢټܘPrepayments, deposits and other ད˟ಁඖd receivables Ꮆνಁඖ 13 407,376 367,945 Inventories Φஒ 14 4,952 5,557 Amounts due from related companies Ꮆνᗐடʔ̇ಁඖ 15, 34(ii) 38 1,232 Self-produced programmes Ϭႇຝ͌ 3,206 3,760 ᚬ૱ᔾخPurchased programme and fi lm rights, ᑪɃຝ͌ʥཋᄧ net, current portion Ð౨ͫ 16 4,061 5,141 Financial assets at fair value through ܘʔ̡ࠤͶሏԎΕฌऩሏ profi t or loss ୮ଉؿল৻༅ଐ 21 22,479 23,758 Loans and receivables - current ൘ಁʥᎶνಁඖÐ౨ͫ 26 69,136 – ೩ࠤඖ͌ 25 543,417 513,364ټʥଊټCash and cash equivalents ଊ
1,110,824 964,011
Total assets ᐢ༅ଐ 1,433,350 1,161,603
76 უ৷ᇯ഼αం2006 ᙩٲCONSOLIDATED BALANCE SHEET ၃༅ଐ߲ඦ CONTINUED
As at 31 December 2006 ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ ᔾ˞ಋʏͶࠤټ (Amounts expressed in Hong Kong dollars)
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα Note(s) $’000 $’000 ഽ ɝʏ ɝʏڃ
EQUITY ᚬऩ Capital and reserves attributable to the ̯ʔ̇ᚬऩܛτɁᎶЌ Company’s equity holders ༅̯ʥௐ Share capital ٖ̯ 27 494,213 493,867 Reserves ௐ 665,336 505,220
1,159,549 999,087
Minority interests ʭᅕٖᚬऩ 7,139 8,019
Total equity ᐢᚬऩ 1,166,688 1,007,106
LIABILITIES ߲ඦ ݚ৽߲ඦڈ Non-current liabilities Provision for asset retirement ంᄠ༅ଐనࡈᅆௐ reinstatement 4,342 – Deferred income tax liabilities Ⴎֺ֝ೢ߲ඦ 30 1,213 963
5,555 963
Current liabilities ݚ৽߲ඦ Accounts payable, other payables Ꮆ˟ሏಁdԯˢᎶ˟ಁඖ and accruals ʥᎶ߮ಁඖ 24 119,378 95,948 Deferred income Ⴎ֝νɃ 119,580 47,572 Amounts due to related companies Ꮆ˟ᗐடʔ̇ಁඖ 15, 34(ii) 4,743 4,900 Profi ts tax payable Ꮆ˟Сೢ 17,406 5,114
261,107 153,534
Total liabilities ᐢ߲ඦ 266,662 154,497
Total equity and liabilities ᐢᚬऩʥ߲ඦ 1,433,350 1,161,603
Net current assets ݚ৽༅ଐ૱ࠤ 849,717 810,477
Total assets less current liabilities ᐢ༅ଐಕݚ৽߲ඦ 1,172,243 1,008,069
ɀཌྷཌྷȼαɍ˂ɄˀᏵ໎ԑผ༦cԎͅ˞Ɏ໎כ Approved by the Board of Directors on 8 March 2007 and signed on behalf ໎ԑผᖋອiٲof the Board by ԑˤ
LIU Changle CHUI Keung ᅥ ੌੜٽჳ Director Director ໎ԑ ໎ԑ
Phoenix Annual Report 2006 77 ٲFINANCIAL STATEMENTS ল৻ం
ٲBALANCE SHEET ༅ଐ߲ඦ
ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀכ As at 31 December 2006 ᔾ˞ಋʏͶࠤټ (Amounts expressed in Hong Kong dollars)
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα Note(s) $’000 $’000 ഽ ɝʏ ɝʏڃ
ASSETS ༅ଐ ݚ৽༅ଐڈ Non-current asset ᙔʔ̇ؿᚬऩ 23 1,170,216 1,232,543ڃכ Interests in subsidiaries
Current asset ݚ৽༅ଐ ೩ࠤඖ͌ 25 7,458 1,972ټʥଊټCash and cash equivalents ଊ
Total assets ᐢ༅ଐ 1,177,674 1,234,515
EQUITY ᚬऩ
Capital and reserves attributable to ̯ʔ̇ᚬऩܛτɁᎶЌ the Company’s equity holders ༅̯ʥௐ Share capital ٖ̯ 27 494,213 493,867 Reserves ௐ 29 683,307 740,494
Total equity ᐢᚬऩ 1,177,520 1,234,361
LIABILITY ߲ඦ
Current liability ݚ৽߲ඦ Other payables and accruals ԯˢᎶ˟ಁඖʥᎶ߮ಁඖ 154 154
Total liability ᐢ߲ඦ 154 154
Total equity and liability ᐢᚬऩʥ߲ඦ 1,177,674 1,234,515
ɀཌྷཌྷȼαɍ˂ɄˀᏵ໎ԑผ༦cԎͅ˞Ɏ໎כ Approved by the Board of Directors on 8 March 2007 and signed on behalf ໎ԑผᖋອiٲof the Board by ԑˤ
LIU Changle CHUI Keung ᅥ ੌੜٽჳ Director Director ໎ԑ ໎ԑ
78 უ৷ᇯ഼αం2006 ٲCONSOLIDATED STATEMENT OF ၃ᚬऩᛰ৽ CHANGES IN EQUITY
For the year ended 31 December 2006 ࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹ ᔾ˞ಋʏͶࠤټ (Amounts expressed in Hong Kong dollars)
Attributable to the Company’s equity holders ̯ʔ̇ᚬऩܛτɁᎶЌ Share Share Exchange Accumulated Minority Total capital premium reserve defi cit interests equity ʭᅕٖ ძ මЙௐ ୃዶᑋฌ ᚬऩ ᐢᚬऩึٖͫ ̯ٖ Note(s) HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 ഽ ɝʏ ɝʏ ɝʏ ɝʏ ɝʏ ɝʏڃ
ɀཌྷཌྷʄαכ Balance at 1 January 2005 ȹ˂ȹˀ 27 493,680 829,741 2,204 (461,977 ) 6,837 870,485 ᙔʔ̇ڃExchange differences arising on ့ࣵ̔ ଐ́ؿٲtranslation of the fi nancial ল৻ం statements of foreign subsidiaries මЙᔾ – – 1,383 – – 1,383 Exercise of share options ϷԚᑪٖᚬ 27, 28 187 1,774 – – – 1,961 ( Dividend related to 2004 ɰ˟ɀཌྷཌྷ̒α۹ٖࢠ – (49,387 ) – – – (49,387 Profi t for the year α۹ึС – – – 181,482 1,182 182,664
˂ɀཌྷཌྷʄαɊɀכ Balance at 31 December 2005 ɍɊȹˀ 493,867 782,128 3,587 (280,495 ) 8,019 1,007,106
Attributable to the Company’s equity holders ̯ʔ̇ᚬऩܛτɁᎶЌ Share Share Exchange Accumulated Minority Total capital premium reserve defi cit interests equity ʭᅕٖ ძ මЙௐ ୃዶᑋฌ ᚬऩ ᐢᚬऩึٖͫ ̯ٖ Note(s) HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 ഽ ɝʏ ɝʏ ɝʏ ɝʏ ɝʏ ɝʏڃ
ɀཌྷཌྷʒαכ Balance at 1 January 2006 ȹ˂ȹˀ 27 493,867 782,128 3,587 (280,495 ) 8,019 1,007,106 ᙔʔ̇ڃExchange differences arising on ့ࣵ̔ ଐ́ؿٲtranslation of the fi nancial ল৻ం statements of foreign subsidiaries මЙᔾ – – 3,642 – – 3,642 Exercise of share options ϷԚᑪٖᚬ 27, 28 346 3,367 – – – 3,713 ( Dividend related to 2005 ɰ˟ɀཌྷཌྷʄα۹ٖࢠ 9 – (59,278 ) – – – (59,278 Profi t/(loss) for the year α۹ึСʼnᑋฌ – – – 212,385 (1,498 ) 210,887 כInvestment in a subsidiary by a ʭᅕᚬऩٖ ᙔʔ̇ɾҙ༅ – – – – 618 618ڃ minority shareholder
˂ɀཌྷཌྷʒαɊɀכ Balance at 31 December 2006 ɍɊȹˀ 494,213 726,217 7,229 (68,110 ) 7,139 1,166,688
Phoenix Annual Report 2006 79 ٲFINANCIAL STATEMENTS ল৻ం
ٲݚ൴ټCONSOLIDATED CASH FLOW STATEMENT ၃ଊ
For the year ended 31 December 2006 ࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹ ᔾ˞ಋʏͶࠤټ (Amounts expressed in Hong Kong dollars)
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα Note(s) $’000 $’000 ഽ ɝʏ ɝʏڃ
ݚ൴ټCASH FLOWS FROM OPERATING ACTIVITIES Ꮺพ৻ݠ৽ؿଊ 216,476 154,248 31 ټCash generated from operations Ꮺพ৻ଐ́ؿଊ Interest received ɰνСࢠ 23,118 13,937 Income from certifi cate of deposit ΦಁᖬνɃ 976 786 Hong Kong taxation paid ɰ˟ࠗಋೢඖ (33,615 ) (14,986 ) Overseas taxation paid ɰ˟ࣵ̔ೢඖ (51 ) (271 )
ᔾ૱ټNET CASH GENERATED FROM OPERATING Ꮺพ৻ݠ৽ଐ́ؿଊ ACTIVITIES 144,676 215,942
ݚ൴ټCASH FLOWS FROM INVESTING ACTIVITIES ҙ༅ݠ৽ؿଊ – ( ౨༅ଐད˟ಁඖᄈ˱ 22 (24,393ٽ Increase in prepayment for long-term assets ( ʥೕࢄι̯ᄈ˱ (288 ) (1,246ټܘพذ Increase in property deposit and development costs Increase in available-for-sale fi nancial assets ˿Ԝሻਕল৻༅ଐᄈ˱ (962 ) – ( พdᄥָʥஉௐ (29,708 ) (15,878ذPurchase of property, plant and equipment ᑪɃ ( ᚬ 16 (16,728 ) (16,083خPurchase of programme and fi lm rights ᑪɃຝ͌ʥཋᄧ ( ͳઁԹྡྷؿҙ༅ 20 (1,274 ) (11,500כ Investment in a jointly controlled entity พdᄥָʥஉௐֺذProceeds from disposal of property, plant and ˮਕ equipment ಁඖ 29 85 ᚬऩֺټܘพذProceeds from partial disposal of property deposit ˮਕʗ interest ಁඖ 19 19,602 37,792 Purchase of fi nancial assets at fair value through ᑪɃܘʔ̡ࠤͶሏԎΕ ( profi t or loss ฌऩሏ୮ଉؿল৻༅ଐ (148,873 ) (206,768 Proceeds from disposal of fi nancial assets ˮਕܘʔ̡ࠤͶሏԎΕฌऩሏ at fair value through profi t or loss ୮ଉؿল৻༅ଐֺಁඖ 134,437 171,898 Income from fi nancial assets at fair value ܘʔ̡ࠤͶሏԎΕฌऩሏ through profi t or loss ୮ଉؿল৻༅ଐؿνऩ 5,569 4,747
( ᔾ (62,589 ) (36,953૱ټNET CASH USED IN INVESTING ACTIVITIES ҙ༅ݠ৽ֺ͂ଊ
ݚ൴ټCASH FLOWS FROM FINANCING ACTIVITIES ጪ༅ݠ৽ؿଊ Proceeds from exercise of share options ϷԚᑪٖᚬֺಁඖ 27, 28 3,713 1,961 ( τɁؿٖࢠ 9 (59,278 ) (49,387ܛDividends paid to Company’s equity holders ɰ˟ʀ̯ʔ̇ᚬऩ – ᙔʔ̇ɾҙ༅ 618ڃכInvestment in a subsidiary by a minority shareholder ʭᅕᚬऩٖ
( ᔾ (54,947 ) (47,426૱ټNET CASH USED IN FINANCING ACTIVITIES ጪ༅ݠ৽ֺ͂ଊ
೩ࠤඖ͌ᄈ˱ 27,140 131,563ټʥଊټINCREASE IN CASH AND CASH EQUIVALENTS ଊ
೩ࠤඖ͌ټʥଊټଊٱCASH AND CASH EQUIVALENTS AT α BEGINNING OF YEAR 513,364 380,391
EFFECT OF FOREIGN EXCHANGE RATE CHANGES මଅᛰ৽ᄧᚊ 2,913 1,410
೩ࠤඖ͌ 543,417 513,364ټʥଊټCASH AND CASH EQUIVALENTS AT END OF YEAR αୄଊ
80 უ৷ᇯ഼αం2006 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
1. GENERAL INFORMATION 1. ȹঁ༅ࢿ
ᙔڃPhoenix Satellite Television Holdings Limited (the “Company”) and its უ৷ᇯ഼ઁٖτࠉʔ̯̇ʔ̇ʥԯ subsidiaries (collectively, the “Group”) engage in satellite television ʔ̇ီ̯එ྆˚߬Ꮺᇯܱཋ഼ᄤᅌ broadcasting activities. พ৻e
ਅະࢌഽ˫ι͓ʥ˞ࠗಋݯᐢכThe Company is a limited liability company incorporated in the ̯ʔ̇ݯ Cayman Islands and domiciled in Hong Kong. The address of its ؿτࠉʔ̇e̯ʔ̇ؿഽ˫ፒԑ୮ݯCricket registered office is Cricket Square, Hutchins Drive, PO Box 2681, Square, Hutchins Drive, PO Box 2681, Grand Grand Cayman KY1-1111, Cayman Islands. Cayman KY1-1111, Cayman Islandse
ֺτࠉʔ̇ᐲֺ͚מࠗಋᐲ͚כThe Company is listed on the Growth Enterprise Market of The Stock ̯ʔ̇ Exchange of Hong Kong Limited (the “Stock Exchange”). พɐ̟e
˂ɀཌྷཌྷȼαɍכɰͅ໎ԑผٲThe consolidated fi nancial statements have been approved for issue ̯၃ল৻ం by the Board of Directors on 8 March 2007. Ʉˀғ˰ೕe
2. SUMMARY OF SIGNIFICANT 2. ࠇ߬ผ߮ܧ೪ล߬ ACCOUNTING POLICIES
ֺᎶ͂ؿ˚߬ผٲThe principal accounting policies applied in the preparation of these ˞Ɏݯᇁႇϊ೩၃ল৻ం ֺеͶכ೪ɰܧcϊ೩̔ע೪e̊τ႓ܧconsolidated fi nancial statements are set out below. These policies ߮ have been consistently applied to all the years presented, unless ؿֺτα۹ʑԷྵᎶ͂e otherwise stated.
(a) Basis of preparation D ᇁႇਥๅ ȽٲThe consolidated financial statements of Phoenix Satellite უ৷ᇯ഼ઁٖτࠉʔ̇ؿ၃ল৻ం Television Holdings Limited have been prepared in accordance ࣓ኣࠗಋผ߮ʔผཕЗؿࠗಋল৻ంй ʥࠗಋʔ̇ڬࠗಋল৻ంйๅڬwith Hong Kong Financial Reporting Standards (“HKFRS”) ๅ issued by the Hong Kong Institute of Certified Public ૈԝؿሬ͂ׄᚉஃցʥᐲֺ͚พᖬԴ ϤᇁႇeڬAccountants and applicable disclosure requirements of the ɐ̟ஃ Hong Kong Companies Ordinance and the Rules Governing the Listing of Securities on the Growth Enterprise Market of the Stock Exchange.
๑ዃ̌ι̯ؒᇁႇcܘȽٲThe consolidated fi nancial statements have been prepared under ̯၃ল৻ం ʔ̡ࠤͶሏԎΕฌऩሏ୮ଉؿܘthe historical cost convention, as modifi ed by the revaluation of గࠇЅ fi nancial assets at fair value through profi t or loss. ল৻༅ଐАˮሁኬe
ٲؿল৻ంڬThe preparation of financial statements in conformity with ᇁႇଲࠗಋল৻ంйๅ HKFRS requires the use of certain critical accounting estimates. ߬༜͂ߗɳࠇ߬ؿผ߮Ѕ߮c͛ࣂ߬ ೪༦ೡɻАܧIt also requires management to exercise its judgment in the ဳଉᄙΕઔ̯͂එ྆ؿผ߮ ɻࣹʥঢ়۹Рᒾٲprocess of applying the Group’s accounting policies. The ˮРᒾeΕ၃ল৻ం areas involving a higher degree of judgment or complexity, or ֶᇲᔵೡ۹ؿᆲᕿcֶτࠇ߬உʥЅ߮ ഽ4ׄᚉeڃכareas where assumptions and estimates are significant to the ؿᆲᕿȽ consolidated fi nancial statements, are disclosed in note 4.
Phoenix Annual Report 2006 81 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
2. SUMMARY OF SIGNIFICANT 2. ࠇ߬ผ߮ܧ೪ล߬ᙩ ACCOUNTING POLICIES CONTINUED
(a) Basis of preparation (Continued) D ᇁႇਥๅᙩ ؿ࠳ڬɀཌྷཌྷʒάࢽؿɰ˰ೕๅכ L i) Amendments and interpretations to published standards) effective in 2006 ߯ʥᘷ 39໔࠳߯ʔڬHKAS 39 (Amendment), the Fair Value Option, is mandatory ࠗಋผ߮ๅ ɀཌྷཌྷʒכfor the Group’s accounting periods beginning on or after 1 ̡ࠤፕእᚬc̯එ྆ նؿผ߮౨ංྡྷ܃January 2006. This amendment does not have any impact αȹ˂ȹˀֶɾ ʔ̡ܘցܞඑ྆ॶਪፓΨ̯כon the classifi cation and valuation of the Group’s fi nancial Ϸeͅ instruments classifi ed as at fair value through profi t or loss ࠤͶሏԎΕฌऩሏ୮ଉؿল৻ɮԮؿ prior to 1 January 2006 as the Group is able to comply ࠳߯ᅟๅcܨϊඖ࠳߯Ԏಲྦྷ̯එ ܘʗᗘݯکɀཌྷཌྷʒαȹ˂ȹˀכ྆ with the amended criteria for the designation of financial instruments at fair value through profi t or loss; and ʔ̡ࠤͶሏԎΕฌऩሏ୮ଉؿল৻ɮ ԮؿʗᗘʥЅࠤଐ́ͨЄᄧᚊhʥ
Ðᘷ4໔ᔤցڬHKFRS–Int 4, Determining whether an Arrangement ࠗಋল৻ంйๅ ɀཌྷཌྷʒαȹכcontains a Lease, effective for annual periods beginning on ΪખܰЯ˳фै༉c նؿα۹౨ං́ࢽe܃or after 1 January 2006. This interpretation requires the ˂ȹˀֶɾ determination of whether an arrangement is or contains a ϊඖᘷ߬ұᔤցΪખܰЯݯֶ˳ф lease to be based on the substance of the arrangement. ै༉࣓ኣΪખؿྡྷሔʑࢀϤցeԯ כIt requires an assessment of whether: (a) fulfi llment of the ߬ұിЅi(a) ᄚϷΪખܰЯτፆ arrangement is dependent on the use of a specifi c asset or Ԛ͂ȹඖऋց༅ଐֶΛඖ༅ଐ assets (the “Assets”); and (b) the arrangement conveys a ೩༅ଐhʥ(b) ΪખܰЯልʀԚ͂ right to use the Assets. This interpretation has no material ೩༅ଐؿᚬСeϊඖᘷԎಲྦྷ̯ financial impact on the Group, and does not result in එ྆ଐ́ͨЄࠇɣল৻ᄧᚊc͛ಲኒ ᚉׄٲ೪dল৻ంܧsubstantial changes to the Group’s accounting policies, ߎ̯එ྆ؿผ߮ ɀཌྷཌྷʄαɊɀכfi nancial statement disclosures or presentation as compared ֶеͶʿβၤᇁႇ to that used in the preparation of the fi nancial statements as ˂ɍɊȹˀʥ࿀ϭɀཌྷཌྷʄαɊɀ˂ ֺԚّ͂ٲof and for the year ended 31 December 2005. ɍɊȹˀ˅α۹ؿল৻ం ޚˈτྡྷሔᛰ৽e
82 უ৷ᇯ഼αం2006 2. SUMMARY OF SIGNIFICANT 2. ࠇ߬ผ߮ܧ೪ล߬ᙩ ACCOUNTING POLICIES CONTINUED
(a) Basis of preparation (Continued) D ᇁႇਥๅᙩ LL ֆ̰́ࢽ˘̯එ྆Ԏಲొξઔढ़ؿๅ ii) Standards and interpretations to existing standards that) ؿᘷڬʥଊτๅڬ are not yet effective and have not been early adopted by the Group ˰ؿᘷɰڬʥྦྷଊτๅڬThe following standards and interpretations to existing ˞Ɏๅ ɀཌྷཌྷʒαʄ˂ȹˀכstandards have been published that are mandatory for the ೕc̯එ྆ ౨ංྡྷ܃նؿผ߮౨ංֶ༖܃Group’s accounting periods beginning on or after 1 May ֶɾ 2006 or later periods that the Group has not early adopted: ϷcϤ̯එ྆Ԏಲొξઔढ़i
7໔ল৻ɮڬHKFRS 7, Financial instruments: Disclosures, and the • ࠗಋল৻ంйๅ • ڬcomplementary Amendment to HKAS 1, Presentation of Ԯiׄᚉ cʥྦྷࠗಋผ߮ๅ ؿеͶÐ༅̯ׄᚉٲFinancial Statements – Capital Disclosures (effective for 1໔ল৻ం ɀཌྷཌྷȼαȹ˂ȹכannual periods beginning on or after 1 January 2007). ؿ˨࠳߯ նؿα۹౨ං́ࢽe܃HKFRS 7 introduces new disclosures relating to fi nancial ˀֶɾ 7໔ʵɃτᗐڬinstruments. This standard does not have any impact on ࠗಋল৻ంйๅ Ԏಲڬthe classification and valuation of the Group’s financial ল৻ɮԮؿณׄᚉeϊඖๅ instruments; ྦྷ̯එ྆ল৻ɮԮؿʗᗘʥЅࠤଐ ́ͨЄᄧᚊh
• HK(IFRIC)-Int 8, Scope of HKFRS 2 (effective for annual • ࠗಋਝল৻ంйᘷկࡗผÐ 2ڬperiods beginning on or after 1 May 2006). HK(IFRIC)- ᘷ8໔ࠗಋল৻ంйๅ ɀཌྷཌྷʒαʄ˂ȹכInt 8 requires consideration of transactions involving the ໔ؿᆲ նؿα۹౨ං́ࢽe܃issuance of equity instruments – where the identifiable ˀֶɾ consideration received is less than the fair value of the ࠗಋਝল৻ంйᘷկࡗผÐ equity instruments issued - to establish whether or not ᘷ8໔ஃցࣹʥೕϷٖ̯ɮԮ ˤძÐ࠱ֺνՅɾ˿ᖫПˤמthey fall within the scope of HKFRS 2. The Group will ɾ͚ ֺೕϷٖ̯ɮԮɾʔ̡ࠤÐכapply HK(IFRIC)-Int 8 from 1 January 2007, but it is not ძГ ڬࠗಋল৻ంйๅכexpected to have any impact on the Group’s consolidated ᆢցԯܰЯᙔ fi nancial statements; and 2໔ؿᆲe̯එ྆ੀϬɀཌྷཌྷ ȼαȹ˂ȹˀᎶ͂ࠗಋਝল ৻ంйᘷկࡗผÐᘷ8໔c ད౨ԯੀɺผྦྷ̯එ྆ؿ၃ল ଐ́ͨЄᄧᚊhʥٲ৻ం
Phoenix Annual Report 2006 83 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
2. SUMMARY OF SIGNIFICANT 2. ࠇ߬ผ߮ܧ೪ล߬ᙩ ACCOUNTING POLICIES CONTINUED
(a) Basis of preparation (Continued) D ᇁႇਥๅᙩ LL ֆ̰́ࢽ˘̯එ྆Ԏಲొξઔढ़ؿๅ ii) Standards and interpretations to existing standards that) ؿᘷᙩڬʥଊτๅڬ are not yet effective and have not been early adopted by the Group (Continued) • HK(IFRIC)-Int 10, Interim Financial Reporting and • ࠗಋਝল৻ంйᘷկࡗผÐ Impairment (effective for annual periods beginning on ᘷ10໔ɻ౨ল৻ంйʥಕࠤ ܃ɀཌྷཌྷʒαɊȹ˂ȹˀֶɾכ or after 1 November 2006). HK(IFRIC)-Int 10 prohibits the impairment losses recognised in an interim period նؿα۹౨ං́ࢽeࠗಋਝ on goodwill, investments in equity instruments and ল৻ంйᘷկࡗผÐᘷ investments in financial assets carried at cost to be 10໔ஃցΕɻ౨ంйᆢႏਆᙷdٖ ι̯Ͷሏؿল৻ܘreversed at a subsequent balance sheet date. The Group ̯ɮԮɾҙ༅ʥ ့ˀ܃ˀכwill apply HK(IFRIC)-Int 10 from 1 January 2007, but ༅ଐɾಕࠤᑋฌɺ it is not expected to have any impact on the Group’s ʀ˞Αᅆe̯එ྆ੀϬɀཌྷཌྷȼα consolidated fi nancial statements. ȹ˂ȹˀᎶ͂ࠗಋਝল৻ం йᘷկࡗผÐᘷ10໔c ད౨ԯੀɺผྦྷ̯එ྆ؿ၃ল ଐ́ͨЄᄧᚊeٲ৻ం
LLL ֆ̰́ࢽ˘ၤ̯එ྆Ꮺพ৻ಲᗐؿ iii) Interpretations to existing standards that are not yet) ؿᘷڬeffective and not relevant for the Group’s operations ଊτๅ ؿᘷɰ˰ೕc̯එ྆ڬThe following interpretations to existing standards have been ˞Ɏଊτๅ ն܃ɀཌྷཌྷʒαʄ˂ȹˀֶɾכpublished and are mandatory for the Group’s accounting ౨ංྡྷϷcၤ̯܃periods beginning on or after 1 May 2006 or later periods ؿผ߮౨ංֶ༖ but are not relevant for the Group’s operations: එ྆ؿᏪพ৻ಲᗐi
• HK(IFRIC)-Int 7, Applying the Restatement Approach • ࠗಋਝল৻ంйᘷկࡗผÐ ڬunder HKAS 29, Financial Reporting in Hyperinfl ationary ᘷ7໔࣓ኣࠗಋผ߮ๅ รঢ়ഌᏜΔਂɻؿল৻כEconomies (effective from 1 March 2006). HK(IFRIC)- 29໔ Int 7 provides guidance on how to apply requirements ంйᎶ͂ࠇͶؒϬɀཌྷཌྷʒα of HKAS 29 in a reporting period in which an entity ɍ˂ȹˀ́ࢽeࠗಋਝল৻ identifi es the existence of hyperinfl ation in the economy ంйᘷկࡗผÐᘷ7໔߯ ం౨ංᎶ͂ࠗಋผ͇כΣЄྡྷע of its functional currency, when the economy was not ڏ˞ʵcܞ29໔ஃցɾڬhyperinfl ationary in the prior period. As none of the group ߮ๅ ༦֡౨כentities have a currency of a hyperinfl ationary economy ԯ˲ॶஒྫྷֺΕᏜΔਂ as its functional currency, HK(IFRIC)-Int 7 is not relevant ංԎಲรঢ়ഌࣂc˿ᖫПᏜ එ྆כto the Group’s operations; and Δਂรঢ়ഌؿΦΕֲeͅ Έྡྷลಲรঢ়ഌᏜΔਂؿஒ ࠗಋਝܨАݯԯ˲ॶஒྫྷcྫྷ ল৻ంйᘷկࡗผÐᘷ7 ໔ၤ̯එ྆ؿᏪพ৻ಲᗐhʥ
84 უ৷ᇯ഼αం2006 2. SUMMARY OF SIGNIFICANT 2. ࠇ߬ผ߮ܧ೪ล߬ᙩ ACCOUNTING POLICIES CONTINUED
(a) Basis of preparation (Continued) D ᇁႇਥๅᙩ LLL ֆ̰́ࢽ˘ၤ̯එ྆Ꮺพ৻ಲᗐؿ iii) Interpretations to existing standards that are not yet) ؿᘷᙩڬeffective and not relevant for the Group’s operations ଊτๅ (Continued) • HK(IFRIC)-Int 9, Reassessment of embedded derivatives • ࠗಋਝল৻ంйᘷկࡗผÐ (effective for annual periods beginning on or after ᘷ9 ໔ࠇЅʑສβߪ́ɮ ɀཌྷཌྷʒαʒ˂ȹˀֶɾכJune 2006). HK(IFRIC)-Int 9 requires an entity to Ԯ 1 նؿα۹౨ං́ࢽeࠗಋਝ܃ assess whether an embedded derivative is required to be separated from the host contract and accounted for ল৻ంйᘷկࡗผÐᘷ as a derivative when the entity fi rst becomes a party to 9 ໔߬ұྡྷിЅʑສβߪ́ɮԮ the contract. Subsequent reassessment is prohibited ܰЯၤ˚ʗᔴcԎྡྷࠖ unless there is a change in the terms of the contract ωιݯؿ߯ʿࣂɃሏͶݯ that signifi cantly modifi es the cash fl ows that otherwise ߪ́ɮԮeԯ܃ɺ൬ϷࠇЅc ɾૈಁˮଊᛰҡcԎɣఝڈ would be required under the contract, in which case ݚټreassessment is required. As none of the group entities ࠳߯ඖɎ̊Ϸֺɾଊ АˮࠇЅeڬϊੱؗɎcכhave changed the terms of their contracts, HK(IFRIC)-Int ൴c එ྆Έྡྷลಲҡҝԯؿכͅ .is not relevant to the Group’s operations 9 ૈಁcܨࠗಋਝল৻ంйᘷ կࡗผÐᘷ 9 ໔ၤ̯එ྆ؿ Ꮺพ৻ಲᗐe
Phoenix Annual Report 2006 85 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
2. SUMMARY OF SIGNIFICANT 2. ࠇ߬ผ߮ܧ೪ล߬ᙩ ACCOUNTING POLICIES CONTINUED
(a) Basis of preparation (Continued) D ᇁႇਥๅᙩ ɀཌྷཌྷʒάࢽၤ̯එ྆Ꮺพכ LY iv) Standards, amendments and interpretations effective in) d࠳߯ʥᘷڬbut not relevant for the Group’s operations ৻ಲᗐؿๅ 2006 ɀཌྷཌྷʒכd࠳߯ʥᘷڬThe following standards, amendments and interpretations ˞Ɏๅ նؿผ߮౨ංྡྷ܃are mandatory for accounting periods beginning on or αȹ˂ȹˀֶɾ after 1 January 2006 but are not relevant to the Group’s Ϸcၤ̯එ྆ؿᏪพ৻ಲᗐi operations:
19໔࠳߯ÐڬHKAS 19 (Amendment) – Actuarial Gains and Losses, • ࠗಋผ߮ๅ • ᑋdඑི྆߮ʥׄᚉhޔGroup Plans and Disclosures; ၀့
21໔࠳߯ÐڬHKAS 21 (Amendment) – Net Investment in a Foreign • ࠗಋผ߮ๅ • Operation; ࣵ̔พ৻ҙ༅૱ᔾh
39໔࠳߯ÐڬHKAS 39 (Amendment) – Cash Flow Hedge Accounting • ࠗಋผ߮ๅ • ݚ൴ྦྷҿټؿଊמof Forecast Intragroup Transactions; དಡඑ྆ʑ͚ ผ߮ؒh
39໔ʥࠗಋল৻ంڬHKAS 39 and HKFRS 4 (Amendment) – Financial • ࠗಋผ߮ๅ • 4໔࠳߯Ðল৻ኪڬGuarantee Contracts; йๅ hړ
6໔ᘊଐ༅ڬHKFRS 6, Exploration for and Evaluation of Mineral • ࠗಋল৻ంйๅ • Resources; ؿৼʥിЅh
1໔ ࠳ڬHKFRS 1 (Amendment) – First-time Adoption of Hong • ࠗಋল৻ంйๅ • ڬKong Financial Reporting Standards and HKFRS 6 ߯Ðࠖωઔढ़ࠗಋল৻ంйๅ 6໔࠳ڬAmendment), Exploration for and Evaluation of Mineral ʥࠗಋল৻ంйๅ) Resources; ߯ᘊଐ༅ؿৼʥിЅh
Ðᘷ5໔ڬHKFRS–Int 5, Rights to Interests arising from • ࠗಋল৻ంйๅ • ֺଐټDecommissioning, Restoration and Environmental ༜Аdనࡈʥྊ࠳నਥ Rehabilitation Funds; and ́ᚬऩؿᚬСhʥ
• HK(IFRIC)–Int 6, Liabilities arising from Participating • ࠗಋਝল৻ంйᘷկࡗผÐ in a Specific Market – Waste Electrical and Electronic ᘷ6໔ၤऋց̟Ðᄠૃཋ Equipment. ኂʥཋɥஉௐֺଐ́ؿ߲ඦe
86 უ৷ᇯ഼αం2006 2. SUMMARY OF SIGNIFICANT 2. ࠇ߬ผ߮ܧ೪ล߬ᙩ ACCOUNTING POLICIES CONTINUED
(b) Consolidation E ၃ ᙔʔ̇࿀ڃʔ̇ʥԯ̯ܢ˳ٲThe consolidated financial statements include the financial ၃ল৻ం eٲstatements of the Company and all its subsidiaries made up to ϭɊɀ˂ɍɊȹˀ˅ؿল৻ం 31 December.
ᙔʔ̇ڃ L i) Subsidiaries) එ྆τᚬஃဳԯল৻̯ܞᙔʔ̇Ƚڃ Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the ʥᏪ༜ܧ೪ԎܞઁԹȹ˸˞ɐ ऋП͌ؿྡྷܢ˳financial and operating policies generally accompanying ҙᚬؿֺτྡྷ a shareholding of more than one half of the voting rights. eЅ̯߮එ྆ܰЯઁԹ̊ȹྡྷ The existence and effect of potential voting rights that are ࣂcϣᄬଊࣂ˿ϷԚֶ˿ᔝؿ currently exercisable or convertible are considered when ᅶΕҙᚬؿΦΕʥᄧᚊe assessing whether the Group controls another entity.
ᙔʔ̇ȽϬԯઁԹᚬᔝଫϭ̯එ྆ڃ Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated ɾˀ౨Ͳᅕ၃cԎϬઁԹᚬୄ˅ from the date that control ceases. ˀ౨၃e
The purchase method of accounting is used to account for ̯එ྆ઔ͂νᑪผ߮ؒݯ̯එֺ྆ν מᙔʔ̇Ͷሏeνᑪι̯ݯ͚ڃthe acquisition of subsidiaries by the Group. The cost of ᑪؿ an acquisition is measured as the fair value of the assets ˀֺ˟༅ଐؿʔ̡ࠤdֺೕϷؿٖ given, equity instruments issued and liabilities incurred ̯ɮԮʥֺೕֶֻ́ኪɾ߲ඦc˱ɐ νᑪԑඖؿι̯eΕਆพכઅᓊᙔق or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifi able assets acquired ԡ༦ೡɻֺνᑪɾ˿ፑП༅ଐdֺ νᑪכand liabilities and contingent liabilities assumed in a ֻኪɾ߲ඦʥֶಳ߲ඦcя ү߮൴cϤˇٱԯʔ̡ࠤАˮܘbusiness combination are measured initially at their fair ˀ values at the acquisition date, irrespective of the extent of ߮ʥͨЄʭᅕٖᚬऩeνᑪι̯൚ any minority interest. The excess of the cost of acquisition ˮ̯එ྆ᎶЌֺνᑪɾ˿ፑП૱༅ଐ over the fair value of the Group’s share of the identifiable ʔ̡ࠤɾᔾȽͶАਆᙷe࠱νᑪι ᙔʔ̇ɾڃඑ྆ᎶЌֺνᑪ̯כnet assets acquired is recorded as goodwill. If the cost of ̯Г τᗐᔾੀڬacquisition is less than the fair value of the Group’s share ˿ፑП૱༅ଐʔ̡ࠤc ʑᆢႏeٲઅΕνऩق of the identifi able net assets of the subsidiary acquired, the difference is recognised directly to the income statement. dᔾʥඑ྆ʑʔ̇ං͚מInter-company transactions, balances and unrealised gains ʔ̇ං͚ ؿ̰ྡྷଊνऩȽʀ˞ྦྷሻeʑ͚מ .on transactions between group companies are eliminated ొ˿מ͚ڈଐ́ؿ̰ྡྷଊᑋฌcמ Unrealised losses are also eliminated unless the transaction ͛ڬᔝଫ༅ଐɾಕࠤcЯעprovides evidence of an impairment of the asset transferred. Ԝᖬኣᖬ ೪ɰܧᙔʔ̇ؿผ߮ڃሻeྦྷא˞Accounting policies of subsidiaries have been changed ʀ ၤ̯එֺ྆ઔړwhere necessary to ensure consistency with the policies Аˮ̦߬ሁኬc˞ᆢ adopted by the Group. ͂ɾผ߮ܧ೪ȹߎe
Phoenix Annual Report 2006 87 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
2. SUMMARY OF SIGNIFICANT 2. ࠇ߬ผ߮ܧ೪ล߬ᙩ ACCOUNTING POLICIES CONTINUED
(b) Consolidation (Continued) E ၃ᙩ ᙔʔ̇ᙩڃ L i) Subsidiaries (Continued)) ᙔʔ̇ڃכcٲʔ̇ؿ༅ଐ߲ඦ̯כ In the Company’s balance sheet the investments in ι̯ܘᙔʔ̇ಁඖȽڃsubsidiaries and amount due from a subsidiary are stated ؿҙ༅ʥᎶν at cost less provision for impairment losses. The results of κಕࠤᑋฌᅆௐͶሏe̯ʔ࣓̇ኣ ᙔʔ̇ؿพڃsubsidiaries are accounted for by the Company on the basis ɰνʥᎶνٖࢠ့߮ of dividends received and receivable. ᐜe
(ii) Jointly controlled entities LL ͳઁԹྡྷ ᚬऩܘͳઁԹྡྷؿᚬऩכThe Group’s interests in jointly controlled entities are ̯එ྆ ι̯ᆢႏeܘүٱaccounted for by the equity method of accounting and are ့ؒ߮Ԏ initially recognised at cost.
ฌ܃The Group’s share of its jointly controlled entities’ post- ̯එ྆ᚫЌͳઁԹྡྷؿνᑪ ʑᆢႏc̯එ྆ᎶЌνᑪٲνऩכacquisition profits or losses is recognised in the income ऩ ௐʑᆢႏeୃዶνכؿௐᛰ৽܃ statement, and its share of post-acquisition movements in ҙ༅ؿሏࠍࠤАˮሁܘᛰ৽Ƚ܃reserves is recognised in reserves. The cumulative post- ᑪ acquisition movements are adjusted against the carrying ኬe̯එ྆ᎶЌͳઁԹྡྷؿᑋ ᎶνಁඖړЄԯˢ̰ኪͨܢ˳amount of the investment. When the Group’s share of losses ฌ ͳઁԹྡྷؿᚬऩכin a jointly controlled entity equals or exceeds its interest in ೩ɘֶ൚༦ԯ the jointly controlled entity, including any other unsecured ࣂc̯එ྆Ԏɺᆢႏ൬ȹүᑋฌc ˟ͳઁԹྡྷʻٲೕ߲́ඦֶˤڈ ,receivables, the Group does not recognise further losses АПሃeڬunless it has incurred obligations or made payments on ಁඖ behalf of the jointly controlled entity.
ϤמUnrealised gains on transactions between the Group and ̯එ྆ၤԯͳઁԹྡྷɾං͚ ͳઁכits jointly controlled entities are eliminated to the extent ଐ́ɾ̰ᛰଊνऩΕ̯එ྆ of the Group’s interest in the jointly controlled entities. Թྡྷɾᚬऩᆲʑྦྷሻḛᛰଊᑋ Ԝᖬኣᖬొמ͚ڈUnrealised losses are also eliminated unless the transaction ฌ͛ʀ˞ྦྷሻc АПሃeͳઁڬᔝଫ༅ଐɾಕࠤע .provides evidence of an impairment of the asset transferred Accounting policies of jointly controlled entities have been Թྡྷɾผ߮ܧ೪ɰАˮ̦߬ሁኬc ೪ȹߎeܧၤ̯එֺ྆ઔ͂ɾړchanged where necessary to ensure consistency with the ˞ᆢ policies adopted by the Group.
၃כᑋȽޔͳઁԹྡྷؿᚫᑁכ Dilution gains and losses in jointly controlled entities are ʑᆢႏeٲrecognised in the consolidated income statement. νऩ
88 უ৷ᇯ഼αం2006 2. SUMMARY OF SIGNIFICANT 2. ࠇ߬ผ߮ܧ೪ล߬ᙩ ACCOUNTING POLICIES CONTINUED
(c) Segment reporting F ʗᗘంй ৻ؿȹୂ༅רֶۂԑొԜଐܞA business segment is a group of assets and operations engaged พ৻ʗᗘ in providing products or services that are subject to risks and ଐʥพ৻cϤୂ༅ଐʥพ৻ؿࠓ፮ʥΑ ԯˢพ৻ʗᗘeΔਂʗᗘȽΕܺכreturns that are different from those of other business segments. ంτП ৻cרֶۂA geographical segment is engaged in providing products or ȹऋցᏜྊɎԑొԜଐ ΕԯˢᏜכservices within a particular economic environment that are Ϥʗᗘؿࠓ፮ʥΑంτП subject to risks and returns that are different from those of ྊᏪؿʗᗘe segments operating in other economic environments.
(d) Foreign currency translation G ̔ྫྷ့ (i) Functional and presentation currency L ˲ॶʥеంஒྫྷ ɾඖܢ˳ֺٲItems included in the financial statements of each of the ̯එ྆Έྡྷɾল৻ం ྡྷᏪֺΕɾ˚߬ᏜܘGroup’s entities are measured using the currency of the ͌cȽ primary economic environment in which the entity operates ྊɾஒྫྷ˲ॶஒྫྷ߮ ൴ e ၃ ಋྫྷеͶcಋྫྷݯ̯ʔ˞ٲthe “functional currency”). The consolidated financial ল৻ం) statements are presented in HK dollars, which is the ̇ɾ˲ॶʥеంஒྫྷe Company’s functional and presentation currency.
ʥמLL ͚ ii) Transactions and balances) ˀɾଊϷමଅמ͚ܘяמForeign currency transactions are translated into the ̔ྫྷ͚ ܘ့ʥמfunctional currency using the exchange rates prevailing at ့ݯ˲ॶஒྫྷeΐɐ߸͚ the dates of the transactions. Foreign exchange gains and ့ˀɾමଅЙ˞̔ྫྷ߮ࠤɾஒྫྷ כlosses resulting from the settlement of such transactions and ༅ଐʥ߲ඦϤଐ́ɾමЙฌऩcя ᆢႏeٲfrom the translation at year-end exchange rates of monetary νऩ assets and liabilities denominated in foreign currencies are recognised in the income statement.
ஒྫྷֲল৻༅ଐʥ߲ඦؿ့ᔾڈ Translation differences on non-monetary financial assets and liabilities are reported as part of the fair value gain or ȽеంͶݯʔ̡ࠤฌऩȹͫeτᗐ ʔ̡ܘஒྫྷֲল৻༅ଐʥ߲ඦΣڈ loss. Translation differences on non-monetary financial τԎΕฌऩሏ୮ଉؿٖ̯ؿܛassets and liabilities such as equities held at fair value ࠤ ฌऩሏᆢႏݯʔ̡ࠤฌऩכthrough profi t or loss are recognised in profi t or loss as part ့ᔾя ஒྫྷֲল৻༅ଐΣڈof the fair value gain or loss. Translation differences on ȹͫeτᗐ non-monetary financial assets such as equities classified ʗᗘݯ˿Ԝሻਕؿٖ̯я߮Ƀᚬऩ as available for sale are included in the available-for-sale ɻ˿Ԝሻਕௐʑe reserve in equity.
Phoenix Annual Report 2006 89 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
2. SUMMARY OF SIGNIFICANT 2. ࠇ߬ผ߮ܧ೪ล߬ᙩ ACCOUNTING POLICIES CONTINUED
(d) Foreign currency translation (Continued) G ̔ྫྷ့ᙩ (iii) Group companies LLL එ྆ʔ̇ The results and financial position of all the group entities ˲ॶֲஒྫྷၤеͶஒྫྷɺؿֺτඑ (none of which has the currency of a hyperinflationary ྆ྡྷΈྡྷяಲรঢ়ഌᏜΔ ˞ܘؗяرeconomy) that have a functional currency different from the ਂؿஒྫྷؿพᐜʥল৻ presentation currency are translated into the presentation Ɏʿ့ؒݯеͶஒྫྷi currency as follows:
ֺеͶؿ༅ଐʥٲa) assets and liabilities for each balance sheet presented (a) Ұͫ༅ଐ߲ඦ) ɾ့ˀٲare translated at the closing rate at the date of that ߲ඦя˞༅ଐ߲ඦ balance sheet; ɾν̟මଅ့h
ܘɾνɃʥʻˮඖ͌ٲb) income and expenses for each income statement (b) Ұͫνऩ) ̡яමଅྦྷڈare translated at average exchange rates (unless ̡яමଅ့ ڈˀଊϷමଅɾୃ߮ᄧᚊԎמthis average is not a reasonable approximation of ͚ මଅcΕϊੱٶthe cumulative effect of the rates prevailing on the ܰȹଉؿઅ ˀؿමמtransaction dates, in which case income and expenses ؗɎνɃʥʻˮȽ͚͂ are translated at the exchange rates on the dates of the ଅ့hʥ transactions); and c) all resulting exchange differences are recognised as a (c) ֺኒߎؿȹʘමЙᔾȽᆢႏݯ) separate component of equity. ᚬऩؿዟ͓ȹඖe
૱၃ሏ͌ࣂc့ࣵ̔พ৻ҙ༅כ On consolidation, exchange differences arising from the translation of the net investment in foreign operations ᔾࣂଐ́ؿමЙᔾȽͶɃᚬऩʑe are taken to equity. When a foreign operation is partially ࣵ̔พ৻ͫˮᜑֶਕˮࣂcͶ ɻᆢٲνऩכdisposed of or sold, exchange differences that were ɃᚬऩʑؿමЙᔾȽ recorded in equity are recognised in the income statement ႏݯˮਕฌऩȹͫe as part of the gain or loss on sale.
The functional currency of the jointly controlled entities in ̯එֺ྆ҙ༅ؿͳઁԹྡྷؿ˲ॶ ͳઁԹྡྷכwhich the Group has invested is the Renminbi. The Group’s ஒྫྷݯɁ̵ྫྷe̯එ྆ ့ˀؿν̟ܘinvestment in the net assets of the jointly controlled entities ༅ଐ૱ࠤؿҙ༅Ƚ are translated at the closing rate at the date of the balance මଅ൬Ϸ့e̯එ྆ᚫЌͳઁԹ ᚬऩɃሏؿܘsheet. The Group’s share of profits/(losses) of the jointly ྡྷؿึСʼnᑋฌȽ controlled entities are translated at the average exchange ̡яමଅ൬Ϸ့eֺኒߎؿȹʘම rates for equity accounting purposes. All resulting exchange ЙᔾяᆢႏАᚬऩؿዟ͓ȹඖe differences are recognised as a separate component of equity.
90 უ৷ᇯ഼αం2006 2. SUMMARY OF SIGNIFICANT 2. ࠇ߬ผ߮ܧ೪ล߬ᙩ ACCOUNTING POLICIES CONTINUED
พdᄥָʥஉௐذ H e) Property, plant and equipment) ዃ̌ι̯κҗᓿܘพdᄥָʥஉௐȽذ Property, plant and equipment are stated at historical cost less depreciation and impairment losses. Historical cost includes ʥಕࠤᑋฌ܃Ͷሏeዃ̌ι̯˳ܢνᑪ અᎶЌؿʻeقexpenditure that is directly attributable to the acquisition of the ೩ඖ͌ items.
Subsequent costs are included in the asset’s carrying amount or ඩඖ͌τᗐɾ̰ԞᏜСऩτ˿ॶݚɃ recognised as a separate asset, as appropriate, only when it is ̯එ྆ʥඖ͌ι̯ॶ˿ቌ߮൴ࣂcԯ܃ι probable that future economic benefi ts associated with the item ̯ʿ߮Ƀ༅ଐሏࠍࠤֶᆢႏݯ̊̔ȹඖ༅ ଐכڬwill fl ow to the Group and the cost of the item can be measured ଐΣሬ͂eֺτԯˢၐ࠳ʥၐᙶ κeٲ౨ංʑΕνऩܧreliably. All other repairs and maintenance are charged in the ́ؿল income statement during the fi nancial period in which they are incurred.
ɺผ߮ొکԯѧιʥ˿Ԛ͂ɾכ༅ଐۺNo depreciation is provided on assets under construction until Ε พdᄥָʥஉௐɾҗᓿȽԚذthey are completed and are available for use. Depreciation of җᓿeԯˢ Ѕ߮כᇃ့ؒ߮cగ֤೩ɾძࠤق͂ other property, plant and equipment is calculated using the straight-line method to allocate cost to their residual values over ˿Ԛ͂αࠉʑʗΣɎi their estimated useful lives, as follows:
Buildings 3.33% ᅢΧ 3.33% ैܘพ࠳ 15%ֶذLeasehold improvements 15% or over the terms ै༉ of the leases α౨ Furniture and fi xtures 15% – 20% ்ᯫʥສ 15% – 20% Broadcast operations and ᄤᅌᏪ༜ʥ 20% other equipment 20% ԯˢஉௐ Motor vehicles 20% Ӂӹ 20%
Ұ့ˀc༅ଐɾძࠤʥ˿Ԛ͂כ The assets’ residual values and useful lives are reviewed, and ሬੱؗɎАˮሁכadjusted if appropriate, at each balance sheet date. αࠉяผᄗቇcԎ ኬe
ᔾټԯЅ߮˿νΑכAn asset’s carrying amount is written down immediately to its ࠱ܺ༅ଐؿሏࠍࠤɣ ഽ2(i)c༅ଐɾሏࠍࠤੀЩࣂಕࠤڃ recoverable amount if the asset’s carrying amount is greater than ᔾeټits estimated recoverable amount (Note 2(i)). ϭԯ˿νΑ
Gains and losses on disposals are determined by comparing the ˮਕฌऩȽΕੀֺಁඖၤሏࠍࠤАˈ༖ ᆢႏeٲνऩכᔤցcԎ܃ proceeds with the carrying amount and are recognised in the income statement.
Phoenix Annual Report 2006 91 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
2. SUMMARY OF SIGNIFICANT 2. ࠇ߬ผ߮ܧ೪ล߬ᙩ ACCOUNTING POLICIES CONTINUED
ʥೕࢄι̯ټܘพذ I f) Property deposit and development costs) ι̯κͨЄಕܘʥೕࢄι̯Ƚټܘพذ Property deposit and development costs are carried at cost less any impairment losses. ࠤᑋฌͶሏe
ᚬخJ ᑪɃຝ͌ʥཋᄧ g) Purchased programme and fi lm rights) ι̯κୃዶᚫܘᚬȽخPurchased programme and film rights are recorded at cost ᑪɃຝ͌ʥཋᄧ less accumulated amortisation and any impairment losses. The ሻʥͨЄಕࠤᑋฌͶሏeᑪɃຝ͌ʥཋᄧ ೩ᑪɃຝ͌ʥཋᄧࠖωʥכᚬι̯خ cost of purchased programme and film rights is expensed in ᚬஃخতሏcֶ࣓ኣٲࣂΕνऩܮthe income statement either on the fi rst and second showing of ɀωᅌ خΕڬΛωcܮᚬࠉ౨ʑᅌخsuch purchased programme and film rights or amortised over ցc˿Ε the license period if the license allows multiple showings within ᚬࠉ౨ʑᚫሻe the license period.
Purchased programme and fi lm rights with a remaining license Ɏஈ˿౨ݯɊɀ˂ֶ˞Ɏؿຝ͌ʥཋ ᚬͶАݚ৽༅ଐeخperiod of twelve months or less are classifi ed as current assets. ᄧ
(h) Self-produced programmes K Ϭႇຝ͌ Self-produced programmes are stated at cost less any Ϭႇຝ͌Ƚܘι̯κͨЄಕࠤᑋฌͶ અႇАʻˮʥሬˈԝؿقܢ˳impairment losses. Cost comprises direct production ሏeι̯ ؿຝ͌ੀЩࣂૃיexpenditures and an appropriate portion of production ႇА͂eႇАɻԎሯ ʑ࿁ሻcֶ࠱ϊ೩ຝ͌˿ᑨՅɾٲνऩכ overheads. Programmes in production that are abandoned are ټੀι̯࿁ಕϭ˿νΑڬι̯cכwritten off in the income statement immediately, or when the νऩГ cϤֺଐܮ౨ʑᅌכrevenue to be generated by these programmes is determined ᔾeɰѧιຝ͌ੀ cٲʔβ့߮ԎতɃνऩܘto be lower than cost, the cost is written down to recoverable ́ɾι̯ੀผ ౨ංɾι̯eיamount. Completed programmes will be broadcast over a short ˞࿁ሻᅌ period of time and their costs are expensed in the income statement in accordance with a formula computed to write off the cost over the broadcast period.
ল৻༅ଐڈᙔʔ̇dͳઁԹྡྷʥڃכ L i) Impairment of investments in subsidiaries, jointly controlled) entities and non-fi nancial assets ؿҙ༅ಕࠤ Assets that have an indefi nite useful life or are not yet available ኟτɺᆢց˿Ԛ͂αࠉֶֆ̰ॶԚ͂ؿ༅ for use are not subject to amortisation and are tested annually ଐяɺผʀ˞ᚫሻcผҰαАಕࠤಡ for impairment. Assets that are subject to amortisation are eˮଊԑֶͧੱؗҝᛰᛷ̰̦͐ॶν ผᏎদᚫሻ༅ଐɾಕࠤeಕڬreviewed for impairment whenever events or changes in Αሏࠍࠤc ᔾټ༅ଐሏࠍࠤ൚༦ԯ˿νΑܘcircumstances indicate that the carrying amount may not be ࠤᑋฌ recoverable. An impairment loss is recognised for the amount Щ༅ଐʔ̡ࠤಕˮਕι̯ʥԚ͂ძࠤԭ by which the asset’s carrying amount exceeds its recoverable ّɾ༖ঢ়ّɾᔾᆢႏeగിЅಕࠤϤ ˋݚ൴ɾГټዟ͓ʗፑଊ˿ܘamount. The recoverable amount is the higher of an asset’s fair Ӱc༅ଐ ଐ́௰ϽʗᗘeሯՇಕࠤɾ༅ټvalue less costs to sell and value in use. For the purposes of ̡ଊ Ұ͇ంˀ౨Ꮞদܰכassessing impairment, assets are grouped at the lowest levels ଐਆᙷ̔ผ for which there are separately identifiable cash flows (cash- Я˿АˮಕࠤΑᅆe generating units). Assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.
92 უ৷ᇯ഼αం2006 2. SUMMARY OF SIGNIFICANT 2. ࠇ߬ผ߮ܧ೪ล߬ᙩ ACCOUNTING POLICIES CONTINUED
(j) Financial assets M ল৻༅ଐ ܘThe Group classifies its financial assets in the following ̯එ྆ੀԯল৻༅ଐʗᗘݯ˞ɎᗘПi categories: at fair value through profit or loss, loans and ʔ̡ࠤͶሏԎΕฌऩሏ୮ଉd൘ಁʥᎶν receivable and available-for-sale. The classification depends ಁඖ˞ʥ˿ԜሻਕeʗᗘʿؒȽ഼˝νᑪ ωᆢٱכon the purposes for which the financial assets were acquired. ল৻༅ଐɾ͌ؿϤցeဳଉᄙผ Management determines the classifi cation of its fi nancial assets ႏࣂᔤցԯল৻༅ଐɾʗᗘe at initial recognition.
ʔ̡ࠤͶሏԎΕฌऩሏ୮ଉؿল৻ܘ L i) Financial assets at fair value through profi t or loss) ༅ଐ Аൕሒؿল৻༅ଐc˞ʥܛThis category has fi nancial assets held for trading, and those ϊᗘПτ ʔ̡ࠤͶሏԎΕฌऩሏ୮ଉؿܘٱdesignated at fair value through profi t or loss at inception. A financial asset is classified in this category if acquired ল৻༅ଐeΣֺνᑪ༅ଐ˚߬ܰݯȿ ցݯϊᗘܞprincipally for the purpose of selling in the short term or if Ε౨ʑˮਕֶΣဳଉᄙ ڈso designated by management. Derivatives are classifi ed as Пcল৻༅ଐȽིʗݯϊᗘПe ߪڬցݯྦྷҿඖ͌cЯܞheld for trading unless they are designated as hedges. ߪ́ɮԮȽ АൕሒeܛɮԮ͛ʗᗘݯ́
(ii) Loans and receivables LL ൘ಁʥᎶνಁඖ Loans and receivables are non-derivative financial assets ൘ಁʥᎶνಁඖȽԮτ՞ցֶ˿ᆢց ڈᔾ˘ɺผΕݠᙺ̟ɐ̟ؿټwith fixed or determinable payments that are not quoted ˟ಁ in an active market. They are included in current assets, ߪ́ল৻༅ଐeϊ೩ඖ͌Ƚ߮Ƀݚ৽ except for those with maturities greater than 12 months ༅ଐɾʑcЎ့ͅˀ߮Ɋɀ ݚ৽༅ڈʗݯིڬʿԷ౨ؿ༅ଐ܃˂ -after the balance sheet date. These are classifi ed as non current assets. Items accounted for as loans and receivables ଐeɃሏͶА൘ಁʥᎶνಁඖؿඖ͌ ؿᎶνሏಁ˞ʥདٲare also included in accounts receivable, and prepayments, ͛߮Ƀ༅ଐ߲ඦ ʥԯˢᎶνಁඖʑeټܘdeposits and other receivables in the balance sheet. ˟ಁඖd
(iii) Available-for-sale fi nancial assets LLL ˿Ԝሻਕল৻༅ଐ ցݯϊᗘПֶܞAvailable-for-sale financial assets are non-derivatives that ˿Ԝሻਕল৻༅ଐȽ ߪ́ɮڈare either designated in this category or not classified in ԎಲʗᗘݯͨЄԯˢᗘПɾ ့ˀ߮ɊɀכဳଉᄙᏃڈany of the other categories. They are included in non- Ԯe ڬcurrent assets unless management intends to dispose of ˂ʑˮਕ˿Ԝሻਕল৻༅ଐcЯ ݚ৽༅ଐe˿Ԝሻڈthe investment within 12 months of the balance sheet date. ඖҙ༅Ƚ߮Ƀ ࠗಋྊ̔ӝɁೕϷّؿܞAvailable-for-sale financial assets represented unlisted ਕল৻༅ଐ ɐ̟ᖬԴeڈ .securities of private issuers outside Hong Kong
Phoenix Annual Report 2006 93 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
2. SUMMARY OF SIGNIFICANT 2. ࠇ߬ผ߮ܧ೪ล߬ᙩ ACCOUNTING POLICIES CONTINUED
(j) Financial assets (Continued) M ল৻༅ଐᙩ ˀמ͚כRegular purchases and sales of fi nancial assets are recognised ল৻༅ଐؿց౨νᑪʥˮਕя on the trade-date – the date on which the Group commits to Щ̯එֻ྆ጻνᑪֶˮਕ༅ଐˀ ʔ̡ࠤͶሏԎΕฌऩሏܘڈpurchase or sell the asset. Investments are initially recognised ᆢႏeֺτԎ ʔ̡ࠤܘүٱat fair value plus transaction costs for all financial assets not ୮ଉؿল৻༅ଐؿҙ༅ඖ͌ ʔ̡ࠤͶሏԎΕฌܘι̯ᆢႏeמcarried at fair value through profit or loss. Financial assets ˱ɐ͚ ʔ̡ࠤᆢܘүٱcarried at fair value through profi t or loss are initially recognised ऩሏ୮ଉؿল৻༅ଐȽ তሏeҙٲνऩכڬι̯מat fair value, and transaction costs are expensed in the income ႏcϤ͚ ݚ൴ؿᚬСɰԷ౨ֶɰټstatement. Financial assets are derecognised when the rights to ༅ඖ͌νՅଊ receive cash flows from the investments have expired or have ᔝᜑc˘̯එ྆ɰɣߎɐੀኟτᚬؿֺτ ผᆢႏল৻༅ڬbeen transferred and the Group has transferred substantially ࠓ፮Αంᔝଫc ݠᙺ̟ɐכԜሻਕল৻༅ଐ˿כall risks and rewards of ownership. Available-for-sale financial ଐeͅ assets are subsequently carried at cost as these securities have Ԏಲ̟ంძ˘ԯʔ̡ࠤಲؒ˿ቌ߮൴c no quoted market price in an active market and their fair values ܨϊ೩ᖬԴԯ܃ܘι̯Ͷሏeܘʔ̡ࠤͶ ʔ̡ܘ܃cannot be reliably measured. Financial assets at fair value ሏԎΕฌऩሏ୮ଉؿল৻༅ଐԯ through profit or loss are subsequently carried at fair value. ࠤͶሏe൘ಁʥᎶνಁඖяઔ͂ྡྷСࢠ ᚫሻι̯Ͷሏeܘؒ Loans and receivables are carried at amortised cost using the effective interest method.
ʔ̡ࠤͶሏԎΕฌऩሏ୮ଉؿল৻༅ܘ Gains or losses arising from changes in the fair value of the fi nancial assets at fair value through profi t or loss’ category are ଐcΣԯʔ̡ࠤˮଊᛰ৽cֺଐ́ؿฌऩ‘ eٲଐ́౨ʑͶɃνऩכrecorded in the income statement in the period in which they я arise.
ʔ̡ࠤͶሏؿল৻༅ଐؿ̟ɺݠܘIf the market for a financial asset carried at fair value is not ࠱ߗ ɐ̟ᖬԴϤӰc̯එ྆ผઔ͂ڈactive (and for unlisted securities), the Group established fair ᙺʥగ value by using valuation techniques feasible to the Group. ྦྷ̯එ྆˿ϷɾЅࠤҌᆢցʔ̡ࠤcϊ ൬Ϸڬʔ̡ࡈܘ౨ٶઔ͂ܢ˳These could include the use of recent arm’s length transactions, ೩ЅࠤҌ كɾɮԮdޚdϣԯˢɣߎמreference to other instruments that are substantially the same, ɾ͚ ݚټძࠤdଊ̟͐ܞindicative market values obtained from reputable financial Ίল৻ዀ࿚ᏵՅɾ institutions, discounted cash flow analysis and option pricing ൴ൎଊʗʥ౨ᚬցძᅡβcԎɣࠉ۹ models, making maximum use of market inputs and relying as Δઔ̟͂༅cϤသ˿ॶɺԗፆऋցྡྷ little as possible on entity-specifi c inputs. ༅e
Ұ့ˀിЅল৻༅ଐֶȹכThe Group assesses at each balance sheet date whether ̯එ྆ผ there is objective evidence that a fi nancial asset or a group of ୂল৻༅ଐτಲˮଊಕࠤؿ۪ᜮᖬኣe൘ fi nancial assets are impaired. Impairment testing of loans and ಁʥᎶνಁඖdᎶνሏಁၤད˟ಁඖdܘ ڃכʥԯˢᎶνಁඖؿಕࠤಡȽ༗߸ټ receivables, accounts receivable and prepayments, deposits and other receivables is described in Note 2(l). ഽ2(l)e
94 უ৷ᇯ഼αం2006 2. SUMMARY OF SIGNIFICANT 2. ࠇ߬ผ߮ܧ೪ล߬ᙩ ACCOUNTING POLICIES CONTINUED
(k) Inventories N Φஒ Inventories, comprising decoder devices and satellite receivers, Φஒc˳ܢᆦኂኂҥʥᇯܱઅνኂcȽ ι̯ࠤၤ˿ᛰଊ૱ࠤԭّɻ༖ГّͶܘ are stated at the lower of cost and net realisable value. Cost ᔤցeΦஒڬͱ൬ͱˮࡈܘis determined using the first-in, first-out method. The cost of ሏeι̯ࠤȽ ֺτᑪൕι̯c˱ɮι̯ʥݯҐܢ˳inventories comprises all costs of purchase, costs of conversion ι̯ ؗϤଐ́ؿԯˢιرand other costs incurred in bringing the inventories to their Φஒ༠ߎଊτֺʥ ˀพ৻༦ೡɻܞڬpresent location and condition. Net realisable value is the ̯Εʑe˿ᛰଊ૱ࠤ estimated selling price in the ordinary course of business, less ɾЅ߮ਕძಕ˾ሬ͂ɾ˿ᛰሻਕ͂e applicable variable selling expenses.
(l) Loans and receivables, accounts receivable and prepayments, O ൘ಁʥᎶνಁඖdᎶνሏಁၤད˟ಁඖd ʥԯˢᎶνಁඖټܘ deposits and other receivables Loans and receivables, accounts receivable and prepayments, ൘ಁʥᎶνಁඖdᎶνሏಁၤད˟ಁඖd ʔ̡ࠤᆢႏcܘٱʥԯˢᎶνಁඖټܘ deposits and other receivables are recognised initially at fair ᚫሻι̯ࠤ߮ܘСଅؒྡྷ˞ڬ܃value and subsequently measured at amortised cost using ԯ the effective interest method, less provision for impairment. A ့cԎκಕࠤᅆௐeΣτᖬኣᛷ̯͐ ๑ᎶνಁؿࡈԞૈಁνՅֶᛰܘprovision for impairment is established when there is objective එ྆ಲؒ ྦྷמАˮಕࠤᅆௐe͚ڬevidence that the Group will not be able to collect or realise ଊֺτ˄ಁc ॶሯՇ˿ʹྦྷמall amounts due according to the original terms of the assets. ʹˮଊࠇɣল৻шྊd͚ ᑹಁя˄הSignificant financial difficulties of the counterparty, probability वଐֶ൬Ϸল৻ࠇୂc˞ʥ ᔾݯ༅ଐሏࠍࠤټthat the counterparty will enter bankruptcy or financial ഼ݯ༅ଐɰಕࠤeᅆௐ ࡈྡྷСଅҗ့ɾܘݚ൴ټreorganisation, and default or delinquency in payments are ၤЅ̰߮Ԟଊ considered indicators that the asset is impaired. The amount ଊࠤԭّؿᔾe༅ଐɾሏࠍࠤȽ༦Ԛ ᆢٲνऩכᔾټሏϤκಕcϤᑋฌאof the provision is the difference between the asset’s carrying ͂ௐ amount and the present value of estimated future cash flows, ႏcԎ߮ɃሻਕdȹঁʥϷܧ͂ʑe ᎶνכڬᔾȽᔤցɺ˿νΑࣂcټdiscounted at the original effective interest rate. The carrying ˿νΑ ֺ࿁ሻಁᔾɾکሏʑ࿁ሻeͱאamount of the assets is reduced through the use of an allowance ሏಁɾௐ ʑሻਕdȹঁʥٲνΑᅕȽতɃνऩ܃account, and the amount of the loss is recognised in the income ԯ statement within selling, general and administration expenses. Ϸܧ͂ඖɎe When an accounts receivable is determined to be uncollectible, it is written off against the allowance account for accounts receivable. Subsequent recoveries of amounts previously written off are credited against selling, general and administration expenses in the income statement.
೩ࠤඖ͌ټʥଊټP ଊ m) Cash and cash equivalents) dႺϷټଊʹܢ˳೩ࠤඖ͌ټʥଊټCash and cash equivalents include cash in hand, deposits held ଊ at call with banks, and other short-term highly liquid investments ց౨Φಁcʥͅҙ༅ˀ߮Է౨ˀݯɍ with original maturities of three months or less. ˂ֶ˞Ɏؿԯˢ౨ঢ়ݚ৽ҙ༅e
Q Ⴎ֝νɃ n) Deferred income) Ϭɍʿ۪ʸདͱνՅؿᄤܞDeferred income represents advertising revenue, subscription Ⴎ֝νɃȽ ৻νɃeרrevenue and promotion service revenue received in advance йνɃdν഼νɃʥۧඨ from third party customers.
Phoenix Annual Report 2006 95 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
2. SUMMARY OF SIGNIFICANT 2. ࠇ߬ผ߮ܧ೪ล߬ᙩ ACCOUNTING POLICIES CONTINUED
̯ٖ R o) Share capital) Ordinary shares are classified as equity. Incremental costs ౝٖʗᗘݯᚬऩeၤೕϷณֶٖᑪٖᚬ અτᗐؿᄈ൴ι̯cͶɃᚬऩАݯֺق directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. ಁඖؿಕࠤκೢඖe
S Ⴎֺ֝ೢ p) Deferred income tax) Deferred income tax is provided in full, using the liability Ⴎֺ֝ೢ˞߲ඦؒగ༅ଐʥ߲ඦɾೢਥ ɻֺͶሏࠍࠤɾංɾٲmethod, on temporary differences arising between the tax ၤԯΕ၃ল৻ం bases of assets and liabilities and their carrying amounts in ᅗࣂᔾАˮͲᅕᅆௐeಳϤcΣႮֺ֝ үᆢٱɻמthe consolidated fi nancial statements. However, if the deferred ೢȽϬพ৻ԡ˞̔ؿ͚ ࣂԎɺᄧᚊผ߮מincome tax arises from initial recognition of an asset or liability ႏ༅ଐֶ߲ඦcϤΕ͚ ɺผɃሏ୮ଉeڬin a transaction other than a business combination that at the ֶೢ৻Сᅼֶᑋฌc time of the transaction affects neither accounting nor taxable τᗐႮֺ֝ೢ༅ଐɰᛰଊֶႮֺ֝ೢ ့ˀଊכ˞profit or loss, it is not accounted for. Deferred income tax is ߲ඦɰ့ࣂcႮֺ֝ೢ determined using tax rates (and laws) that have been enacted ϷɰԹցֶɣߎɐɰԹցʥད౨ᏵᎶ͂ɾ or substantially enacted by the balance sheet date and are ೢଅʥؒԝ့߮e expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
ڬሻᅗࣂᔾcאᎶᇾೢึС˿ॶ܃Deferred income tax assets are recognised to the extent that it is ࠱ˀ probable that future taxable profi t will be available against which ผᆢႏႮֺ֝ೢ༅ଐe the temporary differences can be utilised.
Deferred income tax is provided on temporary differences ᅆΑᅗࣂᔾɾࣂං˿Շ̯එ྆ઁԹc དӮੀԞᅆἉc̯˿כarising on investments in subsidiaries and jointly controlled Ϥᅗࣂᔾɺผ ᙔʔ̇ʥͳઁԹྡྷɾҙڃכentities, except where the timing of the reversal of the temporary එ྆ੀగ difference is controlled by the Group and it is probable that the ༅ֺଐ́ɾᅗࣂᔾ߮ొႮֺ֝ೢᅆ temporary difference will not reverse in the foreseeable future. ௐe
(q) Employee benefi ts T ࡗါС (i) Employee leave entitlements L ࡗᎶԔ౨ Employee entitlements to annual leave are recognised ࡗԔτؿαΕᓊࡗᎶԔτࣂᆢ when they accrue to employees. A provision is made for the ႏe̯එ྆ݯ࿀ϭ့ˀ˅ࡗɰొ ৻Ϥଐ́αؿЅ߲߮ඦАˮרestimated liability for annual leave as a result of services Ԝɾ rendered by employees up to the balance sheet date. ᅆௐe
Employee entitlements to sick leave and maternity or ࡗؿञʥଐֶஷʗࡴɺАᆢ ϭࡗ̳βͤݯ˅eقpaternity leave are not recognised until the time of leave. ႏc
96 უ৷ᇯ഼αం2006 2. SUMMARY OF SIGNIFICANT 2. ࠇ߬ผ߮ܧ೪ล߬ᙩ ACCOUNTING POLICIES CONTINUED
(q) Employee benefi ts (Continued) T ࡗါСᙩ ٦ི߮ LL ii) Bonus plans) එֻ྆ኪΐ̯כThe expected bonus payments are recognised as a liability ད౨ʻ˟ؿ٦Ƚ ৻Ϥଐ́ؿଊτؒցֶרwhen the Group has a present legal or constructive ࡗֺొԜ obligation as a result of services rendered by employees and ઐցֲஐͨcԎΕ˿ଉЅ߮τᗐஐ ᔾࣂᆢႏݯ߲ඦeټa reliable estimate of the obligation can be made. ͨؿ
Ɋɀ˂ʑכ٦ི߮ؿ߲ඦད౨ੀ Liabilities for bonus plans are expected to be settled within twelve months and are measured at the amounts expected ᑹcԎ࣓ኣΕ˟ࣂད౨ผʻ˟ؿ ᔾ့߮eټ .to be paid when they are settled
ஐͨټLLL ঽͤ iii) Pension obligations) The Group operates defined contribution retirement ̯එ࣓྆ኣΔؒԝʥஃԝcݯࠗಋ schemes for the Hong Kong employees based on local ࡗဳଉցᔾԜಁঽིͤ߮e̯එ྆ laws and regulations. Contributions to the schemes by the ʥࡗΉི߮АˮؿԜಁȽ࣓ኣࡗ νכGroup and employees are calculated as a percentage of ؿਥ̯ᑀ༭ؿܺȹϛʗˈ့߮e ̯ܞতሏؿঽͤါСི߮ι̯Ƚٲemployees’ basic salaries. The retirement benefi t schemes’ ऩ ؿԜಁeټcosts expensed in the income statement represent එ྆ɰ˟ֶᎶ˟ʀਥ contributions paid or payable by the Group to the funds.
The Group’s contributions to the defined contribution ̯එ྆ΉցᔾԜಁঽིͤ߮АˮؿԜ ଐ́ࣂͶАʻcԎ˞ͲᅕՅכretirement schemes are expensed as incurred and are ಁȽ ᔴི߮ؿ೩ࡗؿӀکreduced by contributions forfeited by those employees who Ԝಁ leave the schemes prior to vesting fully in the contributions. νԜಁκಕeི߮ؿ༅ଐȽၤ̯එ ܛټThe assets of the schemes are held separately from those of ྆ؿ༅ଐʗʥ˞ዟ͓ဳଉؿਥ the Group in independently administered funds. τe
ᙔʔֺ̇ΕਝࡼؿڃPursuant to the relevant local regulations of the countries ࣓ኣ̯එ྆ࣵ̔ ᙔʔ̇ၤΈڃwhere the overseas subsidiaries of the Group are located, Δτᗐஃԝcϊ೩ ঽͤါСི߮ʥʼnֶϬϷஉ֚ܧthese subsidiaries participate in respective government Ϭؿ retirement benefit schemes and/or set up their own ͓ঽͤါСི߮τᗐི߮cኣϊ ᙔʔ̇Ήτᗐི߮ݯ༅ࣟڃretirement benefit schemes (the “Schemes”) whereby τᗐ they are required to contribute to the Schemes to fund the ࡗؿঽͤါСАˮԜಁeΉτᗐ߮ Έਝֺஃց࣓ኣሬܘretirement benefi ts of the eligible employees. Contributions ིАˮؿԜಁȽ ι̯ؿߗɳϛʗˈֶ๑ᑀټmade to the Schemes are calculated either based on certain ͂ؿᑀ ᔾ့߮eټҰΊࡗ˞՞ցܘ܃ٲpercentages of the applicable payroll costs or fi xed sums for ज़ each employee with reference to a salary scale, as stipulated ֺԜಁ̔c̯එ྆Ԏಲ൬ȹүԜ כunder the requirements in the respective countries. The ಁஐͨe࣓ኣτᗐི߮АˮؿԜಁ ᆢႏতሏeٲGroup has no further obligation beyond the required ଐ́ࣂϬνऩ contributions. The contributions under the Schemes are expensed in the income statement as incurred.
Phoenix Annual Report 2006 97 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
2. SUMMARY OF SIGNIFICANT 2. ࠇ߬ผ߮ܧ೪ล߬ᙩ ACCOUNTING POLICIES CONTINUED
(q) Employee benefi ts (Continued) T ࡗါСᙩ LY ˞ٖͫʻ˟ؿ iv) Share-based compensation) רThe fair value of the employee services received in ̯එ྆గˮᑪٖᚬϤՅɾࡗ exchange for the grant of share options is recognised as an ৻ʔ̡ࠤȽᆢႏА͂eᑪٖᚬᓊᙔ expense. The total amount to be expensed over the vesting ౨ංʻሻɾᐢᔾȽϣɰˮᑪٖᚬ ̟ڈperiod is determined by reference to the fair value of the ɾʔ̡ࠤϤᔤցcɺ߮ʥͨЄ СॶɈʥޔshare options granted, excluding the impact of any non- ᓊᙔੱؗɾᄧᚊԝΣ ˳ᓊᙔૈ̟ͧڈᅟe͌ٽmarket vesting conditions (for example, profitability and ሻਕᄈ ད౨˿ʀϷԚɾᑪٖᚬᅕ͌ɾכܢ sales growth targets). Non-market vesting conditions are Έ့ˀc̯ʔ̇ผ࠳ҝԯכincluded in assumptions about the number of options that உʑe are expected to become exercisable. At each balance sheet Ѕ߮ད౨˿ʀϷԚɾᑪٖᚬɾᅕ͌e νכڬdate, the Company revises its estimates of the number of ࠳ҝࡈԞЅ߮ᅕΥΣτᄧᚊc ʑᆢႏc˞ʥΕɎᓊᙔ౨ංྦྷٲshare options that are expected to become exercisable. It ऩ ᎶሁኬeᑪٖᚬᏵϷԚࣂcޚrecognises the impact of the revision of original estimates, ٖᚬА ߮Ƀٖ܃ι̯מif any, in the income statement, and a corresponding ֺಁඖκͨЄ͚ adjustment to equity over the remaining vesting period. ̯ࠍࠤʥٖͫึძሏe When the share options are exercised, the proceeds received net of any transaction costs are credited to share capital (nominal value) and share premium account.
(r) Provisions U ᅆௐ ܁༦֡ԑͧኒߎ̯එֻ྆ኪଊࣂؒכProvisions are recognised when the Group has a present ͅ ॶኒߎ༅ݚ˿۾legal or constructive obligation as a result of past events, it is ֶઐցஐͨcϤஐͨ ᔾ˿ଉΔЅ߮ࣂcᅆௐᏵټprobable that an outfl ow of resources will be required to settle ˮc˘ݚˮ the obligation, and the amount has been reliably estimated. ᆢႏeԎɺผగ̰ԞᏪᑋฌϤᆢႏᅆ Provisions are not recognised for future operating losses. ௐe
Where there are a number of similar obligations, the likelihood ࠱ˮଊΛඖᗘЍඦ৻cผЯኒߎᏜСऩ that an outfl ow will be required in settlement is determined by ݚˮ˞ඦ৻Ƚϣᄬඦ৻ɾኬᗘП considering the class of obligations as a whole. A provision is ܃ᆢցeЩԚᗘПඦ৻ɻͨЄȹඖ˿ॶ recognised even if the likelihood of an outflow with respect to ݚˮᏜСऩؿዀผɺɣcʋผᆢႏᅆ any one item included in the same class of obligations may be ௐe small.
ད౨߬ඦܘҗκଅکProvisions are measured at the present value of the expenditures ᅆௐȽԚ͂ೢ ܮҗκଅʦکexpected to be required to settle the obligation using a pre-tax ৻ɾʻˮؿଊࠤ့߮cϤೢ ྦྷஒྫྷࣂංძࠤʥඦ৻ऋցࠓ፮̟کdiscount rate that reflects current market assessments of the ˱time value of money and the risks specifi c to the obligation. The ؿിЅe፭ടࣂංઐଫϤኒߎɾᅆௐᄈ increase in the provision due to passage of time is recognised as ȽᆢႏݯСࢠ͂e interest expense.
98 უ৷ᇯ഼αం2006 2. SUMMARY OF SIGNIFICANT 2. ࠇ߬ผ߮ܧ೪ล߬ᙩ ACCOUNTING POLICIES CONTINUED
(s) Revenue recognition V νɃᆢႏ Revenue mainly represents income from advertising sales, net of νɃ˚߬ԞϬᄤйሻਕνɃκτᗐɾ ͂ʥν഼νɃɰྦྷټthe related agency commission expenses, and subscription sales ˤଉਆЏ after eliminating sales within the Group. ሻඑ྆ʑሻਕe
˿ᔾॶټThe Group recognises revenue when the amount of revenue ̯එ྆νɃᆢႏɾᅟๅݯֺν can be reliably measured, it is probable that future economic ቌ߮൴ʥ̰ԞᏜСऩੀݚɃ̯එ྆cϤ Ɏכbenefits will flow to the entity and specific criteria have been ̯එ྆Έพ৻ɾνɃᆢႏऋցᅟๅɰ met for each of the Group’s activities as described below. The ʼ༗߸eΕֺτၤሻਕτᗐɾֶಳԑͧᏵ ᔾॶ˿ቌ߮ټcԎɺႏݯνɃکamount of revenue is not considered to be reliably measurable ᘪҺɾ until all contingencies relating to the sale have been resolved. ൴eඑ྆Ƚ࣓ኣԯ༦֡พᐜ൬ϷЅ့cԎ ʥΈΪખɾऋПێᗘמThe Group bases its estimates on historical results, taking into ϣᄬ۪ʸᗘПd͚ consideration the type of customer, the type of transaction and ୀຝe the specifi cs of each arrangement.
Revenue is recognised as follows: νɃᆢႏΣɎi
(i) Broadcasting advertising revenue L ᄤᅌᄤйνɃ ܃͂ټBroadcasting advertising revenue, net of agency ᄤᅌᄤйνɃκˤଉਆЏ τᗐᄤйᅌˮࣂᆢႏeכ commission expenses, is recognised upon the broadcast of advertisements. (ii) Subscription revenue LL ν഼νɃ Subscription revenue received or receivable from the cable ɰνֶᎶντᇃཋ഼ʗሻਆֶˤଉؿ ٲνऩכdistributors or agents is amortised on a time proportion ν഼νɃȽԗ๑ࣂංˈԝ basis to the income statement. The unamortised portion is ʑᚫሻḛʀᚫሻؿͫͶАႮ֝ν classifi ed as deferred income. Ƀe
(iii) Magazine advertising revenue LLL ᔵႌᄤйνɃ ᔵႌכ܃͂ټMagazine advertising revenue net of commission expense is ᔵႌᄤйνɃκЏ ࣂᆢႏeخrecognised when the magazine is published. ˮ
(iv) Magazine subscription/circulation revenue LY ᔵႌ߯ᑪʼnೕϷνɃ ɰνֶᎶν۪ܞMagazine subscription or circulation revenue represents ᔵႌ߯ᑪֶೕϷνɃ Пᔵႌכsubscription or circulation money received or receivable ʸ߯ᑪֶೕϷಁඖcԎ from customers and is recognised when the respective ೕֶˮਕࣂᆢႏe magazine is dispatched or sold.
(v) Sales of decoder devices and satellite receivers Y ᆦኂኂҥʥᇯܱઅνኂሻਕ Revenue from sales of decoder devices and satellite ԞϬᆦኂኂҥʥᇯܱઅνኂሻਕؿ ኟτᚬؿࠓ፮ʥΑంᔝଫࣂכreceivers is recognised on the transfer of risks and rewards νɃȽ ͚˟۪ʸʥۂof ownership, which generally coincides with the time when ᆢႏcࣂංɣߎɐၤஒ eޚthe goods are delivered to customers and the title has ֺτᚬᔝଫࣂ passed.
Phoenix Annual Report 2006 99 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
2. SUMMARY OF SIGNIFICANT 2. ࠇ߬ผ߮ܧ೪ล߬ᙩ ACCOUNTING POLICIES CONTINUED
(s) Revenue recognition (Continued) V νɃᆢႏᙩ (vi) Interest income and income from certifi cate of deposit YL СࢠνɃʥΦಁᖬνɃ Interest income from bank deposits and income from ႺϷΦಁСࢠνɃʥΦಁᖬνɃઔ͂ ࣂංˈԝਥๅ൬Ϸᆢܘcertificate of deposit are recognised on a time-proportion ྡྷСࢠؒ basis using the effective interest method. When a receivable ႏe࠱Ꮆνಁˮଊಕࠤc̯එ྆ผੀ is impaired, the Group reduces the carrying amount to ሏࠍࠤಕϭԯܘτᗐɮԮࡈτྡྷС ݚ൴Ϥஉցɾټits recoverable amount, being the estimated future cash ଅൎଊɾЅ̰߮Ԟଊ flow discounted at original effective interest rate of the ˿νΑಁᔾcԎᘗᙩൎଊАݯС instrument, and continues unwinding the discount as ࢠνɃe interest income.
ஒνɃמ YLL vii) Barter revenue) ɻАמஒ͚מඑ྆Ε̯כஒνɃȽמ Barter revenue is recognised at the fair value of goods or רᔵႌֶొԜۧඨخservices received or receivable in the transaction upon the ˮᄤйᅌˮdˮ רֶۂɻɰνֶᎶνஒמ͚ܘbroadcast of advertisements, the publishing of the magazine ৻ࣂc or the provision of promotion services to be provided by the ৻ؿʔ̡ࠤᆢႏe Group in the barter transaction.
(t) Leases W ै༉ (i) Operating leases L Ꮺै༉ जֺτᚬɣͫࠓ፮ʥΑړLeases in which a significant portion of the risks and ͅˮैɁ rewards of ownership are retained by the lessor are ంؿै༉яʗᗘݯᏪै༉e࣓ኣ classified as operating leases. Payments made under Ꮺै༉ʻ˟ؿಁᔾκϬˮैɁν ᇃق˞༉౨ैܘȽټoperating leases (net of any incentives received from the ՅؿͨЄᆉ ɻʻሻeٲlessor) are expensed in the income statement on a straight- ؒΕνऩ line basis over the period of the lease.
ܘThe up-front prepayments made for land use rights are గɠΔԚ͂ᚬϤʻ˟ؿད˟ಁඖȽ ᇃؒᚫሻcֶ࠱ˮଊಕࠤcق˞amortised on a straight-line basis over the period of the ै༉౨ ɻʻሻeٲτᗐಕࠤΕνऩڬ lease, or where there is impairment, the impairment is expensed in the income statement.
(ii) Finance leases LL ጪ༅ै༉ พdᄥָʥஉௐeذThe Group leases certain property, plant and equipment. ̯එ྆ै༉ߗɳ Leases of property, plant and equipment where the Group ̯ͅඑ྆ኟτֺτᚬɣͫࠓ፮ʥ พdᄥָʥஉௐؿै༉яʗذhas substantially all the risks and rewards of ownership Αంؿ նैכare classified as finance leases. Finance leases are ᗘݯጪ༅ै༉eጪ༅ै༉Ƚ พɾʔ̡ࠤၤГै༉ذֺैܘcapitalised at the lease’s commencement at the lower of ༉ࣂ the fair value of the leased property and the present value ಁඖɾଊࠤԭّɻؿ༖Гّʀ˞༅̯ พdᄥָذof the minimum lease payments. The property, plant and ʝe࣓ኣጪ༅ै༉ᑪɃɾ ඖ༅ଐؿ˿Ԛ͂α౨ʥܘequipment acquired under finance leases is depreciated ʥஉௐȽ over the shorter of the useful life of the asset and the lease ै༉౨ԭّɻؿ༖ّʀ˞җᓿe term.
100 უ৷ᇯ഼αం2006 2. SUMMARY OF SIGNIFICANT 2. ࠇ߬ผ߮ܧ೪ล߬ᙩ ACCOUNTING POLICIES CONTINUED
X ٖࢠʗݢ u) Dividend distribution) ٖכτɁАˮؿٖࢠʗݢܛDividend distribution to the Company’s equity holders is Ή̯ʔ̇ᚬऩ τɁғؿ౨ංʑΕ̯ܛrecognised as a liability in the Group’s financial statements in ࢠᏵ̯ʔ̇ᚬऩ ʑᆢႏݯ߲ඦeٲthe period in which the dividends are approved by the Company’ එ྆ল৻ం s equity holders.
3. FINANCIAL RISK MANAGEMENT 3. ল৻ࠓ፮ဳଉ
(a) Financial risk factors D ল৻ࠓ፮ΐॖ The Group’s activities expose it to a variety of financial risks: ̯එ྆ɾพ৻ࠍྦྷɺল৻ࠓ፮i̟ market risk (including currency risk, fair value interest risk ࠓ፮˳ܢஒྫྷࠓ፮dʔ̡ࠤСଅࠓ፮ʥ ࠓ፮ʥټ൘ࠓ፮dݚ৽༅ڌand price risk), credit risk, liquidity risk and cash fl ow interest- ძࣟࠓ፮d ݚСଅࠓ፮e̯එ྆ኬࠓ፮ဳଉೡټrate risk. The Group’s overall risk management programme ଊ ጪ̟ɾɺ˿དಡֲ˞ఖұټfocuses on the unpredictability of fi nancial markets and seeks β˚߬ৌྦྷ ଊɾᅶΕɺСᄧᚊࠌٲto minimise potential adverse effects on the Group’s financial ੀԯྦྷ̯එ྆ল৻ performance. ϭГe
Risk management is mainly carried out by the finance ࠓ፮ဳଉ˚̯߬ͅඑ྆ল৻ᐢဟეኒؿল ΕپਨϷeল৻پল৻پdepartment (the “Finance Department”) headed by the Chief ৻ Financial Officer of the Group. The Finance Department ၤ̯එ྆༜Ꮺ௰Ͻ၇АcԚ͂ߪ́ল ߪ́ল৻ɮԮ୮ଉኬল৻ࠓڈidentifies and evaluates financial risks in close co-operation ৻ɮԮʥ with the Group’s operating units to cope with overall risk ፮˞ϭऋցეਟࠓ፮cΣ̔මࠓ፮dСଅ ൘ࠓ፮c༦ೡɻᆢցʥിЅল৻ڌmanagement, as well as specific areas, such as foreign ࠓ፮d eټexchange risk, interest-rate risk, credit risk, use of derivative ࠓ፮cʥҙ༅ݚ৽༅ fi nancial instruments and non-derivative fi nancial instruments, and investing excess liquidity.
(i) Market risk L ̟ࠓ፮ (a) Foreign exchange risk (a) ̔මࠓ፮ ࠍܨඑ྆Ƚਝ༜Ꮺc̯כͅ The Group operates internationally and is exposed to foreign exchange risk arising from various currency ྦྷɺஒྫྷ˚߬ݯɁ̵ྫྷdʏ ˳exposures, primarily with respect to the Renminbi, US ʥߜᔦֺଐ́ɾ̔මࠓ፮c dᆢႏ༅ଐၤ߲ඦcמਆพ͚ܢ dollar and UK pound. Foreign exchange risk arises from ࣵ̔Ꮺพ৻ɾҙ༅૱ᔾяכfuture commercial transactions, recognised assets and ʥ liabilities and net investments in foreign operations. ผଐ́̔මࠓ፮e
Phoenix Annual Report 2006 101 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
3. FINANCIAL RISK MANAGEMENT 3. ল৻ࠓ፮ဳଉᙩ CONTINUED
(a) Financial risk factors (Continued) D ল৻ࠓ፮ΐॖᙩ (i) Market risk (Continued) L ̟ࠓ፮ᙩ (a) Foreign exchange risk (Continued) (a) ̔මࠓ፮ᙩ ʥᆢႏ༅ଐמਆพ͚܃To manage their foreign exchange risk arising from ݯဳଉˀ future commercial transactions and recognised ၤ߲ඦଐ́ɾ̔මࠓ፮c̯එ྆ ߬˞ಋʏd˚מassets and liabilities, entities in the Group engage ʑྡྷ൬Ϸɾ͚ in transactions mainly in HK dollar, US dollar and ʏʥɁ̵ྫྷ߮ࠤ࠱˿ॶe̯ Renminbi to the extent possible. The Group currently එ྆ଊࣂԎಲྦྷɁ̵ྫྷ൬Ϸྦྷҿ c༦ց౨ဟྦဳଉԯࠓמdoes not hedge transactions undertaken in Renminbi ͚ but manages its exposure through constant monitoring ፮c˞သ˿ॶࠌГԯɁ̵ྫྷࠓ፮ ʥᆢႏמਆพ͚܃ᔾeˀټto limit as much as possible the amount of its Renminbi ؿ exposures. Foreign exchange risk arises when future ༅ଐၤ߲ඦȽ˞ྡྷ˲ॶஒྫྷ˞ commercial transactions and recognised assets and ̔ɾஒྫྷ߮ძࣂcੀผଐ́̔ම ߲ஐဟʥဳଉپliabilities are denominated in a currency that is not the ࠓ፮eল৻ ؗeرentity’s functional currency. The Finance Department Ұိ̔ྫྷɾࠓ፮ is responsible for monitoring and managing the net position in each foreign currency.
ࣵ̔Ꮺพ৻ɾכThe Group has certain investments in foreign ̯එ྆τߗɳ operations, whose net assets are exposed to foreign ҙ༅cԯ૱༅ଐࠍྦྷ̔ྫྷමЙ currency translation risk. Currency exposure arising ࠓ፮e̯එ྆Ꮺพ৻ɾ૱༅ଐ ɻജɁ̵כfrom the net assets of the Group’s operations, such as ଐ́ɾஒྫྷࠓ፮cΣ those in the People’s Republic of China (the “PRC”), ͳਝɻਝdߜਝʥਝɾ the United Kingdom and the United States is managed ૱༅ଐc˚߬༦˞τᗐ̔ྫྷ߮ primarily through operating liabilities denominated in ძɾᏪ߲ඦဳଉe the relevant foreign currencies.
(b) Price risk (b) ძࣟࠓ፮ ၃כߗɳҙ༅ܛඑֺ̯྆כͅ The Group is exposed to securities price risk because ʔ̡ࠤͶܘʑʗᗘݯٲthe return on certain investments held by the Group ༅ଐ߲ඦ classifi ed on the consolidated balance sheet as fi nancial ሏԎΕฌऩሏ୮ଉؿল৻༅ଐ ߗɳɐ̟ٖ̯ᖬԴכassets at fair value through profit or loss are tied to ɾΑంՅҺ එ྆ࠍྦྷᖬԴძ̯ܨthe share prices of certain listed equity securities. ɾٖძc Management has adopted the indicative market value ࣟࠓ፮eဳଉᄙɰઔढ़ͅೕϷّ ძࠤАݯ೩ҙ̟͐ܞprovided by the issuers as their best estimate of the fair ొԜɾ ˇvalues of such investments. The Group is not exposed ༅ؿԙЅ߮ʔ̡ࠤe̯එ྆ ძࣟࠓ፮eτᗐ൬ȹۂto commodity price risk. For further details, see note ࠍྦྷਆ ഽ21eڃכүੱ༗ .21
102 უ৷ᇯ഼αం2006 3. FINANCIAL RISK MANAGEMENT 3. ল৻ࠓ፮ဳଉᙩ CONTINUED
(a) Financial risk factors (Continued) D ল৻ࠓ፮ΐॖᙩ ൘ࠓ፮ڌ LL ii) Credit risk) ೩ࠤඖټʥଊټଊכ൘ࠓ፮Ϭڌ ,Credit risk arises from cash and cash equivalents ʔ̡ࠤͶሏԎΕฌऩሏ୮ଉؿܘfinancial assets at fair value through profit or loss, loans ͌d כיand receivables, and deposits with banks and financial ল৻༅ଐd൘ಁʥᎶνಁඖʥΦ institutions, as well as credit exposures to advertising agents ႺϷʥল৻ዀ࿚ɾΦಁc˞ʥᄤйˤ ᑹᎶ̰ܢ˳ࠓ፮͂ڌand customers, including outstanding receivables and ଉʥ۪ʸɾ כeמcommitted transactions. The Group has a receivable from νಁඖʥ̰൬Ϸɰֻጻɾ͚ an advertising agent, Shenzhou, in the PRC amounting ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀc̯එ྆ to HK$344,263,000 representing approximately 24% of τᎶνɻਝᄤйˤଉुήɾᎶνಁඖ the total assets of the Group as of 31 December 2006. ݯ 344,263,000ಋʏcЌ̯එ྆ᐢ༅ ᙩဟྦԯ۪ܛThe Group manages its exposure to credit risk through ଐɾ24%e̯එ྆༦ ሔॖcဳଉԯࠍ͂ڌcontinual monitoring of the credit quality of its customers ʸʥᄤйˤଉɾ ر൘ࠓ፮cԎϣᄬ֤೩ɾল৻ڌand advertising agents, taking into account their financial ྦྷɾ position, collection history, past experience and other ؗdνಁዃ̌d༦֡ʥԯˢΐॖe factors. For banks, financial institutions and issuers గႺϷdল৻ዀ࿚ʥߪ́ল৻ɮԮɾ ढ़ԮӪΡᐰڌof derivative financial instruments, only reputable well ೕϷّϤӰc̯එ྆ඩ ΊႺϷʥল৻ዀ࿚eكestablished banks and fi nancial institutions are accepted. ᙷɾ
ࠓ፮ټLLL ݚ৽༅ iii) Liquidity risk) τ˨ӷؿܛܞࠓ፮ဳଉټPrudent liquidity risk management implies maintaining ᔑݚ৽༅ ೩ࠤඖ͌cႺϷᏵӷټʥଊټsufficient cash and cash equivalents, the availability of ଊ ൘ᔾ۹ஃᑷ̟ࠓ፮ؿڌfunding through an adequate amount of committed banking ਪؿႺϷ ᗐพ৻ؿݚ৽ֲሔcলޚכfacilities and the ability to close out market positions. Due ॶɈeͅ ܛړ൘ڌοΕ༦˿৽͂ႺϷپto the dynamic nature of the underlying businesses, the ৻ ೩ࠤඖ͌ټʥଊټؿݚ৽ֲeଊټFinance Department aims to maintain fl exibility in funding ༅ ഽ25ʥڃכ൘ੱʗП༗ڌby keeping committed banking facilities available. Details of ʥႺϷ cash and cash equivalents and banking facilities are set out 32e in note 25 and 32 respectively.
Phoenix Annual Report 2006 103 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
3. FINANCIAL RISK MANAGEMENT 3. ল৻ࠓ፮ဳଉᙩ CONTINUED
(a) Financial risk factors (Continued) D ল৻ࠓ፮ΐॖᙩ ݚ൴ʥʔ̡ࠤСଅࠓ፮ټLY ଊ iv) Cash fl ow and fair value interest rate risk) ʥଊټଊܢ˳ࢠ༅ଐڃඑ྆ɾ̯כͅ As the Group has interest-bearing assets comprising cash ʔ̡ࠤͶሏԎܘ೩ࠤඖ͌ʥʗᗘݯټ and cash equivalents and investments classifi ed as fi nancial assets at fair value through profit or loss and loans and Εฌऩሏ୮ଉؿল৻༅ଐؿҙ༅ඖ͌ Сଅᛰʝؿ൘ಁʥᎶכreceivables for which returns are dependent on changes in ˞ʥΑంՅҺ ټඑ྆ɾνɃʥᏪ༜ଊ̯ܨinterest rates, the Group’s income and operating cash fl ows νಁඖc can be affected by changes in market interest rates. ݚ൴ੀՇԷ̟Сଅᛰ৽ɾᄧᚊe
ݚ൴ʥʔ̡ࠤСଅࠓ፮ټThe Group’s cash flow and fair value interest-rate risks ̯එ྆ɾଊ τɺСଅڃprimarily arise from bank deposits. Bank deposits placed ˚߬ͅႺϷΦಁଐ́e ݚټat variable rates expose the Group to cash fl ow interest-rate ؿႺϷΦಁԚ̯එ྆ࠍྦྷଊ τ՞ցСଅؿႺϷڃrisk whereas those placed at fi xed rates expose the Group to Сଅࠓ፮cϤ fair value interest-rate risk. The Finance Department’s policy ΦಁԚ̯එ྆ࠍྦྷʔ̡ࠤСଅࠓ ̡ˋሬܛ೪ݯၐܧɾپis to maintain an appropriate level between fi xed-rate and ፮eল৻ αכfl oating-rate deposits. At the year end, 8% of bank deposits ɾ՞ցСଅʥࣺ৽СଅΦಁe were at fi xed rates. ˀc8% ɾႺϷΦಁݯ՞ցСଅe
(b) Fair value estimation E ʔ̡ࠤЅ߮ ʔ̡ࠤͶሏԎΕฌऩሏ୮ଉؿল৻༅ଐܘ The fair value of fi nancial assets at fair value through profi t or loss that are not openly traded is determined with reference to Ԏɺผʔൕሒɾʔ̡ࠤȽϣೕϷ ഽ21eڃძࠤϤᔤց̟͐ܞindicative market values provided by issuers (Note 21). ّొԜؿ
The nominal value less estimated credit adjustments of accounts ᎶνሏಁʥᎶ˟ሏಁؿሏࠍಕࠤЅ߮c eٶޚcЅ߮ၤ֤೩ؿʔ̡ࠤ܃൘ሁኬڌ receivable and accounts payable are assumed to approximate their fair values.
104 უ৷ᇯ഼αం2006 4. CRITICAL ACCOUNTING ESTIMATES 4. ࠇ߬ผ߮Ѕ߮ʥРᒾᙩ AND JUDGEMENTS CONTINUED
ࣂАˮؿЅ߮ʥРᒾผ࣓ኣ༦֡ٲEstimates and judgments are continually evaluated and are based ᇁႇল৻ం on historical experience and other factors, including expectations ʥԯˢΐॖcАˮിЅc˳ܢད౨ˀ ΕτᗐੱؗɎˮଊႏݯଉؿԑͧe܃ of future events that are believed to be reasonable under the circumstances.
(a) Critical accounting estimates and assumptions D ࠇ߬ผ߮Ѕ߮ʥஉ ੀԞc̯එ྆ผАˮЅ߮ʥஉeᗲכྦྷ The Group makes estimates and assumptions concerning the ʭၤτᗐؿޅfuture. The resulting accounting estimates will, by definition, ࣟϤӰcֺଐ́ؿผ߮Ѕ߮ eτࠇɣࠓ፮ϤኒߎɎޚseldom equal the related actual results. The estimates and ྡྷѧͲ α۹༅ଐၤ߲ඦؿሏࠍࠤАɣఝܧassumptions that have a significant risk of causing a material ȹল adjustment to the carrying amounts of assets and liabilities ࠳߯ؿЅ߮ʥஉΕɎʼሃ߸e within the next fi nancial year are discussed below.
(i) Provision for impairment of receivables L Ꮆνಁඖಕࠤᅆௐ Signifi cant judgment is exercised in the assessment of the ኬിЅᎶνҰȹ۪ʸؿಁඖࣂА АˮРᒾࣂcဳଉᄙכcollectibility of accounts receivable from each customer. In ˮࠇ߬Рᒾe making its judgment, management considers a wide range ϣᄬᇽΛΐॖcΣሻਕɁࡗؿ།൬ ܃ɾܢ˳of factors such as results of follow-up procedures performed ೡѵd۪ʸؿ˟ಁ෮Ή ؗeرby sales personnel, customers’ payment trend including ؿ˟ಁʥ۪ʸؿল৻ subsequent payments and customers’ fi nancial position.
LL ֺೢ ii) Income taxes) ᅕ̇ؒᚬਂᖔढ़ֺכThe Group is subject to income taxes in numerous ̯එ྆ jurisdictions. Signifi cant judgment is required in determining ೢe߬Аˮࠇ߬Рᒾ˞ᔤցͲଈᆲ ˀพ৻ɻcכthe worldwide provision for income taxes. There are many ʑɾֺೢᅆௐe ᆢמʥ့߮ɾୄೢඖɺמtransactions and calculations for which the ultimate tax ଠΛ͚ Ѕ߮ᅶΕೢඖ߲ඦԷכdetermination is uncertain during the ordinary course of ցe̯එ྆ਥ business. The Group recognises liabilities for anticipated tax ౨Ϥᆢႏད౨Ꮆ˟ೢඖ߲ඦeୄ ত፣ɾೢඖಁᔾΦΕٱpayable based on estimates of the potential tax liability due. ೢඖၤ Where the fi nal tax outcome is different from the amounts ଔࣂcᔾੀᄧᚊАˮɐ߸ᔤց that were initially recorded, such differences will impact ౨ංɾֺೢʥႮ֝ೢඖᅆௐe̯එ ഽ7eڃthe income tax and deferred tax provisions in the period in ྆ؿɻਝೢඖੱ͛ᇼϣ which such determination is made. Please also refer to note 7 for details of the Group’s PRC tax exposure.
พؿʔ̡ࠤذɻֺઅνמஒ͚מכ LLL iii) Fair value of a property received in a barter transaction) ɻઅνמஒ͚מα۹ʑΕ̯כThe Group received a property in a barter transaction ̯එ྆ ഽڃੱᇼϣמพτᗐ͚ذduring the year (please refer to Note 17(a) for details of the ȹඖ c̯ͅඑ྆܃מ൬Ϸ͚כtransaction). The revenues to be recognised by the Group 17(a)e พɾʔ̡ذas a result of the transaction are measured based on the fair ᆢႏɾνɃȽ࣓ኣֺઅν ؿמvalue of the property received. The Group determined the ࠤ့߮e̯එ྆Ƚϣၤ͚ พძࣟʥذᆠਆɾʹྦྷמfair value of the property by making reference to the price ɍʿ͚ ˀ౨מ͚כพذfor the property negotiated with the third party counterparty ዟ͓Ѕࠤֺᇁႇ พɾʔ̡ࠤeذcᔤց܃to the transaction and a valuation of the property as at the ؿЅࠤ date of the transaction prepared by an independent valuer.
Phoenix Annual Report 2006 105 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
4. CRITICAL ACCOUNTING ESTIMATES 4. ࠇ߬ผ߮Ѕ߮ʥРᒾᙩ AND JUDGEMENTS CONTINUED
೪ࣂؿࠇ߬РᒾܧᎶ̯͂එ྆ผ߮כ E b) Critical judgments in applying the Group’s accounting policies) ʔ̡ࠤͶሏԎΕܘؿמݠᙺ̟͚כڈThe fair value of fi nancial assets at fair value through profi t or Ԏ loss that are not traded in an active market is determined by ฌऩሏ୮ଉؿল৻༅ଐɾʔ̡ࠤȽԚ͂Ѕ using valuation techniques. The Group adopted the indicative ࠤҌᔤցe̯එ྆ઔढ़ͅೕϷّొԜؿ ძࠤАݯԯྦྷ೩ল৻ɮԮʔ̡̟͐ܞ market value provided by the issuers as their best estimate of the ˞ഽ21e̯එ྆ႏݯcڃfair values of these fi nancial instruments (Note 21). The Group ࠤؿԙРᒾ ʔ̡ࠤܘconsidered that it would be more practicable to benchmark the ϊ೩ল৻ɮԮೕϷّొԜɾɐ߸ ̟͐ܞvalues of these fi nancial assets at fair value through profi t or loss ͶሏԎΕฌऩሏ୮ଉؿল৻༅ଐɾ to the indicative market value provided by the issuer of these ძࠤАݯਥๅძc༖༜͂ԯˢЅࠤʿؒ financial instruments rather than selecting another valuation ҡݯ˿Ϸe̯එ྆ႏݯcϊ೩ল৻ɮԮೕ ল৻ЅࠤכძࠤȽਥ̟͐ܞmethod. The Group considered that the indicative market value ϷّొԜؿ ᇁႇ˘˿˞ࠦፆeێprovided by the issuers of these financial instruments was ᅡ prepared based on a fi nancial valuation model and can be relied on.
106 უ৷ᇯ഼αం2006 5. REVENUE AND SEGMENT 5. νɃʥʗᗘ༅ࢿ INFORMATION
The Group is principally engaged in satellite television broadcasting ̯එ྆ؿ˚߬พ৻ݯᇯܱཋ഼ᄤᅌ ሔʗᗘؿ̯එ྆νɃʗΣɎiֲܘactivities. An analysis of the Group’s revenue by nature is as follows: พ৻e
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
Revenue νɃ Advertising sales ᄤйሻਕ 973,310 937,825 Subscription sales ν഼νɃ 41,511 38,973 Magazine advertising and ᔵႌᄤйʥ߯ᑪֶ subscription or circulation sales ೕϷνɃ 18,030 19,786 Others ԯˢ 24,816 38,184
1,057,667 1,034,768
Other revenue ԯˢνɃ Exchange gain, net මЙνऩ૱ᔾ 15,124 13,997 Interest income, net СࢠνɃ૱ᔾ 23,118 13,937 Income from certifi cate of deposit ΦಁᖬνɃ 976 786 Sales of programmes ຝ͌ሻਕ 3,715 768 Fair value gain on fi nancial assets at ܘʔ̡ࠤͶሏԎΕฌऩሏ୮ଉ fair value through profi t or loss ؿল৻༅ଐؿʔ̡ࠤνऩ (realised and unrealised) ɰᛰଊʥ̰ᛰଊ 4,910 6,424 ʥټܘพذGain from partial disposal of property ˮਕʗ deposit and development ೕࢄι̯ؿνऩ ഽ19 – 11,599ڃ (costs (Note 19 Others, net ԯˢ૱ᔾ 8,646 (399 )
56,489 47,112
Total revenues ᐢνɃ 1,114,156 1,081,880
Primary reporting format – business segments ˚߬еంࣟβÐพ৻ʗᗘ The Group is organised into four main business segments including: ̯එ྆˳ܢ̒ඖ˚߬พ৻ʗᗘc˳ܢi
(i) Television broadcasting – broadcasting of television programmes (i) ཋ഼ᄤᅌ Ð ཋ഼ຝ͌dᄤйᄤᅌʥొԜ and commercials and provision of promotion activities; ۧඨݠ৽h ৻hרii) Programme production and ancillary services; (ii) ຝ͌ႇАʥʻ) ၉ॎhʥپ৻ Ð ొԜɃרiii) Internet services – provision of website portal; and (iii) ʃᐲ၉) ʥೕϷخ৻dᔵႌˮרۂiv) Other activities – merchandising services, magazine publication (iv) ԯˢพ৻ Ð ਆ) ৻eרand distribution, and other related services. ˞ʥԯˢτᗐ
Phoenix Annual Report 2006 107 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
5. REVENUE AND SEGMENT 5. νɃʥʗᗘ༅ࢿᙩ INFORMATION CONTINUED
Year ended 31 December 2006 ࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹ Programme production and Inter- Television ancillary Internet Other segment broadcasting services services activities elimination Group ຝ͌ႇАʥ ৻ ԯˢพ৻ ʗᗘංྦྷሻ ̯එ྆ר৻ ʃᐲ၉רཋ഼ᄤᅌ ʻ $’000 $’000 $’000 $’000 $’000 $’000 ɝʏ ɝʏ ɝʏ ɝʏ ɝʏ ɝʏ
Revenue νɃ External sales ྦྷ̔ሻਕ 1,014,822 1,914 13,490 27,441 – 1,057,667 Inter-segment sales ʗᗘංሻਕ 611 24,584 – 30 (25,225) –
Total revenue ᐢνɃ 1,015,433 26,498 13,490 27,471 (25,225) 1,057,667
Segment results ʗᗘพᐜ 351,549 (1,921) 894 (2,984 ) – 347,538
( ഽa (100,195ڃUnallocated expenses (Note a) ̰ʗ͂
Profi t before share of results ᎶЌͳઁԹྡྷพᐜd of jointly controlled entities, ֺೢʥʭᅕٖ Сึکincome tax and minority ᚬऩ interests 247,343 Share of losses of jointly ᎶЌͳઁԹྡྷᑋฌ controlled entities (1,518) (Income tax expense ֺೢ͂ (34,938
Profi t for the year ̯α۹ึС 210,887 Minority interests ʭᅕٖᚬऩ 1,498
Profi t attributable to equity ̯ʔ̇ᚬऩܛτɁ holders of the Company ᎶЌึС 212,385
ഽb 64,385 68,454 17,038 10,191 – 160,068ڃSegment assets (Note b) ʗᗘ༅ଐ Unallocated assets ̰ʗ༅ଐ 1,273,282
Total assets ᐢ༅ଐ 1,433,350
(ഽc (27,006 ) (5,281) (11,888 ) (10,273 ) – (54,448ڃSegment liabilities (Note c) ʗᗘ߲ඦ Unallocated liabilities ̰ʗ߲ඦ (212,214)
Total liabilities ᐢ߲ඦ (266,662)
( ഽd (11,678 ) (2,789) (3,417 ) – – (17,884ڃCapital expenditure (Note d) ༅̯ʻˮ Unallocated capital expenditure ̰ʗ༅̯ʻˮ (67,979)
(85,863)
Depreciation җᓿ (18,533 ) (2,883) (1,897 ) (60 ) – (23,373) ᚬಕࠤخImpairment of purchased ᑪɃຝ͌ʥཋᄧ programme and fi lm rights (1,680 ) – – – – (1,680) Provision for impairment of Ꮆνಁඖಕࠤᅆௐ receivables (16,293 ) – – – – (16,293) ᚬᚫሻخAmortisation of purchased ᑪɃຝ͌ʥཋᄧ programme and fi lm rights (17,011 ) – – – – (17,011) Reversal of provision for ᎶνಁඖಕࠤᅆௐᅆΑ impairment of receivables 12,152 – – – – 12,152
108 უ৷ᇯ഼αం2006 5. REVENUE AND SEGMENT 5. νɃʥʗᗘ༅ࢿᙩ INFORMATION CONTINUED
Year ended 31 December 2005 ࿀ϭɀཌྷཌྷʄαɊɀ˂ɍɊȹˀ˅α۹ Programme production and Inter- Television ancillary Internet Other segment broadcasting services services activities elimination Group ຝ͌ႇАʥ ৻ ԯˢพ৻ ʗᗘංྦྷሻ ̯එ྆ר৻ ʃᐲ၉רཋ഼ᄤᅌ ʻ $’000 $’000 $’000 $’000 $’000 $’000 ɝʏ ɝʏ ɝʏ ɝʏ ɝʏ ɝʏ Revenue νɃ External sales ྦྷ̔ሻਕ 976,797 3,991 6,581 47,399 – 1,034,768 Inter-segment sales ʗᗘංሻਕ – 28,808 – – (28,808 ) –
Total revenue ᐢνɃ 976,797 32,799 6,581 47,399 (28,808 ) 1,034,768
Segment results ʗᗘพᐜ 281,610 3,489 (6,221 ) 205 – 279,083 Unallocated other income ̰ʗԯˢνऩ ഽe 11,599ڃ (Note e) ( ഽa (84,885ڃUnallocated expenses (Note a) ̰ʗ͂
Profi t before share of results ᎶЌͳઁԹྡྷพᐜd کof jointly controlled entities, ֺೢʥʭᅕٖᚬऩ income tax and minority ึС interests 205,797 ͳઁԹྡྷؿכ Provision for impairment loss in a jointly controlled entity ಕࠤᑋฌᅆௐ (472) Share of losses of jointly ᎶЌͳઁԹྡྷ controlled entities ᑋฌ (1,906) (Income tax expense ֺೢ͂ (20,755
Profi t for the year ̯α۹ึС 182,664 (Minority interests ʭᅕٖᚬऩ (1,182
Profi t attributable to equity ̯ʔ̇ᚬऩܛτɁ holders of the Company ᎶЌึС 181,482
ഽb 78,278 86,025 28,008 8,243 – 200,554ڃSegment assets (Note b) ʗᗘ༅ଐ Unallocated assets ̰ʗ༅ଐ 961,049
Total assets ᐢ༅ଐ 1,161,603
(ഽc (27,118 ) (3,778 ) (11,959 ) (9,822 ) – (52,677ڃSegment liabilities (Note c) ʗᗘ߲ඦ Unallocated liabilities ̰ʗ߲ඦ (101,820)
Total liabilities ᐢ߲ඦ (154,497 )
(ഽd (7,070 ) (1,276 ) (2,232 ) (299 ) – (10,877ڃCapital expenditure (Note d) ༅̯ʻˮ Unallocated capital expenditure ̰ʗ༅̯ʻˮ (5,001 )
(15,878 )
Depreciation җᓿ (21,431 ) (3,801 ) (919 ) (30 ) – (26,181 ) Impairment of purchased ᑪɃຝ͌ʥཋᄧ ( ᚬಕࠤ (3,380 ) – – – – (3,380خ programme and fi lm rights Impairment of inventories Φஒಕࠤ – – – (3,257 ) – (3,257 ) Provision for impairment Ꮆνಁඖಕࠤ of receivables ᅆௐ (106,177 ) – – – – (106,177 ) ᚬخAmortisation of purchased ᑪɃຝ͌ʥཋᄧ programme and fi lm rights ᚫሻ (22,325 ) – – – – (22,325 )
Phoenix Annual Report 2006 109 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
5. REVENUE AND SEGMENT 5. νɃʥʗᗘ༅ࢿᙩ INFORMATION CONTINUED
ഽiڃ :Note a) Unallocated expenses represent primarily: (a) ̰ʗ͂˚߬ݯi) – corporate staff costs; Ð එ྆ࡗɮι̯h hټै۩offi ce rental; Ð ፒʔ – – general administrative expenses; and Ð ȹঁϷܧʻhʥ marketing and advertising expenses that relate to the Group as a Ð ၤ̯එ྆ኬτᗐؿ̟ઐᄤʥᄤй – whole. ʻe
พdᄥָʥஉௐdΦஒdذܢ˳b) Segment assets consist primarily of property, plant and equipment, (b) ʗᗘ༅ଐ˚߬) eټinventories, receivables and operating cash. ᎶνಁඖʥᏪଊ
(c) Segment liabilities comprise operating liabilities. (c) ʗᗘ߲ඦ˳ܢᏪ߲ඦe
พdᄥָʥஉௐeذᄈᑪܢ˳d) Capital expenditure comprises additions to property, plant and (d) ༅̯ʻˮ) equipment.
พͫᚬऩֺذˮਕ૯Γܞe) Unallocated other income represents gain, after providing for estimated (e) ̰ʗԯˢνऩ) ഽ19eڃtaxes, on disposal of partial interest of a property in Shenzhen (Note 19). νऩ
110 უ৷ᇯ഼αం2006 5. REVENUE AND SEGMENT 5. νɃʥʗᗘ༅ࢿᙩ INFORMATION CONTINUED
Secondary reporting format – geographical segments ɀеంࣟβÐΔਂʗᗘ
Year ended 31 December 2006 ࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹ Total Capital Revenue assets expenditure νɃ ᐢ༅ଐ ༅̯ʻˮ $’000 $’000 $’000 ɝʏ ɝʏ ɝʏ
The People’s Republic of China ɻജɁ̵ͳਝ (including Hong Kong) ˳ܢࠗಋ 985,536 1,390,662 84,143 United States ਝ 30,600 20,828 380 Europe ᅩݘ 18,014 16,030 436 Others ԯˢ 23,517 5,830 904
1,057,667 1,433,350 85,863
Year ended 31 December 2005 ࿀ϭɀཌྷཌྷʄαɊɀ˂ɍɊȹˀ˅α۹ Total Capital Revenue assets expenditure νɃ ᐢ༅ଐ ༅̯ʻˮ $’000 $’000 $’000 ɝʏ ɝʏ ɝʏ
The People’s Republic of China ɻജɁ̵ͳਝ (including Hong Kong) ˳ܢࠗಋ 956,182 1,119,743 10,782 United States ਝ 41,151 24,073 1,240 Europe ᅩݘ 12,547 13,045 232 Others ԯˢ 24,888 4,742 3,624
1,034,768 1,161,603 15,878
ʸֺΕؿਝࡼ့߮eᐢ༅ଐʥ༅۪כRevenue is based on the country in which the customer is located. νɃȽਥ ༅ଐֺΕؿਝࡼ့߮eכTotal assets and capital expenditure are based on the country where ̯ʻˮȽਥ the assets are located.
Phoenix Annual Report 2006 111 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
ሔིʗؿֲ͂ܘ .EXPENSES BY NATURE 6 .6
Expenses included in operating expenses and selling, general and ྦྷ˳ܢΕᏪ͂ʥሻਕdȹঁʥϷܧ͂ʑ administrative expenses are analysed as follows: ؿ͂ʗΣɎi
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
ᚬᚫሻخAmortisation of purchased programme ᑪɃຝ͌ʥཋᄧ and fi lm rights 17,011 22,325 Production costs of self-produced Ϭႇຝ͌ႇАι̯ programmes 119,786 91,710 ഽ34(i)(b)d(o) 17,000 16,368ڃټTransponder rental (Note 34(i)(b), (o)) ᔝೕኂै Provision for impairment of receivables Ꮆνಁඖಕࠤᅆௐ 16,293 106,177 Reversal of provision for impairment ᎶνಁඖಕࠤᅆௐᅆΑ of receivables (12,152 ) – Employee benefi t expenses ࡗါС͂ ټ໎ԑ༭ܢ˳ ’including Directors) ഽ11 263,418 242,207ڃ (emoluments) (Note 11 ټOperating lease rental in respect of ɎͶᏪै༉ै Directors’ quarters Ð໎ԑ਼ٞ 1,202 1,185 – land and buildings of third parties ÐɍʿؿɠΔʥᅢΧ 17,959 15,567 – Cost of inventories sold ɰਕΦஒι̯ 626 566 Depreciation expenses җᓿ͂ 23,373 26,181 Amortisation of lease premium for land ɠΔै༉͂ᚫሻ 540 – 2,230 2,410 ټAuditors’ remuneration ࣏ᅕ༭ พdᄥָʥஉௐಕࠤذ Impairment of property, plant and equipment 677 – ᚬಕࠤخImpairment of purchased ᑪɃຝ͌ʥཋᄧ programme and fi lm rights 1,680 3,380 Impairment of inventories Φஒಕࠤ – 3,257
112 უ৷ᇯ഼αం2006 INCOME TAX EXPENSE 7. ֺೢ͂ .7
˞α۹Ѕ߮ᎶᇾೢึС̯ܘHong Kong profi ts tax has been provided at the rate of 17.5% (2005: ࠗಋСೢȽ 17.5%) on the estimated assessable profi t for the year. Taxation on 17.5%ɀཌྷཌྷʄαi17.5%ೢଅᅆௐeࣵ overseas profits has been calculated on the estimated assessable ̔ึСᎶ˟ೢඖȽ࣓ኣ̯α۹ؿЅ߮Ꮆᇾೢึ එ྆พ৻ֺΕਝࡼؿሬ͂ೢଅ့߮e̯ܘprofi t for the year at the rates of taxation prevailing in the countries Сc in which the Group operates.
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
Current income tax ଊࣂֺೢi – Hong Kong profi ts tax ÐࠗಋСೢ 45,532 21,379 – Overseas taxation Ðࣵ̔ೢඖ 51 271 ༦֡α۹ࠗಋСೢכUnder/(over) provision of Hong Kong Ð – profi ts tax in the prior year ᅆௐɺӷʼn൚ᔾᅆௐ 375 (895 ) – ( ഽ30 (11,020ڃDeferred income tax (Note 30) Ⴎֺ֝ೢ
34,938 20,755
ȹȾȾɄαȹ˂ɀɊˀcɻਝਝࡼೢ৻כ On 20 January 1998, the PRC State Administration of Taxation granted a Tax Ruling of Business Tax and Foreign Enterprise ᐢѫగ̯එ྆Ϭɻਝुήཋ഼τࠉʔ̇ Income Tax on certain of the Group’s advertising fees collected ुήνՅߗɳᄤйೕˮᏪพೢ ഽڃfrom Shenzhou Television Company Ltd. (“Shenzhou”) in the ʥ̔ਆҙ༅ͬพֺೢೢ৻സց PRC (Note 13) (the “Ruling”). The Group has dealt with the 13സցe̯එ྆ɰ࣓ኣസ ʑ୮ଉɐ߸ೢඖeಳٲ၃ল৻ంכaforementioned taxes according to the Ruling in the consolidated ց ॶ˿܃ʥؒஃʥᘷˀ܁fi nancial statements. However, PRC tax laws and regulations and the Ϥcɻਝτᗐೢνؒ ࠗڈɻਝϤכඑ྆గߗɳ഼ݯ̯ڬinterpretations thereof may change in the future such that the Group ᛰ৽c would be subject to PRC taxation on certain income deemed to be ಋՅɾνɃᖔढ़ɻਝೢඖe̯එ྆ੀᘗᙩᜮ sourced in the PRC other than Hong Kong. The Group will continue ྦɻਝೢؒԹɾೕࢄ˞ിЅസցɾሬ͂ʥ to monitor developments in the PRC tax regime in order to assess the τࢽֲe ongoing applicability and validity of the Ruling.
Phoenix Annual Report 2006 113 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
INCOME TAX EXPENSE CONTINUED 7. ֺೢ͂ᙩ .7
С့߮ؿೢඖcၤઔ̯͂ึکThe tax on the Group’s profi t before tax differs from the theoretical ̯එ࣓྆ኣೢ amount that would arise using the tax rate of the location in which ʔ̇ᏪֺΕΔਂؿೢଅϤଐ́ɾଉሃಁᔾؿ the Company operates as follows: ଔΣɎi
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
С 245,825 203,419ึکProfi t before income tax ֺೢ
Calculated at a taxation rate of 17.5% ࣓ኣೢଅ17.5%့߮ (2005: 17.5%) ɀཌྷཌྷʄαi17.5% 43,019 35,598 Income not subject to taxation ˇᇾೢνɃ (10,823 ) (13,925) Expenses not deductible for ɺ˿గᇾೢϤκಕ͂ taxation purposes 10,273 8,925 Tax losses not recognised ̰ᆢႏೢඖᑋฌ 9,431 6,389 ᆢႏ̰کUtilisation of previously unrecognised ৽͂ͱ tax losses ೢඖᑋฌ (3,631 ) (15,202) ᆢႏೢඖ̰کRecognition of deferred tax asset ᆢႏΐͱ arising from previously unrecognised ᑋฌϤଐ́ – ( tax losses ɾႮ֝ೢඖ༅ଐ (13,900 Provision for overseas operations ࣵ̔Ꮺพ৻ᅆௐ 51 271 ༦֡α۹ࠗಋСೢכ Under/(over) provision of Hong Kong profi ts tax in prior years ᅆௐɺӷʼn൚ᔾᅆௐ 375 (895 ) Others ԯˢ 143 (406)
Tax expense ೢඖ͂ 34,938 20,755
8. LOSS ATTRIBUTABLE TO EQUITY 8. ̯ʔ̇ᚬऩܛτɁᎶЌᑋฌ HOLDERS OF THE COMPANY
The loss attributable to equity holders of the Company is dealt ̯ʔ̇ᚬऩܛτɁᎶЌᑋฌ1,276,000ಋʏɀ with in the financial statements of the Company to the extent of ཌྷཌྷʄαi673,000ಋʏɰ߮Ƀ̯ʔ̇ؿল eٲHK$1,276,000 (2005: HK$673,000). ৻ం
114 უ৷ᇯ഼αం2006 DIVIDENDS 9.ٖࢠ .9
˅࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀכ The 2005 fi nal dividends paid during the year ended 31 December were HK$59,278,000 (HK$0.012 per share). A dividend α۹ʻ˟ؿɀཌྷཌྷʄα̱౨ٖࢠݯ 2006 in respect of 2006 of HK$0.014 per share, amounting to a total 59,278,000ಋʏҰٖ0.012ಋʏe໎ ɀཌྷཌྷȼαɍ˂ɄˀᐾϷؿ໎ԑכdividend of HK$69,190,000 estimated based upon the number ԑੀ of outstanding shares of approximately 4,942,126,000 as at 31 ผผᘪɐొеɀཌྷཌྷʒαٖࢠҰٖ0.014 ɀཌྷཌྷʒαɊɀ˂ɍɊȹכDecember 2006, is to be proposed by the Directors at a Board of ಋʏc࣓ኣ Directors meeting to be held on 8 March 2007. These financial ˀɾ̰ϷԚٖͫᅕ͌4,942,126,000ٖ statements do not refl ect this dividend payable. ့߮Ѕ߮ͳݯ69,190,000ಋʏeϊ ωᎶ˟ٖࢠeܰܮԎ̰ʦٲ೩ল৻ం
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
ᘪ̱౨ٖࢠҰٖ0.014ಋʏۺ Proposed fi nal dividend of HK$0.014 (2005: HK$0.012) per share ɀཌྷཌྷʄαi0.012ಋʏ 69,190 59,278
СޔEARNINGS PER SHARE 10. Ұٖ .10
Basic ਥ̯ τɁܛСȽ࣓ኣ̯ʔ̇ᚬऩޔBasic earnings per share is calculated by dividing the profit Ұٖਥ̯ attributable to equity holders of the Company by the weighted ᎶЌึС˞αʑɰೕϷౝٖؿ˱ᚬ average number of ordinary shares in issue during the year. ̡яᅕ့߮e
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα
Profi t attributable to equity holders of ̯ʔ̇ᚬऩܛτɁᎶЌึС the Company ($’000) ɝʏ 212,385 181,482
Weighted average number of ɰೕϷౝٖؿ˱ᚬ̡яᅕ ordinary shares in issue (’000) ɝٖ 4,940,000 4,938,340
СޔBasic earnings per share Ұٖਥ̯ (Hong Kong cents) ಋ˦ 4.30 3.67
Phoenix Annual Report 2006 115 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
СᙩޔEARNINGS PER SHARE CONTINUED 10. Ұٖ .10
Diluted ᚫᑁ СȽΕஉֺτᚫᑁᅶΕౝٖɰޔDiluted earnings per share is calculated by adjusting the weighted Ұٖᚫᑁ ˱average number of ordinary shares outstanding to assume ᔝؿੱؗɎc࣓ኣɰೕϷౝٖؿሁኬ conversion of all dilutive potential ordinary shares. The Company ᚬ̡яᅕ့߮e̯ʔ̇τȹᗘᚫᑁᅶΕౝ has one category of dilutive potential ordinary shares which is share ٖcЩᑪٖᚬe̯ʔ̇Ƚ࣓ኣֆ̰ϷԚᑪٖᚬ ʔܘ˿ؿႏᑪᚬྫྷࠤ൬Ϸ့߮c˞ᔤցڃoptions. A calculation is done to determine the number of shares that ֺ ౨ංؿ̡я̟ٖძϤכʔٖ̯̇ͫܘcould have been acquired at fair value (determined as the average ̡ࠤ annual market share price of the Company’s shares) based on the ցᑪɃؿٖͫᅕ͌eɐ߸့ֺ߮ؿٖͫᅕ ੀผೕϷؿٖ܃monetary value of the subscription rights attached to outstanding ͌Ƚၤஉ೩ᑪٖᚬᏵϷԚ உכϊ့߮ؿٖͫᅕ͌ʭܘshare options. The number of shares calculated as above is ͫᅕ͌ˈ༖e࠱ ੀผೕϷؿٖͫᅕ܃compared with the number of shares that would have been issued ֺτ̰ϷԚᑪٖᚬᏵϷԚ τᗐᔾЩᅶΕᚫᑁٖͫȽ˱Ƀϭɰೕڬassuming the exercise of the share options. Where the number of ͌c ᔤցҰٖכshares so calculated is smaller than the number of shares that would Ϸౝٖؿ˱ᚬ̡яᅕc˞༠ߎ͂ Сؿౝٖ˱ᚬ̡яᅕeޔhave been issued assuming the exercise of all the outstanding share ᚫᑁ options, the difference represents potential dilutive shares and is added to the weighted average number of ordinary shares in issue to arrive at the weighted average number of ordinary shares for diluted earnings per share.
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα
Сؿ̯ʔ̇ޔᔤցҰٖᚫᑁכ͂ Profi t attributable to equity holders of the Company used to determine ᚬऩܛτɁᎶЌึС diluted earnings per share ($’000) ɝʏ 212,385 181,482
Weighted average number of ɰೕϷౝٖؿ˱ᚬ̡яᅕ ordinary shares in issue (’000) ɝٖ 4,940,000 4,938,340 Adjustment for share options (’000) గᑪٖᚬАˮؿሁኬɝٖ 5,582 8,680
СؿౝٖޔᔤցҰٖᚫᑁכ͂ Weighted average number of ordinary shares for diluted earnings ˱ᚬ̡яᅕɝٖ per share (’000) 4,945,582 4,947,020
Сಋ˦ 4.29 3.67ޔDiluted earnings per share (HK cents) Ұٖᚫᑁ
116 უ৷ᇯ഼αం2006 ټ໎ԑ༭ܢ˳EMPLOYEE BENEFIT EXPENSES 11. ࡗါС͂ .11 INCLUDING DIRECTORS’ EMOLUMENTS
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
ʥԯˢݛൎ 251,010 231,305ټWages, salaries and other allowances ɮ༅dᑀ Unutilised annual leave ̰͂α 1,544 75 ι̯ Ð ցᔾԜಁི߮ټPension costs – defi ned contribution ঽͤ plans, net of forfeited contributions κӀνԜಁ ഽa 10,864 10,827ڃ (Note a)
263,418 242,207
ι̯ÐցᔾԜಁི߮ټD ঽͤ a) Pensions – defi ned contribution plans) ᙔʔֺ̇ΕؿΔྻԝʥڃ๑ΈܘThe Group operates a number of defi ned contribution pension ̯එ྆ ི߮e̯එټschemes in accordance with the respective subsidiaries’ local ؒஃஉτΛඖցᔾԜಁঽͤ ଅֶ๑ᑀˈټؿɺ༅ټࡗᑀܘpractices and regulations. The Group is obligated to contribute ྆ ᔾΉ೩ི߮ټҰΊࡗ˞՞ցܘ܃ٲfunding to these plans based on various percentages of the ज़ e೩ི߮ؿ༅ଐȹঁֺͅဳଉټemployees’ salaries or a fi xed sum per employee with reference ొԜ༅ τeܛপɁڌؿዟ͓ټto their salary level. The assets of these schemes are generally ਥ held in separate trustee administered funds.
߮ټi) Employees in Hong Kong are provided with a defined (i) ࠗಋࡗȽᏵొԜցᔾԜಁʔዶ) ټࡗਥ̯ᑀܘ˂contribution provident fund scheme and the Group is ིcϤ̯එ྆Ұ required to make monthly contribution to the scheme ؿ10%Ήི߮АˮԜಁeӀνԜ ሻ˚ؿ̰ԞԜಁe࿀ϭאכbased on 10% of the employees’ basic salaries. Forfeited ಁȽ͂ contributions are used to offset the employer’s future ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹c contributions. For the year ended 31 December 2006, ࡗؿԜಁᐢᔾݯ11,037,000ಋʏ the aggregate amount of the employer’s contributions was ɀཌྷཌྷʄαi10,808,000ಋʏc approximately HK$11,037,000 (2005: HK$10,808,000) and ϤӀνԜಁᐢᔾݯ1,875,000ಋʏ the total amount of forfeited contributions was approximately ɀཌྷཌྷʄαi1,210,000ಋʏe HK$1,875,000 (2005: HK$1,210,000).
ܛThe assets of the scheme are held separately from those of ི߮ؿ༅ଐȽၤ̯එ྆༅ଐʗ ଉဳଉeټthe Group and are managed by independent professional τcԎͅዟ͓ਿพਥ fund managers.
Since 1 December 2000, the employees in Hong Kong ϬɀཌྷཌྷཌྷαɊɀ˂ȹˀcࠗಋ ི߮ੜټcan elect to join the Mandatory Provident Fund Scheme ࡗ˿ፕእ˱ɃੜԹֲʔዶ ɀכི߮Ƚ࣓ኣټི߮eੜዶټthe “MPF Scheme”). The MPF Scheme was introduced ዶ) ԝϤؒټpursuant to the Mandatory Provident Fund legislation ཌྷཌྷཌྷαཕЗؿੜԹֲʔዶ ི߮c̯එ྆ʥΈټintroduced in 2000. Under the MPF Scheme, the Group ઐˮe࣓ኣੜዶ ᗐνɃؿ5%ցޚࡗܘ˂and each of the employees make monthly contribution to ϽࡗҰ ԝΉི߮Аؒټthe scheme at 5% of the employees’ relevant income as ຮӮੜԹֲʔዶ defi ned under the Mandatory Provident Fund legislation. ˮԜಁe
Phoenix Annual Report 2006 117 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
ᙩټ໎ԑ༭ܢ˳EMPLOYEE BENEFIT EXPENSES 11. ࡗါС͂ .11 INCLUDING DIRECTORS’ EMOLUMENTS CONTINUED
ι̯ÐցᔾԜಁི߮ᙩټD ঽͤ a) Pensions – defi ned contribution plans (continued)) (i) (continued) (i) ᙩ Both the employer’s and the employees’ contributions are ˚ʥࡗؿԜಁяՇΈϽࡗҰ ᗐνɃ20,000ಋʏؿɐࠉֺஃޚ˂ subject to a cap of monthly relevant income of HK$20,000 5,000ಋכᗐνɃʭޚ˂Ұכfor each employee. For those employees with monthly ࠉeϭ relevant income less than HK$5,000, since 1 February ʏؿࡗcϬɀཌྷཌྷɍαɀ˂ȹˀc 2003, the employees’ contributions are voluntary. ೩ࡗ˿ϬᗙАˮԜಁe
For the year ended 31 December 2006, the aggregate ࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α ˚ི߮Аˮؿټamount of employer’s contributions made by the Group ۹c̯එ྆Ήੜዶ to the MPF Scheme was approximately HK$1,296,000 Ԝಁᐢᔾݯ1,296,000ಋʏɀཌྷ (2005: HK$1,281,000) and the total amount of forfeited ཌྷʄαi1,281,000ಋʏcϤӀν contributions was approximately HK$40,000 (2005: Ԝಁᐢᔾݯ40,000ಋʏɀཌྷཌྷʄ HK$52,000). αi52,000ಋʏe
ᙔʔֺ̇Εਝࡼؿڃii) Pursuant to the relevant local regulations of the countries (ii) ࣓ኣ̯එ྆ࣵ̔) ᙔʔ̇ၤΈڃᗐΔʿؒஃc೩ޚ ,where the overseas subsidiaries of the Group are located ঽͤါСི߮ʥþֶஉ͓ԯ֚ܧthese subsidiaries participate in respective government Ϭؿ retirement benefi t schemes and/or set up their own schemes ̯Ӹؿི߮ီτᗐི߮cኣ ˞collectively, the “Schemes”) whereby they are required to ϊc֤೩Ήτᗐི߮АˮԜಁc) eټcontribute to the Schemes to fund the retirement benefi ts of ݯ༅ࣟࡗؿঽͤါСొԜ༅ the eligible employees. Contributions made to the Schemes Ήτᗐི߮АˮؿԜಁȽ࣓ኣΈϽ are calculated either based on certain percentages of the ࡗؿሬ͂ᑀ༅ι̯ؿߗɳϛʗˈֶ՞ ᔾ့߮cԎϣΈਝࡼؿؒஃֺټapplicable payroll costs or fixed sums for each employee ց ᆲe̯එ྆ԎಲͨЄԯټwith reference to a salary scale, as stipulated under the ஃցؿᑀ requirements in the respective countries. The Group has ˢ൚ˮֺஃցԜಁؿஐͨe೩ི߮ ɻٲ၃νऩכАˮࣂכno further obligation beyond the required contributions. ɎؿԜಁȽ The contributions under the Schemes are charged to the κe consolidated income statement as incurred.
118 უ৷ᇯ഼αం2006 ᙩټ໎ԑ༭ܢ˳EMPLOYEE BENEFIT EXPENSES 11. ࡗါС͂ .11 INCLUDING DIRECTORS’ EMOLUMENTS CONTINUED
ټE ໎ԑʥঢ়ज़ဳଉɁࡗؿ༭ b) Directors’ and senior management’s emoluments) The remuneration of every Director for the year ended 31 ҰΊ໎ԑ࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ ༗ͶΣɎiټDecember 2006 is set out below: ˅α۹ؿ༭
Employer’s Quarters and contribution Discretionary housing to pension Name of Director Fees Salary bonuses allowance scheme Total ˚Ή ི߮ټٞʥ ঽ਼ͤ יੱೕ ؿ٦ ָ۰ݛൎ АˮؿԜಁ ᐢ߮ ټᑀ ټ໎ԑշΊ $’000 $’000 $’000 $’000 $’000 $’000 ɝʏ ɝʏ ɝʏ ɝʏ ɝʏ ɝʏ
ᅥ – 4,818 1,500 879 445 7,642ٽLIU Changle ჳ .1 2. CHUI Keung ੌੜ – 1,974 700 971 182 3,827 ɀཌྷཌྷʒαכWANG Jiyan ˔Ӱ .3 (appointed on 29 September 2006) Ⱦ˂ɀɊȾˀᏵկͨ ഽ$ – 1,722 700 848 159 3,429ڃ (note A) 4. Michelle Lee GUTHRIE 0LFKHOOH/HH*87+5,( ɀཌྷཌྷʒαכ (resigned on 29 September 2006) Ⱦ˂ɀɊȾˀᖽͨ – – – – – – – – – – – – ڋLAU Yu Leung, John ჳީ .5 6. CHEUNG Chun On, Daniel ਜ਼ᔪΪ ɀཌྷཌྷʒαכ (resigned on 29 September 2006) Ⱦ˂ɀɊȾˀᖽͨ – – – – – – 7. LO Ka Shui ᖓཽ 200 – – – – 200 8. CHEUNG San Ping ਜ਼ณМ ɀཌྷཌྷʒαכ (resigned on 29 September 2006) Ⱦ˂ɀɊȾˀᖽͨ – – – – – – 9. XU Gang ஈࡄ – – – – – – – – – – – – ɻۺGONG Jianzhong ᛛ .10 11. LEUNG Hok Lim ષነዅ 200 – – – – 200 12. Thaddeus Thomas 7KDGGHXV7KRPDV BECZAK %(&=$. 200 – – – – 200 GAO Nianshu ঢ়֨࣊ .13 ɀཌྷཌྷʒαכ (appointed on 29 September 2006) Ⱦ˂ɀɊȾˀᏵկͨ – – – – – – LU Xiangdong ቧΉ .14 ɀཌྷཌྷʒαכ (appointed on 29 September 2006) Ⱦ˂ɀɊȾˀᏵկͨ – – – – – – 15. Paul Francis AIELLO 3DXO)UDQFLV$,(//2 ɀཌྷཌྷʒαכ (appointed on 29 September 2006) Ⱦ˂ɀɊȾˀᏵկͨ – – – – – –
ഽAi ˔ӰϬɀཌྷཌྷʒαȾ˂ɀɊȾˀڃ Note A: Mr. WANG Jiyan was appointed as a Director effective from ᅕᔾ૪ၰɀཌྷټSeptember 2006, the amount of remuneration covers full ɰᏵկͨݯ໎ԑc༭ 29 year 2006. ཌྷʒα۹Ͳαe
Phoenix Annual Report 2006 119 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
ᙩټ໎ԑ༭ܢ˳EMPLOYEE BENEFIT EXPENSES 11. ࡗါС͂ .11 INCLUDING DIRECTORS’ EMOLUMENTS CONTINUED
ᙩټE ໎ԑʥঢ়ज़ဳଉɁࡗؿ༭ b) Directors’ and senior management’s emoluments (continued)) ᅥͱٽɀཌྷཌྷʒαɊɀ˂ɍɊȹˀcჳכ As of 31 December 2006, Mr. LIU Changle had outstanding Ұٖ1.08ಋʏႏᑪ5,320,000ܘ˿share options to purchase 5,320,000 (2005: 5,320,000) shares ́ኟτ at HK$1.08 per share, Mr. CHUI Keung had outstanding share ٖɀཌྷཌྷʄαi5,320,000ٖٖͫؿ Ұܘ˿options to purchase 3,990,000 (2005: 3,990,000) shares at ̰ϷԚᑪٖᚬcϤੌੜͱ́ኟτ HK$1.08 per share and Mr. WANG Jiyan had outstanding share ٖ 1.08ಋʏႏᑪ3,990,000ٖɀཌྷཌྷʄ options to purchase 3,990,000 (2005: 3,990,000) shares at αi3,990,000ٖٖͫؿ̰ϷԚᑪٖᚬe Ұٖ1.08ಋʏႏᑪܘ˿HK$1.08 per share. No options were exercised during 2006 and ˔Ӱͱ́ኟτ the fair values of these options have not been included in the 3,990,000ٖɀཌྷཌྷʄαi3,990,000ٖ ɀཌྷכdirectors’ emoluments disclosed above. The above outstanding ٖͫؿ̰ϷԚᑪٖᚬeᑪٖᚬԎಲ share options had vested as at 31 December 2006. ཌྷʒʑᏵϷԚcϤ೩ᑪٖᚬؿʔ̡ࠤ͛ ʑeɐ߸̰ټ߮Ƀɐʼֺׄᚉؿ໎ԑ༭̰ ɀཌྷཌྷʒαɊɀ˂ɍɊȹכϷԚᑪٖᚬɰ ˀᓊᙔe
The remuneration of every Director for the year ended 31 ҰΊ໎ԑ࿀ϭɀཌྷཌྷʄαɊɀ˂ɍɊȹˀ ༗ͶΣɎiټDecember 2005 is set out below: ˅α۹ؿ༭
Employer’s Quarters and contribution Discretionary housing to pension Name of Director Fees Salary bonuses allowance scheme Total ˚Ή ི߮ټٞʥ ঽ਼ͤ יੱೕ ؿ٦ ָ۰ݛൎ АˮؿԜಁ ᐢ߮ ټᑀ ټ໎ԑշΊ $’000 $’000 $’000 $’000 $’000 $’000 ɝʏ ɝʏ ɝʏ ɝʏ ɝʏ ɝʏ
ᅥ – 4,701 1,600 864 434 7,599ٽLIU Changle ჳ .1 2. CHUI Keung ੌੜ – 1,925 800 948 178 3,851 3. Michelle Lee GUTHRIE 0LFKHOOH/HH*87+5,( – – – – – – – – – – – – ڋLAU Yu Leung, John ჳީ .4 5. CHEUNG Chun On, Daniel ਜ਼ᔪΪ – – – – – – 6. LO Ka Shui ᖓཽ 200 – – – – 200 7. KUOK Khoon Ean ʬ ɀཌྷཌྷʄαכ (resigned on 10 March 2005) ɍ˂Ɋˀᖽͨ 38 – – – – 38 8. CHEUNG San Ping ਜ਼ณМ – – – – – – 9. XU Gang ஈࡄ – – – – – – – – – – – – ɻۺGONG Jianzhong ᛛ .10 11. LEUNG Hok Lim ષነዅ ɀཌྷཌྷʄαכ (appointed on 21 January 2005) ȹ˂ɀɊȹˀᏵկͨ 189 – – – – 189 12. Thaddeus Thomas BECZAK 7KDGGHXV7KRPDV%(&=$. ɀཌྷཌྷʄαכ (appointed on 11 March 2005) ɍ˂ɊȹˀᏵկͨ 162 – – – – 162
120 უ৷ᇯ഼αం 2006
ᙩټ໎ԑ༭ܢ˳EMPLOYEE BENEFIT EXPENSES 11. ࡗါС͂ .11 INCLUDING DIRECTORS’ EMOLUMENTS CONTINUED
(c) Five highest paid individuals F ʄϽঢ়ᑀɁɡ The fi ve individuals whose emoluments were the highest in the ࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹c Group for the year ended 31 December 2006 include three ̯එ྆ʄϽঢ়ᑀɁɡɻc˳ܢɍΊɀ כټtwo) Executive Directors whose emoluments are refl ected ཌྷཌྷʄαiԭΊਨϷ໎ԑc֤೩༭ :2005) eαʑɎԭܮin the analysis presented in (a) above. The emoluments paid/ ɐʼ(a) еͶؿʗʑʦ payable to the remaining two (2005: three) individuals during ΊɀཌྷཌྷʄiɍΊɁɡʻ˟þᎶ˟ؿ ΣɎiټthe year are as follows: ༭
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
5,662 4,076 ټSalaries ᑀ ؿ٦ 1,400 2,400יDiscretionary bonus ੱೕ Housing allowance ָ۰ݛൎ 2,009 2,781 523 376 ټPension fund ঽͤ
7,861 11,366
The emoluments of the remaining two (2005: three) individuals ɎԭΊɀཌྷཌྷʄαiɍΊɁɡؿ༭ ʍ˝˞Ɏᆲiټ :fell within the following bands
Number of individuals Ɂᅕ Emolument bands 2006 2005 ᆲ ɀཌྷཌྷʒα ɀཌྷཌྷʄαټ༭
HK$3,000,001 – HK$3,500,000 3,000,001ಋʏ Ð 3,500,000ಋʏ 1 2 HK$3,500,001 – HK$4,000,000 3,500,001ಋʏ Ð 4,000,000ಋʏ – – HK$4,000,001 – HK$4,500,000 4,000,001ಋʏ Ð 4,500,000ಋʏ 1 1
˟During the year, no emoluments or incentive payments were paid αʑcԎಲΉʄϽঢ়ᑀɁɡʻ˟ֶᎶ ᆉc˞Аݯ˱Ƀ̯එֶټor payable to the fi ve highest paid individuals as an inducement ͨЄ༭ to join the Group or as compensation for loss of office (2005: ྆ؿᆉֶАݯঽͨɀཌྷཌྷʄαi Nil). ಲe
Phoenix Annual Report 2006 121 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
12. ACCOUNTS RECEIVABLE, NET 12. Ꮆνሏಁ૱ᔾ
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
Accounts receivable Ꮆνሏಁ 70,938 170,319 Less: Provision for impairment ಕiᎶνሏಁಕࠤᅆௐ of receivables (14,779 ) (127,065)
56,159 43,254
eٶޚThe carrying amounts of accounts receivable, net, approximate their Ꮆνሏಁؿሏࠍࠤၤ֤೩ؿʔ̡ࠤ fair value.
ɻਝכ˞ɻਝկͨȹᄤйˤଉcᔄכThe Group has appointed an advertising agent in the PRC to ̯එ྆ɰ promote the sales of the Group’s advertising airtime and programme ྊʑઐᄤ̯එ྆ؿᄤйࣂݒሻਕʥຝ͌ᖳХc ഽ13e̯එڃsponsorship and collect advertising revenues within the PRC on Ԏ౧̯එ྆νՅᄤйνɃӮ behalf of the Group (see note 13). The Group generally requires ྆ȹঁ߬ұ۪ʸདͱʻ˟ಁඖcʀͫ ൘౨eڌcustomers to pay in advance, but grants a credit period of 30 days to ۪ʸ30ˀϭ90ˀؿ 90 days to some customers.
The ageing analysis of the accounts receivable from customers is as Ꮆν۪ʸሏಁؿሏᙍʗΣɎi follows:
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
0-30 days 0ϭ30ˀ 31,446 19,031 31-60 days 31ϭ60ˀ 10,780 12,623 61-90 days 61ϭ90ˀ 4,343 1,701 91-120 days 91ϭ120ˀ 5,644 9,046 Over 120 days 18,725 127,918
70,938 170,319 Less: Provision for impairment ಕiᎶνሏಁಕࠤᅆௐ of receivables (14,779 ) (127,065)
56,159 43,254
එ྆Ԏಲτᗐ̯ܨඑ྆ኟτɣ൴۪ʸc̯כͅ There is no concentration of credit risk with respect to accounts ൘එɻࠓ፮eڌreceivable because the Group has a large number of customers. Ꮆνሏಁؿ
࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹c̯כ :The Group has recognised a loss of HK$16,293,000 (2005 HK$106,177,000) for the impairment of its accounts receivable එ྆గԯᎶνሏಁಕࠤϤᆢႏᑋฌ16,293,000 during the year ended 31 December 2006. The loss has been ಋʏɀཌྷཌྷʄαi106,177,000ಋʏeᑋ ܧɻሻਕdȹঁʥϷٲincluded in selling, general and administrative expenses in ฌɰ߮Ƀ၃νऩ α۹ʑగᎶνሏಁಕ̯כthe consolidated income statement. The Group has written off ͂ඖɎe̯එ྆ɰ HK$128,579,000 (2005: HK$17,220,000) of accounts receivables ࠤᅆௐ࿁ሻ128,579,000ಋʏɀཌྷཌྷʄαi ༦֡כagainst the provision for impairment of receivables and reversed 17,220,000ಋʏɾᎶνሏಁcԎᅆΑ HK$12,152,000 of the provision for impairment of receivables made α۹АˮɾᎶνಁඖಕࠤᅆௐ12,152,000ಋ in prior years during the year. ʏe
122 უ৷ᇯ഼αం2006 ʥԯˢᎶνಁඖټܘPREPAYMENTS, DEPOSITS AND 13. ད˟ಁඖd .13 OTHER RECEIVABLES
ȹ೫Ꮆνܢ˳ʥԯˢᎶνಁඖټܘIncluded in prepayments, deposits and other receivables is an ད˟ಁඖd amount of approximately HK$344,263,000 (2005: HK$299,805,000) ɻਝᄤйˤଉुήؿಁඖ344,263,000ಋʏ owing from an advertising agent, Shenzhou, in the PRC. The amount ɀཌྷཌྷʄαi299,805,000ಋʏeϊಁඖ එ྆νՅؿᄤйνɃɰκʻ̯ٲrepresents advertising revenue collected, net of expenses incurred ݯुήˤ ଊϷႺϷСଅ߮ࢠeܘʥאby Shenzhou on behalf of the Group. The balance is unsecured and ˮeݯಲ bears interest at prevailing bank interest rates.
পΪખcڌThe Group has set up a commercial and trust arrangement ̯එ྆ၤुήɰ͓߯ȹඖਆพʥ ɀཌྷཌྷɀαȾ˂ɀɊʄˀ˰ೕכwith Shenzhou, details of which have been disclosed in the ੱɰΕ̯ʔ̇ announcement made by the Company on 25 September 2002. ؿʔйʑׄᚉe
পؒྦྷЮ೩ၤुήؿڌαઐˮؿٶThe Trust Law in the PRC enacted in recent years has not laid ಳϤcɻਝ পΪખϤӰԎಲୀؿໃྡྷஃցcΐϊc̰ڌ out specific detailed implementation rules applicable to trust arrangements such as that of the Group with Shenzhou, therefore ॶٛցΪખɻ˿ԗؒਨϷؿᆲeᒖಳဳଉ ɐȹ˿ϷؿΪખc܁the extent of the enforceability of the arrangement is still unclear. ᄙȿԷଊϷΪખȽؒ Ӡԯˢ˿Ϸፒؒ˞ҝޢAlthough the management recognises that the present arrangement Ўဳଉᄙੀᘗᙩဟྦʥ is the only legally viable arrangement, the management will continue ഁτᗐੱؗe to monitor and explore alternatives to improve the situation.
˂ɀཌྷཌྷʒαɊɀכThe management of the Group is of the opinion that the amount ̯එ྆ဳଉᄙႏݯc owing from Shenzhou of approximately HK$344,263,000 as at 31 ɍɊȹˀुή˄ɾಁඖ344,263,000ಋʏ December 2006 is fully recoverable and no provision is required. ੀ˿੪ᅕνΑcܨϊˇАˮᅆௐe
ʥԯˢᎶνಁඖؿሏࠍࠤၤ֤ټܘThe carrying amounts of prepayments, deposits and other ད˟ಁඖd eٶޚreceivables approximate their fair values. ೩ؿʔ̡ࠤ
14. INVENTORIES 14.Φஒ
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
Decoder devices and satellite receivers ᆦኂʥᇯܱઅνኂ 4,952 5,557
The cost of inventories recognised as expense and included in other Φஒι̯ݯᅕ626,000ಋʏɀཌྷཌྷʄαi income, net, amounted to HK$626,000 (2005: HK$566,000). 566,000ʏɰᆢႏА͂cԎ߮ɃԯˢνɃ ૱ᔾඖɎe
Phoenix Annual Report 2006 123 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
15. AMOUNTS DUE FROM/TO RELATED 15.ᎶνþᎶ˟ᗐடʔ̇ಁඖ COMPANIES
ȹαɾ̰ʻ˟ݯכThe outstanding balances with related companies are aged less than ᗐடʔ̇ֆτሏᙍʭ ޚ߬ұᑹɀཌྷཌྷʄαiܘdЛࢠʥאone year and are unsecured, non-interest bearing and repayable on ಲ demand (2005: Same). e
The carrying amounts of amounts due from/to related companies ᎶνþᎶ˟ᗐடʔ̇ಁඖؿሏࠍࠤၤ֤೩ؿʔ eٶޚapproximate their fair values. ̡ࠤ
ᚬ૱ᔾخPURCHASED PROGRAMME AND FILM 16. ᑪɃຝ͌ʥཋᄧ .16 RIGHTS, NET
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏɝʏ
20,109 30,067ٱBalance, beginning of year α Additions ᄈᑪ 16,728 16,083 Amortisation ᚫሻ (17,011 ) (22,325) Impairment loss ಕࠤᑋฌ (1,680 ) (3,380 ) Others ԯˢ (170 ) (336 )
Balance, end of year αୄ 17,976 20,109
ᚬخLess: Purchased programme ಕiᑪɃຝ͌ʥཋᄧ and fi lm rights – current portion Ð౨ͫ (4,061 ) (5,141 )
13,915 14,968
124 უ৷ᇯ഼αం2006 17. LEASE PREMIUM FOR LAND 17. ɠΔै༉͂
˟ད˟Ꮺै༉ܞɠΔԚ͂ᚬɾᚬऩכThe Group’s interest in land use rights represents prepaid operating ̯එ྆ lease payments and its net book value is analysed as follows: ಁcʥԯሏࠍ૱ࠤʗΣɎi
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
Outside Hong Kong, held on: ࠗಋྊ̔cܛτi – Leases of over 50 years ൚༦αؿै༉ 74,696
For the For the year ended year ended 31 December 31 December 2006 2005 ࿀ϭ ࿀ϭ ɀཌྷཌྷʒα ɀཌྷཌྷʄα Ɋɀ˂ Ɋɀ˂ ɍɊȹˀ ɍɊȹˀ α۹ ˅α۹˅ $’000 $’000 ɝʏ ɝʏ
– – ٱBalance, beginning of year α – ഽD 75,236ڃAdditions (Note a) ສ Amortisation expense ᚫሻ͂ (540) –
Balance, end of year αୄ 74,696 –
ၤᒟႚඑ྆τࠉʔ̇ᒟכܞa) Additions for the year represented the land use rights of a villa (a) ̯α۹ສ) ɻֺઅνПྎמஒ͚מthe “Villa”) received from a barter transaction with Mission Hills ႚ൬Ϸؿ) Group Limited (“Mission Hills”). ПྎؿɠΔԚ͂ᚬe
ɀཌྷཌྷʒαʒ˂ɀɊɍˀc̯එ྆ၤᒟכ On 23 June 2006 the Group entered into a strategic cooperation agreement (the “Strategic Cooperation Agreement”) and a ႚ͓߯ኝАԾᘪኝАԾᘪ ஒԾᘪe࣓ኣኝמஒԾᘪמbarter agreement (the “Barter Agreement”) with Mission Hills. ʥ According to the Strategic Cooperation Agreement, the Group АԾᘪc̯එ྆ੀΕԯᇯܱཋ഼፼༞ɐొ will provide advertising airtime on its satellite television channels ԜᄤйࣂݒcԎ༦С̯͂එ྆༅ʥΕ and assist Mission Hills in the planning and promotion of the ఌพؿეኒΔϽԾХᒟႚஃིʥۧඨᒟ ಶeኝАԾᘪؿۂcorporate image and branding of Mission Hills by using the ႚؿͬพѼോʥ Group’s resources and leading position in the media industry. ౨ࠉȽ͓߯ͅˀ౨߮ݯ౨ʄαe The contract term of the Strategic Cooperation Agreement is fi ve years from the date of the contract.
Phoenix Annual Report 2006 125 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
17. LEASE PREMIUM FOR LAND 17. ɠΔै༉͂ᙩ CONTINUED
(a) (Continued) (a) ᙩ
ஒԾᘪcᒟႚੀ˞98,000,000ಋמUnder the Barter Agreement, Mission Hills will transfer the title, ࣓ኣ rights and interests of the Villa in Mission Hills in Residence ʏɾძࣟΉ̯එ྆ᔝᜑᒟႚΕɣΩೕࢄඖ ПྎؿพᚬdᚬСʥᚬऩcϤАכdevelopment to the Group at a price of approximately HK$98 ͌ɻ ஒԾמmillion and in exchange, the Group will provide: (1) airtime ݯ͚c̯එ྆ੀొԜi(1)͓߯ͅ for advertisements for five years from the date of the Barter ᘪˀ౨߮ݯ౨ʄαؿ೩ძࠤᄤйࣂݒ ντҗᜑٲȹঁძ͌ܘAgreement of an equivalent value based on charging rates that ࣓ኣ༖̯ʔ̇ are at a discount to the Company’s normal rate card charges ؿνˋ့̡߮ʥ(2)τᗐஃིʥۧඨᒟ ৻eרಶؿۂand (2) services related to the planning and promotion of the ႚʥԯඖ͌ؿͬพѼോʥ corporate image and branding of Mission Hills and its projects. Пྎؿʔ̡ࠤዟ͓Ѕࠤۤࣟ༅ଐി ˂ɀཌྷཌྷʒαȼכThe fair value of the Villa has been assessed by an independent Ѕᚋਐτࠉʔ̇ിЅc valuer, Vigers Appraisal & Consulting Limited, on 31 July 2006 ɍɊȹˀݯ103,000,000ಋʏcΐϊc at approximately HK$103 million, and therefore the agreed price ဳଉᄙႏݯ98,000,000ಋʏɾᘪցძၤ ˳eПྎؿᐢι̯ٶޚof HK$98 million is considered by management to approximate Пྎؿʔ̡ࠤ ᗐೢඖݯ100,543,000ಋʏeޚܢ the fair value of the Villa. The total cost of the Villa, including relevant taxes, is approximately HK$100,543,000. The cost of Пྎؿι̯ɰ࣓ኣዟ͓ЅࠤֺАЅࠤc the Villa has been allocated between the lease premium for land ིʗݯɠΔै༉͂75,236,000ಋʏ (HK$75,236,000) and the building (HK$25,307,000) based on ʥᅢΧ25,307,000ಋʏe the valuation assessment of the independent valuer.
ʄα౨ࠉొԜᄤйࣂݒܘThe total revenues to be recorded by the Group for the provision గ̯එ྆ ৻Ϥੀʀ፣ؿᐢνɃȽ࣓ኣ˞רof airtime and services over the fi ve year period of the contract ʥ is based on the fair value of the Villa received of approximately 98,000,000ಋʏઅνؿПྎؿʔ̡ࠤ߮ HK$98 million. The revenues recorded for airtime utilised by ့eగᒟႚֺԚ͂ᄤйࣂݒϤ፣ؿνɃ Mission Hills is based on the rates charged to other customers Ƚ࣓ኣΉᑪൕᗘЍᄤйࣂݒࢀ൴ؿԯˢ۪ ৻רpurchasing similar volumes of airtime. The revenues recorded ʸֺνՅؿ͂ˋ့̡߮eగֺొԜ for the services provided is based on prices for the services Ϥ፣ؿνɃȽ࣓ኣၤᒟႚᘪցؿֺొԜ ৻ɾძ့ࣟ߮eר .provided agreed with Mission Hills
For the year ended 31 December 2006, the Group recognised ࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀα۹c ৻רapproximately HK$9,827,000 and HK$22,856,000, respectively, ̯එ྆గֺԚ͂ᄤйࣂݒʥֺొԜ of revenue for airtime utilised and services provided. As at 31 ϤᆢႏνɃʗПݯ9,827,000ಋʏʥ ˂ɀཌྷཌྷʒαɊɀכDecember 2006, the unutilised value of airtime and services 22,856,000ಋʏe totaling HK$65,362,000 has been recorded in deferred income ɍɊȹˀcͳ65,362,000ಋʏؿ̰Ԛ͂ ɻؿႮٲ৻ɰ߮Ƀ༅ଐ߲ඦרin the balance sheet. The Group took possession of the Villa in ᄤйࣂݒʥ ɀཌྷཌྷʒαȼ˂ኟכJuly 2006 and received title in February 2007. ֝νɃʑe̯එ྆ɰ ɀཌྷཌྷȼαɀ˂અνԯพכτПྎcԎ ᚬe
126 უ৷ᇯ഼αం2006 พdᄥָʥஉௐ૱ᔾذ.PROPERTY, PLANT AND EQUIPMENT, 18 .18 NET
Broadcast Furniture operations Leasehold and and other Motor Construction Buildings improvements fi xtures equipment vehicles in progress Total ै༉ ்ᯫʥ ᄤᅌᏪ༜ʥ ɮೡ ᐢ߮ۺพ࠳ ສ ԯˢஉௐ Ӂӹ Εذ ᅢΧ $’000 $’000 $’000 $’000 $’000 $’000 $’000 ɝʏ ɝʏ ɝʏ ɝʏ ɝʏ ɝʏ ɝʏ
ɀཌྷཌྷʄαȹ˂ȹˀכ At 1 January 2005 Cost ι̯ – 22,824 2,913 106,613 8,764 – 141,114 Accumulated depreciation ୃዶҗᓿ – (11,225 ) (1,837 ) (69,142 ) (4,041 ) – (86,245 )
Net book amount ሏࠍ૱ࠤ – 11,599 1,076 37,471 4,723 – 54,869
Year ended ࿀ϭɀཌྷཌྷʄαɊɀ˂ December 2005 ɍɊȹˀ˅α۹ 31 ሏࠍ૱ࠤ – 11,599 1,076 37,471 4,723 – 54,869ٱOpening net book amount ౨ Exchange differences මЙᔾ – (96 ) (20 ) 46 43 – (27 ) Additions ᄈᑪ – 1,419 7 13,076 1,376 – 15,878 Disposals ˮਕ – – – (6 ) (15 ) – (21 ) Depreciation җᓿ – (3,717 ) (427 ) (20,465 ) (1,572 ) – (26,181 )
Closing net book amount ౨ୄሏࠍ૱ࠤ – 9,205 636 30,122 4,555 – 44,518
ɀཌྷཌྷʄαɊɀ˂ɍɊȹˀכ At 31 December 2005 Cost ι̯ – 24,120 2,842 119,612 9,916 – 156,490 Accumulated depreciation ୃዶҗᓿ – (14,915 ) (2,206 ) (89,490 ) (5,361 ) – (111,972 )
Net book amount ሏࠍ૱ࠤ – 9,205 636 30,122 4,555 – 44,518
Year ended ࿀ϭɀཌྷཌྷʒαɊɀ˂ December 2006 ɍɊȹˀ˅α۹ 31 ሏࠍ૱ࠤ – 9,205 636 30,122 4,555 – 44,518ٱOpening net book amount ౨ Exchange differences මЙᔾ – 104 11 645 (31 ) – 729 ഽD 25,307 4,348 110 17,624 1,768 36,706 85,863ڃAdditions (Note a) ᄈᑪ Disposals ˮਕ – – – – (110 ) – (110 ) Depreciation җᓿ (352 ) (6,109 ) (237 ) (15,136 ) (1,539 ) – (23,373 ) Impairment ಕࠤ – (256 ) (188 ) (233 ) – – (677 )
Closing net book amount ౨ୄሏࠍ૱ࠤ 24,955 7,292 332 33,022 4,643 36,706 106,950
ɀཌྷཌྷʒαכ At 31 December 2006 Ɋɀ˂ɍɊȹˀ Cost ι̯ 25,307 28,530 2,888 136,946 11,501 36,706 241,878 Accumulated depreciation ୃዶҗᓿʥಕࠤ and impairment (352 ) (21,238 ) (2,556 ) (103,924 ) (6,858 ) – (134,928 )
Net book amount ሏࠍ૱ࠤ 24,955 7,292 332 33,022 4,643 36,706 106,950
Phoenix Annual Report 2006 127 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
พdᄥָʥஉௐ૱ᔾᙩذ.PROPERTY, PLANT AND EQUIPMENT, 18 .18 NET CONTINUED
Depreciation expense of HK$15,136,000 (2005: HK$20,465,000) җᓿ͂15,136,000ಋʏɀཌྷཌྷʄαi has been included in operating expenses, and HK$8,237,000 (2005: 20,465,000ಋʏɰ߮ɃᏪ͂ʑcϤ HK$5,716,000) in selling, general and administrative expenses. 8,237,000ಋʏɀཌྷཌྷʄαi5,716,000ಋʏ Ƚ߮ɃሻਕdȹঁʥϷܧ͂ʑe
එ྆Ԕτ૯Γȹᄝᅢ̯ܢ˳ɮೡۺഽai Εڃ Note a: Construction in progress consists of the Group’s entitlement to use ڃכsquare meters in the building in Shenzhen discussed in Χɻؿ10,000̡ʿϝԚ͂ᚬС 10,000 Note 19. The Group’s entitlement to use has been accounted for as ഽ19ׄᚉe̯එ྆ؿԚ͂ᚬСɰ a fi nance lease as follows: ɃሏͶАጪ༅ै༉ΣɎi
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
Cost – capital fi nance lease ι̯Ð༅̯ጪ༅ै༉ 30,848 –
128 უ৷ᇯ഼αం2006 ʥೕࢄι̯ټܘพذ .PROPERTY DEPOSIT AND 19 .19 DEVELOPMENT COSTS
ᙔڃɀཌྷཌྷȹαʒ˂Ɋȹˀc̯ʔ̇ؿȹංכ On 11 June 2001, the Group entered into an agreement with ૯Γ ɻכஃིਝɠѫ (The Shenzhen National Land Planning Bureau)1 to ʔ̇ၤ૯Γ̟ஃིਝɠѫᖋ߯ᑪൕȹϽ̟ acquire a land use right on a parcel of land situated in Shenzhen, the ਝ૯ΓɾɠΔؿɠΔԚ͂ᚬԾᘪc˞Аೕࢄȹ ȹႇАɻܢ˳ԯذዾۺPRC for the development of a building (which includes a production ᄝԜ̯එ྆Ԛ͂ؿ centre) for the Group. The total consideration for the acquisition was ʶeᑪൕɠΔԚ͂ᚬؿᐢˤძ57,354,000 approximately HK$57,354,000. ಋʏe
๑ԾᘪؿԜಁஃցcɰʻ˟ʀ૯Γ̟ஃིਝܘ Pursuant to the payment terms of the agreement, the full amount of approximately HK$57,354,000 was paid to ૯Γ̟ஃིਝɠѫ (The ɠѫؿͲಁඖݯ57,354,000ಋʏcАݯ ˂ɀཌྷཌྷɍαʒכShenzhen National Land Planning Bureau)1 as the cost of the land νᑪɠΔԚ͂ᚬؿ͂cԎ eټܘพذacquisition, and was recorded as a property deposit of the Group as ɍɊˀɃሏͶА̯එ྆ؿ at 30 June 2003.
کPursuant to an agreement dated 29 October 2003 (the “Agreement”) ࣓ኣ̯එ྆ၤɻณඑ྆ઁٖτࠉʔ̇ ᐲֺ͚כඑ྆τࠉʔ̇ԯٖͫۺޫီ entered into by the Group and Oasiscity Limited (“Oasiscity”), a ᙔʔ̇Oasiscity Limitedڃwholly-owned subsidiary of Neo-China Group (Holdings) Limited ˚ɐ̟ؿͲ༅ ɀཌྷཌྷɍαɊ˂ɀɊȾˀ߯כ formerly known as “Neo-Tech Global Limited”), the shares of Oasiscity) which are listed on the Main Board of the Stock Exchange, Oasiscity ͓ؿԾᘪԾᘪcOasiscityੀ߲ஐʻ˟ೕࢄ cϤɻณඑ྆ઁٖټؿȹʘֺ༅ذዾۺwould be responsible for providing all required financing for the eړdevelopment of the building and the fulfillment of such obligation τࠉʔ̇͛ɰݯᄚϷ೩ஐͨϤАˮኪ ൬ȹүʻ˟ͨЄ༅ذዾۺwas guaranteed by Neo-China Group (Holdings) Limited. The ̯එ྆ˇݯೕࢄ ˮਕڈذዾۺೕࢄඖ͌ѧιࣂԔτכcټ Group would not be required to provide any further financing for ᗐͫᚬऩeޚthe development of the building but would be entitled to a relevant ࠍዶؿ portion of the non-saleable area of the building on completion of the development.
ɀཌྷཌྷʄαʄ˂Ɋɀˀc̯එ྆ၤ Oasiscityכ On 12 May 2005, the Group and Oasiscity entered into a supplementary agreement (the “Supplementary Agreement”), ͓߯ȹͫ˨Ծᘪ˨Ծᘪc࣓ኣ˨ ۺଊࣂ̳Εጙذዾۺכpursuant to which the Group transferred its entitlement to 10,000 Ծᘪc̯එ྆ੀԯ ˮਕࠍዶؿ 10,000 ̡ʿϝᔝڈsquare meters of the non-saleable area of the building under ɻᎶԔτؿ construction to Oasiscity for RMB60,000,000 (equivalent to ᜑʀ OasiscitycАძݯɁ̵ྫྷ 60,000,000 ʏ 55,800,000 ಋʏcʗɍ౨ʻ˟eכ೩ޚ approximately HK$55,800,000) payable in 3 installments. The ˮਕڈذዾۺc̯එ྆Ԕτ܃מ൬Ϸ͚כ Group’s entitlement to the relevant portion of the non-saleable area ᗐͫᚬऩ։ࣂੀಕϭ 10,000 ̡ʿޚof the building was reduced to 10,000 square meters after this ࠍዶؿ ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀc̯එ྆ɰכtransaction. As at 31 December 2006, the Group had received the ϝe entire amount of RMB60,000,000 due from Oasiscity under the ࣓ኣ˨ԾᘪνՅ Oasiscity ɾͲಁඖɁ̵ྫྷ Supplementary Agreement. 60,000,000 ʏe
כɀཌྷཌྷʒαɊ˂೨ɮe̯එ྆כɰذዾۺConstruction of the building was completed in October 2006. The ˮਕࠍڈɻؿذዾۺGroup took possession of the non saleable area in the building ɀཌྷཌྷʒαɊɀ˂ኟτ එ྆ɰ̯כto which it was entitled in December, 2006 and commenced ዶᚬऩcԎնʑ࠳ɮೡeͅ ˂ɀཌྷཌྷʒαɊɀכพؿֺτᚬcذinterior fitting out work. Since the Group had taken possession ኟτ೩ ʥೕࢄι̯Ͳټܘพذof the premises, the entire balance of the property deposit and ɍɊȹˀcֺଐ́ؿ ഽڃɮೡӮۺdevelopment costs incurred of HK$30,848,000 has been transferred 30,848,000ಋʏɰᅆϭΕ to construction in progress (see note 18) as at 31 December 2006. 18e
1 name translated for reference only
Phoenix Annual Report 2006 129 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
ͳઁԹྡྷؿҙ༅כ .INVESTMENTS IN JOINTLY 20 .20 CONTROLLED ENTITIES
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
ٱι̯Ͷሏcαܘɐ̟ҙ༅ڈ Unlisted investments, at cost, beginning of the year 11,972 472 ഽ aڃͳઁԹྡྷؿ؇༅כ Capital injection into a jointly controlled entity (Note a) 1,274 11,500
ι̯Ͷሏcαୄ 13,246 11,972ܘɐ̟ҙ༅ڈ Unlisted investments, at cost, end of the year Less: provision for impairment ಕiಕࠤᅆௐ (472 ) (472 ) Less: share of jointly controlled entities’ results ಕiᚫЌͳઁԹྡྷพᐜ – net loss Ðᑋฌ૱ᔾ (3,424 ) (1,906 )
ɐ̟ҙ༅૱ᔾcαୄ 9,350 9,594ڈ Unlisted investments, net, end of the year
ɀཌྷཌྷ̒αɄ˂ʄˀc̯එ྆ၤ˵ԕᄤכ ഽaiڃ Note a: On 5 August 2004, the Group signed an agreement with ˵ԕᄤ ᅌʔ̇ to form a sino-foreign joint venture, ˵ԕүᄤйඨᅌτ ᅌʔ̇ᖋ߯Ծᘪc˞Εɻਝι͓ɻ̔༅ ࠉʔ̇, in the PRC. Pursuant to the agreement, upon obtaining ʔ̇˵ԕүᄤйඨᅌτࠉʔ̇e࣓ኣ Ᏽɻਝτᗐѫؿֺτ̦ғۿall necessary approvals and licences from the relevant authorities Ծᘪc ༅ʔ̇כc̯එ྆ੀగ܃˿in the PRC, the Group would have to inject approximately ʼʥஈ ޚHK$12,774,000 (equivalent to RMB13,500,000) for a 45% ؿ45%ٖᚬᚬऩϤ؇Ƀ12,774,000ಋʏ ɀཌྷཌྷʒכɁ̵ྫྷ13,500,000ʏeכshareholding interest in this joint venture. As of 31 December ೩ the capital injection of RMB13,500,000 had been made by αɊɀ˂ɍɊȹˀc̯එ྆ɰАˮ؇༅Ɂ ,2006 the Group. ̵ྫྷ13,500,000ʏe
130 უ৷ᇯ഼αం2006 ͳઁԹྡྷؿҙ༅ᙩכ.INVESTMENTS IN JOINTLY 20 .20 CONTROLLED ENTITIES CONTINUED
ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀؿͳઁԹྡྷכ Details of the jointly controlled entities as at 31 December 2006 were as follows: ੱΣɎi
Percentage of equity Issued and fully Place and date of Place of interest held paid share capital/ Name incorporation operation Principal activity by the Group registered capital અ ɰೕϷʥقඑ̯྆ τؿٖ̯ ᖔӷٖ̯ʼnܛ ഽ˫ι͓ Ίီ Δᒨʥˀ౨ Ꮺ༜Δᒨ ˚߬พ৻ ᚬऩϛʗˈ ഽ˫༅̯
China Global British Virgin Islands, British Virgin Dormant 50% US$2 Television Limited 18 October 2001 Islands ߜᙔ୮ɤະࢌc ߜᙔ୮ɤະࢌ ᅗಲᏪพ 50% 2ʏ ɀཌྷཌྷȹα Ɋ˂ɊɄˀ
˵ԕၖၕუ৷ʼʝ The PRC, The PRC Dormant 40% RMB1,250,000 τࠉʔ̇ 27 June 2003ڸҙ༅ ɻਝc ɻਝ ᅗಲᏪพ 40% Ɂ̵ྫྷ ɀཌྷཌྷɍα 1,250,000ʏ ʒ˂ɀɊȼˀ
˵ԕүᄤйඨᅌ The PRC, The PRC Advertising business 45% RMB30,000,000 τࠉʔ̇ 7 January 2005 in radio broadcasting industry in the PRC ɻਝc ɻਝ ɻਝಲᇃཋ 45% Ɂ̵ྫྷ ɀཌྷཌྷʄα ᄤᅌพؿ 30,000,000ʏ ȹ˂ȼˀ ᄤйพ৻
Phoenix Annual Report 2006 131 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
ͳઁԹྡྷؿҙ༅ᙩכ .INVESTMENTS IN JOINTLY 20 .20 CONTROLLED ENTITIES CONTINUED
Unaudited combined financial information of the jointly controlled ɐ߸ͳઁԹྡྷؿ̰ᄗ࣏ԡল৻༅ࢿΣ entities was as follows: Ɏi
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
Assets: ༅ଐi ݚ৽༅ଐ 267 457ڈ Non-current assets Current assets ݚ৽༅ଐ 22,271 22,002
22,538 22,459
Liabilities: ߲ඦi Current liabilities ݚ৽߲ඦ 285 97
285 97
Net assets ༅ଐ૱ࠤ 22,253 22,362
Income νɃ – – Expenses ͂ (3,427 ) (4,351 )
( ᑋฌ (3,427 ) (4,351܃Loss after income tax ֺೢ
ͳઁԹྡྷؿᚬכThere are no contingent liabilities relating to the Group’s interests ̯එ྆ลಲͨЄၤ̯එ྆ in the jointly controlled entities, and no contingent liabilities of the ऩτᗐؿֶτ߲ඦc˘ͳઁԹྡྷ̯Ӹ͛ಲ jointly controlled entities themselves. ͨЄֶτ߲ඦe
132 უ৷ᇯ഼αం2006 ʔ̡ࠤͶሏԎΕฌऩሏ୮ଉؿলܘ.FINANCIAL ASSETS AT FAIR VALUE 21 .21 THROUGH PROFIT OR LOSS ৻༅ଐ
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
ʔ̡ࠤͶሏ 102,506 89,729ܘɐ̟ҙ༅cڈ Unlisted investments at fair value (౨ͫ (80,027 ) (65,971ٽLess: Non-current portion ಕi
22,479 23,758
ʔ̡ࠤͶܘցݯܞүᆢႏࣂٱכThe above investments were designated as fair value through profi t ɐ߸ҙ༅Ƚ նˀϭԷٱܘor loss on initial recognition. Investments with a maturity longer than ሏԎΕฌऩሏ୮ଉؿল৻༅ଐe ʔܘ౨ͫeٽone year at the inception date are classifi ed as non-current. Changes ౨ˀ൚༦ȹαؿҙ༅ȽʗᗘА in fair values (realised and unrealised) of fi nancial assets at fair value ̡ࠤͶሏԎΕฌऩሏ୮ଉؿল৻༅ଐؿɰᛰଊ ɻԯˢνɃٲthrough profi t or loss are recognised in other income in the income ʥ̰ᛰଊʔ̡ࠤᛰ৽ȽতɃνऩ ഽ5eڃstatement (Note 5). ඖɎ
Сڏ೩ҙ༅Ԏɺʔൕሒʥॠ˜˿͂ؿכͅ As these investments are not publicly traded and in the absence of ʔ̇ઔ̯ܨreadily available information to determine the fair values of these ༅ࢿc˞ᔤց೩ҙ༅ؿʔ̡ࠤc ძࠤАݯ೩ҙ༅ؿ̟͐ܞinvestments, the Group has adopted the indicative market value ढ़ೕϷɁొԜؿ provided by the issuers as its best estimate of the fair values of these ԙЅ߮ʔ̡ࠤe investments.
౨༅ଐད˟ಁඖٽ.PREPAYMENT FOR LONGTERM 22 .22 ASSETS
ɀཌྷཌྷʒαȾ˂Ɋ̒ˀcუ৷ɻʶࠗಋכ On 14 September 2006, Phoenix Centre (Hong Kong) Limited Phoenix Centre”), an indirect wholly-owned subsidiary of the τࠉʔ̇უ৷ɻʶ̯ʔ̇ؿංઅͲ༅“) ᙔʔ̇cАݯൕʿʥუ৷ᇯ഼τࠉʔ̯̇ڃ Company, as purchaser, and Phoenix Satellite Television Company ᙔʔ̇cАݯუ৷ɻʶؿኪڃLimited, an indirect wholly-owned subsidiary of the Company, ʔ̇ؿංઅͲ༅ ܆ဍ˸ኒࠗಋτࠉʔ̇ࠔ˺܆Ɂၤࠔړ as Phoenix Centre’s guarantor, entered into a sale and purchase ຒɈ˸ኒࠗಋτࠉʔ̇cАݯီکagreement (the “Sale and Purchase Agreement”) with Freescale ˺ဍ Semiconductor Hong Kong Limited (“Freescale”) (formerly known ሒʿ͓߯ൕሒԾᘪcኣϊუ৷ɻʶ෮ᑪൕ พͅᐢᅢࠍࠍዶذࠗಋɣࡣɮพ ؿכas Motorola Semiconductors Hong Kong Limited) as vendor, ȹᄝϽ whereby Phoenix Centre agreed to purchase a property located in 38,442̡ʿϝؿै༉ɠΔʥᅢΧᚬऩୂι พcࣹʥᐢˤძݯ15,500,000ʏذthe Tai Po Industrial Estate in Hong Kong consisting of an interest in 120,900,000 ಋʏˤძeכ೩ޚ leasehold land and buildings with a gross fl oor area of approximately ѧιמsquare meters (the “Property”), for a total consideration of ˤძੀͅᖋອൕሒԾᘪˀ౨߮ϭ͚ 38,442 US$15,500,000 (equivalent to approximately HK$120,900,000) ˀ౨ɀཌྷཌྷȼαʄ˂ɍɊȹˀѧιˀ౨ พذthe “Consideration”). The Consideration is to be paid by instalments ˅ʗ౨ʻ˟e࣓ኣͿ٦ೢૈԝcగˮᜑ) starting from the date of signing of the Sale and Purchase Agreement ϤᎶ˟ؿֺτͿ٦ೢЅ߮ݯ4,534,000ಋʏc to 31 May 2007, the date of completion of the transaction (the ੀͅუ৷ɻʶʻ˟e “Completion Date”). All stamp duties payable on the assignment of the Property under the Stamp Duty Ordinance, estimated to be HK$4,534,000, are to paid by Phoenix Centre.
Phoenix Annual Report 2006 133 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
౨༅ଐད˟ಁඖᙩٽ.PREPAYMENT FOR LONGTERM 22 .22 ASSETS CONTINUED
༅ଐ߲ඦʑכɀཌྷཌྷʒαɊɀ˂ɍɊȹˀcכ As at 31 December 2006, an amount of HK$24,393,000 was ౨༅ଐད˟ಁඖݯ24,393,000ಋʏcٽrecognised as prepayment for long-term assets in the balance ᆢႏ ܆ൕሒԾᘪɻؿ˟ಁΪખΉࠔܘඑ̯྆ܢ˳ sheet, consisting of HK$24,096,000 paid out by the Group to ͂܁ᗐؒޚFreescale according to the payment schedule stated in the Sale and ˺ဍʻ˟ؿ24,096,000ಋʏʥ ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀcכPurchase Agreement and related legal costs of HK$297,000. As 297,000ಋʏe כ೩ޚat 31 December 2006, the remaining balance of the Consideration ˤძؿᔾݯᅕ12,400,000ʏ ʻ˟eکѧιˀ౨כamounted to USD12,400,000 (equivalent to approximately 96,720,000ಋʏɰ HK$96,720,000) and was to be paid out by the Completion Date.
พؿै༉ɠΔˮैɁࠗಋޫҌ්ʔ̇ذIn accordance with the requirements of the Hong Kong Science ࣓ኣ ˂ɀཌྷཌྷȼαʄכand Technology Parks Corporation, Phoenix Centre, the lessor of ؿஃցcუ৷ɻʶֻ͛ጻੀ พʑѧιΪძࠤذthe leasehold land of the Property, has also undertaken to complete ɍɊȹˀ48˂ʑΕ 105,000,000ಋʏؿณዀኂʥஉௐcԎכinstallation of new machinery and equipment with a value of not less ɺʭ ༜Аeܪѧιˀ౨18˂ʑնஉכ than HK$105,000,000 at the Property within 48 months of 31 May 2007, and to commence operation of the facility within 18 months from the Completion Date.
ᙔڃᙔʔ̇ؿᚬऩʥᎶνȹංڃכ.INTERESTS IN SUBSIDIARIES AND 23 .23 AMOUNT DUE FROM A SUBSIDIARY, ʔ̇ಁඖ૱ᔾ NET
Company ̯ʔ̇ 2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
– – ഽ iڃι̯ࠤܘɐ̟ٖͫcڈ (Unlisted shares, at cost (Note i ഽ iiڃᙔʔ̇ಁඖ૱ᔾڃAmount due from a subsidiary, Ꮆν net (Note ii) 1,170,216 1,232,543
1,170,216 1,232,543
134 უ৷ᇯ഼αం2006 ᙔڃᙔʔ̇ؿᚬऩʥᎶνȹංڃכ.INTERESTS IN SUBSIDIARIES AND 23 .23 AMOUNT DUE FROM A SUBSIDIARY, ʔ̇ಁඖ૱ᔾᙩ NET CONTINUED
ഽiڃ :Notes
ᙔʔ̇ੱڃɀཌྷཌྷʒαɊɀ˂ɍɊȹˀؿכ (i) Details of subsidiaries as at 31 December 2006 were as follows: (i) ΣɎi
Percentage Issued and of equity fully paid Place of interest share capital/ incorporation and Place of held by the registered Name kind of legal entity operation Principal activities Group capital ɰೕϷʥᖔӷ ܛඑֺ̯྆ ഽ˫ι͓ ٖ̯ᚬऩ ٖ̯ʼn Ίီ ΔᒨʥؒցྡྷᗘП Ꮺ༜Δᒨ ˚߬พ৻ ϛʗˈ ഽ˫༅̯
Phoenix Satellite Hong Kong, limited Hong Kong Provision of 100% HK$20 Television Company liability company management and Limited related services უ৷ᇯ഼τࠉʔ̇ ࠗಋ ࠗಋ ొԜဳଉʥ 100% 20ಋʏ ৻רτࠉஐͨʔ̇ τᗐ
Phoenix Satellite British Virgin Islands, Hong Kong Satellite television 100% US$1 Television (Chinese limited liability broadcasting Channel) Limited company უ৷ᇯ഼ɻʼ̎ ߜᙔ୮ɤະࢌ ࠗಋ ᇯܱཋ഼ᄤᅌ 100% 1ʏ τࠉʔ̇ τࠉஐͨʔ̇
Phoenix Satellite British Virgin Islands, British Virgin Satellite television 100% US$1 Television (Movies) limited liability Islands broadcasting Limited company უ৷ᇯ഼ཋᄧ̎ ߜᙔ୮ɤະࢌ ߜᙔ୮ɤ ᇯܱཋ഼ᄤᅌ 100% 1ʏ τࠉʔ̇ τࠉஐͨʔ̇ ະࢌ
Phoenix Satellite British Virgin Islands, British Virgin Trademark holding 100% US$1 Television Trademark limited liability Islands Limited company უ৷ᇯ഼ਆᅟτࠉʔ̇ ߜᙔ୮ɤະࢌ ߜᙔ୮ɤ ܛτਆᅟ 100% 1ʏ τࠉஐͨʔ̇ ະࢌ
Phoenix Satellite British Virgin Islands, British Virgin Investment holding 100% US$1 Television (Europe) limited liability Islands Limited company უ৷ᇯ഼ᅩݘ̎ ߜᙔ୮ɤະࢌ ߜᙔ୮ɤ ҙ༅ઁٖ 100% 1ʏ τࠉʔ̇ τࠉஐͨʔ̇ ະࢌ
PCNE Holdings Limited British Virgin Islands, British Virgin Investment holding 70% US$1,000 limited liability Islands company PCNE Holdings Limited ߜᙔ୮ɤະࢌ ߜᙔ୮ɤ ҙ༅ઁٖ 70% 1,000ʏ τࠉஐͨʔ̇ ະࢌ
Phoenix Chinese The United Kingdom, The United Satellite television 70% £9,831,424 News & Entertainment limited liability Kingdom broadcasting Limited company Phoenix Chinese ߜਝ ߜਝ ᇯܱཋ഼ᄤᅌ 70% 9,831,424ߜᔦ News & Entertainment τࠉஐͨʔ̇ Limited
Phoenix Annual Report 2006 135 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
ᙔڃᙔʔ̇ؿᚬऩʥᎶνȹංڃכ.INTERESTS IN SUBSIDIARIES AND 23 .23 AMOUNT DUE FROM A SUBSIDIARY, ʔ̇ಁඖ૱ᔾᙩ NET CONTINUED
ഽiᙩڃ (Notes: (Continued
Percentage Issued and of equity fully paid Place of interest share capital/ incorporation and Place of held by the registered Name kind of legal entity operation Principal activities Group capital ɰೕϷʥᖔӷ ܛඑֺ̯྆ ഽ˫ι͓ ٖ̯ᚬऩ ٖ̯ʼn Ίီ ΔᒨʥؒցྡྷᗘП Ꮺ༜Δᒨ ˚߬พ৻ ϛʗˈ ഽ˫༅̯
Phoenix Satellite British Virgin Islands, British Virgin Investment holding 100% US$1 Television Information limited liability Islands Limited company უ৷༅τࠉʔ̇ ߜᙔ୮ɤະࢌ ߜᙔ୮ɤ ҙ༅ઁٖ 100% 1ʏ τࠉஐͨʔ̇ ະࢌ
PHOENIXi Investment British Virgin Islands, British Virgin Investment holding 94.3% US$123,976 Limited limited liability Islands (Ordinary company shares) PHOENIXi Investment ߜᙔ୮ɤະࢌ ߜᙔ୮ɤ ҙ༅ઁٖ 94.3% 123,976ʏ Limited τࠉஐͨʔ̇ ະࢌ ౝٖ
US$7,500 (Series A preferred shares) 7,500ʏ Aୂͱٖ
PHOENIXi, Inc. The United States of The United Dormant 94.3% US$0.1 America, limited States of liability company America PHOENIXi, Inc. Сਠଠਝ Сਠ ᅗಲᏪพ 94.3% 0.1ʏ τࠉஐͨʔ̇ ଠਝ
Phoenix Satellite British Virgin Islands, British Virgin Investment holding 100% US$1 Television (B.V.I.) limited liability Islands Holding Limited company (Note a) უ৷ᇯ഼එ྆τࠉʔ̇ ߜᙔ୮ɤະࢌ ߜᙔ୮ɤ ҙ༅ઁٖ 100% 1ʏ ഽ a τࠉஐͨʔ̇ ະࢌڃ
Phoenix Weekly British Virgin Islands, British Virgin Investment holding 100% US$1 Magazine (BVI) limited liability Islands Limited company Phoenix Weekly ߜᙔ୮ɤະࢌ ߜᙔ୮ɤ ҙ༅ઁٖ 100% 1ʏ Magazine (BVI) τࠉஐͨʔ̇ ະࢌ Limited
Hong Kong Phoenix Hong Kong, limited Hong Kong Publishing and 77% HK$100 Weekly Magazine liability company distribution of Limited periodicals ʥೕϷ౨˰ 77% 100ಋʏخࠗಋუ৷൪˰τࠉʔ̇ ࠗಋ ࠗಋ ˮ τࠉஐͨʔ̇
Phoenix Satellite British Virgin Islands, Hong Kong Satellite television 100% US$1 Television (InfoNews) limited liability broadcasting Limited company უ৷ᇯ഼༅̎ ߜᙔ୮ɤະࢌ ࠗಋ ᇯܱཋ഼ᄤᅌ 100% 1ʏ τࠉʔ̇ τࠉஐͨʔ̇
136 უ৷ᇯ഼αం2006 ᙔڃᙔʔ̇ؿᚬऩʥᎶνȹංڃכ.INTERESTS IN SUBSIDIARIES AND 23 .23 AMOUNT DUE FROM A SUBSIDIARY, ʔ̇ಁඖ૱ᔾᙩ NET CONTINUED
ഽiᙩڃ (Notes: (Continued
Percentage Issued and of equity fully paid Place of interest share capital/ incorporation and Place of held by the registered Name kind of legal entity operation Principal activities Group capital ɰೕϷʥᖔӷ ܛඑֺ̯྆ ഽ˫ι͓ ٖ̯ᚬऩ ٖ̯ʼn Ίီ ΔᒨʥؒցྡྷᗘП Ꮺ༜Δᒨ ˚߬พ৻ ϛʗˈ ഽ˫༅̯
Phoenix Satellite British Virgin Islands, British Virgin Investment holding 100% US$1 Television Development limited liability Islands (BVI) Limited company Phoenix Satellite ߜᙔ୮ɤະࢌ ߜᙔ୮ɤ ҙ༅ઁٖ 100% 1ʏ Television Development τࠉஐͨʔ̇ ະࢌ (BVI) Limited
Phoenix Satellite Hong Kong, limited Hong Kong Investment holding 100% HK$2 Television Development liability company Limited უ৷഼ೕࢄτࠉʔ̇ ࠗಋ ࠗಋ ҙ༅ઁٖ 100% 2ಋʏ τࠉஐͨʔ̇
Guofeng On-line The PRC, limited The PRC Internet services 94.3% US$500,000 (Beijing) Information liability company Technology Company Limited ৻ 94.3% 500,000ʏרࢠ ɻਝ ɻਝ ʃᐲ၉ڌਝუΕᇃ˵ԕ Ҍτࠉʔ̇ τࠉஐͨʔ̇
Phoenix Film and The PRC, limited The PRC Ancillary services 60% HK$10,000,000 Television (Shenzhen) liability company for programme Company Limited production ৻ 60% 10,000,000ಋʏרუ৷ᄧ഼૯Γ ɻਝ ɻਝ ຝ͌ႇАʻ τࠉʔ̇ τࠉஐͨʔ̇
Phoenix Satellite British Virgin Islands, British Virgin Investment holding 100% US$1 Television (Universal) limited liability Islands Limited company Phoenix Satellite ߜᙔ୮ɤະࢌ ߜᙔ୮ɤ ҙ༅ઁٖ 100% 1ʏ Television (Universal) τࠉஐͨʔ̇ ະࢌ Limited
Phoenix Satellite The United States of The United Provision of 100% US$1 Television (U.S.) Inc. America, limited States of management and liability company America promotional related services Phoenix Satellite Сਠଠਝ Сਠ ొԜဳଉʥ 100% 1ʏ ৻רTelevision (U.S.) Inc. τࠉஐͨʔ̇ ଠਝ τᗐઐᄤ
Phoenix Satellite British Virgin Islands, Taiwan Programme 100% US$1 Television (Taiwan) limited liability production Limited company ౺ࣝႇАٖͫτࠉʔ̇ ߜᙔ୮ɤະࢌ ̎ᜪ ຝ͌ႇА 100% 1ʏ τࠉஐͨʔ̇
Phoenix Annual Report 2006 137 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
ᙔڃᙔʔ̇ؿᚬऩʥᎶνȹංڃכ.INTERESTS IN SUBSIDIARIES AND 23 .23 AMOUNT DUE FROM A SUBSIDIARY, ʔ̇ಁඖ૱ᔾᙩ NET CONTINUED
ഽiᙩڃ (Notes: (Continued
Percentage Issued and of equity fully paid Place of interest share capital/ incorporation and Place of held by the registered Name kind of legal entity operation Principal activities Group capital ɰೕϷʥᖔӷ ܛඑֺ̯྆ ഽ˫ι͓ ٖ̯ᚬऩ ٖ̯ʼn Ίီ ΔᒨʥؒցྡྷᗘП Ꮺ༜Δᒨ ˚߬พ৻ ϛʗˈ ഽ˫༅̯
Phoenix Satellite British Virgin Islands, British Virgin Dormant 100% US$1 Television Investments limited liability Islands (BVI) Limited company Phoenix Satellite ߜᙔ୮ɤະࢌ ߜᙔ୮ɤ ᅗಲᏪพ 100% 1ʏ Television Investments τࠉஐͨʔ̇ ະࢌ (BVI) Limited
Hong Kong Phoenix Hong Kong, limited Hong Kong Investment 100% HK$2 Satellite Television liability company holding Limited ࠗಋუ৷ᇯ഼τࠉʔ̇ ࠗಋ ࠗಋ ҙ༅ઁٖ 100% 2ಋʏ τࠉஐͨʔ̇
Phoenix Glow Limited British Virgin Islands, British Virgin Provision of 100% US$1 limited liability Islands agency services company ৻ 100% 1ʏרუ৷ɾͮτࠉʔ̇ ߜᙔ୮ɤະࢌ ߜᙔ୮ɤ ొԜˤଉ τࠉஐͨʔ̇ ະࢌ
Shenzhen Wutong Shan The PRC, limited The PRC Programme 54% RMB5,000,000 Television liability company production Broadcasting Limited ૯Γ̟િࣝɬཋ഼ᄤᅌ ɻਝ ɻਝ ຝ͌ႇА 54% Ɂ̵ྫྷ τࠉʔ̇ τࠉஐͨʔ̇ 5,000,000ʏ
Phoenix Global British Virgin Islands, British Virgin Investment 100% US$1 Television Limited limited liability Islands holding company უ৷ଈཋ഼τࠉʔ̇ ߜᙔ୮ɤະࢌ ߜᙔ୮ɤ ҙ༅ઁٖ 100% 1ʏ τࠉஐͨʔ̇ ະࢌ
Fenghuang On-line The PRC, limited The PRC Internet 100% US$1,850,000 (Beijing) Information liability company services Technology Company Limited ৻ 100% 1,850,000ʏרࢠ ɻਝ ɻਝ ʃᐲ၉ڌუ৷Εᇃ˵ԕ Ҍτࠉʔ̇ τࠉஐͨʔ̇
Phoenix Pictures Limited Hong Kong, limited Hong Kong Dormant 100% HK$1 liability company Phoenix Pictures Limted ࠗಋ ࠗಋ ᅗಲᏪพ 100% 1ಋʏ τࠉஐͨʔ̇
138 უ৷ᇯ഼αం2006 ᙔڃᙔʔ̇ؿᚬऩʥᎶνȹංڃכ .INTERESTS IN SUBSIDIARIES AND 23 .23 AMOUNT DUE FROM A SUBSIDIARY, ʔ̇ಁඖ૱ᔾᙩ NET CONTINUED
ഽiᙩڃ Notes: (Continued)
Percentage Issued and of equity fully paid Place of interest share capital/ incorporation and Place of held by the registered Name kind of legal entity operation Principal activities Group capital ɰೕϷʥᖔӷ ܛඑֺ̯྆ ഽ˫ι͓ ٖ̯ᚬऩ ٖ̯ʼn Ίီ ΔᒨʥؒցྡྷᗘП Ꮺ༜Δᒨ ˚߬พ৻ ϛʗˈ ഽ˫༅̯
Phoenix Media and Malaysia, limited Malaysia Provision of 70% RM1,000,000 Broadcast Sdn Bhd liability company agency services and programme production ৻ʥ 70% RM1,000,000רPhoenix Media and ԞϹԓ ԞϹԓ ొԜˤଉ Broadcast Sdn Bhd τࠉஐͨʔ̇ ຝ͌ႇА
Phoenix Centre Hong Kong, limited Hong Kong Property holding 100% HK$1 (Hong Kong) Limited liability company พઁٖ 100% 1ಋʏذ უ৷ɻʶࠗಋ ࠗಋ ࠗಋ τࠉʔ̇ τࠉஐͨʔ̇
Green Lagoon British Virgin Islands, The PRC Property holding 100% US$1 Investments Limited limited liability company พઁٖ 100% 1ʏذ Green Lagoon ߜᙔ୮ɤະࢌ ɻਝ Investments Limited τࠉஐͨʔ̇
ܛઅقa) Phoenix Satellite Television (B.V.I.) Holding Limited is directly held (a) უ৷ᇯ഼එ྆τࠉʔ̯̇ͅʔ̇) ʔ̇༦̯ͅڬᙔʔ̇ڃby the Company, while all other subsidiaries are indirectly held by τcϤֺτԯˢ the Company through Phoenix Satellite Television (B.V.I.) Holding უ৷ᇯ഼එ྆τࠉʔ̇ංઅܛτe Limited.
߬ұܘdЛࢠʥאᙔʔ̇ಁඖݯಲڃii) Amount due from a subsidiary is unsecured, non-interest bearing and (ii) Ꮆν) repayable on demand. ᑹe
ᙔʔ̇ڃܛiii) The Company has undertaken to provide necessary fi nancial resources (iii) ̯ʔֻ̇ጻొԜ̦߬ল৻༅˞ʻ) ᗐძࠤޚᙔʔ̇ؿڃto support the future operations of the subsidiaries. The Directors are ؿ̰ԞᏪ༜e໎ԑႏݯc ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀכᙔʔ̇ڃכof the opinion that the underlying value of the subsidiaries was not less ɺГ than the carrying amount of the subsidiaries as at 31 December 2006. ؿሏࠍࠤe
Phoenix Annual Report 2006 139 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
24. ACCOUNTS PAYABLE, OTHER 24. Ꮆ˟ሏಁdԯˢᎶ˟ಁඖʥᎶ߮ PAYABLES AND ACCRUALS ಁඖ
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
Accounts payable Ꮆ˟ሏಁ 10,253 10,780 Other payables and accruals ԯˢᎶ˟ಁඖʥᎶ߮ಁඖ 109,125 85,168
119,378 95,948
The ageing analysis of the accounts payable is as follows: Ꮆ˟ሏಁؿሏᙍʗΣɎi
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
0-30 days 0ϭ30ˀ 5,234 5,730 31-60 days 31ϭ60ˀ 1,286 1,828 61-90 days 61ϭ90ˀ 593 907 91-120 days 91ϭ120ˀ 13 457 Over 120 days 120ˀ˞ɐ 3,127 1,858
10,253 10,780
The carrying amounts of accounts payable, other payables and Ꮆ˟ሏಁdԯˢᎶ˟ಁඖʥᎶ߮ಁඖؿሏࠍࠤ eٶޚaccruals approximate their fair values. ၤԯʔ̡ࠤ
140 უ৷ᇯ഼αం2006 ೩ࠤඖ͌ټʥଊټCASH AND CASH EQUIVALENTS 25. ଊ .25
Group Company ̯එ྆ ̯ʔ̇ 2006 2005 2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 $’000 $’000 ɝʏ ɝʏ ɝʏ ɝʏ
1,972 7,458 105,413 144,887 ټCash at bank and in hand ႺϷʥʹଊ Short-term bank deposits ౨ႺϷΦಁ 398,530 407,951 – –
543,417 513,364 7,458 1,972
The effective interest rate on short-term bank deposits was 4.61% ౨ႺϷΦಁؿྡྷСଅݯ4.61%ɀཌྷཌྷʄ these deposits have an average maturity of 16 days. αi2.63%c೩ႺϷΦಁؿ̡яϭԷ౨ˀݯ ;(2.63% :2005) 16ˀe
26. LOANS AND RECEIVABLES 26. ൘ಁʥᎶνಁඖ
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
ഽ a 30,342 31,018ڃCertifi cate of deposit (Note a) Φಁᖬ – ഽ b 38,794ڃɐ̟ᖬԴڈ (Unlisted security (Note b
69,136 31,018 Less: Current portion ಕi౨ͫ (69,136 ) –
– 31,018
Note a: Certificate of deposit represented a deposit placed with a bank ɀཌྷཌྷȼכʀȹංႺϷԎੀיΦܞഽai Φಁᖬڃ which will mature in October 2007 and is stated at amortised cost. ɰᚫሻι̯ͶሏeܘαɊ˂Է౨ؿΦಁcȽ
ݠכɐ̟ᖬԴȽল৻ዀ࿚ֺೕϷ˘Ԏಲڈ ഽbiڃ Note b: Unlisted security is a security with determinable payments which ˟ᙺ̟ంძؿ˿࣓ኣ̟Сଅᛰ৽ᆢց are based on market interest rate movements that are not quoted ɰᚫሻܘɐ̟ᖬԴȽڈᔾؿᖬԴeټಁ in an active market issued by a fi nancial institution. The unlisted ι̯Ͷሏe security is stated at amortised cost.
Phoenix Annual Report 2006 141 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
̯ٖ.SHARE CAPITAL 27 .27
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα Number of Number of shares Amount shares Amount ᔾټ ᔾ ٖᅕټ ᅕٖ $’000 $’000 ɝʏ ɝʏ
Authorised: ؒցi Ordinary share of HK$0.1 each Ұٖࠍࠤ0.1ಋʏ ౝٖ 10,000,000,000 1,000,000 10,000,000,000 1,000,000
Issued and fully paid: ɰೕϷʥᖔӷi 493,680 4,936,796,000 493,867 4,938,666,000 ٱBeginning of year α Exercise of share options ϷԚᑪٖᚬ 3,460,000 346 1,870,000 187
End of year αୄ 4,942,126,000 494,213 4,938,666,000 493,867
SHARE OPTIONS 28.ᑪٖᚬ .28
The Company has several share option schemes under which it ̯ʔ̇உτᅕᑪٖᚬི߮c࣓ኣི߮˿Ή̯ ˿ʔ̇ؿਨϷ໎ԑʀ̯ܢ˳may grant options to employees of the Group (including Executive එ྆ؿࡗ ˿Directors of the Company) to subscribe for shares of the Company. ႏᑪ̯ʔٖ̇ͫؿᑪٖᚬeֺˮؿᑪٖᚬ τᗐི߮༗ͶؿૈಁϷԚe̯එ྆ԎಲͨЄܘ Options are granted and exercisable in accordance with the terms set ᑪΑ့ֶᑪٖᚬeټout in the relevant schemes. The Group has no legal or constructive ؒցֶઐցֲஐͨ˞ଊ obligation to repurchase or settle the options in cash.
ᗐ˱ᚬ̡яϷޚMovements in the number of share options outstanding and their ̰ϷԚᑪٖᚬᅕ͌ؿᛰ৽ʥԯ related weighted average exercise prices are as follows: Ԛძ༗ͶΣɎi
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα Average Average exercise exercise price in HK$ Options price in HK$ Options per share ’000 per share ’000 Ұ̡ٖя Ұ̡ٖя ϷԚძ ᑪٖᚬ ϷԚძ ᑪٖᚬ ಋʏ ɝٖ ಋʏ ɝٖ
ȹ˂ȹˀ 1.11 54,378 1.11 56,942כ At 1 January Exercised ɰϷԚ 1.07 (3,460 ) 1.05 (1,870 ) Lapsed ɰ̖ࢽ 1.49 (2,682 ) 1.06 (694 )
Ɋɀ˂ɍɊȹˀ 1.09 48,236 1.11 54,378כ At 31 December
142 უ৷ᇯ഼αం2006 SHARE OPTIONS CONTINUED 28.ᑪٖᚬᙩ .28
48,236,000כɀཌྷཌྷʒαɊɀ˂ɍɊȹˀcכ As at 31 December 2006, out of the 48,236,000 (2005: 54,378,000 options) outstanding options, all (2005: 53,946,000) were ͫɀཌྷཌྷʄαi54,378,000ͫᑪٖᚬ̰Ϸ exercisable. Options exercised in 2006 resulted in 3,460,000 shares Ԛᑪٖᚬɻcֺτᑪٖᚬɀཌྷཌྷʄαi ɀཌྷཌྷʒαϷԚכshares) being issued at HK$1.07 each (2005: 53,946,000я˿ʀϷԚe 1,870,000 :2005) Ұٖࠍࠤ1.07ಋʏɀཌྷཌྷܘHK$1.05). The related weighted average share price at the time of ؿᑪٖᚬɰኒߎ exercise was HK$1.27 (2005: HK$1.48) per share. ʄαi1.05ಋʏೕϷ3,460,000ٖٖͫɀཌྷ ᗐޚϷԚࣂؿכཌྷʄαi1,870,000ٖٖͫe ᚬ̡яٖძݯҰٖ1.27ಋʏɀཌྷཌྷʄαi˱ 1.48ಋʏe
αୄ̰ϷԚᑪٖᚬ˞ɝٖݯ௰ϽؿԷ౨כ Share options outstanding (in ’000) at the end of the year have the following expiry date and exercise prices: ˀʥϷԚძΣɎi
Exercise price Share options ϷԚძ ᑪٖᚬ Expiry date Է౨ˀ HK$ per share 2006 2005 Ұٖಋʏ ɀཌྷཌྷʒα ɀཌྷཌྷʄα ɝٖ ɝٖ ’000 ’000
13 June 2010 ɀཌྷȹཌྷαʒ˂Ɋɍˀ 1.08 37,140 40,358 14 February 2011 ɀཌྷȹȹαɀ˂Ɋ̒ˀ 1.99 500 1,700 9 August 2011 ɀཌྷȹȹαɄ˂Ⱦˀ 1.13 9,124 10,588 19 December 2012 ɀཌྷȹɀαɊɀ˂ɊȾˀ 0.79 1,472 1,732
48,236 54,378
Phoenix Annual Report 2006 143 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
29. RESERVES 29.ௐ
Movements in the reserves of the Company during the year were as ̯ʔ̇αʑؿௐᛰ৽ΣɎi follows:
Company ̯ʔ̇ Share Accumulated premium defi cit Total ძ ୃዶᑋฌ ᐢ߮ึٖͫ $’000 $’000 $’000 ɝʏ ɝʏ ɝʏ
ɀཌྷཌྷ̒αɊɀ˂ɍɊȹˀ 829,741 (40,961 ) 788,780כ At 31 December 2004 Exercise of share options ϷԚᑪٖᚬ 1,774 – 1,774 Loss for the year αʑᑋฌ – (673 ) (673 ) ( Dividends paid relating to 2004 ɰ˟ɀཌྷཌྷ̒α۹ٖࢠ (49,387 ) – (49,387
ɀཌྷཌྷʄαɊɀ˂ɍɊȹˀ 782,128 (41,634 ) 740,494כ At 31 December 2005 Exercise of share options ϷԚᑪٖᚬ 3,367 – 3,367 Loss for the year αʑᑋฌ – (1,276 ) (1,276 ) ( Dividends paid relating to 2005 ɰ˟ɀཌྷཌྷʄα۹ٖࢠ (59,278 ) – (59,278
ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ 726,217 (42,910 ) 683,307כ At 31 December 2006
Pursuant to Section 34 of the Companies Law (Revised) of the ࣓ኣਅະࢌʔ̇ؒ࠳߯ 34 ૈʥ̯ c̯ʔ̇ؿٖͫึძ˿ԜʗݢڬCayman Islands and the Articles of Association of the Company, ʔ̇ೡୀ ɀཌྷཌྷʒαɊɀ˂ɍɊȹכτɁeܛshare premium of the Company is available for distribution to ʀᚬऩ τɁؿ̯ܛequity holders. As at 31 December 2006, in the opinion of the ˀc໎ԑႏݯc˿Ԝʗݢʀᚬऩ ძሏʥୃዶᑋฌݯึٖͫܢ˳Directors, the Company’s reserves available for distribution to equity ʔ̇ௐ holders, comprising the share premium account and accumulated 683,307,000 ಋʏɀཌྷཌྷʄαi740,494,000 deficit, amounted to approximately HK$683,307,000 (2005: ಋʏe HK$740,494,000).
DEFERRED INCOME TAX 30. Ⴎֺ֝ೢ .30
Deferred taxation for the year ended 31 December 2006 is ࿀ϭɀཌྷཌྷʒαɊɀ˂ɍɊȹˀ˅α۹ؿႮ֝ ߬ೢଅ˚ܘcalculated in full on temporary differences under the liability method ೢඖȽ࣓ኣ߲ඦؒగᅗࣂֲଔc using a principal taxation rate of 17.5% (2005: 17.5%). 17.5%ɀཌྷཌྷʄαi17.5%АͲᅕ့߮e
Deferred income tax assets are recognised for tax loss carry-forwards Ⴎֺ֝ೢ༅ଐȽగֺᔝɾೢඖᑋฌАˮᆢ to the extent that the realisation of the related tax benefit through ႏc˞˿ॶ༦̰ԞᎶᇾೢึС˿Էɾޚ ˂ɀཌྷཌྷʒαɊɀכthe future taxable profi ts is probable. The Group has unrecognised ᗐೢ৻Сऩݯࠉe̯එ྆ tax losses of HK$423,000,000 as at 31 December 2006 (2005: ɍɊȹˀɾ̰ᆢႏೢඖᑋฌݯ 423,000,000 HK$433,000,000) to carry forward against future taxable income. ಋʏɀཌྷཌྷʄαi433,000,000 ಋʏc˿ ᆢႏɾೢ৻̰כሻ̰ԞᎶᇾೢνɃhא˞Approximately HK$403,000,000 (2005: HK$423,000,000) of the ᔝ unrecognised tax losses have no expiry date and the remaining ᑋฌɻc 403,000,000 ಋʏɀཌྷཌྷʄαi balance will expire at various dates up to and including 2025. 423,000,000 ಋʏԎಲԷ౨ˀcϤᔾੀ αؿΛˀ౨Էܢ˳࿀ϭɀཌྷɀʄαכ ౨e
144 უ৷ᇯ഼αం2006 DEFERRED INCOME TAX CONTINUED 30.Ⴎֺ֝ೢᙩ .30
αʑؿႮ֝ೢඖ༅ଐʥ߲ඦᛰ৽Εᨔሻכ The movement in deferred income tax assets and liabilities (prior to ΣɎiکoffsetting of balances within the same taxation jurisdiction) during ȹᄩೢΔਂؿ the year is as follows:
˱ೢඖҗᓿ Accelerated tax depreciation Deferred income tax liabilities Ⴎֺ֝ೢ߲ඦ 2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
30 963 ٱAt the beginning of the year α ٲCharged to the consolidated income κϬ ߮Ƀ၃νऩ statement 250 933
At the end of the year αୄ 1,213 963
Decelerated Tax losses tax depreciation Total ೢඖᑋฌ ಕೢඖҗᓿ ᐢ߮ Deferred income tax assets Ⴎֺ֝ೢ༅ଐ 2006 2005 2006 2005 2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα ɀཌྷཌྷʒα ɀཌྷཌྷʄα ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 $’000 $’000 $’000 $’000 ɝʏ ɝʏ ɝʏ ɝʏ ɝʏ ɝʏ
( 30) ( 963) 3,233 – (3,263) ( 963) ٱAt the beginning of the year α (Credited)/charged to the κϬ߮Ƀ၃ ٲconsolidated income νऩ statement (10,582 ) 2,300 (688 ) (3,233 ) (11,270 ) (933)
At the end of the year αୄ (11,545 ) (963 ) (688 ) – (12,233 ) (963)
Phoenix Annual Report 2006 145 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
ټCASH GENERATED FROM 31. Ꮺพ৻ଐ́ؿଊ .31 OPERATIONS
ٲݚɃ૱ᔾྦྷሏټReconciliation of profit from operations to net cash inflow from ᏪึСၤᏪพ৻ଊ operating activities
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
С 245,825 203,419ึکProfi t before income tax ֺೢ Amortisation of lease premium for land ɠΔै༉͂ᚫሻ 540 – พdᄥָʥஉௐҗᓿذ Depreciation of property, plant and equipment 23,373 26,181 ᚬʥԯˢخAmortisation of purchased programme and ᑪɃຝ͌dཋᄧ fi lm rights and other charges ʻᚫሻ 18,861 26,041 – พdᄥָʥஉௐಕࠤ 677ذ Impairment of property, plant and equipment Provision for impairment loss in a jointly ͳઁԹྡྷಕࠤᑋฌᅆௐ controlled entity – 472 Provision for impairment of inventories Φ༉ಕࠤᅆௐ – 3,257 Provision for impairment of receivables Ꮆνಁඖಕࠤᅆௐ 16,293 106,177 Reversal of provision for impairment of ᎶνಁඖಕࠤᅆௐᅆΑ receivables (12,152 ) – พdᄥָʥஉௐᑋฌʼnذLoss/(gain) on disposal of property, plant ˮਕ and equipment νऩ 81 (64 ) Share of losses of jointly controlled entities ᚫЌͳઁԹྡྷᑋฌ 1,518 1,906 Interest income, net СࢠνɃ૱ᔾ (23,118 ) (14,723) Other income, net ԯˢνɃ૱ᔾ (7,325 ) (30,134) Increase in accounts receivable Ꮆνሏಁᄈ˱ (29,198 ) (51,034) ʥԯˢᎶνټܘIncrease)/decrease in prepayments, ད˟ಁඖd) deposits and other receivables ಁඖᄈ˱ʼnಕʭ (83,939 ) 2,531 Increase in loans and receivables ൘ಁʥᎶνಁඖᄈ˱ (38,794 ) – Decrease/(increase) in inventories Φஒಕʭʼnᄈ˱ 605 (63 ) Decrease/(increase) in amounts due from Ꮆνᗐடʔ̇ಁඖಕʭʼn related companies ᄈ˱ 1,194 (725 ) Decrease in self-produced programmes Ϭႇຝ͌ಕʭ 554 6,892 Increase/(decrease) in accounts payable, Ꮆ˟ሏಁdԯˢᎶ˟ಁඖʥ other payables and accruals Ꮆ߮ಁඖᄈ˱ʼnಕʭ 27,772 (69,130) Increase in deferred income Ⴎ֝νɃᄈ˱ 11,638 8,658 Decrease in amounts due to related Ꮆ˟ᗐடʔ̇ಁඖಕʭ companies (157 ) (3,185 )
216,476 154,248 ټCASH GENERATED FROM OPERATIONS Ꮺพ৻ଐ́ؿଊ
מ͚ټଊڈ Non-cash transactions ஒמܞמ͚ټଊڈα۹ଐ́ؿ˚̯߬כ The principal non-cash transaction occurring in the current year is ഽ17(a)ɻሃ߸eڃΣמthe barter transaction as discussed in Note 17(a). ͚
146 უ৷ᇯ഼αం2006 ൘ڌBANKING FACILITIES 32.ႺϷ .32
ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀc̯එ྆ؿႺכ As at 31 December 2006, the Group had banking facilities amounting ൘ᔾݯ18,907,000ಋʏɀཌྷཌྷʄαiڌto approximately HK$18,907,000 (2005: HK$18,407,000) of Ϸ which approximately HK$11,735,000 (2005: HK$12,600,000) was 18,407,000ಋʏcɻ11,735,000ಋʏɀ unutilised. The facilities are covered by counter indemnities from the ཌྷཌྷʄαi12,600,000ಋʏʋ̰৽͂eτᗐ eאАړ൘̯ͅඑ྆ొԜؿʦኪڌ .Group
ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀc3,907,000כ As at 31 December 2006, deposits of approximately HK$3,907,000 HK$3,407,000) were pledged with a bank to secure a ಋʏɀཌྷཌྷʄαi3,407,000ಋʏؿΦಁɰ :2005) ᙔʔ̇พ˚ႺϷኪڃʀႺϷcАݯʀȹא .banking guarantee given to the landlord of a subsidiary eۂאؿړ
COMMITMENTS 33.ֻኪ .33
ᚬخD ᑪɃຝ͌ʥཋᄧ a) Programme and fi lm rights acquisition) ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀc̯එ྆כ As at 31 December 2006, the Group had aggregate ᄚϷֻኪᐢۿᚬؿخoutstanding programme and film rights related commitments τᗐຝ͌ʥཋᄧ of approximately HK$34,123,000 (2005: HK$53,902,000) of ᔾݯ34,123,000ಋʏɀཌྷཌྷʄαi which HK$33,695,000 (2005: All) was in respect of a fi lm rights 53,902,000ಋʏcɻ33,695,000ಋʏ acquisition agreement with STAR TV Filmed Entertainment ɀཌྷཌྷʄαiͲȽၤStar TV Filmed Limited (“STAR Filmed”) extending to 27 August 2008. Total Entertainment Limited STAR Filmed ᚬԾᘪτᗐcԾᘪ֝خprogramme and fi lm rights related commitments are analysed as ᖋ߯ؿᑪൕཋᄧ follows: ᙩϭɀཌྷཌྷɄαɄ˂ɀɊȼˀeτᗐຝ͌ ᚬؿֻኪᐢᔾʗΣɎiخʥཋᄧ
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
ȹα 20,776 20,295כNot later than one year ɺፖ ʄαכȹαЎɺፖכLater than one year and not later than ፖ fi ve years 13,347 33,607
34,123 53,902
Phoenix Annual Report 2006 147 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
COMMITMENTS CONTINUED 33. ֻኪᙩ .33
৻ר E b) Service charges) ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀc̯එ྆כ As at 31 December 2006, the Group had total committed ɀཌྷཌྷȾαʒ˂ɍɊˀʥɀཌྷכservice charges payable to Satellite Television Asian Region ʗПగ ৻ԾᘪϤרLimited (“STARL”) and Fox News Network L.L.C. (“Fox”) of ཌྷȼαȼ˂ɀɊʄˀԷ౨ؿ approximately HK$120,853,000 (2005: HK$20,912,000) and Ꮆ˟ʀᇯܱཋ഼τࠉʔ̇STARLʥ ৻רHK$1,896,000 (2005: HK$5,225,000) in respect of a service Fox News Network L.L.C. Foxؿ agreement expiring on 30 June 2009 and 25 July 2007, ݯ120,853,000ಋʏɀཌྷཌྷʄαi respectively. Total committed service charges payable to STARL 20,912,000ಋʏʥ1,896,000ಋʏɀཌྷ and Fox are analysed as follows: ཌྷʄαi5,225,000ಋʏeᎶ˟STARL ʥ ৻ֻ͂ኪᐢᔾʗΣɎiרFoxؿ
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
ȹα 50,016 24,246כNot later than one year ɺፖ ʄαכȹαЎɺፖכLater than one year and not later than ፖ fi ve years 72,733 1,891
122,749 26,137
(c) Operating lease F Ꮺै༉ ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀc̯එ࣓྆כ As at 31 December 2006, the Group had rental commitments of approximately HK$33,588,000 (2005: HK$18,401,000) under ኣΛඖ֝౨ϭɀཌྷȹȹαȾ˂ؿᏪै༉ various operating leases extending to September 2011. Total ֻኪ33,588,000ಋʏɀཌྷཌྷʄαi e࣓ኣɺ˿࿄ሻټfuture minimum lease payments payable under non-cancellable 18,401,000ಋʏؿै ᐢᔾʗΣټoperating leases are as follows: Ꮺै༉c̰ԞГؿै Ɏi
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
ȹα 12,079 7,367כNot later than one year ɺፖ ʄαכȹαЎɺፖכLater than one year and not later than ፖ fi ve years 21,137 9,771 ʄα 372 1,263כLater than fi ve years ፖ
33,588 18,401
148 უ৷ᇯ഼αం2006 COMMITMENTS CONTINUED 33.ֻኪᙩ .33
G ԯˢֻኪ d) Other commitments) ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀc̯එ࣓྆כ As at 31 December 2006, the Group had other operating commitments of approximately HK$37,911,000 (2005: ኣΛඖԾᘪτԯˢᏪֻኪ37,911,000 HK$20,887,000) under various agreements as follows: ಋʏɀཌྷཌྷʄαi20,887,000ಋʏcʗ ΣɎi
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
ȹα 24,130 11,510כNot later than one year ɺፖ ʄαכȹαЎɺፖכLater than one year and not later than ፖ fi ve years 13,781 9,377
37,911 20,887
Phoenix Annual Report 2006 149 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
מRELATED PARTY TRANSACTIONS 34.ᗐடɁɡ͚ .34
(i) The Group had the following significant transactions with (i) ̯එ྆౦ၤᗐடɁɡցຮӮࠗಋผ߮ๅ 24໔ Ð ᗐடɁɡׄᚉ൬ϷɎͶࠇڬ the related parties as defined in HKAS 24 – Related Party iמDisclosures: ɣ͚
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα Notes $’000 $’000 ഽ ɝʏ ɝʏڃ
৻רService charges paid/payable to ΉSTARLʻ˟ʼnᎶ˟ؿ STARL a, b 53,416 54,174
Commission for advertising sales ΉSTARLʻ˟ʼnᎶ˟ؿᄤйሻਕ ټ৻Џרand marketing services ʥ̟ઐᄤ paid/payable to STARL a, c – 51
Commission for international ΉSTARLʻ˟ʼnᎶ˟ؿਝ߯ᑪ ټ৻Џרsubscription sales and marketing ሻਕʥ̟ઐᄤ services paid/payable to STARL a, d 3,201 2,864
Film licence fees paid/payable to ΉStar Filmedʻ˟ʼnᎶ˟ؿཋᄧ STAR Filmed ஈ˿ a, e 20,326 20,355
Service charges paid/payable to Ήԓݘཋ഼τࠉʔ̇ԓݘ ৻ f, g 731 28רAsia Television Limited (“ATV”) ཋ഼ʻ˟ʼnᎶ˟ؿ
Service charges received/receivable Ήԓݘཋ഼νՅʼnᎶνՅؿ ৻ f, h 1,276 1,278ר from ATV
৻ i, j 3,689 3,782רService charges paid/payable to Fox ΉFoxʻ˟ʼnᎶ˟ؿ
Service charges paid/payable to Ή British Sky Broadcasting British Sky Broadcasting Limited LimitedBSkyBʻ˟ʼn ৻ k, l 1,120 3,164רBSkyB”) Ꮆ˟ؿ“)
Service charges received/receivable ΉDIRECTV, Inc.DIRECTV ৻ m, n 1,954 1,751רfrom DIRECTV, Inc. (“DIRECTV”) νՅʼnᎶνՅؿ
Programme licence fees to SGL ΉSGL Entertainment Limited Entertainment Limited (“SGL”) SGLʻ˟ؿຝ͌ஈ˿ a, o 210 546
Programme license fees paid/ Ήԓݘཋ഼ͬพτࠉʔ̇ payable to Asia Television ԓ഼ͬพʻ˟ʼnᎶ˟ؿ Enterprise Limited (“ATVE”) ຝ͌ஈ˿ f, p 428 –
එ྆ʔ̇ʥڌAdvertising sales to China Mobile Ήɻਝଫ৽ ڌᙔʔ̇ɻଫ৽ڃCommunications Corporation ԯ and its subsidiaries (the “CMCC එ྆൬Ϸؿᄤйሻਕ Group”) q, r 8,912 –
Key management compensation ˚߬ဳଉɁࡗᑀ༭ iii 25,623 25,605
150 უ৷ᇯ഼αం2006 ᙩמRELATED PARTY TRANSACTIONS 34. ᗐடɁɡ͚ .34 CONTINUED
(i) (Continued) (i)ᙩ
ഽiڃ :Notes
(a) STARL, STAR Filmed, SGL and other STAR TV group companies (a) STARLdSTAR FilmeddSGL ʥᇯ഼එ྆ʑ ඨఌඑ྆τࠉʔ̇ؿيare wholly-owned subsidiaries of STAR Group Limited, which owns ԯˢʔ̇cяݯܱ ᙔʔ̇cԯኟτXing Kong Chuanڃof Xing Kong Chuan Mei Group Co., Ltd., a substantial equity Ͳ༅ 100% holder of the Company. Mei Group Co., Ltd.̯ʔ̇˚ٖ߬ؿ 100%ᚬऩe
Ή̯ܢ˳৻רb) Service charges paid/payable to STARL cover a wide range of (b) Ή STARL ʻ˟ʼnᎶ˟ؿ) ৻Ƚ࣓ר৻cרtechnical services provided to the Group are charged based on එ྆ొԜؿΛʏʝҌ ৻רɀཌྷཌྷɍαʄ˂ɀɊȾˀ͓߯ؿכthe terms of the service agreement dated 29 May 2003. The ኣ ̯כ৻Ծᘪؿૈಁล߬༗רsummary of the terms of the service agreement is set out in the Ծᘪᔤցc ɀཌྷཌྷɍαʒ˂ɊˀֺೕˮؿԲכsection headed “New Star Services Agreement” of the circular of ʔ̇ ৻Ծᘪȹຝcרthe Company dated 10 June 2003 (the “Circular”). Either fixed Բɻ ณ ഼ fees or variable fees are charged depending on the type of services ʗݯ՞ցνֶࣺ৽νԭိc഼˝ֺԚ ᗘПϤցeܪutilised. ͂ؿஉ c) The commission for advertising sales and marketing services paid/ (c) Ή STARLʻ˟ʼnᎶ˟ؿᄤйሻਕʥ̟ઐ) එ྆ᑨՅʥ̯ٲȽ࣓ኣԯˤټ৻ؿЏרpayable to STARL is based on 4% – 15% (2005: 4% – 15%) of the ᄤ net advertising income generated and received by it on behalf of νՅؿᄤйνɃ૱ᔾɰκɍʿˤଉ the Group after deducting the relevant amount of the third party ؿτᗐಁᔾؿ4%ϭ15%ɀཌྷཌྷʄαi agency fees. 4%ϭ15%့߮e d) The commission for international subscription sales and marketing (d) Ή STARLʻ˟ʼnᎶ˟ؿਝ߯ᑪሻਕʥ̟) එ྆ᑨ̯ٲȽ࣓ኣԯˤټ৻ؿЏרservices paid/payable to STARL is based on 15% (2005: 15%) of ઐᄤ the subscription fees generated and received by it on behalf of the ՅʥνՅؿν഼ؿ15%ɀཌྷཌྷʄαi Group. 15%့߮e e) The fi lm licence fees are charged in accordance with a fi lm rights (e) ཋᄧஈ˿Ƚ࣓ኣၤSTAR Filmed ͓߯ؿ) ᚬԾᘪνՅeخacquisition agreement with STAR Filmed. ᑪɃཋᄧ
ᙔʔ̇cϤڃf) ATVE is a wholly-owned subsidiary of ATV which is considered to (f) ԓ഼ͬพȽԓݘཋ഼ؿͲ༅) ഼ݯ̯ʔ̇ؿᗐடڬbe a connected party to the Company pursuant to the GEM Listing ࣓ኣพɐ̟ஃ Rules. Ɂɡe
ɀཌྷཌྷʒכᅥͱ́ʥஹ̷౸ͱ́ٽMr. LIU Changle and Mr. CHAN Wing Kee benefi cially own 93.3% ჳ and 6.7% respectively of Today’s Asia Limited, which indirectly αɊɀ˂ɍɊȹˀʗПྡྷऩኟτʌˀ owns approximately 46% of ATV as at 31 December 2006. Mr. ԓݘτࠉʔ̇ԯංઅኟτԓݘཋ഼ כCHAN Wing Kee also owns 95% of Dragon Sheen Holdings Limited 46%ᚬऩ93.3%ʥ6.7%ᚬऩe which holds 16.25% indirect interest in ATV as at 31 December ɀཌྷཌྷʒαɊɀ˂ɍɊȹˀcஹ̷౸ He also owns 80% of Dragon Goodwill International Limited, ͱ́͛ኟτ᎘ଞඑ྆τࠉʔ̇ؿ95% .2006 τԓݘܛڬwhich completed its acquisition of 32.75% interests in ATV on 25 ᚬऩc᎘ଞඑ྆τࠉʔ̇ July 2003. ཋ഼ؿ16.25%ංઅᚬऩe֤͛ኟτ Dragon Goodwill International Limited ؿ 80%ᚬऩcϤDragon Goodwill ˂ɀཌྷཌྷɍαȼכInternational Limited ɀɊʄˀѧινᑪԓݘཋ഼ؿ32.75%ᚬ ऩe g) Service charges paid/payable to ATV cover news footage and data (g) Ήԓݘཋ഼ݯ̯එ྆ొԜؿณၘːݒʥᅕ) ܘ৻cȽר৻Ϥʻ˟ʼnᎶ˟ؿרtransmission services provided to the Group which are charged ኣඨ based on terms mutually agreed upon between both parties. ᔶʿ෮ؿૈಁʻ˟e
Phoenix Annual Report 2006 151 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
ᙩמRELATED PARTY TRANSACTIONS 34.ᗐடɁɡ͚ .34 CONTINUED
(i) (Continued) (i)ᙩ
Ɏܢ˳৻רh) Service charges received/receivable from ATV cover the following (h) Ήԓݘཋ഼νՅʼnᎶνՅؿ) ৻רܘ৻cԎרservices provided to ATV which are charged based on terms ͶొԜʀԓݘཋ഼Ԛ͂ؿ ؿૈಁνiעܞspecifi ed in a service agreement: Ծᘪ the use of fl oor area for the location of receivers; Ð Ԛ͂અνኂֺΕΔᒨؿᅢࠍࠍዶh –
ܢ˳the use of master control room equipment and transmission Ð Ԛ͂ᐢઁԹ۩உௐʥඨஉௐ – ቔhړequipment (including maintenance for daily wear and tear); గˀ३ၿ൬Ϸ
– fi bre optic transmission; and Ð ͮᛪඨhʥ
৻eרvideo tapes administration and playout services. Ð ᄧဳଉʥᅌ –
(i) Fox is an associate of Xing Kong Chuan Mei Group Co., Ltd., a (i) Fox Ƚ Xing Kong Chuan Mei Group Co., substantial equity holder of the Company. Ltd.̯ʔ̇˚ٖ߬ؿᐲᏪʔ̇e
ɎͶొԜܢ˳৻רj) Service charges paid/payable to Fox cover the following services (j) Ή Fox ʻ˟ʼnᎶ˟ؿ) ৻Ծרܘ৻Ƚר৻cרprovided to the Group which are charged based on the terms ʀ̯එ྆Ԛ͂ؿ ؿૈಁνՅiעܞspecifi ed in a service agreement: ᘪ
ዟࡼʥɺ˿ᔝڈ৻ؿרgranting of non-exclusive and non-transferable licence to Ð ߯ᑪFox ณၘ – subscribe for Fox’s news service; ᜑஈ˿ᚬh leasing of office space and access to workspace, subject to Ð ፒʔ۩ै༉ʥԚ͂ɮА۩c഼˝ԯԜ – availability; and ᎶϤցhʥ
ᐲਝؿᙘᄧ౾dͲכaccessing Fox’s camera hook up at the United Nations, Ð Ԛ͂Fox Ͻ – ᅌقinterview positions in various places in the United States and ΈΔؿઔΔ˞ʥͅFox ᇯܱ live shots from Fox’s satellite truck positions for events that Fox ӹϽສՅFox ɰ൬Ϸం༞ؿԑͧؿ is already covering, subject to availability. ଊೋࠍc഼˝ԯԜᎶϤցe
the Newsီکk) BSkyB is 36.3% owned by News Holdings Limited (formerly known (k) News Holdings Limited) as The News Corporation Limited), a wholly-owned subsidiary of Corporation Limitedኟ τ BSkyB ؿ 36.3% News Corporation, which indirectly owns 100% of Xing Kong Chuan ٖᚬcϤNews Holdings Limited ංઅኟτ Mei Group Co., Ltd., a substantial equity holder of the Company. Xing Kong Chuan Mei Group Co., Ltd.̯ ʔ̇˚ٖ߬ؿ100%ᚬऩe
ɎͶొܢ˳৻רl) Service charges paid/payable to BSkyB cover the following services (l) Ή BSkyBʻ˟ʼnᎶ˟ؿ) ৻רܘ৻Ƚר৻cרprovided to the Group which are charged based on terms specifi ed Ԝʀ̯එ྆Ԛ͂ؿ ؿૈಁνՅiעܞin the service agreements: Ծᘪ
– transponder rental; Ð ᔝೕኂै༉h
৻hʥרuplinking services; and Ð Ήɐඨፏ –
৻eרڲܞencoding and electronic programme guide services. Ð ˱ʥཋɥຝ͌ –
152 უ৷ᇯ഼αం2006 ᙩמRELATED PARTY TRANSACTIONS 34.ᗐடɁɡ͚ .34 CONTINUED
(i) (Continued) (i)ᙩ
(m) DIRECTV is 34% indirectly owned by Fox. Fox is an associate of (m) DIRECTVȽͅFoxංઅኟτ34%ᚬऩeFox Xing Kong Chuan Mei Group Co., Ltd., a substantial equity holder ȽXing Kong Chuan Mei Group Co., Ltd.̯ of the company. ʔ̇˚ٖ߬ؿᐲᏪʔ̇e
৻רܘ৻Ƚרn) Service charges received/receivable from DIRECTV are charged (n) ΉDIRECTVνՅʼnᎶνؿ) ؿૈಁνՅeעܞbased on terms specifi ed in a service agreement. Ծᘪ
ܞஈ˿Ծᘪܘo) Programme license fees to SGL are charged based on terms (o) Ή SGL ʻ˟ؿຝ͌ஈ˿Ƚ) ؿૈಁνՅeע .specifi ed in a license agreement
ɀཌྷཌྷɍαʄ˂ɀɊȾˀ͓߯ؿຝכp) Pursuant to a programme licensing agreement dated 29 May 2003, (p) ࣓ኣ) the programme license fees paid/payable to ATVE with respect to a ͌ஈ˿ԾᘪcగԾᘪΪખֺஃցؿຝ͌ Ϥɰ˟ʼnᎶ˟ԓ഼ͬพؿຝ͌ஈ˿Ƚٲ list of programmes as stipulated in the schedule of the agreement ՞ցֶ͂ᔶʿ෮ؿ͂νՅeԾܘ are charged at a fixed fee or fees to be mutually agreed. The ɀཌྷཌྷɍαʒכʔ̯̇כsummary of the terms of the agreement are set out in the section ᘪؿૈಁล߬༗ headed “ATV Programme Licensing Agreement” of the Circular of ˂Ɋˀ˰ೕؿԲԓݘཋ഼ຝ͌ஈ˿Ծ the Company dated 10 June 2003. ᘪȹຝe
එ྆༦ԯɻਝଫ৽ࠗಋڌq) The CMCC Group, through its wholly-owned subsidiary of China (q) ɻଫ৽) ᙔʔ̇ኟτ̯ʔڃMobile (Hong Kong) Group Limited, owns 19.9% of the issued එ྆τࠉʔ̇ؿͲ༅ ڌshare capital of the Company. CMCC has become a connected ̇ɰೕϷٖ̯ؿ19.9% ᚬऩeɻଫ৽ party to the Company since 25 August 2006. ϬɀཌྷཌྷʒαɄ˂ɀɊʄˀιݯ̯ʔ̇ ؿᗐடɁɡe
එ྆൬ϷؿᄤйሻਕȽτᗐڌr) Advertising sales to the CMCC Group are related to airtime (r) Ήɻଫ৽) advertising and programme sponsoring on channels operated by Ε̯එֺ྆Ꮺ፼༞ɐؿᄤйࣂݒʥຝ͌ ɀཌྷཌྷʒαȾ˂Ʉˀ˰ೕכthe Group as disclosed in the announcement of the Company dated ᖳХΣ̯ʔ̇ September 2006. ؿʔйʑׄᚉe 8
ଐ́מഽ34(i)ׄᚉؿᗐடɁɡ͚ڃii) Year end balances arising from related parties transactions as (ii) Σɐʼ) disclosed in note 34(i) above were as follows: ؿαୄΣɎi
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
Amounts due from related companies Ꮆνᗐடʔ̇ಁඖ 38 1,232 Amounts due to related companies Ꮆ˟ᗐடʔ̇ಁඖ (4,743 ) (4,900)
ȹαcԎכThe outstanding balances with related companies are aged less ᗐடʔ̇ؿ̰ʻ˟ሏᙍʭ ߬ұᑹeܘdЛࢠʥאthan one year and are unsecured, non-interest bearing and ݯಲ repayable on demand.
Phoenix Annual Report 2006 153 ഽڃٲNOTES TO THE FINANCIAL STATEMENTS ল৻ం
ᙩמRELATED PARTY TRANSACTIONS 34.ᗐடɁɡ͚ .34 CONTINUED
(iii) Key management compensation (iii) ˚߬ဳଉɁࡗᑀ༭
2006 2005 ɀཌྷཌྷʒα ɀཌྷཌྷʄα $’000 $’000 ɝʏ ɝʏ
13,499 13,831 ټSalaries ᑀ ؿ٦ 5,200 5,800יDiscretionary bonuses ੱೕ Quarters and housing allowance ਼ٞʥָ۰ݛൎ 5,315 5,062 1,244 1,277 ټPension fund ঽͤ
25,623 25,605
35. COMPARATIVE FIGURES 35. ˈ༖ᅕΥ
Certain of the 2005 comparative figures have been reclassified to ߗɳɀཌྷཌྷʄαؿˈ༖ᅕΥɰࠇณʗᗘc˞ଲ conform to the current year’s presentation. Certain depreciation ̯α۹ؿеͶʿβeߗɳҗᓿ͂ɰሻ expenses have been reclassified from selling, general and ਕdȹঁʥϷܧ͂ࠇณʗᗘϭᏪ͂cʥ administrative expenses to operating expenses and the income from ΦಁᖬνɃɰСࢠνɃࠇณʗᗘϭԯˢν certifi cate of deposit have been reclassifi ed from interest income to Ƀe other income.
154 უ৷ᇯ഼αం2006 FINANCIAL SUMMARY ল৻ล߬
CONSOLIDATED RESULTS 綜合業績 Six months Year ended Year ended Year ended ended Year ended 31 December 31 December 31 December 31 December 30 June 2006 2005 2004 2003 2003 ࿀ϭ ࿀ϭ ࿀ϭ ࿀ϭ ࿀ϭ ɀཌྷཌྷʒα ɀཌྷཌྷʄα ɀཌྷཌྷ̒α ɀཌྷཌྷɍα ɀཌྷཌྷɍα Ɋɀ˂ɍɊȹˀ Ɋɀ˂ɍɊȹˀ Ɋɀ˂ɍɊȹˀ Ɋɀ˂ɍɊȹˀ ʒ˂ɍɊˀ α۹ ˅α۹ ˅α۹ ʒ˂ ˅α۹˅ $’000 $’000 $’000 $’000 $’000 ɝʏ ɝʏ ɝʏ ɝʏ ɝʏ
Results พᐜ Revenue νɃ 1,057,667 1,034,768 959,660 304,030 615,462 Operating expenses* Ꮺ͂* (729,483 ) (653,654 ) (694,841 ) (288,437 ) (584,500 ) Selling, general and administrative ሻਕdȹঁʥϷܧ͂* expenses* (137,330 ) (222,429 ) (126,283 ) (60,172 ) (124,295 ) Other income/(expenses), net ԯˢνɃʼn͂૱ᔾ 54,971 44,734 17,518 7,958 21,631
СʼnึکProfi t/(loss) before taxation and ೢʥʭᅕٖᚬऩ minority interests ᑋฌ 245,825 203,419 156,054 (36,621 ) (71,702 ) Taxation ೢඖ (34,938 ) (20,755 ) (4,826 ) (2,559 ) (3,811 )
( Сʼnᑋฌ 210,887 182,664 151,228 (39,180 ) (75,513ึکProfi t/(loss) before minority interests ʭᅕٖᚬऩ Minority interests ʭᅕٖᚬऩ 1,498 (1,182 ) (734 ) 314 3,150
Profi t/(loss) attributable to equity ̯ʔ̇ᚬऩܛτɁᎶЌึСʼn holders of the Company ᑋฌ 212,385 181,482 150,494 (38,866 ) (72,363 )
Phoenix Annual Report 2006 155 FINANCIAL SUMMARY ল৻ล߬
CONSOLIDATED ASSETS AND ၃༅ଐʥ߲ඦ LIABILITIES As at As at 31 December 30 June ʒ˂ɍɊˀכ Ɋɀ˂ɍɊȹˀכ 2006 2005 2004 2003 2003 ɀཌྷཌྷʒα ɀཌྷཌྷʄα ɀཌྷཌྷ̒α ɀཌྷཌྷɍα ɀཌྷཌྷɍα $’000 $’000 $’000 $’000 $’000 ɝʏ ɝʏ ɝʏ ɝʏ ɝʏ
Total assets ༅ଐᐢࠤ 1,433,350 1,161,603 1,082,592 878,039 932,603 Total liabilities ߲ඦᐢᔾ (266,662 ) (154,497 ) (212,107 ) (165,516 ) (180,563 ) ( Minority interests ʭᅕٖᚬऩ (7,139 ) (8,019 ) (6,837 ) (6,103 ) (6,832
Capital and reserves attributable to ̯ʔ̇ᚬऩܛτɁᎶЌ the Company’s equity holders ༅̯ʥௐ 1,159,549 999,087 863,648 706,420 745,208
αˀͅܧɀཌྷཌྷ̒αȹ˂Ʉˀc̯ʔ̇ੀԯলכ On 8 January 2004, the Company changed its fi nancial year end from 30 June to 31 December. The Directors consider the reason for the change ʒ˂ɍɊˀҡҝݯɊɀ˂ɍɊȹˀe໎ԑႏݯcҡ αˀؿࡈΐܰοΕၤ̯එ྆ʥԯᄤй۪ʸܧof financial year end is to align the Group’s business cycle with that of ҝল ޑȹߎcܛړτᗐ۪ʸؿˤଉؿพ৻൪౨ٲits advertising customers, and the agents who represent them, which ʥˤ ዃܘnormally have year end on 31 December and determine their advertising ΐτᗐ۪ʸȹঁ˞Ɋɀ˂ɍɊȹˀݯαˀʥ budgets and operate on a calendar year basis. α൪౨Һցԯᄤйད့ʥᏪ༜e
˂αˀɰͅʒ˂ɍɊˀҡҝݯɊɀܧলכͅ As a result of the change of financial year end from 30 June to 31 December, the consolidated results and consolidated assets and liabilities ɍɊȹˀcܨ၃พᐜၤ၃༅ଐʥ߲ඦɰͶ͐ԭ have shown two different fi nancial year end. ɺলܧαˀe
* Certain depreciation expenses have been reclassifi ed from selling, general and * ߗɳҗᓿ͂ɰሻਕdȹঁʥϷܧ͂ࠇณʗᗘϭ administrative expenses to operating expenses. Ꮺ͂e
156 უ৷ᇯ഼αం2006 CAPITAL FINANCIAL PRESS LIMITED FINANCIAL PRESS CAPITAL : THE GRAPHIS COMPANY LIMITED PRINTING THE GRAPHIS COMPANY : DESIGN
0% (Pantone 873C) Pantone 873C (Gold) 100% Panto phoenix satellite television holdings limited 鳳凰衛視控股有限公司
PHOENIX SATELLITE TELEVISION HOLDINGS LIMITED annual report 9th Floor, One Harbourfront, 18 Tak Fung Street, Risin Hunghom, Kowloon, Hong Kong Tel. (852) 2621 9888 Fax. (852) 2621 9898
鳳凰衛視控股有限公司 香港九龍紅磡德豐街18號海濱廣場1座9樓 電話. (852) 2621 9888 傳真. (852) 2621 9898 年報 2006 http://www.phoenixtv.com phoenix sa
thegraphis file name: N997_Phoenix_AR06_ Pantone 873C (Gold) 100% Pantone 873C (Gold) 30% rev: (02)-19-Mar-2007