Media Asia Group Holdings Limited 寰亞傳媒集團有限公司 (Stock Code 股份代號：8075) ANNUAL REPORT 年度報告 Year ended 31 July 2017 二零一七年七月三十一日止 Media Asia expands into China’s media and entertainment markets, aiming to bring to the audience with ever-wider, more exuberant choice in entertainment experiences. 寰亞傳媒全面拓展中國大陸傳媒及娛樂市場， 為廣大觀眾帶來更豐富、更全面的娛樂享受。 CHARACTERISTICS OF THE GROWTH ENTERPRISE MARKET (“GEM”) OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE “STOCK EXCHANGE”) GEM has been positioned as a market designed to accommodate companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. 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 that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM. This report, for which the directors of Media Asia Group Holdings Limited (the “Directors”) collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the GEM for the purpose of giving information with regard to Media Asia Group Holdings Limited. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief, the information contained in this report is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this report misleading. CONTENTS 3 Corporate Information 4 Corporate Profile 5 Financial Summary 6 Chairman’s Statement 8 Management Discussion and Analysis 12 Environmental, Social and Governance Report 17 Corporate Governance Report 26 Biographical Details of Directors 30 Report of the Directors 41 Independent Auditor’s Report 46 Consolidated Income Statement 47 Consolidated Statement of Comprehensive Income 48 Consolidated Statement of Financial Position 50 Consolidated Statement of Changes in Equity 51 Consolidated Statement of Cash Flows 53 Notes to the Financial Statements 117 Notice of Annual General Meeting 2 CORPORATE INFORMATION PLACE OF INCORPORATION PRINCIPAL PLACE OF BUSINESS Incorporated in the Cayman Islands and 11th Floor continued in Bermuda Lai Sun Commercial Centre 680 Cheung Sha Wan Road BOARD OF DIRECTORS Kowloon, Hong Kong Executive Directors PRINCIPAL SHARE REGISTRAR AND Lam Kin Ngok, Peter (Chairman) Chan Chi Kwong TRANSFER OFFICE Lui Siu Tsuen, Richard Conyers Corporate Services (Bermuda) Limited Yip Chai Tuck Clarendon House 2 Church Street Independent Non-executive Directors Hamilton HM 11 Bermuda Chan Chi Yuen Ng Chi Ho, Dennis BRANCH SHARE REGISTRAR AND Zhang Xi TRANSFER OFFICE IN HONG KONG AUDIT COMMITTEE Computershare Hong Kong Investor Services Limited Chan Chi Yuen (Chairman) Shops 1712-1716, 17th Floor Ng Chi Ho, Dennis Hopewell Centre Zhang Xi 183 Queen’s Road East Wanchai, Hong Kong NOMINATION COMMITTEE INDEPENDENT AUDITOR Zhang Xi (Chairman) Ernst & Young Chan Chi Yuen Certified Public Accountants Lui Siu Tsuen, Richard Ng Chi Ho, Dennis PRINCIPAL BANKERS Yip Chai Tuck DBS Bank (Hong Kong) Limited REMUNERATION COMMITTEE Hang Seng Bank Limited The Hongkong and Shanghai Banking Chan Chi Yuen (Chairman) Corporation Limited Lui Siu Tsuen, Richard Ng Chi Ho, Dennis LISTING INFORMATION Yip Chai Tuck Zhang Xi Place of Listing The Growth Enterprise Market of AUTHORISED REPRESENTATIVES The Stock Exchange of Hong Kong Limited Lui Siu Tsuen, Richard Stock Code Lau Siu Mui 8075 COMPLIANCE OFFICER Board Lot Lui Siu Tsuen, Richard 4,000 shares COMPANY SECRETARY WEBSITE Lau Siu Mui www.mediaasia.com REGISTERED OFFICE INVESTOR RELATIONS Clarendon House Tel: (852) 3184 0990 2 Church Street Fax: (852) 3184 9999 Hamilton HM 11 E-mail: [email protected] Bermuda Annual Report 2016-2017 3 CORPORATE PROFILE Media Asia Group Holdings Limited (the “Company”) was incorporated in the Cayman Islands on 29 February 2000 as an exempted company with limited liability under the Companies Law (Revised) of the Cayman Islands. The Company’s domicile was changed to Bermuda by way of de-registration in the Cayman Islands and continuation as an exempted company under the laws of Bermuda on 3 December 2009. The Company’s issued ordinary shares of HK$0.01 each have been listed and traded on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited since 31 May 2001. The following is a corporate chart of the Company and its principal subsidiaries (collectively, the “Group”) as at the date of this annual report. The Group’s principal activities include film production and distribution; organisation, management and production of concerts and live performances; artiste management; production and distribution of television programs; music production and publishing; licensing of media contents; provision of consultancy services in planning and management of cultural, entertainment and live performance projects. THE COMPANY Television Events Artiste Film Music Programs Management Management Media Asia Film Media Asia TV Media Asia Music Media Asia Media Asia Talent International Program Production Limited Entertainment Management Limited (HK) Limited Limited Limited Media Asia Film Media Asia TV Media Asia Music Media Asia Lam & Lamb Production Program Distribution Publishing Performance Agency Entertainment Limited Limited Limited (Macao) Limited Limited Media Asia Film 寰亞文化傳播 Distribution (HK) （中國）有限公司 Limited Media Asia Distribution (Beijing) Co., Ltd. 4 Media Asia Group Holdings Limited FINANCIAL SUMMARY A summary of the results and of the assets and liabilities of the Company and its subsidiaries (the “Group”) for the last five financial years, as extracted from the published audited financial statements of the Group, is set out below: RESULTS Year ended 31 July 2017 2016 2015 2014 2013 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Continuing operations Turnover 562,913 520,443 712,418 456,950 441,170 Profit/(loss) before tax (176,048) (99,655) 29,501 (147,713) (84,273) Income tax expense (2,413) (2,582) (4,883) (5,510) (6,748) Profit/(loss) for the year from continuing operations (178,461) (102,237) 24,618 (153,223) (91,021) Discontinued operation Loss for the year from a discontinued operation — — — — (1,940) Profit/(loss) for the year attributable to owners of the Company and non-controlling interests (178,461) (102,237) 24,618 (153,223) (92,961) ASSETS AND LIABILITIES As at 31 July 2017 2016 2015 2014 2013 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Total assets 1,274,744 1,432,223 1,502,479 927,662 1,163,257 Total liabilities (647,128) (621,674) (607,663) (373,159) (690,650) Net assets 627,616 810,549 894,816 554,503 472,607 Annual Report 2016-2017 5 CHAIRMAN’S STATEMENT OVERVIEW OF RESULTS During the year ended 31 July 2017, the Company and its subsidiaries (the “Group”) recorded a turnover of approximately HK$562,913,000, representing an increase of 8% from turnover of approximately HK$520,443,000 for the year ended 31 July 2016. The Group recorded a loss after tax of approximately HK$178,461,000 (2016: approximately HK$102,237,000) and a loss attributable to owners of the Company of approximately HK$169,955,000 (2016: approximately HK$95,546,000) during the year. The significant increase in loss attributable to owners of the Company was primarily attributable to unsatisfactory performance of the Group’s films recently released. Dr. LAM Kin Ngok, Peter As at 31 July 2017, the Group’s equity attributable to owners Chairman of the Company amounted to approximately HK$638,309,000 (2016: approximately HK$812,805,000) and the net asset value per share attributable to owners of the Company was HK29.9 cents (2016: HK38.1 cents). DIVIDEND The board of the directors of the Company (the “Board”) does not recommend the payment of any dividend for the year ended 31 July 2017 (2016: Nil). PROSPECTS Regarding our film business, a number of successful products have been released with satisfactory box office and critical acclaim during the year. “Love Off The Cuff” reached HK$30 million box office in Hong Kong, being the highest among all Chinese films in 2017 so far. “Trivisa” has won the Best Film, Best Director, Best Screenplay, Best Actor and Best Film Editing awards in the 36th Hong Kong Film Awards. The Group will continue its effort to provide quality films to the audience and the next upcoming major product is the long-awaited John Woo’s return to his old style action-thriller “Manhunt”, featuring Zhang Han Yu and Fukuyama Masaharu. The film just premiered at the 74th Venice International Film Festival with great acclaim and is set for release later this year. The “Infernal Affairs” drama series we produced for iQiyi and TVB have generated satisfactory viewership for the two platforms and the latest titles in our TV production pipelines are “New Horizon”, a 50 episode romance drama series starring Zheng Kai and Chen Chiao-en and “Shadow of Justice”, a 36 episode detective drama series tailor-made for the Alibaba’s Youku platforms featuring Julian Cheung and Fiona Sit. For music and live entertainment businesses, the exclusive distribution licenses of our music products with Taobao China Software Co. Ltd. and Warner Music continue to provide stable income contribution to the Group. The recent “Liza Wang 50th Anniversary The Timeless Concert 2017” has earned good reputation and public praises. The Group will continue to work with prominent local and Asian artistes for concert promotion.