Annual Report
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(Stock Code 股份代號:8075) ANNUAL REPORT 年度報告 Year ended 31 July 2018 二零一八年七月三十一日止 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。 Media Asia expands into China's media and entertainment markets, CHARACTERISTICS OF GEM OF aiming to bring to the audience with ever-wider, more exuberant choice in entertainment experiences. THE STOCK EXCHANGE OF HONG KONG LIMITED (THE “STOCK EXCHANGE”) 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。 GEM has been positioned as a market designed to accommodate small and mid-sized 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. Given that the companies listed on GEM are generally small and mid- sized companies, 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 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 18 Corporate Governance Report 27 Biographical Details of Directors 31 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 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 Lam Kin Ngok, Peter (Chairman) PRINCIPAL SHARE REGISTRAR AND 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 Chan Chi Yuen Bermuda Ng Chi Ho, Dennis Zhang Xi BRANCH SHARE REGISTRAR AND 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 Zhang Xi (Chairman) INDEPENDENT AUDITOR Chan Chi Yuen Ernst & Young Lui Siu Tsuen, Richard Certified Public Accountants Ng Chi Ho, Dennis Yip Chai Tuck PRINCIPAL BANKERS DBS Bank (Hong Kong) Limited REMUNERATION COMMITTEE Hang Seng Bank Limited Chan Chi Yuen (Chairman) The Hongkong and Shanghai Banking Lui Siu Tsuen, Richard Corporation Limited Ng Chi Ho, Dennis Yip Chai Tuck LISTING INFORMATION Zhang Xi Place of Listing GEM of The Stock Exchange of Hong Kong Limited AUTHORISED REPRESENTATIVES 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) 2370 5825 2 Church Street Fax: (852) 2743 8459 Hamilton HM 11 E-mail: [email protected] Bermuda Annual Report 2017-2018 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$0.01 each have been listed and traded on GEM of The Stock Exchange of Hong Kong Limited since 31 May 2001. The following is a corporate chart of the Company and its principal subsidiaries (collectively, the “Group”) as at the date of this annual report. The Group’s principal activities include film production and distribution; organisation, management and production of concerts and live performances; artiste management; production and distribution of television programs; music production and publishing; licensing of media contents; provision of consultancy services in planning and management of cultural, entertainment and live performance projects. THE COMPANY Television Events Artiste Film Music Programs Management Management Media Asia Film Media Asia TV Media Asia Music Media Asia Media Asia Talent International Program Production Limited Entertainment Management Limited (HK) Limited Limited Limited Media Asia Film Media Asia TV Media Asia Music Media Asia Lam & Lamb Production Program Distribution Publishing Performance Entertainment Limited Limited Limited Agency (Macao) Limited Limited Media Asia Film 寰亞文化傳播 Distribution (HK) (中國)有限公司 Limited Media Asia Distribution (Beijing) Co., Ltd. 4 Media Asia Group Holdings Limited FINANCIAL SUMMARY A summary of the results and of the assets and liabilities of the Company and its subsidiaries (the “Group”) for the last five financial years, as extracted from the published audited financial statements of the Group, is set out below: RESULTS Year ended 31 July 2018 2017 2016 2015 2014 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Turnover 489,931 562,913 520,443 712,418 456,950 Profit/(loss) before tax (282,420) (176,048) (99,655) 29,501 (147,713) Income tax expense (1,781) (2,413) (2,582) (4,883) (5,510) Profit/(loss) for the year attributable to owners of the Company and non-controlling interests (284,201) (178,461) (102,237) 24,618 (153,223) ASSETS AND LIABILITIES As at 31 July 2018 2017 2016 2015 2014 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Total assets 1,176,892 1,274,744 1,432,223 1,502,479 927,662 Total liabilities (831,126) (647,128) (621,674) (607,663) (373,159) Net assets 345,766 627,616 810,549 894,816 554,503 Annual Report 2017-2018 5 CHAIRMAN’S STATEMENT Dr. LAM Kin Ngok, Peter Chairman OVERVIEW OF RESULTS During the year ended 31 July 2018, the Company and its subsidiaries (the “Group”) recorded a turnover of approximately HK$489,931,000, representing a decrease of 13% from turnover of approximately HK$562,913,000 for the year ended 31 July 2017. The Group recorded a loss after tax of approximately HK$284,201,000 (2017: approximately HK$178,461,000) and a loss attributable to owners of the Company of approximately HK$273,503,000 (2017: approximately HK$169,955,000) 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 released in the first quarter of the financial year ended 31 July 2018. As at 31 July 2018, the Group’s equity attributable to owners of the Company amounted to approximately HK$364,534,000 (2017: approximately HK$638,309,000) and the net asset value per share attributable to owners of the Company was HK17.1 cents (2017: HK29.9 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 2018 (2017: Nil). PROSPECTS Targeting at the PRC film market, the Group continues to invest in original production of quality films with Chinese themes. “When Robbers Meet The Monster”, an action comedy film featuring Louis Koo, Zhou Dongyu and Cheney Chen with director Andrew Lau, “Bodies At Rest”, an action crime film by director Renny Harlin casting Nick Cheung and Richie Jen, “Fagara in Mara”, a romance film produced by Ann Hui featuring Sammi Cheng, and “I’m Living It”, a feature film produced by Cheang Pou Soi with Aaron Kwok and Miriam Yeung, are under post-production. Projects under development include an action film “Knockout” by director Roy Chow featuring Han Geng and a romance comedy film “The Calling of a Bus Driver” with Ivana Wong and director Patrick Kong. 6 Media Asia Group Holdings Limited CHAIRMAN’S STATEMENT The drama series “Shadow of Justice” started broadcasting in Alibaba’s Youku and Viu TV since September and have generated satisfactory viewership for the two platforms. The latest titles in our TV production pipelines include “New Horizon”, a 50 episode romance drama series starring Zheng Kai and Chen Chiao-en, and we are discussing with various Chinese portals and video web sites for new project development. On top of our existing distribution license with Warner Music, during the year we have entered into an exclusive PRC distribution license of our music products with Tencent Music Entertainment (Shenzhen) Co., Ltd and these licenses have been providing stable income contribution to the Group. The Group is actively looking for new talent in Greater China and further co-operation with Asian artistes with an aim to build up a strong artiste roster. The recent “JJ Lin Sanctuary World Tour Hong Kong” has earned good reputation and public praises.