Media Asia Group Holdings Limited
Media Asia Group Holdings Limited 寰亞傳媒集團有限公司 (formerly known as Rojam Entertainment Holdings Limited) （前稱 Rojam Entertainment Holdings Limited）
(Stock Code 股份代號： 8075) 寰亞傳媒集團有限公司
Annual Report 年報 2011
Media Asia Group Holdings Limited Annual Report 寰亞傳媒集團有限公司 (Incorporated in the Cayman Islands and continued in Bermuda with limited liability) （於開曼群島註冊成立及於百慕達存續之有限公司）
23/F., Sunshine Plaza, No. 353 Lockhart Road, Wanchai, Hong Kong
香港灣仔駱克道三百五十三號三湘大廈二十三樓 年報
Tel 電話 : (852) 3184-0990 Fax 傳真 : (852) 3184-9999 2011 Website 互聯網址 : http://www.maghl.com E-mail 電子郵件 : [email protected] 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。
Celebrities, senior management and strategic partners attended the press conference regarding the proposed change of the Company’s name and logo held in Shanghai on 28 July 2011.
群星、高級管理層及戰略性合作伙 伴出席於二零一一年七月二十八日 在上海舉行有關擬更改本公司名稱 及標誌之新聞發佈會。 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.
Hong Kong Exchanges and Clearing Limited and the Stock Exchange take no responsibility for the contents of this report, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this report.
This report, for which the directors of Media Asia Group Holdings Limited (formerly known as Rojam Entertainment 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 of the Stock Exchange 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. 2 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 Contents 115 39 13 48 47 45 43 41 40 37 24 19 4 9 6 5 3 Consolidated StatementofFinancialPosition Consolidated StatementofComprehensive Income Consolidated IncomeStatement Independent Auditors’Report Report oftheDirectors Report Corporate Governance Biographical DetailsofDirectors Management DiscussionandAnalysis Chairman’s Statement Financial Summary Corporate Chart Corporate Information Notice ofSpecialGeneralMeeting Notes totheFinancialStatements Statement ofFinancialPosition Consolidated StatementofCashFlows Consolidated StatementofChangesinEquity Corporate Information
PLACE OF INCORPORATION HEAD OFFICE AND PRINCIPAL PLACE Incorporated in the Cayman Islands and OF BUSINESS continued in Bermuda 23rd Floor, Sunshine Plaza 353 Lockhart Road BOARD OF DIRECTORS Wanchai, Hong Kong Executive Directors Lam Kin Ngok, Peter (Chairman) PRINCIPAL SHARE REGISTRAR AND Yu Feng TRANSFER OFFICE Choi Chiu Fai, Stanley Codan Services Limited Tang Jun (Chief Executive Officer) Clarendon House Lui Siu Tsuen, Richard 2 Church Street Annual Report 2011 Chan Chi Kwong Hamilton HM 11 Etsuko Hoshiyama Bermuda Chan Chi Ming, Alvin BRANCH SHARE REGISTRAR AND Independent Non-executive Directors Chan Chi Yuen TRANSFER OFFICE IN HONG KONG Ng Chi Ho, Dennis Computershare Hong Kong Investor Services Limited Zhang Xi Shops 1712–1716, 17th Floor Hopewell Centre AUDIT COMMITTEE 183 Queen’s Road East Wanchai Chan Chi Yuen (Chairman) MEDIA ASIA GROUP HOLDINGS LIMITED Hong Kong Ng Chi Ho, Dennis Zhang Xi INDEPENDENT AUDITORS REMUNERATION COMMITTEE Ernst & Young Certified Public Accountants Chan Chi Yuen (Chairman) Tang Jun 3 Lui Siu Tsuen, Richard SOLICITORS Ng Chi Ho, Dennis As to Hong Kong Law: Zhang Xi Cheung Tong & Rosa Solicitors
AUTHORISED REPRESENTATIVES As to Bermuda Law: Conyers Dill & Pearman Lui Siu Tsuen, Richard Etsuko Hoshiyama PRINCIPAL BANKERS COMPLIANCE OFFICER DBS Bank (Hong Kong) Limited The Hongkong and Shanghai Banking Corporation Etsuko Hoshiyama, CPA, AICPA Limited
COMPANY SECRETARY LISTING Etsuko Hoshiyama, CPA, AICPA The issued shares of the Company are listed and traded on the Growth Enterprise Market of REGISTERED OFFICE The Stock Exchange of Hong Kong Limited Clarendon House 2 Church Street STOCK CODE/BOARD LOT Hamilton HM 11 8075/2,000 Bermuda WEBSITE http://www.maghl.com 4 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 telecommunications services. businesses andlicensingofsoftwaretechnologyforuseinconnectionwithprovisionvalue-added and liveperformanceprojects;provisionofcontentstonewmedia;operationmediarelated operation; provisionofconsultancyservicesinplanningandmanagementcultural,entertainment and distributionoftelevisiondramaseries;musicproductionpublishing;cinemainvestment management andproductionofconcertsliveperformances;artistemanagement; date ofthisreport.TheGroup’sprincipalactivitiesincludefilmproductionanddistribution;organisation, The followingisacorporatechartoftheCompanyanditssubsidiaries(collectively,“Group”)asat The StockExchangeofHongKongLimited(the“StockExchange”)since31May2001. HK$0.01 each(the“Shares”)havebeenlistedandtradedontheGrowthEnterpriseMarket“GEM”)of company underthelawsofBermudaon3December2009.TheCompany’sissuedordinaryshares changed toBermudabywayofde-registrationintheCaymanIslandsandcontinuationasanexempted limited liabilityundertheCompaniesLaw(Revised)ofCaymanIslands.TheCompany’sdomicilewas “Company”) wasincorporatedintheCaymanIslandson29February2000asanexemptedcompanywith Media AsiaGroupHoldingsLimited(formerlyknownasRojamEntertainmentLimited)(the Corporate Chart Distribution Distribution (HK) Limited (HK) Limited Media Asia Media Asia Media Asia Production Limited Movie Video Film Film Distribution TV Program Media Asia Television Limited Drama Media Asia Media Asia Publishing Limited Limited Music Music Music Entertainment Entertainment Entertainment Management The Company Performance (Hong Kong) Media Asia Media Asia Media Asia (Macao) (Macao) Limited Limited Agency Limited Limited Xinhua Events Management Management Media Asia Limited Artiste Talent Distribution AnyMusic Limited Digital Investments Operation Premier Cinema Limited Gold Financial Summary
A summary of the results and of the assets and liabilities of the Group for the last five financial periods, as extracted from the published audited financial statements of the Group and restated/reclassified as appropriate, is set out below:
Period from 1 April 2011 to 31 July Year ended 31 March
2011 2011 2010 2009 2008 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Annual Report 2011 Results for the period/year (continuing operations and discontinued operations)
Turnover 10,363 9,592 1,914 2,714 6,677
Profit/(loss) before tax 43 (45,736) (17,021) (48,977) (62,795)
Profit/(loss) attributable to owners MEDIA ASIA GROUP HOLDINGS LIMITED of the parent and non-controlling interests 413 (45,468) (16,920) (47,822) (63,205)
Assets and liabilities 5 Total assets 581,408 47,719 56,756 38,292 93,056 Total liabilities (289,566) (24,676) (4,381) (5,323) (13,378)
Net assets 291,842 23,043 52,375 32,969 79,678
6 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 resources forits operations. net proceedsamounted toapproximately HK$291,000,000,thereby providingtheGroupwithadditional cash In earlySeptember 2011,theCompany completed aplacingofshares tocertainindependent investorsand Placing ofnewshares preparation work. March to31July.Thischange waseffectedtosubstantiallysimplifythereporting proceduresandaccounts financial yearenddatewith thatofeSunandhassincethenchangedthefinancial yearenddatefrom31 As eSunhasbecometheultimateholdingcompanyof theCompany,Companyhasoptedtoalignits directors inSeptemberandOctober2011. 2011. Further,theboardofdirectorsCompany (the“Board”)appointedtwoadditionalexecutive Reflecting thechangeofcontrolinCompany,four newexecutivedirectorshavebeenappointedinJune Change ofmanagementandchangefinancialyear enddate businesses. publishing, televisionprogramproductionanddistribution, investmentinmovietheatres,andnewmedia includes filmproductionanddistribution,concertmusicperformance,artistemanagement, events management,andstrongbusinessnetworksofitsstrategicpartners,thescopeGroup Leveraging oneSun’sexperienceandcoreresourcesinperformance,mediaentertainmentbusinesses, choice inentertainmentexperiences. China’s mediaandentertainmentmarketsbyofferingmainlandaudiencewithawidermoreexuberant 公司 “Acquisition”). Rojamhaschangeditsnameto“MediaAsiaGroupHoldingsLimited”( investors, acquiredacontrollingshareholdinginterestinRojamEntertainmentHoldingsLimited(“Rojam”)(the On 9June2011,eSunHoldingsLimited(“eSun”),togetherwiththeYunfengFund,SINAgroupandother CHANGE OFNAMETOMEDIAASIAGROUPHOLDINGSLIMITED ACQUISITION OFROJAMENTERTAINMENTHOLDINGSLIMITEDANDSUBSEQUENT Chairman’s Statement ) witheffectfrom23August2011.There-brandingwillenabletheGrouptoexpandintoMainland LAM KinNgok,Peter Chairman 寰亞傳媒集團有限 OVERVIEW OF RESULTS During the four-month period from 1 April 2011 to 31 July 2011 (the “Period”), the Group recorded a turnover of approximately HK$10,363,000. As the turnover for the twelve-month period ended 31 March 2011 was approximately HK$9,592,000, pro-forma annualised turnover for the Period represents a 224% increase when compared with the turnover of the Group for the previous twelve-month period. The significant increase in the turnover of the Group was mainly attributable to the revenue derived from the events organised by the Group in Macau and the People’s Republic of China (the “PRC” or “China”). The Group’s profit before tax for the Period was approximately HK$43,000 (year ended 31 March 2011: loss of approximately HK$45,736,000). Profit attributable to owners of the parent for the Period was approximately
HK$985,000 (year ended 31 March 2011: loss of approximately HK$43,887,000). Annual Report 2011
As at 31 July 2011, the Group’s equity attributable to owners of the parent amounted to approximately HK$293,995,000 and the net asset value per share was approximately HK$0.029.
BUSINESS REVIEW Since the completion of the Acquisition on 9 June 2011, the new management of the Company has been considering how best to harness the diverse experience and expertise of its key stakeholders with a view to gradually diversifying its entertainment business into other sectors.
Some key highlights for the Period are set out below: MEDIA ASIA GROUP HOLDINGS LIMITED
Live entertainment During the Period, the Group organised and participated in three concerts, including Sammi Cheng in Macau, Elva Hsiao in Beijing and Ekin Cheng in the United States of America.
Film production 7 The Group has started production of a film with well-known casting and has committed equity investment in two projects with leading production companies in the PRC and Europe respectively. The Group has also entered into an agreement with an award-winning film director in Hong Kong, which calls for the film director to direct five films to be produced by the Group in a five-year period.
Cinema operations The Group, by way of a joint venture with an independent PRC party, has committed an investment of approximately RMB20,000,000 in a cinema project which will be located in a property currently under development in Sanlitun, Beijing, the PRC. Operation of the cinema is anticipated to commence in 2014.
Licensing of software business This line of business will be under review in light of its importance and contribution to the Group’s other lines of business. 8 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 Hong Kong,27 October2011 Chairman Lam KinNgok,Peter venture andIlookforward to ourcollaborationmaketheGroupasuccess. I wouldliketotakethisopportunitywelcomethe new managementteamanddirectorstothisexciting MANAGEMENT ANDSTAFF The Boarddoesnotrecommendthepaymentofadividend forthefourmonthsended31July2011. DIVIDEND including Shanghai,ChengduandWuhan. secure therighttooperatecinemasindeveloper’s shoppingcomplexlocatedinmajorcitiesofthePRC pursuing opportunitiesinthecinemaoperationbusiness. Itisindiscussionwithapropertydeveloperto The Groupanticipatesthatthefilmmarketwillcontinue togrowinthenearfutureandisthereforeactively opportunities withvariouswell-knownproducersanddirectorsinthisarea. as wellinternetvideobroadcastingwebsiteoperators.TheGroupislookingforstrategicco-operation series, ispromisingduetocontinuedstrongdemandforgoodqualityproductsfromPRCtelevisionstations The Groupbelievesthatthereturnoninvestmentfromtelevisionprograms,especiallydrama new medialicensingoperations. song writersandisplanningtopublishitsownmusicproductionsin2012withanemphasisondeveloping celebrities, bothinHongKongandthePRC.TheGroupisalsolookingforothertalentssuchassingers The Groupisalsokeenonbuildingupitsartisteteamandindiscussionswithvariousfamousartistes events inthePRCandMacaumarkets. Asian artistes.Plansarebeingmadetoextenditspresencebypromotingandorganisingliveentertainment The Grouphascommittedtoparticipateinandorganiseanumberofconcertswithpopularlocalaswell productions andotherbusinesspartners’products. also continuetodevelopitsdistributionplatforminboththeatricalandotherformats,forown produce high-qualityChineselanguageproductionswithmajorappealtothePRCmarket.TheGroupwill The Groupanticipatesthatitsfirstfilmproductwillbereleasedinyear2012.Itcontinuetoinvestand acquisition, withprimaryfocusinthePRCandMacaumarkets. will continuetoexploreopportunitiesbroadentheGroup’sincomestreamthroughbusinessand/orassets experiences bylinkingonlineactivitieswithofflineexperiences,andviceversa.ManagementoftheGroup We arealsointerestedindevelopinglocationbasedentertainmentprojectstocreateinteractive The Groupwillentermarketsofstrategicimportanceandexpanditsportfoliotobroadenappealsynergy. revenue fromourmovies,television,music,liveentertainment,merchandisingandtalentmanagement. providers andadvertisers,theGroupendeavourstobuildupadistributionplatformthatwilldelivermaximum parties withvaluessimilartoours.Byleveragingonthestrengthsofourstrategicinvestors,partners,content and newmedia.TheGroupwillaimtodistributenotonlyourownproductsbutalsocontentsfromthird efforts acrossalldivisionsoftheGroup,includingfilm,television,music,liveentertainment,talentmanagement entertainment platforms.Adedicatedteamwillbechargedtorealisethisplanwithsynergisticandcohesive The Groupwilladoptacomprehensiverevenueplanrealisedacrossallmajorconsumermediaand PROSPECTS Chairman’s Statement (continued) Management Discussion and Analysis
FIRST COMPLETION OF SUBSCRIPTION AGREEMENT On 23 March 2011, the Company entered into a subscription agreement (the “Subscription Agreement”) with Perfect Sky Holdings Limited (“Perfect Sky”), a wholly-owned subsidiary of eSun, Sun Great Investments Limited (“Sun Great”), Next Gen Entertainment Limited (“Next Gen”), Memestar Limited (“Memestar”), On Chance Inc. and Grace Promise Limited (collectively, the “Subscriber(s)”), pursuant to which (i) the Company conditionally agreed to issue to Perfect Sky, Sun Great, Next Gen and Memestar (collectively, the “Share Subscribers”), and the Share Subscribers conditionally agreed to subscribe for a total of 6,918,343,209 Shares (the “Share Subscription”); and (ii) the Company conditionally agreed to issue to the Subscribers, and the Subscribers conditionally agreed to subscribe for the convertible notes which comprise the first completion
convertible notes in an aggregate principal amount of HK$371,386,642 (the “First Completion Convertible Annual Report 2011 Notes”) and the second completion convertible notes in an aggregate principal amount of HK$224,873,937 (the “Second Completion Convertible Notes”) (Note).
The completion of the Share Subscription and the subscription of the First Completion Convertible Notes (the “First Completion”) took place on 9 June 2011. Upon the First Completion, the Company issued to (i) the Share Subscribers an aggregate of 6,918,343,209 Shares for a total subscription price of HK$118,613,358 and (ii) the Subscribers the First Completion Convertible Notes with an aggregate principal amount of HK$371,386,642. The Company then became an indirect subsidiary of eSun.
Note: Further details of the First Completion Convertible Notes and the Second Completion Convertible Notes are set
out in Notes 25 and 21 of the “Notes to the financial statements”, respectively. MEDIA ASIA GROUP HOLDINGS LIMITED
APPOINTMENT OF NEW DIRECTORS TO THE BOARD Pursuant to the Subscription Agreement, Perfect Sky nominated Dr. Lam Kin Ngok, Peter, Mr. Lui Siu Tsuen, Richard and Mr. Chan Chi Kwong, and Next Gen nominated Mr. Yu Feng to be appointed as executive directors of the Company. The board of directors of the Company (the “Board”) at that time approved such appointments and the appointment of Dr. Lam Kin Ngok, Peter as the Chairman of the Board with effect 9 from 16 June 2011.
Further, Mr. Tang Jun was appointed an executive director and the Chief Executive Officer of the Company with effect from 6 September 2011 and Mr. Choi Chiu Fai, Stanley was appointed an executive director with effect from 24 October 2011 while Mr. Ng Chi Ho, Dennis was appointed an independent non-executive director of the Company with effect from 3 October 2011.
CHANGE OF FINANCIAL YEAR END DATE The Board announced on 19 August 2011 the change of financial year end date of the Company from 31 March to 31 July with effect from 31 July 2011 to align the financial year end date of the Company with that of eSun and eSun’s other listed affiliates. The consolidated financial statements presented, therefore, covered a four-month period from 1 April 2011 to 31 July 2011. 10 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 the issueofFirstCompletion ConvertibleNotes. approximately HK$1,776,000 fortheyearended31March2011.Thesignificant increase wasattributableto to approximatelyHK$4,383,000 forthePeriodhadsignificantlyincreasedwhen comparedwiththatof amounts oftheconvertiblebondsissuedinApril2010 and theFirstCompletionConvertibleNotesamounting ended 31March2011:Nil).Financecostsbeingtheeffective interestexpensesontheoutstandingprincipal March 2011:approximatelyHK$46,341,000).Fairvalue gainonaforwardcontractwasHK$20,655,000(year of HK$7,317,000).OperatingexpensesforthePeriod wasapproximatelyHK$17,500,000(yearended31 Cost ofsalesforthePeriodwasapproximatelyHK$10,785,000 (yearended31March2011:approximately March 2011:lossofapproximatelyHK$43,887,000). Profit attributabletoownersoftheparentforPeriod wasapproximatelyHK$985,000(yearended31 attributable tofairvaluegainontheforwardcontractarising fromtheSecondCompletionConvertibleNotes. of approximatelyHK$45,736,000).Turningtoprofitfrom significantlossofthepreviousfinancialyearwas The Group’sprofitbeforetaxforthePeriodwasapproximatelyHK$43,000(yearended31March2011:loss mainly attributabletotherevenuederivedfromeventsorganisedbyGroupinMacauandPRC. 2011: approximatelyHK$9,592,000).ThesignificantincreaseintheannualisedturnoverofGroupwas During thePeriod,GrouprecordedaturnoverofapproximatelyHK$10,363,000,(yearended31March FINANCIAL REVIEW approximately HK$291,000,000. Listing ofSecuritiesontheGEM(the“GEMRules”)).ThenetproceedsfromPlacingamountedto Company oranyofitssubsidiariestheirrespectiveassociates(asdefinedintheRulesGoverning to threeplaceeswhoandwhoseultimatebeneficialownersareindependentof,notconnectedwith,the 2011. ThePlacingwascompletedon8SeptemberAnaggregateof1,467,500,000Shareswereissued Placing wasapprovedbytheShareholdersatspecialgeneralmeetingofCompanyheldon27August Agent agreedtoplaceup2,022,051,522SharesatapriceofHK$0.20perShare(the“Placing”).The supplemental agreementon28July2011and1August2011,respectively,pursuanttowhichthePlacing The CompanyandCLSALimited(the“PlacingAgent”)enteredintoaconditionalplacingagreement PLACING OFNEWSHARES Holdings Limited”andadopttheChinesename“ change theCompany’sEnglishnamefrom“RojamEntertainmentHoldingsLimited”to“MediaAsiaGroup annual generalmeetingoftheCompanyheldon20August2011(the“AGM”),amongotherthings,(i)to The BoardproposedtoseektheapprovalofshareholdersCompany(the“Shareholders”)at CHANGE OFCOMPANYNAMEANDINCREASEINAUTHORISEDSHARECAPITAL and Analysis Management Discussion with effectfrom22September2011. changed from“Rojam”to“MediaAsia”andtheChinesestockshortnameof“ Companies inHongKongon12September2011.TheEnglishstockshortnameoftheCompanyhasbeen Name wasapprovedbytheRegistrarofCompaniesinBermudaon23August2011and in AuthorisedShareCapitalwereapprovedbytheShareholdersatAGM.TheChangeofCompany existing Shares(the“IncreaseinAuthorisedShareCapital”).TheChangeofCompanyNameandtheIncrease Shares bythecreationofanadditional10,000,000,000Shares,ranking from HK$500,000,000dividedinto50,000,000,000SharestoHK$600,000,00060,000,000,000 Company (the“ChangeofName”)and(ii)toincreasetheauthorisedsharecapital (continued) 寰亞傳媒集團有限公司 pari passu ” asthesecondarynameof 寰亞傳媒 in allrespectswiththe ” hasbeenadopted BUSINESS REVIEW Live entertainment During the Period, the Group organised and participated in three concerts, including Sammi Cheng in Macau, Elva Hsiao in Beijing and Ekin Cheng in the United States of America. The total revenue from these concerts amounted to approximately HK$9,760,000.
Film production The Group has started production of a film with well-known casting and has committed equity investment in two projects with leading production companies in the PRC and Europe respectively. The Group has
also entered into an agreement with an award-winning film director in Hong Kong, which calls for the film Annual Report 2011 director to direct five films to be produced by the Group in a five-year period.
Cinema operations In July 2011, the Group has entered into a framework agreement with an independent PRC party for, by way of a joint venture with the independent PRC party, an investment in a cinema project, which will be located in a property currently under development in Sanlitun, Beijing, the PRC with capital contribution by the Group of approximately RMB3,000,000. Operation of the cinema is anticipated to commence in 2014. Further to the framework agreement, in September 2011, the Group has entered into a joint venture agreement with the independent PRC party. Pursuant to the joint venture agreement, the Group has committed its capital contribution to the joint venture company (to be established) for the aforesaid cinema project of approximately RMB20,000,000. MEDIA ASIA GROUP HOLDINGS LIMITED
Licensing of software business The turnover from licensing of software business for the Period amounted to approximately HK$603,000 while the turnover for the year ended 31 March 2011 was approximately HK$1,968,000. This line of business will be under review in light of its importance and contribution to the Group’s other lines of business. 11 CAPITAL STRUCTURE, LIQUIDITY AND FINANCIAL RESOURCES At 31 July 2011, the Group’s shareholders’ funds increased by approximately 1,094% to approximately HK$293,995,000 (as at 31 March 2011: approximately HK$24,624,000). The significant increase was mainly attributable to the Share Subscription and the issue of the First Completion Convertible Notes. Total assets amounted to approximately HK$581,408,000 (as at 31 March 2011: approximately HK$47,719,000) which included current assets amounting to approximately HK$568,521,000 (as at 31 March 2011: approximately HK$41,693,000). Current liabilities were approximately HK$12,318,000 (as at 31 March 2011: approximately HK$2,946,000). Net asset value per share as at 31 July 2011 was approximately HK$0.029 (as at 31 March 2011: approximately HK$0.011). Current ratio was approximately 46.2 (as at 31 March 2011: approximately 14.2).
At 31 July 2011, the Group’s bank and cash balances significantly increased to approximately HK$507,315,000 (as at 31 March 2011: approximately HK$20,449,000). The balances were approximately 90% denominated in Hong Kong dollars, 2% in Renminbi (“RMB”) and 8% in United States dollars. The RMB denominated balances were placed with licensed banks in the PRC. The conversion of these RMB balances into foreign currencies and the remittance of such foreign currencies denominated balances are subject to the rules and regulation of foreign exchange control promulgated by the PRC government. During the Period, the Group had net cash outflows of approximately HK$23,705,000 and approximately HK$43,000 from operating activities and investing activities, respectively and net cash inflow of approximately HK$510,561,000 from financing activities. The significant increase in bank and cash balances is mainly attributable to the proceeds received from the Share Subscription and the issue of the First Completion Convertible Notes. 12 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 Shares wereissuedon5May 2011. were convertedinto500,000,000Shareson18April2011 andtheoptionswereexercised250,000,000 (ii) theoptionstosubscribefor250,000,000Sharesat the priceofHK$0.05perShare.Theconvertiblebonds HK$25,000,000 whichwouldbeconvertedinto500,000,000 SharesatthepriceofHK$0.05perShare,and Limited, theCompanyissuedtoGoldenCoachLimited (i)theconvertiblebondsinprincipalamountof agreement, bothdated30September2009,entered intobetweentheCompanyandGoldenCoach On 30April2010,pursuanttotheconvertiblebonds subscriptionagreementandtheoptions CONVERTIBLE BONDSANDOPTIONS provided toemployees. salary reviewisconductedannually.Staffbenefits,including medicalcoverageandprovidentfunds,arealso Group’s remunerationpolicyisbasicallydeterminedbytheperformanceofindividualemployees.Ingeneral, amounted toapproximatelyHK$4,933,000(yearended31March2011:HK$13,956,000).The March 2011:9)inHongKongandShenzhen.Staffcosts,includingdirectors’emolumentsforthePeriod, At 31July2011,theGrouphad29(31March2011:25)employeesincluding13directorsof EMPLOYEE INFORMATIONANDREMUNERATIONPOLICY The Grouphadnomaterialcontingentliabilitiesat31July2011(asMarch2011:Nil). CONTINGENT LIABILITIES The GrouphadnomaterialacquisitionsordisposalsofsubsidiariesduringthePeriod. MATERIAL ACQUISITION/DISPOSALANDSIGNIFICANTINVESTMENTS Details ofthemovementsinsharecapitalCompanyaresetoutNote28tofinancialstatements. SHARE CAPITAL At 31July2011,theGroupdidnothaveanychargeonitsassets(asatMarch2011:Nil). CHARGE ONGROUPASSETS 31 March2011:Nil). financed internally.At31July2011,theGrouphadnooutstandingforeigncurrencyhedgecontracts(asat The Group’sexposuretoforeigncurrenciesislimiteditsinvestmentinsubsidiaries,whichare EXPOSURE TOFLUCTUATIONSINEXCHANGERATESANDRELATEDHEDGES at 31March2011:86.2%). Group, beingthetotaldebtsoverequityattributabletoownersofparent,wasapproximately94.3%(as borrowing. NointerestshavebeencapitalisedduringthePeriod.At31July2011,gearingratioof Save fortheaforesaid,at31July2011,Groupdidnothaveanybankloans,overdraftsorother approximately HK$277,153,000(asat31March2011:convertiblebondsofHK$21,215,000). At 31July2011,thenetcarryingamountofFirstCompletionConvertibleNotesclassifiedasliabilitywas CAPITAL STRUCTURE,LIQUIDITYANDFINANCIALRESOURCES and Analysis Management Discussion (continued)
(Continued)
Biographical Details of Directors
EXECUTIVE DIRECTORS Dr. Lam Kin Ngok, Peter, aged 54, was appointed an executive director and the Chairman of the Board with effect from 16 June 2011. Dr. Lam is also the deputy chairman of Lai Sun Garment (International) Limited (“LSG”), the chairman of Lai Sun Development Company Limited (“LSD”) and Lai Fung Holdings Limited (“LFH”), and an executive director of eSun and Crocodile Garments Limited (“CGL”). The issued shares of LSG, LSD, LFH, eSun and CGL are listed and traded on the Main Board of the Stock Exchange. LSG is the controlling shareholder of LSD while LSD is the controlling shareholder of eSun which is the ultimate holding company of the Company. Dr. Lam has extensive experience in the property development and investment, hospitality and media and entertainment businesses. Annual Report 2011 Dr. Lam is currently a director of The Real Estate Developers Association of Hong Kong. He is also chairman of Hong Kong Chamber of Films Limited and the Entertainment Industry Advisory Committee of the Hong Kong Trade Development Council, honorary chairman of Hong Kong, Kowloon & New Territories Motion Picture Industry Association Limited, vice chairman of the Hong Kong Film Development Council and a member of the Hong Kong Tourism Board. In addition, Dr. Lam is a trustee of The Better Hong Kong Foundation, a member of the 11th National Committee of the Chinese People’s Political Consultative Conference, a member of Friends of Hong Kong Association Limited and a director of Hong Kong-Vietnam Chamber of Commerce Limited. Dr. Lam was conferred an Honorary Doctorate of the Academy by The Hong Kong Academy for Performing Arts in June 2011.
Mr. Yu Feng, aged 48, was appointed an executive director of the Company with effect from 16 June 2011. MEDIA ASIA GROUP HOLDINGS LIMITED Mr. Yu is the founder and chairman of Yunfeng Fund, L.P. (the “Yunfeng Fund”) which was launched by Mr. Yu together with other entrepreneurs in 2010. He has over 10 years’ working experience in the field of media and entertainment industry and has extensive knowledge and recognised credential in the entertainment industry. Mr. Yu holds a Bachelor degree in Philosophy from Fudan University, the PRC and a Master degree in Philosophy from the same university. He has also obtained a Master degree in Executive Master of Business Administration from China Europe International Business School. Mr. Yu is currently a director of 13 each of Huayi Brothers Media Corporation, a company whose securities are listed and traded on the China Growth Enterprise Market and Shanghai Guangdian Electric Group Co., Ltd, a company whose securities are listed and traded on the Shanghai Stock Exchange. Mr. Choi Chiu Fai, Stanley, an executive director of the Company, is also one of the founders of the Yunfeng Fund.
Mr. Choi Chiu Fai, Stanley, aged 42, was appointed as an executive director of the Company with effect from 24 October 2011. Mr. Choi possesses about 20 years of experience in securities, futures, financial derivative products and merger and acquisition projects. Apart from working at senior positions for different financial groups in Hong Kong, Mr. Choi has also served as a member of the top management of the following three companies, the shares of which are listed and traded on the Stock Exchange. He was the deputy chairman and an executive director of HyComm Wireless Limited from April 2010 to September 2010, an executive director of Simsen International Corporation Limited from May 2008 to April 2010 and the chief executive officer and an executive director of Oriental Ginza Holdings Limited from October 2006 to October 2007. Mr. Choi received a Bachelor of Business Administration degree (Magna Cum Laude) majoring in finance from Wichita State University and a Master of Science degree in International Finance from University of Illinois, both in the United States of America. In June 2006, he was awarded a Master degree in law from the Law School of the Chinese People’s University. He is currently studying for a Doctor of Business Administration programme organised by the City University of Hong Kong and his thesis will be in the area of financial engineering. Mr. Choi is one of the founders of the Yunfeng Fund, a well-capitalised private equity fund focused on telecommunications, media and technology and new energy investment projects. 14 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 entertainment, experienceandproducts. Interactive Entertainment Limited(listedon Nasdaq),whichfocuseson developingnextgeneration interactive senior vicepresidentandchief executiveofficerofShandaTiandiLtd.,awholly-owned subsidiaryofShanda 2010 ascorporateseniorvice president—Chinaaffairs.PriortojoiningtheCompany, Mr.Tangwasgroup merged withTheWaltDisney Company(“WaltDisney”)in1996.Mr.Tanghad served forWaltDisneyuntil Mr. Tangjoinedandwasappointed thedirector,ChinaoperationsofCapitalCities/ABC, Inc.,whichwas state-owned Beijingbased media andentertainmentconglomerateworked forituntil1993.In1994, Relations inBeijing,China,withaBachelordegreeof Artin1983,Mr.TangjoinedChinaFilmGroup,a industry bothinChinaandtheUnitedStatesofAmerica. AftergraduatingfromtheInstituteofInternational the RemunerationCommitteeofCompany.Mr.Tang hasextensiveexperienceinfilmandentertainment Company witheffectfrom6September2011.Mr.Tang isamemberofboththeExecutiveCommitteeand Mr. TangJun Rules. there isnoinformationtobedisclosedpursuantparagraphs (h)to(v)ofRule17.50(2)theGEMListing For thepurposeofhisre-electionasadirector Company attheforthcomingspecialgeneralmeeting, which arelistedonanysecuritiesmarketinHongKongoroverseas. Group; and(iv)didnotholdanydirectorshipsinthelastthreeyearspubliccompanies,securitiesof meaning ofPartXVtheSFO;(iii)didnotholdotherpositionswithCompanyandmembers in theShares,underlyingSharesordebentureofCompanyanyitsassociatedcorporationswithin senior management,orsubstantialcontrollingshareholdersoftheCompany;(ii)didnothaveanyinterests Save asaforesaid,atthedateofthisreport,Mr.Choi(i)didnothaveanyrelationshipwithdirectors, (c) GracePromiseLimited(“GracePromise”)held492,092,899underlyingSharesandwasdeemedtobe (b) (a) by Company. Asatthedateofthisreport, with referencetotheprevailingmarketconditionsandhisdutiesresponsibilitiestimeallotted Choi isentitledtoreceiveadirector’sfeeofHK$10,000permonth,whichhasbeendeterminedbytheBoard laws oftheCompany.PursuanttoaforesaidserviceagreementbetweenMr.ChoiandCompany, general meetingsoftheCompany(“AGMs”)atleastonceeverythreeyearsinaccordancewithBye- special generalmeetingandifre-elected,issubjecttoretirementbyrotationre-electionatfutureannual payment inlieuthereof.Mr.Choiissubjecttoretirementandre-electionasdirectorattheforthcoming determinable bytheCompanyorMr.Choigivingotherpartynotlessthanthreemonths’notice Mr. ChoiandtheCompanyhaveenteredintoaserviceagreementwithnofixedtenure,whichis EXECUTIVE DIRECTORS Details ofDirectors Biographical chairman oftheYunfengFund. of thetotalissuedShares.Mr.YuFeng,anexecutivedirectorCompany,isalsofounderand 32,228,248,603 underlyingShareswithinthemeaningofPartXVSFO,representing245.26% Mr. ChoiisoneofthefoundersYunfengFundwhichhasinterestinanaggregate Subscription Agreement.GracePromiseiswhollyandbeneficiallyownedbyMr.Choi; interested in31,736,155,704underlyingSharesheldbyotherpartiesactingconcertpursuanttothe (the “SFO”); pursuant toPartXVoftheSecuritiesandFuturesOrdinance(Chapter571LawsHongKong) immediately below,Mr.Choiwasdeemedtohaveinterestin32,228,248,603underlyingShares virtue ofMr.Choi’sinterestthroughhiscontrolledcorporationdescribedinparagraph(b) , aged49,wasappointedanexecutivedirectorand theChiefExecutiveOfficerof (continued)
(Continued) EXECUTIVE DIRECTORS (Continued) The Company has entered into a service agreement with Mr. Tang for a term of three years. Mr. Tang is subject to retirement and re-election as director at the forthcoming special general meeting of the Company and if re-elected, is subject to retirement by rotation and re-election at future AGMs at least once every three years in accordance with the Bye-laws of the Company. Pursuant to the aforesaid service agreement between Mr. Tang and the Company, and by reference to the performance of the Company, his experience, duties and responsibilities and prevailing market practices, Mr. Tang is entitled to receive a total remuneration (inclusive of a director’s fee of US$15,000) of US$660,000 per annum and share options to subscribe for a total of 7,077,576 Shares under the share option scheme adopted by the Company on 19 November 2009. Annual Report 2011 As at the date of this report, Mr. Tang has interest in a share option to subscribe for 94,025,000 Shares pursuant to Part XV of the SFO.
Save as aforesaid, as at the date of this report, Mr. Tang (i) did not have any relationship with any directors, senior management, or substantial or controlling shareholders of the Company; (ii) did not have any interests in the Shares, underlying Shares or debentures of the Company or any of its associated corporations within the meaning of Part XV of the SFO; (iii) did not hold other positions with the Company and other members of the Group; and (iv) did not hold any directorships in the last three years in any public companies, the securities of which are listed on any securities market in Hong Kong or overseas.
For the purpose of his re-election as a director of the Company at the forthcoming special general meeting, MEDIA ASIA GROUP HOLDINGS LIMITED there is no information to be disclosed pursuant to paragraphs (h) to (v) of Rule 17.50(2) of the GEM Listing Rules.
Mr. Lui Siu Tsuen, Richard, aged 55, was appointed an executive director of the Company with effect from 16 June 2011 and is a director of a number of subsidiaries of the Company. He is also a member of both the Executive Committee and the Remuneration Committee of the Company. Mr. Lui joined eSun in April 2010 15 as the chief operating officer of its Media and Entertainment Division and became an executive director of eSun with effect from 1 July 2010. He is currently the chief executive officer of eSun and an executive director of LSG, LSD and LFH respectively. LSG is the controlling shareholder of LSD while LSD is the controlling shareholder of eSun which is the ultimate holding company of the Company.
Mr. Lui is also an independent non-executive director of Prosperity Investment Holdings Limited and 21 Holdings Limited. Prior to joining eSun, Mr. Lui was a director of Hanny Holdings Limited and Rosedale Hotel Holdings Limited (formerly known as Wing On Travel (Holdings) Limited). The issued shares of all the aforementioned companies are listed and traded on the Main Board of the Stock Exchange. He was also a director of PSC Corporation Ltd., a company listed on Singapore Exchange Securities Trading Limited and a director of MRI Holdings Limited, a company previously listed on the Australian Securities Exchange. Mr. Lui has over 25 years of experience in property investment, corporate finance and media and entertainment business. He is a fellow member of each of the Hong Kong Institute of Certified Public Accountants and The Chartered Institute of Management Accountants, United Kingdom and an associate of The Institute of Chartered Accountants in England and Wales. He holds a Master of Business Administration degree from The University of Adelaide in Australia. 16 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 various managementpositionswithWinterthurGroup,amembercompanyofCreditSuisseGroup. regional assetmanagementexperienceforinvestmentportfolioinAsiaduringhis11yearsofemployment over 15yearsofexperienceinthefinancialsector.PriortojoiningGroup,Mr.Changainedextensive Ontario inCanada1994andreceivedtheCharteredFinancialAnalyst(CFA)designation2000.Hehas Mr. ChanobtainedaBachelordegreeinScience(MathematicsandStatistics)fromtheUniversityofWestern of subsidiariestheCompany.HehasbeenresponsibleforcorporatefinanceandinvestmentGroup. 2009 andisamemberoftheExecutiveCommitteeCompany.Mr.Chanalsodirectornumber Mr. ChanChiMing,Alvin Before joiningtheGroup,Ms.HoshiyamawasamanagerofPricewaterhouseCoopersinHongKong. experience intheareaofbusinessadministration,development,andtaxconsulting. an associatememberofTheAmericanInstitutionCertifiedPublicAccountants.Shehasover20years is acertifiedpublicaccountantregisteredwiththeHongKongInstituteofCertifiedPublicAccountantsand Japan andaMasterdegreeofLawsinTaxationfromUniversityDenver,theUnitedStatesAmerica.She administration oftheGroup.Ms.HoshiyamaholdsaBachelordegreeLawfromKwanseiGakuinUniversity, compliance officeroftheCompany,responsibleforlegalandcompanysecretarialaffairsbusiness the Company.Ms.HoshiyamajoinedGroupinMarch2000.Sheisalsocompanysecretaryand is amemberoftheExecutiveCommitteeCompany.Shealsodirectorcertainsubsidiaries Ms. EtsukoHoshiyama Kong LimitedandSCMP.comLimited. director ofWarnerMusicHongKongLimitedandhadservedasseniorexecutivescompanieslikeEMI and entertainmentfieldsinthePRCHongKong.PriortojoiningeSungroup,hewasmanaging Bachelor ofSciencedegreeinManagementSciences.Hehasover20yearsexperiencevariousmedia and EntertainmentDivisionofeSun.Mr.ChangraduatedfromtheUniversityWarwickinEnglandwitha wholly-owned subsidiaryofeSuninNovember2010andischargethenon-filmoperationsMedia owned subsidiaryofeSuninOctober2008andadirectorEastAsiaMusic(Holdings)Limited,another subsidiaries oftheCompany.Mr.ChanwasappointedadirectorEastAsiaEntertainmentLimited,wholly- June 2011andisamemberoftheExecutiveCommitteeCompany.Healsodirectornumber Mr. ChanChiKwong EXECUTIVE DIRECTORS Details ofDirectors Biographical , aged51,wasappointedanexecutivedirectoroftheCompanywitheffectfrom16 , aged50,hasbeenanexecutivedirectoroftheCompanysinceJuly2007and , aged42,wasappointedanexecutivedirectoroftheCompanyinSeptember (continued)
(Continued) INDEPENDENT NON-EXECUTIVE DIRECTORS Mr. Chan Chi Yuen, aged 45, was appointed an independent non-executive director of the Company in September 2009. Mr. Chan is the chairman of both the Audit Committee and the Remuneration Committee of the Company. He holds a Bachelor degree with honours in Business Administration and a Master of Science degree in Corporate Governance and Directorship. He is a fellow of the Hong Kong Institute of Certified Public Accountants and The Association of Chartered Certified Accountants in the United Kingdom and an associate of The Institute of Chartered Accountants in England and Wales. Mr. Chan is a practising certified public accountant and has extensive experience in financial management, corporate finance and corporate governance. Annual Report 2011 Mr. Chan is currently an executive director of Sam Woo Holdings Limited, a non-executive director of New Times Energy Corporation Limited and an independent non-executive director of Asia Energy Logistics Group Limited, China Gamma Group Limited, China Gogreen Assets Investment Limited, China Grand Forestry Green Resources Group Limited and U-RIGHT International Holdings Limited. Mr. Chan was an executive director of Kong Sun Holdings Limited from February 2007 to November 2009, Amax Holdings Limited from August 2005 to January 2009 and China E-Learning Group Limited from July 2007 to September 2008, and an independent non-executive director of The Hong Kong Building and Loan Agency Limited from October 2009 to February 2011, Richly Field China Development Limited from February 2009 to August 2010 and Superb Summit International Timber Company Limited from April 2007 to June 2010. The issued shares of all the aforesaid companies are listed and traded on the Stock Exchange. MEDIA ASIA GROUP HOLDINGS LIMITED
Pursuant to the letter agreement dated 30 September 2011 and entered into between the Company and Mr. Chan and subject to the terms and conditions contained therein, the appointment of Mr. Chan as an independent non-executive director of the Company is for a term of one year commencing on 30 September 2011.
Mr. Zhang Xi, aged 42, was appointed an independent non-executive director of the Company in September 17 2009 and is a member of both the Audit Committee and the Remuneration Committee of the Company. Mr. Zhang graduated with a Bachelor degree in Science (Electrical Engineering) from Shanghai Jiao Tong University in July 1991 and obtained an International Master degree in Business Administration from York University in Canada in 1998. Mr. Zhang is currently a Chartered Financial Analyst (CFA) charterholder. He has over 10 years of experience in the financial sector. Mr. Zhang is currently an independent non-executive director of Asia Energy Logistics Group Limited, the shares of which are listed and traded on the Stock Exchange.
Pursuant to the letter agreement dated 29 August 2011 and entered into between the Company and Mr. Zhang and subject to the terms and conditions contained therein, the appointment of Mr. Zhang as an independent non-executive director of the Company is for a term of one year commencing on 1 September 2011. 18 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 Rules. there isnoinformationtobedisclosedpursuantparagraphs(h)(v)ofRule17.50(2)theGEMListing For thepurposeofhisre-electionasadirectorCompanyatforthcomingspecialgeneralmeeting, securities ofwhicharelistedonanymarketinHongKongoroverseas. of theGroup;and(iv)didnotholdanydirectorshipsinlastthreeyearspubliccompanies, the meaningofPartXVSFO;(iii)didnotholdotherpositionswithCompanyandmembers in theShares,underlyingSharesordebenturesofCompanyanyitsassociatedcorporationswithin senior management,orsubstantialcontrollingshareholdersoftheCompany;(ii)didnothaveanyinterests Save asaforesaid,atthedateofthisreport,Mr.Ng(i)didnothaveanyrelationshipwithdirectors, the prevailingmarketpracticeandhisdutiesresponsibilitiestimeallocatedtoCompany. receive adirector’sfeeofHK$10,000permonth,whichhasbeendeterminedbytheBoardwithreferenceto in accordancewiththeBye-lawsofCompany.PursuanttoLetterAgreement,Mr.Ngisentitled re-elected, issubjecttoretirementbyrotationandre-electionatfutureAGMsleastonceeverythreeyears Mr. Ngissubjecttoretirementandre-electionasdirectorattheforthcomingspecialgeneralmeetingif appointment ofMr.Ngasanindependentnon-executivedirectortheCompanyisforatermoneyear. Company (the“LetterAgreement”)andsubjecttothetermsconditionscontainedtherein, Pursuant totheletteragreementdated30September2011andenteredintobetweenMr.Ng traded ontheMainBoardofStockExchange. the companysecretaryofTechProTechnologyDevelopmentLimited,awhosesharesarelistedand shares arelistedandtradedontheGEMofStockExchangefromJuly2007toApril2010iscurrently Mr. NgwasthecompanysecretaryofPowerleaderScience&TechnologyGroupLimited,awhose experience inauditing,accounting,financialmanagementandcorporateaffairs. Institute ofCertifiedPublicAccountants.Heisalsoapractisingcertifiedpublicaccountantandhasextensive is anassociateofTheInstituteCharteredAccountantsinAustraliaandafellowmembertheHongKong 2011. Mr.NgholdsaBachelorofCommercedegreefromtheUniversityNewSouthWales,Australiaand both theAuditCommitteeandRemunerationofCompanywitheffectfrom3October Mr. NgChiHo,Dennis INDEPENDENT NON-EXECUTIVEDIRECTORS Details ofDirectors Biographical , aged53,wasappointedanindependentnon-executivedirectorandamemberof (continued)
(Continued) Corporate Governance Report
The Company is committed to achieving and maintaining high standards of corporate governance in compliance with the principles set out in the Code on Corporate Governance Practices (the “CG Code”) contained in Appendix 15 to the GEM Listing Rules from time to time.
(1) CORPORATE GOVERNANCE PRACTICES The Company has complied with all the code provisions set out in the CG Code throughout the four months ended 31 July 2011.
(2) DIRECTORS’ SECURITIES TRANSACTIONS
The Company has adopted a Code of Practice for Securities Transactions by Directors and Designated Annual Report 2011 Employees (the “Securities Code”) on terms no less than the required standard set out in Rules 5.48 to 5.67 of the GEM Listing Rules. The Company had also made specific enquiry of all directors of the Company (the “Directors”) who have confirmed in writing their compliance with the required standard set out in the Securities Code during the Period.
(3) BOARD OF DIRECTORS (3.1) The Board supervises the management of the business and affairs of the Company. The Board’s primary duty is to ensure the viability of the Company and to ensure that it is managed in the best interests of the shareholders as a whole while taking into account the interests of other
stakeholders. MEDIA ASIA GROUP HOLDINGS LIMITED
The Board has established specific committees with written terms of reference to assist it in the efficient implementation of its functions, namely the Executive Committee (which was established on 19 August 2011), the Audit Committee and the Remuneration Committee. Specific responsibilities have been delegated to the above committees. 19 (3.2) As at the date of this report, the Board comprises eight executive Directors, namely Dr. Lam Kin Ngok, Peter (Chairman), Mr. Yu Feng, Mr. Choi Chiu Fai, Stanley, Mr. Tang Jun (Chief Executive Officer), Mr. Lui Siu Tsuen, Richard, Mr. Chan Chi Kwong, Ms. Etsuko Hoshiyama and Mr. Chan Chi Ming, Alvin and three independent non-executive Directors (“INEDs”), namely Mr. Chan Chi Yuen, Mr. Zhang Xi and Mr. Ng Chi Ho, Dennis.
The brief biographical particulars of the above Directors are set out in the “Biographical Details of Directors” section in this annual report on pages 13 to 18.
(3.3) The Company has complied with the requirements under Rules 5.05(1) and (2) of the GEM Listing Rules during the Period. The former Rule requires that every board of directors of a listed issuer must include at least three INEDs and the latter Rule requires that at least one of the INEDs must have appropriate professional qualifications or accounting or related financial management expertise. All INEDs also meet the guidelines for assessment of their independence set out in Rule 5.09 of the GEM Listing Rules.
Save as disclosed in the “Biographical Details of Directors” section of this annual report, none of the Directors has any financial, business, family or other material/relevant relationships with one another. 20 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 (7) REMUNERATION COMMITTEE NOMINATIONOFDIRECTORS (6) (5) NON-EXECUTIVE DIRECTORS CHAIRMANANDCHIEFEXECUTIVEOFFICER (4) Report Corporate Governance appointed theChiefExecutiveOfficerofCompanywitheffectfrom6September2011. Executive OfficerweresharedamongstotherexecutiveDirectorsduringthePeriod.Mr.TangJunwas while thepositionofChiefExecutiveOfficerremainedvacantandresponsibilities Dr. LamKinNgok,PeterwasappointedtheChairmanofBoardwitheffectfrom16June2011 not beperformedbythesameindividual. The CGCoderequiresthattherolesofchairmanandchiefexecutiveofficerbeseparated (7.3) (7.2) (7.1) appointment ofexecutiveDirectorsduringthePeriod. Board willbecarriedoutbytheexecutiveDirectors.TheDirectorsfollowedthisprocessin the relevanttime.Theprocessofidentifyingandselectingappropriatecandidatesforapprovalby based ontheirknowledge,skills,experienceandexpertisetherequirementsofCompanyat The Companyhasnotestablishedanominationcommittee.PotentialnewDirectorswillberecruited All theexistingnon-executiveDirectorswereappointedforaspecificterm. The RemunerationCommitteeheldone meetingduringthePeriodtoreviewremunerationof The RemunerationCommitteehasbeenchargedwiththeresponsibilityofmaking On 23October2006,theBoardestablishedaRemunerationCommitteewhichcurrently comprises the newlyappointedexecutiveDirectors. motivate personneloftherequiredqualitytomanage Companysuccessfully. level ofremunerationofferedbytheCompanyiscompetitiveandsufficienttoattract,retain salaries, allowances,bonuses,shareoptions,benefitsinkindandpensionrightstoensurethatthe remuneration ofallDirectorsandseniormanagement,includingbutnotlimitedtodirectors’fees, recommendations totheBoardonanappropriatepolicyandframeworkforallaspectsof 21 October2011respectively). Tsuen, RichardandMr.TangJun(appointedasmemberswitheffectfrom12August2011 as amemberwitheffectfrom3October2011)andtwoexecutiveDirectors,namelyMr.LuiSiu three INEDs,namelyMessrs.ChanChiYuen(Chairman),ZhangXiandNgHo,Dennis(appointed (continued) (8) AUDIT COMMITTEE (8.1) On 21 May 2001, the Board established an Audit Committee which currently comprises three INEDs, namely Mr. Chan Chi Yuen (Chairman), Mr. Zhang Xi and Mr. Ng Chi Ho, Dennis (appointed as a member with effect from 3 October 2011).
The principal responsibilities of the Audit Committee include the monitoring of the integrity of periodical financial statements of the Company, the review of significant financial reporting judgements contained in them before submission to the Board for approval, and the review and monitoring of the auditors’ independence and objectivity as well as the effectiveness of the audit
process. Annual Report 2011
The Company has complied with Rule 5.28 of the GEM Listing Rules in that at least one of the members of the Audit Committee (which must comprise a minimum of three members and must be chaired by an INED) is an INED who possesses appropriate professional qualifications or accounting or related financial management expertise.
(8.2) The Audit Committee held two meetings during the Period. It reviewed the audited annual results of the Company for the year ended 31 March 2011 and other matters related to the financial and accounting policies and practices of the Company.
(9) INDEPENDENT AUDITORS’ REMUNERATION MEDIA ASIA GROUP HOLDINGS LIMITED Messrs. Ernst & Young, Certified Public Accountants (“E&Y”) were appointed independent auditors of the Company at the AGM in place of Messrs. RSM Nelson Wheeler, Certified Public Accountants (“RSM”), the retiring independent auditors of the Company, which did not seek re-appointment at the AGM. The remuneration in respect of the services provided by E&Y and RSM for the Group for the Period and for the year ended 31 March 2011 respectively is analysed as follows: 21 Period from 1 April 2011 Year ended to 31 July 31 March 2011 2011 E&Y RSM HK$’000 HK$’000
Audit services 1,100 680 Non-audit services 510 —
The non-audit services provided by E&Y during the Period included mainly the accounting and advisory services. 22 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 (11) ATTENDANCE RECORDATMEETINGS REPORTING (10) FINANCIAL Report Corporate Governance Mr. WongKamChoi s tuoHsiaa1/5NAN/A N/A N/A N/A 14/15 14/15 Mr. LukHongMan,Hammond Mr. ChanChiMing,Alvin Ms. EtsukoHoshiyama Mr. ChanChiKwong Mr. LuiSiuTsuen,Richard Mr. YuFeng r hn i71 / 1/1 1/1 2/2 1/2 7/15 6/15 Mr. YeungWaiHung,Peter Mr. ChanChiYuen Mr. ZhangXi Independent Non-executiveDirectors . Mr.Wong KamChoiresignedwitheffectfrom 12September2011. 4. Mr.YeungWaiHung,Peterresignedwitheffectfrom1August 2011. 3. Mr.LukHongMan,Hammondretiredfromofficeaftertheconclusion oftheAGMheldon20August2011. 2. Dr.LamKinNgok,Peter,Mr.YuFeng,Lui Siu Tsuen,RichardandMr.ChanChiKwongwereappointed 1. Notes:
Dr. LamKinNgok,Peter Executive Directors Number ofMeetingsheld statements issetoutintheindependentauditors’reportcontainedthisannualreport. The statementbytheindependentauditorsofCompanyabouttheirresponsibilitiesforfinancial generally acceptedinHongKong. view ofthestateaffairsCompanyanditssubsidiaries,inaccordancewithaccountingprinciples The Directorsareresponsibleforthepreparationoffinancialstatementswhichgiveatrueandfair ietr Board Directors Meetings heldbetween1April2011and31July Remuneration CommitteemeetingsduringthePeriodissetoutinfollowingtable: The attendancerecordofeachDirectoratBoardmeetings,AuditCommitteemeetingsand executive Directorswitheffectfrom16June2011. (Note 1)
(Note 4) (Note 1) (Note 1)
(Note 1) (Note 3) (Note 2) (continued) Number ofmeetingsattended/ 21 / N/A N/A 12/15 /5221/1 1/1 2/2 2/2 5/15 6/15 Number ofmeetingsheld / / N/A N/A N/A N/A N/A N/A N/A N/A 4/6 5/6 1/6 2/6 1521
Committee Audit
Remuneration Committee
(12) INTERNAL CONTROLS The Board has overall responsibility for the establishment, maintenance and review of the Group’s system of internal control. The Board has conducted a review of, and is satisfied with the effectiveness of the system of internal control of the Group.
(13) COMMUNICATION WITH SHAREHOLDERS The Company has established a number of channels to communicate with the Shareholders as follows:
(i) corporate communications such as annual reports, quarterly reports, interim reports and circulars
are issued in printed form and are available on the Stock Exchange’s website at www.hkex.com.hk Annual Report 2011 and the Company’s website at www.maghl.com (formerly www.rojam.com);
(ii) periodic announcements are made through the Stock Exchange and published on the respective websites of the Stock Exchange and the Company;
(iii) corporate information is made available on the Company’s website;
(iv) annual and special general meetings provide a forum for the Shareholders to make comments and exchange views with the Directors and senior management; and MEDIA ASIA GROUP HOLDINGS LIMITED (v) the Company’s branch share registrar in Hong Kong serves the Shareholders in respect of share registration, dividend payment and related matters.
(14) INVESTOR RELATIONS The Company keeps on promoting investor relations and enhancing communication with the existing Shareholders and potential investors. It welcomes suggestions from investors, stakeholders and the 23 public who may contact the Company by phone on (852) 3184 0990 during normal business hours, by fax at (852) 3184 9999 or by e-mail at [email protected]. 24 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 applied topayupunissuedsharesbeissuedmembers oftheCompanyasfullypaidbonusshares. However, theCompany’ssharepremiumaccount,in amountofapproximatelyHK$109,611,000,maybe At 31July2011,theCompanyhadnoreservesavailable forcashdistributionand/orinspecie. DISTRIBUTABLE RESERVES financial statements. Details ofthemovementsinsharecapitalCompanyduringPeriodaresetoutNote28to SHARE CAPITAL to thefinancialstatements,respectively. Details oftheconvertiblenotesandbondsissuedbyCompanyaresetoutinNotes2526 CONVERTIBLE NOTESANDBONDS Note 14tothefinancialstatements. Details ofthemovementsinproperty,plantandequipmentGroupduringPeriodaresetout PROPERTY, PLANTANDEQUIPMENT Note 30tothefinancialstatements. Details ofthemovementsinreservesGroupandCompanyduringPeriodaresetout RESERVES Board doesnotrecommendthepaymentofadividendforPeriod(yearended31March2011:Nil). The resultsoftheGroupforPeriodaresetoutinconsolidatedincomestatementonpage39. RESULTS ANDDIVIDENDS Note 5tothefinancialstatements. An analysisoftheGroup’sperformanceforPeriodbybusinessandgeographicalsegmentsissetoutin subsidiaries aresetoutinNote17tothefinancialstatements. During thePeriod,Companyactedasaninvestmentholdingcompany.Theprincipalactivitiesofits PRINCIPAL ACTIVITIES from 1April2011to31July2011. The Directorspresenttheirreporttogetherwiththeauditedconsolidatedfinancialstatementsforperiod Report oftheDirectors SUMMARY OF FINANCIAL INFORMATION A summary of the results and of the assets and liabilities of the Group for the last five financial periods is set out in the Financial Summary of this annual report on page 5.
PURCHASE, SALE OR REDEMPTION OF SHARES During the Period, the Company did not redeem any of its shares listed on the Stock Exchange nor did the Company or any of its subsidiaries purchase or sell any of such shares.
DIRECTORS
The Directors during the Period and up to the date of this report were: Annual Report 2011
Executive Directors Dr. Lam Kin Ngok, Peter (Chairman) (appointed with effect from 16 June 2011) Mr. Yu Feng (appointed with effect from 16 June 2011) Mr. Choi Chiu Fai, Stanley (appointed with effect from 24 October 2011) Mr. Tang Jun (Chief Executive Officer) (appointed with effect from 6 September 2011) Mr. Lui Siu Tsuen, Richard (appointed with effect from 16 June 2011) Mr. Chan Chi Kwong (appointed with effect from 16 June 2011) Ms. Etsuko Hoshiyama
Mr. Chan Chi Ming, Alvin MEDIA ASIA GROUP HOLDINGS LIMITED Mr. Luk Hong Man, Hammond (retired on 20 August 2011)
Independent non-executive Directors Mr. Zhang Xi Mr. Chan Chi Yuen Mr. Yeung Wai Hung, Peter (resigned with effect from 1 August 2011) 25 Mr. Wong Kam Choi (resigned with effect from 12 September 2011) Mr. Ng Chi Ho, Dennis (appointed with effect from 3 October 2011)
In accordance with By-law 83(2) of the Company’s Bye-laws and code provision A.4.2 of the Code on Corporate Government Practices of the GEM Listing Rules, Mr. Ng Chi Ho, Dennis is required to retire at the forthcoming special general meeting. Being eligible, he offers himself for re-election.
As a good corporate governance practice, Mr. Tang Jun and Mr. Choi Chiu Fai, Stanley voluntarily retire as directors and offer themselves for re-election though they are due to retire only at the annual general meeting to be held in 2012.
BIOGRAPHICAL DETAILS OF DIRECTORS Brief biographical particulars of the Directors are set out on pages 13 to 18 of this annual report. Other particulars of the same are contained elsewhere in this report. 26 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 at arm’slengthfromthebusinessofsuchcompanies. Shareholders asawhole.Therefore,theGroupiscapableofcarryingonitsbusinessesindependentlyof,and duty totheCompanyandhasactedwillcontinueactinbestinterestofits cannot personallycontroltheBoard.Further,Mr.Yuisfullyawareof,andhasbeendischarging,hisfiduciary However, theBoardisindependentfromboardofdirectorsaforesaidcompaniesandMr.Yu businesses intheMainlandofChina. Mr. YuFengheldshareholdinginterestsand/ordirectorshipsincompaniesengagedtheentertainment Group pursuanttotheGEMListingRules. the businesses,whichcompeteorarelikelytocompete,eitherdirectlyindirectly,withbusinessesof During thePeriodandatdateofthisreport,followingDirectorwasconsideredtohaveinterestsin DIRECTORS’ INTERESTSINCOMPETINGBUSINESSES of itssubsidiariestotheCompanyoranysubsidiaries. significance oranycontractoffortheprovisionservicesbycontrollingshareholder any ofitssubsidiaries,andthecontrollingshareholderorsubsidiariesenteredintocontract Save asdisclosedinNote33tothefinancialstatements,atnotimeduringPeriodhadCompanyor CONTROLLING SHAREHOLDER’SINTERESTSINCONTRACTS subsidiaries wasapartyduringthePeriod. or indirectly,inanycontractofsignificancetothebusinessGroupwhichCompanyits Save asdisclosedinNote33tothefinancialstatements,noDirectorhadamaterialinterest,whetherdirectly DIRECTORS’ INTERESTSINCONTRACTS company withinoneyearwithoutpaymentofcompensation,otherthanstatutorycompensation. service contractwiththeCompanyand/oranyofitssubsidiaries,whichisnotdeterminablebyemploying None oftheDirectorsproposedforre-electionatforthcomingspecialgeneralmeetinghasanunexpired DIRECTORS’ SERVICECONTRACTS Report oftheDirectors (continued) DIRECTORS’ AND CHIEF EXECUTIVE’S INTERESTS IN SECURITIES At 31 July 2011, the interests or short positions of the Directors and chief executive of the Company or their respective associates (as defined under the GEM Listing Rules) in the Shares, underlying Shares and debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) (a) which were notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO), or (b) which were required, pursuant to Section 352 of the SFO, to be entered in the register (the “Register”) referred to therein, or (c) which were required, pursuant to the Code of Practice for Securities Transaction by Directors and Designated Employees adopted by the Company, to be notified to the Company
and the Stock Exchange, were are follows: Annual Report 2011
(1) The Company (a) Long positions in Shares
Approximate percentage of Capacity in which Number of total issued Name of Directors the Shares are held the Shares Shares (Note 5)
Dr. Lam Kin Ngok, Peter (i) Interest of controlled corporations 5,150,425,500 50.94% MEDIA ASIA GROUP HOLDINGS LIMITED (Note 1) (ii) Deemed interest under S.317 of 1,768,343,209 17.49% the SFO
Total 6,918,768,709 68.43%
27 Mr. Yu Feng (Note 2) (i) Interest of controlled corporations 576,098,633 5.70% (ii) Deemed interest under S.317 of 6,342,670,076 62.73% the SFO
Total 6,918,768,709 68.43%
Ms. Etsuko Hoshiyama Beneficial owner 3,000,000 0.03% Mr. Chan Chi Yuen Beneficial owner 2,300,000 0.02% Mr. Yeung Wai Hung, Peter Beneficial owner 2,300,000 0.02% (Note 3) Mr. Wong Kam Choi Beneficial owner 2,300,000 0.02% (Note 4) 28 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 (2) Associated Corporations (1) The Company DIRECTORS’ ANDCHIEFEXECUTIVE’SINTERESTSINSECURITIES Report oftheDirectors a eSunHoldingsLimited (a) b LongpositionsinunderlyingShares (b) r a i gk ee i Itrs fcnrle oprtos47641636.00% 447,604,186 Interestofcontrolledcorporations (i) Dr. LamKinNgok,Peter Name ofDirector Mr. YuFeng Dr. LamKinNgok,Peter Name ofDirectors (Note 1)
(Continued) (Note2) (continued)
Ttl40386936.22% 450,398,629 Total i)Bnfca we ,9,4 0.22% 2,794,443 (ii) Beneficial owner the sharesareheld Capacity inwhich 155.24% 15,695,000,000 DeemedinterestunderS.317of Interestofcontrolledcorporations (ii) (i) underlying Sharesareheld Capacity inwhichthe i Itrs fcnrle oprtos646697364.16% 6,486,699,793 DeemedinterestunderS.317of Interestofcontrolledcorporations (ii) (i) oa 5905627256.48% 25,930,586,277 256.48% 25,930,586,277 Total Total Ordinary sharesofHK$0.50each the SFO the SFO
(Continued) 0255627101.24% 10,235,586,277 9438644192.32% 19,443,886,484 the underlying Interests in Number of the shares
Shares (Note 5) percentage of percentage of Approximate Approximate 31 July2011 shares asat total issued total issued
Shares DIRECTORS’ AND CHIEF EXECUTIVE’S INTERESTS IN SECURITIES (Continued) (2) Associated Corporations (Continued) (b) Perfect Sky Holdings Limited
Ordinary shares of US$1.00 each
Approximate percentage of total issued Capacity in which Number of shares as at Annual Report 2011 Name of Director the shares are held the shares 31 July 2011
Dr. Lam Kin Ngok, Peter Interest of controlled corporations 1 100.00%
(c) Yunfeng Fund, L. P.
Approximate percentage of total issued
Capacity in which Number of shares as at MEDIA ASIA GROUP HOLDINGS LIMITED Name of Director the shares are held the shares 31 July 2011
Mr. Yu Feng Beneficial Owner 1 13.03%
(d) Next Gen Entertainment Limited
Ordinary shares of US$1.00 each 29
Approximate percentage of total issued Capacity in which Number of shares as at Name of Director the shares are held the shares 31 July 2011
Mr. Yu Feng Interest of controlled corporations 1 100.00% 30 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 other bodycorporate. Director toacquirebenefitsbymeansoftheacquisition ofsharesin,ordebenturesof,theCompanyany time duringthePeriodwasCompanyoranyofits subsidiariesapartytoanyarrangementenable Save asdisclosedinthe“ShareOptionScheme”section andinNote29tothefinancialstatements,atno ARRANGEMENT FORDIRECTORSTOACQUIRE SHARESORDEBENTURES to theCompanyandStockExchangeorrecordedin theRegisterasaforesaid. and/or debenturesoftheCompanyoranyitsassociated corporations,whichwererequiredtobenotified interested, orwasdeemedtobeinterestedinthelongandshortpositionsShares,underlyingShares Save asdisclosedabove,at31July2011,noneoftheDirectorsorchiefexecutiveCompanywas (2) Associated Corporations DIRECTORS’ ANDCHIEFEXECUTIVE’SINTERESTSINSECURITIES Report oftheDirectors 5 ThetotalnumberofissuedSharesasat31July2011(thatis,10,110,257,612Shares)hasbeenusedforthe (5) (4) Mr.YeungWaiHung,Peterresignedasanindependentnon-executiveDirectorwitheffectfrom1August (3) (b) 2 () Byvirtueoftheinterest (a) (2) (b) 1 () Byvirtueofthe (a) (1) Notes: calculation oftheapproximatepercentage. 2011. Mr. WongKamChoiresignedasanindependentnon-executiveDirectorwitheffectfrom12September 2011. chairman. Mr.Yuisalsothesoledirectorofaforesaidfund’sgeneralpartner. Next Genisawholly-ownedsubsidiaryoftheYunfengFund,whichMr.Yufounderand Interests InSecurities”belowpursuanttoPartXVoftheSFO. owned byNextGenasshowninthesectionheaded“SubstantialShareholders’andOtherPersons’ paragraph (b)immediatelybelow,Mr.YuwasdeemedtobeinterestedintheSharesowned/to beneficially ownedbyDr.Lam. owned byDr.Lamandisapproximately29.99%WisdomanLimitedwhichinturn50% and indirectlyownedbyLaiSunGarment(International)Limited(“LSG”).LSGisapproximately8.07% 36.00% byLaiSunDevelopmentCompanyLimited(“LSD”)whichisapproximately47.97%directly Perfect Skyisawholly-ownedsubsidiaryofeSunandindirectlyownedastoapproximately Other Persons’InterestsInSecurities”belowpursuanttoPartXVoftheSFO. owned/to beownedbyPerfectSkyasshowninthesectionheaded“SubstantialShareholders’and described inparagraph(b)immediatelybelow,Dr.LamwasdeemedtobeinterestedtheShares interest ofDr.LamKinNgok,Peter(“Dr.Lam”)throughhiscontrolledcorporations
(Continued) (continued) of Mr.YuFeng(“Mr.Yu”)throughhiscontrolledcorporationsdescribedin
(Continued) SUBSTANTIAL SHAREHOLDERS’ AND OTHER PERSONS’ INTERESTS IN SECURITIES As at 31 July 2011, so far as it is known by or otherwise notified by any Director or the chief executive of the Company, the particulars of the corporations or persons who had 5% or more interests in the following long positions in the Shares and underlying Shares as recorded in the register required to be kept under Section 336 of the SFO or were entitled to exercise, or control the exercise of, 10% or more of the voting power at any general meeting of the Company (the “Voting Entitlements”) (i.e. within the meaning of substantial shareholders of the GEM Listing Rules) were as follows:
Long position in the Shares Annual Report 2011 Deemed interest Approximate Capacity in which the Number of pursuant to percentage Name of Shares and the underlying Number of the underlying Section 317 of total Shareholders Shares are held the Shares Shares of the SFO Total issued Shares (Note 7) (Note 9)
Dr. Lam Kin Ngok, Peter Interest of controlled corporations 5,150,425,500 15,695,000,000 12,003,929,486 32,849,354,986 324.91% (Note 1)
Lai Sun Garment (International) Interest of controlled corporations 5,150,425,500 15,695,000,000 12,003,929,486 32,849,354,986 324.91% Limited (Note 1) MEDIA ASIA GROUP HOLDINGS LIMITED
Zimba International Limited Interest of controlled corporations 5,150,425,500 15,695,000,000 12,003,929,486 32,849,354,986 324.91% (Note 1)
Lai Sun Development Company Interest of controlled corporations 5,150,425,500 15,695,000,000 12,003,929,486 32,849,354,986 324.91% Limited (Note 1) 31 Transtrend Holdings Limited Interest of controlled corporations 5,150,425,500 15,695,000,000 12,003,929,486 32,849,354,986 324.91% (Note 1) eSun Holdings Limited (Note 1) Interest of a controlled corporation 5,150,425,500 15,695,000,000 12,003,929,486 32,849,354,986 324.91%
Perfect Sky Holdings Limited Beneficial owner 5,150,425,500 15,695,000,000 12,003,929,486 32,849,354,986 324.91% (Note 1)
Mr. Tse On Kin (Note 2) Interest of a controlled corporation 1,100,000,000 430,000,000 31,319,354,986 32,849,354,986 324.91%
Sun Great Investments Beneficial owner 1,100,000,000 430,000,000 31,319,354,986 32,849,354,986 324.91% Limited (Note 2)
Mr. Yu Feng (Note 3) Interest of controlled corporations 576,098,633 6,486,699,793 25,786,556,560 32,849,354,986 324.91%
Yunfeng Fund, L. P. (Note 3) Interest of a controlled corporation 576,098,633 6,486,699,793 25,786,556,560 32,849,354,986 324.91%
Next Gen Entertainment Beneficial owner 576,098,633 6,486,699,793 25,786,556,560 32,849,354,986 324.91% Limited (Note 3)
SINA Corporation (Note 4) Interest of a controlled corporation 92,244,576 1,164,487,920 31,592,622,490 32,849,354,986 324.91% 32 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 Shareholders Name of Long positionintheShares (Continued) SUBSTANTIAL SHAREHOLDERS’ANDOTHERPERSONS’INTERESTSINSECURITIES Report oftheDirectors Mr. ChanChunKuen Golden CoachLimited On ChanceInc. 嚴紅春 Mr. ZhouXin Mrs. HawkenXiuLi Limited Prowise GlobalInvestment Grace PromiseLimited Maggie Ms. CheungFungKuen, Mr. ChoiChiuFai,Stanley Memestar Limited (Note 5) (Note 5)
(Note 6) (Note 6) (Note 5)
(Note 6) (Note 6) (Note 4) (Note 6) (Note 8) (Note 8) oa f()ad(i 697,000,000 Total of(i)and(ii)
Shares areheld Shares andtheunderlying Capacity inwhichthe i)Bnfca we ,0,0 ,0,0 0.09% 6.80% 9,000,000 688,000,000 — — 324.91% — 32,849,354,986 — 31,772,155,704 1,077,199,282 324.91% 324.91% 324.91% — 9,000,000 688,000,000 32,849,354,986 32,849,354,986 324.91% 32,849,354,986 31,772,155,704 31,772,155,704 31,772,155,704 1,077,199,282 1,077,199,282 1,077,199,282 32,849,354,986 — (ii) Beneficial 324.91% Interestofacontrolled 324.91% owner — — 31,772,155,704 (i) 324.91% 1,077,199,282 Beneficial owner 32,849,354,986 Beneficial owner 32,849,354,986 — 31,772,155,704 Interest ofacontrolledcorporation 32,849,354,986 31,592,622,490 1,077,199,282 Interest ofacontrolledcorporation 31,772,155,704 1,164,487,920 — 1,077,199,282 92,244,576 Interest ofacontrolledcorporation — Beneficial owner Interest ofacontrolledcorporation Interest ofacontrolledcorporation Beneficial owner neeto otoldcroain—10719223,7,5,0 2893496324.91% 32,849,354,986 31,772,155,704 1,077,199,282 — Interest ofacontrolledcorporation (Continued) (continued) corporation
8,0,0 8,0,0 6.80% 688,000,000 — — 688,000,000 Number of the Shares
the underlying Number of Shares
Deemed interest
pursuant to Section 317 fteSOTotal of theSFO Nt )(Note9) (Note 7) 6.89% percentage of Approximate total issued Shares SUBSTANTIAL SHAREHOLDERS’ AND OTHER PERSONS’ INTERESTS IN SECURITIES (Continued) Long position in the Shares (Continued) Notes:
(1) Perfect Sky is wholly-owned by eSun. eSun is owned as to approximately 36.00% by Transtrend Holdings Limited (“Transtrend”). Transtrend is wholly-owned by LSD. LSD is approximately 47.97% owned by LSG and two of LSG’s wholly-owned subsidiaries, namely Zimba International Limited (“Zimba”) and Joy Mind Limited. LSG is approximately 8.07% owned by Dr. Lam and is approximately 29.99% owned by Wisdoman Limited which is in turn 50% beneficially owned by Dr. Lam. Thus, all the above companies are corporations controlled by Dr. Lam,
and Dr. Lam, LSG, Zimba, LSD, Transtrend and eSun are deemed to be interested in such Shares which Perfect Sky Annual Report 2011 is interested in pursuant to Part XV of the SFO.
(2) Sun Great is wholly and beneficially owned by Mr. Tse On Kin (“Mr. Tse”). Mr. Tse is, therefore, deemed to be interested in such Shares which Sun Great is interested in pursuant to Part XV of the SFO.
(3) Next Gen is wholly and beneficially owned by the Yunfeng Fund, of which Mr. Yu is the founder and chairman. Mr. Yu and the Yunfeng Fund are, therefore, deemed to be interested in such Shares which Next Gen is interested in pursuant to Part XV of the SFO. Mr. Yu is also the sole director of the general partner of the Yunfeng Fund.
(4) Memestar is wholly and beneficially owned by SINA Corporation (“SINA”). SINA is, therefore, deemed to be
interested in such Shares which Memestar is interested in pursuant to Part XV of the SFO. MEDIA ASIA GROUP HOLDINGS LIMITED
(5) Grace Promise is wholly and beneficially owned by Mr. Choi Chiu Fai, Stanley (“Mr. Choi”). Mr. Choi and his spouse Ms. Cheung Fung Kuen, Maggie are, therefore, deemed to be interested in such Shares which Grace Promise is interested in pursuant to Part XV of the SFO. Mr. Choi was appointed an executive Director with effect from 24 October 2011.
(6) On Chance Inc. (“On Chance”) is owned as to 95% by Mr. Zhou Xin (“Mr. Zhou”) and as to 5% by Prowise Global 33 Investment Limited (“Prowise”) which is in turn 100% beneficially owned by Mrs. Hawken Xiu Li (“Mrs. Hawken”). Mrs. Hawken, Prowise, Mr. Zhou and his spouse 嚴紅春 are, therefore, deemed to be interested in such Shares which On Chance is interested in pursuant to Part XV of the SFO.
(7) Pursuant to Section 317 of the SFO, each of the Subscribers was deemed to be interested in the Shares and the underlying Shares held by the other Subscribers.
(8) Golden Coach Limited is wholly and beneficially owned by Mr. Chan Chun Kuen (“Mr. Chan”). Mr. Chan is, therefore, deemed to be interested in Golden Coach Limited’s interest in 688,000,000 Shares. In addition, Mr. Chan is personally interested in 9,000,000 Shares.
(9) The total number of issued Shares as at 31 July 2011 (that is, 10,110,257,612 Shares) has been used for the calculation of the approximate percentage.
Save as disclosed above, the Directors are not aware of any other corporation or person who, as at 31 July 2011, had the Voting Entitlements or any interests or short positions in the Shares or underlying Shares as recorded in the register required to be kept under Section 336 of the SFO. 34 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 member oftheGrouporanyinvestedentity,totakeupoptionssubscribeforShares. shareholder ofanymembertheGrouporinvestedentityholdersecuritiesissuedby independent non-executivedirector),supplier,customer,advisor,consultant,agent,contractor,andany to whichtheDirectorsmay,attheirdiscretion,inviteanyemployee,director,non-executivedirector(including The Companyadoptedashareoptionscheme(the“ShareOptionScheme”)on19November2009,pursuant SHARE OPTIONSCHEME would obligetheCompanytooffernewsharesonapro-ratabasisitsexistingShareholders. There isnoprovisionforpre-emptiverightsundertheCompany’sBy-laws,orlawsofBermuda,which PRE-EMPTIVE RIGHTS Rules atanytimeduringthePeriod,andasdateofthisannualreport. Directors, theCompanyhascompliedwithsufficiencyofpublicfloatrequirementunderGEMListing Based ontheinformationthatispubliclyavailabletoCompanyandwithinknowledgeof PUBLIC FLOAT the Group. more than5%oftheCompany’sissuedShares)hadaninterestinfivelargestsuppliersorcustomers None oftheDirectors,theirassociatesoranyShareholder(whichtoknowledgeDirectorsown 21%. purchases forthePeriodandfromlargestsupplierincludedthereinamountedtoapproximately Purchases fromtheGroup’sfivelargestsuppliersaccountedforapproximately59%oftotal 62%. the Group’stotalrevenueandincomefromlargestcustomerincludedthereinamountedtoapproximately During thePeriod,Grouphadthreeidentifiablelargestcustomersaccountedforapproximately77%of MAJOR CUSTOMERSANDSUPPLIERS Report oftheDirectors (continued) SHARE OPTION SCHEME (Continued) Details of the movements in the share options granted and exercised during the Period under the Share Option Scheme are as follows:
Number of share options
Outstanding Granted Exercised Lapsed Cancelled Outstanding Date of Exercise Exercise as at during during during during as at grant period price Name of grantee 1 April 2011 the Period the Period the Period the Period 31 July 2011 (dd-mm-yyyy) (dd-mm-yyyy) per Share (Note (4)) (Note (4)) (HK$)
Directors Annual Report 2011
Mr. Chan Chi Ming, Alvin 23,000,000 — (23,000,000) — — — 15-11-2010 15-11-2010 to 0.198 14-11-2020
Mr. Luk Hong Man, Hammond 23,000,000 — (23,000,000) — — — 15-11-2010 15-11-2010 to 0.198 (Note (2)) 14-11-2020
Ms. Etsuko Hoshiyama 5,800,000 — (3,000,000) (2,800,000) — — 15-11-2010 15-11-2010 to 0.198 14-11-2020
Mr. Chan Chi Yuen 2,300,000 — (2,300,000) — — — 15-11-2010 15-11-2010 to 0.198 14-11-2020
Mr. Zhang Xi 2,300,000 — (2,300,000) — — — 15-11-2010 15-11-2010 to 0.198 MEDIA ASIA GROUP HOLDINGS LIMITED 14-11-2020
Mr. Yeung Wai Hung, Peter 2,300,000 — (2,300,000) — — — 15-11-2010 15-11-2010 to 0.198 (Note (1)) 14-11-2020
Mr. Wong Kam Choi (Note (3)) 2,300,000 — (2,300,000) — — — 15-11-2010 15-11-2010 to 0.198 14-11-2020 35 Employees 76,600,000 — (7,600,000) — (69,000,000) — 15-11-2010 15-11-2010 to 0.198 14-11-2020
Others 92,000,000 — (69,000,000) (23,000,000) — — 15-11-2010 15-11-2010 to 0.198 14-11-2020
Total 229,600,000 — (134,800,000) (25,800,000) (69,000,000) —
Notes:
(1) Mr. Yeung Wai Hung, Peter resigned as an independent non-executive Director with effect from 1 August 2011.
(2) Mr. Luk Hong Man, Hammond retired as an executive Director after the conclusion of the AGM held on 20 August 2011.
(3) Mr. Wong Kam Choi resigned as an independent non-executive Director with effect from 12 September 2011.
(4) 69,000,000 underlying Shares were surrendered for cancellation in the unconditional mandatory cash offer made by Perfect Sky (the “Offer”). Pursuant to the terms of the Share Option Scheme, 25,800,000 share options outstanding as at 7 July 2011 (being the date of the close of the Offer) lapsed automatically upon the close of the Offer.
(5) There is no vesting period for the share options.
Details of the Share Option Scheme are set out in Note 29 to the financial statements. 36 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 Hong Kong,27October2011 Chairman Lam KinNgok,Peter On behalfoftheBoard The consolidatedfinancialstatementshavebeenauditedbyE&Y. auditors oftheCompanywillbeproposedatannualgeneralmeetingin2012. changes ofauditorsinthepastthreeyears.Aresolutionforre-appointmentE&Yasindependent office untiltheconclusionofnextannualgeneralmeeting.Saveasaforesaid,therewerenoother E&Y wereappointedauditorsoftheCompanyinplaceretiringauditors,RSM,atAGMtohold INDEPENDENT AUDITORS all theindependentnon-executiveDirectorstobeindependent. confirmation ofhisindependencepursuanttoRule5.09theGEMListingRulesandCompanyconsiders The Companyhasreceivedfromeachoftheindependentnon-executiveDirectorsinwritinganannual INDEPENDENCE OFINDEPENDENTNON-EXECUTIVEDIRECTORS pages 19to23ofthisannualreport. Details oftheCompany’scorporategovernancepracticesaresetoutinCorporateGovernanceReporton CORPORATE GOVERNANCE retirement schemeataraterangingfrom7%to22%ofthebasicsalaryitsemployees. the relevantlocalgovernmentauthoritiessinceincorporation.Itisrequiredtomakecontributions A subsidiaryinthePRCisrequiredtoparticipateadefinedcontributionretirementschemeorganisedby maximum limitofHK$1,000. The employer’smonthlycontributionisattherateof5%eachemployee’ssalaryupto their monthlysalariesuptoamaximumofHK$1,000andtheymaychoosemakeadditionalcontributions. (Chapter 485oftheLawsHongKong).Underscheme,employeesarerequiredtocontribute5% scheme oftheGroupsetupinaccordancewithHongKongMandatoryProvidentFundSchemeOrdinance The subsidiariesoperatinginHongKongarerequiredtoparticipateadefinedcontributionretirement PENSION SCHEMEARRANGEMENTS Report oftheDirectors (continued) Independent Auditors’ Report
INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF MEDIA ASIA GROUP HOLDINGS LIMITED (FORMERLY KNOWN AS ROJAM ENTERTAINMENT HOLDINGS LIMITED) (Incorporated in the Cayman Islands and continued in Bermuda with limited liability) Annual Report 2011 We have audited the consolidated financial statements of Media Asia Group Holdings Limited (the “Company”) and its subsidiaries (together, the “Group”) set out on pages 39 to 114, which comprise the consolidated and company statements of financial position as at 31 July 2011, and the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the period from 1 April 2011 to 31 July 2011, and a summary of significant accounting policies and other explanatory information.
DIRECTORS’ RESPONSIBILITY FOR THE CONSOLIDATED FINANCIAL STATEMENTS The directors of the Company are responsible for the preparation of the consolidated financial statements that give a true and fair view in accordance with Hong Kong Financial Reporting Standards issued by the MEDIA ASIA GROUP HOLDINGS LIMITED Hong Kong Institute of Certified Public Accountants (the “HKICPA”) and the disclosure requirements of the Hong Kong Companies Ordinance, and for such internal control as the directors determine is necessary to enable the preparation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error.
AUDITORS’ RESPONSIBILITY 37 Our responsibility is to express an opinion on these consolidated financial statements based on our audit. Our report is made solely to you, as a body, in accordance with Section 90 of the Bermuda Companies Act 1981, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.
We conducted our audit in accordance with Hong Kong Standards on Auditing issued by the HKICPA. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity’s preparation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 38 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 27 October2011 Hong Kong 8 FinanceStreet,Central Two InternationalFinanceCentre 18th Floor Hong Kong Certified PublicAccountants Ernst &Young properly preparedinaccordancewiththedisclosurerequirementsofHongKongCompaniesOrdinance. 1 April2011to31JulyinaccordancewithHongKongFinancialReportingStandardsandhavebeen Company andoftheGroupasat31July2011,Group’sprofitcashflowsforperiodfrom In ouropinion,theconsolidatedfinancialstatementsgiveatrueandfairviewofstateaffairs OPINION Auditors’ Report Independent (continued) Consolidated Income Statement Period from 1 April 2011 to 31 July 2011
Period from 1 April 2011 Year ended to 31 July 31 March 2011 2011 Notes HK$’000 HK$’000
TURNOVER 6 10,363 9,592 Cost of sales (10,785) (7,317)
Gross profit/(loss) (422) 2,275 Annual Report 2011 Other income 6 50 106 Marketing expenses (2,956) (241) Administrative expenses (10,112) (35,412) Fair value gain on a forward contract 21 20,655 — Other operating gains 1,643 — Other operating expenses (4,432) (10,688)
PROFIT/(LOSS) FROM OPERATING ACTIVITIES 4,426 (43,960) Finance costs 7 (4,383) (1,776)
MEDIA ASIA GROUP HOLDINGS LIMITED PROFIT/(LOSS) BEFORE TAX 8 43 (45,736) Income tax credit 10 370 268
PROFIT/(LOSS) FOR THE PERIOD/YEAR 413 (45,468)
39 Attributable to: Owners of the parent 985 (43,887) Non-controlling interests (572) (1,581)
413 (45,468)
EARNINGS/(LOSS) PER SHARE ATTRIBUTABLE TO OWNERS OF THE PARENT
Basic and diluted 13 HK0.016 cent HK(1.903) cents
40 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 Non-controlling interests Period from1April2011to31July of Comprehensive Income Consolidated Statement PROFIT/(LOSS) FORTHEPERIOD/YEAR Owners oftheparent Attributable to: TOTAL COMPREHENSIVEINCOME/(LOSS)FORTHEPERIOD/YEAR NET OF TAX OTHER COMPREHENSIVEINCOMEFORTHEPERIOD/YEAR,
Exchange differencesontranslationofforeignoperations OTHER COMPREHENSIVEINCOME
1 April2011 Period from to 31July HK$’000 1,258 2011 (572) 273 273 413 686 686
Year ended 31 March HK$’000 (45,468) (44,891) (43,310) (44,891) (1,581) 2011 577 577 Prepayment Other intangibleassets Cash andcashequivalents Trade receivables Convertible bonds Property, plantandequipment NON-CURRENT ASSETS Trade payables CURRENT LIABILITIES Total currentassets Films underproduction CURRENT ASSETS Total non-currentassets Convertible notes NON-CURRENT LIABILITIES TOTAL ASSETSLESSCURRENTLIABILITIES NET CURRENTASSETS Total currentliabilities Net assets Total non-currentliabilities Forward contract Prepayments, depositsandotherreceivables Accruals andotherpayables Deferred taxliabilities 3l July2011 of FinancialPosition Consolidated Statement
Notes 20 15 22 19 26 14 23 16 25 21 20 24 27
HK$’000 568,521 507,315 291,842 277,248 277,153 569,090 556,203 31 July 14,054 12,887 11,000 17,589 26,148 12,318 10,126 1,036 3,415 2,192 2011 851 95 —
31 March HK$’000 16,422 20,449 41,693 23,043 21,730 21,215 44,773 38,747 4,560 1,466 4,822 6,026 2,946 2,946 2011 515 — — — — — 41 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 42 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 ietrDirector LuiSiuTsuen,Richard Director Tang Jun 3l July2011 of FinancialPosition Consolidated Statement Total equity Issued capital Equity attributabletoownersoftheparent EQUITY Non-controlling interests Reserves (continued)
Notes 30(a) 28
HK$’000 291,842 293,995 192,892 101,103 31 July (2,153) 2011
31 March HK$’000 23,043 24,624 23,071 (1,581) 1,553 2011 Issue ofconvertiblebonds foreign Exchangedifferencesontranslationof operations Other comprehensiveincomefortheyear: t1Arl21 30124,7 ,2 1,8)5,7 52,375 — 52,375 (19,788) 4,625 — — — 44,475 2 23,061 fortheyear Total comprehensiveincome/(loss) Loss fortheyear At 1April2010 t3 ac 012,7 226 23,071 At 31March2011 Equity-settled shareoptionarrangements ot fiseo ovril od (83) — — — Proceeds fromissueofshareoptions Costs ofissueconvertiblebonds Shares issuedundershareoptionscheme (Note 26(b)) (Note 28) K’0 K’0 K’0 K’0 K’0 K’0 K’0 K’0 K’0 K’0 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
(Note 26(a)) aia con upu eev eev eev eev ossTtlitrssequity interests Total losses reserve reserve reserve reserve surplus account capital sudpeimCnrbtdCptlrgtpyettasainAcmltdcnrligTotal controlling Accumulated translation rightpayment Capital Contributed premium Issued
#
hr usrpinSaebsdcrec Non- currency Share-based Subscription Share 44,475 #
Period from1April2011to3lJuly of ChangesinEquity Consolidated Statement Attributable toownersoftheparent 4,664 #
10224——— ——————577—577—577 4,74 — — — ——————577——————— ————— ———— 2,500 #
8,161 #
5,202 #
(63,675) #
464(,8)23,043 (1,581) 24,624
7———— 43 2,50
MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 Foreign ———— 0——— ,9 ,9 8,197 — 8,197 — — 8,197 3)——18—198 — 198 — — (36) 4,8)(330 151 (44,891) (1,581) (43,310) (45,468) (43,887) (1,581) (43,887) (43,887) ,0 2,500 — 2,500 ,4 4,747 — 4,747 8)—(83) — (83) At 1April2011 44 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 Period from1April2011to3lJuly of ChangesinEquity Consolidated Statement # At 31July2011 Issue ofaforwardcontract Costs ofissueconvertiblenotes Issue ofconvertiblenotes Subscription ofshares Shares issuedundershareoptionscheme Exercise ofshareoptions Conversion ofconvertiblebonds Exchangedifferencesontranslationof foreign operations Other comprehensiveincomefortheperiod: Profit/(loss) fortheperiod Share issueexpense fortheperiod Total comprehensiveincome/(loss) uponlapse orcancellationofshareoptions Transfer ofshare-basedpaymentreserve ThesereserveaccountscomprisetheconsolidatedreservesofHK$192,892,000(31 March2011:HK$1,553,000)in (Note 28) the consolidatedstatementoffinancialposition. K’0 K’0 K’0 K’0 K’0 K’0 K’0 K’0 K’0 K’0 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 (Note 28(c))
aia con upu eev eev eev eev ossTtlitrssequity interests Total losses reserve reserve reserve reserve surplus account capital sudpeimCnrbtdCptlrgtpyettasainAcmltdcnrligTotal controlling Accumulated translation payment right Capital Contributed premium Issued (Note26(b)) 0,0 109,611 101,103 (Note 25) 301264,7 ,6 ,0 ,6 ,0 6,7)2,2 151 23,043 (1,581) 24,624 (63,675) 5,202 8,161 2,500 4,664 44,475 226 23,071 9144,3 1,1 118,614 — 118,614 — — — — — — 49,430 69,184 ,4 013———(,9)——2,9 26,690 12,500 — 21,286 — — 26,690 12,500 — 21,286 — — — — — (4,791) — — — (2,500) — — — (4,664) — — — 30,133 12,500 1,348 20,950 2,500 5,000 (Note 21) 8 8 52 413 (572) 985 985 — — — — — — — 330 ,7 — 5,493 — (2,751) 89,909 — (3,628) — — — — 5,493 686 (2,751) 273 89,909 3,370 — (3,628) — (572) — — — — — 1,258 — — (3,370) 273 — 985 — — — — — — 273 — — — — 273 — — 5,493 (2,751) — — 89,909 — — — — — — — — — — — — — — (3,628) — — — — — — — — — —
(continued)
(Note 26(a)) #
hr usrpinSaebsdcrec Non- currency Share-based Subscription Share 44,475 #
Attributable toownersoftheparent 92,651 #
— #
— #
5,475 #
(59,320) #
9,9 213 291,842 (2,153) 293,995
Foreign Amortisation ofotherintangibleassets Interest income Finance costs Adjustments for: Increase infilmsunderproduction Equity-settled shareoptionexpense Impairment ofotherintangibleassets Impairment oftradeandotherreceivables Decrease/(increase) intradereceivables Loss on disposalofitemsproperty,plantandequipment Gain ondisposalofasubsidiary Increase intradepayables Depreciation Profit/(loss) beforetax CASH FLOWSFROMOPERATINGACTIVITIES Interest received CASH FLOWSFROMINVESTINGACTIVITIES Net cashflowsusedinoperatingactivities Net cashflowsusedininvestingactivities
Increase inaccrualsandotherpayables Increase inprepayments,depositsandotherreceivables Fairvalue gainonaforwardcontract Disposal ofasubsidiary Purchases ofitemsproperty,plantandequipment Proceeds fromdisposalofitemsproperty,plantand equipment Purchase ofotherintangibleassets Period from1April2011to31July of CashFlows Consolidated Statement
Notes 21 31 8 6 7 8 8 8 8 8
1 April2011 Period from to 31July HK$’000 (20,655) (23,705) (14,054) (12,614) (7,840) 4,383 7,180 2,192 1,431 3,085 2011 480 167 (76) (41) (69) (15) (43) 43 41 — — — — —
Year ended 31 March HK$’000 (45,736) (27,503) (45,641) (16,045) (3,661) (1,000) (1,441) (2,368) 1,776 8,197 1,271 4,249 2,456 1,483 2011 333 (57) 85 16 57 — — — — 8 45 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 46 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 Proceeds fromissueofshareoptions Effect offoreignexchangeratechanges Cash andcashequivalentsatthebeginningofperiod/year Interest paid Proceeds fromissueofsharesundershareoptionscheme Proceeds fromsubscriptionofshares CASH FLOWSFROMFINANCINGACTIVITIES Cash andcashequivalents ANALYSIS OFCASHANDEQUIVALENTS CASH ANDEQUIVALENTSATENDOFPERIOD/YEAR NET INCREASE/(DECREASE)INCASHANDEQUIVALENTS Net cashflowsfromfinancingactivities Period from1April2011to31July of CashFlows Consolidated Statement
Proceeds fromissueofconvertiblebonds convertible notes Issue costsforsubscriptionofsharesandissue Proceeds fromissueofconvertiblenotes Proceeds fromissueofsharesupontheexerciseshareoptions (continued)
Notes 26(b) 26(b) 26(a) 28(c) 22 22 25
1 April2011 Period from to 31July HK$’000 371,387 118,614 486,813 510,561 507,315 507,315 (18,606) 12,500 26,690 20,449 2011 (24) 53 — —
Year ended 31 March HK$’000 (23,021) 22,500 43,466 24,988 20,449 20,449 2,500 2011 (210) 198 — — — — 4 Cash andcashequivalents Prepayments, depositsandotherreceivables Reserves ietrDirector LuiSiuTsuen,Richard Director Tang Jun Investments insubsidiaries NON-CURRENT ASSETS Convertible notes NON-CURRENT LIABILITIES TOTAL ASSETSLESSCURRENTLIABILITIES NET CURRENTASSETS Accruals andotherpayables CURRENT LIABILITIES Total currentassets Due fromsubsidiaries CURRENT ASSETS Total equity Issued capital EQUITY Net assets Total non-currentliabilities Forward contract Convertible bonds 31 July2011 Financial Position Statement of
Notes 30(b) 22 20 17 25 24 18 28 21 26
HK$’000 576,357 489,580 277,153 572,687 572,684 295,534 194,431 101,103 295,534 277,153 31 July 26,148 56,189 4,440 3,673 2011 — 3
31 March HK$’000 15,652 19,254 36,435 21,215 34,507 34,503 13,292 23,071 13,292 21,215 (9,779) 1,529 1,932 2011 — — 4 47 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 48 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 1. CORPORATE INFORMATION 31 July2011 Financial Statements Notes tothe in BermudaandwhosesharesarelistedtradedontheMainBoardofStockExchange. First Completion(asdefinedbelow)hasbeeneSunHoldingsLimited(“eSun”)whichwasincorporated In theopinionofdirectorsCompany,ultimateholdingcompanyCompanysince company. TheprincipalactivitiesofitssubsidiariesaresetoutinNote17tothefinancialstatements. During theperiodfrom1April2011to31July2011,Companyactedasaninvestmentholding “Stock Exchange”). are listedandtradedontheGrowthEnterpriseMarketofTheStockExchangeHongKongLimited(the business is23rdFloor,SunshinePlaza,353LockhartRoad,Wanchai,HongKong.TheCompany’sshares is ClarendonHouse,2ChurchStreet,HamiltonHM11,Bermuda.Theaddressofitsprincipalplace “Company”) isanexemptedcompanyunderthelawsofBermuda.Theaddressitsregisteredoffice Media AsiaGroupHoldingsLimited(formerlyknownasRojamEntertainmentLimited)(the (ii) the Company theCompanyconditionallyagreed toissuePerfectSky,SunGreat,NextGenandMemestar(the (i) pursuant towhich: Limited (“Memestar”),OnChanceInc.andGracePromise(collectively,the“Subscribers”), Sun GreatInvestmentsLimited(“SunGreat”),NextGenEntertainment(“NextGen”),Memestar Agreement”) withPerfectSkyHoldingsLimited(“PerfectSky”),awholly-ownedsubsidiaryofeSun, On 23March2011,theCompanyenteredintoasubscriptionagreement(the“Subscription First completionofthesubscriptionagreement are setoutinNotes25and 21tothefinancialstatements,respectively. Further detailsoftheFirstCompletion ConvertibleNotesandtheSecondCompletion ConvertibleNotes First Completion,PerfectSky heldapproximately51.30%oftheissuedsharecapital oftheCompany. Notes withanaggregateprincipalamount(beforeexpenses) ofHK$371,386,642.Immediatelyafterthe price (beforeexpenses)ofHK$118,613,358;and(ii) the SubscribersFirstCompletionConvertible aggregate of6,918,343,209ordinarysharesHK$0.01 eachintheCompanyforatotalsubscription Completion Date”).OntheFirstDate, Companyissuedto(i)theShareSubscribersan First CompletionConvertibleNotes(the“FirstCompletion”) werefulfilledon9June2011(the“First All conditionsprecedenttothecompletionof Share Subscriptionandthesubscriptionof (iii) the aggregate cashconsiderationofHK$118,613,358; 6,918,343,209 ordinarysharesofHK$0.01eachintheCompany(the“ShareSubscription”)foran “Share Subscribers”),andtheShareSubscribersconditionallyagreedtosubscribeforatotalof of HK$224,873,937(the“SecondCompletionConvertible Notes”). agreed tosubscribeforthesecondcompletionconvertible notesinanaggregateprincipalamount HK$371,386,642 (the“FirstCompletionConvertibleNotes”);and agreed tosubscribeforthefirstcompletionconvertiblenotesinanaggregateprincipalamountof Company conditionallyagreedtoissuetheSubscribers, andtheSubscribersconditionally conditionally agreedtoissuetheSubscribers,andSubscribers . BASISOFPREPARATION 3.1 CHANGEOFFINANCIALYEAR ENDDATE 2. profit orlossretainedprofits, asappropriate. Group’s shareofcomponents previouslyrecognisedinothercomprehensiveincome isreclassifiedto (ii) thefairvalueofanyinvestment retainedand(iii)anyresultingsurplusordeficit inprofitorloss.The translation differencesrecorded inequity;andrecognises(i)thefairvalueofconsideration received, liabilities ofthesubsidiary,(ii)carryingamountany non-controllinginterestand(iii)thecumulative If theGrouplosescontroloverasubsidiary,itderecognises (i)theassets(includinggoodwill)and equity transaction. A changeintheownershipinterestofasubsidiary,without alossofcontrol,isaccountedforasan balance. Losses withinasubsidiaryareattributedtothenon-controlling interestevenifthatresultsinadeficit Adjustments aremadetobringintolineanydissimilar accounting policiesthatmayexist. full. gains andlossesresultingfromintra-grouptransactionsdividendsareeliminatedonconsolidationin consolidated untilthedatethatsuchcontrolceases.Allintra-groupbalances,transactions,unrealised from thedateofacquisition,beingonwhichGroupobtainscontrol,andcontinuetobe period astheCompany,usingconsistentaccountingpolicies.Theresultsofsubsidiariesareconsolidated to 31March2011).Thefinancialstatementsofthesubsidiariesarepreparedforsamereporting subsidiaries fortheperiodfrom1April2011to31July(yearendedMarch2011:2010 The consolidatedfinancialstatementsincludetheofCompanyandits Basis ofconsolidation nearest thousandexceptwhenotherwiseindicated. financial statementsarepresentedinHongKongdollars(“HK$”)andallvaluesroundedtothe historical costconvention,exceptfortheforwardcontractwhichhasbeenmeasuredatfairvalue.These disclosure requirementsoftheHongKongCompaniesOrdinance.Theyhavebeenpreparedunder Public Accountants(the“HKICPA”),accountingprinciplesgenerallyacceptedinHongKongandthe Accounting Standards(“HKASs”)andInterpretations)issuedbytheHongKongInstituteofCertified Standards (“HKFRSs”)(whichincludeallHongKongFinancialReportingStandards, These financialstatementshavebeenpreparedinaccordancewithHongKongFinancialReporting period. 2010 to31March2011andthereforemaynotbecomparablethoseamountsshownforthecurrent the consolidatedstatementofcashflowsandrelatednotescoveratwelve-monthperiodfrom1April consolidated statementofcomprehensiveincome,thechangesinequityand 2011. Thecorrespondingcomparativeamountsshownfortheconsolidatedincomestatement, financial statementspresentedthereforecoveredafour-monthperiodfrom1April2011to31July year enddateoftheCompanywiththateSunandeSun’sotherlistedaffiliates.Theconsolidated end dateoftheCompanyfrom31MarchtoJulywitheffect2011alignfinancial The boardofdirectorstheCompanyannouncedon19August2011changefinancialyear 49 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 50 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 . CHANGESINACCOUNTINGPOLICIESANDDISCLOSURES 3.2 31 July2011 Financial Statements Notes tothe financial statements. The adoptionofthesenewandrevisedstandardshashadnosignificantfinancialeffecton been revisedtoreflectthechangesindefinitionsofrelatedpartiesunderstandard. influenced bythesamegovernmentasreportingentity.Theaccountingpolicyforrelatedpartieshas transactions withagovernmentandentitiesthatarecontrolled,jointly-controlledorsignificantly standard alsointroducesanexemptionfromthegeneralrelatedpartydisclosurerequirementsfor persons andkeymanagementpersonnelaffectrelatedpartyrelationshipsofanentity.Therevised emphasise asymmetricalviewofrelatedpartyrelationshipsaswellclarifyinginwhichcircumstances HKAS 24(Revised)clarifiesandsimplifiesthedefinitionsofrelatedparties.Thenew value oftheequityinstrumentsissuedisrecognisedimmediatelyinprofitorloss. Any differencebetweenthecarryingamountoffinancialliabilitythatisextinguishedandfair extinguishment. should bemeasuredbyreferencetothefairvalueoffinancialliabilityextinguishedasdate If thefairvalueofequityinstrumentsissuedisnotreliablydeterminable, should bemeasuredatthefairvalueofequityinstrumentsissued,ifthiscandeterminedreliably. financial liability.Theinterpretationstatesthatequityinstrumentsissuedinadebtforswap is derecognisedandtheequityinstrumentsissuedaretreatedasconsiderationpaidtoextinguishthat “consideration paid”inaccordancewithparagraph41ofHKAS39.Asaresult,thefinancialliability HK(IFRIC)-Int 19clarifiesthatequityinstrumentsissuedtoacreditorextinguishfinancialliabilityare HKAS 24(Revised) HK(IFRIC)-Int 19 time forthecurrentperiod’sfinancialstatements. The GrouphasadoptedthefollowingnewandrevisedHKFRSs,applicabletoGroup,forfirst (continued) Related PartyDisclosures Extinguishing FinancialLiabilitieswithEquityInstruments . ISSUEDBUTNOTYETEFFECTIVEHONGKONGFINANCIALREPORTING 3.3 impact ontheGroup’sresultsofoperationsandfinancialposition. upon initialapplication.TheGroupisnotyetinapositiontostatewhethertheywouldhavesignificant The GroupisintheprocessofmakinganassessmentimpactthesenewandrevisedHKFRSs 4 3 2 1 HKAS 28(2011) AmendmentstoHKAS12 HKAS 27(2011) HKAS 19(2011) HKAS 12Amendments HKAS 1(Revised) HKFRS 13 HKFRS 12 HKFRS 11 AmendmentstoHKFRS7 HKFRS 10 HKFRS 9 AmendmentstoHKFRS 1 HKFRS 7Amendments HKFRS 1Amendments effective, inthesefinancialstatements. The GrouphasnotappliedthefollowingnewandrevisedHKFRSs,thathavebeenissuedbutareyet STANDARDS Effectiveforannualperiodsbeginningonorafter1January2013 Effectiveforannualperiodsbeginningonorafter1July2012 Effectiveforannualperiodsbeginningonorafter1January2012 Effectiveforannualperiodsbeginningonorafter1July2011 Investments inAssociatesandJointVentures Separate FinancialStatements Employee Benefits Presentation ofFinancialStatements Fair ValueMeasurement Disclosure ofInterestsinOtherEntities Joint Arrangements Consolidated FinancialStatements Financial Instruments TransfersofFinancialAssets FixedDatesforFirst-timeAdopters ReportingStandards—SevereHyperinflationandRemovalof Recovery ofUnderlyingAssets
4
4
4
4 Financial Instruments:Disclosures— First-time AdoptionofHongKongFinancial Income Taxes—DeferredTax:
4 1
2 4
3 1
4
4 51 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 52 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 . SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES 3.4 31 July2011 Financial Statements Notes tothe d anequityinvestmentaccountedforinaccordancewithHKAS 39,iftheGroupholds,directlyor (d) anassociate,iftheGroupdoesnothaveunilateralorjointcontrol,butholds,directlyindirectly, (c) sale inaccordancewithHKFRS5arestatedatcostlessanyimpairmentlosses. received andreceivable.TheCompany’sinvestmentsinsubsidiariesthatarenotclassifiedasheldfor The resultsofsubsidiariesareincludedintheCompany’sincomestatementtoextentdividends indirectly, soastoobtainbenefitsfromitsactivities. A subsidiaryisanentitywhosefinancialandoperatingpoliciestheCompanycontrols,directlyor Subsidiaries (b) a (b) a asubsidiary,iftheGrouphasunilateralcontrol,directlyorindirectly,overjointventure; (a) A jointventureistreatedas: or inaccordancewiththetermsofjointventureagreement. surplus assetsaresharedbytheventurers,eitherinproportiontotheirrespectivecapitalcontributions, upon itsdissolution.Theprofitsorlossesfromthejointventure’soperationsandanydistributionsof venture parties,thedurationofjointandbasisonwhichassetsaretoberealised The jointventureagreementbetweentheventurersstipulatescapitalcontributionsof the otherpartieshaveaninterest. undertake aneconomicactivity.ThejointventureoperatesasaseparateentityinwhichtheGroupand A jointventureisanentitysetupbycontractualarrangement,wherebytheGroupandotherparties Joint ventures nor isinapositiontoexercisesignificantinfluenceover, thejointventure. indirectly, lessthan20%ofthejointventure’sregistered capitalandneitherhasjointcontrolof, significant influenceoverthejointventure;or generally notlessthan20%ofthejointventure’sregisteredcapitalandisinapositiontoexercise directly orindirectly,overthejointventure; jointly-controlled entity,iftheGroupdoesnothaveunilateralcontrol,buthasjoint (continued) . SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES 3.4 recognised. Animpairment loss recognisedforgoodwillisnotreversedinasubsequent period. generating unit(groupofcash-generating units)islessthanthecarryingamount, animpairmentlossis of cash-generatingunits)to whichthegoodwillrelates.Whererecoverable amountofthecash- Impairment isdetermined by assessingtherecoverableamountofcash-generating unit(group units. irrespective ofwhetherotherassetsorliabilitiesthe Groupareassignedtothoseunitsorgroupsof groups ofcash-generatingunits,thatareexpectedto benefitfromthesynergiesofcombination, combination is,fromtheacquisitiondate,allocatedto eachoftheGroup’scash-generatingunits,or the endofreportingperiod.Forpurposeimpairment testing,goodwillacquiredinabusiness the carryingvaluemaybeimpaired.TheGroupperforms itsannualimpairmenttestofgoodwillasat is testedforimpairmentannuallyormorefrequentlyif eventsorchangesincircumstancesindicatethat After initialrecognition,goodwillismeasuredatcostless anyaccumulatedimpairmentlosses.Goodwill acquired, thedifferenceis,afterreassessment,recognisedinprofitorlossasagainonbargainpurchase. sum ofthisconsiderationandotheritemsislowerthanthefairvaluenetassetssubsidiary equity interestsintheacquireeovernetidentifiableassetsacquiredandliabilitiesassumed.If the amountrecognisedfornon-controllinginterestsandanyfairvalueofGroup’spreviouslyheld Goodwill isinitiallymeasuredatcostbeingtheexcessofaggregateconsiderationtransferred, remeasured untilitisfinallysettledwithinequity. to othercomprehensiveincome.Ifthecontingentconsiderationisclassifiedasequity,itshallnotbe to beanassetorliabilityisrecognisedinaccordancewithHKAS39eitherprofitlossasachange acquisition date.Subsequentchangestothefairvalueofcontingentconsiderationwhichisdeemed Any contingentconsiderationtobetransferredbytheacquirerisrecognisedatfairvalue through profitorloss. previously heldequityinterestintheacquireeisremeasuredtofairvalueasatacquisitiondate If thebusinesscombinationisachievedinstages,acquisitiondatefairvalueofacquirer’s embedded derivativesinhostcontractsbytheacquiree. circumstances andpertinentconditionsasattheacquisitiondate.Thisincludesseparationof appropriate classificationanddesignationinaccordancewiththecontractualterms,economic When theGroupacquiresabusiness,itassessesfinancialassetsandliabilitiesassumedfor incurred. at theproportionateshareofacquiree’sidentifiablenetassets.Acquisitioncostsareexpensedas combination, theacquirermeasuresnon-controllinginterestinacquireeeitheratfairvalueor and theequityinterestsissuedbyGroupinexchangeforcontrolofacquiree.Foreachbusiness assets transferredbytheGroup,liabilitiesassumedGrouptoformerownersofacquiree is measuredattheacquisitiondatefairvaluewhichsumofvalues Business combinationsareaccountedforusingtheacquisitionmethod.Theconsiderationtransferred Business combinationsfrom1April2010 Business combinationsandgoodwill
(Continued)
53 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 54 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 . SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES 3.4 31 July2011 Financial Statements Notes tothe adjustments tothecontingentconsiderationwererecognisedaspartofgoodwill. economic outflowwasmorelikelythannotandareliableestimatedeterminable.Subsequent Contingent considerationwasrecognisedif,andonlytheGrouphadapresentobligation, under thecontract. terms ofthecontractthatsignificantlymodifiedcashflowsotherwisewouldhavebeenrequired acquiree werenotreassessedonacquisitionunlessthebusinesscombinationresultedinachange When theGroupacquiredabusiness,embeddedderivativesseparatedfromhostcontractby share ofinterestdidnotaffectpreviouslyrecognisedgoodwill. Business combinationsachievedinstageswereaccountedforasseparatesteps.Anyadditionalacquired measured attheproportionateshareofacquiree’sidentifiablenetassets. attributable totheacquisitionformedpartofcosts.Thenon-controllinginterestwas Business combinationswereaccountedforusingthepurchasemethod.Transactioncostsdirectly following differencesappliedtobusinesscombinationsprior1April2010: In comparisontotheabove-mentionedrequirementswhichwereappliedonaprospectivebasis, Business combinationspriorto1April2010butafterJanuary2005 operation disposedofandtheportioncash-generatingunitretained. operation. Goodwilldisposedofinthiscircumstanceismeasuredbasedontherelativevalues included inthecarryingamountofoperationwhendetermininggainorlossondisposal operation withinthatunitisdisposedof,thegoodwillassociatedwithof Where goodwillformspartofacash-generatingunit(groupunits)andthe Business combinationsfrom1April2010 Business combinationsandgoodwill arises inthoseexpensecategories consistentwiththefunctionofimpairedasset. specific totheasset.Animpairmentlossischarged theincomestatementinperiodwhichit pre-tax discountratethatreflectscurrentmarketassessments ofthetimevaluemoneyandrisks In assessingvalueinuse,theestimatedfuturecashflows arediscountedtotheirpresentvalueusinga An impairmentlossisrecognisedonlyifthecarryingamount ofanassetexceedsitsrecoverableamount. recoverable amountisdeterminedforthecash-generating unittowhichtheassetbelongs. inflows thatarelargelyindependentofthosefromother assetsorgroupsofassets,inwhichcasethe less coststosell,andisdeterminedforanindividual asset,unlesstheassetdoesnotgeneratecash recoverable amountisthehigherofasset’sorcash-generating unit’svalueinuseanditsfair (other thanfinancialassetsandgoodwill),theasset’s recoverableamountisestimated.Anasset’s Where anindicationofimpairmentexists,orwhenannualtestingforassetisrequired Impairment ofnon-financialassets (continued)
(Continued)
(Continued)
(Continued)
. SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES 3.4 oo eils30% is thedifferencebetweennetsalesproceedsand carryingamountoftherelevantasset. loss ondisposalorretirementrecognisedintheincome statementintheyearassetisderecognised 30% upon disposalorwhennofutureeconomicbenefitsare expectedfromitsuseordisposal.Anygain An itemofproperty,plantandequipmentanysignificant partinitiallyrecognisedisderecognised least attheendofeachfinancialyear. Residual values,usefullivesandthedepreciationmethod arereviewed,andadjustedifappropriate,at item isallocatedonareasonablebasisamongtheparts andeachpartisdepreciatedseparately. 20%–25% Where partsofanitemproperty,plantandequipmenthavedifferentusefullives,thecostthat Motor vehicles Computer equipment Office equipment,furnitureandfixtures purpose areasfollows: and equipmenttoitsresidualvalueoverestimatedusefullife.Theprincipalannualratesusedforthis Depreciation iscalculatedonthestraight-linebasistowriteoffcostofeachitemproperty,plant individual assetswithspecificusefullivesanddepreciation. plant andequipmentarerequiredtobereplacedatintervals,theGrouprecognisessuchpartsas is capitalisedinthecarryingamountofassetasareplacement.Wheresignificantpartsproperty, incurred. Insituationswheretherecognitioncriteriaaresatisfied,expenditureforamajorinspection as repairsandmaintenance,isnormallychargedtotheincomestatementinperiodwhichit Expenditure incurredafteritemsofproperty,plantandequipmenthavebeenputintooperation,such directly attributablecostsofbringingtheassettoitsworkingconditionandlocationforintendeduse. losses. Thecostofanitemproperty,plantandequipmentcomprisesitspurchasepriceany Property, plantandequipmentarestatedatcostlessaccumulateddepreciationanyimpairment Property, plantandequipmentdepreciation the periodinwhichitarises. for theassetinprioryears.Areversalofsuchanimpairmentlossiscreditedtoincomestatement have beendetermined(netofanydepreciation/amortisation)hadnoimpairmentlossrecognised the recoverableamountofthatasset,butnottoanhigherthancarryingwould asset otherthangoodwillisreversedonlyiftherehasbeenachangeintheestimatesusedtodetermine indication exists,therecoverableamountisestimated.Apreviouslyrecognisedimpairmentlossofan that previouslyrecognisedimpairmentlossesmaynolongerexistorhavedecreased.Ifsuchan An assessmentismadeattheendofeachreportingperiodastowhetherthereanyindication Impairment ofnon-financialassets
(Continued)
(Continued)
55 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 56 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 . SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES 3.4 31 July2011 Financial Statements Notes tothe (iii) Customer contracts (ii) Club debentures (i) Computer software on aprospectivebasis. be supportable.Ifnot,thechangeinusefullifeassessmentfromindefinitetofiniteisaccountedfor an indefinitelifeisreviewedannuallytodeterminewhethertheassessmentcontinues generating unitlevel.Suchintangibleassetsarenotamortised.Theusefullifeofanassetwith assets withindefiniteusefullivesaretestedforimpairmentannuallyeitherindividuallyoratthecash- an intangibleassetwithafiniteusefullifearereviewedatleasteachfinancialyearend.Intangible that theintangibleassetmaybeimpaired.Theamortisationperiodandmethodfor amortised overtheusefuleconomiclifeandassessedforimpairmentwheneverthereisanindication intangible assetsareassessedtobefiniteorindefinite.Intangiblewithlivessubsequently Intangible assetsacquiredseparatelyaremeasuredoninitialrecognitionatcost.Theusefullivesof Intangible assets recoverable amountandthe carryingamountexceedstherecoverableamount. An impairmentlossismade iftherehasbeenachangeintheestimateused todeterminethe losses. under productionareaccountedforonafilm-by-film basis andarestatedatcostlessanyimpairment reclassified asfilmproducts(whicharetobestatedat thelowerofcostandnetrealisablevalue).Films raw materialsconsumedinthecreationoffilms.Upon completion,thesefilmsunderproductionare Films underproductionincludecosts,costs ofservices,directlabourcosts,facilitiesand Films underproduction lives ofthesoftwarelicences5years. and impairmentlosses.Amortisationiscalculatedona straight-linebasisovertheestimateduseful communications operatorsinthePRC.Theamountisstatedatcostlessaccumulatedamortisation added telecommunicationsservicesandhaveestablishedcooperativearrangementswithleading providers whichpossessValue-AddedTelecommunicationOperationLicencestoprovidevalue- Customer contractsrepresentsoftwarelicencewithtelecommunicationsservice the clubdebenturehassufferedanimpairmentloss. to annualimpairmentreview.Impairmentisreviewedannuallyorwhenthereanyindicationthat membership. Clubdebentureswithanindefiniteeconomicusefullifearestatedatcostandsubject Amortisation iscalculatedinaccordancewithanestimatedusefullifeonindividualclub Club debenturesarestatedatcostlessaccumulatedamortisationandimpairmentlosses. estimated usefullivesof10years. amortisation andimpairmentlosses.Amortisationiscalculatedonastraight-linebasisovertheir and bringtousethespecificsoftware.Computersoftwareisstatedatcostlessaccumulated Acquired computersoftwarelicencesarecapitalisedonthebasisofcostsincurredtoacquire (continued)
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. SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES 3.4 modifies thecashflowsthat wouldotherwiseberequired. statement. Reassessmentonly occursifthereisachangeinthetermsofcontract thatsignificantly embedded derivativesaremeasured atfairvaluewithchangesinrecognised intheincome and thehostcontractsarenotheldfortradingordesignated atfairvaluethroughprofitorloss.These value iftheireconomiccharacteristicsandrisksarenot closelyrelatedtothoseofthehostcontracts Derivatives embeddedinhostcontractsareaccounted forasseparatederivativesandrecordedatfair the assets. receivables, available-for-salefinancialassetsorheld-to-maturity investmentsdependsonthenatureof circumstances. Thereclassificationfromfinancialassets atfairvaluethroughprofitorlosstoloansand foreseeable futuresignificantlychanges,theGroupmay electtoreclassifythesefinancialassetsinrare trade thesefinancialassetsduetoinactivemarkets andmanagement’sintenttoselltheminthe whether theintenttoselltheminneartermis still appropriate.WhentheGroupisunableto The Groupevaluatesitsfinancialassetsatfairvaluethroughprofitorloss(heldfortrading)toassess below. financial assets,whicharerecognisedinaccordancewithpoliciessetoutfor“Revenuerecognition” recognised intheincomestatement.Thesenetfairvaluechangesdonotincludeanydividendsonthese profit orlossarecarriedinthestatementoffinancialpositionatfairvaluewithchanges hedging instrumentsinhedgerelationshipsasdefinedbyHKAS39.Financialassetsatfairvaluethrough category includesderivativefinancialinstrumentsenteredintobytheGroupthatarenotdesignatedas assets areclassifiedasheldfortradingiftheyacquiredthepurposeofsaleinnearterm.This Financial assetsatfairvaluethroughprofitorlossincludefinancialheldfortrading. Financial assetsatfairvaluethroughprofitorloss The subsequentmeasurementoffinancialassetsdependsontheirclassificationasfollows: Subsequent measurement forward contract. The Group’sfinancialassetsincludecashandequivalents,tradereceivables,otherreceivablesa regulation orconventioninthemarketplace. or salesoffinancialassetsthatrequiredeliverywithintheperiodgenerallyestablishedby that theGroupcommitstopurchaseorsellasset.Regularwaypurchasessalesare All regularwaypurchasesandsalesoffinancialassetsarerecognisedonthetradedate,thatis,date transaction costs. at fairvalue,plus,inthecaseofinvestmentsnotvaluethroughprofitorloss,directlyattributable financial assetsatinitialrecognition.Whenarerecognisedinitially,theymeasured profit orloss,andloansreceivables,asappropriate.TheGroupdeterminestheclassificationofits Financial assetswithinthescopeofHKAS39areclassifiedasfinancialatfairvaluethrough Initial recognitionandmeasurement Investments andotherfinancialassets
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57 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 58 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 . SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES 3.4 31 July2011 Financial Statements Notes tothe income statementasotheroperatingexpenses. included inotherincomethestatement.Thelossarisingfromimpairmentisrecognised costs thatareanintegralpartoftheeffectiveinterestrate.Therateamortisationis cost iscalculatedbytakingintoaccountanydiscountorpremiumonacquisitionandincludesfees amortised costusingtheeffectiveinterestratemethodlessanyallowanceforimpairment.Amortised not quotedinanactivemarket.Afterinitialmeasurement,suchassetsaresubsequentlymeasuredat Loans andreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthat Loans andreceivables Investments andotherfinancialassets discount rateformeasuringanyimpairmentlossisthe current effectiveinterestrate. (i.e., theeffectiveinterestratecomputedatinitialrecognition). Ifaloanhasvariableinterestrate,the of theestimatedfuturecashflowsisdiscountedat financialasset’soriginaleffectiveinterestrate future cashflows(excludingcreditlossesthat havenotyetbeenincurred).Thepresentvalue measured asthedifferencebetweenasset’scarrying amountandthepresentvalueofestimated If thereisobjectiveevidencethatanimpairmentloss hasbeenincurred,theamountoflossis loss is,orcontinuestobe,recognisedarenotincludedinacollectiveassessmentofimpairment. them forimpairment.Assetsthatareindividuallyassessedimpairmentandwhichan the assetinagroupoffinancialassetswithsimilarcreditriskcharacteristicsandcollectivelyassesses of impairmentexistsforanindividuallyassessedfinancialasset,whethersignificantornot,itincludes financial assetsthatarenotindividuallysignificant.IftheGroupdeterminesnoobjectiveevidence evidence ofimpairmentexistsforfinancialassetsthatareindividuallysignificant,orcollectively For financialassetscarriedatamortisedcost,theGroupfirstassessesindividuallywhetherobjective Financial assetscarriedatamortisedcost future cashflows,suchaschangesinarrearsoreconomicconditionsthatcorrelatewithdefaults. reorganisation andobservabledataindicatingthatthereisameasurabledecreaseintheestimated in interestorprincipalpayments,theprobabilitythattheywillenterbankruptcyotherfinancial a debtororgroupofdebtorsisexperiencingsignificantfinancialdifficulty,defaultdelinquency of financialassetsthatcanbereliablyestimated.Evidenceimpairmentmayincludeindications that losseventhasanimpactontheestimatedfuturecashflowsoffinancialassetorgroup more eventsthathasoccurredaftertheinitialrecognitionofasset(anincurred“lossevent”)and is deemedtobeimpairedif,andonlythereobjectiveevidenceofimpairmentasaresultoneor financial assetoragroupofassetsisimpaired.A The Groupassessesattheendofeachreportingperiodwhetherthereisanyobjectiveevidencethata Impairment offinancialassets (continued)
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. SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES 3.4 Group couldberequiredtorepay. lower oftheoriginalcarryingamountassetand themaximumamountofconsiderationthat Continuing involvementthattakestheformofaguarantee overthetransferredassetismeasuredat obligations thattheGrouphasretained. The transferredassetandtheassociatedliabilityare measured onabasisthatreflectstherightsand continuing involvementintheasset.Inthatcase,Groupalsorecognisesanassociatedliability. of theassetnortransferredcontrolasset,isrecognisedtoextentGroup’s through arrangement,andhasneithertransferrednorretainedsubstantiallyalltherisksrewards When theGrouphastransferreditsrightstoreceivecashflowsfromanassetorenteredintoapass- theGrouphastransferreditsrightstoreceivecashflowsfromasset orhasassumedan • therightstoreceivecashflowsfromassethaveexpired;or • assets) isderecognisedwhen: A financialasset(or,whereapplicable,apartoforgroupsimilar Derecognition offinancialassets recovery iscreditedtotheincomestatement. is increasedorreducedbyadjustingtheallowanceaccount.Ifafuturewrite-offlaterrecovered, of aneventoccurringaftertheimpairmentwasrecognised,previouslyrecognisedloss If, inasubsequentperiod,theamountofestimatedimpairmentlossincreasesordecreasesbecause been realisedorhastransferredtotheGroup. allowance arewrittenoffwhenthereisnorealisticprospectoffuturerecoveryandallcollateralhas for thepurposeofmeasuringimpairmentloss.Loansandreceivablestogetherwithanyassociated reduced carryingamountandisaccruedusingtherateofinterestusedtodiscountfuturecashflows of thelossisrecognisedinincomestatement.Interestcontinuestobeaccruedon The carryingamountoftheassetisreducedthroughuseanallowanceaccountand Financial assetscarriedatamortisedcost Impairment offinancialassets risks andrewardsoftheasset,buthastransferredcontrolasset. and rewardsoftheasset,or(b)Grouphasneithertransferrednorretainedsubstantiallyall “pass-through” arrangement;andeither(a)theGrouphastransferredsubstantiallyallrisks obligation topaythereceivedcashflowsinfullwithoutmaterialdelayathirdpartyunder
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59 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 60 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 . SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES 3.4 31 July2011 Financial Statements Notes tothe value ispositiveandasaliability whenitsfairvalueisnegative. in fairvaluerecognised the incomestatement.Forwardcontractiscarriedas an assetwhenitsfair asset oraliabilityonthecommitment date,andissubsequentlyre-measuredatfair valuewithchanges derivative financialinstrumentunderHKAS39.Theforward contractisrecognisedatitsfairvalueasan For accountingpurpose,forwardcontractontheSecond CompletionConvertibleNotesisclassifiedasa Forward contract instruments arefirstrecognised. of proceedstheconvertiblenotes/convertiblebonds totheliabilityandequitycomponentswhen the liabilityandequitycomponentsofconvertible notes/convertiblebondsbasedontheallocation conversion optionisnotremeasuredinsubsequentyears. Transactioncostsareapportionedbetween recognised andincludedinshareholders’equity,net of transactioncosts.Thecarryingamountthe of theproceedsconvertiblenotes/convertiblebonds isallocatedtotheconversionoptionthat term liabilityontheamortisedcostbasisuntilextinguishedconversionorredemption.Theremainder market rateforanequivalentnon-convertiblenote/convertiblebond;andthisamountiscarriedasalong of convertiblenotes/convertiblebonds,thefairvalueliabilitycomponentisdeterminedusinga recognised asaliabilityinthestatementoffinancialposition,nettransactioncosts.Onissuance The componentofconvertiblenotes/convertiblebondsthatexhibitscharacteristicsaliabilityis Convertible notes/convertiblebonds included infinancecoststheincomestatement. or coststhatareanintegralpartoftheeffectiveinterestrate.Therateamortisationis Amortised costiscalculatedbytakingintoaccountanydiscountorpremiumonacquisitionandfees liabilities arederecognisedaswellthroughtheeffectiveinterestratemethodamortisationprocess. which casetheyarestatedatcost.Gainsandlossesrecognisedintheincomestatementwhen cost, usingtheeffectiveinterestratemethodunlesseffectofdiscountingwouldbeimmaterial,in After initialrecognition,interest-bearingloansandborrowingsaresubsequentlymeasuredatamortised Loans andborrowings The measurementoffinancialliabilitiesdependsontheirclassificationasfollows: Subsequent measurement and convertiblebonds. The Group’sfinancialliabilitiesincludetradepayables,otherpayablesandaccruals,convertiblenotes directly attributabletransactioncosts. All financialliabilitiesarerecognisedinitiallyatfairvalueandinthecaseofloansborrowings,plus The Groupdeterminestheclassificationofitsfinancialliabilitiesatinitialrecognition. Financial liabilitieswithinthescopeofHKAS39areclassifiedasloansandborrowings,appropriate. Initial recognitionandmeasurement Financial liabilities (continued)
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. SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES 3.4 included infinancecoststheincomestatement. obligation. Theincreaseinthediscountedpresentvalue amountarisingfromthepassageoftimeis at theendofreportingperiodfutureexpendituresexpectedtoberequiredsettle When theeffectofdiscountingismaterial,amountrecognisedforaprovisionpresentvalue provided thatareliableestimatecanbemadeoftheamountobligation. past eventanditisprobablethatafutureoutflowofresourceswillberequiredtosettletheobligation, A provisionisrecognisedwhenapresentobligation(legalorconstructive)hasarisenasresultof Provisions instrument whichissubstantiallythesame;adiscountedcashflowanalysis;andoptionpricingmodels. include usingrecentarm’slengthmarkettransactions;referencetothecurrentvalueofanother active market,thefairvalueisdeterminedusingappropriatevaluationtechniques.Suchtechniques positions), withoutanydeductionfortransactioncosts.Forfinancialinstrumentswherethereisno quoted marketpricesordealerpricequotations(bidforlongpositionsandaskshort The fairvalueoffinancialinstrumentsthataretradedinactivemarketsisdeterminedbyreferenceto Fair valueoffinancialinstruments simultaneously. amounts andthereisanintentiontosettleonanetbasis,orrealisetheassetsliabilities financial positionif,andonlythereisacurrentlyenforceablelegalrighttooffsettherecognised Financial assetsandfinancialliabilitiesareoffsetthenetamountisreportedinstatementof Offsetting offinancialinstruments between therespectivecarryingamountsisrecognisedinincomestatement. treated asaderecognitionoftheoriginalliabilityandrecognitionnewliability,difference terms, orthetermsofanexistingliabilityaresubstantiallymodified,suchexchangemodificationis When anexistingfinancialliabilityisreplacedbyanotherfromthesamelenderonsubstantiallydifferent expires. A financialliabilityisderecognisedwhentheobligationunderdischargedorcancelled, Derecognition offinancialliabilities
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61 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 62 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 . SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES 3.4 31 July2011 Financial Statements Notes tothe the landandbuildingsasafinanceleaseinproperty,plantequipment. reliably betweenthelandandbuildingelements,entireleasepaymentsareincludedincostof recognised onthestraight-linebasisoverleaseterms.Whenpaymentscannotbeallocated Prepaid landleasepaymentsunderoperatingleasesareinitiallystatedatcostandsubsequently statement onthestraight-linebasisoverleaseterms. accounted forasoperatingleases.Rentalspayableundertheleasesarechargedtoincome Leases wheresubstantiallyalltherewardsandrisksofownershipassetsremainwithlessorare Leases financial statements. an externalvaluerusingaBlack-Scholesmodel,further detailsofwhicharesetoutinNote29tothe by referencetothefairvalueatdatewhichthey aregranted.Thefairvalueisdeterminedby The costofequity-settledtransactionswithemployees forgrantsafter7November2002ismeasured employees renderservicesasconsiderationforequityinstruments (“equity-settledtransactions”). directors) oftheGroupreceiveremunerationinform ofshare-basedpaymenttransactions,whereby to eligibleparticipantswhocontributethesuccess of theGroup’soperations.Employees(including The Companyoperatesashareoptionschemeforthepurposeofprovidingincentivesandrewards Share-based paymenttransactions Employee benefits interestincome,onanaccrualbasisusingtheeffectivemethodbyapplyingratethat (d) (c) licensing income (b) turnoverfromentertainmenteventsorganisedbytheGroup,whenarecompleted; (a) revenue canbemeasuredreliably,onthefollowingbases: Revenue isrecognisedwhenitprobablethattheeconomicbenefitswillflowtoGroupand Revenue recognition instrument tothenetcarryingamountoffinancialasset. exactly discountstheestimatedfuturecashreceiptsthroughexpectedlifeoffinancial with thesubstanceofrelevantagreements;and with theprovisionofvalue-addedtelecommunicationsservices,onanaccrualbasisinaccordance completed, inproportionasagreedwithco-investors; net incomefromentertainmenteventsorganisedbyotherco-investors,whentheare generated fromthelicensingofcontentandtechnologyforuseinconnection (continued)
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. SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES 3.4 pension scheme. charged totheincomestatement astheybecomepayableinaccordancewiththe rulesofthecentral contribute certainpercentage ofitspayrollcoststothecentralpensionscheme. Thecontributionsare in acentralpensionscheme operatedbythelocalmunicipalgovernment.Thissubsidiary isrequiredto The employeesoftheGroup’s subsidiarywhichoperatesinMainlandChinaare required toparticipate when contributedintotheScheme. independently administeredfund.TheGroup’semployer contributionsvestfullywiththeemployees the rulesofScheme.TheassetsSchemeare heldseparatelyfromthoseoftheGroupinan basic salariesandarechargedtotheincomestatement astheybecomepayableinaccordancewith eligible toparticipateintheScheme.Contributionsare madebasedonapercentageoftheemployees’ “Scheme”) undertheMandatoryProvidentFundSchemes Ordinance,forthoseemployeeswhoare The GroupoperatesadefinedcontributionMandatory ProvidentFundretirementbenefitscheme(the Retirement benefitscheme earnings/(loss) pershare. The dilutiveeffectofoutstandingoptionsisreflectedasadditionalsharedilutioninthecomputation settled transactionawardsaretreatedequally. modification oftheoriginalaward,asdescribedinpreviousparagraph.Allcancellationsequity- award onthedatethatitisgranted,cancelledandnewawardsaretreatedasiftheywerea However, ifanewawardissubstitutedforthecancelledaward,anddesignatedasreplacement where non-vestingconditionswithinthecontrolofeitherGrouporemployeearenotmet. and anyexpensenotyetrecognisedfortheawardisimmediately.Thisincludes Where anequity-settledawardiscancelled,ittreatedasifhadvestedonthedateofcancellation, transaction, orisotherwisebeneficialtotheemployeeasmeasuredatdateofmodification. is recognisedforanymodificationthatincreasesthetotalfairvalueofshare-basedpayment if thetermshadnotbeenmodified,originalofawardaremet.Inaddition,anexpense Where thetermsofanequity-settledawardaremodified,asaminimumexpenseisrecognised performance and/orserviceconditionsaresatisfied. irrespective ofwhetherornotthemarketnon-vestingconditionissatisfied,providedthatallother where vestingisconditionaluponamarketornon-vestingcondition,whicharetreatedas No expenseisrecognisedforawardsthatdonotultimatelyvest,exceptequity-settledtransactions period. represents themovementincumulativeexpenserecognisedasatbeginningandendofthat of equityinstrumentsthatwillultimatelyvest.Thechargeorcredittotheincomestatementforaperiod reflects theextenttowhichvestingperiodhasexpiredandGroup’sbestestimateofnumber recognised forequity-settledtransactionsattheendofeachreportingperioduntilvestingdate over theperiodinwhichperformanceand/orserviceconditionsarefulfilled.Thecumulativeexpense The costofequity-settledtransactionsisrecognised,togetherwithacorrespondingincreaseinequity, Share-based paymenttransactions Employee benefits
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63 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 64 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 . SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES 3.4 31 July2011 Financial Statements Notes tothe Hong Kongdollarsattheweightedaverageexchangeratesforperiod/year. recurring cashflowsofoverseassubsidiarieswhicharisethroughouttheperiod/yeararetranslatedinto translated intoHongKongdollarsattheexchangeratesrulingdatesofcashflows.Frequently For thepurposeofconsolidatedstatementcashflows,flowsoverseassubsidiariesare foreign operationandtranslatedattheclosingrate. carrying amountsofassetsandliabilitiesarisingonacquisitionaretreatedasthe Any goodwillarisingontheacquisitionofaforeignoperationandanyfairvalueadjustmentsto the incomestatement. component ofothercomprehensiveincomerelatingtothatparticularforeignoperationisrecognisedin and accumulatedintheforeigncurrencytranslationreserve.Ondisposalofaoperation, rates fortheyear.Theresultingexchangedifferencesarerecognisedinothercomprehensiveincome and theirincomestatementsaretranslatedintoHongKongdollarsattheweightedaverageexchange presentation currencyoftheCompanyatexchangeratesrulingendreportingperiod As attheendofreportingperiod,assetsandliabilitiestheseentitiesaretranslatedinto The functionalcurrenciesofcertainoverseassubsidiariesareotherthantheHongKongdollar. currency aretranslatedusingtheexchangeratesatdatewhenfairvaluewasdetermined. rates atthedatesofinitialtransactions.Non-monetaryitemsmeasuredfairvalueinaforeign that aremeasuredintermsofhistoricalcostaforeigncurrencytranslatedusingtheexchange the endofreportingperiod.Alldifferencesaretakentoincomestatement.Non-monetaryitems denominated inforeigncurrenciesareretranslatedatthefunctionalcurrencyratesofexchangeruling respective functionalcurrencyratesrulingatthedatesoftransactions.Monetaryassetsandliabilities Foreign currencytransactionsrecordedbytheentitiesinGroupareinitiallyusingtheir items includedinthefinancialstatementsofeachentityaremeasuredusingthatfunctionalcurrency. and presentationcurrency.EachentityintheGroupdeterminesitsownfunctionalcurrency These financialstatementsarepresentedinHongKongdollars,whichistheCompany’sfunctional Foreign currencies (continued)
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. SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES 3.4 taxable profitwillbeavailable toallowallorpartofthedeferredtaxassetberecovered. of eachreportingperiodand arerecognisedtotheextentthatithasbecomeprobable thatsufficient part ofthedeferredtaxassettobeutilised.Unrecognised deferredtaxassetsarereassessedattheend to theextentthatitisnolongerprobablesufficient taxableprofitwillbeavailabletoallowallor The carryingamountofdeferredtaxassetsisreviewed attheendofeachreportingperiodandreduced inrespectofdeductibletemporarydifferencesassociatedwithinvestments insubsidiaries,deferred • wherethedeferredtaxassetrelatingtodeductibletemporary differencesarisesfromtheinitial • losses canbeutilised,except: which thedeductibletemporarydifferences,andcarryforwardofunusedtaxcredits credits andunusedtaxlosses,totheextentthatitisprobabletaxableprofitwillbeavailableagainst Deferred taxassetsarerecognisedforalldeductibletemporarydifferences,carryforwardofunused inrespectoftaxabletemporarydifferencesassociatedwithinvestmentssubsidiaries,wherethe • wherethedeferredtaxliabilityarisesfrominitialrecognitionofgoodwilloranassetin a • Deferred taxliabilitiesarerecognisedforalltaxabletemporarydifferences,except: reporting purposes. reporting periodbetweenthetaxbasesofassetsandliabilitiestheircarryingamountsforfinancial Deferred taxisprovided,usingtheliabilitymethod,onalltemporarydifferencesatendof interpretations andpracticesprevailinginthecountrieswhichGroupoperates. been enactedorsubstantivelybytheendofreportingperiod,takingintoconsideration to berecoveredfromorpaidthetaxationauthorities,basedontaxrates(andlaws)thathave Current taxassetsandliabilitiesforthecurrentpriorperiodsaremeasuredatamountexpected loss isrecognised,eitherinothercomprehensiveincomeordirectlyequity. Income taxcomprisescurrentanddeferredtax.relatingtoitemsrecognisedoutsideprofitor Income tax differences canbeutilised. reverse intheforeseeablefutureandtaxableprofitwill beavailableagainstwhichthetemporary tax assetsareonlyrecognisedtotheextentthatitisprobable thatthetemporarydifferenceswill time ofthetransaction,affectsneitheraccounting profit nortaxableorloss;and recognition ofanassetorliabilityinatransactionthatisnotbusinesscombinationand,atthe temporary differenceswillnotreverseintheforeseeablefuture. timing ofthereversaltemporarydifferencescanbecontrolledanditisprobablethat the accountingprofitnortaxableorloss;and transaction thatisnotabusinesscombinationand,atthetimeoftransaction,affectsneither
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65 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 66 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 . SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES 3.4 31 July2011 Financial Statements Notes tothe and thesametaxationauthority. current taxassetsagainstliabilitiesandthedeferredtaxesrelatetosametaxableentity Deferred taxassetsanddeferredliabilitiesareoffsetifalegallyenforceablerightexiststosetoff enacted orsubstantivelybytheendofreportingperiod. when theassetisrealisedorliabilitysettled,basedontaxrates(andlaws)thathavebeen Deferred taxassetsandliabilitiesaremeasuredattheratesthatexpectedtoapplyperiod Income tax b thepartyisanentitywhereanyoffollowingconditionsapplies: (b) thepartyisapersonorclosememberofthatperson’sfamilyand (a) A partyisconsideredtoberelatedtheGroupif: Related parties vi apersonidentifiedin(a)(i)hassignificantinfluenceovertheentity orisamemberofthekey (vii) theentityiscontrolledorjointlybyapersonidentifiedin(a);and (vi) theentityisapost-employmentbenefitplanfor ofemployeeseithertheGroup (v) oneentityis ajointventureofthirdentityandtheotherisanassociate (iv) theentityandGroupare joint venturesofthesamethirdparty; (iii) (ii) one theentityandGrouparemembers ofthesamegroup; (i) isamemberofthekeymanagement personneloftheGrouporaparentGroup; (iii) hassignificantinfluenceovertheGroup;or (ii) hascontrolorjointoverthe Group; (i) management personneloftheentityoraparent the entity. or anentityrelatedtotheGroup; entity; fellow subsidiaryoftheotherentity);
(Continued) entity isanassociateorjointventureoftheother(oraparent,subsidiary (continued)
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. SIGNIFICANTACCOUNTINGJUDGEMENTSANDKEYESTIMATES 4. SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES 3.4 a Usefullifeofotherintangibleassets (a) amounts ofassetsandliabilitieswithinthenextfinancial year,arediscussedbelow. of thereportingperiod,thathaveasignificantrisk causingamaterialadjustmenttothecarrying The keyassumptionsconcerningthefuture,andothersourcesofestimationuncertaintyatend Estimation uncertainty adjustment tothecarryingamountsofassetsorliabilitiesaffectedinfuture. about theseassumptionsandestimatescouldresultinoutcomesthatrequireamaterial and thedisclosureofcontingentliabilities,atendreportingperiod.However,uncertainty estimates andassumptionsthataffectthereportedamountsofrevenues,expenses,assetsliabilities, The preparationoftheGroup’sfinancialstatementsrequiresmanagementtomakejudgements, the borrowingoffunds. are incurred.Borrowingcostsconsistofinterestandotherthatanentityincursinconnectionwith from theborrowingcostscapitalised.Allotherareexpensedinperiodwhichthey temporary investmentofspecificborrowingspendingtheirexpenditureonqualifyingassetsisdeducted when theassetsaresubstantiallyreadyfortheirintendeduseorsale.Investmentincomeearnedon sale, arecapitalisedaspartofthecostthoseassets.Thecapitalisationsuchborrowingcostsceases i.e., assetsthatarenecessarilytakeasubstantialperiodoftimetogetreadyfortheirintendeduseor Borrowing costsdirectlyattributabletotheacquisition,constructionorproductionofqualifyingassets, Borrowing costs use. and atbanks,includingtermdeposits,assetssimilarinnaturetocash,whicharenotrestrictedas For thepurposeofstatementfinancialposition,cashandequivalentscompriseonhand demand andformanintegralpartoftheGroup’scashmanagement. maturity ofgenerallywithinthreemonthswhenacquired,lessbankoverdraftswhicharerepayableon into knownamountsofcash,aresubjecttoaninsignificantriskchangesinvalue,andhaveashort on handanddemanddeposits,shorttermhighlyliquidinvestmentsthatarereadilyconvertible For thepurposeofconsolidatedstatementcashflows,andequivalentscomprise Cash andcashequivalents down technicallyobsoleteornonstrategicassetsthathave beenabandonedorsold. charge whereusefullivesaredifferenttothosepreviously estimated,oritwillwrite-offwrite- of otherintangibleassetssimilarnatureandfunctions. TheGroupwillrevisetheamortisation other intangibleassets.Thisestimateisbasedonthehistorical experienceoftheactualusefullives The Groupdeterminestheestimatedusefullivesandrelated amortisationchargesfortheGroup’s
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67 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 68 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 . OPERATINGSEGMENTINFORMATION 5. SIGNIFICANTACCOUNTING JUDGEMENTSANDKEYESTIMATES 4. 31 July2011 Financial Statements Notes tothe d Fairvalueofaforwardcontract (d) Impairmentoftradeandotherreceivables (c) Impairmentofotherintangibleassets (b) Estimation uncertainty b imbsns Investment in,productionof,saleanddistributionoffilms — — Licensingofsoftwarebusiness (c) Ev — Filmbusiness (b) Entertainmentbusiness (a) services andhasthefollowingreportablesegments: For managementpurpose,theGroupisorganisedintobusinessunitsbasedontheirproductsand (31 March2011:Nil). value oftheforwardcontractGroupandCompanywasapproximatelyHK$26,148,000 factors couldaffectthereportedfairvalueoffinancialinstruments.Asat31July2011, adjustment factorstothestockprice,creditriskandvolatility.Changesinassumptionsaboutthese required inestablishingfairvalues.Thejudgementsincludeconsiderationofinputssuchas observable marketswherepossible,butthisisnotfeasible,adegreeofjudgement they aredeterminedusingvaluationtechniques.Theinputstothesemodelstakenfrom Where fairvalueoffinancialassetsandliabilitiescannotbederivedfromactivemarkets, period/year inwhichsuchestimatehasbeenchanged. will impactthecarryingvalueoftradeandotherreceivablesimpairmentin and estimates.Wheretheactualresultisdifferentfromoriginalestimate,suchdifference not becollectible.Theidentificationofimpairmentreceivablesrequirestheusejudgement debtor. Impairmentsarisewhereeventsorchangesincircumstancesindicatethatthebalancesmay and otherreceivables,includingthecurrentcreditworthinesspastcollectionhistoryofeach The Groupmakesimpairmentofreceivablesbasedonassessmentstherecoverabilitytrade suitable discountrateinordertocalculatethepresentvalue. Group toestimatethefuturecashflowsexpectedarisefromotherintangibleassetsanda intangible assetswithreferencetotheirvalue-in-use.Thevalue-in-usecalculationrequiresthe amount oftheotherintangibleassets.TheGroupmeasuresrecoverable intangible assetsmaybeimpaired.Ifanyindicationexists,theGroupestimatesrecoverable The Groupassessesattheendofeachreportingperiodwhetherthereisanindicationthatother
(Continued) (continued) telecommunications servicesinthePRC for useinconnectionwiththeprovisionofvalueadded Development andlicensingofsoftwaretechnology services ent organisationandprovisionofeventmanagement
(Continued) . OPERATINGSEGMENTINFORMATION 5. Segment liabilities Segment assets As at31July2011 Impairmentofotherintangibleassets Other materialnon-cashitem: Amortisationofotherintangibleassets Other materialitem: Segment loss Revenue fromexternalcustomers 31July 2011 Period from1April2011to Segment profitorloss,assetsandliabilities: bonds anddeferredtaxliabilities. Segment liabilitiesdonotincludecertainaccrualsandotherpayables,convertiblenotes, forward contract,certaincashandequivalentsothercorporateassets. Segment assetsdonotincludecertainproperty,plantandequipment,otherintangibleassets,a other operatingexpensesandfinancecosts. contract, marketingexpenses,certainadministrativeotheroperatinggains, financial statements.Segmentprofitsorlossesdonotincludeotherincome,fairvaluegainonaforward The accountingpoliciesoftheoperatingsegmentsaresameasthosedescribedinNote3.4to strategies. They aremanagedseparatelybecauseeachbusinessrequiresdifferenttechnologyandmarketing The Group’sreportablesegmentsarestrategicbusinessunitsthatofferdifferentproductsandservices. making decisionsaboutresourcesallocationandperformanceassessment. Management monitorstheresultsofGroup’soperatingsegmentsseparatelyforpurpose
Entertainment business K’0 K’0 K’0 HK$’000 HK$’000 HK$’000 HK$’000 5672,2 ,2 57,324 4,520 27,127 25,677 209 75 272 (5,606) (2,792) (725) (2,089) ,7 1 17,724 31 219 7,474 ,6 0 10,363 603 — 9,760
(Continued) ,4 2,541 2,541 — — 7 474 474 — —
business Film
of software Licensing uiesTotal business
69 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 70 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 . OPERATINGSEGMENTINFORMATION 5. 31 July2011 Financial Statements Notes tothe Segment profitorloss,assetsandliabilities: emn iblte — 18,983 — 1,337 — 17,646 1,271 4,249 (1,898) 2,438 1,271 4,249 1,315 2,438 — — 9,592 (3,213) — Segment liabilities Segment assets 1,968 As at31March2011 Impairment oftradeandotherreceivables 7,624 Impairment ofotherintangibleassets Other materialnon-cashitems: Amortisation ofotherintangibleassets Other materialitem: Segment profit/(loss) Revenue fromexternalcustomers Year ended31March2011 (continued)
(Continued)
(Continued)
Entertainment K’0 K’0 HK$’000 HK$’000 HK$’000 business
of software Licensing uiesTotal business
. OPERATINGSEGMENTINFORMATION 5. Loss fromreportablesegments Profit orloss Total assetsfromreportablesegments Assets Consolidated profit/(loss)beforetax Reconciliations ofoperatingsegmentinformation: Consolidated totalassets Fair valuegainonaforwardcontract Other income Unallocated amounts: Othercorporateassets Cashandcashequivalents Forward Otherintangibleassets contract Property,plantandequipment Unallocated amounts: Finance Other operatingexpenses costs Other operatinggains Administrative expenses Marketing expenses
(Continued)
1 April2011 Period from to 31July HK$’000 HK$’000 581,408 491,710 31 July 20,655 26,148 57,324 (2,956) (5,606) (4,383) (1,417) (6,376) 4,937 1,000 2011 2011 289 50 43 76
Year ended 31 March 31 March HK$’000 HK$’000 (45,736) (10,078) (31,849) 20,449 18,983 47,719 (1,898) (1,776) 2,261 4,560 1,466 2011 2011 (241) 106 — — — 71 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 72 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 . OPERATINGSEGMENTINFORMATION 5. 31 July2011 Financial Statements Notes tothe Reconciliations ofoperatingsegmentinformation: Total liabilitiesfromreportablesegments Liabilities Consolidated totalliabilities Total amortisationchargedfromreportablesegments —amortisation ofotherintangibleassets Other materialitem Total impairmentlossesfromreportablesegments —impairmentofotherintangibleassets Other materialnon-cashitem Consolidated amortisationcharges same astheconsolidatedtotals. Apart fromtheabove, totals ofothermaterialitemsdisclosedinthesegment informationarethe Consolidated impairmentlosses Accrualsandotherpayables Unallocated amounts: Convertible notes Convertible bonds Deferred taxliabilities Unallocated amounts Unallocated amounts (continued)
(Continued)
(Continued)
1 April2011 Period from to 31July HK$’000 HK$’000 277,153 289,566 31 July 7,724 4,659 2,541 3,085 2011 2011 544 480 474 30 — 6
Year ended 31 March 31 March HK$’000 HK$’000 21,215 24,676 2,946 1,271 2,456 2,438 1,271 2011 2011 515 18 — — — . OPERATINGSEGMENTINFORMATION 5. Hong Kong Customer A Entertainment business the period/yearissetoutbelow: Revenue derivedfromasinglecustomerwhichcontributedto10%ormoreoftheGroup’srevenuefor Information aboutmajorcustomers on locationofassets. Revenue informationisbasedonlocationofthecustomersandnon-currentassets Geographical information United StatesofAmerica Macau Mainland China Customer C Licensing ofsoftwarebusiness Customer B
1 April2011 Period from to 31July HK$’000 10,363 6,689 2,777 2011
(Continued) 897 eeu Non-currentassets Revenue —
Year ended 31 March HK$’000 8,200 1,122 9,592 2011 270 —
1 April2011 Period from to 31July HK$’000 HK$’000 31 July 12,887 12,787 6,400 2011 2011 100 603 — — —
Year ended 31 March 31 March HK$’000 HK$’000 6,026 3,624 2,402 1,968 1,122 2011 2011 — — — 73 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 74 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 . TURNOVERANDOTHERINCOME 6. 31 July2011 Financial Statements Notes tothe 7. FINANCE COSTS An analysisoftheGroup’sturnoverandotherincomeisasfollows: Interest income Other income Entertainment eventincome Turnover —FirstCompletionConvertibleNoteswhollyrepayable within five years Interest on: An analysisoffinancecostsisasfollows:
Licensing ofsoftwareincome Others —convertiblebondswhollyrepayablewithinfiveyears (continued)
1 April2011 1 April2011 Period from Period from to 31July to 31July HK$’000 HK$’000 10,363 10,413 9,760 4,383 4,288 2011 2011 603 41 50 95 Group Group 9
Year ended Year ended 31 March 31 March HK$’000 HK$’000 9,592 1,968 7,624 9,698 1,776 1,776 2011 2011 106 49 57 — . PROFIT/(LOSS)BEFORETAX 8. Depreciation * # Impairment ofotherintangibleassets* The Group’sprofit/(loss)beforetaxisarrivedataftercharging/(crediting): Salaries, bonusesandallowances Employee benefitexpense(includingdirectors’emoluments Amortisation ofotherintangibleassets* organised byco-investors Share ofnetincomefromentertainmentevents organised byco-investors* Share ofnetlossfromentertainmentevents Impairment oftradeandotherreceivables* Pension schemecontributions Equity-settled shareoptionexpense Auditors’ remuneration inrespect oflandandbuildings Minimum leasepaymentunderoperatingleases Other equity-settledshareoptionexpense Gain ondisposalofasubsidiary Loss ondisposalofitemsproperty,plantandequipment Theseitemsareincluded in“Otheroperatinggains”onthefaceofconsolidatedincomestatement. Theseitemsareincluded in“Otheroperatingexpenses”onthefaceofconsolidatedincomestatement. # # (Note 9) ):
1 April2011 Period from to 31July HK$’000 1,100 3,085 4,933 4,860 2011 476 480 167 (76) (87) 73 — — — — — Group
Year ended 31 March HK$’000 13,956 1,671 2,456 4,249 1,271 4,927 8,865 3,270 2011 680 333 610 164 — — 8 75 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 76 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 . DIRECTORS’ANDEMPLOYEES’ EMOLUMENTS 9. 31 July2011 Financial Statements Notes tothe (a) Directors’ emoluments follows: and thedisclosurerequirementsofSection161HongKongCompaniesOrdinance,areas of SecuritiesontheGrowthEnterpriseMarketStockExchange(the“GEM”ListingRules) Directors’ emolumentsfortheperiod/year,disclosedpursuanttoRulesGoverningListing Salaries andallowances Other emoluments: Fees remuneration disclosures. to 31July2011andtheyearendedMarch have beenincludedintheabovedirectors’ of grant,andtheamountincludedinfinancialstatements fortheperiodfrom1April2011 been recognisedintheincomestatementovervestingperiod,wasdeterminedatdate which aresetoutinNote29tothefinancialstatements.Thefairvalueofsuchoptions,has of theirservicestotheGroupundershareoptionschemeCompany,furtherdetails During theyearended31March2011,certaindirectorsweregrantedshareoptionsinrespect Pension schemecontributions Equity-settled shareoptionbenefits (continued)
1 April2011 Period from to 31July HK$’000 1,018 1,252 1,032 2011 220 14 — Group
Year ended 31 March HK$’000 2,168 2,037 4,717 4,241 2011 476 36 . DIRECTORS’ANDEMPLOYEES’ EMOLUMENTS 9. (a) Directors’ emoluments Lam KinNgok,Peter Executive Directors Period from1April2011to31July Luk HongMan,Hammond Etsuko Hoshiyama Chan ChiMing,Alvin Chan ChiKwong Lui SiuTsuen,Richard Yu Feng Wong KamChoi Yeung WaiHung,Peter Zhang Xi Chan ChiYuen Independent Non-executiveDirectors
(Note(i)) (Note (iv)) (Note (i)) (Note(i)) (Note(i)) (Note (iii))
(Continued) (Note(ii)) 2 ,1 41,252 160 14 — 1,018 — 220 160 01081 1,092 14 1,018 60 K’0 K’0 K’0 HK$’000 HK$’000 HK$’000 HK$’000 Fees 5382375 2 358 15 15——1515——1515——15 40——4040——4040——4040——40 6 169 334 169 4 4 4 165 330 165 — — —
(Continued) Salaries and allowances
contributions
Pension scheme
remuneration 77
MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 Total 78 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 . DIRECTORS’ANDEMPLOYEES’ EMOLUMENTS 9. 31 July2011 Financial Statements Notes tothe (a) Directors’ emoluments hn i10—8 202 198 202 202 — — — — 82 82 1,211 82 82 1,351 — 1,351 12 — — 12 — 12 120 206 116 120 817 120 817 993 522 522 — — — Wong KamChoi Yeung WaiHung,Peter Zhang Xi Chan ChiYuen Independent Non-executiveDirectors Etsuko Hoshiyama Luk HongMan,Hammond Chan ChiMing,Alvin Executive Directors Year ended31March2011 during theperiod/year. There wasnoarrangementunderwhichadirectorwaived oragreedtowaiveanyemoluments Resignedwitheffectfrom12September2011 (iv) Resignedwitheffectfrom1August2011 (iii) Retiredon20August2011 (ii) Appointed witheffectfrom16June2011 (i) Notes: (continued)
(Continued)
K’0 K’0 K’0 K’0 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Fees 7 2 804 — 328 — 476 7 ,3 ,6 64,717 36 2,168 2,037 476 ,3 ,4 63,913 36 1,840 2,037 —
Salaries and allowances
(Continued)
share-option
benefits Equity- settled contributions
Pension scheme remuneration Total . DIRECTORS’ANDEMPLOYEES’ EMOLUMENTS 9. (b) Employees’ emoluments period/year areasfollows: remaining three(yearended31March2011:three)non-director,highestpaidemployeesforthe two) directors,detailsofwhoseemolumentsaresetoutabove.Detailstheremuneration The fivehighestpaidemployeesduringtheperiodincludedtwo(yearended31March2011: bands isasfollows: The numberofnon-director,highestpaidemployeeswhoseremunerationfellwithinthefollowing Salaries andallowances Below HK$1,000,000 Pension schemecontributions
HK$1,500,001 toHK$2,000,000 HK$1,000,001 toHK$1,500,000
(Continued)
1 April2011 1 April2011 Period from Period from Number ofemployees to 31July to 31July HK$’000 2011 2011 913 918 — — Group Group 5 3 3
Year ended Year ended 31 March 31 March HK$’000 4,309 4,324 2011 2011 15 — 3 1 2 79 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 80 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 0 INCOMETAXCREDIT 10. 31 July2011 Financial Statements Notes tothe not generateanyassessableprofitsarisinginHongKongoroverseasduringtheperiod/year. No provisionforHongKongoroverseasprofitstaxhasbeenmadetheperiod/yearasGroupdid Profit/(loss) beforetax rates) totheeffectivetaxrates,areasfollows: tax creditattheeffectiverates,andareconciliationofapplicablerates(i.e.,statutory rates forthejurisdictionsinwhichCompanyandmajorityofitssubsidiariesaredomiciledto A reconciliationoftheincometaxexpense/(credit)applicabletoprofit/(loss)beforeatstatutory Deferred taxcreditfortheperiod/year Tax atthestatutorytaxrate Tax creditattheGroup’seffectiverate Expenses notdeductiblefortax other jurisdictions Adjustments fortaxrates Tax lossesnotrecognised Income notsubjecttotax differences Deferred taxarisingfromtemporary (continued) (Note 27)
K’0 % HK$’000 to 31July2011 343 (8,007.1) (3,443) ,4 6,837.2 2,940 1 April2011 Period from 30 (860.5) (370) 30 (860.5) (370) 2 1,227.8 528 3)(74.4) (32) 43 16.5 7
Group
1 April2011 Period from to 31July HK$’000 K’0 % HK$’000 (45,736) 104 (2.4) (16.5) (1,074) (7,546) 31 March2011 ,0 10.5 4,801 ,6 7.8 3,561 2011 28 (0.6) (268) 28 (0.6) (268) Year ended 370 5 0.6 258 Group
Year ended 31 March HK$’000 2011 268 3 EARNINGS/(LOSS)PERSHAREATTRIBUTABLETOTHEOWNERSOFPARENT 13. 12. DIVIDENDS PROFIT/(LOSS)ATTRIBUTABLETOOWNERSOFTHEPARENT 11. effect duringthe yearended31March2011. exercise ofoptions andtheconversionof alloutstandingconvertible bondsastheyhadananti-dilutive The calculationofdiluted loss persharefortheyearended31March2011 had notassumedthe dilutive effectduringtheperiod. assumed theconversionof theFirstCompletionConvertibleNotesassuchconversion hasananti- The calculationofdilutedearnings persharefortheperiodfrom1April2011to 31July2011hasnot inthebasicearnings/(loss)persharecalculation Weighted averagenumberofordinarysharesinissueused Shares basic earnings/(loss)persharecalculation Profit/(loss) attributabletoownersoftheparentusedin Earnings/(loss) The calculationofbasicearnings/(loss)pershareisbasedon: period/year. approximately 5,979,461,000(31March2011:2,306,229,000)inissueduringthe year attributabletoownersoftheparentandweightedaveragenumberordinaryshares The calculationofbasicearnings/(loss)pershareamountsisbasedontheprofit/(loss)forperiod/ the periodfrom1April2011to31July (year ended31March2011:Nil). The boardofdirectorstheCompanydoesnotrecommendpaymentanydividendinrespect has beendealtwithinthefinancialstatementsofCompany(Note30(b)). 2011 includesaprofitofHK$14,129,000(yearended31March2011:lossHK$41,719,000)which The consolidatedprofitattributabletoownersoftheparentforperiodfrom1April201131July
1 April2011 1 April2011 Period from Period from to 31July to 31July 5,979,461 HK$’000 Number ofshares 2011 2011 ’000 985
Year ended Year ended 2,306,229 31 March 31 March HK$’000 (43,887) 2011 2011 ’000 81 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 82 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 4 PROPERTY,PLANTANDEQUIPMENT 14. 31 July2011 Financial Statements Notes tothe Group Dsoas—(5)—(150) 1,441 15 704 — 1,324 — — (150) 79 14 510 — 38 1 194 Exchange realignment Disposals Additions At1April 2010 Cost: t3 uy21 3 6 8 1,287 (4) 15 4 586 (738) — — — 468 (738) (4) 15 4 2,010 233 — — — 1,324 — — 453 At31 July2011 233 Exchange Disposal ofasubsidiary realignment Disposals Additions At31 March2011and1April Dsoas—(2)—(126) 10 327 333 — — — 232 (126) 9 60 298 — 29 1 41 Exchange realignment Disposals Charge fortheyear At1April 2010 Accumulated depreciation: Dsoas—()—(4) 4 (275) — 167 — (275) (4) 131 544 4 — 22 — 232 — — 14 241 71 Exchange Disposalofasubsidiary realignment Disposals Chargefortheperiod At31March2011and1April t3 uy21 5238 436 88 263 85 At31July2011 t3 uy21 4 0 9 851 498 205 148 At31July2011 Net carryingamount: t3 ac 0112221021,466 1,092 212 162 At31March2011
(continued)
equipment, furniture K’0 K’0 K’0 HK$’000 HK$’000 HK$’000 HK$’000 itrseupetvhce Total vehicles equipment fixtures Office n optrMotor Computer and
5 OTHERINTANGIBLEASSETS 15. t3 ac 013 ,4 ,8 4,560 2,985 1,540 35 At31March2011 t3 uy21 6100—1,036 — 1,000 36 At31July2011 Net carryingamount: t3 uy21 1 96720,254 309 19,637 3,085 480 613 307 2,541 474 16,380 4 2 544 6 16,315 — — 61 — 4 At 31July2011 Exchange realignment Impairment Amortisation fortheperiod losses At 31March2011and1April Ecag elgmn 0 608 1,271 12,045 2,456 604 1,271 12,002 2,438 21,290 40 — 4 19,637 17 3 1,613 — — 1 40 Exchange realignment Impairment Amortisation fortheyear losses At 1April2010 impairment: Accumulated amortisationand At31 July2011 Ecag elgmn 237350 337 20,940 12 19,300 1 1,601 39 Exchange At 31March2011and1April realignment Adtos—100—1,000 855 19,085 — 828 18,472 1,000 575 26 — 38 1 Exchange realignment Additions At1April2010 Cost: Group
optrCu Customer Club Computer otaedbnue otat Total contracts debentures software K’0 K’0 K’0 HK$’000 HK$’000 HK$’000 HK$’000
83 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 84 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 6 FILMSUNDERPRODUCTION 16. OTHERINTANGIBLEASSETS 15. 31 July2011 Financial Statements Notes tothe from 1April2011to31July2011. 31 March2011:Nil)whichhasbeenrecognisedintheconsolidatedincomestatementforperiod reporting period.ThereviewledtotherecognitionofanimpairmentlossHK$544,000(yearended The Groupcarriedoutareviewoftherecoverableamountclubdebenturesatend HK$1,000,000) haveindefiniteusefullife. The clubdebenturesasat31July2011withanetcarryingamountofHK$1,000,000(31March2011: Club debentures Atbeginningofperiod/year Cost: discount rateusedinmeasuringthevalue-in-useasat31March2011was16.67%. customer contractsasat31March2011hadbeendeterminedonthebasisoftheirvalue-in-use.The recognised intheconsolidatedincomestatementforperiod/year.Therecoverableamountof an impairmentlossofHK$2,541,000(yearended31March2011:HK$1,271,000)whichhasbeen are attributabletotheGroup’slicensingofsoftwaresegment.Thereviewledrecognition reporting period,havingregardthemarketconditionsofGroup’ssoftware.Thecustomercontracts The Groupcarriedoutareviewoftherecoverableamountcustomercontractsatend communications operatorsinthePRC. telecommunications servicesandwhohaveestablishedcooperativearrangementswiththeleading who possessValue-AddedTelecommunicationOperationLicensestoprovidevalue-added Customer contractsrepresentsoftwarelicencewithtelecommunicationserviceproviders Customer contracts Atendofperiod/year Additions (continued)
(Continued)
HK$’000 31 July 14,054 14,054 2011 — Group
31 March HK$’000 2011 — — — nMscLmtd PRC/Mainland AnyMusic Limited* hm nvreLmtd ogKn 1ordinaryshare HongKong Champ UniverseLimited* rme odIvsmnsLmtdHn og1ordinary share Garden (formerlyknownasForest Limited) Media AsiaEntertainmentLimited HongKong Premier GoldInvestmentsLimited 7 INVESTMENTSINSUBSIDIARIES 17. Unlisted investments,atcost Name Particulars oftheprincipalsubsidiariesasat31July2011arefollows: # Less: Impairmentlosses AnimpairmentofHK$81,485,000(31March2011:HK$81,485,000) wasrecognisedforcertainunlisted was nochangeintheimpairmentaccountduringcurrentperiodandprioryear. determined withreferencetotheestimatedfairvalueofunderlyingassetsheldbysubsidiaries.There investments withacarryingamountofHK$81,488,000(31March2011:HK$81,489,000).Theprovisionwas China ogKn 100ordinary shares Hong Kong #
of HK$1 US$5,140,000 Registered capitalof of HK$1 ofHK$1each and operation registration incorporation/ Place of
0%—Provisionofmanagement — 100% 0%—Cinemaoperation — 100% capital registered share of issuedshare/ Nominal value 0%Development andlicensing 100% — 0%Entertainmentactivity 100% —
HK$’000 (81,485) 31 July 81,488
consulting services business servicesinthePRCand information telecommunication value-added the provisionof connection with technology of softwareand in services production 2011 Company Percentage ofequity ietIndirect Direct 3 attributable to teCmayPrincipalactivities theCompany
31 March HK$’000 (81,485) 81,489 2011 4 85 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 ei saMscLmtd ogKn 1ordinaryshare (Macao) Limited* Media AsiaPerformanceAgency WayMusic Limited) HongKong (formerly knownasSharp Media AsiaMusicPublishingLimited Media AsiaMusicLimited* Limited* Media AsiaEntertainment(Macao) Twinkle TalentManagementLimited) Limited* (formerlyknownas Media AsiaTalentManagement 1ordinaryshare UnitedKingdom Media AsiaFilms(UK)Limited* Choice DevelopmentLimited) (formerly knownasDynasty Media AsiaFilmProductionLimited (HK) Limited* Media AsiaFilmDistribution Limited* Media AsiaTVProgramDistribution Limited* Media AsiaVideoDistribution(HK) oa netimn iie*Hn og100,001 HongKong Rojam EntertainmentLimited* 86 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 7 INVESTMENTSINSUBSIDIARIES 17. 31 July2011 Financial Statements Notes tothe Name
aa Registeredcapital Macau 100ordinaryshares Hong Kong Registeredcapital Macau ogKn 1ordinaryshare Hong Kong 100ordinaryshares 1ordinaryshare Hong Kong Hong Kong ogKn 1ordinary share Hong Kong ogKn 1ordinaryshare Hong Kong (continued)
of HK$1 of MOP25,000 ofHK$1 each of GBP1 of MOP25,000 of HK$1 ofHK$1 each of HK$1 of HK$1 ofHK$1each ordinary shares of HK$1 and operation registration incorporation/ Place of
(Continued)
0%—Intellectualpropertyholding, — 100% capital registered share of issuedshare/ Nominal value 0%Musicproductionand 100% — 0%Entertainmentactivity 100% Musicpublishing 100% — Filmdistribution — 100% — Provisionofevents 100% — 0%Provisionofartiste 100% — Filmproduction 100% Filmdistribution 100% — — 0%Licensingoftelevision 100% — 0%Licensingoffilmrightsand 100% —
distribution
production consultancy services management and management service drama andfilmrights saleofvideoproducts services provisionofmanagement Percentage ofequity ietIndirect Direct attributable to teCmayPrincipalactivities theCompany Limited* Xinhua Entertainment(HongKong) BritishVirgin Xinhua EntertainmentLimited* 19. TRADE RECEIVABLES DUEFROMSUBSIDIARIES 18. INVESTMENTSINSUBSIDIARIES 17. Trade receivables The carryingamountsoftheduefromsubsidiariesapproximatetotheirfairvalues. The amountsduefromsubsidiariesareunsecured,interest-freeandhavenofixedtermsofrepayment. length. give detailsofothersubsidiarieswould,intheopiniondirectors,resultparticularsexcessive affected theresultsforperiod/yearorformedasubstantialportionofnetassetsGroup.To The abovetableliststhesubsidiariesofCompanywhich,inopiniondirectors,principally * Name significant concentrationof creditrisk.Tradereceivablesarenon-interest-bearing. balances arereviewedregularly byseniormanagement.Inviewoftheaforementioned, thereisno from 30to60days.TheGroup seekstomaintainstrictcontroloveritsoutstanding receivables.Overdue The Group’stradingterms with itscustomersaremainlyoncredit.Thecreditperiod generallyranges Impairment SubsidiarieswhosefinancialstatementswerenotauditedbyErnst&Young,HongKongoranothermember firm oftheErnst&YoungGlobalnetwork. ogKn 10ordinaryshares Hong Kong Hong Kong Islands/
ofHK$1 each of US$1 1 ordinaryshare and operation registration incorporation/ Place of
(Continued)
capital registered share of issuedshare/ Nominal value 0 Entertainmentbusiness 80% Investmentholding 100% — —
HK$’000 31 July (3,918) 3,415 7,333
2011 Percentage ofequity ietIndirect Direct Group attributable to teCmayPrincipalactivities theCompany
31 March HK$’000 (3,918) 4,822 8,740 2011 87 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 88 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 19. TRADE RECEIVABLES 31 July2011 Financial Statements Notes tothe and netofprovisions,isasfollows: An ageinganalysisoftradereceivablesasattheendreportingperiod,basedoninvoicedate Within 30days Movements inprovisionforimpairmentoftradereceivablesduringtheperiod/yearareasfollows: At beginningofperiod/year enhancements overthesebalances. of thereceivablesisexpectedtoberecovered.TheGroup doesnotholdanycollateralorothercredit receivables relatetocustomersthatwereindefault in settlementsandonlyaportionorno before provisionofHK$3,918,000(31March2011: HK$3,918,000). Theindividuallyimpairedtrade impaired tradedebtorsofHK$3,918,000(31March2011: HK$3,918,000)withagrosscarryingamount Included intheaboveprovisionforimpairmentof trade receivablesisaprovisionforindividually At endofperiod/year Over 90days 31 to60days 61 to90days Exchange realignment Impairment lossesreversed Impairment lossesrecognised (continued) (Continued)
HK$’000 HK$’000 31 July 31 July 2,436 3,415 3,918 3,918 2011 2011 542 231 206 — — — Group Group
31 March 31 March HK$’000 HK$’000 (1,129) 3,941 4,822 3,918 4,820 2011 2011 654 227 187 40 — 19. TRADE RECEIVABLES 0 PREPAYMENTS,DEPOSITS ANDOTHERRECEIVABLES 20. does notholdanycollateralorothercreditenhancementsoverthesebalances. a significantchangeincreditqualityandthebalancesarestillconsideredfullyrecoverable.TheGroup opinion thatnoprovisionforimpairmentisnecessaryinrespectofthesebalancesastherehasnotbeen a goodtrackrecordwiththeGroup.Basedonpastexperience,directorsofCompanyare Receivables thatwerepastduebutnotimpairedrelatetoanumberofindependentcustomershave for whomtherewasnorecenthistoryofdefault. Receivables thatwereneitherpastduenorimpairedrelatetoalargenumberofdiversifiedcustomers Neither pastduenorimpaired impaired isasfollows: The ageinganalysisoftradereceivablesthatarenotindividuallynorcollectivelyconsideredtothe balances relatetoreceivables forwhichtherewasnorecenthistoryofdefault. None oftheaboveassets is eitherpastdueorimpaired.Thefinancialassetsincluded intheabove Non-current portion Prepayments Over 180dayspastdue 1 to90dayspastdue 91 to180dayspastdue Portion classifiedascurrentportion Deposits andotherreceivables (Continued)
HK$’000 (17,589) 31 July 11,000 28,589 24,309 4,280 2011 ru Company Group
31 March HK$’000 (16,422) 16,422 14,875 1,547 2011 —
HK$’000 HK$’000 31 July 31 July (4,440) 2,436 3,415 4,440 3,797 2011 2011 317 662 643 — — Group
31 March 31 March HK$’000 HK$’000 (1,529) 3,868 4,822 1,529 1,529 2011 2011 415 539 — — — 89 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 90 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 21. FORWARD CONTRACT 31 July2011 Financial Statements Notes tothe
ConvertibleNotes,atfairvalue Forward contractonSecondCompletion volatilities, andprevailingmarket interestratesetc. taken intoaccountfactorsincluding adjustedweightedaveragemarketpricesofthe Company’sshares, Greater ChinaAppraisalLimited, anindependentfirmofprofessionalvaluers. Thevaluationshave determined withreferencetothevaluationsofforward contractasatthosedatesperformedby The fairvaluesoftheforwardcontractasatissue dateof9June2011and31Julywere March 2011:Nil)intheincomestatementforperiod from1April2011to31July2011. position andafairvaluegaininrespectoftheforward contractofHK$20,655,000(yearended31 HK$26,148,000 (31March2011:Nil)inrespectofthe forwardcontractinthestatementoffinancial As at31July2011,theGroupandCompany have recognisedaderivativefinancialassetof statement. date, andissubsequentlyremeasuredatfairvaluewith changesinfairvaluerecognisedtheincome the scopeofHKAS39,andisrecognisedatitsfairvalueasanassetoraliabilityoncommitment respect oftheissueSecondCompletionConvertibleNotesconstitutesaforwardcontractwithin regard, beforetheissueofSecondCompletionConvertibleNotes,SubscriptionAgreementin The CompanywascontractuallyobligatedtoissuetheSecondCompletionConvertibleNotes.Inthis Completion Date(i.e.,9June2011). Convertible Notesisexpectedtotakeplaceon9June2012,beingthefirstanniversaryofFirst Subject tofulfilmentofcertainconditions,completiontheissueSecondCompletion maturity dateattheprincipalamountoutstanding. Convertible Notes,theSecondCompletionNoteswillberedeemedbyCompanyon purchased orcancelledinaccordancewiththetermsandconditionsofSecondCompletion date whichisfivebusinessdaysprecedingthematuritydate.Unlesspreviouslyconverted,redeemed, period commencingonthefirstdayofSecondCompletionConvertibleNotesandexpiring Company’s ordinarysharesofHK$0.01eachataconversionpriceHK$0.02785pershareduringthe above). TheSecondCompletionConvertibleNotesareconvertible,attheoptionofholders,into amount ofHK$224,873,937(beingtheSecondCompletionConvertibleNotesreferredtoinnote1 conditionally agreedtosubscribefor3-yearzerocouponconvertiblenotesinanaggregateprincipal among otherterms,theCompanyconditionallyagreedtoissueSubscribersand Pursuant totheSubscriptionAgreementofwhichdetailshavebeensetoutinnote1above, (continued)
HK$’000 Group andCompany 31 July 26,148 2011
31 March HK$’000 2011 — 2 CASHANDEQUIVALENTS 22. 23. TRADE PAYABLES Less than30days as follows: An ageinganalysisoftradepayablesasattheendreportingperiod,basedoninvoicedate,is carrying amountsofthecashandequivalentsapproximatetotheirfairvalues. balances andtimedepositsaredepositedwithcreditworthybanksnorecenthistoryofdefault.The requirements oftheGroup,andearninterestatrespectiveshort-termtimedepositrates.Bank are madeforvaryingperiodsofbetweenonedayandthreemonthsdependingontheimmediatecash Cash atbanksearnsinterestfloatingratesbasedondailybankdepositrates.Short-termtimedeposits of foreignexchangecontrolbythegovernmentauthoritiesconcerned. currencies denominatedbalancesoutofMainlandChinaaresubjecttotherelevantrulesandregulations denominated cashandbankbalancesintoforeigncurrenciestheremittanceofsuch (“RMB”) amountedtoHK$12,435,000(31March2011:HK$2,036,000).TheconversionofRMB At theendofreportingperiod,cashandbankbalancesGroupdenominatedinRenminbi Cash andcashequivalents Cash andbankbalances Trade payablesarenon-interest-bearingandhaveanaverage credittermofonemonth. Time deposits
HK$’000 507,315 429,008 31 July 78,307 2011 ru Company Group
31 March HK$’000 20,449 11,696 8,753 2011
HK$’000 HK$’000 429,008 489,580 31 July 31 July 60,572 2,192 2011 2011 Group
31 March 31 March HK$’000 HK$’000 15,652 8,753 6,899 2011 2011 — 91 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 92 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 4 ACCRUALSANDOTHERPAYABLES 24. 31 July2011 Financial Statements Notes tothe 25. CONVERTIBLE NOTES
—afellowsubsidiary due otherpayablesareamounts to: Included inaccruals,and non-interest-bearing andhaveanaveragecredittermofonemonth. The carryingamountsofaccrualsandotherpayablesapproximatetotheirfairvalues.Otherare The relatedcompanyisajointly-controlledentityoffellowsubsidiary. amounts dueareunsecured,non-interest-bearingandhavenofixedtermsofrepayment. The balanceswiththeaboverelatedpartiesarosefromordinarycourseofbusinessCompany. HK$0.01 each intheCompanyataconversion priceofHK$0.02785 pershare. conversion right entitlingtherelevant holders tosubscribefora totalof7,231,118,192shares of Completion ConvertibleNotes inanaggregateprincipalamountofHK$201,386,642 carriesthe HK$0.01 eachintheCompany ataconversionpriceofHK$0.016pershare andpartoftheFirst conversion rightentitlingthe relevantholderstosubscribeforatotalof10,625,000,000 sharesof Completion ConvertibleNotes inanaggregateprincipalamountofHK$170,000,000 carriesthe The FirstCompletionConvertible Noteswereissuedtotheholderson9June2011. PartoftheFirst Convertible Notesandexpiringonthedatewhichisfive businessdaysprecedingthematuritydate. ordinary sharesofHK$0.01eachduringtheperiodcommencing onthefirstdayofFirstCompletion The FirstCompletionConvertibleNotesareconvertible, attheoptionofholders,intoCompany’s amount ofHK$371,386,642(beingtheFirstCompletion ConvertibleNotesreferredtoinNote1above). conditionally agreedtosubscribefor3-yearzerocoupon convertiblenotesinanaggregateprincipal among otherterms,theCompanyconditionallyagreed toissuetheSubscribersand Pursuant totheSubscriptionAgreementofwhich detailshavebeensetoutinNote1above, First CompletionConvertibleNotes —arelatedcompany (continued)
HK$’000 31 July 2011 160 150 310 ru Company Group
31 March HK$’000 2011 — — —
HK$’000 HK$’000 277,153 Group andCompany 31 July 31 July 2011 2011 150 150 —
31 March 31 March HK$’000 HK$’000 2011 2011 — — — — 26. CONVERTIBLE BONDS 25. CONVERTIBLE NOTES a ConvertiblebondsintheprincipalamountofHK$25,000,000 (a) the prevailingmarketinterestrateasat31July2011. approximately HK$262,263,000.Thefairvaluewascalculated bydiscountingthefuturecashflowsat The fairvalueoftheliabilitycomponentFirstCompletion ConvertibleNotesat31July2011was component. 31 July2011wascalculatedbyapplyinganeffectiveinterestrateof10.8%perannumtotheliability The interestchargedfortheperiodfromdateofissueFirstCompletionConvertibleNotesto Liability componentat31July2011 Interest charged Liability componentatdateofissue Direct transactioncostsattributabletotheliabilitycomponent Equity component Face valueofconvertiblenotesissued liability andequitycomponents,asfollows: The netproceedsreceivedfromtheissueofFirstCompletionConvertibleNotesweresplitasto equity componentandisincludedaspartofshareholders’equity. interest rateforasimilarnotewithoutconversionoption.Theresidualamountisassignedasthe The fairvalueoftheliabilitycomponentwasestimatedatissuedateusinganequivalentmarket redeemed bytheCompanyonmaturitydate(i.e.8June2014)atprincipalamountoutstanding. conditions oftheFirstCompletionConvertibleNotes,Noteswillbe Unless previouslyconverted,redeemed,purchasedorcancelledinaccordancewiththetermsand per annum,payable semi-annuallyinarrears on31Marchand30September ineachyear. attaching totheconvertible bondswasnotexercised.Thecarriedinterest atarateof2% The convertiblebondswould beredeemedatparon29April2013ifthe conversion right bond note. issue ofthebondsandtheir settlementdate.Thebondswereconvertibleat20 shares perHK$1 convertible intoordinarysharesofHK$0.01eachinthe Companyatanytimebetweenthedateof The convertiblebondswereissuedtothebondholder on30April2010.Thesaidbondswere (Continued)
Group and Company HK$’000 277,153 272,865 371,387 (89,909) 31 July (8,613) 4,288 2011 93 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 94 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 26. CONVERTIBLE BONDS 31 July2011 Financial Statements Notes tothe a ConvertiblebondsintheprincipalamountofHK$25,000,000 (a) b Shareoptions intheprincipalamountofHK$12,500,000 (b) iblt opnn t3 uy21 — (459) (4,747) 19,898 21,215 25,000 (355) Liability componentat31July2011 Conversion ofconvertiblebonds Interest charged Liability componentat31March2011and1April Interest paidorpayable Interest charged Liability componentatdateofissue Direct transactioncostsattributabletotheliabilitycomponent Equity component Face valueofconvertiblebondsissued equity components,asfollows: The netproceedsreceivedfromtheissueofconvertiblebondsweresplitastoliabilityand 250,000,000 ordinaryshares ofHK$0.01eachatthepriceHK$0.05pershare(Note 28(b)). Upon exerciseoftheshareoptionsbyoptionholder, on5May2011,theCompanyissued equity assubscriptionrightreserveat31March2011. The optionfeeofHK$2,500,000receivedduringtheyear ended31March2011wasrecognisedin exercisable foraperiodofthreeyearsfromthedate issue. ordinary sharesofHK$0.01eachintheCompanyatan optionpriceofHK$0.05pershare, On 30April2010,theCompanygrantedtooption holdertosubscribefor250,000,000 at theprevailingmarketinterestrateas31March2011. approximately HK$21,593,000.Thisfairvaluewascalculatedbydiscountingthefuturecashflows The fairvalueoftheliabilitycomponentconvertiblebondsat31March2011was per annumtotheliabilitycomponent. Interest chargedfortheperiod/yearwascalculatedbyapplyinganeffectiveinterestrateof9.4% (continued) (Continued) (Note 28(a))
(Continued)
Group and Company HK$’000 (21,310) 1,776 95 7 DEFERREDTAXLIABILITIES 27. xhnedfeecs—44 (54) 4 24 — 759 — 515 24 (54) 759 366 — — 149 Exchange differences Disposal ofasubsidiary during theperiod Deferred taxcreditedtotheincomestatement At 31March2011and1April Exchange differences statement duringtheyear Deferred taxcharged/(credited)totheincome At 1April2010 Group Movements indeferredtaxliabilitiesduringtheperiod/yearwereasfollows: t3 uy21 5—95 — 95 available againstwhichthetaxlossescanbeutilised. that havebeenloss-makingforsometimeanditisnot consideredprobablethattaxableprofitswillbe Deferred taxassetshavenotbeenrecognisedinrespect oftheselossesastheyhaveariseninsubsidiaries taxable profits. 2011: approximatelyHK$4,977,000)thatwillexpireinonetofiveyearsforoffsettingagainstfuture The GroupalsohastaxlossesarisinginMainlandChinaofapproximatelyHK$5,555,000(31March of thecompaniesinwhichlossesarose. approximately HK$46,885,000)thatareavailableindefinitelyforoffsettingagainstfuturetaxableprofits The GrouphastaxlossesarisinginHongKongofapproximatelyHK$64,122,000(31March2011: At 31July2011 (Note 10) (Note 10)
depreciation Accelerated K’0 K’0 HK$’000 HK$’000 HK$’000 4 47 (268) (417) 149 tax 30 (370) (370) —
intangible sesTotal assets Other
95 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 96 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 Subscription ofshares Exercise ofshareoptions Conversion ofconvertiblebonds scheme Shares issuedundertheshareoption Nt 6a)(a) (Note 26(a)) 28. SHARE CAPITAL 31 July2011 Financial Statements Notes tothe c PursuanttotheSubscriptionAgreement ofwhichthedetailshavebeensetoutinNote1above,Company (c) On5May2011,theCompanyissued250,000,000ordinary sharesofHK$0.01eachatthepriceHK$0.05 (b) Uponreceipt ofanoticefromthebondholderrequestingforfullconversionconvertiblebondson (a) Notes: Balance attheendofperiod/year Balance atthebeginningof Movements inissuedsharecapitaloftheCompanyduringperiod/yearareasfollows: Ordinary sharesofHK$0.01each Issued andfullypaid: OrdinarysharesofHK$0.01each Authorised: included inNote29to thefinancial statements. Details ofthe Company’sshareoption scheme andtheshareoptions issuedunderthescheme are Share options the period/year issue ofthosesharesamounted toapproximatelyHK$118,614,000(beforeexpense). issued on9June2011atotal of6,918,343,209ordinarysharesHK$0.01each.The proceeds fromthe per shareuponexerciseofthe share optionsbytheoptionholder. per sharewithaprincipalamountofHK$25,000,000. 18 April2011,theCompanyissued500,000,000ordinaryshares ofHK$0.01eachatthepriceHK$0.05 Nt )(c) (Note 1) Nt 6b)(b) (Note 26(b)) (continued) Notes
Period from1April2011 ubro Nominal Number of ubro Nominal Number of 01027101,103 10,110,257 01027101,103 10,110,257 500,000 50,000,000 ,0,1 23,071 2,307,114 ,1,4 69,184 6,918,343 5,0 2,500 5,000 1,348 250,000 500,000 134,800 hrsvalue shares hrsvalue shares to 31July2011 31 July2011 00HK$’000 ’000 00HK$’000 ’000
00000500,000 50,000,000 ubro Nominal Number of ubro Nominal Number of ,0,1 23,071 2,307,114 ,0,1 23,071 2,307,114 23,061 2,306,114 31 March2011 31 March2011 hrsvalue shares hrsvalue shares ,0 10 1,000 00HK$’000 ’000 00HK$’000 ’000 Year ended —— —— ——
9 SHAREOPTIONSCHEME 29. (g) Anygrantofshareoptionstoasubstantialshareholderoranindependentnon-executive director (f) (e) (d) TheCompanymayseekapprovaloftheCompany’sshareholdersatgeneralmeetingforrefreshing (c) Thetotalnumberofshareswhichmaybeissueduponexerciseallshareoptionstogranted (b) (a) The principaltermsoftheShareOptionSchemeare: latter date. Stock Exchange)and,unlessotherwisecancelledoramended,willremaininforcefor10yearsfromthe became effectiveon24November2009(beingthedateofconditionallistingapprovalissuedby the GrouporanyInvestedEntity.TheShareOptionSchemewasadoptedon19November2009and suppliers, customers,advisors,consultants,agents,contractors,andshareholdersofanymember participants includefull-timeandpart-timeemployees,executivedirectors,non-executive are valuabletotheGroupandanyInvestedEntity(asdefinedinShareOptionScheme).Eligible to enabletheGrouprecruitandretainhigh-caliberemployeesattracthumanresourcesthat providing incentivesandrewardstoeligibleparticipantsfortheircontributiontheGroupand/or The Companyoperatesashareoptionscheme(the“ShareOptionScheme”)forthepurposeof together with paymentofanominalconsideration ofHK$1forthegrant bythegrantee. The offerofagrantshare optionsmaybeacceptedwithin28daysfromthe dateofoffer, approval inadvanceatageneral meeting. date ofgrant)inexcess HK$5 million,withinany12-monthperiod,issubject toshareholders’ issue atanytimeorwithan aggregatevalue(basedonthepriceofCompany’s sharesatthe of theCompany,ortoanytheirassociates,inexcess of0.1%thesharesCompanyin executive directors. Company, ortoanyoftheirassociates,issubjectapproval inadvancebytheindependentnon- Any grantofshareoptionstoadirector,chiefexecutive orsubstantialshareholderofthe approval atageneralmeetingwithsuchparticipantand hisassociatesabstainingfromvoting. at anytime.Anyfurthergrantofshareoptionsinexcess ofthislimitissubjecttoshareholders’ options) inany12-monthperiodmustnotexceed1% ofthesharesCompanyinissue options grantedtoeacheligibleparticipant(includingbothexercisedandoutstandingshare Subject to(f)below,themaximumnumberofsharesbeissueduponexerciseshare approval ofthelimit. limit asrefreshedmustnotexceed10%ofthetotalnumbersharesinissueatdate issued uponexerciseofallshareoptionstobegrantedundertheShareOptionScheme the 10%limitunderShareOptionSchemesavethattotalnumberofshareswhichmaybe in issueasat19November2009(the“SchemeLimit”). under theShareOptionSchememustnotinaggregateexceed10%oftotalnumbershares Company fromtimetotime. scheme oftheCompanymustnotinaggregateexceed30%issuedsharecapital granted andyettobeexercisedundertheShareOptionSchemeanyothershareoption The maximumnumberofsharestobeissueduponexercisealloutstandingshareoptions 97 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 98 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 9 SHAREOPTIONSCHEME 29. 31 July2011 Financial Statements Notes tothe Details oftheshareoptionsoutstandingduringperiod/yearareasfollows: Company. Share optionsdonotconferrightsontheholderstodividendsorvoteatgeneralmeetingsof Theexercisepriceoftheshareoptionsisdeterminedby thedirectors,butmustnotbelowerthan (i) Theexerciseperiodoftheshareoptionsgrantedisdeterminedbydirectorsprovidedthatsuch (h) ofthe period/year Outstanding atthebeginning endoftheperiod/year Outstanding atthe Exercised duringtheperiod/year Granted duringtheperiod/year year. Noshare optionsweregrantedduring theperiodfrom1April2011 to31July2011. year ended31 March2011wasHK$8,197,000 whichwasrecognised asashareoptionexpense forthat from thedateofgrant(i.e. 15November2010).Thefairvalueoftheshareoptions grantedduringthe The exerciseperiodofallthe shareoptionsgrantedduringtheyearended31March 2011is10years were exercisedduringtheperiod wasHK$0.255pershare(31March2011:HK$0.285). The weightedaverageclosing priceoftheSharesimmediatelybeforedateson whichshareoptions Theexercisepriceoftheshareoptionsissubject toadjustmentincaseofrightsissueorotherspecificchanges * endoftheperiod/year Exercisable atthe period/year Lapsed/cancelled duringthe
shares. immediately precedingthedateofoffergrant;and(iii)nominalvalueCompany’s shares asstatedintheStockExchange’sdailyquotationssheetsforfivetradingdays quotations sheetonthedateofoffergrant;(ii)averageclosingpriceCompany’s the highestof(i)closingpriceCompany’ssharesasstatedinStockExchange’sdaily determination dateoftheShareOptionScheme,ifearlier. period mustnotbemorethantenyearsfromthedateofoffergrantshareoptionsor in theCompany’ssharecapital. (continued) (Continued)
hr pin pershare share options 148000 0.198 (134,800,000) 2,0,0 0.198 229,600,000 9,0,0)0.198 (94,800,000) Period from1April2011 ubro Exerciseprice* Number of
to 31July2011 —— —— ——
HK$
hr pin pershare share options 3,0,0 0.198 230,600,000 2,0,0 0.198 229,600,000 2,0,0 0.198 229,600,000 Year ended31March2011 10000 0.198 (1,000,000) ubro Exerciseprice* Number of —— ——
HK$ 9 SHAREOPTIONSCHEME 29. in theCompany,representing 0.006%oftheCompany’ssharesinissueasatthat date. shares) andmightgrantfurther optionstosubscribeforamaximumof786,440shares ofHK$0.01each represented approximately 0.72%oftheCompany’ssharesinissueatthatdate (13,140,257,612 entitling thegranteetosubscribe for94,025,000sharesofHK$0.01eachin the Company,which At thedateofapproval these financialstatements,theCompanyhadanoutstanding shareoption 2011 aresetoutintheCompany’sannouncementdated 26August2011. of granttheoptionwasHK$0.2042pershare.Further detailsoftheoptiongrantedon26August range fromHK$0.2042toHK$0.26546pershare.The closing priceoftheCompany’ssharesatdate first tranchewillstartfromthetwelfthmonthafter CommencementDate,andtheexerciseprices will bedividedintothreetrancheswithdifferentvesting andexerciseperiods.Theperiodofthe 0.581 officer oftheCompanywitheffectfrom6September 2011(the“CommencementDate”)).Theoption 65.35% 0.295% granted toaneligibleparticipant(whowasappointed anexecutivedirectorandthechief On 26August2011,anoptiontosubscribeforatotal of94,025,000sharestheCompanywas HK$0.198 Listing RulesandRule23.01(4)oftheGEMRules. 15November2010 meeting heldon22October2011pursuanttotherequirementsofRule17.01(4)MainBoard The refreshmentoftheSchemeLimitwasalsoapprovedbyshareholderseSunataspecialgeneral passing therelevantresolution. 1,011,025,761 shares,representing10%ofthetotalissuedsharesCompanyasatdate the SchemeLimitallowingCompanytograntfurtheroptionsforsubscriptionofupatotal annual generalmeetingoftheCompanyheldon20August2011forapprovingrefreshment In compliancewithChapter23oftheGEMListingRules,shareholderspassedaresolutionat At 31July2011,theCompanyhadnoshareoptionoutstandingunderShareOptionScheme. No otherfeatureoftheoptionsgrantedwasincorporatedintomeasurementfairvalue. and behaviouralconsiderations. adjusted, basedontheGroup’sbestestimate,foreffectsofnon-transferability,exerciserestrictions a periodequaltotheexpectedlifeofshareoptions.Theusedinmodelhasbeen Expected volatilitywasdeterminedbycalculatingthehistoricalofCompany’ssharepricefor Expected lifeofoption(year) Risk-free interestrate(%) Expected volatility(%) Dividend yield(%) Exercise pricepershare Date ofgrant used: conditions uponwhichtheshareoptionsweregranted.Thefollowingtablelistsinputstomodel estimated asatthedateofgrant,usingaBlack-Scholesmodel,takingintoaccounttermsand The fairvalueofequity-settledshareoptionsgrantedduringtheyearended31March2011was (Continued)
— 99 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 su fafradcnrc ,9 5,493 — (2,751) — — — — — 5,493 — (2,751) — — (3,628) — cancellationofshareoptions reserveuponlapseor Transfer ofshare-basedpayment Issue ofaforwardcontract Costs ofissueconvertiblenotes Issue ofconvertiblenotes scheme Shares issuedundershareoption Share issueexpense Subscription ofshares Exercise ofshareoptions Conversion ofconvertiblebonds ot fiseo ovril od 8)———(83) — — — (83) — — share options Proceeds fromissueof Costs ofissueconvertiblebonds Issue ofconvertiblebonds Share-based payments At 31July2011 t3 ac 01ad1Arl21 2 445464250811(985 (9,779) (69,805) 8,161 2,500 4,664 44,475 226 for theperiod comprehensive income Profit fortheperiodandtotal At 31March2011and1April t1Arl21 445———(806 16,391 (28,086) — — — 44,475 2 option scheme Shares issuedundershare comprehensive lossfortheyear Loss fortheyearandtotal At 1April2010 (Note 26(a)) (Note 26(a)) (Note 28) (Note 26(b)) 100 (Note 28) MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 (Note 28(c)) (Note 26(b)) (Note 25) 30. RESERVES 31 July2011 Financial Statements Notes tothe (b) Company (a) Group
year arepresentedintheconsolidatedstatementofchangesequity. The amountsoftheGroup’sreservesandmovementsthereinforcurrentperiodprior 0,1 4459,5 5,0)194,431 (52,306) — — 92,651 44,475 109,611 013———(,9)—25,342 — 10,000 16,286 — — (4,791) — — — (2,500) — — — — (4,664) — — 30,133 49,430 12,500 20,950 224——— 999———89,909 — — — 89,909 — — ———— ,4 4,747 — — — 4,747 — — ———— ————— ,0 2,500 — — 2,500 — — — ————— (continued) ————— —————
rmu otiue aia ih payment right Capital Contributed premium K’0 K’0 K’0 K’0 K’0 K’0 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 con upu eev eev eev ossTotal losses reserve reserve reserve surplus account Share
Nt )(oei)(Noteiii) (Noteii) (Note i)
330 ,7 — 3,370 (3,370) ,9 8,197 — 8,197
3)—188 — (36) Subscription
4,1)(41,719) (41,719) 41914,129 14,129
Share- based 49,430 (3,628) Accumulated 1 DISPOSALOFASUBSIDIARY 31. 30. RESERVES ano ipslo usday76 463 54 Gain ondisposalofasubsidiary Net assetsdisposedof Deferred taxliabilities Cash andcashequivalents Prepayments, depositsandotherreceivables Property, plantandequipment The netassetsofOrientalBrandatthedatedisposal wereasfollows: and purchasetransactionwascompletedon28July2011. Brand Limited(“OrientalBrand”)foraconsiderationofapproximatelyHK$608,000.Theaforesaidsale party, pursuanttowhichtheCompanyagreeddisposeofitsentire100%equityinterestinOriental On 28July2011,theCompanyenteredintoasaleandpurchaseagreementwithanindependentthird (b) Company Cash consideration ii Subscriptionrightreserve (iii) (ii) Capital reserve (i) Contributed surplus Notes: options. subscription rightreserveistransferredtosharepremiumaccountupontheexerciseof Subscription rightreserverepresentsthenetproceedsreceivedfromissueofshareoptions.The convertible notes/convertiblebondsinNotes25and26tothefinancialstatements,respectively. bonds issuedbytheCompanyrecognisedinaccordancewithaccountingpoliciesadoptedfor The capitalreserverepresentsthevalueofunexercisedequitycomponentconvertiblenotes/ therealisablevalueofitsassets wouldtherebybelessthantheaggregateofitsliabilitiesand — itis,orwouldafterthepaymentbe,unabletopayitsliabilitiesastheybecomedue; — contributed surplusif: distribution. However,theCompanycannotdeclareorpayadividend,makedistributionoutof Under theBermudaCompaniesAct,contributedsurplusaccountofCompanyisavailablefor in 2009. accumulated lossesoftheCompanyasaresultCapitalReorganisationeffected Contributed surplusrepresentstheneteffectofcapitalreductionandelimination
(Continued)
issued sharecapitalandpremiumaccounts. (Continued)
HK$’000 532 608 (54) 69 101 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 102 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 1 DISPOSALOFASUBSIDIARY 31. 31 July2011 Financial Statements Notes tothe 32. COMMITMENTS ahcnieaint eev 608 (69) Cash andcashequivalentsdisposedof Cash considerationtoreceive An analysisofthecashflowsinrespectdisposalasubsidiaryisasfollows: uigtepro rm1Arl21 o3 uy21 (69) (a) Capital commitment Note: during theperiodfrom1April2011to31July Net cashoutflowinrespectofthedisposalasubsidiary Less: Cashconsiderationreceivedsubsequenttotheendofreportingperiod TheconsiderationwasrecordedasareceivableoftheGroupat31July2011.Subsequentto for, asfollows: As 31July2011,theGrouphadfollowingcapitalcommitment,contractedbutnotprovided commitment. At theendofreportingperiod,Company did nothaveanyothersignificantcapital Capital contributionpayabletoajointventurebeestablished 2011, thereceivablewasfullysettledincashbypurchaser. (continued)
(Continued)
(Note) HK$’000 31 July 3,555 2011 Group
31 March HK$’000 HK$’000 2011 (608) 539 — 3 RELATEDPARTYTRANSACTIONS 33. 32. COMMITMENTS Further detailsofdirectors’ emoluments areincludedinNote9tothefinancialstatements. Short termemployeebenefits Compensation ofkeymanagementpersonneltheGroup: had thefollowingmaterialtransactionswithrelatedpartiesduringperiod/year: In additiontothetransactionsandbalancesdetailedelsewhereinthesefinancialstatements,Group Operatingleasecommitments (b) Post-employment benefits Equity-settled shareoptionexpense commitments (31March2011:Nil). At theendofreportingperiod,Companyhadnoothersignificantoperatinglease Within oneyear operating leasesfallingdueasfollows: At 31July2011,theGrouphadtotalfutureminimumleasepaymentsundernon-cancellable (31 March2011:onetotwoyears). arrangements. Leasesforpropertiesarenegotiatedtermsrangingfromsixmonthstotwoyears As 31July2011,theGroupleasedcertainofitsofficepremisesunderoperatinglease
(Continued)
Period from to 31July HK$’000 HK$’000 31 July 1 April 2,151 2,170 2011 2011 583 19 — Group Group
Year ended 31 March 31 March HK$’000 HK$’000 2,168 6,822 9,041 2011 2011 806 51 103 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 104 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 4 FINANCIALINSTRUMENTSBYCATEGORY 34. 31 July2011 Financial Statements Notes tothe 31 July2011 Financial assets Group period areasfollows: The carryingamountsofeachthecategoriesfinancialinstrumentsasatendreporting Trade receivables Cash andcashequivalents Forward contract deposits andotherreceivables Financial assetsincludedinprepayments, ahadcs qiaet 20,449 1,184 Cash andcashequivalents depositsandotherreceivables Financial assetsincludedinprepayments, Trade receivables 31 March2011 (continued)
eevbe rfto osTotal profitorloss receivables on n through Loans and K’0 K’0 HK$’000 HK$’000 HK$’000 1,9 618540,338 507,315 26,148 — 514,190 507,315 ,6 3,460 3,415 — — 3,460 3,415 61826,148 26,148 —
fair value Financial assets at
receivables Loans and HK$’000 26,455 4,822 4 FINANCIALINSTRUMENTSBYCATEGORY 34. Cash andcashequivalents Forward contract depositsandotherreceivables Financial assetsincludedinprepayments, Due fromsubsidiaries 31 July2011 Financial assets Company Trade payables Financial liabilities Group Convertible bonds Convertible notes Financial liabilitiesincludedinaccrualsandotherpayables
(Continued)
(Continued)
eevbe rfto osTotal profitorloss receivables on n through Loans and K’0 K’0 HK$’000 HK$’000 HK$’000 4,3 618572,683 489,580 26,148 — 546,535 489,580 619—56,189 — 56,189
6 766 — 766 amortised cost 61826,148 26,148 — 31 July2011 liabilities at
Financial HK$’000 277,153 287,207 fair value Financial assets at 7,862 2,192 —
31 March2011
amortised cost liabilities at HK$’000 Financial 21,215 24,161 2,946 — — 105 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 106 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 4 FINANCIALINSTRUMENTSBYCATEGORY 34. 31 July2011 Financial Statements Notes tothe 31 March2011 Company ahadcs qiaet 15,652 158 Cash andcashequivalents deposits andotherreceivables Financial assetsincludedinprepayments, Due fromsubsidiaries Financial liabilities Financial liabilitiesincludedinaccrualsandotherpayables Convertible bonds Convertible notes
(Continued) (continued)
(Continued)
amortised cost 31 July2011 liabilities at Financial HK$’000 280,826 277,153 3,673 —
31 March2011
amortised cost liabilities at receivables Loans and HK$’000 HK$’000 Financial 19,254 23,147 21,215 35,064 1,932 — 5 FAIRVALUEHIERARCHY 35. nta eonto ffi au n9Jn 015,493 20,655 — At 31July2011 Fair valuegainrecognisedintheincomestatement Initial recognitionoffairvalueon9June2011 At 1April2010,31March2011and Forward contract Movements infairvaluemeasurementLevel3duringtheperiod/yearwereasfollows: measured atfairvalueinLevel3. As at31July2011,theforwardcontractamountingtoHK$26,148,000(31March2011:Nil)was Level 3: Level 2: fairvaluesmeasuredbasedonquoted prices(unadjusted)inactivemarketsforidenticalassets Level 1: instruments: The Groupusesthefollowinghierarchyfordetermininganddisclosingfairvaluesoffinancial (unobservable inputs) significant effectontherecordedfairvaluearenotbasedobservablemarketdata fair valuesmeasuredbasedonvaluationtechniquesforwhichanyinputshavea significant effectontherecordedfairvalueareobservable,eitherdirectlyorindirectly fair valuesmeasuredbasedonvaluationtechniquesforwhichallinputshavea or liabilities
Group and Company HK$’000 26,148 107 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 108 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 6 FINANCIALRISKMANAGEMENTOBJECTIVESANDPOLICIES 36. 31 July2011 Financial Statements Notes tothe managing eachoftheserisksandtheyaresummarisedasfollows: issue derivativefinancialinstrumentsfortradingpurposes.Thedirectorsreviewandagreepolicies not usedanyderivativesandotherinstrumentsforhedgingpurposes.TheGroupdoesholdor on itsriskmanagement.AstheGroup’sexposuretotheserisksiskeptaminimum,Grouphas manage theGroup’sexposuretotheserisks.Generally,Groupintroducesconservativestrategies interest raterisk.ThedirectorsoftheCompanymeetperiodicallytoanalyseandformulatemeasures The mainrisksarisingfromtheGroup’sfinancialinstrumentsareforeigncurrencyrisk,creditriskand trade receivablesandpayables,whicharisedirectlyfromitsoperations. funds fortheGroup’soperations.TheGrouphasvariousotherfinancialassetsandliabilitiessuchas contract andcashequivalents.Themainpurposeofthesefinancialinstrumentsistoraise The Group’sprincipalfinancialinstrumentscompriseconvertiblenotes/convertiblebonds,aforward fHn ogdla ekn gis M 1,863 5 If HongKongdollarweakensagainstRMB 31 March2011 If HongKongdollarweakensagainstRMB 31 July2011 to areasonablypossiblechangeintheRMBexchangerate,withallothervariablesheldconstant. The followingtabledemonstratesthesensitivityofGroup’sequityatendreportingperiod and willconsiderappropriatehedgingmeasuresinthefutureasmaybenecessary. However, theGroupwillconstantlyrevieweconomicsituationanditsforeignexchangeriskprofile At present,theGroupdoesnotintendtoseekhedgeitsexposureforeignexchangefluctuations. exposed toforeignexchangeriskarisingfromtheexposureofRMBagainstHongKongdollars. Certain subsidiariesoftheCompanyhavetransactionsdenominatedinRenminbi(“RMB”).TheGroupis Foreign currencyrisk (continued)
nraei Increase Increase in M aeinequity RMB rate HK$’000 % 1,091 5
6 FINANCIALRISKMANAGEMENTOBJECTIVESANDPOLICIES 36. b Duefromanagent oftheGroup’sentertainmentbusiness (b) Duefromtwomajorcustomers oftheGroup’slicensingsoftwarebusiness (a) an agentoftheGroup’sentertainmentbusiness. trade receivablesareduefromtwomajorcustomersoftheGroup’slicensingsoftwarebusinessand For outstandingtradereceivables,theGrouphassignificantconcentrationofcreditriskasmajority credit-ratings assignedbyinternationalcredit-ratingagencies. The creditriskonbankandcashbalancesislimitedbecausethecounterpartiesarebankswithhigh carrying amountsoftheseinstruments. other receivables,arisesfromdefaultofthecounterparty,withamaximumexposureequalto The creditriskoftheGroup’sfinancialassets,whichcomprisecashandequivalents,trade significant. receivable balancesaremonitoredonanongoingbasisandtheGroup’sexposuretobaddebtsisnot customers whowishtotradeoncredittermsaresubjectverificationprocedures.Inaddition, The Grouptradesonlywithrecognisedandcreditworthythirdparties.ItistheGroup’spolicythatall Credit risk monitored bythedirectors. The Grouphaspoliciesinplacetomonitorcreditrisk. Theamountduefromtheagentisclosely receivables. uncertain. Asaresult,thedirectorsdeterminedtomake aprovisionofthesameamountfortrade HK$3,918,000 (yearended31March2011:HK$3,918,000)(Note19)fromthesecustomersis operating environment,thedirectorsanticipatethatrecoverabilityoftradereceivables experience andotherfactors.Duetothecurrentmarketsituationdeteriorationof assessing thecreditqualityofthesecustomerstakingintoaccounttheirrepaymenthistory,past Since thereisnoindependentratingonthesecustomers,thecreditriskcontrolledby contract isrenewedannually. customers, whichisnegotiatedbetweenthepartiesbasedonexistingmarketconditionswhen In return,AnyMusicisentitledtoaspecifiedpercentageoftherevenuegeneratedbythese customers whichtheyuseinprovisionofvalue-addedtelecommunicationsservicesthePRC. subsidiary oftheCompany,andthesecustomers,AnyMusiclicensesitstechnologyto Pursuant tothecontractbetweenAnyMusicLimited(“AnyMusic”),anindirectwholly-owned
(Continued) 109 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 110 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 6 FINANCIALRISKMANAGEMENTOBJECTIVESANDPOLICIES 36. 31 July2011 Financial Statements Notes tothe
equity. other variablesheldconstant,oftheGroup’sprofit/(loss)beforetaxandCompany’s The followingtabledemonstratesthesensitivitytoareasonablypossiblechangeininterestrates,withall will considerappropriatehedgingmeasuresinfutureasmaybenecessary. However, theGroupwillconstantlyrevieweconomicsituationanditsinterestrateriskprofile, At present,theGroupdoesnotintendtoseekhedgeitsexposureinterestratefluctuations. financial instrumentwillfluctuatebecauseofchangesinmarketinterestrates. changes inmarketinterestrates.Cashflowrateriskisthethatfuturecashflowsofa Fair valueinterestrateriskisthethatofafinancialinstrumentwillfluctuatebecause bank deposits,convertiblenotesandbonds. The Group’sexposuretotheriskofchangesinmarketinterestratesrelatesprimarily Interest raterisks iedpst .%4 405 44 0.5% 44 44 0.5% Time deposits 31 March2011 Time deposits 31 July2011 operations. The Groupadoptsaprudentliquidityriskmanagementpolicytomaintainsufficientcashfundits (continued)
ecnae eoetxi qiypretg)inequity percentage) inequity beforetax percentage) nitrs nraei ininterest Increasein in interest nraeIncrease Increase ae(npoi/ls)Ices ae(nIncrease rate(in Increase profit/(loss) rate (in .%21521505 2,145 0.5% 2,145 2,145 0.5%
ru Company Group K’0 K’0 HK$’000 HK$’000 HK$’000
(Continued)
6 FINANCIALRISKMANAGEMENTOBJECTIVESANDPOLICIES 36. oa ,4 9 50128,986 25,041 26,040 498 2,946 25,041 3,447 — 498 501 — 2,946 Total Convertible bonds Accruals andotherpayables At 31March2011 Total Convertible notes accruals andotherpayables Financial liabilitiesincludedin Trade payables At 31July2011 Group the contractualundiscountedpayment,isasfollows: The maturityprofileoftheGroup’sfinancialliabilitiesasatendreportingperiod,basedon Liquidity risk
esta ewe Between2 Between1 Less than esta ewe Between2 Between1 Less than K’0 K’0 K’0 HK$’000 HK$’000 HK$’000 HK$’000 K’0 K’0 K’0 HK$’000 HK$’000 HK$’000 HK$’000 004—3137381,441 371,387 — 10,054 erad2yasad5yasTotal and5years and2years 1 year erad2yasad5yasTotal and5years and2years 1 year ,9 2,192 — — 2,192 ,6 7,862 — — 7,862 7,8 371,387 371,387 — —
(Continued)
111 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 112 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 6 FINANCIALRISKMANAGEMENTOBJECTIVESANDPOLICIES 36. 31 July2011 Financial Statements Notes tothe Company the contractualundiscountedpayment,isasfollows: The maturityprofileoftheCompany’sfinancialliabilitiesasatendreportingperiod,basedon Liquidity risk Accruals andotherpayables At 31July2011 Total Convertible notes
ovril od 0 9 50126,040 1,932 25,041 — 498 501 — 1,932 Convertible bonds Accruals andotherpayables At 31March2011 oa ,3 9 50127,972 25,041 498 2,433 Total
(Continued) (continued)
esta ewe Between2 Between1 Less than esta ewe Between2 Between1 Less than K’0 K’0 K’0 HK$’000 HK$’000 HK$’000 HK$’000 K’0 K’0 K’0 HK$’000 HK$’000 HK$’000 HK$’000 erad2yasad5yasTotal and5years and2years 1 year erad2yasad5yasTotal and5years and2years 1 year ,7 3,673 — — 3,673 ,7 7,8 375,060 371,387 — 3,673 7,8 371,387 371,387 — —
(Continued)
7 EVENTSAFTERTHE REPORTINGPERIOD 37. FINANCIALRISKMANAGEMENTOBJECTIVESANDPOLICIES 36. a ChangeofCompanyname andincreaseinauthorisedsharecapital (a) hands. 31.49%(yearended31March2011:75.62%)oftheshares wereinpublic period. As at 31 July 2011, float, anditdemonstratestheGroup’scontinuingcompliancewith25%thresholdthroughout receives areportfromtheshareregistrarsmonthlyonsubstantialinterestsshowingnon-public Exchange, ithastomaintainsufficientpublicfloatrequiredundertheGEMListingRules.TheGroup The onlyexternallyimposedcapitalrequirementisthat,fortheGrouptomaintainitslistingonStock The Groupmonitorscapitalbymaintaininganetcashpositionthroughouttheperiod/year. dividends, returncapitaltoshareholders,issuenewshares,raisedebtsandredeemexistingdebts. conditions. Inordertomaintainoradjustthecapitalstructure,Groupmaypaymentof The Groupmanagesthecapitalstructureandmakesadjustmentstoitinlightofchangeseconomic maintain anoptimalcapitalstructuretoreducethecostofcapital. going concerninordertoprovidereturnsforshareholdersandbenefitsotherstakeholders The Group’sobjectiveswhenmanagingcapitalaretosafeguardtheabilitycontinueasa Capital management September 2011. set outintheCompany’s circular dated21July2011andtheCompany’sannouncement dated19 Further detailsoftheChangeCompanyNameand theIncreaseinAuthorisedShareCapitalare the Chinesestockshortnameof“ 2011. TheEnglishstockshortnameoftheCompanywas changedfrom“Rojam”to“MediaAsia”and in Bermudaon23August2011andbytheRegistrar ofCompaniesinHongKongon12September Shareholders attheAGM.TheChangeofCompanyName wasapprovedbytheRegistrarofCompanies The ChangeofCompanyNameandtheIncreasein Authorised ShareCapitalwereapprovedbythe i) toincreasetheauthorisedsharecapitalofCompanyfromHK$500,000,000dividedinto (ii) (i) to other things: at theannualgeneralmeetingofCompanyheldon20August2011(the“AGM”),among The boardproposedtoseektheapprovalofshareholdersCompany(the“Shareholders”) pari passu into 60,000,000,000Sharesbythecreationofanadditional 10,000,000,000Shares,ranking 50,000,000,000 ordinarysharesofHK$0.01each(the“Shares”)toHK$600,000,000divided as thesecondarynameofCompany(the“ChangeName”);and “Media AsiaGroupHoldingsLimited”andadopttheChinesename“ change theCompany’sEnglishnamefrom“RojamEntertainmentHoldingsLimited”to inallrespectswiththeexistingShares(the“Increase AuthorisedShareCapital”). 寰亞傳媒 ” wasadoptedwitheffectfrom22September2011.
(Continued) 寰亞傳媒集團有限公司 ” 113 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 114 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 9 APPROVALOFTHE FINANCIAL STATEMENTS 39. 38. COMPARATIVE AMOUNTS EVENTSAFTERTHEREPORTINGPERIOD 37. 31 July2011 Financial Statements Notes tothe b PlacingofNewShares (b) October 2011. The financialstatementswereapprovedandauthorisedforissuebytheboardofdirectorson27 would produceamoreappropriatepresentationoftheGroup’sfinancialresults. expenses toconformwithcurrentperiod’spresentation.Intheopinionofdirectors,suchreclassifications Prior yearcomparativeamountsoncostofsalesHK$610,000hadbeenreclassifiedtootheroperating (c) Company’s announcementsdated28July2011,1August2011and8September2011. Further detailsofthePlacingaresetoutinCompany’scirculardated11August2011and net proceedsfromthePlacingamountedtoapproximatelyHK$291,000,000. any ofitssubsidiariesortheirrespectiveassociates(asdefinedintheGEMListingRules).The whose ultimatebeneficialownersareindependentof,andnotconnectedwith,theCompany September 2011.Anaggregateof1,467,500,000Shareswereissuedtothreeplaceeswhoand general meetingoftheCompanyheldon27August2011.ThePlacingwascompleted8 HK$0.20 perShare(the“Placing”).ThePlacingwasapprovedbytheShareholdersatspecial pursuant towhichthePlacingAgentagreedplaceup2,022,051,522Sharesatapriceof agreement andasupplementalon28July20111August2011,respectively, The CompanyandCLSALimited(the“PlacingAgent”)enteredintoaconditionalplacing participant, thedetailsofwhicharesetoutinNote29tofinancialstatements. On 26August2011,ashareoptioncomprising94,025,000Shareswasgrantedtoaneligible (continued)
(Continued) . Tobevalid,aformofproxy,togetherwiththepowerattorneyorother authority(ifany)underwhichitis 2. AmemberoftheCompany(the“Member”)entitled toattendandvoteattheSGMisentitledappointone(or, 1. Notes: ToelectthefollowingdirectorsofCompany(the“Directors”): (2) (1) To modification, thefollowingresolutionsasordinaryofCompany: 2011 at11:30a.m.(the“SGM”)forthepurposeofconsideringand,ifthoughtfit,passing,withorwithout Golden MileHongKong,50NathanRoad,Tsimshatsui,Kowloon,KongonMonday,19December HOLDINGS LIMITED NOTICE ISHEREBYGIVENTHAT Bermuda Hamilton HM11 2 ChurchStreet Clarendon House Registered office: Hong Kong,31October2011 c Mr.NgChiHo,Dennisasanindependentnon-executiveDirector. (c) Mr.ChoiChiuFai,StanleyasanexecutiveDirector;and (b) Mr.TangJunasanexecutiveDirector; (a) directors andtheindependentauditorsforfourmonthsended31July2011; deemed tohave beenrevoked. voting attheSGMoranyof itsadjournedmeetingshouldtheysowish.Inthatevent,their formsofproxywillbe as valid.Completionandreturn oftheformproxyshallnotprecludeMembersfrom attending inpersonand for holdingtheSGMoritsadjourned meeting(asthecasemaybe)andindefault,proxy shallnotbetreated Hopewell Centre,183Queen’s RoadEast,Wanchai,HongKong,notlessthan48hoursbefore thetimeappointed the CompanyinHongKong(the “Registrar”),ComputershareHongKongInvestorServices Limited,at17MFloor, signed, oranotariallycertifiedcopyofsuchpowerauthority, mustbelodgedwiththebranchshareregistrarof Member. with theCompany’sBye-laws.AproxyneednotbeaMember butmustattendtheSGMinpersontorepresent if heholdstwoormoreshares,thanone)proxytoattend theSGMandvoteonhisbehalfinaccordance receive andconsidertheauditedfinancialstatementsofCompanyreports (the“Company”)willbeheldatCrystalRooms1and2,Basement3,HolidayInn aspecialgeneralmeetingofthemembers ORDINARY RESOLUTIONS Special GeneralMeeting Notice of Media AsiaGroupHoldingsLimited By OrderoftheBoard Wanchai, HongKong 353 LockhartRoad Sunshine Plaza 23rd Floor ofbusiness inHongKong: Head officeandprincipalplace Etsuko Hoshiyama Company Secretary MEDIA ASIAGROUP 115 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 116 MEDIA ASIA GROUP HOLDINGS LIMITED Annual Report 2011 . Ifatropicalcyclone warningsignalNo.8oraboveisexpectedtobehoistedablackrainstorm 7. IncompliancewithRule17.47(4)oftheGEMListingRulesandCompany’sBye-laws,votingonresolutionsin 6. Concerningagendaitem2ofthisNotice, 5. WheretherearejointregisteredholdersofanyshareintheCompany,onesuchmayattendand 4. ToascertaintheentitlementstoattendandvoteatSGM,Membersmustlodgerelevanttransfer 3. Special GeneralMeeting Notice of in mindtheirownsituationsand iftheydoso,areadvisedtoexercisecareandcaution. Members shoulddecideontheir ownwhethertheywouldattendtheSGMunderabadweather conditionbearing The SGMwillbeheldasscheduled whenanamberorredrainstormwarningsignalisinforce. a.m. onthedateofSGM,andwhereconditionspermit, SGMwillbeheldasscheduled. If atropicalcyclonewarningsignalNo.8oraboveblack rainstormwarningsignaliscancelledatorbefore9:00 Limited. supplementary noticepostedontherespectivewebsitesof CompanyandHongKongExchangesClearing will bepostponedandtheMembersinformedof date,timeandvenueofthepostponedSGMbya is expectedtobeinforceatanytimebetween9:00a.m.and 5:00p.m.onthedateofSGM,thenSGM will bedecidedbywayofapoll. respect oftheabovematterssetoutinthisnoticeandanyotherresolutionsproperlyputtovoteSGM which needstobebroughttheattentionofMembers. pursuant toanyoftherequirementsunderRule17.50(2)GEMListingRules,andthereisnoothermatter For thepurposeoftheirre-electionasDirectorsatSGM,thereisnootherinformationwhichdiscloseable inaccordancewithRule17.46(A)oftheGEMListingRules,detailsaforesaidDirectorsaresetout (ii) Asagoodcorporategovernancepractice, Mr.TangJun(appointedanexecutivedirectorandthechief (i) in of memberstheCompanyinrespectsuchshareshallalonebeentitledtovotethereof. personally orbyproxy,thatoneofsuchholderssopresentwhosenamestandsfirstintheregister/branchregister solely entitledthereto;butifmorethanoneofsuchjointholdersarepresentattheSGMoritsadjournedmeeting, vote attheSGMoritsadjournedmeeting,eitherinpersonbyproxy,respectofsuchsharesasifhe/she/itwere for registration. document(s) andsharecertificate(s)attheRegistrar’saboveofficenotlaterthan4:30p.m.on14December2011 2011. “Biographical DetailsofDirectors”sectiontheAnnualReportCompanyforperiodended31July 2012; and offer themselvesforre-electionthoughtheyareduetoretireonlyattheannualgeneralmeetingbeheldin (appointed anexecutivedirectorwitheffectfrom24October2011)willvoluntarilyretireasdirectorsand, executive officeroftheCompanywitheffectfrom6September2011)andMr.ChoiChiuFai,Stanley October 2011)willretireand,beingeligible,offerhimselfforre-election. Chi Ho,Dennis(appointedanindependentnon-executivedirectortofillacasualvacancywitheffectfrom3 Growth EnterpriseMarketofTheStockExchangeHongKongLimited(the“GEMListingRules”),Mr.Ng Corporate GovernancePracticesetoutinAppendix15totheRulesGoverningListingofSecuritieson accordance withBye-law83(2)oftheCompany’sBye-lawsandcodeprovisionA.4.2Codeon (continued) Media Asia actively expands the media and entertainment markets of mainland China. Its business scope includes film production, concert and music performance, artiste management, television dramas production and distribution, investment in movie theatres, and new media business.
寰亞傳媒大力開拓中國大陸的傳媒及娛樂市 場，其業務範圍包括電影製作、演唱會與音 樂表演、藝人管理、電視劇製作與發行、電 影院投資及新媒體業務。 Media Asia Group Holdings Limited
Media Asia Group Holdings Limited 寰亞傳媒集團有限公司 (formerly known as Rojam Entertainment Holdings Limited) （前 稱 Rojam Entertainment Holdings Limited）
(Stock Code 股份代號： 8075) 寰亞傳媒集團有限公司
Annual Report 年報 2011
Media Asia Group Holdings Limited Annual Report 寰亞傳媒集團有限公司 (Incorporated in the Cayman Islands and continued in Bermuda with limited liability) （於開曼群島註冊成立及於百慕達存續之有限公司）
23/F., Sunshine Plaza, No. 353 Lockhart Road, Wanchai, Hong Kong
香港灣仔駱克道三百五十三號三湘大廈二十三樓 年報
Tel 電話 : (852) 3184-0990 Fax 傳真 : (852) 3184-9999 2011 Website 互聯網址 : http://www.maghl.com E-mail 電子郵件 : [email protected]