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WISDOM SPORTS GROUP 智美體育集團 (Incorporated in the Cayman Islands with limited liability) (Stock code: 1661) ANNUAL RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2017 CONSOLIDATED RESULTS The board (the “Board”) of directors (the “Directors” and each a “Director”) of Wisdom Sports Group (the “Company”) is pleased to announce the audited consolidated results of the Company and its subsidiaries (collectively, the “Group”) for the year ended 31 December 2017 as follows: FINANCIAL HIGHLIGHTS • Net profit attributable to owners of the Group increased by approximately 8.8% to RMB101.6 million for the year ended 31 December 2017 from RMB93.4 million for the year ended 31 December 2016. • The Board has proposed a payment of final dividend of RMB0.062 per share for the year ended 31 December 2017 to the shareholders. Subject to the approval by the shareholders at the annual general meeting (the “AGM”) of the Company to be held on Tuesday, 29 May 2018, the proposed final dividend is expected to be paid on Friday, 15 June 2018 to shareholders, whose names appear on the register of members of the Company on Wednesday, 6 June 2018, in Hong Kong dollars at the spot rate published by The People’s Bank of China on 6 June 2018. - 1 - CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2017 Note 2017 2016 RMB’000 RMB’000 (restated) Continuing operations Revenue 4 371,463 410,155 Cost of services (240,845) (273,636) Gross profit 130,618 136,519 Other income 5 26,113 33,373 Other (losses)/gains 6 (8,770) 8,729 Selling and distribution expenses (24,532) (23,963) General and administrative expenses (51,144) (54,829) Profit from operations 72,285 99,829 Share of results of associates (2,765) 235 Share of result of a joint venture (1,772) 3,786 Profit before tax 67,748 103,850 Income tax expense 8 (35,460) (33,906) Profit for the year from continuing operations 9 32,288 69,944 Discontinued operations 10 Profit for the year from discontinued operations 69,300 23,419 Profit for the year attributable to owners of the Company 101,588 93,363 - 2 - Note 2017 2016 RMB’000 RMB’000 (restated) Other comprehensive income Items that may be reclassified subsequently to profit or loss: Fair value change in available-for-sale financial assets (1,890) – Other comprehensive income for the year, net of tax (1,890) – Total comprehensive income for the year attributable to owners of the Company 99,698 93,363 Earnings per share attributable to owners of the Company 12 From continuing and discontinued operations Basic and diluted RMB0.06 RMB0.06 From continuing operations Basic and diluted RMB0.02 RMB0.04 - 3 - CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2017 Note 2017 2016 RMB’000 RMB’000 ASSETS Non-current assets Property, plant and equipment 20,870 22,970 Investment properties 18,212 19,472 Goodwill 105 105 Intangible assets 8,868 3,855 Available-for-sale financial assets 54,850 39,000 Other receivables 50,000 255,069 Investments in associates 92,271 5,835 Investment in a joint venture – 31,286 Deferred tax assets 2,042 – Total non-current assets 247,218 377,592 Current assets Trade receivables 13 172,607 219,087 Other receivables 469,301 107,453 Prepayments and other current assets 118,829 119,941 Cash and cash equivalents 324,434 524,450 Total current assets 1,085,171 970,931 TOTAL ASSETS 1,332,389 1,348,523 EQUITY AND LIABILITIES Equity attributable to owners of the Company Share capital 2,454 2,479 Reserves 1,210,319 1,195,001 TOTAL EQUITY 1,212,773 1,197,480 - 4 - Note 2017 2016 RMB’000 RMB’000 LIABILITIES Current liabilities Trade payables 14 68,782 113,285 Other payables and accrued expenses 18,177 19,399 Advance from customers 6,244 8,637 Income tax payables 26,413 9,722 Total current liabilities 119,616 151,043 TOTAL LIABILITIES 119,616 151,043 TOTAL EQUITY AND LIABILITIES 1,332,389 1,348,523 NET CURRENT ASSETS 965,555 819,888 - 5 - NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 1. GENERAL INFORMATION Wisdom Sports Group (the “Company”) was incorporated in the Cayman Islands as an exempted company with limited liability under the Companies Law, Cap 22 (2012 Revision) of the Cayman Islands on 21 March 2012 and its shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”). Its ultimate controlling party is Ms. Ren Wen, who is also the Chairlady of the Board and President of the Company. The address of the registered office is Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands and the principal place of business of the Company in China is No. 43, Building B, 25 Xiaoyun Road, Chaoyang District, Beijing, the People’s Republic of China (the “PRC”). The Company is an investment holding company. The Company and its subsidiaries (collectively referred to as the “Group”) is principally engaged in the provision of events operation and marketing services, sports services and advertising program and branding services in the PRC. These consolidated financial statements are presented in Renminbi (“RMB”) unless otherwise stated. RMB is also the functional currency of the Company. The consolidated financial statements have been approved for issue by the Board of Directors on 28 March 2018. 2. BASIS OF PREPARATION These consolidated financial statements have been prepared in accordance with all applicable Hong Kong Financial Reporting Standards (“HKFRSs”) issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”). HKFRSs comprise Hong Kong Financial Reporting Standards (“HKFRS”); Hong Kong Accounting Standards (“HKAS”); and Interpretations. These consolidated financial statements also comply with the applicable disclosure provisions of the Rules Governing the Listing of Securities on the Stock Exchange and with the disclosure requirements of the Hong Kong Companies Ordinance (Cap. 622). Significant accounting policies adopted by the Group are disclosed below. The HKICPA has issued certain new and revised HKFRSs that are first effective or available for early adoption for the current accounting period of the Group. Note 3 provides information on any changes in accounting policies resulting from initial application of these developments to the extent that they are relevant to the Group for the current and prior accounting periods reflected in these consolidated financial statements. - 6 - 3. ADOPTION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS (a) Application of new and revised HKFRSs The HKICPA has issued a number of new and revised HKFRSs that are first effective for annual periods beginning on or after 1 January 2017. None of these impact on the accounting policies of the Group. (b) New and revised HKFRSs in issue but not yet effective The Group has not early applied new and revised HKFRSs that have been issued but are not yet effective for the financial year beginning 1 January 2017. These new and revised HKFRSs include the following which may be relevant to the Group. Effective for accounting periods beginning on or after HKFRS 9 Financial Instruments 1 January 2018 HKFRS 15 Revenue from Contracts with Customers 1 January 2018 Amendments to HKAS 40 Investment Property: Transfers of investment property 1 January 2018 HKFRS 16 Leases 1 January 2019 HK(IFRIC) 23 Uncertainty over Income Tax Treatments. 1 January 2019 The Group is in the process of making an assessment of what the impact of these amendments and new standards is expected to be in the period of initial application. So far the Group has identified some aspects of the new standards which may have a significant impact on the consolidated financial statements. Further details of the expected impacts are discussed below. While the assessment has been substantially completed for HKFRS 9 and HKFRS 15, the actual impacts upon the initial adoption of the standards may differ as the assessment completed to date is based on the information currently available to the Group, and further impacts may be identified before the standards are initially applied in the Group’s interim financial report for the six months ended 30 June 2018. The Group may also change its accounting policy elections, including the transition options, until the standards are initially applied in that interim financial report. HKFRS 9 Financial Instruments HKFRS 9 will replace HKAS 39 Financial Instruments: Recognition and Measurement. HKFRS 9 introduces new requirements for classification and measurement of financial assets, new rules for hedge accounting and a new impairment model for financial assets. HKFRS 9 is effective for annual periods beginning on or after 1 January 2018 on a retrospective basis. The Group plans to adopt the new standard on the required effective date and will not restate comparative information. - 7 - Based on an analysis of the Group’s financial assets and financial liabilities as at 31 December 2017 on the basis of the facts and circumstances that existed on that date, the Directors of the Company have assessed the impact of HKFRS 9 to the Group’s consolidated financial statements as follows: (a) Classification and measurement The Group expects to irrevocably designate those listed and unlisted equity securities currently classified as available-for-sale as at fair value through other comprehensive income.