UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF
1934
November 21, 2012
Commission File Number : 000-30354
CITY TELECOM
(H.K.) LIMITED
(Translation of registrants name into English)
13th Floor
Trans Asia Centre
18 Kin Hong Street
Kwai Chung
New Territories
Hong Kong
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
x
Form 20-F
¨
Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1):
¨
Indicate by check mark if the
registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
¨
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
¨
Yes
x
No
If Yes is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): n/a
City Telecom (H.K.) Limited (the Company) is furnishing under cover of Form 6-K a statement
dated November 21, 2012 relating to the Announcement of the Companys Annual Results for the year ended August 31, 2012.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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CITY TELECOM (H.K.) LIMITED
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By:
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/s/ Wong Nga Lai, Alice
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Name:
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Wong Nga Lai, Alice
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Title:
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Executive Director,
Chief
Financial Officer and
Company Secretary
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Dated: November 21, 2012
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no
responsibility for the contents of this announcement, 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 announcement.
CITY TELECOM (H.K.) LIMITED
(incorporated in Hong Kong with limited liability under the Companies Ordinance)
(Stock code: 1137)
ANNUAL RESULTS FOR THE YEAR ENDED 31 AUGUST 2012
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HIGHLIGHTS
Recommended a final dividend of HK15 cents per ordinary share in cash (FY2011: HK15
cents per ordinary share) bringing total dividend to HK30 cents per ordinary share for FY2012 (FY2011: HK30 cents per ordinary share)
Profit from discontinued operations (net of tax) of HK$3,771.7 million due to the
very substantial disposal of the Groups International Telecommunications Services and Fixed Telecommunications Network Service businesses (the Telecom Business) during the year
Strong balance
sheet with net cash position of HK$2,623.8 million
On continuing operations, a loss of HK$73.8 million incurred (FY2011: HK$32.1 million) due to the start-up multimedia business
Turnover from
continuing operations amounted to HK$3.8 million (FY2011: HK$Nil)
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- 1 -
The Board of Directors (the Board or the Directors) of City Telecom (H.K.) Limited
(City Telecom or the Company) is pleased to present the audited consolidated results of the Company and its subsidiaries (collectively referred to as the Group) for the year ended 31 August 2012 together with
the comparative figures for the previous year.
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 AUGUST 2012
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2012
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2011
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Note
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HK$000
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HK$000
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(restated)
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Continuing operations
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Turnover
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4
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3,762
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Cost of sales
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5
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(6,006
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Valuation gains on investment properties
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18,200
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Other operating expenses
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6
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(a)
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(104,960
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(23,481
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Other income, net
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6
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(b)
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19,920
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3,456
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Finance costs, net
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6
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(c)
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(2,455
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(7,303
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Loss before taxation
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6
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(71,539
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(27,328
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Income tax expense
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7
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(2,281
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(4,782
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Loss from continuing operations
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(73,820
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(32,110
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Discontinued operations
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Profit from discontinued operations (net of tax)
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3
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3,771,694
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346,025
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Profit for the year
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3,697,874
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313,915
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- 2 -
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2012
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2011
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Note
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HK$000
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HK$000
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(restated)
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Attributable to:
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Equity shareholders of the Company
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Continuing operations
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(71,406)
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(32,110)
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Discontinued operations
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3,771,694
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346,025
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3,700,288
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313,915
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Non-controlling interest
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Continuing operations
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(2,414)
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Discontinued operations
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(2,414)
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Profit for the year
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3,697,874
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313,915
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Basic (loss)/earnings per share
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9
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Continuing operations
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HK(9.0) cents
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HK(4.1) cents
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Discontinued operations
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HK480.9 cents
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HK44.9 cents
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HK471.9 cents
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HK40.8 cents
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Diluted (loss)/earnings per share
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9
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Continuing operations
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HK(9.0) cents
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HK(4.1) cents
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Discontinued operations
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HK474.1 cents
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HK43.7 cents
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HK465.1 cents
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HK39.6 cents
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- 3 -
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2012
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2012
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2011
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HK$000
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HK$000
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Profit for the year
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3,697,874
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313,915
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Other comprehensive income
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Exchange differences on translation of financial statements of subsidiaries outside Hong Kong
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(265
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2,383
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Exchange reserve realised upon disposal of Telecom Business
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(4,881
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Total comprehensive income for the year
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3,692,728
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316,298
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Attributable to:
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Equity shareholders of the Company
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3,695,142
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316,298
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Non-controlling interest
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(2,414
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3,692,728
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316,298
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- 4 -
CONSOLIDATED BALANCE SHEET
AS AT 31 AUGUST 2012
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2012
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2011
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Note
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HK$000
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HK$000
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Non-current assets
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Goodwill
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1,066
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Fixed assets
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477,141
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1,642,701
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Intangible assets
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311,726
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Long term receivable and prepayment
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284
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4,101
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Deferred expenditure
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15,323
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789,151
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1,663,191
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Current assets
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Accounts receivable
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10
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1,311
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71,999
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Other receivables, deposits and prepayments
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31,581
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90,984
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Programme costs
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87,617
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Inventories
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577
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Deferred expenditure
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29,312
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Term deposits
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544,040
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Cash at bank and in hand
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2,083,079
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408,976
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2,748,205
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601,271
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Current liabilities
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Bank overdrafts unsecured
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3,026
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845
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Accounts payable
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11
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5,371
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17,419
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Other payables and accrued charges
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31,118
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209,585
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Deposits received
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2,259
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26,969
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Current portion deferred services revenue
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85,895
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Tax payable
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935
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2,281
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Current portion obligations under finance leases
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85
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105
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42,794
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343,099
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Net current assets
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2,705,411
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258,172
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Total assets less current liabilities
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3,494,562
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1,921,363
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- 5 -
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2012
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2011
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Note
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HK$000
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HK$000
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Non-current liabilities
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Deferred tax liabilities
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1,346
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111,138
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Long-term deferred services revenue
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992
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Derivative financial instrument
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9,663
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11,564
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Obligations under finance leases
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160
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288
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11,169
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123,982
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Net assets
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3,483,393
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1,797,381
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Capital and reserves
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Share capital
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12
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80,902
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77,191
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Reserves
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12
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3,402,491
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1,720,190
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Total equity
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3,483,393
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1,797,381
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|
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|
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- 6 -
Notes
:
1.
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BASIS OF PREPARATION AND ACCOUNTING POLICIES
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The annual results set out in the announcement are extracted from the Groups consolidated financial statements which have been prepared in accordance with all applicable International Financial
Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB), which collective term includes all applicable individual International Financial Reporting Standards, International Accounting
Standards (IASs) and Interpretations issued by the IASB. As Hong Kong Financial Reporting Standards (HKFRSs), which collective term includes all applicable individual Hong Kong Financial Reporting Standards, Hong Kong
Accounting Standards (HKASs) and Interpretations issued by the Hong Kong Institute of Certified Public Accountants (HKICPA) and accounting principles generally accepted in Hong Kong, are derived from and consistent with
IFRSs, the Groups consolidated financial statements also comply with HKFRSs. The Groups consolidated financial statements also comply with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited (the Listing Rules) and the requirements of the Hong Kong Companies Ordinance.
The
measurement basis used in the preparation of the financial statements is the historical cost basis except that investment properties and certain financial assets are stated at their fair values or amortised costs.
The preparation of financial statements in conformity with IFRSs and HKFRSs requires management to make judgements, estimates and
assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of making the judgements about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The IASB/HKICPA has issued a number of amendments, new standards and interpretations which are not yet effective for the year
ended 31 August 2012 and which have not been adopted in the Groups consolidated financial statements.
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Effective for
accounting periods
beginning on or after
|
|
|
|
Amendments to IAS/HKAS 1
|
|
Presentation of financial statements
Presentation of items of other
comprehensive income
|
|
1 July 2012
|
|
|
|
IFRS/HKFRS 10
|
|
Consolidated financial statement
|
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1 January 2013
|
|
|
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IFRS/HKFRS 12
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|
Disclosure of interest in other entities
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1 January 2013
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IFRS/HKFRS 13
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Fair value measurement
|
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1 January 2013
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IAS/HKAS 27
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Separate financial statements (2011)
|
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1 January 2013
|
|
|
|
Amendments to IFRS/HKFRS 7
|
|
Financial instruments:
Disclosures
Offsetting financial assets and financial liabilities
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|
1 July 2013
|
|
|
|
Amendments to IAS/HKAS 32
|
|
Financial instruments:
Presentation
Offsetting financial assets and financial liabilities
|
|
1 January 2014
|
|
|
|
IFRS/HKFRS 9
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|
Financial instruments
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|
1 January 2015
|
- 7 -
The Group is in the process of making an assessment of what the impact of these amendments,
new standards and new interpretations is expected to be in the period of initial application. So far the Group is not yet in a position to state whether they would have a significant impact on the Groups results of operations and financial
position.
The IASB/HKICPA has issued a number of amendments to IFRS/HKFRSs and one new interpretation that are first
effective for the current accounting period of the Group and the Company. Of these, the following developments are relevant to the Groups and the Companys financial statements:
|
|
|
IAS/HKAS 24 (revised 2009), Related party disclosures
|
|
|
|
Improvements to IFRSs/HKFRSs (2010)
|
The above developments relate primarily to clarification of certain disclosure requirements applicable to the Groups and the Companys financial statements. These developments have no material
impact on the contents of the Groups and the Companys financial statements for the current or comparative periods.
2.
|
CHANGE IN ACCOUNTING POLICIES
|
The Group has early adopted the amendments to IAS/HKAS 12,
Income taxes
, in respect of the recognition of deferred tax on investment properties carried at fair value under IAS/HKAS 40,
Investment properties
. The amendments are effective for annual period beginning on or after 1 January 2012, but as permitted by the amendments, the Group and the Company have adopted the amendments for the year ended 31 August 2012.
Other than the early adoption of amendments to IAS/HKAS 12, the Group has not applied any new standard, amendment or
interpretation that is not yet effective for the current accounting period.
Amendments to IAS/HKAS 12, Income taxes
Under IAS/HKAS 12 deferred tax is required to be measured with reference to the tax consequences that would follow from
the manner in which the entity expects to recover the carrying amount of the asset(s) in question. In this regard, the amendments to IAS/HKAS 12 introduced a rebuttable presumption that the carrying amount of investment property carried at fair
value under IAS/HKAS 40,
Investment property
, will be recovered through sale. This presumption is rebutted on a property-by-property basis if the investment property in question is depreciable and is held within a business model whose
objective is to consume substantially all of the economic benefits embodied in the investment property over time, rather than through sale.
As a result of adopting the amendments to IAS/HKAS 12, the Group reviewed its investment property portfolio and concluded that the presumption in the amended IAS/HKAS 12 that the carrying value of the
property will be recovered through sale should be adopted in respect of each of the investment properties located in Hong Kong. Therefore, the deferred tax relating to these properties has been measured on the basis of recovering their carrying
amounts entirely through sale. This change in policy has no impact on the financial statements for the year ended 31 August 2011.
Change of accounting policy Investment properties
Effective from
1 September 2011, the Group has changed its accounting policy with respect to investment properties from the cost model to the fair value model. Any gain or loss arising from a change in fair value or from the retirement or disposal of an
investment property is recognised in profit or loss. The Group considers that measurement using the fair value model provides more relevant information about the financial performance of these investment properties given of their increased
significance in the Groups balance sheet.
The financial statements for the year ended 31 August 2011 have not been
retrospectively restate due to the immaterial effect resulting from the change in accounting policy.
- 8 -
3.
|
DISCONTINUED OPERATIONS
|
On 31 March 2012, the Group entered into a Sales and Purchase Agreement with a third party (the Purchaser) to dispose of
the Groups International Telecommunications Services and Fixed Telecommunications Network Service businesses (the Telecom Business) (the Disposal). The consideration for the Disposal comprised of cash consideration of
HK$4,873,649,000 on a cash-free, debt-free basis. As part and parcel of the Disposal, the Telecom Business grant an intangible asset, including indefeasible right of use (IRU) of the telecommunications capacity and right to use of
telecommunications services to the Group upon the completion of Disposal. The Disposal was completed on 30 May 2012. The operating results of the disposed Telecom Business up to the disposal date have been presented as discontinued operations
in this announcement.
The presentation of comparative information in respect of the year ended 31 August 2011 has been
restated to show the discontinued operations separately from continuing operations.
|
(a)
|
The results of the discontinued operations included in the consolidated financial statements for the current and prior years are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Business
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
Note
|
|
|
HK$000
|
|
|
HK$000
|
|
Turnover
|
|
|
4
|
|
|
|
1,433,775
|
|
|
|
1,681,458
|
|
|
|
|
|
Network costs and cost of sales
|
|
|
5
|
|
|
|
(277,028
|
)
|
|
|
(212,315
|
)
|
|
|
|
|
Other operating expenses
|
|
|
6
|
(a)
|
|
|
(860,946
|
)
|
|
|
(1,073,683
|
)
|
|
|
|
|
Other income, net
|
|
|
6
|
(b)
|
|
|
3,638
|
|
|
|
3,793
|
|
|
|
|
|
Finance costs, net
|
|
|
6
|
(c)
|
|
|
574
|
|
|
|
944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit before taxation
|
|
|
|
|
|
|
300,013
|
|
|
|
400,197
|
|
|
|
|
|
Income tax expense
|
|
|
7
|
|
|
|
(48,407
|
)
|
|
|
(54,172
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit after taxation
|
|
|
|
|
|
|
251,606
|
|
|
|
346,025
|
|
|
|
|
|
Gain on sale of discontinued operations
|
|
|
3
|
(c)
|
|
|
3,520,088
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the year
|
|
|
|
|
|
|
3,771,694
|
|
|
|
346,025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 9 -
|
(b)
|
The cash flows of the discontinued operations for the current and prior years are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Business
|
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
Net cash from operating activities
|
|
|
414,695
|
|
|
|
747,982
|
|
Net cash from/(used in) investing activities
|
|
|
4,336,661
|
|
|
|
(363,124
|
)
|
Net cash used in financing activities
|
|
|
(211,887
|
)
|
|
|
(379,843
|
)
|
|
|
|
|
|
|
|
|
|
Net cash inflow from discontinued operations
|
|
|
4,539,469
|
|
|
|
5,015
|
|
|
|
|
|
|
|
|
|
|
|
(c)
|
Effect of Disposal on the financial position of the Group:
|
|
|
|
|
|
|
|
HK$000
|
|
Net assets disposed of:
|
|
|
|
|
|
|
Goodwill
|
|
|
1,066
|
|
Fixed assets
|
|
|
1,601,528
|
|
Long term receivable and prepayment
|
|
|
4,533
|
|
Deferred expenditure
|
|
|
36,978
|
|
Accounts receivable
|
|
|
75,481
|
|
Other receivables, deposits and prepayments
|
|
|
165,161
|
|
Cash at bank and in hand
|
|
|
42,357
|
|
Bank overdrafts unsecured
|
|
|
(7,529
|
)
|
Accounts payable
|
|
|
(19,221
|
)
|
Other payables and accrued charges
|
|
|
(147,364
|
)
|
Deposits received
|
|
|
(20,946
|
)
|
Tax payable
|
|
|
(1,721
|
)
|
Deferred tax liabilities
|
|
|
(157,102
|
)
|
Deferred services revenue
|
|
|
(81,241
|
)
|
Obligations under finance leases
|
|
|
(49
|
)
|
|
|
|
|
|
|
|
|
1,491,931
|
|
|
|
|
|
|
Satisfied by:
|
|
|
|
|
Cash consideration
|
|
|
(4,873,649
|
)
|
Grant of intangible assets including IRU of the telecommunications capacity and right to use of telecommunications
services
|
|
|
(316,943
|
)
|
Exchange reserve realised upon disposal of Telecom Business
|
|
|
(4,881
|
)
|
Transaction costs
|
|
|
183,454
|
|
|
|
|
|
|
Gain on sale of discontinued operations
|
|
|
(3,520,088
|
)
|
|
|
|
|
|
No provision for Hong Kong Profits Tax has been made for the gain on sale of discontinued operations.
|
(d)
|
Analysis of the net cash inflow in respect of the Disposal:
|
|
|
|
|
|
|
|
HK$000
|
|
Cash consideration
|
|
|
4,873,649
|
|
Transaction costs
|
|
|
(183,454
|
)
|
Cash and cash equivalents disposed of
|
|
|
(34,828
|
)
|
|
|
|
|
|
Net cash inflow
|
|
|
4,655,367
|
|
|
|
|
|
|
- 10 -
4.
|
TURNOVER AND SEGMENT INFORMATION
|
Turnover
The Group is principally engaged in the provision of multimedia
production and contents distribution business, including but not limited to the offer of free TV programming, multimedia and drama productions, contents distribution and other related services (Multimedia Business).
Prior to the Disposal, the Group was also engaged in the provision of international telecommunications services and fixed
telecommunications network services to customers in Hong Kong and Canada which have been classified as discontinued operations in the accompanying financial statements.
The amount of each significant category of revenue recognised in turnover during the year is as follows:
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
|
|
|
|
(restated)
|
|
Continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
Licensing of programme rights and provision of artiste management services
|
|
|
3,762
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations:
|
|
|
|
|
|
|
|
|
International telecommunications services
|
|
|
134,645
|
|
|
|
197,134
|
|
Fixed telecommunication network services
|
|
|
1,299,130
|
|
|
|
1,484,324
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,433,775
|
|
|
|
1,681,458
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,437,537
|
|
|
|
1,681,458
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Segmental information
|
For the year ended 31 August 2011, the Group had two reportable business segments international telecommunications services
and fixed telecommunications network services. As a result of the Disposal, the Group now has one reportable business segment multimedia services and others. The previously reported segment information for the year ended 31 August 2011
has been restated to reflect the changes in the composition of the Groups business segments.
|
|
|
|
|
Continuing operations:
|
|
|
|
|
|
|
|
Multimedia services and others
|
|
:
|
|
provision of multimedia production and distribution and other multimedia related activities
|
Discontinued operations:
|
|
|
|
|
|
|
|
International telecommunications
|
|
:
|
|
provision of international long distance calls services
|
|
|
|
Fixed telecommunications network
|
|
:
|
|
provision of dial up and broadband Internet access services, local voice-over-IP (VoIP) services, IP-TV services and corporate data services
|
The Groups inter-segment transactions mainly consist of provision of leased lines services and
licensing of programme right. These transactions were entered into on similar terms as those contracted with third parties.
- 11 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
|
Continuing
operations
|
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
Multimedia
services
and others
HK$000
|
|
|
International
tele-
communications
services
HK$000
|
|
|
Fixed
tele-
communications
network
services
HK$000
|
|
|
Elimination
HK$000
|
|
|
Group
HK$000
|
|
Turnover
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External sales
|
|
|
3,762
|
|
|
|
134,645
|
|
|
|
1,299,130
|
|
|
|
|
|
|
|
1,437,537
|
|
Inter-segment sales
|
|
|
1,100
|
|
|
|
698
|
|
|
|
10,530
|
|
|
|
(12,328
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,862
|
|
|
|
135,343
|
|
|
|
1,309,660
|
|
|
|
(12,328
|
)
|
|
|
1,437,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment results
|
|
|
(107,204
|
)
|
|
|
32,555
|
|
|
|
263,246
|
|
|
|
|
|
|
|
188,597
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other net income, excluding interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,317
|
|
Valuation gains on investment properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,200
|
|
Gain on sale of discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,520,088
|
|
Interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,241
|
|
Finance costs, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,881
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit before taxation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,748,562
|
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(50,688
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,697,874
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 12 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011 (restated)
|
|
|
|
Continuing
operations
|
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
Multimedia
services
and others
HK$000
|
|
|
International
tele-
communications
services
HK$000
|
|
|
Fixed
tele-
communications
network
services
HK$000
|
|
|
Elimination
HK$000
|
|
|
Group
HK$000
|
|
Turnover
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External sales
|
|
|
|
|
|
|
197,134
|
|
|
|
1,484,324
|
|
|
|
|
|
|
|
1,681,458
|
|
Inter-segment sales
|
|
|
|
|
|
|
3,814
|
|
|
|
14,837
|
|
|
|
(18,651
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
200,948
|
|
|
|
1,499,161
|
|
|
|
(18,651
|
)
|
|
|
1,681,458
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment results
|
|
|
(23,481
|
)
|
|
|
89,313
|
|
|
|
306,147
|
|
|
|
|
|
|
|
371,979
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other net income, excluding interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,883
|
|
Interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,366
|
|
Finance costs, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,359
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit before taxation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
372,869
|
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(58,954
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
313,915
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.
|
NETWORK COSTS AND COST OF SALES
|
Continuing operations:
Cost of sales mainly include talent costs and other
production costs which are directly attributable to the revenue generated from licensing of programme rights and provision of artiste management services.
Discontinued operations:
Network costs and cost of sales mainly include
interconnection charges paid to local and overseas carriers, leased line rentals, programme fees, and production costs for the IP-TV service, and do not include depreciation charge which is included in other operating expenses.
- 13 -
6.
|
(LOSS)/PROFIT BEFORE TAXATION
|
(Loss)/profit before taxation is arrived at after charging/(crediting) the following:
|
(a)
|
Other operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
|
|
|
|
(restated)
|
|
Continuing operations
|
|
|
|
|
|
|
|
|
Advertising and marketing expenses
|
|
|
214
|
|
|
|
|
|
Auditors remuneration
|
|
|
1,630
|
|
|
|
1,392
|
|
|
|
|
|
|
|
|
|
|
Depreciation:
|
|
|
|
|
|
|
|
|
Owned fixed assets
|
|
|
6,144
|
|
|
|
1,452
|
|
Held under finance lease
|
|
|
124
|
|
|
|
133
|
|
Less
: Depreciation capitalised as programme costs
|
|
|
(1,632
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,636
|
|
|
|
1,585
|
|
|
|
|
|
|
|
|
|
|
Operating lease charges in respect of land and buildings
|
|
|
2,827
|
|
|
|
|
|
Loss on disposal of fixed assets
|
|
|
675
|
|
|
|
382
|
|
Talent costs
(note 6(d))
|
|
|
55,971
|
|
|
|
6,837
|
|
Amortisation of intangible assets
|
|
|
5,217
|
|
|
|
|
|
Others
|
|
|
33,790
|
|
|
|
13,285
|
|
|
|
|
|
|
|
|
|
|
|
|
|
104,960
|
|
|
|
23,481
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
Advertising and marketing expenses
|
|
|
271,532
|
|
|
|
344,136
|
|
Auditors remuneration
|
|
|
1,071
|
|
|
|
1,385
|
|
|
|
|
|
|
|
|
|
|
Depreciation:
|
|
|
|
|
|
|
|
|
Owned fixed assets
|
|
|
181,252
|
|
|
|
216,338
|
|
Held under finance lease
|
|
|
17
|
|
|
|
274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
181,269
|
|
|
|
216,612
|
|
|
|
|
|
|
|
|
|
|
Operating lease charges in respect of land and buildings
|
|
|
26,910
|
|
|
|
28,426
|
|
(Gain)/loss on disposal of fixed assets
|
|
|
(2,674
|
)
|
|
|
626
|
|
Talent costs
(note 6(d))
|
|
|
233,814
|
|
|
|
304,518
|
|
Amortisation of deferred expenditure
|
|
|
29,902
|
|
|
|
37,873
|
|
Others
|
|
|
119,122
|
|
|
|
140,107
|
|
|
|
|
|
|
|
|
|
|
|
|
|
860,946
|
|
|
|
1,073,683
|
|
|
|
|
|
|
|
|
|
|
|
|
|
965,906
|
|
|
|
1,097,164
|
|
|
|
|
|
|
|
|
|
|
- 14 -
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
|
|
|
|
(restated)
|
|
Continuing operations
|
|
|
|
|
|
|
|
|
Bank interest income
|
|
|
(16,167
|
)
|
|
|
(2,039
|
)
|
Rentals from investment properties
|
|
|
(3,388
|
)
|
|
|
|
|
Net exchange gain
|
|
|
(229
|
)
|
|
|
(1,234
|
)
|
Others
|
|
|
(136
|
)
|
|
|
(183
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(19,920
|
)
|
|
|
(3,456
|
)
|
|
|
|
|
|
|
|
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
(1,074
|
)
|
|
|
(1,327
|
)
|
Net exchange (gain)/loss
|
|
|
(408
|
)
|
|
|
239
|
|
Others
|
|
|
(2,156
|
)
|
|
|
(2,705
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,638
|
)
|
|
|
(3,793
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(23,558
|
)
|
|
|
(7,249
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
|
|
|
|
(restated)
|
|
Continuing operations
|
|
|
|
|
|
|
|
|
Interest element of finance leases
|
|
|
15
|
|
|
|
22
|
|
Interest on bank borrowings
|
|
|
|
|
|
|
1,152
|
|
Amortisation of upfront costs on long-term bank loan
|
|
|
|
|
|
|
182
|
|
Change in fair value of derivative financial instrument
|
|
|
(1,901
|
)
|
|
|
271
|
|
Write-off of upfront costs upon settlement of long-term bank loan
|
|
|
|
|
|
|
1,251
|
|
Other borrowing costs
|
|
|
4,341
|
|
|
|
4,425
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,455
|
|
|
|
7,303
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
Interest element of finance leases
|
|
|
4
|
|
|
|
8
|
|
Others
|
|
|
(578
|
)
|
|
|
(952
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(574
|
)
|
|
|
(944
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
1,881
|
|
|
|
6,359
|
|
|
|
|
|
|
|
|
|
|
- 15 -
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
|
|
|
|
(restated)
|
|
Continuing operations
|
|
|
|
|
|
|
|
|
Wages and salaries
|
|
|
101,483
|
|
|
|
6,404
|
|
Provision for annual leave
|
|
|
2,928
|
|
|
|
48
|
|
Retirement benefit costs defined contribution plans
|
|
|
3,993
|
|
|
|
385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
108,404
|
|
|
|
6,837
|
|
Less
: Talent costs capitalised as programme costs
|
|
|
(47,140
|
)
|
|
|
|
|
Talent costs included in costs of sales
|
|
|
(5,293
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Talent costs included in other operating expenses
|
|
|
55,971
|
|
|
|
6,837
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
Wages and salaries
|
|
|
396,008
|
|
|
|
511,205
|
|
Provision for annual leave
|
|
|
|
|
|
|
564
|
|
Equity settled share-based transaction
|
|
|
10,480
|
|
|
|
4,652
|
|
Retirement benefit costs defined contribution plans
|
|
|
38,074
|
|
|
|
43,487
|
|
|
|
|
|
|
|
|
|
|
|
|
|
444,562
|
|
|
|
559,908
|
|
Less
: Talent costs capitalised as fixed assets
|
|
|
(17,671
|
)
|
|
|
(22,206
|
)
|
Talent costs included in network costs and costs of sales
|
|
|
(6,247
|
)
|
|
|
(10,843
|
)
|
Talent costs included in advertising and marketing expenses
|
|
|
(186,830
|
)
|
|
|
(222,341
|
)
|
|
|
|
|
|
|
|
|
|
Talent costs included in other operating expenses
|
|
|
233,814
|
|
|
|
304,518
|
|
|
|
|
|
|
|
|
|
|
|
|
|
289,785
|
|
|
|
311,355
|
|
|
|
|
|
|
|
|
|
|
Talent costs include all compensation and benefits paid to and accrued for all individuals employed by
the Group, including Directors.
Hong
Kong Profits Tax rate is 16.5% . The statutory income tax rate in the Peoples Republic of China (PRC) is 25%. CTI Guangzhou Customer Services Co., Ltd., a former wholly owned subsidiary of the Company, being a recognised Advanced
Technology Service Enterprise, is subject to income tax at a reduced rate of 15% from calendar years 2010 to 2012. Non-Hong Kong current taxation is mainly related to the PRC income tax.
- 16 -
The amount of income tax expense in the consolidated income statement represents:
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
|
|
|
|
(restated)
|
|
Continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
Current taxation
|
|
|
|
|
|
|
|
|
|
|
|
Hong Kong
|
|
|
|
|
|
|
|
|
Provision for the year
|
|
|
(935
|
)
|
|
|
|
|
Deferred taxation
|
|
|
|
|
|
|
|
|
Origination and reversal of temporary differences
|
|
|
(1,346
|
)
|
|
|
(4,782
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,281
|
)
|
|
|
(4,782
|
)
|
|
|
|
|
|
|
|
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
Current taxation
|
|
|
|
|
|
|
|
|
|
|
|
Non-Hong Kong
|
|
|
|
|
|
|
|
|
Provision for the year
|
|
|
(2,443
|
)
|
|
|
(3,524
|
)
|
Under-provision in respect of prior years
|
|
|
|
|
|
|
(135
|
)
|
|
|
|
Deferred taxation
|
|
|
|
|
|
|
|
|
|
|
|
Origination and reversal of temporary differences
|
|
|
(45,964
|
)
|
|
|
(50,513
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(48,407
|
)
|
|
|
(54,172
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(50,688
|
)
|
|
|
(58,954
|
)
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Dividends payable to equity shareholders of the Company attributable to the year:
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
Special dividend declared and paid of HK$2.5 per ordinary share (2011: HK$Nil)
|
|
|
2,022,542
|
|
|
|
|
|
Interim dividend declared and paid of HK15 cents per ordinary share (2011: HK15 cents per ordinary share)
|
|
|
119,674
|
|
|
|
115,605
|
|
Final dividend proposed after the balance sheet date of HK15 cents per ordinary share (2011: HK15 cents per ordinary
share)
|
|
|
121,352
|
|
|
|
115,787
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,263,568
|
|
|
|
231,392
|
|
|
|
|
|
|
|
|
|
|
The final dividend proposed after the balance sheet date has not been recognised as a liability at the
balance sheet date.
- 17 -
|
(b)
|
Dividends attributable to the previous financial year, approved and paid during the year:
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
Final dividend in respect of the financial year ended 31 August 2011, approved and paid of HK15 cents per ordinary share
(2011: HK13.5 cents per ordinary share in respect of the financial year ended 31 August 2010)
|
|
|
115,901
|
|
|
|
103,735
|
|
|
|
|
|
|
|
|
|
|
In respect of the final dividend for the financial year ended 31 August 2011, there is a difference
of HK$114,000 between the final dividend disclosed in the last annual financial statements and the amounts approved and paid during the year which represents dividends attributable to new shares issued upon the exercise of share options before the
closing date of the register of members.
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
Profit attributable to equity shareholders
|
|
|
3,700,288
|
|
|
|
313,915
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
Number
|
|
|
Number
|
|
|
|
of shares
|
|
|
of shares
|
|
|
|
000
|
|
|
000
|
|
Issued ordinary shares at the beginning of the year
|
|
|
771,912
|
|
|
|
764,997
|
|
Effect of share options exercised
|
|
|
12,164
|
|
|
|
3,810
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary shares at the end of the year (basic)
|
|
|
784,076
|
|
|
|
768,807
|
|
Incremental shares from assumed exercise of share options
|
|
|
11,511
|
|
|
|
23,992
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary shares at the end of the year (diluted)
|
|
|
795,587
|
|
|
|
792,799
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
HK471.9 cents
|
|
|
|
HK40.8 cents
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
|
HK465.1 cents
|
|
|
|
HK39.6 cents
|
|
|
|
|
|
|
|
|
|
|
- 18 -
The
majority of the Groups accounts receivable are due within 30 days from the date of billings. Customers with receivable that are more than 3 months overdue are requested to settle all outstanding balance before further credit is granted.
The aging analysis of the accounts receivable is as follows:
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
Current30 days
|
|
|
573
|
|
|
|
44,949
|
|
3160 days
|
|
|
565
|
|
|
|
16,417
|
|
6190 days
|
|
|
94
|
|
|
|
6,861
|
|
Over 90 days
|
|
|
79
|
|
|
|
10,302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,311
|
|
|
|
78,529
|
|
Less
: Allowance for doubtful debts
|
|
|
|
|
|
|
(6,530
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
1,311
|
|
|
|
71,999
|
|
|
|
|
|
|
|
|
|
|
The
aging analysis of the accounts payable is as follows:
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
Current 30 days
|
|
|
2,920
|
|
|
|
11,719
|
|
3160 days
|
|
|
315
|
|
|
|
245
|
|
6190 days
|
|
|
84
|
|
|
|
733
|
|
Over 90 days
|
|
|
2,052
|
|
|
|
4,722
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,371
|
|
|
|
17,419
|
|
|
|
|
|
|
|
|
|
|
- 19 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-
|
|
|
|
|
|
|
|
|
|
Share
|
|
|
Share
|
|
|
Capital
|
|
|
redemption
|
|
|
Retained
|
|
|
Exchange
|
|
|
Revaluation
|
|
|
Other
|
|
|
|
|
|
controlling
|
|
|
Total
|
|
|
|
|
|
|
capital
|
|
|
premium
|
|
|
reserve
|
|
|
reserve
|
|
|
profits
|
|
|
reserve
|
|
|
reserve
|
|
|
reserve
|
|
|
Total
|
|
|
interest
|
|
|
equity
|
|
|
|
Note
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
At 1 September 2011
|
|
|
|
|
|
|
77,191
|
|
|
|
1,083,495
|
|
|
|
23,759
|
|
|
|
7
|
|
|
|
607,783
|
|
|
|
5,146
|
|
|
|
|
|
|
|
|
|
|
|
1,797,381
|
|
|
|
|
|
|
|
1,797,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,700,288
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,700,288
|
|
|
|
(2,414
|
)
|
|
|
3,697,874
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5,146
|
)
|
|
|
|
|
|
|
|
|
|
|
(5,146
|
)
|
|
|
|
|
|
|
(5,146
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,700,288
|
|
|
|
(5,146
|
)
|
|
|
|
|
|
|
|
|
|
|
3,695,142
|
|
|
|
(2,414
|
)
|
|
|
3,692,728
|
|
Final dividend paid in respect of previous year
|
|
|
8
|
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(115,901
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(115,901
|
)
|
|
|
|
|
|
|
(115,901
|
)
|
Special dividend paid in respect of current year
|
|
|
8
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,022,542
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,022,542
|
)
|
|
|
|
|
|
|
(2,022,542
|
)
|
Interim dividend paid in respect of current year
|
|
|
8
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(119,674
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(119,674
|
)
|
|
|
|
|
|
|
(119,674
|
)
|
Shares issued upon exercise of share option
|
|
|
|
|
|
|
3,711
|
|
|
|
104,510
|
|
|
|
(33,044
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,177
|
|
|
|
|
|
|
|
75,177
|
|
Equity settled share-based transactions
|
|
|
6
|
(d)
|
|
|
|
|
|
|
|
|
|
|
10,480
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,480
|
|
|
|
|
|
|
|
10,480
|
|
Share options lapsed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,195
|
)
|
|
|
|
|
|
|
1,195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revaluation of investment properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
165,156
|
|
|
|
|
|
|
|
165,156
|
|
|
|
|
|
|
|
165,156
|
|
Contributions from non-controlling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,450
|
|
|
|
2,450
|
|
Acquisition of non-controlling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,826
|
)
|
|
|
(1,826
|
)
|
|
|
(36
|
)
|
|
|
(1,862
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2012
|
|
|
|
|
|
|
80,902
|
|
|
|
1,188,005
|
|
|
|
|
|
|
|
7
|
|
|
|
2,051,149
|
|
|
|
|
|
|
|
165,156
|
|
|
|
(1,826
|
)
|
|
|
3,483,393
|
|
|
|
|
|
|
|
3,483,393
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 September 2010
|
|
|
|
|
|
|
76,500
|
|
|
|
1,074,997
|
|
|
|
21,064
|
|
|
|
7
|
|
|
|
513,208
|
|
|
|
2,763
|
|
|
|
|
|
|
|
|
|
|
|
1,688,539
|
|
|
|
|
|
|
|
1,688,539
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
313,915
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
313,915
|
|
|
|
|
|
|
|
313,915
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,383
|
|
|
|
|
|
|
|
|
|
|
|
2,383
|
|
|
|
|
|
|
|
2,383
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
313,915
|
|
|
|
2,383
|
|
|
|
|
|
|
|
|
|
|
|
316,298
|
|
|
|
|
|
|
|
316,298
|
|
Final dividend paid in respect of previous year
|
|
|
8
|
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(103,735
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(103,735
|
)
|
|
|
|
|
|
|
(103,735
|
)
|
Interim dividend paid in respect of current year
|
|
|
8
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(115,605
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(115,605
|
)
|
|
|
|
|
|
|
(115,605
|
)
|
Shares issued upon exercise of share option
|
|
|
|
|
|
|
691
|
|
|
|
8,498
|
|
|
|
(1,957
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,232
|
|
|
|
|
|
|
|
7,232
|
|
Equity settled share-based transactions
|
|
|
6
|
(d)
|
|
|
|
|
|
|
|
|
|
|
4,652
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,652
|
|
|
|
|
|
|
|
4,652
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2011
|
|
|
|
|
|
|
77,191
|
|
|
|
1,083,495
|
|
|
|
23,759
|
|
|
|
7
|
|
|
|
607,783
|
|
|
|
5,146
|
|
|
|
|
|
|
|
|
|
|
|
1,797,381
|
|
|
|
|
|
|
|
1,797,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 20 -
BUSINESS REVIEW
FY2012 is an exciting and remarkable year for City Telecom, not only because we celebrated our 20th anniversary, it was also the turning point to begin a completely new era in the multimedia industry. On
30 May 2012, we completed the very substantial disposal transaction of the entire Telecom Business, including Fixed Telecommunications Network Services business (FTNS) and International Telecommunications business (IDD),
since then, the Multimedia Business becomes the principle focus of the Group, which includes the production, sales and distribution of Cantonese TV drama series, news programmes and other TV programmes. It will also include the offering of free TV
programming services in Hong Kong, subject to the grant of the domestic free television programme service licence by the Chief Executive in Council.
While our first 9 months financial results were mainly contributed by the Telecom Business, we have been actively building our foothold in the Multimedia Business in Hong Kong since FY2011. In FY2011
Chairmans Statement, our Chairman, Mr. Ricky Wong clearly stated our vision for this new business to unleash the creativity potential of drama production in Hong Kong, and to nurture hundreds of writers in the coming eight to
ten years, bringing Hong Kong back into the position of Asian drama production hub. With this clear direction in mind, we are running the talk now:
Reversing the Creative Direction
City Telecom is reputable in leading change
in an industry and in fighting the Goliath, and our management team is distinctive at execution to make our dream come true. All of these have been well proved in our 20-year history in the telecommunications industry. Now, we are stepping into a
new arena to drive for a revolution change here, our first change is to enable a much larger room for creativity and possibility which we consider as one of the key determining factors to encourage variety and to unleash the creativity
potential for drama production. In long run, we aim to prolong the creative period from approximately 3 months to approximately 6 months to further enhance the quality.
Strong Production Momentum
Since mid-2011, we embarked a large scale
head-hunting process to recruit the top tier talents in the multimedia industry from creative directors to post production professionals, we now have a professional team of more than 500 talents together with about 220 artistes.
All of us are gear-up in full speed to prepare for the battle since April 2012, we started to produce our weapons at present, we have completed shooting for 4 TV drama series with 4 others in progress (ranging from
1030 hours per series).
Our another focus is on infotainment and variety programmes we expect to produce a wide spectrum of
programmes with no boundary on subjects and locations, ranging from world class production, such as Challenge to execute impossible missions including chasing the hurricane in the United States, climbing into a live volcano in Vanuatu,
etc., and to programmes introducing domestic local culture, such as Secret of Food.
- 21 -
Upon the disposal of the Telecom Business, the news production operation unit remained with the Group which
will continue to provide news content to the Telecom Business for their bbTV broadcasting use under a licensing arrangement. Once our broadcasting start, our news production operation unit will fully support the news programme production.
Apart from the above self-produced programmes, we also purchased popular and high quality contents from Japan, Korea and Mainland China
including TV drama series and cartoons. To adapt to local audiences, we maintain a professional dubbing team for the post production process, including dubbing to local language and subtitling. As of 31 August 2012, we have more than 850
episodes of purchased content in our library.
With the assumption that we can start broadcasting in the second half of 2013, we intend to
double our 2012 production output on TV drama series, and on infotainment and variety programmes in 2013.
Top Tier Hardware
We understand hardware is an inevitable component to link talents and creativity together for high quality output. Hence, we are committed
to invest resources to provide top tier facilities:
1.
|
TV & Multimedia Production and Distribution Centre in Tseung Kwan O Industrial Estate (the Centre)
|
After our ground breaking ceremony in February 2012, the Centre reached its milestone in October 2012 by completing the foundation work
and is now under the tendering stage on superstructural works. The Centre will possess gross floor area of approximately 500,000 sq. ft. and consists of 12 studios, including an 18,000 sq. ft. studio which is the largest in Hong Kong and smaller
studios with 3,000 sq. ft. each. Construction works are expected to be completed in FY2014 and the Centre will become our headquarter.
2.
|
Hollywood movie graded production equipment
|
While we mentioned we are aiming at quality production, we are the first in the Hong Kong free TV platform to use Hollywood movie graded ARRI cameras for TV drama series production. Moreover, according to
our plan, we will also have the post production facilities in the Centre to equip with pioneering technology, compatible for 3D, 4k and even 8k super-high standards. In short, our hardware would be future-proofed not only for todays
production.
Audience Engagement
City Telecom is well known to be a pioneer, and we are not going to position ourselves same as the incumbent our aim is clear to have our high quality production to go beyond the traditional
free TV platform. Nowadays, it is almost impossible to capture 100% of our audiences eyeballs back to the TV screen because of the competition from the companion devices which are an indefeasible equipment in our daily life.
Ridding on our expertise on communication technology, we are going to create an integrated interactive multi-screen viewer experience, so as to engage the companion device users to stick with our productions, no matter on TV
screen or on the companion device screen.
- 22 -
In short, our whole team consisting over 700 professionals are all excited about this new multimedia venture
in Hong Kong more important, we share the same vision as our Chairman, Mr. Ricky Wong we want to enhance the quality and increase the variety to our Hong Kong people, so as to bring Hong Kong back into the position of Asian drama
production hub.
FINANCIAL REVIEW
FY2012 was an extraordinary year in terms of cashflow due to the disposal of the Telecom Business during the year which has secured our funding flexibility to develop the Multimedia Business. While we are
at the start-up stage preparing for the TV programme library, no material revenue was generated from the Multimedia Business during the year. Most of the resources were mainly invested into producing weapons for the battle to be
declared.
Continuing operations
Continuing operations mainly include Multimedia Business as well as corporate functions. A net loss of HK$73.8 million was recorded in FY2012 versus a net loss of HK$32.1 million in FY2011 mainly due to
the uncapitalised expenses from Multimedia Business which represented the talent costs expensed to profits and loss before resources being fully deployed to the production during the year, and the maintenance of full corporate functions after the
disposal of Telecom Business.
There were HK$3.8 million turnover generated in FY2012 (FY2011: HK$Nil) mainly represented the licence fee
received from the Telecom Business to broadcast the news content produced by the news production operation unit, and the income received from artiste management functions.
As at 31 August 2012, we invested HK$87.6 million into programme costs which mainly represented the capitalisation of talent costs and production overheads which were directly attributable to
programme production and purchased contents during the year (FY2011: HK$Nil).
Discontinued operations
On 11 April 2012, the Group announced to dispose our telecommunications business (the Discontinued Operations) in Hong Kong and in Canada
to enable us to focus on the Multimedia Business. The Group subsequently received the final consideration of HK$4,873.6 million on 30 May 2012 to conclude our 20-year legend in the FTNS and IDD landscape. This transaction has brought to us a
gain on sale of Discontinued Operations of HK$3,520.1 million, together with the 9 months operation results from the Telecom Business before the disposal, the total net profits generated from the Discontinued Operations were HK$3,771.7 million.
- 23 -
LIQUIDITY AND CAPITAL RESOURCES
The Group continued to be in a strong financial position for the year under review, in particular after receiving the final consideration of HK$4,873.6 million (a net cash inflow of HK$4,655.4 million
after netting transaction costs of HK$183.4 million and HK$34.8 million represented the cash and cash equivalents disposed of) from the sale of Telecom Business during the year. A special dividend of HK$2,022.5 million (i.e. at HK$2.5 per ordinary
share) was distributed on 29 June 2012. The remaining cash will be used to fund the continuing development and expansion of the Groups Multimedia Business. Pending such use of the funds, consistent with the overall treasury objectives and
policy, the Group will undertake treasury management activities with respect to its surplus cash assets. As and when cash is expected to be required to fund the continuing development and expansion of the Multimedia Business, the investments will be
realised as appropriate.
As of 31 August 2012, the Group had total cash at bank and in hand and term deposits amounting to HK$2,627.1
million (31 August 2011: HK$409.0 million) and outstanding borrowing of HK$3.3 million (31 August 2011: HK$1.2 million), which led to a net cash position of HK$2,623.8 million (31 August 2011: HK$407.8 million). As of 31 August 2012, the Group
has utilised HK$2.0 million banking facilities mainly for providing bank guarantees to utility vendors in lieu of utility deposits (31 August 2011: HK$6.9 million), leaving HK$21.3 million available for future utilisation.
As of 31 August 2012, we only had long-term liability of obligations under finance leases which amounted to HK$0.2 million (31 August 2011: HK$0.3
million). Our total cash and cash equivalents consisted of cash at bank and in hand and term deposits. There is no pledged bank deposit as at 31 August 2012 and 31 August 2011.
The debt maturity profiles of the Group as of 31 August 2012 and 31 August 2011 were as follows:
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
Repayable within one year
|
|
|
3,111
|
|
|
|
950
|
|
Repayable in the second year
|
|
|
90
|
|
|
|
105
|
|
Repayable in the third to fifth year
|
|
|
70
|
|
|
|
183
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
3,271
|
|
|
|
1,238
|
|
|
|
|
|
|
|
|
|
|
As of 31 August 2012, our outstanding borrowings bear fixed or floating interest rate and are all denominated in
Hong Kong dollars. As the Group was in net cash position for both FY2012 and FY2011, no gearing ratio is presented.
In FY2012, we spent
HK$462.4 million on capital expenditure versus HK$449.2 million in FY2011. Among this amount, HK$178.8 million was incurred for the Multimedia Business mainly for the construction of the Centre and for the set-up of production facilities for TV
drama series and Infotainment and variety programme. The remaining of HK$283.6 million was for the disposed Telecom Business.
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For the construction of the Centre and the expansion into the Multimedia Business pending the grant of
licence, our capital expenditure outlook for FY2013 is expected to be about HK$700.0 million, which is expected to be funded by internal resources retained from the consideration received from the disposal of Telecom Business, and banking facilities
within the Group. Overall, the Groups financial position remains sound for continuous business expansion.
Charge on Group Assets
As of 31 August 2012, the Group has not been required for any pledged deposits to secure its banking facilities.
Exchange Rates
All the Groups
monetary assets and liabilities are primarily denominated in either Hong Kong dollars or United States dollars. Given the exchange rate of the Hong Kong dollar to the United States dollar has remained close to the current pegged rate of HKD7.80 =
USD1.00 since 1983, management does not expect significant foreign exchange gains or losses between the two currencies.
Contingent
Liabilities
As of 31 August 2012, the Group had total contingent liabilities in respect of guarantees provided to utility vendors in
lieu of payment of utility deposits of HK$2.0 million (31 August 2011: HK$5.6 million) and HK$Nil to suppliers (31 August 2011: HK$1.3 million).
Save as disclosed above, there are no material contingent liabilities or off-balance-sheet obligations.
PROSPECTS
From this year onward, City Telecom is a 100% devoted multimedia company in Hong
Kong. While we are in the start-up stage, when transparency is low and subject to wider business variance and the granting of the free domestic television programme service licence, our preliminary key metrics are planned below but are subject to
change as business and market condition evolves:
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Self-produced content will scale up and plan to double the production output in 2012 with a budget of approximately HK$1.0 million per hour for TV drama series
production in 2013. We expect that majority of the production related costs and overheads will be capitalised until airing of programmes, expected some 69 months after the free domestic television programme service licence grant.
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Capital expenditure of about HK$700.0 million, majority of which will be for the new multimedia production and distribution centre under construction in Tseung Kwan O
Industrial Estate, New Territories. The latest announced construction cost budget is expected to be not less than HK$800.0 million to FY2014.
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DIVIDEND
In line with the guidance given in FY2011 annual report, the Board is recommending a final dividend of HK15 cents per ordinary share, together with the interim dividend paid at HK15 cents per ordinary
share, this will bring a total of HK30 cents per ordinary share to our shareholders for FY2012 (FY2011: HK30 cents per ordinary share).
In
addition to the above, because of the sale of the Telecom Business, part of the consideration from the transaction has been returned to our shareholders via a special dividend on 29 June 2012 at HK$2.5 per ordinary share.
Going forward, given the start up of the Multimedia Business which may have a wider variance, it is estimated that the Group will be in the investment
stage in the next three years and do not expect there will be dividend payout until we start to generate profit. By then, we shall review our dividend policy based on the balance sheet position, profit generating ability as well as the development
plans ahead.
TALENT REMUNERATION
Including the directors of the Group, as at 31 August 2012, the Group had 537 permanent full-time Talents versus 3,080 as of 31 August 2011. The total Talent-related cost was HK$553.0 million in
FY2012 versus HK$566.7 million in FY2011. The decrease in headcount was mainly due to the sale of Telecom Business during the year.
The Group
provides remuneration package consisting of basic salary, bonus and other benefits. Bonus payments are discretionary and dependent on both the Groups and individual performances. The Group also provides comprehensive medical insurance
coverage, competitive retirement benefits schemes, staff training programmes and operates share option schemes.
PURCHASE, SALE OR
REDEMPTION OF LISTED SECURITIES
Neither the Company nor any of its subsidiaries has purchased, sold nor redeemed any of the Companys
listed securities during the year ended 31 August 2012.
COMPLIANCE WITH CODE ON CORPORATE GOVERNANCE PRACTICES
The Company has complied with the applicable code provisions of the Code on Corporate Governance Practices as set out in former Appendix 14 to the Listing
Rules from 1 September 2011 to 31 March 2012 and has complied with the applicable code provisions as set out in Corporate Governance Code and Corporate Governance Report to the existing Appendix 14 of the Listing Rules from 1 April
2012 to 31 August 2012.
CODE OF CONDUCT FOR SECURITIES TRANSACTIONS BY DIRECTORS
The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuer (the Model Code) contained in Appendix 10 to
the Listing Rules as the code of conduct for securities transactions by Directors (the Company Code).
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Having made specific enquiry with the Directors, all of the Directors confirmed that they had complied with
the required standard set out in the Model Code and the Company Code throughout the year ended 31 August 2012.
REVIEW BY AUDIT
COMMITTEE
The Audit Committee has reviewed and discussed with the management of the Company the audited final results for the year ended
31 August 2012.
The Audit Committee comprises three Independent Non-executive Directors, namely Mr. Lee Hon Ying, John (the
Chairman of the Audit Committee), Dr. Chan Kin Man and Mr. Peh Jefferson Tun Lu.
FINAL DIVIDEND
The Board has recommended to pay a final dividend of HK15 cents per ordinary share in respect of the year ended 31 August 2012 (2011: HK15 cents per
ordinary share). Subject to the approval of the Companys shareholders at the forthcoming Annual General Meeting, the proposed final dividend will be distributed on or about 24 January 2013 to the shareholders whose names appear on the
register of members of the Company as at the close of business on 8 January 2013.
CLOSURE OF REGISTER OF MEMBERS
The register of members of the Company will be closed during the following periods:
(i)
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from 27 December 2012 to 31 December 2012, both days inclusive, for the purpose of ascertaining shareholders entitlement to attend and vote at the 2012
Annual General Meeting. In order to be eligible to attend and vote at the 2012 Annual General Meeting, all transfer documents accompanied by the relevant share certificates must be lodged for registration with the Companys Share Registrar,
Computershare Hong Kong Investor Services Limited at Shops Nos. 1712-1716, 17th Floor, Hopewell Centre, 183 Queens Road East, Wanchai, Hong Kong not later than 4:30 p.m. on 24 December 2012; and
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(ii)
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from 7 January 2013 to 8 January 2013, both days inclusive, for the purpose of ascertaining shareholders entitlement to the proposed final dividend. In
order to establish entitlements to the proposed final dividend, all transfer documents accompanied by the relevant share certificates must be lodged for registration with the Companys Share Registrar, Computershare Hong Kong Investor Services
Limited at Shops Nos. 1712-1716, 17th Floor, Hopewell Centre, 183 Queens Road East, Wanchai, Hong Kong not later than 4:30 p.m. on 4 January 2013.
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ANNUAL GENERAL MEETING
The Annual General Meeting of the Company will be held on 31 December 2012. Notice of the Annual General Meeting together with the Companys Annual Report will be published and dispatched in the
manner as required by the Listing Rules in due course.
By Order of the Board
Wong Nga Lai, Alice
Executive Director, Chief Financial Officer and
Company Secretary
Hong Kong, 21 November 2012
As at the date of this announcement, the executive directors
of the Company are Mr. Wong Wai Kay, Ricky (Chairman), Mr. Cheung Chi Kin, Paul (Vice Chairman), Ms. To Wai Bing (Chief Executive Officer), Ms. Wong Nga Lai, Alice (Chief Financial Officer); the non-executive director is
Dr. Cheng Mo Chi, Moses; and the independent non-executive directors are Mr. Lee Hon Ying, John, Dr. Chan Kin Man and Mr. Peh Jefferson Tun Lu.
Where the English and the Chinese texts conflicts, the English text prevails
- 28 -
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