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 28, 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:
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Form 20-F
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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
þ
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 the
Companys annual report and audited consolidated financial statements 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: Wong Nga Lai, Alice
Title: Executive Director,
Chief Financial Officer and
Company Secretary
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Dated: November 28, 2012
THE BEGINNING OF A TV MIRACLE
City Telecom (H.K.) Limited
Stock CodeSEHK: 1137; NASDAQ: CTEL
City Telecom (H.K.) Limited is a Hong Kong and the U.S. listed company (SEHK: 1137;
NASDAQ : CTEL). Established in 1992, the Group possesses extensive and successful experience in telecom market liberalization, popularizing advanced technology & applications.
The Group strives to expand its foothold to the TV industry. Since 2011, we have been aggressive in forming the dream team
of artistes, production and creative Talents. The Group will invest over HK$800 million in the next three years to build a 500,000 sq. ft. TV & Multimedia Production Centre, including the largest studio in Asia with an area of 18,000 sq.
ft. and post-production suite equips with 3D and Super High-definition production facilities. The production centre is expected to go into full operation in 2014.
At commencement, City Telecoms TV business will broadcast 5 channels, and will increase to 30 in 6 years. City Telecom targets in 2013 to double up the production output produced in
2012.
Contents
02 Financial Highlights
04 Major Milestones and
Events
08 Chairmans Statement
12 Managements Discussion and Analysis
20
Updates on Free TV & Multimedia Business 20 TV & Multimedia Production Centre 22 Our Talents 26 Drama Production 28 Variety & Infotainment Production
32 Profile of Directors and Senior Management
Financial Information
37 Corporate Governance Report
46 Report of the
Directors
55 Independent Auditors Report
56 Consolidated Income Statement
57 Consolidated Statement of Comprehensive Income
58 Balance Sheet
60 Consolidated Statement of Changes in Equity
61
Consolidated Cash Flow Statement
62 Notes to the Financial Statements 119 Five-Year Financial Summary 120
Corporate Information
City Telecom (H.K.) Limited Annual Report 2012
Financial Highlights
In thousands of Hong Kong dollars except for per share amounts and ratios
For the year ended Year-on-Year Change
31 August 31 August 2012 2011 Amount %
Continuing Operations
Turnover 3,7623,762
100.0% Loss attributable to shareholders (71,406) (32,110) (39,296) 122.4% Loss per share
Basic (HK cents) (9.0) (4.1) (4.9) 119.5%
Diluted (HK cents) (9.0) (4.1) (4.9) 119.5% Total dividend declared per share (HK cents) 30.0
30.0-
Interim 15.0 15.0-
Final 15.0 15.0-Capital Expenditures 178,750 51,255 127,495 248.7%
Discontinued Operations1
Profit attributable to shareholders 3,771,694 346,025 3,425,669 990.0%
Profit after taxation 251,606 346,025 (94,419) (27.3%)
Gain on sale of discontinued operations 3,520,0883,520,088 100%
As at As at
31 August 31 August
2012 2011
Cash position2 2,627,119 408,976 2,218,143 542.4% Total outstanding borrowings 3,271 1,238 2,033
164.2% Total equity attributable to equity shareholders 3,483,393 1,797,381 1,686,012 93.8% Shares in issue (in thousands) 809,017 771,912 37,105 4.8% Net asset per share (HK$) 4.31 2.33 1.98 85.0% Gearing ratio N/A N/A N/A N/A
1 Discontinued operations represented the disposal of Telecom Business completed on 30 May 2012. Hence, the profit
after taxation represented the first nine months results of the Telecom Business during the year ended 31 August 2012.
2
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Cash position means cash at bank and in hand and term deposits, but excluding
pledged bank deposits.
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City Telecom (H.K.) Limited Annual Report 2012 04
Major Milestones and Events
1992 MAY 1997 JAN MAR AUG
City Telecom (H.K.)
Limited Launch of IDD300 Calling Set up INC (the Specialized City Telecom was listed on (City Telecom) was Service IDD Network for Corporations) The Stock Exchange of Hong incorporated in Hong Kong for corporate sector Kong Limited
MAR 2001 MAY 2002 APR JUN
Launch of Broadband CTI International awarded the HKBN officially launched Launched of HKBN IDD0030 Internet services by HKBN Satellite-based Fixed Carrier local on-net VoIP telephony
service license service, and upgraded to become a wireline-based FTNS licensee
2006 SEP 2008 JAN FEB 2009 FEB
City Telecom enhanced Work- HKBN launched the free HKBN awarded contract for City Telecom launched talent Life
Balance with the launch WiFi Service at public rental the provision of payphone upgrade program: Next of eight employee-beneficial housing estates service at the Hong Kong Station: University measures International Airport
DEC 2010 FEB MAR APR
HKBN shattered the one- HKBN took on climate City Telecom celebrated 10 HKBN launched 1 Gbps millionth mark for Fixed change with expedition to the Years on NASDAQ broadband for HK$199/
Telecommunications Network Antarctica month (US$26) Services subscriptions HKBN launched bb100 + WiFi services at Hong Kong International Airport
MAY JUN JUN AUG
Surpassed 10,000 Symmetric
Incredible 1Gbps Triple- Awesome HK$9.9/month City Telecom announced the 1Gbps Subscribers Play (1Gbps Broadband, (US$1.30) HomeTel Switch- establishment of Worldclass HomeTel, bbTV) for HK$158/ Over Offer for incumbents Multimedia Centre
Doorway month (US$20/month) customers to Multimedia Creativity
1998 NOV 1999 JAN NOV 2000 FEB
The first company to receive Launch of IDD1666 Direct ADR listing on the NASDAQ Hong Kong Broadband the license of ISR
voice Calling Service National Market of USA Network Limited (HKBN), service in Hong Kong a subsidiary of City Telecom obtained the local wireless FTNS license
2003 AUG 2004 NOV 2005 APR OCT
HKBN officially
launched HKBN announced the launch HKBN launched bb1000 HKBN launched 2b IP-TV service of bb100, Hong Kongs Fibre-To-The-Home 1Gbps Broadband Phone Service, first 100Mbps residential residential broadband service
providing VoIP service to broadband service local and overseas users via software version broadband phone
NOV
NOV
HKBN launched AWESOME City Telecom received SPEED. FOR EVERYONE Innovation in
Recruitment 100Mbps broadband at and Champion of HR HK$99 /month (US$13) awards at the HRM Awards 2009
NOV DEC 2011 APR
Mr. Ricky Wong, Chairman,
HKBN launches HD Online HKBN bbTV became Local was awarded Ernst & Young Music Portal MusicOne News Contents Provider for Entrepreneur Of The Year Smart TVs and launched 2010 China For Telecom bbTV GIANT mobile apps
Category
The HKSAR Government granted a piece of land in Tseung Kwan O for City HKBN Big Fat Dumb
Groundbreaking Telecom to build our TV & Multimedia Production Centre. Mr. Samson Tam,
Pipes that easily handles of City Telecoms
ex-Legislative Council Member (4th
over 100GB/month per user TV & Multimedia from left), Ms. Shirley Yuen, CEO of across our 600,000 plus Production Centre HKGCC (5th from left), Mr. Ricky Wong,
Chairman of City Telecom (3rd from right) FTTH/B customer base and other guests of honour officiating the
Groundbreaking Ceremony.
Mr. Ricky Wong, Chairman of City City Telecoms TV & Multimedia
City Telecom urges
Telecom (11th from the left) led our
guests and talents to celebrate Production Centre reached a Government to vet Free TV 20 th Anniversary. new milestone
applications at Normal Hong Kong Speed
IN THE FIRST DECADE, WE INTRODUCED CALL-BACK IDD SERVICE INTO HONG KONG, THUS LEADING
IN COMPETITION INTO THE MARKET.
City Telecom (H.K.) Limited Annual Report 2012 08
Chairmans Statement
Most of us know that, viewers behaviour has been changing and most of them would not retain 100% of their focus on TV screens. Those who are able to attract the eyeballs of the
audience will become the King of the traditional TV industry. If someone still insists on casting and traditional TV program production, one would be weeded out by the market force created by technology.
Dear Shareholders, I strongly believe that City Telecom has marshaled the essential Talents and ?nancial resources to face
the challenge. The 2012 is a special year for City Telecom. On one hand we road ahead will not be simple and ?at, but this is a long-celebrated 20th Anniversary, and we concluded our ?rst venture term investment project. The only thing that went
beyond my in telecom business on the other. There are ups and downs expectation is the approval time for the Domestic Free Television in economic cycles, so do business ?nancial returns. Our Programme Service Licence. We have been very aggressive to
management team foresees the constraints on expansion and express our concerns and urge the Government to grant the competition for operating ?xed telecom network service in a small licence as soon as possible. Up to this moment, I have not city
like Hong Kong; and we also noticed the rapid growth for the heard of any negative feedback or comments so far. While our demand towards Chinese entertainment programmes globally, application has reached the ?nal stage of vetting, we strongly
particularly from China. believe that City Telecom will be granted the licence as planned.
With the long
history of TV & movie production, Hong Kong embraces a rich pool of creative & production Talents. In recent years, the degradation of the industry was largely originated Wong Wai Kay, Ricky from issues on corporate governance and
management Chairman culture. Despite this, Hong Kong remains to be the hub of
Hong Kong, 21 November 2012
creativity freedom that mingles cultures from the East and West.
Undoubtedly, the Chinese economy has been
blooming over the past decades, but Hong Kong embraces irreplaceable cultural advantage that would possibly be transformed into financial returns. By virtue of our 20 years technology knowhow and expertise, we aim to integrate connected TV,
smartphones & tablets, creating a new experience in media convergence.
In recent decade, there have
been discussions over the convergence of Internet, computer and TV devices. Just like a decade ago, Fibre-to-the-Home was a hot topic, but many people spoke without further actions. Some people have the guts, but they dont have sufficient
resources; while some other people that are resourceful, but they are too complacent to start all over again.
I strongly believe that City Telecom has marshaled the essential Talents and financial
resources to face the challenge. The road ahead will not be simple and flat, but this is a long-term investment project.
IN THE SECOND DECADE, HONG KONG BROADBAND NETWORK LIMITED WAS ESTABLISHED. WE LAID OUR
OPTIC FIBRE NETWORK ALL OVER HONG KONG, OFFERING HIGH SPEED BROADBAND SERVICES AT AFFORDABLE PRICE LEVELS.
City Telecom (H.K.) Limited Annual Report 2012
Managements Discussion and Analysis
BUSINESS REVIEW missions including chasing the hurricane in the United States, climbing
into a live volcano in Vanuatu, etc., and to programmes FY2012 is an exciting and remarkable year for City Telecom, not introducing domestic local culture, such as Secret of Food. only because we celebrated our 20th anniversary, it was
also the turning point to begin a completely new era in the multimedia Upon the disposal of the Telecom Business, the news production industry. On 30 May 2012, we completed the very substantial operation unit remained with the Group which will
continue to disposal transaction of the entire Telecom Business, including provide news content to the Telecom Business for their bbTV Fixed Telecommunications Network Services business (FTNS) broadcasting use under a licensing
arrangement. Once our and International Telecommunications business (IDD), since broadcasting start, our news production operation unit will fully then, the Multimedia Business becomes the principle focus of support the news programme
production. the Group, which includes the production, sales and distribution of Cantonese TV drama series, news programmes and other Apart from the above self-produced programmes, we also TV programmes. It will also include the offering of free TV
purchased popular and high quality contents from Japan, Korea programming services in Hong Kong, subject to the grant of the and Mainland China including TV drama series and cartoons. domestic free television programme service licence by the Chief
To adapt to local audiences, we maintain a professional dubbing Executive in Council. team for the post production process, including dubbing to local language and subtitling. As of 31 August 2012, we have more While our first 9 months financial
results were mainly contributed than 850 episodes of purchased content in our library. by the Telecom Business, we have been actively building our foothold in the Multimedia Business in Hong Kong since With the assumption that we can start
broadcasting in the second FY2011. In FY2011 Chairmans Statement, our Chairman, Mr. half of 2013, we intend to double our 2012 production output on Ricky Wong clearly stated our vision for this new business to TV drama series, and
on infotainment and variety programmes in unleash the creativity potential of drama production in Hong 2013.
Kong, and to nurture hundreds of writers in the coming eight to ten years, bringing Hong Kong back into the position of
Asian Top Tier Hardware drama production hub. With this clear direction in mind, we are We understand hardware is an inevitable component to link running the talk now: talents and creativity together for high quality output. Hence, we are
committed to invest resources to provide top tier facilities:
Reversing the Creative Direction
City Telecom is reputable in leading change in an industry and 1. TV & Multimedia Production and
Distribution Centre in in fighting the Goliath, and our management team is distinctive at Tseung Kwan O Industrial Estate (the Centre) execution to make our dream come true. All of these have been After our ground breaking ceremony in
February 2012, the well proved in our 20-year history in the telecommunications Centre reached its milestone in October 2012 by completing industry. Now, we are stepping into a new arena to drive for the foundation work and is now under the
tendering stage a revolution change here, our first change is to enable a much on superstructural works. The Centre will possess gross floor larger room for creativity and possibility which we consider as area of approximately 500,000 sq. ft. and
consists of 12 one of the key determining factors to encourage variety and to studios, including an 18,000 sq. ft. studio which is the largest unleash the creativity potential for drama production. In long in Hong Kong and smaller studios with 3,000
sq. ft. each. run, we aim to prolong the creative period from approximately 3 Construction works are expected to be completed in FY2014 months to approximately 6 months to further enhance the quality. and the Centre will become our headquarter.
Strong Production Momentum 2. Hollywood movie grade production equipment
Since mid-2011, we embarked a large scale head-hunting While we mentioned we are aiming at quality production,
process to recruit the top tier talents in the multimedia industry we are the first in the Hong Kong free TV platform to use from creative directors to post production professionals, we Hollywood movie grade ARRI cameras for TV drama series
now have a professional team of more than 500 talents together production. Moreover, according to our plan, we will also with about 220 artistes. All of us are gear-up in full speed to have the post production facilities in the Centre equipped
prepare for the battle since April 2012, we started to produce with pioneering technology, compatible for 3D, 4k and even our weapons at present, we have completed shooting for 4 8k super-high standards. In short, our
hardware would be TV drama series with 4 others in progress (ranging from 1030 future-proofed not only for todays production. hours per series).
Audience Engagement
Our another focus is on
infotainment and variety programmes City Telecom is well known to be a pioneer, and we are not we expect to produce a wide spectrum of programmes with going to position ourselves same as the incumbent our aim no boundary on subjects
and locations, ranging from world is clear to have our high quality production to go beyond the class production, such as Challenge to execute impossible traditional free TV platform. Nowadays, it is almost impossible to
City Telecom (H.K.) Limited Annual Report 2012 14
Managements Discussion and Analysis
capture 100% of our audiences eyeballs back to the TV screen conclude our 20-year legend in the FTNS and IDD landscape. because of the competition from the companion
devices which This transaction has brought to us a gain on sale of Discontinued are an indefeasible equipment in our daily life. Ridding on our Operations of HK$3,520.1 million, together with the 9 months expertise on communication technology, we
are going to create operation results from the Telecom Business before the disposal, an integrated interactive multi- screen viewer experience, so the total net profits generated from the Discontinued Operations as to engage the
companion device users to stick with our were HK$3,771.7 million. productions, no matter on TV screen or on the companion device
screen. LIQUIDITY AND CAPITAL RESOURCES
In short,
our whole team consisting over 700 professionals are all The Group continued to be in a strong financial position for excited about this new multimedia venture in Hong Kong more the year under review, in particular after receiving the final
important, we share the same vision as our Chairman, Mr. Ricky consideration of HK$4,873.6 million (a net cash inflow of Wong we want to enhance the quality and increase the variety HK$4,655.4 million after netting transaction costs of
HK$183.4 of free TV programmes to our Hong Kong people, so as to bring million and HK$34.8 million represented the cash and cash Hong Kong back into the position of Asian drama production equivalents disposed of) from the sale of Telecom Business
hub. 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 FINANCIAL REVIEW 2012. The remaining cash will be used to fund the continuing development and expansion of the
Groups Multimedia Business. FY2012 was an extraordinary year in terms of cashflow due to Pending such use of the funds, consistent with the overall the disposal of the Telecom Business during the year which treasury objectives and policy, the
Group will undertake treasury has secured our funding flexibility to develop the Multimedia management activities with respect to its surplus cash assets. As Business. While we are at the start-up stage preparing for the TV and when cash is expected
to be required to fund the continuing programme library, no material revenue was generated from the development and expansion of the Multimedia Business, the Multimedia Business during the year. Most of the resources were investments will be
realised as appropriate. mainly invested into producing weapons for the battle to be declared. 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 Continuing
Operations August 2011: HK$409.0 million) and outstanding borrowing of Continuing operations mainly include Multimedia Business HK$3.3 million (31 August 2011: HK$1.2 million), which led as well as corporate functions. A net loss of HK$73.8 million
to a net cash position of HK$2,623.8 million (31 August 2011: was recorded in FY2012 versus a net loss of HK$32.1 million HK$407.8 million). As of 31 August 2012, the Group has utilised in FY2011 mainly due to the uncapitalised expenses from
HK$2.0 million banking facilities mainly for providing bank Multimedia Business which represented the talent costs guarantees to utility vendors in lieu of utility deposits (31 August expensed to profits and loss before resources being fully 2011:
HK$6.9 million), leaving HK$21.3 million available for deployed to the production during the year, and the maintenance future utilisation. of full corporate functions after the disposal of Telecom Business. As of 31 August 2012, we only had
long-term liability of There were HK$3.8 million turnover generated in FY2012 obligations under finance leases which amounted to HK$0.2 (FY2011: HK$Nil) mainly represented the licence fee received million (31 August 2011: HK$0.3 million). Our total
cash and from the Telecom Business to broadcast the news content cash equivalents consisted of cash at bank and in hand and term produced by the news production operation unit, and the income deposits. There is no pledged bank deposit as at
31 August 2012 received from artiste management functions. and 31 August 2011.
As at 31 August
2012, we invested HK$87.6 million into The debt maturity profiles of the Group as of 31 August 2012 and programme costs which mainly represented the capitalisation 31 August 2011 were as follows: of talent costs and production overheads
which were directly 2012 2011 attributable to programme production and purchased contents HK$000 HK$000 during the year (FY2011: HK$Nil).
Repayable within one year 3,111 950 Discontinued Operations Repayable in the second year 90 105 On 11 April 2012, the Group announced to dispose our Repayable in the third to fifth
year 70 183 telecommunications business (the Discontinued Operations) in Hong Kong and in Canada to enable us to focus on the Total 3,271 1,238 Multimedia Business. The Group subsequently received the final consideration of HK$4,873.6
million on 30 May 2012 to
As of 31 August 2012, our outstanding borrowings bear fixed Self-produced
content will scale up and plan to double the or floating interest rate and are all denominated in Hong Kong production output in 2012 with a budget of approximately dollars. As the Group was in net cash position for both FY2012 HK$1.0 million per
hour for TV drama series production in and FY2011, no gearing ratio is presented. 2013. We expect that majority of the production related costs In FY2012, we spent HK$462.4 million on capital expenditure and overheads will be capitalised until
airing of programmes, versus HK$449.2 million in FY2011. Among this amount, expected some 69 months after the free domestic television HK$178.8 million was incurred for the Multimedia Business programme service licence grant. mainly for the
construction of the Centre and for the set-up of Capital expenditure of about HK$700.0 million, majority production facilities for TV drama series and Infotainment and of which will be for the new multimedia production and variety programme.
The remaining of HK$283.6 million was for distribution centre under construction in Tseung Kwan O the disposed Telecom Business. Industrial Estate, New Territories. The latest announced For the construction of the Centre and the expansion into
construction cost budget is expected to be not less than the Multimedia Business pending the grant of licence, our HK$800.0 million to FY2014. capital expenditure outlook for FY2013 is expected to be about HK$700.0 million, which is expected to be
funded by internal DIVIDEND resources retained from the consideration received from the In line with the guidance given in FY2011 annual report, the disposal of Telecom Business, and banking facilities within the Board is recommending a final
dividend of HK15 cents per Group. Overall, the Groups financial position remains sound for ordinary share, together with the interim dividend paid at HK15 continuous business expansion. cents per ordinary share, this will bring a total of HK30
cents per ordinary share to our shareholders for FY2012 (FY2011: HK30 Charge on Group Assets cents per ordinary share).
As of 31 August 2012, the Group has not been required for any pledged deposits to secure its banking facilities. In addition to the above, because of the sale of the Telecom Business,
part of the consideration from the transaction has been Exchange Rates returned to our shareholders via a special dividend on 29 June All the Groups monetary assets and liabilities are primarily 2012 at HK$2.5 per ordinary share.
denominated in either Hong Kong dollars or United States dollars. Given the exchange rate of the Hong Kong dollar to the Going forward, given the start up of the Multimedia Business United States dollar has remained close to the current pegged which
may have a wider variance, it is estimated that the Group rate of HKD7.80 = USD1.00 since 1983, management does not will be in the investment stage in the next three years and do not expect significant foreign exchange gains or losses between the
expect there will be dividend payout until we start to generate two currencies. profit. By then, we shall review our dividend policy based on the balance sheet position, profit generating ability as well as the Contingent Liabilities development
plans ahead.
As of 31 August 2012, the Group had total contingent liabilities in respect of guarantees
provided to utility vendors in lieu of TALENT REMUNERATION payment of utility deposits of HK$2.0 million (31 August 2011:
HK$5.6 million) and HK$Nil to suppliers (31 August 2011: Including the directors of the Group, as at 31 August 2012, the HK$1.3 million). Group had 537 permanent full- time Talents
versus 3,080 as of
31 August 2011. The total Talent-related cost was HK$553.0 Save as disclosed above,
there are no material contingent million in FY2012 versus HK$566.7 million in FY2011. The liabilities or off-balance-sheet obligations. decrease in headcount was mainly due to the sale of Telecom Business during the year.
PROSPECTS The Group provides remuneration package consisting of From this year onward, City Telecom is a 100% devoted
basic salary, bonus and other benefits. Bonus payments are multimedia company in Hong Kong. While we are in the start-up discretionary and dependent on both the Groups and individual stage, when transparency is low and subject to wider
business performances. The Group also provides comprehensive medical variance and the granting of the free domestic television insurance coverage, competitive retirement benefits schemes, programme service licence, our preliminary key metrics are
staff training programmes and operates share option schemes. planned below but are subject to change as business and market condition evolves:
HONG KONG
ENTERTAINMENT CREATOR
CREATING MIRACLES
STEPPING INTO OUR THIRD DECADE, WE ARE MARCHING TOWARDS OUR NEW BATTLEFIELD :
FREE TV & MULTIMEDIA BUSINESS.
City Telecom (H.K.) Limited Annual Report 2012
Updates on Free TV & Multimedia Business
IN AUGUST 2011, THE GOVERNMENT GRANTED US A PARCEL OF LAND IN TSEUNG KWAN O TO BUILD TV & MULTIMEDIA PRODUCTION CENTRE.
The Centre will possess gross floor area of Open-style design, including glass elevated
walkways around the studios, for the public and academic exceeding 500,000 sq. ft. The design of organizations to observe our shooting, enhancing public
the building caters practical usage needs, understanding on TV industry; corporate social responsibility, environmental
Collaboration with Independent Content Producers,
friendliness and various important aspects :
contributing to the development of local creative industry;
The first TV station project in Hong Kong with environmental
Allocating studio time on student training for universities certification, BEAM Plus; and tertiary institutions, nurturing
the next generation TV elites.
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.;
Post production centre equipped with pioneering
technology, compatible for 3D, 4k and even 8k super-high standards;
City Telecom (H.K.) Limited Annual Report 2012
Updates on Free TV & Multimedia Business
Our Talents
CITY TELECOM EMBRACES MORE THAN 500
BACKSTAGE ELITES
shooting location. Mr. Ben Fong, Executive Producer, Creative (Right Three in First Row)
welcomed them and show Team the unity of Production team and Creative team.
CREATIVE DIRECTORS
Lam Shiu Chi
Lam Shiu Chi has worked at two local TV stations and Taiwan Next TV, with Lau Choi Wan her career in TV industry Square Pegs and Life Made commenced in the 90s. Since
Simple are two notable works then, she developed over 30 of Lau Choi Wan, whereas pieces of notable works, in audiences were moved by the which she is particularly good simple & innocent personalities at the creation of feminine of
the main character Ah dramas and depicting Wong. Her other credits exquisite love relationships. include LEscargot, Gun Part of her works including Metal Grey, House of Armed Reaction ,
War of Harmony and Vengeance and the Genders, My Family Ghetto Justice I and II. and Forrest Cat II, etc.
Choy Shuk Yin, Stella
Chu Kang Ki Stella Choy
graduated from the Chu Kang Ki is known for Faculty of Social Science of making breakthroughs in The University of Hong Kong creating distinctive characters and she has been involving in which achieved critical the success of a diverse slate acclaim
for his works. More of popular television hits over notably, some of them received the past 18 years. Wars of In-positive comments from the Laws and Wars of In-Laws II public, including E.U. , depicted the
conflicts between Burning Flame, La Femme mother and daughter in law, Desperado, To Get Unstuck receiving positive reviews from In Time and Youre Hired, audiences. Her other credits etc. The
breakout character include Maidens Vow, Laughing Gor in E.U. soon Curse of the Royal Harem became the classic hero as the and Lives of Omission. madness of online sharing led to
continuous popularity.
SCRIPT SUPERVISORS
Lee Yee Wah, Anna Leung Man Wa, Pion
Anna Lee worked as a part- Pion Leung has participated in time script writer for television writing numerous large-scale and films since her study projects, including At the in the
School of Journalism Threshold of An Era, The
Pun Man Hung
and Communication at The Gem of Life, Triumph in the
Chinese University of Hong Skies, Healing Hands and Pun Man Hung is active Kong. She has since written
Cant Buy Me Love, etc. in writing television scripts the films City Cop, Twist and she also involved in and GEN-X COPS, etc. Yip Sai Hong scriptwriting for films. Take Also, she has
contributed My Word For It, The Yip Sai Hong wrote for the Hippocratic Crush, Armed to the television hits of television series of Revolving Police Archives, Fist of Reaction I to III,
Healing Doors of Vengeance, Bar Hands III and Turning Point Fury, Curse of the Royal Bender, Face to Fate and Harem, Revolving Doors of are some of her significant
Light of Million Hope during pieces.
Vengeance and E.U. series the period he
worked for the I to III. two major local TV stations as
Choi Ting Ting, Tessa
well as Taiwan Next TV.
Suen Ho Ho, Gabe Tessa Choi wrote a series Gabe Suen served as a Lau Siu Kwan of scripts for television, script writer for a major local including Forensic Heroes Lau Siu Kwan
wrote for the I to III, Burning Flame II, television station prior to famous television series on joining CTI, where she wrote a To Catch The Uncatchable ancient China palace War and Beyond the Realm of number of
popular plays. And and Beauty, which received more notably, she specializes Conscience which has have positive receptions and achieved a high degree of in bringing the audiences into overwhelmed the audience. the movie through revealing
audience share.
Other modern and timeliness the inner feelings of each credits include Instinct,
characters. Her notable works Armed Reaction I to III, Pao Wai Chung, Alex include Sisters Of Pearl, Forensic Heroes I and II Alex Pao specializes in writing Beauty Knows No Pain and as well as
Every Move You classic sitcoms and long-form The Hippocratic Crush.
Make. TV series.
His notable works include File of Justice I to III, Secret of the Heart, Virtues of Harmony, War of the Genders and The Gem of Life, etc.
Creative Director, Mr. Chu Kang Ki (Middle) plays the role of tutor in nurturing the new bloods from the TV industry
by sharing his personal experience.
City Telecom (H.K.) Limited Annual Report 2012
Updates on Free TV & Multimedia Business
Our Talents
Kwan Shu Ming, Anthony
Anthony Kwan worked as Senior Producer at other local TV station and played a critical role in directing a wide variety of
drama series such as Three Kingdoms RPG, Production Wong Kwok Keung Under the Canopy of Love Wong Kwok Keung possesses and The Ultimate Crime Team more than 20 years of Fighter, The Mysteries of experience
in drama directing. Love and Burning Flame. EXECUTIVE His works include Forensic Heroes 3, No Regrets and So Man Chung, Danny PRODUCERS A Fistful of Stances.
Danny So is a prolific Lau Shun On, Douglas television drama producer Fong Chun Wah, Ben who has participated in a Ben
Fong is best known for In the past 23 years, Douglas number of epochal large-developing family drama Lau specializes in directing re- scale production. His series series over the past 20 years. edited TV series such as The credits include
flagship series His screen credits include Return of the Condor Heroes, Triumph in the Skies, Moonlight Resonance, Royal Tramp and Eternal Ups and Downs in the Sea Cant Buy Me
Love and Happiness, etc. Other famous of Love; featured series Daddy Good Deeds. works include A Step into the filmed in Africa The Last Past, Crimson Sabre and Breakthrough;
high-rated Chan Sun Hop Strike at Heart. series Lives of Omission; collaborative series with Chan Sun Hop has worked at Au Yiu Hing, Benjamin CCTV for the celebration the two local major TV stations of 10th Anniversary
of the over the years, participating in Benjamin Au has produced establishment of Hong the production of large-scale a number of renowned Kong Special Administrative projects. He is best known for series over the past 15 years, Region
The Drive of directing action dramas and including Armed Reaction Life as well as Detective his major works include Tiger 4, Burning Flame 3 and Investigation Files I-IV. In Cubs, Gun
Metal Grey, The Greatness of A Hero, addition, he is the guest host D.I.E., House of Harmony etc. His notable piece Ghost of RTHKs programme giving and Vengeance, Curse of the
Writer, received overwhelming commentary on Royal Harem and My Date responses and reached a high with a Vampire. percentage of ratings.
Luk Tin Wah, Jimmy
Jimmy Luk is best known as the
director of the popular television hits, including War and Beauty, Healing Hands season 2 and 3 and When Heaven Burns, etc. His notable works include The Executive Producers, Mr. M.C.
So and Mr. Chan Sun Hop Dance of Passion and No led other producers to attend
Regrets, featuring with epic The National Association of and well-written characters . Broadcasters (NAB)
Show in Las Vegas for experience exchange.
Infotainment and Documentary Department
PRODUCTION Wong Ursule (Right) and CONTROLLER Tsang Kwok Cheung (Left) and our crew formed the SCRIPT first Asian team,
visiting Joani Tang SENIOR the worlds great active SUPERVISORS volcanoes in Vanuatu.
Joani Tang is an
experienced EXECUTIVE programme producer for
TV documentaries. Prior PRODUCERS Chan Wai Yi, Victoria to
joining CTI, she was the Victoria Chan is a veteran
Producer and Associate Vice script writer for documentary
Mill Tse
Carman Lee
President of ATV and was and infotainment programmes. Mill Tse is an experienced one of the founding members Carman Lee, is a veteran She took part in the producer with more than
screenplay creator for food of the team that produced creative writing of awarded and travel programs. He notable works such as Hong 20 years in directing and programmes Stories from managing. She produced fronted the series of
Hong Kong Today and Stories Afar and On the Road. Kong Today and in the from Afar. Besides, she has various kinds of variety At the same time, she shows, including Jade period of 2000 to 2001,
also worked as Production also made great efforts in he exceled at creating and Executive of Enrichment and Solid Gold Best Ten Music producing international Awards Presentation, TVB producing different genres Infotainment Department at
standard documentaries. of food programs, including TVB and produced popular Anniversary Awards, Miss She contributed to The Hong Kong Pageant and the series of Famous programmes such as On the Secret of Chinese
Beauty Chinese Cuisine hosted Road and Being. She also Movie Buff Championship. series of Discovery Channel. by May Huang, Worldwide produced documentaries for She also worked for the Culinary
Creations, Famous National Geographic Channel Tely Fung National Geographic Channel, Chinese Cuisine III, Eating and Discovery Channel. Despite storylining The Kung Healthy, Fresh Taste, Best
Tely Fung is a documentary the fact that the documentaries Fu Killers. In 2010, she Trips Around The World, film producer, for over 20 that produced by her have participated in Siu Mei Kung Deluxe Tour and Taiwan
years contributed to some broadened audiences horizons Fu which won the Creative Delicacies. In recent years, of the notable programmes to global perspective, it also won Award for U.S International he planned Admirals
Feast screened in Hong Kong. He a number of awards. Film and Video Festival. Series for the celebrity chefhas produced a number of classic informative Wong Wing Chi. programmes, including Hong Kong Today, Stories from
Afar as well as other top tier variety shows such as Hong Kong Film Awards.
In the recent
ten years, he has been focusing on filming international standard documentaries for Discovery Channel. His latest production, Cheers Hong Kong received positive credits from audiences.
Ms. Joani Tang, Production Controller of Infotainment and Documentary (Right Two in First Row) visited Thich Nhat
Hanh, (Right Three in First Our crew travels to the Row) the spiritual leader of meditation retreat campsite in the modern world.
France. Thich Nhat Hanh leads the believers from all over the world in the practice of walking meditation every day.
City Telecom (H.K.) Limited Annual Report 2012 26
Updates on Free TV & Multimedia Business
Drama Production
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Life and Kate actor a and his crimes including Man Lung ong Yat W covers dailyLam in loveW
TV drama have fallen detective . tough-minded irascible police a dual role, Wong A an takes crushAdrian
life of an undercover; for . This unexpected daughter the 12 years robbers imprisoned each other the king of with break; analyzes the most exhilarating framed for prison officer to be a senior police proves a crime; single forcibly committing
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featuring their wisdom
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fight Real Society surveillance drama, each
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The . Kung sanguinary the fight and . The story of stopping or todays media meaning revenges of for taking
statements who a tool used main actresses is not to maintain led by three but aiming was but sins free newspaper committing . This TV in the same justice work and the daily and pursuing visions, peace stories different out the humanistic possess the
conflicts drama brings such news underlines martial arts breaking featuring different Baji . by sun and them Wing T between
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Fu, etc
Kung
? ? s s cre c ws, wi thr th eat off o nu he clear a radad The
Th he int h hosts st o of th o about 10 e doc ocuu kiloom ? men ramam Fuk F ush help p th the vi ima nuc clelee cti ctt ar p nororthe th ast 5 5IJIJDI_ D /IB in Japan, rea ce c ntury U_)B BO BOI_JT shooting in JOnn JO ali presents thee
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The episode covers a couple of stories telling how the warriors float with different beliefs. Thich Nhat
Hanh is a spiritual leader, influencing more than one hundred million people in the world; Aung San Suu Kyi strives for the freedom of democracy for Burmese throughout her whole life; War correspondents headed off to Fukushima, Japan with the
fearless of natural disasters and radiation. Our production crew traveled to France, Burma, Afghanistan, Libyan and Fukushima Prefecture of Japan in search of the impacting and life-changing stories.
Wong gU Ursule e tra and Ts velled d tto Van uat u u reac ea Wo vol vo hing an acti ng
Ursule canano. ve (Right g
Che eun ungg (Lef eft ftt) k star ta te ted t mo mouu Wong He and ntaineering g
skiki Ya an l the th he to loccal a act er the U.S and tri tri ive volcanoo ed to catchh of V Vanuatatu. torrnaddo.
City Telecom sent a crew to a remote city in Gansu province, to shoot the maiden visit
to the pioneering ORBIS Flying Eye Hospital (FEH).
r Ms. SanSaS dra Ambassado to o witw ness me t to the
ed plapl ne e.
(Righ ghg t) wen fulfu u ly y facili litat ery y on n a nzhouo a surg severe re of La a gi irl
l with who ba b by y girl nzhou. d a areare of L La ry urau l taracta surge gi irlr rgorg ing g c ca S, t the he l be unde d RBIRB wil picturtu e foro mother e . ainted a and her red an nd p recove dra Ng.
San
Variety & Infotainment Production
arta ticularl rly w p ore he wilw l explxp k, nac ck itional s trad adi d tio ional e. h audi dien enc rabra able taste of
ogram m witw s conso ide it is the in n the e pr e saida tha at ack. She acks, h itii onao al snac the heart brown n infinii ty in ol a perfect co am m in prp ogr ar ricr e cake sug
_ _
Food lovers hit up every corner in Hong Kong in search of the best local, handcrafted foods. Apart from unlocking the allusion, they shared the secret of cooking as well.
City Telecom (H.K.) Limited Annual Report 2012 32
Pro?le of Directors and Senior Management
EXECUTIVE DIRECTORS
Mr. WONG Wai Kay, Ricky 1 Mr. CHEUNG Chi Kin, Paul 2
Chairman Vice Chairman
aged 50, is the co-founder
and Chairman of the Group and is aged 55, is the co-founder and Vice Chairman of the Group also a director of various subsidiaries of the Group. Mr. Wong is and is also a director of various subsidiaries of the Group. responsible for our
overall strategic planning and management.
Mr. Cheung is responsible for overall strategic planning and
Mr. Wong has over 27 years experience in the telecommunications management of the Group. Prior to that, Mr. Cheung was and computer industries and has substantial experience in appointed as the Chief Executive Of?cer and was
responsible corporate management. He had worked at a major US-listed for our day-to-day operations and technological research, computer company as a marketing representative and was development and support activities. Mr. Cheung has more
responsible for marketing and distribution of computer products than 31 years experience in the telecommunications and in Hong Kong from 1985 to 1989. He was also a co-founder computer industries and has substantial experience in corporate and
director of a company principally engaged in import and management. He had worked in several companies engaged distribution of computer systems in Canada prior to co-founding in application software development and computer consultancy of the Group.
Mr. Wong holds a Bachelors Degree in Science prior to co-founding of the Group. Mr. Cheung graduated with a and a Master of Business Administration Degree (Executive MBA
Diploma of Advanced Programming and System Concepts Design Programme) from The Chinese University of Hong Kong. He is a
from Herzing Institute, Canada. Mr. Cheung is a ?rst cousin of ?rst cousin of Mr. Cheung Chi Kin, Paul, the Vice Chairman of the Mr. Wong Wai Kay, Ricky, the Chairman of the Group.
Group. Currently, Mr. Wong is a member of Zhejiang Committee, Chinese Peoples Political Consultative
Conference, a member of the Board of Trustees, United College, The Chinese University of Hong Kong and a member of the executive committee of the Digital Solidarity Fund of Hong Kong Council of Social Service.
Ms. TO Wai Bing 3 Ms. WONG Nga Lai, Alice 4
Chief Executive Officer Chief Financial Officer & Company Secretary
aged 50, was appointed as the Executive Director and Chief aged 37, was appointed as the Executive Director, Chief
Executive Officer of the Group on 30 May 2012. Ms. To is also Financial Officer and Company Secretary of the Group on 30 the Chief Operating Officer of Hong Kong Media Production May 2012 and is also a director of various subsidiaries of
the Company Limited, the Chief Executive Officer of Leader Group. Ms. Wong has over 14 years of experience in financial Artiste Management Company Limited, as well as a director management and accounting. She is mainly responsible for of
abovementioned subsidiaries. Ms. To is responsible for the Groups overall finance functions, procurement function as overseeing the multimedia business of the Group. Prior to that, well as investor engagement. Prior to that, Ms. Wong
was the Ms. To was the Managing Director of Business Development of Financial Controller of the Group. Ms. Wong holds a Bachelor the Group. Ms. To has a Diploma in Electronic Engineering and a of Commerce degree from the University of
Queensland, a Higher Certificate in Electronic Engineering from The Hong Kong Master of Business Administration degree from the Hong Kong Polytechnic University. Ms. To re-joined the Group in May 2007 University of Science and Technology and a
Postgraduate after her previous service with the Group from September 1998 Diploma in Corporate Governance. She is a qualified member of to July 2006. Before joining the Group, Ms. To had worked at the Hong Kong Institute of Certified Public
Accountants (HKICPA) Hong Kong Telecom International Limited for 16 years. and Association of Chartered Certified Accountants (ACCA). She has been a member of the Student Affairs Sub-committee of ACCA Hong Kong since 2010. Before joining the Group,
Ms. Wong had worked for PricewaterhouseCoopers in Hong Kong primarily focusing on the technology, info-communications and entertainment sectors.
NON-EXECUTIVE DIRECTOR INDEPENDENT NON-EXECUTIVE DIRECTORS
Dr. CHENG Mo Chi, Moses 5 Mr. LEE Hon Ying, John 6
aged 62, was appointed as an Independent Non-executive aged 66, is the managing director of Cyber Networks Consultants
Director of the Group since 17 June 1997 and has been re- Company in Hong Kong. He was the Regional Director, Asia designated as a Non-executive Director of the Group with effect Pacific of Northrop Grumman-Canada, Ltd. He was previously from
30 September 2004. Dr. Cheng is also a member of the the director of network services of Digital Equipment (HK) Remuneration Committee of the Company and was appointed Limited and prior to that, worked for Cable and Wireless (HK) as a
member of the Nomination Committee of the Company Limited and Hong Kong Telecom. He is a chartered engineer on 27 February 2012. Dr. Cheng is a practising solicitor and and a member of Institution of Engineering and Technology, the the
senior partner of Messrs. P.C. Woo & Co. Dr. Cheng was United Kingdom, the Hong Kong Institution of Engineers and the a member of the Legislative Council of Hong Kong. He is the Hong Kong Computer Society. He received a Masters
Degree in Founder Chairman of the Hong Kong Institute of Directors of Information System from The Hong Kong Polytechnic University which he is now the Honorary President and Chairman Emeritus. in 1992. In addition, he is the Vice President and Board
Member Dr. Cheng currently holds directorships in K. Wah International of the Society of St. Vincent de Paul, Council General, which is Holdings Limited, China Mobile Limited, China Resources an international charity body with its head office
in Paris, France. Enterprise, Limited, Towngas China Company Limited, Kader He is the Commission member of Catholic Diocese of Hong Kong Holdings Company Limited, Liu Chong Hing Investment Limited, Diocesan for Hospital Pastoral Care. Mr. Lee
has been a Director Guangdong Investment Limited and Tian An China Investments of the Group since June 1997. Mr. Lee has also been appointed Company Limited, all being public listed companies in Hong as the chairman of the Audit Committee and
Remuneration Kong. Dr. Cheng is also an independent non-executive director Committee of the Company. Mr. Lee has been appointed as a of ARA Asset Management Limited, a company whose shares are member of the Nomination Committee of the
Company on 27 listed on the Singapore Stock Exchange. His other directorships February 2012. in public listed companies in the last 3 years include Hong Kong Exchanges and Clearing Limited and China COSCO Holdings Company Limited, both being public
listed companies in Hong Kong, and ARA Asset Management (Fortune) Limited (formerly known as ARA Asset Management (Singapore) Limited), which manages Fortune Real Estate Investment Trust, a real estate investment trust listed on both the Singapore
Stock Exchange and Hong Kong Stock Exchange.
Dr. CHAN Kin Man 7 Mr. PEH Jefferson Tun Lu 8
aged 53, is Director of Centre for Civil Society Studies, Associate aged 53, is a Certi?ed Public Accountant of the Hong
Kong Director of Center for Entrepreneurship and Associate Professor Institute of Certi?ed Public Accountants and a Certi?ed Practicing of the Department of Sociology of The Chinese University of Accountant of CPA Australia. Mr. Peh holds a
Master Degree in Hong Kong. He received a Bachelor of Social Science Degree Business from the University of Technology, Sydney. He has over from The Chinese University of Hong Kong in 1983 and a Doctor 30 years of experience in ?nance, accounting
and management of Philosophy Degree from Yale University in the U.S. in 1995. from listed and private companies in Hong Kong and Australia. Dr. Chan has been a Director of the Group since June 1997. Mr. Peh has been a Director of the Group
since September Dr. Chan has also been appointed as a member of the Audit 2004. Mr. Peh has also been appointed as a member of the Committee and Remuneration Committee of the Company. Audit Committee and Remuneration Committee of the
Company. Dr. Chan has been appointed as the member of the Nomination Mr. Peh has been appointed as the Chairman of the Nomination Committee of the Company on 27 February 2012. Committee of the Company on 27 February 2012.
SENIOR MANAGEMENT
The Executive Directors of the Company are also members of senior management of the Group.
City Telecom (H.K.) Limited Annual Report 2012
Financial Information
37 Corporate Governance Report 60 Consolidated Statement of Changes
46 Report of the Directors in Equity
55
Independent Auditors Report 61 Consolidated Cash Flow Statement
56 Consolidated Income Statement 62
Notes to the Financial Statements
57 Consolidated Statement of 119 Five-Year Financial Summary Comprehensive
Income 120 Corporate Information
58 Balance Sheet
37
Corporate Governance Report
CORPORATE GOVERNANCE PRACTICES
The Board recognises the importance of corporate governance and is committed to the maintenance of a high corporate governance practices and procedures to safeguard the interests of the shareholders and
to enhance the performance of the Group.
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 Rules Governing the Listing of Securities (the Listing Rules) on The Stock Exchange of Hong Kong Limited (the Stock Exchange) 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 (the New Code) form 1 April 2012 to 31 August 2012.
DIRECTORS SECURITIES TRANSACTIONS
The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (the Model Code) contained in Appendix 10 to the Listing Rules as the code of conduct for
securities transactions by Directors of the Company (the Company Code).
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.
THE BOARD
The
Board steers and oversees the management of the Company including, establishing the strategic direction of the Company, setting the long-term objectives of the Company, monitoring the performance of management, protecting and maximising the
interests of the Company and its shareholders, reviewing, considering and approving the annual budget, management results and performance update against annual budget, together with business reports from the management.
The Board has delegated an executive committee comprising all Executive Directors, with authority and responsibility for day-to-day
operations and administration of the Company.
All Directors have full and timely access to all relevant information as well as
advice and services of the Company Secretary, with a view to ensuring that Board procedures and all applicable rules and regulations, are followed. Upon making request to the Board, all Directors may obtain independent professional advice at the
Companys expense for carrying out their functions.
The
Board currently comprises a total of eight Directors, with four Executive Directors, one Non-executive Director and three Independent Non-executive Directors. During the year ended 31 August 2012 and up to the date of this annual report, the
changes to the composition of the Board were as follows:
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Mr. Yeung Chu Kwong, William resigned as an Executive Director and Chief Executive Officer with effect from 30 May 2012;
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Mr. Lai Ni Quiaque resigned as an Executive Director, Chief Financial Officer and Company Secretary with effect from 30 May 2012;
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Ms. To Wai Bing was appointed as an Executive Director and Chief Executive Officer with effect from 30 May 2012; and
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Ms. Wong Nga Lai, Alice was appointed as an Executive Director, Chief Financial Officer and Company Secretary with effect from 30 May 2012.
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The Board believes that the balance between Executive and Non-executive Directors is reasonable and adequate
to provide sufficient checks and balances that safeguard the interests of shareholders and the Company.
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City Telecom (H.K.) Limited Annual Report 2012
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38
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Corporate Governance Report
As at the date of this annual report, the composition of the Board is set out as
follows:
Executive Directors
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)
Non-executive Director
Dr. Cheng Mo Chi, Moses
Independent Non-executive Directors
Mr. Lee Hon Ying, John
Dr. Chan Kin Man
Mr. Peh Jefferson Tun Lu
Mr. Wong Wai Kay, Ricky is a first cousin of Mr. Cheung Chi Kin, Paul. Save as disclosed above, there are no financial, business, family, other material and relevant relationships among members
of the Board as at the date of this annual report.
The biographical information of the Directors is set out in the section of
Profile of Directors and Senior Management on pages 32 to 35 of this annual report.
(iii)
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Appointment, Re-election and Removal of Directors
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The Board has established a nomination committee on 27 February 2012 with details set out in the section headed (ii) Nomination Committee to review the process of director nomination.
Under the Companys Articles of Association (the Articles), the Board may from time to time appoint a
director either to fill a casual vacancy or as an addition to the existing Board. Any such new director shall hold office only until the next following general meeting of the Company (in the case of filling a casual vacancy) or until the following
annual general meeting of the Company (in the case of an addition to the existing Board), and shall then be eligible for re-election. Every director, including non-executive and independent non-executive directors, is subject to retirement by
rotation at least once every three years. One-third of the directors must retire from office at each annual general meeting and their re-election is subject to the approval of shareholders of the Company.
In accordance with Article 92 of the Articles, Ms. To Wai Bing and Ms. Wong Nga Lai, Alice will hold office until the 2012
annual general meeting of the Company and, being eligible, will offer themselves for re-election at the 2012 annual general meeting.
Furthermore, in accordance with Articles 96 and 99 of the Articles, Dr. Cheng Mo Chi, Moses and Dr. Chan Kin Man will retire from office by rotation at the 2012 annual general meeting and, being
eligible, will offer themselves for re-election at the 2012 annual general meeting.
(iv)
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Chairman and Chief Executive Officer
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The Chairman of the Board is an Executive Director who is responsible for the leadership and effective running of the Board. The Chief Executive Officer is an Executive Director who is responsible for the
Companys operations and business development under the direction of the Board. The positions of the Chairman of the Board and the Chief Executive Officer are currently held by separate individuals for the purpose of ensuring an effective
segregation of duties and a balance of power and authority.
(v)
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Non-executive Director and Independent Non-executive Directors
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The term of office of all Non-executive Directors (including the Independent Non-executive Directors) has been fixed for a specific term of one year. They are subject to retirement by rotation and
re-election at the Companys annual general meeting at least once every three years in accordance with the Articles.
During the year ended 31 August 2012, the Board at all times met the requirements under Rule 3.10 of the Listing Rules relating to
the appointment of at least three Independent Non-executive Directors with at least one of them possessing appropriate professional qualifications or accounting or related financial management expertise.
The Board has received written confirmation of independence from each of the Independent Non-executive Directors and considers them to be
independent and free of any relationship that could materially interfere with the exercise of their independent judgment.
39
Corporate Governance Report
(vi)
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Number of Meetings and Directors Attendance
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The Board meets from time to time, and on no less than four times a year, to discuss and exchange ideas on the Companys affairs. During the year ended 31 August 2012, the Board held seven
meetings to deliberate the interim and final results announcements, financial reports, to recommend or declare dividends and to discuss significant issues and general operation of the Company. Individual attendance records of each Director at the
respective Board and committee meetings are set out in the table on page 42 of this annual report.
(vii)
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Practices and Conduct of Meetings
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Notices of regular Board meetings together with all relevant information and reports prepared by management are given to all Directors at least 14 days before the meetings. For other Board and committees
meetings, reasonable notice is generally given. The Company Secretary is responsible to keep minutes of all Board and committees meetings. Draft minutes are circulated to all Directors or committee members for comment in a timely manner and final
version for their records. The minutes/resolutions of the Board and the committees are open for inspection by Directors.
(viii)
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Training and Support for Directors
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In case there is any newly appointed Director, he/she will be provided with an induction course so as to ensure that he/she has appropriate understanding of the business and operations of the Company and
that he/she is fully aware of his/her responsibilities and obligations under the Listing Rules and the other applicable regulatory requirements.
There are also arrangements in place for providing continuing briefing and professional development to Directors as when necessary.
During the year, the Company has delivered the latest version of A Guide on Directors Duties published by the Hong Kong Companies Registry, Guidelines for Directors and
Guide for Independent Non-executive Directors published by the Hong Kong Institute of Directors to all Directors and encourages them to read such guides in order to acquaint themselves with the general duties of directors and the
required standard of care, skill and diligence in the performance of their functions and exercise of their powers as Directors.
The Company continuously updates Directors on the latest developments regarding the Listing Rules and other applicable regulatory
requirements, to ensure compliance and enhance their awareness of good corporate governance practices. All Directors are encouraged to attend relevant training courses at the Companys expenses. Directors are requested to provide the Company
with their respective training record pursuant to the New Code.
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City Telecom (H.K.) Limited Annual Report 2012
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40
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Corporate Governance Report
COMMITTEES OF THE BOARD
The Board has set up the Audit Committee, Nomination Committee and Remuneration Committee (collectively the Board Committees), for overseeing the respective aspects of the Companys
affairs.
Members of the Board Committees have been advised that they may seek independent professional advice at the Companys expenses
in appropriate circumstances.
The
Board established its Audit Committee in March 1999 with specific terms of reference setting out the committees authority and duties.
The Audit Committee comprises three members, namely, Mr. Lee Hon Ying, John, Dr. Chan Kin Man and Mr. Peh Jefferson Tun Lu, who are all Independent Non-executive Directors and one of whom
possesses the appropriate professional qualifications or accounting or related financial management expertise as required under Rule 3.10(2) of the Listing Rules. Mr. Lee Hon Ying, John is the Chairman of the Audit Committee. The Audit
Committee is provided with sufficient resources to discharge its duties.
The major roles and functions of the Audit Committee
are set out in the Audit Committee Charter which is made available on the website of the Company at www.ctigroup.com.hk. The Audit Committee is responsible for, inter alia, overseeing the accounting and financial reporting processes of the Group
including the audits of the Groups financial statements on behalf of the Board; the appointment of the external auditor and its fees; and reviewing and discussing the internal audit plans and reports of the audit activities, examinations and
results thereof of the Internal Audit Department of the Company.
The Audit Committee held four meetings during the year ended
31 August 2012. Executive Directors, representatives from the Internal Audit Department of the Company and the external auditors of the Company were invited to join the discussions at the relevant meetings.
Following is a summary of works performed by the Audit Committee during the year ended 31 August 2012:
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(i)
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Review of the Companys financial statements for the year ended 31 August 2011 and for the six months ended 29 February 2012;
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(ii)
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Review of the internal audit progress, especially on the compliance of the Sarbanes-Oxley Act;
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(iii)
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Review of the external auditors report on the review of the Companys interim financial report for the six months ended 29 February 2012 and the
Companys audited consolidated financial statements for the year ended 31 August 2011; and
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(iv)
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Pre-approval of the audit and non-audit services provided by the Companys external auditors.
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41
Corporate Governance Report
(ii)
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Nomination Committee
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The
Board established its Nomination Committee in February 2012 with specific terms of reference setting out the committees authority and duties.
The Nomination Committee comprises four members, namely, Mr. Lee Hon Ying, John, Dr. Chan Kin Man, Mr. Peh Jefferson Tun Lu, Dr. Cheng Mo Chi, Moses. Mr. Peh Jefferson Tun Lu is
the Chairman of the Nomination Committee. The Nomination Committee is provided with sufficient resources to discharge its duties. The Nomination Committees objectives are as follows:
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(i)
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Review the structure, size and composition of the Board and make recommendations on any proposed changes to the Board to implement the Companys corporate
strategy;
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(ii)
|
Identify qualified individuals to become members of the Board and select or make recommendations to the Board on the selection of individuals nominated for
directorship;
|
|
(iii)
|
Assess the independence of independent non-executive Directors; and
|
|
(iv)
|
Make recommendations to the Board on the appointment or re-appointment of Directors and succession planning for Directors, in particular the Chairman and chief
executive.
|
The role and authorities of the Nomination Committee, including those set out in code provision A.5.2
of the New Code, were set out in its terms of reference which are available at the Companys website at www.ctigroup.com.hk.
During the year ended 31 August 2012, decisions to consider the appointment of two executive Directors was taken by way of circulated resolutions and the Nomination Committee meeting had not conduced
any meeting. In November 2012, the Nomination Committee held a meeting discussed and reviewed the re-election of all the retiring Directors at the coming 2012 annual general meeting.
(iii)
|
Remuneration Committee
|
The Board established its Remuneration Committee in August 2001 with specific terms of reference setting out the committees
authority and duties.
Mr. Lai Ni Quiaque resigned as an Executive Director, Chief Financial Officer, Company Secretary
and the member of the Remuneration Committee with effect from 30 May 2012.
The Remuneration Committee currently comprises
five members, namely, Mr. Lee Hon Ying, John, Dr. Chan Kin Man, Mr. Peh Jefferson Tun Lu, Dr. Cheng Mo Chi, Moses and Ms. Choy Mei Yuk, Mimi. Mr. Lee Hon Ying, John is the Chairman of the Remuneration Committee. The
Remuneration Committee is provided with sufficient resources to discharge its duties. The Remuneration Committees objectives are as follows:
|
(i)
|
Establish a formal, fair and transparent procedures for developing policy and structure of all remuneration of Directors and senior management;
|
|
(ii)
|
Review and consider the Companys policy for remuneration of Directors and senior management;
|
|
(iii)
|
Determine the remuneration packages of Executive Directors and senior management; and
|
|
(iv)
|
Recommend the remuneration packages of Non-executive Directors (including Independent Non-executive Directors).
|
The role and authorities of the Remuneration Committee, including those set out in code provision B.1.2 of the New Code, were set out in
its terms of reference which are available at the Companys website at www.ctigroup.com.hk.
The Remuneration Committee
held two meetings during the year ended 31 August 2012. Following is a summary of works performed by the Remuneration Committee during the year ended 31 August 2012:
|
(i)
|
Review and approval of the discretionary performance bonus for the senior management; and
|
|
(ii)
|
Review and approval of the remuneration packages of the Directors and the senior management.
|
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
42
|
Corporate Governance Report
ATTENDANCE RECORDS AT THE BOARD AND COMMITTEES MEETINGS
The attendance records of the individual Directors at the Board, Audit Committee and Remuneration Committee meetings for the year ended 31 August
2012 are set out as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Meetings Attended/Held
|
|
|
|
Board
|
|
|
Audit Committee
|
|
|
Remuneration
Committee
|
|
Executive Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Wong Wai Kay, Ricky
|
|
|
7/7
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Mr. Cheung Chi Kin, Paul
|
|
|
7/7
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Ms. To Wai Bing (Note 1)
|
|
|
2/2
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Ms. Wong Nga Lai, Alice (Note 2)
|
|
|
2/2
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Mr. Yeung Chu Kwong, William (Note 3)
|
|
|
4/5
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Mr. Lai Ni Quiaque
#
(Note 4)
|
|
|
4/5
|
|
|
|
N/A
|
|
|
|
1/2
|
|
|
|
|
|
Non-Executive Director
|
|
|
|
|
|
|
|
|
|
|
|
|
Dr. Cheng Mo Chi, Moses
#
|
|
|
7/7
|
|
|
|
N/A
|
|
|
|
1/2
|
|
|
|
|
|
Independent Non-Executive Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Lee Hon Ying, John*
#
|
|
|
7/7
|
|
|
|
4/4
|
|
|
|
2/2
|
|
Dr. Chan Kin Man*
#
|
|
|
7/7
|
|
|
|
4/4
|
|
|
|
2/2
|
|
Mr. Peh Jefferson Tun Lu*
#
|
|
|
7/7
|
|
|
|
4/4
|
|
|
|
2/2
|
|
|
|
|
|
Director, Talent Management
|
|
|
|
|
|
|
|
|
|
|
|
|
Ms. Choy Mei Yuk, Mimi
#
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
1/2
|
|
#
|
Remuneration Committee Member
|
1.
|
Ms. To Wai Bing was appointed as an Executive Director and Chief Executive Officer with effect from 30 May 2012.
|
2.
|
Ms. Wong Nga Lai, Alice was appointed as an Executive Director, Chief Financial Officer and Company Secretary with effect from 30 May 2012.
|
3.
|
Mr. Yeung Chu Kwong, William resigned as an Executive Director and Chief Executive Officer with effect from 30 May 2012.
|
4.
|
Mr. Lai Ni Quiaque resigned as an Executive Director, Chief Financial Officer, Company Secretary and the Member of Remuneration Committee with effect from
30 May 2012.
|
5.
|
The Nomination Committee was set up on 27 February 2012 and no meeting of such committee was held during the year ended 31 August 2012.
|
During the year ended 31 August 2012, the Chairman of the Board held a meeting with the Non-executive Director and the
Independent Non-executive Directors without the presence of the Executive Directors.
43
Corporate Governance Report
CORPORATE GOVERNANCE FUNCTIONS
The Board is also responsible for performing the corporate governance duties as set out below:
a.
|
to develop and review the Companys policies and practices on corporate governance;
|
b.
|
to review and monitor the training and continuous professional development of Directors and senior management;
|
c.
|
to review and monitor the Companys policies and practices on compliance with legal and regulatory requirements;
|
d.
|
to develop, review and monitor the code of conduct and compliance (if any) applicable to the Directors and employees; and
|
e.
|
to review the Companys compliance with the New Code and disclosure in the Corporate Governance Report.
|
DIRECTORS RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Directors acknowledged their responsibility, with the support from the Finance Department of the Company, for preparing the financial statements of the Group for the year ended 31 August 2012.
The Board must ensure that the financial statements of the Group are prepared as to give a true and fair view and on a going concern basis in accordance with the statutory requirements and applicable financial reporting standards.
The statement of the auditor of the Company about their reporting responsibilities and opinion on the financial statements of the Group for the year
ended 31 August 2012 is set out in the Independent Auditors Report on page 55 of this annual report.
DIRECTORS AND OFFICERS LIABILITY INSURANCE AND INDEMNITY
The Company has arranged appropriate Directors and Officers Liability Insurance for its Directors and officers of the Company covering the costs, charges, losses, expenses and liabilities
arising from the performance of their duties. The insurance policy covers the Directors and Officers Liability Contract; Company Reimbursement Contract and Legal Representation Expenses Contract. Throughout the year ended 31 August
2012, no claim has been made against the Directors and officers of the Company.
AUDITORS REMUNERATION
KPMG was re-appointed as the external auditors of the Company by the shareholders of the Company at the 2011 Annual General Meeting.
For the year ended 31 August 2012, the auditors of the Company received approximately HK$1,630,000 for audit services (2011: HK$2,530,000) and
HK$915,000 for non-audit services (2011: HK$Nil).
COMPANY SECRETARY
Ms. Wong Nga Lai, Alice was appointed as the Executive Director, Chief Financial Officer and Company Secretary of the Company with effect from 30 May 2012. The biographical information of
Ms. Wong is set out in the section of Profile of Directors and Senior Management on page 33 of this annual report. According to Rule 3.29 of the Listing Rules, Ms. Wong will take no less than 15 hours of relevant professional
training in each financial year.
SHAREHOLDERS RIGHT
The Company has only one class of shares, all shares have the same voting rights and are entitled to the dividends declared. The rights of our shareholders are set out in, amongst other things, the
Articles and the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) (CO).
Shareholders holding not less than one-twentieth
of the paid-up capital of the Company may request the Board to convene an extraordinary general meeting pursuant to Section 113 of the CO. The objects of the meeting must be stated in the related requisition deposited at the registered office
of the Company.
For including a resolution relating to other matters in a general meeting, shareholders are requested to follow the
requirements and procedures as set out in Section 115A of the CO.
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
44
|
Corporate Governance Report
Pursuant to Article 94(b) of the Articles, if a shareholder wishes to propose a person other than a
retiring Director for election as a Director at a general meeting, the shareholder should deposit a written notice of nomination which shall be given to the Company Secretary at least a seven-day period commencing on a date no earlier than the day
after the despatch of the said notice of the meeting and ending no later than seven days prior to the date of such meeting.
Shareholders and
other stakeholders may send their enquiries and concerns to the Board by addressing them to Company Secretary.
INTERNAL CONTROL FRAMEWORK
Internal Control
The
Board recognises its responsibility to maintain a sound and effective internal control system. The internal control system has been designed to safeguard the Groups assets, maintain proper accounting records and to ensure that transactions are
executed in accordance with established policies and standards as well as appropriate authorisation.
In view of the change in business
operations, the following activities have been undertaken by the Groups management to establish a proper internal control framework in the new multimedia business:
|
A well-established and communicated authorisation structure;
|
|
Policies & procedures that were designed for drama production;
|
|
Weekly cost monitoring reports for each drama;
|
|
Use of Information Technology to build in automatic controls; and
|
|
Various weekly operational meetings between Executive Directors and operational teams.
|
For the year under review, management considered the Groups internal control system is reasonably effective and adequate.
Internal Audit
The Internal Audit Department of the Group plays an impartial role which is
independent to the Groups management in assessing and monitoring of the internal controls. The Director of Internal Audit Department directly reports to the Chairman of the Group and the Audit Committee on findings on material controls,
including financial, operational and compliance controls and risk management functions.
The annual audit plan is prepared based on a risk
assessment with reference to the Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework. The Internal Audit Department worked closely with Executive Directors, Management, and drama production teams in identifying the key
risks of the company, and specific internal audit reviews were formulated as a result of this on-going risk assessment exercise.
Internal
Audit Reports are presented to the Groups management and operational teams for attention and appropriate actions. Remediation actions have been developed collaboratively by Groups management and operational teams to rectify the control
weaknesses identified. As a final stage of the review, follow up reviews are conducted by the Internal Audit Department to ensure that these action plans have been successfully and timely implemented.
As part of the education process to build up good corporate governance in the new multimedia business, the Internal Audit Department shared findings of
the internal audit reviews and other relevant corporate governance issues with the rest of the company during weekly operational meetings or through regular publications which were circulated across the operations.
Compliance with Sarbanes-Oxley Act of 2002
The Company listed on the Nasdaq Stock Market in the U.S. is required to comply with the provisions of the U.S. Sarbanes-Oxley Act of 2002 (the SOX Act), which is a legislation seeking to
enhance the transparency and accountability of the companies in the areas of corporate governance and financial reporting. Under Section 404(a) of the SOX Act, the Groups management is responsible for the effectiveness of the Groups
internal control procedures over financial reporting. With the assistance of Internal Audit Department and external consultants, management of the Group organised and conducted a comprehensive assessment of internal control over financial reporting
based on control criteria as set out in the COSO framework. Based on this assessment, the Directors believe that, as at 31 August 2012, the internal control over financial reporting is effective.
45
Corporate Governance Report
Company Policies
The Group has adopted a number of company policies, including Company Policies and Procedures, Code of Business Conduct and Ethics and individual departmental charters to ensure good corporate governance
practices and high standard of business conducts and ethics of the Group. The Group will regularly review the effectiveness of these policies.
Communication with Shareholders
The
Board and the Company maintain an on-going dialogue with the Companys shareholders and investors through various communication channels including annual general meetings, press conferences and the publication of announcements, circulars,
interim and annual reports. All such publications together with additional information of the Group are timely updated on the Companys website at www.ctigroup.com.hk.
INVESTOR RELATIONS
There is no significant change in the Companys constitutional
documents during the year.
As majority shareholders in our company, we manage the company as shareholders, to create long term value rather
than chase quarterly stock performance. Our approach to Investor Engagement is that we want investors to get to know us as business rather than as a stock. Our majority ownership aligns our agency objectives, i.e. we are creating shareholder value
for ourselves and are also putting our own shareholder capital at risk.
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
46
|
Report of the Directors
The Directors have pleasure in submitting their annual report together with the audited financial
statements for the year ended 31 August 2012.
REGISTERED OFFICE
City Telecom (H.K.) Limited (the Company) is a company incorporated and domiciled in Hong Kong and has its registered office at 13th Floor, Trans Asia Centre, 18 Kin Hong Street, Kwai Chung,
New Territories, Hong Kong.
PRINCIPAL ACTIVITIES AND ANALYSIS OF OPERATIONS
The principal activities of the Company and its subsidiaries (collectively referred to as the Group) are the provision of multimedia production and distribution and other multimedia related
activities. In prior years, its principal subsidiaries were also involved in the provision of international telecommunications services and fixed telecommunications network services to customers in Hong Kong and Canada which were disposed with
effect from 30 May 2012. The principal activities of its major subsidiaries are detailed in note 16 to the financial statements.
An
analysis of the Groups performance for the year by business segments is set out in note 3 to the financial statements.
FINANCIAL
STATEMENTS
The profit of the Group for the year ended 31 August 2012 and the state of the Companys and the Groups affairs
as at that date are set out in the financial statements on pages 56 to 118.
RESERVES
Movements in the reserves of the Group during the year are set out in the consolidated statement of changes in equity. Movements in the reserves of the
Company during the year are set out in note 22 to the financial statements.
A special dividend of HK$2.5 per ordinary share in cash was paid
on 29 June 2012. An interim dividend of HK15 cents per ordinary share in cash (2011: HK15 cents per ordinary share in cash) and a final dividend in respect of the previous financial year of HK15 cents per ordinary share (2011: HK13.5 cents per
ordinary share) in cash were paid on 31 May 2012 and 10 January 2012 respectively.
At a board meeting held on 21 November
2012, the Directors have recommended to pay a final dividend of HK15 cents per ordinary share in cash. Subject to the approval of the shareholders at the forthcoming Annual General Meeting, the final dividend will be distributed on or about 24
January 2013 to shareholders whose names appear on the register of members of the Company as at the close of business on 8 January 2013.
The Register of Members of ordinary shares of the Company will be closed from 7 January 2013 and 8 January 2013, both days inclusive, during
which period, no transfers of ordinary shares will be registered. In order to qualify for the proposed final dividend, all properly completed transfer forms accompanied by the relevant share certificates must be lodged with the Companys share
registrar not later than 4:30 p.m. on 4 January 2013.
DONATIONS
Charitable and other donations made by the Group during the year amounted to HK$200,000 (2011: HK$393,000).
FIXED ASSETS
Details of the movements in fixed assets and particular of major property
interests of the Group are set out in note 14 to the financial statements.
SHARE CAPITAL AND SHARE OPTIONS
Details of the movements in share capital and share options of the Company are set out in note 22 to the financial statements.
DISTRIBUTABLE RESERVES
Distributable
reserves of the Company as at 31 August 2012, calculated in accordance with section 79B of the CO, amounted to approximately HK$2,287,647,000 (2011: HK$146,103,000).
47
Report of the Directors
FIVE-YEAR FINANCIAL SUMMARY
A summary of the results of the assets and liabilities of the Group for the last five financial years is set out on page 119 of this annual report.
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.
GROUPS BORROWINGS
The
Groups borrowings as at 31 August 2012 are repayable in the following periods:
|
|
|
|
|
|
|
|
|
|
|
2012
HK$000
|
|
|
2011
HK$000
|
|
On demand or not exceeding one year
|
|
|
3,111
|
|
|
|
950
|
|
More than one year but not exceeding two years
|
|
|
90
|
|
|
|
105
|
|
More than two years
|
|
|
70
|
|
|
|
183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,271
|
|
|
|
1,238
|
|
|
|
|
|
|
|
|
|
|
DIRECTORS
The Directors during the year and up to the date of this annual report were:
Executive Directors
Mr. Wong Wai Kay, Ricky
Mr. Cheung Chi Kin, Paul
Mr. Yeung
Chu Kwong, William (note (i))
Ms. To Wai Bing (note (ii))
Mr. Lai Ni Quiaque (note (iii))
Ms. Wong Nga Lai, Alice (note (iv))
Non-executive Director
Dr. Cheng
Mo Chi, Moses
Independent Non-executive Directors
Mr. Lee Hon Ying, John
Dr. Chan Kin Man
Mr. Peh Jefferson Tun Lu
Notes:
(i)
|
Mr. Yeung Chu Kwong, William resigned as the Executive Director and Chief Executive Officer with effect from 30 May 2012.
|
(ii)
|
Ms. To Wai Bing was appointed as an Executive Director and Chief Executive Officer with effect from 30 May 2012.
|
(iii)
|
Mr. Lai Ni Quiaque resigned as the Executive Director, Chief Financial Officer, Head of Talent Management and member of Remuneration Committee with effect from
30 May 2012.
|
(iv)
|
Ms. Wong Nga Lai, Alice was appointed as an Executive Director and Chief Financial Officer with effect from 30 May 2012.
|
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
48
|
Report of the Directors
In accordance with Article 92 of the Articles, Ms. To Wai Bing and Ms. Wong Nga Lai, Alice
will hold office until the 2012 annual general meeting, and being eligible, offer themselves for re-election at the 2012 annual general meeting.
Furthermore, in accordance with Articles 96 and 99 of the Articles, Dr. Cheng Mo Chi, Moses and Dr. Chan Kin Man will retire from office by rotation and, being eligible, offer themselves for
re-election at the 2012 annual general meeting.
The Company has received written confirmation from each of the Independent Non-executive
Directors of their independence pursuant to Rule 3.13 of the Listing Rules and considers all the Independent Non-executive Directors to be independent.
DIRECTORS SERVICE CONTRACTS
None of the Directors has a service contract with the
Company or any of its subsidiaries which is not determinable by the employing company within one year without payment of compensation, other than statutory compensation.
DIRECTORS INTERESTS IN CONTRACTS OF SIGNIFICANCE
No contract of significance in
relation to the Groups business to which the Company or any of its subsidiaries was a party and in which a Director of the Company had a material interest, whether directly or indirectly, subsisted at the end of the year or at any time during
the year.
BIOGRAPHICAL DETAILS OF DIRECTORS AND SENIOR MANAGEMENT
Brief biographical details of the Directors and senior management are set out on pages 32 to 35 of this annual report.
CHANGES OF DIRECTORS INFORMATION
Pursuant to Rule 13.51B(1) of the Listing Rules,
the changes of information on Directors are as follows:
(1)
|
Dr. Cheng Mo Chi, Moses, a non-executive director of the Company, had resigned as an independent non-executive director of Hong Kong Exchange and Clearing Limited
(a company listed on the Main Record of the Stock Exchange) with effect from 23 April 2012.
|
(2)
|
Changes in Directors emoluments during the year are set out in note 11 to the financial statements.
|
49
Report of the Directors
DIRECTORS INTERESTS IN SHARES AND UNDERLYING SHARES
Directors Interests or short positions in shares and in share options
At 31 August 2012, the interests or short positions of the Companys Directors, chief executive and their associates in the shares and underlying shares of the Company and its associated
corporations (within the meaning of Part XV of the Securities and Futures Ordinance (the SFO)), as recorded in the register maintained by the Company required to be kept under Section 352 of the SFO or as otherwise notified to the
Company and The Stock Exchange of Hong Kong Limited (the Stock Exchange) pursuant to the Model Code were as follows:
Long
position in ordinary shares and underlying shares of the Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interests
in
underlying
shares
pursuant
|
|
|
|
|
|
Approximate
percentage
interests in
the
Companys
|
|
|
|
Interest in shares
|
|
|
Total
|
|
|
|
|
|
|
Name of Director
|
|
Personal
interests
|
|
|
Corporate
interests
|
|
|
Family
interests
|
|
|
interests
in shares
|
|
|
to share
options
|
|
|
Aggregate
interests
|
|
|
issued share
capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note(1)
|
|
Mr. Wong Wai Kay, Ricky
|
|
|
15,236,893
|
|
|
|
339,814,284
|
|
|
|
|
|
|
|
355,051,177
|
|
|
|
|
|
|
|
355,051,177
|
|
|
|
43.89
|
%
|
|
|
|
|
|
|
|
Note
|
(2)(i)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Cheung Chi Kin, Paul
|
|
|
25,453,424
|
|
|
|
24,924,339
|
|
|
|
|
|
|
|
50,377,763
|
|
|
|
|
|
|
|
50,377,763
|
|
|
|
6.23
|
%
|
|
|
|
|
|
|
|
Note
|
(2)(ii)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ms. To Wai Bing
|
|
|
95,239
|
|
|
|
|
|
|
|
|
|
|
|
95,239
|
|
|
|
|
|
|
|
95,239
|
|
|
|
0.01
|
%
|
Ms. Wong Nga Lai, Alice
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
50,000
|
|
|
|
0.01
|
%
|
Notes:
(1)
|
This percentage is based on 809,016,643 ordinary shares of the Company issued as at 31 August 2012.
|
(2)
|
The corporate interests of Mr. Wong Wai Kay, Ricky and Mr. Cheung Chi Kin, Paul arise through their respective interests in the following companies:
|
|
(i)
|
339,814,284 shares are held by Top Group International Limited (Top Group) which is 42.12% owned by Mr. Wong Wai Kay, Ricky; the interests of Top Group
in the Company is also disclosed under the section Substantial Shareholders of this annual report.
|
|
(ii)
|
24,924,339 shares are held by Worship Limited which is 50% owned by Mr. Cheung Chi Kin, Paul.
|
Details of the Directors interests in share options granted by the Company are set out on pages 51 and 52 of this annual report.
Save as disclosed above, as at 31 August 2012, none of the Directors or chief executive (including their spouse and children under 18 years of age)
of the Company had any interests or short positions in the shares, underlying shares and derivative to ordinary shares of the Company and its associated corporations (within the meaning of Part XV of the SFO) as recorded in the register required to
be kept under Section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code.
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
50
|
Report of the Directors
SHARE OPTION SCHEME
The Company operates a share option scheme (the 2002 Share Option Scheme) which was adopted by shareholders of the Company on 23 December 2002 which the directors may, at their
discretion, invite eligible participants to take up options to subscribe for shares subject to the terms and conditions stipulated therein.
A
summary of the 2002 Share Option Scheme operated by the Company is as follows:
To grant share
options to the eligible participants as incentives and rewards for their contribution to the Company or its subsidiaries.
(2)
|
Eligible participants
|
Eligible participants include Talents, executives or officers (including executive, non-executive and independent non-executive directors)
of the Company or any of its subsidiaries, suppliers and professional advisers of the Group.
(3)
|
The total number of shares available for issue
|
The total number of shares which may be issued upon exercise of options to be granted under the scheme shall not exceed 10% of the shares in issue as at the date of adoption of the 2002 Share Option
Scheme on 23 December 2002 (i.e. 50,302,066 shares). Such limit was refreshed by the shareholders in the general meetings held on 29 December 2004 and 24 December 2007 respectively so that the total number of shares which may be
issued shall be 10% of the shares in issue as at the date of the said general meetings (i.e. 61,407,340 shares and 62,704,840 shares respectively). As at the date of this annual report, the number of shares available for issue in respect thereof is
44,620,299 shares, representing approximately 5.52% of the issued share capital of the Company as at the date of this annual report.
The shares which may be issued upon exercise of all outstanding options to be granted and yet to be exercised under the 2002 Share Option Scheme and any other share option scheme(s) of the Company at any
time shall not exceed 30% of the shares in issue from time to time. No options shall be granted under any scheme(s) of the Company or any of its subsidiaries if this will result in the 30% limit being exceeded.
(4)
|
The maximum entitlement of each participant under the 2002 Share Option Scheme
|
The total number of shares shall be issued upon exercise of the options granted under the 2002 Share Option Scheme and any other share
option scheme(s) of the Company (including exercised, cancelled and outstanding options) to each participant in any 12-month period up to and including the date of grant shall not exceed 1% of the shares in issue as at the date of grant.
Any further grant of options in excess of this 1% limit shall be subject to the issue of a circular by the Company and the approval of the
shareholders of the Company in general meeting with such grantee and his associates abstaining from voting and/or other requirements prescribed under the Listing Rules from time to time.
(5)
|
The period within which the shares must be taken up under an option
|
The period during which an option may be exercised will be determined by the board of directors at its absolute discretion and no option may be exercised more than 10 years from the date of grant.
(6)
|
The minimum period for which an option must be held before it can be exercised
|
The board of directors is empowered to impose, at its discretion, any minimum period that an option must be held at the time of the grant
of any particular option.
(7)
|
The amount payable on application or acceptance of the option and the period within which payments or calls must or may be made or loans for such purposes must be
paid
|
Acceptance of the option must be made within 30 days after the date of offer and HK$1.00 must be paid
as a consideration for the grant of option.
(8)
|
The basis of determining the exercise price
|
The board of directors shall determine the exercise price of each option granted but in any event shall not be less than the highest of: (a) the official closing price of the shares of the Company on
the date of the grant as stated in the Stock Exchange quotation sheet; (b) the average of the closing price of the shares of the Company for the 5 business days immediately preceding the date of the grant as stated in the Stock Exchange
quotation sheet; and (c) the nominal value of the share of the Company on the date of grant.
51
Report of the Directors
(9)
|
The remaining life of the 2002 Share Option Scheme
|
The 2002 Share Option Scheme is valid and effective from 23 December 2002, being the date of adoption, and shall end on the tenth anniversary of such date (both days inclusive).
(10)
|
Details of the share options granted under the 2002 Share Option Scheme as at 31 August 2012 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing
price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
immediately
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
|
|
|
|
|
|
before the
|
|
|
|
|
|
|
|
|
Balance
|
|
|
Options
|
|
|
|
|
|
|
Options
|
|
|
cancelled/
|
|
|
|
|
|
date on
|
|
|
|
|
|
|
|
|
as at
|
|
|
granted
|
|
|
|
|
|
|
exercised
|
|
|
lapsed
|
|
|
Balance as
|
|
|
which the
|
|
|
|
|
|
Exercise
|
|
|
1 September
|
|
|
during
|
|
|
|
|
|
|
during
|
|
|
during
|
|
|
at 31 August
|
|
|
options were
|
|
|
|
Date of grant
|
|
price
HK$
|
|
|
2011
|
|
|
the year
(Note 6)
|
|
|
Vesting period
|
|
Exercise period
|
|
the year
(Note 1)
|
|
|
the year
(Note 7)
|
|
|
2012
|
|
|
granted
HK$
|
|
Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Wong Wai Kay,
Ricky
|
|
5 January 2005
|
|
|
1.5224
|
|
|
|
8,091,604
|
|
|
|
|
|
|
5 January 2005 to
31 December 2006
|
|
5 January 2005 to
20 October 2014
|
|
|
(8,091,604
|
)
|
|
|
|
|
|
|
|
|
|
|
1.53
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Cheung Chi Kin,
Paul
|
|
5 January 2005
|
|
|
1.5224
|
|
|
|
6,091,604
|
|
|
|
|
|
|
5 January 2005 to
31 December 2006
|
|
5 January 2005 to
20 October 2014
|
|
|
(6,091,604
|
)
|
|
|
|
|
|
|
|
|
|
|
1.53
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Yeung Chu
Kwong, William *
|
|
22 May 2006
|
|
|
0.6523
|
|
|
|
165
|
|
|
|
|
|
|
22 May 2006 to
21 May 2009
|
|
22 May 2007 to
21 May 2016
|
|
|
(165
|
)
|
|
|
|
|
|
|
|
|
|
|
0.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6 February 2008
|
|
|
1.7568
|
|
|
|
5,542,791
|
|
|
|
|
|
|
(Notes 2 and 8)
|
|
(Note 2)
|
|
|
(5,542,790
|
)
|
|
|
(1
|
)
|
|
|
|
|
|
|
1.99
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5 February 2010
|
|
|
4.2400
|
|
|
|
6,000,000
|
|
|
|
|
|
|
(Notes 3 and 8)
|
|
(Note 3)
|
|
|
(6,000,000
|
)
|
|
|
|
|
|
|
|
|
|
|
4.34
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Lai Ni Quiaque *
|
|
11 February 2008
|
|
|
1.8660
|
|
|
|
6,044,791
|
|
|
|
|
|
|
(Notes 4 and 8)
|
|
(Note 4)
|
|
|
(6,044,790
|
)
|
|
|
(1
|
)
|
|
|
|
|
|
|
1.86
|
|
|
|
|
|
|
|
|
|
|
|
|
Ms. To Wai Bing
#
|
|
15 February 2008
|
|
|
1.7568
|
|
|
|
302,239
|
|
|
|
|
|
|
(Note 5)
|
|
(Note 5)
|
|
|
(302,239
|
)
|
|
|
|
|
|
|
|
|
|
|
1.79
|
|
|
|
|
|
|
|
|
|
|
|
|
Ms. Wong Nga Lai,
Alice
#
|
|
21 October 2004
|
|
|
1.5224
|
|
|
|
202,289
|
|
|
|
|
|
|
21 October 2004 to
31 December 2006
|
|
1 January 2005 to
20 October 2014
|
|
|
(202,289
|
)
|
|
|
|
|
|
|
|
|
|
|
1.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22 May 2006
|
|
|
0.6523
|
|
|
|
102,291
|
|
|
|
|
|
|
22 May 2006 to
21 May 2009
|
|
22 May 2007 to
21 May 2016
|
|
|
(102,291
|
)
|
|
|
|
|
|
|
|
|
|
|
0.64
|
|
*
|
Resigned on 30 May 2012
|
#
|
Appointed on 30 May 2012
|
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
52
|
Report of the Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing
price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
immediately
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
|
|
|
|
|
|
before the
|
|
|
|
|
|
|
|
|
|
Balance
|
|
|
Options
|
|
|
|
|
|
|
Options
|
|
|
cancelled/
|
|
|
|
|
|
date on
|
|
|
|
|
|
|
|
|
|
as at
|
|
|
granted
|
|
|
|
|
|
|
exercised
|
|
|
lapsed
|
|
|
Balance as
|
|
|
which the
|
|
|
|
|
|
|
Exercise
|
|
|
1 September
|
|
|
during
|
|
|
|
|
|
|
during
|
|
|
during
|
|
|
at 31 August
|
|
|
options were
|
|
|
|
Date of grant
|
|
|
price
HK$
|
|
|
2011
|
|
|
the year
(Note 6)
|
|
|
Vesting period
|
|
Exercise period
|
|
the year
(Note 1)
|
|
|
the year
(Note 7)
|
|
|
2012
|
|
|
granted
HK$
|
|
Talents under continuous employment contacts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Talents
|
|
|
21 October 2004
|
|
|
|
1.5224
|
|
|
|
3,605,682
|
|
|
|
|
|
|
21 October 2004 to
31 December 2006
|
|
1 January 2005 to
20 October 2014
|
|
|
(3,605,682
|
)
|
|
|
|
|
|
|
|
|
|
|
1.53
|
|
|
|
|
22 May 2006
|
|
|
|
0.6523
|
|
|
|
1,122,227
|
|
|
|
|
|
|
22 May 2006 to 21
May 2009
|
|
22 May 2007 to
21 May 2016
|
|
|
(1,121,336
|
)
|
|
|
(891
|
)
|
|
|
|
|
|
|
0.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
37,105,683
|
|
|
|
|
|
|
|
|
|
|
|
(37,104,790
|
)
|
|
|
(893
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
1.
|
During the year ended 31 August 2012, 37,104,790 (2011: 6,914,509) share options were exercised and the weighted average closing price of shares of the Company
immediately before the dates of exercise was HK$4.42 (2011: HK$5.63) per ordinary share.
|
2.
|
The exercise of the share options is subject to certain conditions that must be achieved by the grantee. A modification to the expiry date of the options granted to the
grantee was approved by shareholders of the Company on 21 December 2010 and the options shall be exercised not later than 5 February 2018.
|
3.
|
The exercise of the share options is subject to certain conditions that must be achieved by the grantee. The options shall be exercised not later than 4 February
2020.
|
4.
|
The exercise of the share options is subject to the performance of the Companys shares and certain conditions that must be achieved by the grantee. A modification
to the expiry date of the options granted to the grantee was approved by shareholders of the Company on 21 December 2010 and the options shall be exercise not later than 10 February 2018.
|
5.
|
The exercise of the share options is subject to certain conditions that must be achieved by the grantee. The share options shall be exercised not later than
23 December 2012.
|
6.
|
During the year ended 31 August 2012, no share options were granted.
|
7.
|
During the year ended 31 August 2012, a total of 893 (2011: 629,665) share options were lapsed and no share options were cancelled.
|
8.
|
During the year ended 31 August 2012, a modification to the conditions of the outstanding share options granted to the grantees was approved by shareholders of the
Company on 25 May 2012. Certain conditions imposed on the share options were waived and all unvested outstanding share options became vested and exercisable immediately.
|
(11)
|
In determining the value of the share options granted prior to 31 August 2012, the Black-Scholes option pricing model (the Black-Scholes Model) has
been used except for the share options granted on 11 February 2008 which adopts the Monte Carlo Model. Both models are generally accepted methodologies used to calculate the value of options. The variables of the models include expected life of
the options, risk-free interest rate, expected volatility and expected dividend yield of the shares of the Company.
|
The Group recognises the fair value of share options as an expense in the income statement over the vesting period. The fair value of the share options is measured at the date of grant.
Both the Black-Scholes Model and Monte Carlo Model, applied for the determination of the estimated value of the options granted under 2002
Share Option Scheme require input of highly subjective assumptions, including the expected stock volatility. As the Companys share options have characteristics significantly different from those of traded options, changes in subjective inputs
may materially affect the estimated fair value of the options granted.
53
Report of the Directors
DIRECTORS RIGHTS TO ACQUIRE SHARES OR DEBENTURES
Save as disclosed under the section Share Option Scheme in this annual report, at no time during the year was the Company or any of its
subsidiaries a party to any arrangements to enable the directors and/or the chief executive of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.
SUBSTANTIAL SHAREHOLDERS
At
31 August 2012, the interests or short positions of the persons, other than the directors or chief executive of the Company, in the shares and underlying shares of the Company as recorded in the register maintained by the Company required to be
kept under Section 336 of the SFO were as follows:
|
|
|
|
|
|
|
|
|
|
|
Interests in shares
|
|
|
|
|
Name
|
|
in long positions
|
|
|
Percentage interests
(Note)
|
|
Top Group International Limited
|
|
|
339,814,284
|
|
|
|
42.00
|
%
|
Note: This percentage is based on 809,016,643 shares of the Company issued as at 31 August 2012.
Save as disclosed above, as at 31 August 2012, the Company had not been notified of any persons (other than directors and chief executive of the
Company) having any interest or short positions in the shares and underlying shares of the Company as recorded in the register required to be kept under Section 336 of the SFO.
MANAGEMENT CONTRACTS
No contracts concerning the management and administration of the
whole or any substantial part of the business of the Company were entered into or existed during the year.
MAJOR CUSTOMERS AND SUPPLIERS
The aggregate percentage of turnover for the year attributable to the Groups five largest customers is less than 30% of total
turnover for the year and therefore no disclosures with regard to major customers are made. The percentages of purchases for the year attributable to the Groups major suppliers are as follows:
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
%
|
|
|
%
|
|
Purchases
|
|
|
|
|
|
|
|
|
The largest supplier
|
|
|
11
|
|
|
|
17
|
|
Five largest suppliers combined
|
|
|
32
|
|
|
|
49
|
|
None of the Directors, their associates or any shareholder (which to the knowledge of the Directors own more than 5% of
the Companys issued share capital) had an interest in the major suppliers noted above.
SUFFICIENCY OF PUBLIC FLOAT
On the basis of information that is publicly available to the Company and within the knowledge of the Directors of the Company, as at the date of this
annual report, the Company has maintained a sufficient public float of more than 25 percent of the Companys issued shares as required under the Listing Rules during the year ended 31 August 2012.
CORPORATE GOVERNANCE
Corporate
governance practices adopted by the Company are set out in the Corporate Governance Report on pages 37 to 45 of this annual report.
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
54
|
Report of the Directors
RETIREMENT SCHEME
The Group operates a defined contribution retirement scheme and a Mandatory Provident Fund scheme. Particulars of these retirement schemes are set out in note 10 in the financial statements.
AUDITORS
The financial statements have
been audited by KPMG who shall retire and, being eligible, offer themselves for re-appointment at the forthcoming annual general meeting of the Company.
On behalf of the Board
Wong Wai Kay, Ricky
Chairman
Hong Kong, 21 November
2012
55
Independent Auditors Report
Independent auditors report to the shareholders of City Telecom (H.K.) Limited
(Incorporated in Hong Kong with limited liability)
We have audited the consolidated financial statements of City Telecom (H.K.) Limited (the Company) and its subsidiaries (together the Group) set out on pages 56 to 118, which
comprise the consolidated and Company balance sheets as at 31 August 2012, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated cash flow
statement for the year then ended 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 consolidated
financial statements that give a true and fair view in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board, Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of
Certified Public Accountants and the Hong Kong Companies Ordinance and for such internal control as the directors determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether
due to fraud or error.
AUDITORS RESPONSIBILITY
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. This report is made solely to you, as a body, in accordance with section 141 of the Hong Kong
Companies Ordinance, 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 Hong Kong Institute of Certified Public Accountants. 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 auditor considers internal control relevant to the entitys
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
entitys 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.
OPINION
In our opinion, the consolidated financial statements give a true and fair view of the state of affairs of the Company and of the Group as at
31 August 2012 and of the Groups profit and cash flows for the year then ended in accordance with International Financial Reporting Standards and Hong Kong Financial Reporting Standards and have been properly prepared in accordance with
the Hong Kong Companies Ordinance.
KPMG
Certified Public Accountants
8th Floor, Princes Building
10 Chater Road
Central, Hong Kong
21 November 2012
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
56
|
Consolidated Income Statement
For the year ended 31 August 2012
(Expressed in Hong Kong dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note
|
|
|
2012
HK$000
|
|
|
2011
HK$000
(restated)
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Turnover
|
|
|
3
|
|
|
|
3,762
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
4
|
|
|
|
(6,006
|
)
|
|
|
|
|
|
|
|
|
Valuation gains on investment properties
|
|
|
|
|
|
|
18,200
|
|
|
|
|
|
|
|
|
|
Other operating expenses
|
|
|
5
|
(a)
|
|
|
(104,960
|
)
|
|
|
(23,481
|
)
|
|
|
|
|
Other income, net
|
|
|
5
|
(b)
|
|
|
19,920
|
|
|
|
3,456
|
|
|
|
|
|
Finance costs, net
|
|
|
5
|
(c)
|
|
|
(2,455
|
)
|
|
|
(7,303
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before taxation
|
|
|
5
|
|
|
|
(71,539
|
)
|
|
|
(27,328
|
)
|
|
|
|
|
Income tax expense
|
|
|
6
|
|
|
|
(2,281
|
)
|
|
|
(4,782
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations
|
|
|
|
|
|
|
(73,820
|
)
|
|
|
(32,110
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit from discontinued operations (net of tax)
|
|
|
2
|
|
|
|
3,771,694
|
|
|
|
346,025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the year
|
|
|
|
|
|
|
3,697,874
|
|
|
|
313,915
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity shareholders of the Company
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
|
|
|
(71,406
|
)
|
|
|
(32,110
|
)
|
Discontinued operations
|
|
|
|
|
|
|
3,771,694
|
|
|
|
346,025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,700,288
|
|
|
|
313,915
|
|
Non-controlling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
|
|
|
(2,414
|
)
|
|
|
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,414
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the year
|
|
|
|
|
|
|
3,697,874
|
|
|
|
313,915
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss)/ earnings per share
|
|
|
9
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
|
|
|
HK(9.0) cents
|
|
|
|
HK(4.1) cents
|
|
Discontinued operations
|
|
|
|
|
|
|
HK480.9 cents
|
|
|
|
HK44.9 cents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HK471.9 cents
|
|
|
|
HK40.8 cents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss)/ earnings per share
|
|
|
9
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
|
|
|
HK(9.0) cents
|
|
|
|
HK(4.1) cents
|
|
Discontinued operations
|
|
|
|
|
|
|
HK474.1 cents
|
|
|
|
HK43.7 cents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HK465.1 cents
|
|
|
|
HK39.6 cents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The notes on pages 62 to 118 form part of these financial statements.
57
Consolidated Statement of Comprehensive Income
For the year ended 31 August 2012
(Expressed in Hong Kong dollars)
|
|
|
|
|
|
|
|
|
|
|
2012
HK$000
|
|
|
2011
HK$000
|
|
Profit for the year
|
|
|
3,697,874
|
|
|
|
313,915
|
|
|
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
Exchange differences on translation of financial statements of subsidiaries outside Hong Kong
|
|
|
(265
|
)
|
|
|
2,383
|
|
|
|
|
Exchange reserve realised upon disposal of Telecom Business
|
|
|
(4,881
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the year
|
|
|
3,692,728
|
|
|
|
316,298
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
Equity shareholders of the Company
|
|
|
3,695,142
|
|
|
|
316,298
|
|
Non-controlling interest
|
|
|
(2,414
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,692,728
|
|
|
|
316,298
|
|
|
|
|
|
|
|
|
|
|
The notes on pages 62 to 118 form part of these financial statements.
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
58
|
Balance Sheet
As at 31 August 2012
(Expressed in Hong Kong dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group
|
|
|
The Company
|
|
|
|
Note
|
|
|
2012
HK$000
|
|
|
2011
HK$000
|
|
|
2012
HK$000
|
|
|
2011
HK$000
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
13
|
|
|
|
|
|
|
|
1,066
|
|
|
|
|
|
|
|
|
|
Fixed assets
|
|
|
14
|
|
|
|
477,141
|
|
|
|
1,642,701
|
|
|
|
27,584
|
|
|
|
55,512
|
|
Intangible assets
|
|
|
15
|
|
|
|
311,726
|
|
|
|
|
|
|
|
311,726
|
|
|
|
|
|
Investments in subsidiaries
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
623,437
|
|
|
|
1,082,021
|
|
Long term receivable and prepayment
|
|
|
|
|
|
|
284
|
|
|
|
4,101
|
|
|
|
|
|
|
|
|
|
Deferred expenditure
|
|
|
17
|
|
|
|
|
|
|
|
15,323
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
789,151
|
|
|
|
1,663,191
|
|
|
|
962,747
|
|
|
|
1,137,533
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
18
|
|
|
|
1,311
|
|
|
|
71,999
|
|
|
|
|
|
|
|
6,207
|
|
Other receivables, deposits and prepayments
|
|
|
18
|
|
|
|
31,581
|
|
|
|
90,984
|
|
|
|
11,292
|
|
|
|
5,156
|
|
Programme costs
|
|
|
|
|
|
|
87,617
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventories
|
|
|
|
|
|
|
577
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred expenditure
|
|
|
17
|
|
|
|
|
|
|
|
29,312
|
|
|
|
|
|
|
|
|
|
Term deposits
|
|
|
19
|
(a)
|
|
|
544,040
|
|
|
|
|
|
|
|
544,040
|
|
|
|
|
|
Cash at bank and in hand
|
|
|
19
|
(b)
|
|
|
2,083,079
|
|
|
|
408,976
|
|
|
|
2,068,766
|
|
|
|
254,056
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,748,205
|
|
|
|
601,271
|
|
|
|
2,624,098
|
|
|
|
265,419
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank overdrafts unsecured
|
|
|
|
|
|
|
3,026
|
|
|
|
845
|
|
|
|
3,026
|
|
|
|
|
|
Amounts due to subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
700
|
|
|
|
10,830
|
|
Accounts payable
|
|
|
20
|
|
|
|
5,371
|
|
|
|
17,419
|
|
|
|
|
|
|
|
2,721
|
|
Other payables and accrued charges
|
|
|
20
|
|
|
|
31,118
|
|
|
|
209,585
|
|
|
|
15,418
|
|
|
|
22,863
|
|
Deposits received
|
|
|
|
|
|
|
2,259
|
|
|
|
26,969
|
|
|
|
|
|
|
|
8,038
|
|
Current portion deferred services revenue
|
|
|
21
|
|
|
|
|
|
|
|
85,895
|
|
|
|
|
|
|
|
8,282
|
|
Tax payable
|
|
|
|
|
|
|
935
|
|
|
|
2,281
|
|
|
|
|
|
|
|
356
|
|
Current portion obligations under finance leases
|
|
|
25
|
|
|
|
85
|
|
|
|
105
|
|
|
|
85
|
|
|
|
87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,794
|
|
|
|
343,099
|
|
|
|
19,229
|
|
|
|
53,177
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net current assets
|
|
|
|
|
|
|
2,705,411
|
|
|
|
258,172
|
|
|
|
2,604,869
|
|
|
|
212,242
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets less current liabilities
|
|
|
|
|
|
|
3,494,562
|
|
|
|
1,921,363
|
|
|
|
3,567,616
|
|
|
|
1,349,775
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59
Balance Sheet
As at 31 August 2012
(Expressed in Hong Kong dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group
|
|
|
The Company
|
|
|
|
Note
|
|
|
2012
HK$000
|
|
|
2011
HK$000
|
|
|
2012
HK$000
|
|
|
2011
HK$000
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities
|
|
|
23
|
|
|
|
1,346
|
|
|
|
111,138
|
|
|
|
1,232
|
|
|
|
4,340
|
|
Long-term deferred services revenue
|
|
|
21
|
|
|
|
|
|
|
|
992
|
|
|
|
|
|
|
|
3,071
|
|
Derivative financial instrument
|
|
|
24
|
|
|
|
9,663
|
|
|
|
11,564
|
|
|
|
9,663
|
|
|
|
11,564
|
|
Obligations under finance leases
|
|
|
25
|
|
|
|
160
|
|
|
|
288
|
|
|
|
160
|
|
|
|
245
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,169
|
|
|
|
123,982
|
|
|
|
11,055
|
|
|
|
19,220
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets
|
|
|
|
|
|
|
3,483,393
|
|
|
|
1,797,381
|
|
|
|
3,556,561
|
|
|
|
1,330,555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital and reserves
|
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
|
|
|
|
80,902
|
|
|
|
77,191
|
|
|
|
80,902
|
|
|
|
77,191
|
|
Reserves
|
|
|
|
|
|
|
3,402,491
|
|
|
|
1,720,190
|
|
|
|
3,475,659
|
|
|
|
1,253,364
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
|
|
|
|
3,483,393
|
|
|
|
1,797,381
|
|
|
|
3,556,561
|
|
|
|
1,330,555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Approved and authorised for issue by the board of directors on 21 November 2012.
|
|
|
|
|
|
|
|
|
Wong Wai Kay, Ricky
|
|
Cheung Chi Kin, Paul
|
|
|
|
|
Director
|
|
Director
|
|
|
The notes on pages 62 to 118 form part of these financial statements.
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
60
|
Consolidated Statement of Changes in Equity
For the year ended 31 August 2012
(Expressed in Hong Kong dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note
|
|
|
Share
capital
HK$000
|
|
|
Share
premium
HK$000
|
|
|
Capital
reserve
HK$000
|
|
|
Capital
redemption
reserve
HK$000
|
|
|
Retained
profits
HK$000
|
|
|
Exchange
reserve
HK$000
|
|
|
Revaluation
reserve
HK$000
|
|
|
Other
reserve
HK$000
|
|
|
Total
HK$000
|
|
|
Non-
controlling
interest
HK$000
|
|
|
Total
equity
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
|
|
|
22
|
(c)(i)
|
|
|
3,711
|
|
|
|
104,510
|
|
|
|
(33,044
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,177
|
|
|
|
|
|
|
|
75,177
|
|
Equity settled share-based transactions
|
|
|
5
|
(d)
|
|
|
|
|
|
|
|
|
|
|
10,480
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,480
|
|
|
|
|
|
|
|
10,480
|
|
Share options lapsed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,195
|
)
|
|
|
|
|
|
|
1,195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revaluation of investment properties
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
22
|
(c)(i)
|
|
|
691
|
|
|
|
8,498
|
|
|
|
(1,957
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,232
|
|
|
|
|
|
|
|
7,232
|
|
Equity settled share-based transactions
|
|
|
5
|
(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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The notes on pages 62 to 118 form part of these financial statements.
61
Consolidated Cash Flow Statement
For the year ended 31 August 2012
(Expressed in Hong Kong dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note
|
|
|
2012
HK$000
|
|
|
2011
HK$000
|
|
Net cash inflow from operations
|
|
|
26
|
(a)
|
|
|
184,927
|
|
|
|
588,911
|
|
|
|
|
|
Overseas tax paid
|
|
|
|
|
|
|
(3,003
|
)
|
|
|
(3,012
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash inflow from operating activities
|
|
|
|
|
|
|
181,924
|
|
|
|
585,899
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase in term deposits
|
|
|
|
|
|
|
(544,040
|
)
|
|
|
|
|
Interest received
|
|
|
|
|
|
|
14,282
|
|
|
|
3,059
|
|
Proceeds from disposal of Telecom Business (net of cash disposed of)
|
|
|
2
|
(d)
|
|
|
4,655,367
|
|
|
|
|
|
Purchases of fixed assets
|
|
|
|
|
|
|
(467,840
|
)
|
|
|
(437,477
|
)
|
Proceeds from disposal of fixed assets
|
|
|
|
|
|
|
24,022
|
|
|
|
20,229
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash inflow/(outflow) from investing activities
|
|
|
|
|
|
|
3,681,791
|
|
|
|
(414,189
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash inflow before financing activities
|
|
|
|
|
|
|
3,863,715
|
|
|
|
171,710
|
|
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of new shares
|
|
|
26
|
(b)
|
|
|
75,177
|
|
|
|
7,232
|
|
Repayment of bank loan
|
|
|
|
|
|
|
|
|
|
|
(125,000
|
)
|
Repayment of capital element of finance leases
|
|
|
26
|
(b)
|
|
|
(99
|
)
|
|
|
(212
|
)
|
Interest element of finance leases
|
|
|
|
|
|
|
(19
|
)
|
|
|
(30
|
)
|
Interest paid on bank loans
|
|
|
|
|
|
|
|
|
|
|
(1,152
|
)
|
Other borrowing cost paid
|
|
|
|
|
|
|
(7,134
|
)
|
|
|
(4,638
|
)
|
Acquisition of non-controlling interest
|
|
|
|
|
|
|
(1,862
|
)
|
|
|
|
|
Dividends paid
|
|
|
|
|
|
|
(2,257,812
|
)
|
|
|
(219,312
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash outflow from financing activities
|
|
|
|
|
|
|
(2,191,749
|
)
|
|
|
(343,112
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/(decrease) in cash and cash equivalents
|
|
|
|
|
|
|
1,671,966
|
|
|
|
(171,402
|
)
|
|
|
|
|
Cash and cash equivalents at 1 September
|
|
|
|
|
|
|
408,131
|
|
|
|
578,175
|
|
|
|
|
|
Effect of foreign exchange rate changes
|
|
|
|
|
|
|
(44
|
)
|
|
|
1,358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at 31 August
|
|
|
|
|
|
|
2,080,053
|
|
|
|
408,131
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Analysis of the balances of cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at bank and in hand
|
|
|
19
|
(b)
|
|
|
2,083,079
|
|
|
|
408,976
|
|
Bank overdrafts unsecured
|
|
|
|
|
|
|
(3,026
|
)
|
|
|
(845
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,080,053
|
|
|
|
408,131
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The notes on pages 62 to 118 form part of these financial statements.
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
62
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
1
|
SIGNIFICANT ACCOUNTING POLICIES
|
|
(a)
|
Statement of compliance
|
These financial statements 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, these
financial statements also comply with HKFRSs. These 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 and the requirements of the
Hong Kong Companies Ordinance. A summary of the significant accounting policies adopted by the Group is set out below.
The
IASB has issued certain new and revised IFRSs that are first effective or available for early adoption for the current accounting period of the Group and the Company. The equivalent new and revised HKFRSs consequently issued by the HKICPA as a
result of these developments have the same effective date as those issued by the IASB and are in all material aspects identical to the pronouncements issued by the IASB.
Note 1(c) provides information on any changes in accounting policies resulting from initial application of those developments to the extent that they are relevant to the Group for the current and prior
accounting periods reflected in these financial statements.
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(b)
|
Basis of preparation of the financial statements
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The consolidated financial statements for the year ended 31 August 2012 comprise City Telecom (H.K.) Limited (the Company) and its subsidiaries (collectively referred to as the
Group).
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 as explained in the accounting policies set out below (see notes 1(g), 1(l), 1(o), 1(t) and 1(u)).
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 estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Judgements made by management in the application of IFRSs and HKFRSs that have significant effect on the financial statements and major
sources of estimation uncertainty are discussed in note 31.
|
(c)
|
Change in accounting policies
|
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:
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|
IAS/HKAS 24 (revised 2009), Related party disclosures
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|
|
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.
63
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
1
|
SIGNIFICANT ACCOUNTING POLICIES
(continued)
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|
(c)
|
Change in accounting policies (continued)
|
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 restated due to the immaterial effect resulting from the change in accounting policy.
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(d)
|
Subsidiaries and controlled entities
|
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In
assessing control, potential voting rights that presently are exercisable are taken into account.
An
investment in a subsidiary is consolidated into the consolidated financial statements from the date that control commences until the date that control ceases.
Intra-group balances and transactions and any unrealised profits arising from intra-group transactions are eliminated in full in preparing the consolidated financial statements. Unrealised losses
resulting from intragroup transactions are eliminated in the same way as unrealised gains but only to the extent that there is no evidence of impairment.
Non-controlling interests represent the equity in a subsidiary not attributable directly or indirectly to the Company, and in respect of which the Group has not agreed any additional terms with the
holders of those interests which would result in the Group as a whole having a contractual obligation in respect of those interests that meets the definition of a financial liability.
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City Telecom (H.K.) Limited Annual Report 2012
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64
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
1
|
SIGNIFICANT ACCOUNTING POLICIES
(continued)
|
|
(e)
|
Group accounting (continued)
|
(i) Consolidation (continued)
Non-controlling interests are presented in the consolidated balance sheets within
equity, separately from equity attributable to the equity shareholders of the Company. Non-controlling interests in the results of the Group are presented on the face of the consolidated income statement and the consolidated statement of
comprehensive income as an allocation of the total profit or loss and total comprehensive income for the year between non-controlling interests and the equity shareholders of the Company.
Changes in the Groups interests in a subsidiary that do not result in a loss of control are accounted for as equity transactions,
whereby adjustments are made to the amounts of controlling and non-controlling interests within consolidated equity to reflect the change in relative interests and no gain or loss is recognised.
When the Group loses control of a subsidiary, it is accounted for as a disposal of the entire interest in that subsidiary, with a
resulting gain or loss being recognised in profit or loss. Any interest retained in that former subsidiary at the date when control is lost is recognised at fair value and this amount is regarded as the fair value on initial recognition of a
financial asset or, when appropriate, the cost on initial recognised of an investment in an associate or jointly controlled entity.
In the Companys balance sheet, an investment in a subsidiary is stated at cost less impairment losses (see note 1(k)), unless the investment is classified as held for sale or included in a disposal
group that is classified as held for sale.
(ii) Translation of foreign currencies
Transactions in foreign currencies are translated at exchange rates ruling at the transaction dates. Monetary assets and
liabilities denominated in foreign currencies are translated at exchange rates ruling at the balance sheet date. Exchange differences arising in these cases are dealt with in profit or loss.
For consolidation purposes, the balance sheets of subsidiaries denominated in foreign currencies are translated at the rates of exchange
ruling at the balance sheet date whilst the income statement is translated at an average rate for the year. Exchange differences are dealt with as a movement in reserves.
Goodwill
represents the excess of
|
(i)
|
the aggregate of the fair value of the consideration transferred; over
|
|
(ii)
|
the net fair value of the acquirees identifiable assets and liabilities measured as at the acquisition date.
|
When (ii) is greater than (i), then this excess is recognised immediately in profit or loss as a gain on a bargain purchase.
Goodwill is stated at cost less accumulated impairment losses. Goodwill arising on a business combination is allocated to each
cash-generating unit, or groups of cash generating units, that is expected to benefit from the synergies of the combination and is tested annually for impairment (see note 1(k)).
On disposal of a cash generating unit during the year, any attributable amount of purchased goodwill is included in the calculation of the
profit or loss on disposal.
Investment properties are land and/or buildings which are owned and held to earn rental income and/or for capital appreciation.
Investment properties are stated at fair value, unless they are still in the course of construction or development at the
balance sheet date and their fair value cannot be reliably determined at that time. 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. Rental income from
investment properties is accounted for as described in note 1(v)(vi).
65
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
1
|
SIGNIFICANT ACCOUNTING POLICIES
(continued)
|
(i)
Construction in Progress
Construction in progress is carried at cost, which includes development and construction
expenditure incurred and interest and direct costs attributable to the development less any accumulated impairment loss (see note 1(k)) as considered necessary by the directors. No depreciation is provided for construction in progress. On
completion, the associated costs are transferred to leasehold land and buildings.
(ii) Other Fixed Assets
Other fixed assets, comprising buildings, leasehold improvements, broadcasting and production equipment, network, computer and office
equipment, furniture, fixtures and fittings and motor vehicles, are stated at cost less accumulated depreciation and accumulated impairment losses (see note 1(k)).
Depreciation is calculated to write off the cost of items of fixed assets, less their estimated residual value, if any, using the straight-line method over their estimated useful lives as follows:
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|
|
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Buildings situated on leasehold land are depreciated over the shorter of the unexpired term of lease and their
estimated useful lives of 50 years
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Furniture, fixtures and fittings
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4 years
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Broadcasting and production equipment
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210 years
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Telecommunications/network, computer and office equipment
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420 years
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Motor vehicles
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4 years
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Leasehold improvements are depreciated over the shorter of the unexpired term of the leases and their estimated useful
lives
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Leasehold land classified as held under finance leases is depreciated over the unexpired term of leases
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Where the parts of an item of fixed assets have different useful lives, the cost of the item is allocated
on a reasonable basis between the parts and each part is depreciated separately. Both the useful life of an asset and its residual value, if any, are reviewed annually.
Major costs incurred in restoring fixed assets to their normal working condition are charged to profit or loss. Major improvements are capitalised and depreciated over their expected useful lives to the
Group.
The gain or loss on disposal of a fixed asset is the difference between the net sales proceeds and the carrying amount
of the relevant asset, and is recognised in profit or loss on the date of disposal.
Intangible assets that are acquired by the Group are stated at cost less accumulated amortisation (where the estimated useful life is
finite) and impairment losses (see note 1 (k)).
Amortisation of intangible assets with finite useful lives is charged to
profit or loss on a straight-line basis over the assets estimated useful lives. The following intangible assets with finite useful lives are amortised from the date they are available for use and their estimated useful lives are as follows:
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|
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Indefeasible right of use (IRU) of telecommunications capacity
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|
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20 years
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|
Right to use of telecommunications services
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10 years
|
|
Both the period and method of amortisation are reviewed annually.
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|
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City Telecom (H.K.) Limited Annual Report 2012
|
|
66
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
1
|
SIGNIFICANT ACCOUNTING POLICIES
(continued)
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|
(j)
|
Assets held under leases
|
An arrangement, comprising a transaction or a series of transactions, is or contains a lease if the Group determines that the arrangement
conveys a right to use a specific asset or assets for an agreed period of time in return for a payment or a series of payments. Such a determination is made based on an evaluation of the substance of the arrangement and is regardless of whether the
arrangement takes the legal form of a lease.
(i) Classification of assets leased to the Group
Assets that are held by Group under leases which transfer to the Group substantially all the risks and rewards of ownership are
classified as being held under finance leases. Leases which do not transfer substantially all the risks and rewards of ownership to the Group are classified as operating leases.
Land held for own use under an operating lease for which its fair value cannot be measured separately from the fair value of a building
situated thereon at the inception of the lease, is accounted for as being held under a finance lease, unless the building is also clearly held under an operating lease (see note 1(j)(iii)).
(ii) Finance leases
Where the Group acquires the use of assets under finance leases, the amounts representing the fair value of the leased asset or, if lower, the present value of the minimum lease payments of such assets,
are included in fixed assets with the corresponding liabilities, net of finance charges, recorded as obligations under finance leases. Depreciation and impairment losses are accounted for in accordance with the accounting policy as set out in note
1(h) and note 1(k). Finance charges implicit in the lease payments are charged to profit or loss over the period of the leases so as to produce an approximately constant periodic rate of charge on the remaining balance of the obligations for each
accounting period.
(iii) Operating leases
Leases where substantially all the risks and rewards of ownership of assets remain with the lessor are accounted for as operating leases. Receipts and payments made under operating leases net of any
incentives received by/from the lessor are credited/charged to profit or loss on a straight-line basis over the lease periods.
(i) Impairment of investments in debt and equity securities and accounts and other receivables
Investments in debt and equity securities and other current and non-current receivables that are stated at cost or amortised cost or are
classified as available-for-sale securities are reviewed at the balance sheet date to determine whether there is objective evidence of impairment. Objective evidence of impairment includes observable data that comes to the attention of the Group
about one or more of the following loss events:
|
|
significant financial difficulty of the debtor;
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a breach of contract, such as a default or delinquency in interest or principal payments;
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it becoming probable that the debtor will enter bankruptcy or other financial reorganisation;
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significant changes in the technological, market, economic or legal environment that have an adverse effect on the debtor; and
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|
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a significant or prolonged decline in the fair value of an investment in an equity instrument below its cost.
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
1
|
SIGNIFICANT ACCOUNTING POLICIES
(continued)
|
|
(k)
|
Impairment of assets
(continued)
|
(i) Impairment of investments in debt and equity securities and accounts and other
receivables (continued)
If any such evidence exists, any impairment loss is determined and
recognised as follows:
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|
For investments in subsidiaries, the impairment loss is measured by comparing the recoverable amount of the investment with its carrying amount in accordance with note
1(k)(ii). The impairment loss is reversed if there has been a favourable change in the estimates used to determine the recoverable amount in accordance with note 1(k)(ii).
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For trade and other current receivables and other financial assets carried at amortised cost, the impairment loss is measured as the difference between the assets
carrying amount and the present value of estimated future cash flows, discounted at the financial assets original effective interest rate (i.e. the effective interest rate computed at initial recognition of these assets), where the effect of
discounting is material. This assessment is made collectively where financial assets carried at amortised cost share similar risk characteristics, such as similar past due status, and have not been individually assessed as impaired. Future cash
flows for financial assets which are assessed for impairment collectively are based on historical loss experience for assets with credit risk characteristics similar to the collective group.
|
If in a subsequent period the amount of an impairment loss decreases and the decrease can be linked objectively to an event occurring
after the impairment loss was recognised, the impairment loss is reversed through profit or loss. A reversal of an impairment loss shall not result in the assets carrying amount exceeding that which would have been determined had no impairment
loss been recognised in prior years.
|
|
For available-for-sale securities, the cumulative loss that has been recognised in the fair value reserve is reclassified to profit or loss. The amount of the
cumulative loss that is recognised in profit or loss is the difference between the acquisition cost (net of any principal repayment and amortisation) and current fair value, less any impairment loss on that asset previously recognised in profit or
loss.
|
Impairment losses recognised in profit or loss in respect of available-for-sale equity securities are not
reversed through profit or loss. Any subsequent increase in the fair value of such assets is recognised directly in other comprehensive income.
Impairment losses in respect of available-for-sale debt securities are reversed if the subsequent increase in fair value can be objectively related to an event occurring after the impairment loss was
recognised. Reversals of impairment losses in such circumstances are recognised in profit and loss.
Impairment losses are
written off against the corresponding assets directly, except for impairment losses recognised in respect of trade debtors, whose recovery is considered doubtful but not remote. In this case, the impairment losses for doubtful debts are recorded
using an allowance account. When the Group is satisfied that recovery is remote, the amount considered irrecoverable is written off against trade debtors directly and any amounts held in the allowance account relating to that debt are reversed.
Subsequent recoveries of amounts previously charged to the allowance account are reversed against the allowance account. Other changes in the allowance account and subsequent recoveries of amounts previously written off directly are recognised in
profit or loss.
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|
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City Telecom (H.K.) Limited Annual Report 2012
|
|
68
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
1
|
SIGNIFICANT ACCOUNTING POLICIES
(continued)
|
(k) Impairment of assets
(continued)
(ii) Impairment of other assets
Internal and external sources of information are reviewed at the balance sheet date to identify indications that the following assets may
be impaired or, except in the case of goodwill, an impairment loss previously recognised no longer exists or may have decreased:
If any such indication exists, the assets recoverable amount is estimated. In addition, for goodwill, the recoverable amount is
estimated annually whether or not there is any indication of impairment.
|
|
|
Calculation of recoverable amount
|
The recoverable amount of an asset is the greater of its fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value
using a pretax discount rate that reflects current market assessments of time value of money and the risks specific to the asset. Where an asset does not generate cash inflows largely independent of those from other assets, the recoverable amount is
determined for the smallest group of assets that generates cash inflows independently (i.e. a cash-generating unit).
|
|
|
Recognition of impairment losses
|
An impairment loss is recognised in profit or loss whenever the carrying amount of an asset, or the cash-generating unit to which it belongs, exceeds its recoverable amount. Impairment losses recognised
in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit (or group of units) and then, to reduce the carrying amount of the other assets in the unit (or group of
units) on a pro rata basis, except that the carrying value of an asset will not be reduced below its individual fair value less costs to sell, or value in use, if determinable.
|
|
|
Reversals of impairment losses
|
In respect of assets other than goodwill, an impairment loss is reversed if there has been a favourable change in the estimates used to determine the recoverable amount. An impairment loss in respect of
goodwill is not reversed.
A reversal of an impairment loss is limited to the assets carrying amount that would have
been determined had no impairment loss been recognised in prior years. Reversals of impairment losses are credited to profit or loss in the year in which the reversals are recognised.
(iii) Interim financial reporting and impairment
Under the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited, the Group is required to prepare an interim financial report in compliance with IAS 34/HKAS 34, Interim
financial reporting, in respect of the first six months of the financial year. At the end of the interim period, the Group applies the same impairment testing, recognition and reversal criteria as it would at the end of the financial year (see notes
1(k)(i) and (k)(ii)).
Impairment losses recognised in an interim period in respect of goodwill, available-for-sale equity
securities and unquoted equity securities carried at cost are not reversed in a subsequent period. This is the case even if no loss, or a smaller loss, would have been recognised had the impairment been assessed only at the end of the financial year
to which the interim period relates. Consequently, if the fair value of an available-for-sale equity security increases in the remainder of the annual period, or in any other period subsequently, the increase is recognised in other comprehensive
income and not profit or losses.
69
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
1
|
SIGNIFICANT ACCOUNTING POLICIES
(continued)
|
|
(l)
|
Derivative financial instruments
|
Derivative financial instruments are recognised initially at fair value. At each balance sheet date, the fair value is remeasured. The gain or loss on remeasurement to fair value is recognised immediately
in profit or loss, except where the derivatives qualify for cash flow hedge accounting or hedge of a net investment in a foreign operation, in which case recognition of any resultant gain or loss depends on the nature of the item being hedged. For
the years presented in the consolidated financial statements, none of the Groups derivative financial instruments qualify as hedges or hedge accounting.
Programme costs are stated at cost less amounts expensed and any provision considered necessary by management. Programme costs are charged
to the profit or loss over the showing or licensing period of the programme, with reference to the projected revenue.
|
|
Self-produced Programmes
|
Self-produced programmes consist primarily of drama, infotainment and variety programmes. Cost of self-produced programmes comprises
direct production cost and an appropriate proportion of production overheads.
Purchased programmes consist film rights acquired for showing on the Groups television channel. Cost of purchased programme
comprises cost of purchase, cost of conversion and an appropriate proportion of production overheads.
Deferred expenditure represents customer acquisition costs incurred for successful acquisition or origination of a service subscription
agreement with a customer. Such costs are deferred and amortised on a straight-line basis over the period of the underlying service subscription agreements.
Trade and other receivables are initially recognised at fair value and thereafter stated at amortised cost less allowance for impairment
of doubtful debts (see note 1(k)(i)), except where the receivables are interest-free loans made to related parties without any fixed repayment terms or the effect of discounting would be immaterial. In such cases, the receivables are stated at cost
less impairment of doubtful debts (see note 1(k)(i)).
|
(p)
|
Cash and cash equivalents
|
Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks and other financial institutions, and short-term,
highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value, having been within three months of maturity at acquisition. Bank overdrafts that are repayable on
demand and form an integral part of the Groups cash management are also included as a component of cash and cash equivalents for the purpose of the consolidated cash flow statement.
|
(q)
|
Financial guarantees issued, provisions and contingent liabilities
|
|
(i)
|
Financial guarantees issued
|
Financial guarantees are contracts that require the issuer (i.e. the guarantor) to make specified payments to reimburse the beneficiary of the guarantee (the holder) for a loss the holder
incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument.
Where the
Group issues a financial guarantee, the fair value of the guarantee (being the transaction price, unless the fair value can otherwise be reliably estimated) is initially recognised as deferred income within trade and other payables. Where
consideration is received or receivable for the issuance of the guarantee, the consideration is recognised in accordance with the Groups policies applicable to that category of asset. Where no such consideration is received or receivable, an
immediate expense is recognised in profit or loss on initial recognition of any deferred income. The amount of the guarantee initially recognised as deferred income is amortised in profit or loss over the term of the guarantee as income from
financial guarantees issued. In addition, provisions are recognised in accordance with note 1(q)(ii) if and when (i) it becomes probable that the holder of the guarantee will call upon the Group under the guarantee, and (ii) the amount of
that claim on the Group is expected to exceed the amount currently carried in trade and other payables in respect of that guarantee i.e. the amount initially recognised, less accumulated amortisation.
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|
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City Telecom (H.K.) Limited Annual Report 2012
|
|
70
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
1
|
SIGNIFICANT ACCOUNTING POLICIES
(continued)
|
|
(q)
|
Financial guarantees issued, provisions and contingent liabilities (continued)
|
|
(ii)
|
Other provisions and contingent liabilities
|
Provisions are recognised for other liabilities of uncertain timing or amount when the Group or the Company has a legal or constructive obligation arising as a result of a past event, it is probable that
an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. Where the time value of money is material, provisions are stated at the present value of the expenditure expected to settle the
obligation.
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated
reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future
events are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.
Entitlements to annual leave and long service leave are recognised when they accrue to individuals employed by the Group hereinafter
(referred to as Talents), including directors of the Company. A provision is made for the estimated liability for annual leave and long-service leave as a result of services rendered by talents up to the balance sheet date. Entitlements
to sick leave and maternity or paternity leave are not recognised until the time of leave.
|
(ii)
|
Profit sharing and bonus plans
|
Provisions for profit sharing and bonus plans are recognised when the Group has a present legal or constructive obligation as a result of services rendered by Talents and a reliable estimate of the
obligation can be made.
|
(iii)
|
Retirement benefit costs
|
The Group contributes to defined contribution retirement schemes which are available to certain Talents. Contributions to the schemes by
the Group are calculated as a percentage of Talents basic salaries and charged to profit or loss. The Groups contributions are reduced by contributions forfeited by those Talents who leave the scheme prior to vesting fully in the
contributions.
The assets of the scheme are held in an independently administered fund that is separated from the
Groups assets.
|
(iv)
|
Share-based payments
|
The fair value of share options granted to Talents or Directors is recognised as Talent cost with a corresponding increase in capital
reserve within equity. The fair value is measured at grant date using the Black-Scholes option pricing model or Monte Carlo model, taking into account the terms and conditions upon which the options were granted. Where the Talents have to meet
vesting conditions before becoming unconditionally entitled to the share options, the total estimated fair value of the share options is spread over the vesting period, taking into account the probability that the options will vest.
During the vesting period, the number of share options that is expected to vest is reviewed. Any adjustment to the cumulative fair value
recognised in prior years is charged/credited to profit or loss, with a corresponding adjustment to the capital reserve. On vesting date, the amount recognised as an expense is adjusted to reflect the actual number of share options that vest (with a
corresponding adjustment to the capital reserve) except where forfeiture is only due to not achieving vesting conditions that relate to the market price of the Companys shares. The amount related to share options expense is recorded in the
capital reserve until either the option is exercised or the option expires.
71
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
1
|
SIGNIFICANT ACCOUNTING POLICIES
(continued)
|
Income tax
for the year comprises current tax and movements in deferred tax assets and liabilities. Current tax and movements in deferred tax assets and liabilities are recognised in profit or loss except to the extent that they relate to business
combinations, or items recognised in other comprehensive income or directly in equity, in which case the relevant amounts of tax are recognised in other comprehensive income or directly in equity, respectively.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the
balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax assets and liabilities arise
from deductible and taxable temporary differences respectively, being the differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases. Deferred tax assets also arise from unused tax losses
and unused tax credits.
Apart from certain limited exceptions, all deferred tax liabilities, and all deferred tax assets to
the extent that it is probable that future taxable profits will be available against which the asset can be utilised, are recognised. Future taxable profits that may support the recognition of deferred tax assets arising from deductible temporary
differences include those that will arise from the reversal of existing taxable temporary differences, provided those differences relate to the same taxation authority and the same taxable entity, and are expected to reverse either in the same
period as the expected reversal of the deductible temporary difference or in periods into which a tax loss arising from the deferred tax asset can be carried back or forward. The same criteria are adopted when determining whether existing taxable
temporary differences support the recognition of deferred tax assets arising from unused tax losses and credits, that is, those differences are taken into account if they relate to the same taxation authority and the same taxable entity, and are
expected to reverse in a period, or periods, in which the tax loss or credit can be utilised.
The limited exceptions to
recognition of deferred tax assets and liabilities are those temporary differences arising from goodwill not deductible for tax purposes, the initial recognition of assets or liabilities that affect neither accounting nor taxable profit (provided
they are not part of a business combination), and temporary differences relating to investments in subsidiaries to the extent that, in the case of taxable differences, the Group controls the timing of the reversal and it is probable that the
differences will not reverse in the foreseeable future, or in the case of deductible differences, unless it is probable that they will reverse in the future.
Where investment properties are carried at their fair value in accordance with the accounting policy set out in note 1(g), the amount of deferred tax recognised is measured using the tax rates that would
apply on sale of those assets at their carrying value at the balance sheet date unless the property is depreciable and is held within a business model whose objective is to consume substantially all of the economic benefits embodied in the property
over time, rather than through sale. In all other cases, the amount of deferred tax recognised is measured based on the expected manner of realisation or settlement of the carrying amount of the assets and liabilities, using tax rates enacted or
substantively enacted at the balance sheet date. Deferred tax assets and liabilities are not discounted.
The carrying amount
of a deferred tax asset is reviewed at each balance sheet date and is reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the related tax benefit to be utilised. Any such reduction is
reversed to the extent that it becomes probable that sufficient taxable profits will be available.
Current tax balances and
deferred tax balances, and movements therein, are presented separately from each other and are not offset. Current tax assets are offset against current tax liabilities, and deferred tax assets against deferred tax liabilities, if the Company or the
Group has the legally enforceable right to set off current tax assets against current tax liabilities and the following additional conditions are met:
|
|
in the case of current tax assets and liabilities, the Company or the Group intends either to settle on a net basis, or to realise the asset and settle the liability
simultaneously; or
|
|
|
in the case of deferred tax assets and liabilities, if they relate to income taxes levied by the same taxation authority on either:
|
|
|
the same taxable entity; or
|
|
|
different taxable entities, which, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered,
intend to realise the current tax assets and settle the current tax liabilities on a net basis or realise and settle simultaneously.
|
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
72
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
1
|
SIGNIFICANT ACCOUNTING POLICIES
(continued)
|
|
(t)
|
Interest-bearing borrowings
|
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, the interest-bearing borrowings are stated at amortised cost with
the difference between amortised cost and redemption value recognised in profit or loss over the period of borrowings using the effective interest method.
|
(u)
|
Trade and other payables
|
Trade and other payables are initially recognised at fair value. Except for financial guarantee liabilities measured in accordance with
note 1(q), trade and other payables are subsequently stated at amortised cost unless the effect of discounting would be immaterial, in which case they are stated at cost.
|
(i)
|
Revenue for the provision of international telecommunication and fixed telecommunication network services is recognised, when an agreement exists, service is rendered,
the fee is fixed or determinable, and collectability is probable.
|
|
(ii)
|
Tariff-free period granted to subscribers of fixed telecommunication services are recognised in profit or loss rateably over the term of service subscription agreement.
|
|
(iii)
|
Amount received in advance for the provision of fixed telecommunications network services is deferred and included under deferred service income, and subsequently
recognised as revenue on a straight-line basis over the related service period.
|
|
(iv)
|
Revenue for licensing of programme rights is recognised over the contract period or upon delivery of the programmes concerned in accordance with the terms of the
contracts.
|
|
(v)
|
Interest income is recognised as it accrues using the effective interest method.
|
|
(vi)
|
Rental income receivable under operating leases is recognised in profit or loss in equal instalments over the periods covered by the lease term, except where an
alternative basis is more representative of the platform of benefits to be derived from the leased assets. Lease incentives granted are recognised in profit or loss as an integral part of the aggregate net lease payments receivable.
|
|
(vii)
|
Artiste management fee income is recognised when the services are rendered.
|
Borrowing costs that are directly attributable to the acquisition, construction or production of an asset that necessarily takes a
substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of that asset.
All
other borrowing costs are charged to profit or loss in the year in which they are incurred.
|
(x)
|
Discontinued operations
|
A discontinued operation is a component of the Groups business, the operations and cash flows of which can be clearly distinguished
from the rest of the Group and which represents a separate major line of business. Classification as a discontinued operation occurs upon disposal.
Where an operation is classified as discontinued, a single amount is presented on the face of the income statement, which comprises:
|
|
|
the post-tax profit or loss of the discontinued operation; and
|
|
|
|
the post-tax gain or loss recognised on the disposal of the assets or disposal group constituting the discontinued operation.
|
73
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
1
|
SIGNIFICANT ACCOUNTING POLICIES
(continued)
|
Operating segments, and the amounts of each segment item reported in the financial statements, are identified from the financial
information provided regularly to the Groups most senior executive management for the purposes of allocating resources to, and assessing the performance of, the Groups lines of business.
Geographical information is not presented as majority of the Groups revenue is attributed to customers in Hong Kong and majority of
the assets are located in Hong Kong.
|
(a)
|
A person, or a close member of that persons family, is related to the Group if that person:
|
|
(i)
|
has control or joint control over the Group;
|
|
(ii)
|
has significant influence over the Group; or
|
|
(iii)
|
is a member of the key management personnel of the Group or the Groups parent.
|
|
(b)
|
An entity is related to the Group if any of the following conditions applies:
|
|
(i)
|
The entity and the Group are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).
|
|
(ii)
|
One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).
|
|
(iii)
|
Both entities are joint ventures of the same third party.
|
|
(iv)
|
One entity is a joint venture of a third entity and the other entity is an associate of the third entity.
|
|
(v)
|
The entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group.
|
|
(vi)
|
The entity is controlled or jointly controlled by a person identified in (a).
|
|
(vii)
|
A person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).
|
Close members of the family of a person are those family members who may be expected to influence, or be
influenced by, that person in their dealings with the entity.
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
74
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
2
|
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 report.
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
|
|
|
|
Note
|
|
2012
HK$000
|
|
|
2011
HK$000
|
|
Turnover
|
|
3
|
|
|
1,433,775
|
|
|
|
1,681,458
|
|
Network costs and cost of sales
|
|
4
|
|
|
(277,028
|
)
|
|
|
(212,315
|
)
|
Other operating expenses
|
|
5(a)
|
|
|
(860,946
|
)
|
|
|
(1,073,683
|
)
|
Other income, net
|
|
5(b)
|
|
|
3,638
|
|
|
|
3,793
|
|
Finance costs, net
|
|
5(c)
|
|
|
574
|
|
|
|
944
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit before taxation
|
|
|
|
|
300,013
|
|
|
|
400,197
|
|
Income tax expense
|
|
6
|
|
|
(48,407
|
)
|
|
|
(54,172
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Profit after taxation
|
|
|
|
|
251,606
|
|
|
|
346,025
|
|
Gain on sale of discontinued operations
|
|
2(c)
|
|
|
3,520,088
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the year
|
|
|
|
|
3,771,694
|
|
|
|
346,025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
|
|
|
|
|
|
|
|
|
75
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
2
|
DISCONTINUED OPERATIONS
(continued)
|
|
(c)
|
Effect of Disposal on the financial position of the Group:
|
|
|
|
|
|
|
|
|
|
Note
|
|
HK$000
|
|
Net assets disposed of:
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
13
|
|
|
1,066
|
|
Fixed assets
|
|
14
|
|
|
1,601,528
|
|
Long term receivable and prepayment
|
|
|
|
|
4,533
|
|
Deferred expenditure
|
|
17
|
|
|
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
|
|
23(a)
|
|
|
(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
|
|
|
|
|
|
|
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
76
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
3
|
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.
The amount of each significant category of revenue recognised in turnover during the year is as follows:
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
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
|
|
|
|
|
|
|
|
|
|
|
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.
77
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
3
|
TURNOVER AND SEGMENT INFORMATION
(continued)
|
Segmental information (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
|
Continuing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
operations
|
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
Fixed
|
|
|
|
|
|
|
|
|
|
Multimedia
|
|
|
tele-
|
|
|
tele-
|
|
|
|
|
|
|
|
|
|
services and
|
|
|
communications
|
|
|
communications
|
|
|
|
|
|
|
|
|
|
others
|
|
|
services
|
|
|
network services
|
|
|
Elimination
|
|
|
Group
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
78
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
3
|
TURNOVER AND SEGMENT INFORMATION
(continued)
|
Segmental information (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011 (restated)
|
|
|
|
Continuing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
operations
|
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
Fixed
|
|
|
|
|
|
|
|
|
|
Multimedia
|
|
|
tele-
|
|
|
tele-
|
|
|
|
|
|
|
|
|
|
services and
|
|
|
communications
|
|
|
communications
|
|
|
|
|
|
|
|
|
|
others
|
|
|
services
|
|
|
network services
|
|
|
Elimination
|
|
|
Group
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
79
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
3
|
TURNOVER AND SEGMENT INFORMATION
(continued)
|
Segmental information (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
|
Continuing
|
|
|
|
|
|
|
|
|
|
|
|
|
operations
|
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
International
|
|
|
Fixed
|
|
|
|
|
|
|
Multimedia
|
|
|
tele-
|
|
|
tele-
|
|
|
|
|
|
|
services and
|
|
|
communications
|
|
|
communications
|
|
|
|
|
|
|
others
|
|
|
services
|
|
|
network services
|
|
|
Group
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
Segment assets
|
|
|
2,755,116
|
|
|
|
|
|
|
|
|
|
|
|
2,755,116
|
|
Term deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
544,040
|
|
Investment properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
238,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,537,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment liabilities
|
|
|
51,682
|
|
|
|
|
|
|
|
|
|
|
|
51,682
|
|
Tax payable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
935
|
|
Deferred tax liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53,963
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure incurred during the year
|
|
|
178,750
|
|
|
|
3,665
|
|
|
|
279,978
|
|
|
|
462,393
|
|
Depreciation for the year
|
|
|
4,636
|
|
|
|
7,021
|
|
|
|
174,248
|
|
|
|
185,905
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011 (restated)
|
|
|
|
Continuing
|
|
|
|
|
|
|
|
|
|
|
|
|
operations
|
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
International
|
|
|
Fixed
|
|
|
|
|
|
|
Multimedia
|
|
|
tele-
|
|
|
tele-
|
|
|
|
|
|
|
services and
|
|
|
communications
|
|
|
communications
|
|
|
|
|
|
|
others
|
|
|
services
|
|
|
network services
|
|
|
Group
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
Segment assets
|
|
|
380,736
|
|
|
|
53,509
|
|
|
|
1,830,217
|
|
|
|
2,264,462
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment liabilities
|
|
|
30,764
|
|
|
|
48,695
|
|
|
|
274,203
|
|
|
|
353,662
|
|
Tax payable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,281
|
|
Deferred tax liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
111,138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
467,081
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure incurred during the year
|
|
|
51,255
|
|
|
|
1,631
|
|
|
|
396,310
|
|
|
|
449,196
|
|
Depreciation for the year
|
|
|
1,585
|
|
|
|
9,914
|
|
|
|
206,698
|
|
|
|
218,197
|
|
4
|
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.
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
80
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
5
|
(LOSS)/PROFIT BEFORE TAXATION
|
(Loss)/profit before taxation is arrived at after charging/(crediting) the following:
(a) Other operating expenses
|
|
|
|
|
|
|
|
|
|
|
2012
HK$000
|
|
|
2011
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 5(d))
|
|
|
55,971
|
|
|
|
6,837
|
|
Amortisation of intangible assets (note 15)
|
|
|
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 5(d))
|
|
|
233,814
|
|
|
|
304,518
|
|
Amortisation of deferred expenditure (note 17)
|
|
|
29,902
|
|
|
|
37,873
|
|
Others
|
|
|
119,122
|
|
|
|
140,107
|
|
|
|
|
|
|
|
|
|
|
|
|
|
860,946
|
|
|
|
1,073,683
|
|
|
|
|
|
|
|
|
|
|
|
|
|
965,906
|
|
|
|
1,097,164
|
|
|
|
|
|
|
|
|
|
|
81
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
5
|
(LOSS)/PROFIT BEFORE TAXATION
(continued)
|
(b) Other income, net
|
|
|
|
|
|
|
|
|
|
|
2012
HK$000
|
|
|
2011
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
|
)
|
|
|
|
|
|
|
|
|
|
(c) Finance costs, net
|
|
|
|
|
|
|
|
|
|
|
2012
HK$000
|
|
|
2011
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
82
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
5
|
(LOSS)/PROFIT BEFORE TAXATION
(continued)
|
(d) Talent costs
|
|
|
|
|
|
|
|
|
|
|
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 (note 10)
|
|
|
3,993
|
|
|
|
385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
108,404
|
|
|
|
6,837
|
|
Less:Talent costs capitalised as programme costs
|
|
|
(47,140
|
)
|
|
|
|
|
Talent costs included in cost 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 (note 10)
|
|
|
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 cost 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.
83
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
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.
The amount of income tax expense in the consolidated income statement represents:
|
|
|
|
|
|
|
|
|
|
|
2012
HK$000
|
|
|
2011
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
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
84
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
6
|
INCOME TAX EXPENSE
(continued)
|
The Groups income tax expense differs from the theoretical amount that would arise
using the profits before taxation at applicable tax rates as follows:
|
|
|
|
|
|
|
|
|
|
|
2012
HK$000
|
|
|
2011
HK$000
(restated)
|
|
Profit before taxation
|
|
|
3,748,562
|
|
|
|
372,869
|
|
Notional tax on profit before taxation, calculated at the prevailing tax rates applicable to profit in the jurisdiction
concerned
|
|
|
(619,401
|
)
|
|
|
(63,606
|
)
|
Effect of non-taxable income
|
|
|
4,662
|
|
|
|
535
|
|
Effect of non-deductible expenses
|
|
|
(3,627
|
)
|
|
|
(4,975
|
)
|
Utilisation of tax loss related to prior years
|
|
|
|
|
|
|
6,872
|
|
Effect of unused tax losses not recognised
|
|
|
(9,693
|
)
|
|
|
|
|
Effect of disposal of Telecom Business
|
|
|
577,383
|
|
|
|
|
|
Under-provision in prior years
|
|
|
|
|
|
|
(135
|
)
|
PRC income tax concession
|
|
|
|
|
|
|
2,406
|
|
Others
|
|
|
(12
|
)
|
|
|
(51
|
)
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
(50,688
|
)
|
|
|
(58,954
|
)
|
|
|
|
|
|
|
|
|
|
Representing by
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
(2,281
|
)
|
|
|
(4,782
|
)
|
Discontinued operations
|
|
|
(48,407
|
)
|
|
|
(54,172
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(50,688
|
)
|
|
|
(58,954
|
)
|
|
|
|
|
|
|
|
|
|
7
|
PROFIT ATTRIBUTABLE TO SHAREHOLDERS
|
The profit attributable to shareholders is dealt with in the financial statements of the Company to the extent of HK$4,398,466,000 (2011: HK$212,267,000).
(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.
85
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
(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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
86
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
10
|
RETIREMENT BENEFIT COSTS
|
The Group contributes to an Occupational Retirement Scheme (the ORSO Scheme), a defined contribution retirement scheme, which
is available to some of its Talents in Hong Kong. Under the ORSO Scheme, the Talents are required to contribute 5% of their monthly salaries, while the Groups contributions are calculated at 10% and 5% of the monthly salaries of senior
management Talents and all other Talents respectively. The Talents are entitled to 100% of the employers contributions after 10 years of completed service, or at a reduced scale after completion of 3 to 9 years service. Contributions to
the ORSO Scheme are reduced by contributions forfeited by those Talents who leave the ORSO Scheme prior to vesting fully in the Groups contributions.
A mandatory provident fund scheme (the MPF Scheme) has been established under the Hong Kong Mandatory Provident Fund Scheme Ordinance in December 2000. The then existing Talents of the Group
in Hong Kong could elect to join the MPF Scheme, while all new Talents joining the Group in Hong Kong from then onwards are required to join the MPF Scheme. Both the Group and the Talents are required to contribute 5% of each individuals
relevant income with a maximum amount of HK$1,000 per month before 1 June 2012, and commenced from 1 June 2012, the maximum amount has been increased to HK$1,250, as a mandatory contribution. Employers mandatory contributions are
100% vested in the Talents as soon as they are paid to the MPF Scheme. Senior Talents may also elect to join a Mutual Voluntary Plan (the Mutual Plan) in which both the Group and the Talent, on top of the MPF Scheme mandatory
contributions, make a voluntary contribution to the extent of contributions that would have been made under the ORSO Scheme.
Pursuant to the relevant regulations in the PRC, the Group contributes to a defined contribution retirement scheme organised by the local
social security bureau for each Talent of the subsidiary in the PRC at the rate of 20% of a standard salary base as determined by the local social security bureau. The Group has no other obligation to make payments in respect of retirement benefits
of these Talents.
The retirement schemes for Talents of the Group in other countries follow the local statutory requirements
of the respective countries.
The aggregate employers contributions, net of forfeited contributions, which have been
dealt with in the consolidated income statement during the year are as follows:
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
Gross contributions
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
3,993
|
|
|
|
385
|
|
Discontinued operations
|
|
|
38,074
|
|
|
|
43,487
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,067
|
|
|
|
43,872
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2012, there was no forfeited contribution available to offset future contributions by
the Group to the ORSO Scheme (2011: HK$Nil).
87
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
11
|
DIRECTORS AND SENIOR MANAGEMENTS EMOLUMENTS
|
(a) Directors remuneration
The remuneration of each director for the
year ended 31 August 2012 is set out below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of director
|
|
Fee
HK$000
|
|
|
Salary
HK$000
|
|
|
Discretionary
bonuses
HK$000
|
|
|
Share-based
payment
HK$000
|
|
|
Employers
contribution
to defined
contribution
scheme
HK$000
|
|
|
Total
HK$000
|
|
Wong Wai Kay, Ricky
|
|
|
|
|
|
|
6,707
|
|
|
|
1,050
|
|
|
|
|
|
|
|
670
|
|
|
|
8,427
|
|
Cheung Chi Kin, Paul
|
|
|
|
|
|
|
6,707
|
|
|
|
1,050
|
|
|
|
|
|
|
|
670
|
|
|
|
8,427
|
|
Yeung Chu Kwong, William (note (a))
|
|
|
|
|
|
|
7,477
|
|
|
|
66,163
|
|
|
|
8,901
|
|
|
|
342
|
|
|
|
82,883
|
|
Lai Ni Quiaque (note (a))
|
|
|
|
|
|
|
2,070
|
|
|
|
59,915
|
|
|
|
120
|
|
|
|
207
|
|
|
|
62,312
|
|
To Wai Bing (note (b))
|
|
|
|
|
|
|
6,199
|
|
|
|
4,200
|
|
|
|
|
|
|
|
192
|
|
|
|
10,591
|
|
Wong Nga Lai, Alice (note (b))
|
|
|
|
|
|
|
1,659
|
|
|
|
1,839
|
|
|
|
|
|
|
|
166
|
|
|
|
3,664
|
|
Cheng Mo Chi, Moses
|
|
|
183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
183
|
|
Lee Hon Ying, John
|
|
|
202
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
202
|
|
Chan Kin Man
|
|
|
190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
190
|
|
Peh Jefferson Tun Lu
|
|
|
190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
765
|
|
|
|
30,819
|
|
|
|
134,217
|
|
|
|
9,021
|
|
|
|
2,247
|
|
|
|
177,069
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
(a)
|
Mr. Yeung Chu Kwong, William and Mr. Lai Ni Quiaque resigned as Executive Directors with effect from 30 May 2012.
|
(b)
|
Ms. To Wai Bing and Ms. Wong Nga Lai, Alice were appointed as Executive Directors with effect from 30 May 2012.
|
The remuneration of each director for the year ended 31 August 2011 is set out below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of director
|
|
Fee
HK$000
|
|
|
Salary
HK$000
|
|
|
Discretionary
bonuses
HK$000
|
|
|
Share-based
payment
HK$000
|
|
|
Employers
contribution
to defined
contribution
scheme
HK$000
|
|
|
Total
HK$000
|
|
Wong Wai Kay, Ricky
|
|
|
|
|
|
|
6,704
|
|
|
|
1,000
|
|
|
|
|
|
|
|
670
|
|
|
|
8,374
|
|
Cheung Chi Kin, Paul
|
|
|
|
|
|
|
6,706
|
|
|
|
1,000
|
|
|
|
|
|
|
|
670
|
|
|
|
8,376
|
|
Yeung Chu Kwong, William
|
|
|
|
|
|
|
9,733
|
|
|
|
1,310
|
|
|
|
3,006
|
|
|
|
456
|
|
|
|
14,505
|
|
Lai Ni Quiaque
|
|
|
|
|
|
|
2,762
|
|
|
|
635
|
|
|
|
1,906
|
|
|
|
276
|
|
|
|
5,579
|
|
Cheng Mo Chi, Moses
|
|
|
176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
176
|
|
Lee Hon Ying, John
|
|
|
195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
195
|
|
Chan Kin Man
|
|
|
182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
182
|
|
Peh Jefferson Tun Lu
|
|
|
182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
735
|
|
|
|
25,905
|
|
|
|
3,945
|
|
|
|
4,912
|
|
|
|
2,072
|
|
|
|
37,569
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
No director waived any emoluments in respect of the years ended 31 August 2011 and 2012.
The share-based payment represents the expenses determined based on the fair value of share options granted to certain directors under
the Companys share option scheme. Fair value of share options is estimated in accordance with the Groups significant accounting policies in note 1. The details of the share-based payment are disclosed in note 12.
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
88
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
11
|
DIRECTORS AND SENIOR MANAGEMENTS EMOLUMENTS
(continued)
|
(b) Five highest paid individuals
The five individuals whose emoluments were the highest in the Group for the year include five (2011: four) directors whose emoluments are
reflected in the analysis presented above. In 2011, the emoluments payable to the remaining one individual during the year are as follows:
|
|
|
|
|
|
|
2011
|
|
|
|
HK$000
|
|
Basic salaries, other allowances and benefits in kind
|
|
|
2,523
|
|
Discretionary bonuses
|
|
|
300
|
|
Retirement benefit costs defined contribution plans
|
|
|
181
|
|
|
|
|
|
|
|
|
|
3,004
|
|
|
|
|
|
|
The emoluments fell within the following band:
|
|
|
|
|
|
|
Number of
|
|
|
|
individual
|
|
|
|
2011
|
|
HK$3,000,001 HK$3,500,000
|
|
|
1
|
|
12
|
EQUITY SETTLED SHARE-BASED TRANSACTIONS
|
The Company operates a share option scheme (the 2002 Share Option Scheme) which was adopted by shareholders of the Company on 23 December 2002 whereby the directors may, at their
discretion, invite eligible participants to receive options to subscribe for shares subject to the terms and conditions stipulated therein.
Under the 2002 Share Option Scheme, the Company may grant options to Talents (including executive, non-executive and independent non-executive directors), suppliers and professional advisers to subscribe
for shares of the Company. The maximum number of options authorised under the 2002 Share Option Scheme may not, when aggregated with any shares subject to any other executive and talent share option scheme, exceed 10% of the Companys issued
share capital on the date of adoption. The exercise price of the option is determined by the Companys board of directors at a price not less than the highest of (a) the par value of a share; (b) the average closing price of the
Companys shares for five trading days preceding the grant date; and (c) the closing price of the Companys shares on the date of grant. The 2002 Share Option Scheme is valid and effective for a ten year period up to 22 December
2012 subject to earlier termination by the Company by resolution in general meeting or by the board of directors. The period during which the option may be exercised will be determined by the board of directors at its discretion, save that no option
may be exercised after more than ten years from the date of grant.
89
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
12
|
EQUITY SETTLED SHARE-BASED TRANSACTIONS
(continued)
|
|
(a)
|
The terms and conditions of the options
|
Options that existed during the year ended 31 August 2012 are as follows, whereby all options are settled by physical delivery of shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Vesting
|
|
|
|
|
2002 Share Option Scheme
|
|
option
|
|
|
conditions
|
|
|
Exercisable period
|
|
Options granted to directors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21 October 2004
|
|
|
202,289
|
|
|
|
Condition 1
|
|
|
|
On or prior to 20 October 2014
|
|
5 January 2005
|
|
|
14,183,208
|
|
|
|
Condition 1
|
|
|
|
On or prior to 20 October 2014
|
|
22 May 2006
|
|
|
102,456
|
|
|
|
Condition 1
|
|
|
|
On or prior to 21 May 2016
|
|
6 February 2008
|
|
|
5,542,791
|
|
|
|
Condition 3/6/7
|
|
|
|
On or prior to 5 February 2018
|
|
11 February 2008
|
|
|
6,044,791
|
|
|
|
Condition 2/6/7
|
|
|
|
On or prior to 10 February 2018
|
|
15 February 2008
|
|
|
302,239
|
|
|
|
Condition 5
|
|
|
|
On or prior to 23 December 2012
|
|
5 February 2010
|
|
|
6,000,000
|
|
|
|
Condition 4/7
|
|
|
|
On or prior to 4 February 2020
|
|
|
|
|
|
Options granted to Talents excluding directors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21 October 2004
|
|
|
3,605,682
|
|
|
|
Condition 1
|
|
|
|
On or prior to 20 October 2014
|
|
22 May 2006
|
|
|
1,122,227
|
|
|
|
Condition 1
|
|
|
|
On or prior to 21 May 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total share options
|
|
|
37,105,683
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options that existed during the year ended 31 August 2011 are as follows, whereby all options are
settled by physical delivery of shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Vesting
|
|
|
|
|
2002 Share Option Scheme
|
|
option
|
|
|
conditions
|
|
|
Exercisable period
|
|
Options granted to directors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5 January 2005
|
|
|
16,183,208
|
|
|
|
Condition 1
|
|
|
|
On or prior to 20 October 2014
|
|
22 May 2006
|
|
|
2,023,064
|
|
|
|
Condition 1
|
|
|
|
On or prior to 21 May 2016
|
|
6 February 2008
|
|
|
5,542,791
|
|
|
|
Condition 3/6
|
|
|
|
On or prior to 5 February 2018
|
|
11 February 2008
|
|
|
6,044,791
|
|
|
|
Condition 2/6
|
|
|
|
On or prior to 10 February 2018
|
|
5 February 2010
|
|
|
6,000,000
|
|
|
|
Condition 4
|
|
|
|
On or prior to 4 February 2020
|
|
|
|
|
|
Options granted to Talents excluding directors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21 October 2004
|
|
|
4,158,680
|
|
|
|
Condition 1
|
|
|
|
On or prior to 20 October 2014
|
|
22 May 2006
|
|
|
3,160,379
|
|
|
|
Condition 1
|
|
|
|
On or prior to 21 May 2016
|
|
15 February 2008
|
|
|
604,479
|
|
|
|
Condition 5
|
|
|
|
On or prior to 23 December 2012
|
|
2 May 2008
|
|
|
932,465
|
|
|
|
Condition 5/6
|
|
|
|
On or prior to 1 May 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total share options
|
|
|
44,649,857
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
90
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
12
|
EQUITY SETTLED SHARE-BASED TRANSACTIONS
(continued)
|
|
(a)
|
The terms and conditions of the options (continued)
|
The vesting conditions of the respective share option grant are as follows:
Condition 1
Options granted are vested in one year or evenly vested over a period of two to three years. Options are awarded without performance conditions and are exercisable provided the participants have remained
employed by the end of respective vesting periods.
Condition 2
Vesting of the options is conditional upon the performance of the Companys shares over the period from the close of trading in Hong
Kong on 22 November 2007 to 21 November 2010.
Upon fulfilment of the market conditions, certain options granted vest
immediately, while other options affected by the same market conditions vest evenly over a period of three years.
During the
year ended 31 August 2010, one of the market conditions in the option agreement has been replaced and the vesting of certain options became conditional upon the Company reaching a non-market performance condition. Upon fulfilment of this
non-market performance condition, a portion of the options affected by this condition vest immediately, while other options affected by this condition vest evenly over a period of three years.
Condition 3
Vesting of the options is conditional upon the performance of the participants. Options granted are vested over a period of three to four years from the date of fulfilment of certain key performance
indicators.
During the year ended 31 August 2010, one of the performance conditions had been modified.
Condition 4
Vesting of the options is conditional upon the performance of the participants. Options granted are vested immediately from the date of fulfilment of certain key performance indicators.
Condition 5
Vesting of the options is conditional upon the performance of the participants. Options granted are vested over a period of three to four years from the date of fulfilment of certain key performance
indicators.
Condition 6
During the year ended 31 August 2011, one of the clauses in the option agreement has been modified. As a result of this modification, the expiry period of the share option has been extended to 10
years from the grant date of share options. The Group has accounted for the modification in accordance with IFRS/HKFRS 2 Share-based payment by measuring the incremental fair value which is the difference between the fair value of the
modified share options and that of the original share options, both estimated as at the date of the modification, and recognising the incremental fair value over the period from the modification date until the date when the modified share options
vest. If the modification occurs after vesting date, the incremental fair value granted is recognised immediately. The balance of the original grant-date fair value as at the date of modification continues to be recognised over the remaining
original vesting period. The total incremental fair value arisen from this modification amounts to HK$276,000.
Condition
7
During the year ended 31 August 2012 and in connection with the Disposal, certain conditions imposed on the share
options were waived and all unvested outstanding share options become vested and exercisable immediately. The unamortized original grant date fair value was fully recognised to profit or loss as share-based payment expenses at the date of
modification amounting to HK$8,328,000.
91
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
12
|
EQUITY SETTLED SHARE-BASED TRANSACTIONS
(continued)
|
|
(b)
|
The number and weighted average exercise prices of share options are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
Weighted
average
exercise
price
HK$
|
|
|
Number of
options
|
|
|
Weighted
average
exercise
price
HK$
|
|
|
Number of
options
|
|
2002 Share Option Scheme
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at the beginning of the year
|
|
|
2.03
|
|
|
|
37,105,683
|
|
|
|
1.87
|
|
|
|
44,649,857
|
|
Exercised during the year
|
|
|
2.03
|
|
|
|
(37,104,790
|
)
|
|
|
1.05
|
|
|
|
(6,914,509
|
)
|
Lapsed/forfeited during the year
|
|
|
0.65
|
|
|
|
(893
|
)
|
|
|
1.79
|
|
|
|
(629,665
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at the end of the year
|
|
|
|
|
|
|
|
|
|
|
2.03
|
|
|
|
37,105,683
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at the end of the year
|
|
|
|
|
|
|
|
|
|
|
1.47
|
|
|
|
19,217,594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The weighted average share price at the date of exercise for the share options exercised during the year
was HK$4.42 (2011: HK$5.63).
There is no options outstanding at 31 August 2012. The options outstanding at 31 August
2011 had a weighted average exercise price of HK$2.03 and a weighted average remaining contractual life of 3 years.
|
|
|
|
|
|
|
|
|
|
|
The Group
|
|
|
|
2012
HK$000
|
|
|
2011
HK$000
|
|
Balance as at the beginning of the year
|
|
|
1,066
|
|
|
|
1,066
|
|
Disposal of Telecom Business
|
|
|
(1,066
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at the end of the year
|
|
|
|
|
|
|
1,066
|
|
|
|
|
|
|
|
|
|
|
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
92
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
Group
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction
in progress
HK$000
|
|
|
Investment
properties
HK$000
|
|
|
Leasehold
land and
buildings
HK$000
|
|
|
Leasehold
improvements
HK$000
|
|
|
Furniture,
fixtures
and
fittings
HK$000
|
|
|
Telecom-
munications/
network,
computer
and office
equipment
HK$000
|
|
|
Motor
vehicles
HK$000
|
|
|
Broadcasting
and production
equipment
HK$000
|
|
|
Total
HK$000
|
|
Cost and valuation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 September 2011
|
|
|
51,111
|
|
|
|
|
|
|
|
97,684
|
|
|
|
121,598
|
|
|
|
21,836
|
|
|
|
3,466,362
|
|
|
|
12,219
|
|
|
|
|
|
|
|
3,770,810
|
|
Additions
|
|
|
83,686
|
|
|
|
|
|
|
|
2,911
|
|
|
|
31,790
|
|
|
|
2,295
|
|
|
|
283,911
|
|
|
|
4,796
|
|
|
|
53,004
|
|
|
|
462,393
|
|
Disposals
|
|
|
|
|
|
|
|
|
|
|
(16,343
|
)
|
|
|
(8,092
|
)
|
|
|
(8,836
|
)
|
|
|
(321,549
|
)
|
|
|
(6,951
|
)
|
|
|
(2,877
|
)
|
|
|
(364,648
|
)
|
Disposal of Telecom Business
|
|
|
|
|
|
|
|
|
|
|
(16,425
|
)
|
|
|
(125,516
|
)
|
|
|
(11,378
|
)
|
|
|
(3,378,790
|
)
|
|
|
(4,907
|
)
|
|
|
|
|
|
|
(3,537,016
|
)
|
Fair value adjustment
|
|
|
|
|
|
|
18,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,200
|
|
Exchange adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(118
|
)
|
|
|
(68
|
)
|
|
|
(1,774
|
)
|
|
|
|
|
|
|
|
|
|
|
(1,960
|
)
|
Reclassification
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,306
|
)
|
|
|
|
|
|
|
3,306
|
|
|
|
|
|
Transfer to investment properties (note 14(b))
|
|
|
|
|
|
|
220,000
|
|
|
|
(57,361
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
162,639
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2012
|
|
|
134,797
|
|
|
|
238,200
|
|
|
|
10,466
|
|
|
|
19,662
|
|
|
|
3,849
|
|
|
|
44,854
|
|
|
|
5,157
|
|
|
|
53,433
|
|
|
|
510,418
|
|
Representing:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
134,797
|
|
|
|
|
|
|
|
10,466
|
|
|
|
19,662
|
|
|
|
3,849
|
|
|
|
44,854
|
|
|
|
5,157
|
|
|
|
53,433
|
|
|
|
272,218
|
|
Valuation
|
|
|
|
|
|
|
238,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
238,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
134,797
|
|
|
|
238,200
|
|
|
|
10,466
|
|
|
|
19,662
|
|
|
|
3,849
|
|
|
|
44,854
|
|
|
|
5,157
|
|
|
|
53,433
|
|
|
|
510,418
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 September 2011
|
|
|
|
|
|
|
|
|
|
|
18,651
|
|
|
|
91,937
|
|
|
|
19,661
|
|
|
|
1,987,610
|
|
|
|
10,250
|
|
|
|
|
|
|
|
2,128,109
|
|
Charge for the year
|
|
|
|
|
|
|
|
|
|
|
1,352
|
|
|
|
10,896
|
|
|
|
991
|
|
|
|
170,419
|
|
|
|
1,403
|
|
|
|
2,476
|
|
|
|
187,537
|
|
Disposals
|
|
|
|
|
|
|
|
|
|
|
(16,343
|
)
|
|
|
(7,784
|
)
|
|
|
(8,640
|
)
|
|
|
(300,564
|
)
|
|
|
(6,424
|
)
|
|
|
(2,870
|
)
|
|
|
(342,625
|
)
|
Exchange adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(119
|
)
|
|
|
(59
|
)
|
|
|
(1,561
|
)
|
|
|
|
|
|
|
|
|
|
|
(1,739
|
)
|
Disposal of Telecom Business
|
|
|
|
|
|
|
|
|
|
|
(955
|
)
|
|
|
(91,764
|
)
|
|
|
(9,791
|
)
|
|
|
(1,829,916
|
)
|
|
|
(3,062
|
)
|
|
|
|
|
|
|
(1,935,488
|
)
|
Reclassification
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,870
|
)
|
|
|
|
|
|
|
2,870
|
|
|
|
|
|
Transfer to investment properties (note 14(b))
|
|
|
|
|
|
|
|
|
|
|
(2,517
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,517
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2012
|
|
|
|
|
|
|
|
|
|
|
188
|
|
|
|
3,166
|
|
|
|
2,162
|
|
|
|
23,118
|
|
|
|
2,167
|
|
|
|
2,476
|
|
|
|
33,277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2012
|
|
|
134,797
|
|
|
|
238,200
|
|
|
|
10,278
|
|
|
|
16,496
|
|
|
|
1,687
|
|
|
|
21,736
|
|
|
|
2,990
|
|
|
|
50,957
|
|
|
|
477,141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
14
|
FIXED ASSETS
(continued)
|
Group (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction
in progress
HK$000
|
|
|
Investment
properties
HK$000
|
|
|
Leasehold land
and buildings
HK$000
|
|
|
Leasehold
improvements
HK$000
|
|
|
Furniture,
fixtures and
fittings
HK$000
|
|
|
Telecom-
munications/
network,
computer
and office
equipment
HK$000
|
|
|
Motor
vehicles
HK$000
|
|
|
Broadcasting
and production
equipment
HK$000
|
|
|
Total
HK$000
|
|
Cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 September 2010
|
|
|
|
|
|
|
5,197
|
|
|
|
90,911
|
|
|
|
113,286
|
|
|
|
21,191
|
|
|
|
3,130,209
|
|
|
|
12,948
|
|
|
|
|
|
|
|
3,373,742
|
|
Additions
|
|
|
51,111
|
|
|
|
|
|
|
|
1,576
|
|
|
|
6,851
|
|
|
|
203
|
|
|
|
388,828
|
|
|
|
627
|
|
|
|
|
|
|
|
449,196
|
|
Disposals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(42
|
)
|
|
|
(57,268
|
)
|
|
|
(1,356
|
)
|
|
|
|
|
|
|
(58,666
|
)
|
Exchange adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,461
|
|
|
|
484
|
|
|
|
4,593
|
|
|
|
|
|
|
|
|
|
|
|
6,538
|
|
Transfer of investment property
|
|
|
|
|
|
|
(5,197
|
)
|
|
|
5,197
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2011
|
|
|
51,111
|
|
|
|
|
|
|
|
97,684
|
|
|
|
121,598
|
|
|
|
21,836
|
|
|
|
3,466,362
|
|
|
|
12,219
|
|
|
|
|
|
|
|
3,770,810
|
|
Accumulated depreciation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 September 2010
|
|
|
|
|
|
|
2,413
|
|
|
|
14,284
|
|
|
|
80,316
|
|
|
|
18,132
|
|
|
|
1,816,942
|
|
|
|
9,842
|
|
|
|
|
|
|
|
1,941,929
|
|
Charge for the year
|
|
|
|
|
|
|
104
|
|
|
|
1,850
|
|
|
|
10,349
|
|
|
|
1,121
|
|
|
|
203,009
|
|
|
|
1,764
|
|
|
|
|
|
|
|
218,197
|
|
Disposals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(42
|
)
|
|
|
(36,098
|
)
|
|
|
(1,356
|
)
|
|
|
|
|
|
|
(37,496
|
)
|
Exchange adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,272
|
|
|
|
450
|
|
|
|
3,757
|
|
|
|
|
|
|
|
|
|
|
|
5,479
|
|
Transfer of investment property
|
|
|
|
|
|
|
(2,517
|
)
|
|
|
2,517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2011
|
|
|
|
|
|
|
|
|
|
|
18,651
|
|
|
|
91,937
|
|
|
|
19,661
|
|
|
|
1,987,610
|
|
|
|
10,250
|
|
|
|
|
|
|
|
2,128,109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2011
|
|
|
51,111
|
|
|
|
|
|
|
|
79,033
|
|
|
|
29,661
|
|
|
|
2,175
|
|
|
|
1,478,752
|
|
|
|
1,969
|
|
|
|
|
|
|
|
1,642,701
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
94
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
14
|
FIXED ASSETS (continued)
|
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
munications/
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
network,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Furniture,
|
|
|
computer
|
|
|
|
|
|
|
|
|
|
Investment
|
|
|
Leasehold
|
|
|
fixtures and
|
|
|
and office
|
|
|
Motor
|
|
|
|
|
|
|
property
|
|
|
improvements
|
|
|
fittings
|
|
|
equipment
|
|
|
vehicles
|
|
|
Total
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
Cost and valuation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 September 2011
|
|
|
2,680
|
|
|
|
9,913
|
|
|
|
9,459
|
|
|
|
296,910
|
|
|
|
3,656
|
|
|
|
322,618
|
|
Additions
|
|
|
|
|
|
|
217
|
|
|
|
27
|
|
|
|
20,369
|
|
|
|
571
|
|
|
|
21,184
|
|
Disposals
|
|
|
|
|
|
|
(7,683
|
)
|
|
|
(8,782
|
)
|
|
|
(295,661
|
)
|
|
|
(2,867
|
)
|
|
|
(314,993
|
)
|
Fair value adjustment
|
|
|
4,720
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,720
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2012
|
|
|
7,400
|
|
|
|
2,447
|
|
|
|
704
|
|
|
|
21,618
|
|
|
|
1,360
|
|
|
|
33,529
|
|
Representing:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
2,447
|
|
|
|
704
|
|
|
|
21,618
|
|
|
|
1,360
|
|
|
|
26,129
|
|
Valuation
|
|
|
7,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,400
|
|
|
|
2,447
|
|
|
|
704
|
|
|
|
21,618
|
|
|
|
1,360
|
|
|
|
33,529
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 September 2011
|
|
|
|
|
|
|
8,822
|
|
|
|
8,933
|
|
|
|
246,071
|
|
|
|
3,280
|
|
|
|
267,106
|
|
Charge for the year
|
|
|
|
|
|
|
474
|
|
|
|
326
|
|
|
|
5,583
|
|
|
|
136
|
|
|
|
6,519
|
|
Disposals
|
|
|
|
|
|
|
(7,745
|
)
|
|
|
(8,583
|
)
|
|
|
(248,902
|
)
|
|
|
(2,450
|
)
|
|
|
(267,680
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2012
|
|
|
|
|
|
|
1,551
|
|
|
|
676
|
|
|
|
2,752
|
|
|
|
966
|
|
|
|
5,945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2012
|
|
|
7,400
|
|
|
|
896
|
|
|
|
28
|
|
|
|
18,866
|
|
|
|
394
|
|
|
|
27,584
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
95
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
14
|
FIXED ASSETS
(continued)
|
Company (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
property
HK$000
(restated)
|
|
|
Leasehold
improvements
HK$000
|
|
|
Furniture,
fixtures and
fittings
HK$000
|
|
|
Telecom-
munications/
network,
computer
and office
equipment
HK$000
|
|
|
Motor
vehicles
HK$000
|
|
|
Total
HK$000
(restated)
|
|
Cost and valuation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 September 2010
|
|
|
2,784
|
|
|
|
9,719
|
|
|
|
9,463
|
|
|
|
309,253
|
|
|
|
4,901
|
|
|
|
336,120
|
|
Additions
|
|
|
|
|
|
|
194
|
|
|
|
|
|
|
|
464
|
|
|
|
|
|
|
|
658
|
|
Others
|
|
|
(104
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(104
|
)
|
Disposals
|
|
|
|
|
|
|
|
|
|
|
(4
|
)
|
|
|
(12,807
|
)
|
|
|
(1,245
|
)
|
|
|
(14,056
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2011
|
|
|
2,680
|
|
|
|
9,913
|
|
|
|
9,459
|
|
|
|
296,910
|
|
|
|
3,656
|
|
|
|
322,618
|
|
Representing:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
9,913
|
|
|
|
9,459
|
|
|
|
296,910
|
|
|
|
3,656
|
|
|
|
319,938
|
|
Valuation
|
|
|
2,680
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,680
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,680
|
|
|
|
9,913
|
|
|
|
9,459
|
|
|
|
296,910
|
|
|
|
3,656
|
|
|
|
322,618
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 September 2010
|
|
|
|
|
|
|
8,373
|
|
|
|
8,308
|
|
|
|
249,461
|
|
|
|
4,215
|
|
|
|
270,357
|
|
Charge for the year
|
|
|
|
|
|
|
449
|
|
|
|
625
|
|
|
|
9,048
|
|
|
|
310
|
|
|
|
10,432
|
|
Disposals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12,438
|
)
|
|
|
(1,245
|
)
|
|
|
(13,683
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2011
|
|
|
|
|
|
|
8,822
|
|
|
|
8,933
|
|
|
|
246,071
|
|
|
|
3,280
|
|
|
|
267,106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2011
|
|
|
2,680
|
|
|
|
1,091
|
|
|
|
526
|
|
|
|
50,839
|
|
|
|
376
|
|
|
|
55,512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
96
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
14
|
FIXED ASSETS
(continued)
|
|
(a)
|
The Groups total future aggregate lease income receivable under non-cancellable operating lease are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group
|
|
|
The Company
|
|
|
|
2012
HK$000
|
|
|
2011
HK$000
|
|
|
2012
HK$000
|
|
|
2011
HK$000
|
|
Continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leases in respect of investment properties which are receivable:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Within 1 year
|
|
|
13,659
|
|
|
|
|
|
|
|
105
|
|
|
|
105
|
|
|
|
|
|
|
After 1 year but within 5 years
|
|
|
51,219
|
|
|
|
|
|
|
|
54
|
|
|
|
158
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
64,878
|
|
|
|
|
|
|
|
159
|
|
|
|
263
|
|
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leases in respect of telecommunications facilities and computer equipment which are receivable:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Within 1 year
|
|
|
|
|
|
|
3,604
|
|
|
|
|
|
|
|
|
|
After 1 year but within 5 years
|
|
|
|
|
|
|
2,653
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,257
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
64,878
|
|
|
|
6,257
|
|
|
|
159
|
|
|
|
263
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
During the year ended 31 August 2012, upon the completion of Disposal, certain properties were leased to the Telecom Business and resulted in a change in use from
self use to leasing for rental income. Upon this change in use, the Group transferred these properties from leasehold land and buildings to investment properties. These investment properties are stated at their fair values in accordance with the
accounting policy set out in note 1(g) and the appreciation in value of HK$165,156,000, representing the difference between their fair value and net book value at the date of the transfer, was credited to revaluation reserve.
|
During the year ended 31 August 2011, the lease of the investment property to a third party expired and the
property has then been leased to a group entity for self-use. Upon this change in use, the Group transferred the investment property into leasehold land and buildings.
|
(c)
|
All investment properties of the Group were revalued as at 31 August 2012 on an open market value basis calculated by reference to net rental income allowing for
reversionary income potential. The valuations were carried out by an independent firm of surveyors, RHL Appraisal Limited, who have among their staff Fellows of the Hong Kong Institute of Surveyors with recent experience in the location and category
of property being valued.
|
97
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
14
|
FIXED ASSETS
(continued)
|
|
(d)
|
The net book value of interests in leasehold land and buildings and investment properties situated in Hong Kong are analysed as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group
|
|
|
The Company
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
(restated)
|
|
Leases of between 10 to 50 years
|
|
|
383,275
|
|
|
|
130,144
|
|
|
|
7,400
|
|
|
|
2,680
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Representing:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction in progress carried at cost
|
|
|
134,797
|
|
|
|
51,111
|
|
|
|
|
|
|
|
|
|
Leasehold land and buildings carried at cost
|
|
|
10,278
|
|
|
|
79,033
|
|
|
|
|
|
|
|
|
|
Investment properties stated at fair value
|
|
|
238,200
|
|
|
|
|
|
|
|
7,400
|
|
|
|
2,680
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
383,275
|
|
|
|
130,144
|
|
|
|
7,400
|
|
|
|
2,680
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(e)
|
In addition to the leasehold land and buildings classified as being held under a finance lease, the Group leases telecommunications, computer and office equipment under
finance leases expiring from one to five years. At the end of the lease term the Group has the option to purchase the equipment at a price deemed to be a bargain purchase option. None of the leases included contingent rental.
|
At 31 August 2012, the net book value of telecommunications, computer and office equipment under finance
lease held by the Group amounted to HK$92,000 (2011: HK$267,000).
|
(f)
|
The cost of construction in progress comprises premium paid for the land registered in Hong Kong with a lease term of about 36 years and expenditure incurred on the
development of buildings not yet completed at the year end.
|
|
(g)
|
Further particulars of the Groups properties interest at 31 August 2012 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable
|
|
|
|
|
|
|
|
interest of
|
|
Location
|
|
Use
|
|
Lease term
|
|
the Group
|
|
Office 1, 2 and 3 on 7th Floor,
Mongkok Harbour Centre,
No. 638 Shanghai Street, Kowloon
|
|
Leasing for rental income
|
|
Medium term lease
|
|
|
100
|
%
|
|
|
|
|
12/F,14/F-16/F & Roof on 17/F,
Trans Asia Centre,
No. 18 Kin Hong Street,
Kwai Chung, New
Territories
|
|
Leasing for rental income
|
|
Medium term lease
|
|
|
100
|
%
|
|
|
|
|
13/F, Trans Asia Centre, No. 18
Kin Hong Street,
Kwai Chung, New Territories
|
|
Self-use
|
|
Medium term lease
|
|
|
100
|
%
|
|
|
|
|
The whole of 14/F and Lorry Parking Space
No. L13 on 1/F, Mita Centre,
Nos.552-566 Castle Peak Road,
Kwai Chung, New
Territories
|
|
Leasing for rental income
|
|
Medium term lease
|
|
|
100
|
%
|
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
98
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
The
Group
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Right to use of
|
|
|
|
|
|
|
|
|
|
IRU of the tele-
|
|
|
tele-
|
|
|
|
|
|
|
|
|
|
communications
|
|
|
communications
|
|
|
|
|
|
|
|
|
|
capacity
|
|
|
services
|
|
|
Others
|
|
|
Total
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
Cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 September 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions
|
|
|
226,700
|
|
|
|
90,243
|
|
|
|
2,450
|
|
|
|
319,393
|
|
Written off
|
|
|
|
|
|
|
|
|
|
|
(2,450
|
)
|
|
|
(2,450
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2012
|
|
|
226,700
|
|
|
|
90,243
|
|
|
|
|
|
|
|
316,943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortisation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 September 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortisation for the year
|
|
|
2,905
|
|
|
|
2,312
|
|
|
|
|
|
|
|
5,217
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2012
|
|
|
2,905
|
|
|
|
2,312
|
|
|
|
|
|
|
|
5,217
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2012
|
|
|
223,795
|
|
|
|
87,931
|
|
|
|
|
|
|
|
311,726
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Right to use of
|
|
|
|
|
|
|
IRU of the tele-
|
|
|
tele-
|
|
|
|
|
|
|
communications
|
|
|
communications
|
|
|
|
|
|
|
capacity
|
|
|
services
|
|
|
Total
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
Cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 September 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions
|
|
|
226,700
|
|
|
|
90,243
|
|
|
|
316,943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2012
|
|
|
226,700
|
|
|
|
90,243
|
|
|
|
316,943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortisation:
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 September 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortisation for the year
|
|
|
2,905
|
|
|
|
2,312
|
|
|
|
5,217
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2012
|
|
|
2,905
|
|
|
|
2,312
|
|
|
|
5,217
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value:
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2012
|
|
|
223,795
|
|
|
|
87,931
|
|
|
|
311,726
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Upon the completion of Disposal and as part of the consideration received from the Disposal, the Group
was granted the IRU to use certain capacity of the telecommunication network of the Telecom Business for a term of 20 years and right to use of the telecommunication services from the Telecom Business for a term of 10 years.
The fair value of IRU of telecommunications capacity and right to use of telecommunication services as at the completion date of the
Disposal was determined by the Group with reference to comparable market transactions.
99
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
16
|
INVESTMENTS IN SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
|
|
The Company
|
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
Unlisted investments, at cost (note (a))
|
|
|
|
|
|
|
51,791
|
|
Amounts due from subsidiaries (note (b))
|
|
|
623,437
|
|
|
|
1,040,414
|
|
|
|
|
|
|
|
|
|
|
|
|
|
623,437
|
|
|
|
1,092,205
|
|
Less: Impairment loss
|
|
|
|
|
|
|
(10,184
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
623,437
|
|
|
|
1,082,021
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
The following is a list of the principal subsidiaries which principally affected the results, assets or liabilities of the Group:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage
|
|
|
|
|
|
|
|
|
|
of interest
|
|
|
|
|
|
Principal activities
|
|
Particulars of
|
|
held as at
|
|
|
|
Place of
|
|
and place of
|
|
issued share
|
|
31 August
|
|
Name
|
|
incorporation
|
|
operations
|
|
capital
|
|
2012
|
|
Attitude Holdings Limited
#
|
|
British Virgin Islands
|
|
Inactive
|
|
Ordinary US$1
|
|
|
100
|
|
|
|
|
|
|
Best Intellect Limited
|
|
British Virgin Islands
|
|
Investment holding in Hong Kong
|
|
Ordinary US$1
|
|
|
*100
|
|
|
|
|
|
|
Cosmo True Limited
|
|
British Virgin Islands
|
|
Property investment in Hong
Kong
|
|
Ordinary US$1
|
|
|
*100
|
|
|
|
|
|
|
Excel Billion Profits Limited
|
|
Hong Kong
|
|
Inactive
|
|
Ordinary HK$10,000
|
|
|
100
|
|
|
|
|
|
|
Golden Trinity Holdings Limited
#
|
|
British Virgin Islands
|
|
Investment holding in Hong Kong
|
|
Ordinary US$1
|
|
|
*100
|
|
|
|
|
|
|
Hong Kong Broadband Digital TV Limited
|
|
Hong Kong
|
|
Inactive
|
|
Ordinary HK$10,000
|
|
|
100
|
|
|
|
|
|
|
Hong Kong Broadband Television Company Limited
|
|
Hong Kong
|
|
Inactive
|
|
Ordinary HK$2
|
|
|
100
|
|
|
|
|
|
|
Hong Kong Media Production Company Limited
|
|
Hong Kong
|
|
Provision of multimedia
production and distribution
services
|
|
Ordinary HK$10,000
|
|
|
100
|
|
|
|
|
|
|
Hong Kong Television Network Limited
|
|
Hong Kong
|
|
Inactive
|
|
Ordinary HK$2
|
|
|
100
|
|
|
|
|
|
|
Leader Artiste Management Company Limited
|
|
Hong Kong
|
|
Provision of management and
agency services to artistes
|
|
Ordinary HK$100
|
|
|
100
|
|
|
|
|
|
|
Multi Talent Enterprise Limited
|
|
British Virgin Islands
|
|
Investment holding in Hong Kong
|
|
Ordinary US$1
|
|
|
*100
|
|
|
|
|
|
|
CTI Guangzhou Customer Services Co. Ltd. (translated from the registered name in Chinese)
^
|
|
PRC
|
|
Provision of administrative
support services in the PRC
|
|
Paid in capital of HK$8,000,000
|
|
|
|
|
|
|
|
|
|
Hong Kong Broadband Network Limited (HKBN)
^
|
|
Hong Kong
|
|
Provision of international
telecommunications and fixed
telecommunications network
services in Hong Kong
|
|
Ordinary HK$383,049
|
|
|
|
|
*
|
Shares held directly by the Company.
|
#
|
Subsidiaries not audited by KPMG.
|
^
|
Subsidiaries disposed of during the year.
|
|
(b)
|
Except for a loan to a former subsidiary of HK$Nil (2011: HK$625,860,000) which bears fixed interest of 9% per annum, all the amounts due from subsidiaries are
unsecured, interest-free and have no fixed terms of repayment.
|
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
100
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
|
|
|
|
|
|
|
|
|
|
|
The Group
|
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
Balance as at the beginning of the year
|
|
|
44,635
|
|
|
|
35,612
|
|
Additions during the year
|
|
|
22,245
|
|
|
|
46,896
|
|
Less: Amortisation charge for the year
|
|
|
(29,902
|
)
|
|
|
(37,873
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
36,978
|
|
|
|
44,635
|
|
Disposal of Telecom Business
|
|
|
(36,978
|
)
|
|
|
|
|
Current portion
|
|
|
|
|
|
|
(29,312
|
)
|
|
|
|
|
|
|
|
|
|
Balance as at the end of the year
|
|
|
|
|
|
|
15,323
|
|
|
|
|
|
|
|
|
|
|
Deferred expenditure represents costs incurred by the Telecom Business to acquire subscribers of the
services offered by the Telecom Business, which are treated as customer acquisition costs and are amortised over the period of the underlying service subscription agreements.
18
|
ACCOUNTS RECEIVABLE, OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group
|
|
|
The Company
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
Accounts receivable
|
|
|
1,311
|
|
|
|
78,529
|
|
|
|
|
|
|
|
6,526
|
|
Less: Allowance for doubtful debts
|
|
|
|
|
|
|
(6,530
|
)
|
|
|
|
|
|
|
(319
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,311
|
|
|
|
71,999
|
|
|
|
|
|
|
|
6,207
|
|
Other receivables, deposits and prepayments
|
|
|
31,581
|
|
|
|
90,984
|
|
|
|
11,292
|
|
|
|
5,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,892
|
|
|
|
162,983
|
|
|
|
11,292
|
|
|
|
11,363
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The aging
analysis of accounts receivable, before recognition of impairment losses, is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group
|
|
|
The Company
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
Current 30 days
|
|
|
573
|
|
|
|
44,949
|
|
|
|
|
|
|
|
1,647
|
|
3160 days
|
|
|
565
|
|
|
|
16,417
|
|
|
|
|
|
|
|
2,674
|
|
6190 days
|
|
|
94
|
|
|
|
6,861
|
|
|
|
|
|
|
|
389
|
|
Over 90 days
|
|
|
79
|
|
|
|
10,302
|
|
|
|
|
|
|
|
1,816
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,311
|
|
|
|
78,529
|
|
|
|
|
|
|
|
6,526
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
101
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
18
|
ACCOUNTS RECEIVABLE, OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS
(continued)
|
|
(b)
|
Impairment of accounts receivable
|
Impairment losses in respect of accounts receivable are recorded using an allowance account unless the Group is satisfied that recovery of the amount is remote, in which case the impairment loss is
written off against accounts receivable directly (see note 1(k)(i)).
The movement in the allowance for doubtful debts during
the year including both specific and collective loss components is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group
|
|
|
The Company
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
Balance as at the beginning of the year
|
|
|
6,530
|
|
|
|
5,823
|
|
|
|
319
|
|
|
|
559
|
|
Impairment loss recognised
|
|
|
9,707
|
|
|
|
13,636
|
|
|
|
335
|
|
|
|
483
|
|
Uncollectible amounts written off
|
|
|
(11,707
|
)
|
|
|
(12,929
|
)
|
|
|
|
|
|
|
(723
|
)
|
Disposal of Telecom Business
|
|
|
(4,530
|
)
|
|
|
|
|
|
|
(654
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at the end of the year
|
|
|
|
|
|
|
6,530
|
|
|
|
|
|
|
|
319
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c)
|
Accounts receivable that are not impaired
|
The aging analysis of accounts receivable that are neither individually nor collectively considered to be impaired are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group
|
|
|
The Company
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
Neither past due nor impaired
|
|
|
573
|
|
|
|
44,949
|
|
|
|
|
|
|
|
1,647
|
|
0 30 past due
|
|
|
565
|
|
|
|
16,417
|
|
|
|
|
|
|
|
2,674
|
|
31 60 past due
|
|
|
94
|
|
|
|
6,861
|
|
|
|
|
|
|
|
389
|
|
Over 60 past due
|
|
|
79
|
|
|
|
3,772
|
|
|
|
|
|
|
|
1,497
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,311
|
|
|
|
71,999
|
|
|
|
|
|
|
|
6,207
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables that were neither past due nor impaired relate to a wide range of customers for whom there
was no recent history of default.
Other accounts receivable that were past due but not impaired relate to a number of
independent customers that have a good track record of payment. Based on past experience, management believes that no impairment allowance is necessary in respect of these balances as there has not been a significant change in credit quality and the
balances are still considered fully recoverable. The Group does not hold collateral over these balances.
|
(d)
|
Other receivables, deposits and prepayments
|
Other receivables, deposits and prepayments consist of deposits for purchase of fixed assets, rental deposit, interest receivable, unbilled revenue, prepayment and other receivables. All of the other
receivables, except rental deposits and others amounting to HK$1,392,000 (2011: HK$9,026,000), are expected to be recovered within one year.
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
102
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
19
|
BANK DEPOSITS AND CASH
|
Term
deposits are time deposits with banks with maturity over three months at acquisition.
|
(b)
|
Cash at bank and in hand
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group
|
|
|
The Company
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
Time deposits with banks within three months of original maturity
|
|
|
|
|
|
|
263,270
|
|
|
|
|
|
|
|
206,046
|
|
Cash at bank and in hand
|
|
|
2,083,079
|
|
|
|
145,706
|
|
|
|
2,068,766
|
|
|
|
48,010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at bank and in hand in the balance sheet
|
|
|
2,083,079
|
|
|
|
408,976
|
|
|
|
2,068,766
|
|
|
|
254,056
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20
|
ACCOUNTS PAYABLE, OTHER PAYABLES AND ACCRUED CHARGES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group
|
|
|
The Company
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
Accounts payable
|
|
|
5,371
|
|
|
|
17,419
|
|
|
|
|
|
|
|
2,721
|
|
Other payables and accrued charges
|
|
|
31,118
|
|
|
|
209,585
|
|
|
|
15,418
|
|
|
|
22,863
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,489
|
|
|
|
227,004
|
|
|
|
15,418
|
|
|
|
25,584
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
The aging analysis of the accounts payable is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group
|
|
|
The Company
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
Current 30 days
|
|
|
2,920
|
|
|
|
11,719
|
|
|
|
|
|
|
|
1,137
|
|
31 60 days
|
|
|
315
|
|
|
|
245
|
|
|
|
|
|
|
|
61
|
|
61 90 days
|
|
|
84
|
|
|
|
733
|
|
|
|
|
|
|
|
|
|
Over 90 days
|
|
|
2,052
|
|
|
|
4,722
|
|
|
|
|
|
|
|
1,523
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,371
|
|
|
|
17,419
|
|
|
|
|
|
|
|
2,721
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
Other payables and accrued charges
|
Other payables primarily consist of accrual for Talent salaries and bonus, carrier fees and charges, payable for purchase of fixed assets, advertising and promotional expenses as well as interest payable.
21
|
DEFERRED SERVICES REVENUE
|
Deferred services revenue primarily includes service fees received from customers in advance for the Group and the Companys fixed
telecommunications network services and international telecommunications services. Service fees received in advance is deferred and recognised as revenue on a straight-line basis over the related contract period. The deferred services revenue was
disposed as part of the Telecom Business on 30 May 2012.
103
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
|
(a)
|
Movements in components of equity
|
The reconciliation between the opening and closing balances of each component of the Groups consolidated equity is set out in the consolidated statement of changes in equity. Details of the changes
in the Companys individual components of equity between the beginning and the end of the year are set out below:
The
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
|
|
|
|
|
|
|
|
|
|
Share
|
|
|
Share
|
|
|
Capital
|
|
|
redemption
|
|
|
Retained
|
|
|
|
|
|
|
capital
|
|
|
premium
|
|
|
reserve
|
|
|
reserve
|
|
|
profits
|
|
|
Total
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
At 1 September 2011
|
|
|
77,191
|
|
|
|
1,083,495
|
|
|
|
23,759
|
|
|
|
7
|
|
|
|
146,103
|
|
|
|
1,330,555
|
|
Profit attributable to equity shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,398,466
|
|
|
|
4,398,466
|
|
Final dividend paid in respect of previous year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(115,901
|
)
|
|
|
(115,901
|
)
|
Special dividend paid in respect of current year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,022,542
|
)
|
|
|
(2,022,542
|
)
|
Interim dividend paid in respect of current year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(119,674
|
)
|
|
|
(119,674
|
)
|
Shares issued upon exercise of share option
|
|
|
3,711
|
|
|
|
104,510
|
|
|
|
(33,044
|
)
|
|
|
|
|
|
|
|
|
|
|
75,177
|
|
Equity settled share-based transactions
|
|
|
|
|
|
|
|
|
|
|
10,480
|
|
|
|
|
|
|
|
|
|
|
|
10,480
|
|
Share options lapsed
|
|
|
|
|
|
|
|
|
|
|
(1,195
|
)
|
|
|
|
|
|
|
1,195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2012
|
|
|
80,902
|
|
|
|
1,188,005
|
|
|
|
|
|
|
|
7
|
|
|
|
2,287,647
|
|
|
|
3,556,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 September 2010
|
|
|
76,500
|
|
|
|
1,074,997
|
|
|
|
21,064
|
|
|
|
7
|
|
|
|
153,176
|
|
|
|
1,325,744
|
|
Profit attributable to equity shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
212,267
|
|
|
|
212,267
|
|
Final dividend paid in respect of previous year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(103,735
|
)
|
|
|
(103,735
|
)
|
Interim dividend paid in respect of current year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(115,605
|
)
|
|
|
(115,605
|
)
|
Shares issued upon exercise of share option
|
|
|
691
|
|
|
|
8,498
|
|
|
|
(1,957
|
)
|
|
|
|
|
|
|
|
|
|
|
7,232
|
|
Equity settled share-based transactions
|
|
|
|
|
|
|
|
|
|
|
4,652
|
|
|
|
|
|
|
|
|
|
|
|
4,652
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2011
|
|
|
77,191
|
|
|
|
1,083,495
|
|
|
|
23,759
|
|
|
|
7
|
|
|
|
146,103
|
|
|
|
1,330,555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
104
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
22
|
CAPITAL AND RESERVES
(continued)
|
|
(b)
|
Nature and purpose of reserves
|
The
application of the share premium account is governed by Sections 48B of the Hong Kong Companies Ordinance.
The
capital reserve comprises the portion of the grant date fair value of unexercised share options granted to Talents of the Group that was recognised in accordance with the accounting policy adopted for share-based payment in note 1(r)(iv).
The
exchange reserve comprises all foreign exchange differences arising from the translation of the financial statements of operations outside Hong Kong. The reserve is dealt with in accordance with the accounting policies set out in note 1(e)(ii).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
No. of
|
|
|
Amount
|
|
|
No. of
|
|
|
Amount
|
|
|
|
shares
|
|
|
HK$000
|
|
|
shares
|
|
|
HK$000
|
|
Authorised:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares of HK$0.10 each
|
|
|
2,000,000,000
|
|
|
|
200,000
|
|
|
|
2,000,000,000
|
|
|
|
200,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued and fully paid:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares of HK$0.10 each
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At the beginning of the year
|
|
|
771,911,853
|
|
|
|
77,191
|
|
|
|
764,997,344
|
|
|
|
76,500
|
|
Shares issued upon exercise of share options (note (i))
|
|
|
37,104,790
|
|
|
|
3,711
|
|
|
|
6,914,509
|
|
|
|
691
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At the end of the year
|
|
|
809,016,643
|
|
|
|
80,902
|
|
|
|
771,911,853
|
|
|
|
77,191
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are
entitled to one vote per ordinary share at meetings of the Company. All ordinary shares rank equally with regard to the Companys residual assets.
Notes:
|
(i)
|
During the year ended 31 August 2012, 37,104,790 ordinary shares (2011: 6,914,509 ordinary shares) were issued at a weighted average exercise price of HK$2.03 per
ordinary share (2011: HK$1.05 per ordinary share) to share option holders who had exercised their options with an aggregate consideration of HK$75,177,000 (2011: HK$7,232,000) of which HK$3,711,000 (2011: HK$691,000) was credited to share capital
and the balance of HK$71,466,000 (2011: HK$6,541,000) was credited to the share premium account. HK$33,044,000 (2011: HK$1,957,000) has been transferred from the capital reserve to the share premium account in accordance with the accounting policy
set out in note 1(r)(iv). These shares so issued rank pari passu with the then existing ordinary shares in issue.
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
22
|
CAPITAL AND RESERVES
(continued)
|
|
(c)
|
Share capital (continued)
|
Notes: (continued)
|
(ii)
|
The movement of outstanding share options during the year was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
share options
|
|
|
|
|
|
|
|
|
|
|
|
share options
|
|
|
|
Exercise price
|
|
|
outstanding at
|
|
|
|
|
|
|
|
|
|
|
|
outstanding at
|
|
|
|
per share
|
|
|
1 September
|
|
|
|
|
|
|
|
|
|
|
|
31 August
|
|
Date of grant
|
|
HK$
|
|
|
2011
|
|
|
Granted
|
|
|
Exercised
|
|
|
Lapsed
|
|
|
2012
|
|
21 October 2004
|
|
|
1.5224
|
|
|
|
3,807,971
|
|
|
|
|
|
|
|
(3,807,971
|
)
|
|
|
|
|
|
|
|
|
5 January 2005
|
|
|
1.5224
|
|
|
|
14,183,208
|
|
|
|
|
|
|
|
(14,183,208
|
)
|
|
|
|
|
|
|
|
|
22 May 2006
|
|
|
0.6523
|
|
|
|
1,224,683
|
|
|
|
|
|
|
|
(1,223,792
|
)
|
|
|
(891
|
)
|
|
|
|
|
6 February 2008
|
|
|
1.7568
|
|
|
|
5,542,791
|
|
|
|
|
|
|
|
(5,542,790
|
)
|
|
|
(1
|
)
|
|
|
|
|
11 February 2008
|
|
|
1.8660
|
|
|
|
6,044,791
|
|
|
|
|
|
|
|
(6,044,790
|
)
|
|
|
(1
|
)
|
|
|
|
|
15 February 2008
|
|
|
1.7568
|
|
|
|
302,239
|
|
|
|
|
|
|
|
(302,239
|
)
|
|
|
|
|
|
|
|
|
5 February 2010
|
|
|
4.2400
|
|
|
|
6,000,000
|
|
|
|
|
|
|
|
(6,000,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,105,683
|
|
|
|
|
|
|
|
(37,104,790
|
)
|
|
|
(893
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Each option entitles the holder to subscribe for one ordinary share of HK$0.10 each in the Company at a
predetermined exercise price.
The
Groups primary objectives when managing capital are to maintain a reasonable capital structure, safeguard the Groups ability to continue as a going concern, and to provide returns for shareholders.
The Group manages the amount of capital in proportion to risk, and makes adjustments to its capital structure through the amount of
dividend payment to shareholders, issuance of scrip and new shares, taking into account its future financial obligations and commitments.
The Group undertakes treasury management activities with respect to its surplus cash assets and monitors its capital structure to maintain sufficient cash for providing adequate funding for the
development of the Groups Multimedia Business.
Neither the Company nor any of its subsidiaries are currently subject to
externally imposed capital requirements.
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
106
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
|
(a)
|
Deferred tax assets and liabilities recognised
|
The
components of deferred tax (liabilities)/assets recognised in the consolidated balance sheet and the movement during the year are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
allowances
|
|
|
|
|
|
|
|
|
|
in excess of
|
|
|
Tax losses
|
|
|
|
|
|
|
the related
|
|
|
carried
|
|
|
|
|
|
|
depreciation
|
|
|
forward
|
|
|
Total
|
|
Deferred tax arising from:
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
At 1 September 2010
|
|
|
(146,799
|
)
|
|
|
90,956
|
|
|
|
(55,843
|
)
|
Charged to consolidated income statement
|
|
|
(21,185
|
)
|
|
|
(34,110
|
)
|
|
|
(55,295
|
)
|
Exchange differences
|
|
|
(7
|
)
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2011
|
|
|
(167,991
|
)
|
|
|
56,853
|
|
|
|
(111,138
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 September 2011
|
|
|
(167,991
|
)
|
|
|
56,853
|
|
|
|
(111,138
|
)
|
Charged to consolidated income statement
|
|
|
(25,849
|
)
|
|
|
(21,461
|
)
|
|
|
(47,310
|
)
|
Disposal of Telecom Business
|
|
|
181,737
|
|
|
|
(24,635
|
)
|
|
|
157,102
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2012
|
|
|
(12,103
|
)
|
|
|
10,757
|
|
|
|
(1,346
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
components of deferred tax (liabilities)/assets recognised in the Companys balance sheet and the movement during the year are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
allowances
|
|
|
|
|
|
|
|
|
|
in excess of
|
|
|
Tax losses
|
|
|
|
|
|
|
the related
|
|
|
carried
|
|
|
|
|
|
|
depreciation
|
|
|
forward
|
|
|
Total
|
|
Deferred tax arising from:
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
At 1 September 2010
|
|
|
(6,098
|
)
|
|
|
|
|
|
|
(6,098
|
)
|
Credited to income statement
|
|
|
1,209
|
|
|
|
549
|
|
|
|
1,758
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2011
|
|
|
(4,889
|
)
|
|
|
549
|
|
|
|
(4,340
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 September 2011
|
|
|
(4,889
|
)
|
|
|
549
|
|
|
|
(4,340
|
)
|
Credited to income statement
|
|
|
2,603
|
|
|
|
505
|
|
|
|
3,108
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2012
|
|
|
(2,286
|
)
|
|
|
1,054
|
|
|
|
(1,232
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
107
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
23
|
DEFERRED TAXATION
(continued)
|
|
(a)
|
Deferred tax assets and liabilities recognised (continued)
|
|
(iii)
|
Reconciliation to the consolidated and Companys balance sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group
|
|
|
The Company
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
Net deferred tax asset recognised in the balance sheet
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net deferred tax liabilities recognised in the balance sheet
|
|
|
(1,346
|
)
|
|
|
(111,138
|
)
|
|
|
(1,232
|
)
|
|
|
(4,340
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,346
|
)
|
|
|
(111,138
|
)
|
|
|
(1,232
|
)
|
|
|
(4,340
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
Deferred tax assets not recognised
|
As at 31 August 2012, the Group did not recognise deferred tax assets in respect of unused tax losses of HK$59,787,000 (2011: HK$8,087,000) as it was not probable that future taxable profits against
which the losses could be utilised would be available in the relevant tax jurisdictions.
|
|
|
|
|
|
|
|
|
|
|
The Group
|
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
Expiry in 15 20 years
|
|
|
|
|
|
|
2,412
|
|
No expiry date
|
|
|
59,787
|
|
|
|
5,675
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59,787
|
|
|
|
8,087
|
|
|
|
|
|
|
|
|
|
|
|
(c)
|
Deferred tax liabilities not recognised
|
At 31 August 2011, the Group has not recognised deferred tax liabilities in respect of the 10% (or 5% if tax treaty relief is available) PRC dividend withholding tax on temporary differences relating
to the undistributed profits of its PRC subsidiary amounted to HK$31,550,000, as the Group controls the dividend policy of the subsidiary and it has been determined that it is probable that profits will not be distributed in the foreseeable future.
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
108
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
24
|
DERIVATIVE FINANCIAL INSTRUMENT
|
|
|
|
|
|
|
|
|
|
|
|
The Group and the Company
|
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
Non-current liability
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swap, at fair value through profit or loss
|
|
|
9,663
|
|
|
|
11,564
|
|
As at 31 August 2012 and 31 August 2011, the Group has a 5-year interest rate swap contract
with a HK$175,000,000 notional amount to hedge against interest rate risk. Under this arrangement, the Group will pay a fixed rate interest on the notional amount on a quarterly basis, and receive a floating interest rate at HIBOR rate. The contract
is recognised initially at fair value and is remeasured at each balance sheet date.
The interest rate swap does not quality
for hedge accounting under IAS/HKAS 39, Financial instruments: Recognition and measurement, and therefore changes in its fair value is recognised immediately in profit or loss.
25
|
OBLIGATIONS UNDER FINANCE LEASES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group
|
|
|
The Company
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
Obligations under finance leases (note (a))
|
|
|
245
|
|
|
|
393
|
|
|
|
245
|
|
|
|
332
|
|
Current portion of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
obligations under finance leases
|
|
|
(85
|
)
|
|
|
(105
|
)
|
|
|
(85
|
)
|
|
|
(87
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
160
|
|
|
|
288
|
|
|
|
160
|
|
|
|
245
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2012, the Groups and the Companys long-term debt and other liabilities were
repayable as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group
|
|
|
The Company
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
Obligations under finance leases
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Within 1 year
|
|
|
85
|
|
|
|
105
|
|
|
|
85
|
|
|
|
87
|
|
After 1 year but within 2 years
|
|
|
90
|
|
|
|
105
|
|
|
|
90
|
|
|
|
85
|
|
After 2 years but within 5 years
|
|
|
70
|
|
|
|
183
|
|
|
|
70
|
|
|
|
160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
245
|
|
|
|
393
|
|
|
|
245
|
|
|
|
332
|
|
Less: Current portion of obligations under finance leases
|
|
|
(85
|
)
|
|
|
(105
|
)
|
|
|
(85
|
)
|
|
|
(87
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
160
|
|
|
|
288
|
|
|
|
160
|
|
|
|
245
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
109
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
25
|
OBLIGATIONS UNDER FINANCE LEASES
(continued)
|
|
(a)
|
At 31 August 2012, the Group had obligations under finance leases repayable as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group
|
|
|
|
2012
|
|
|
2011
|
|
|
|
Present
|
|
|
Interest
|
|
|
|
|
|
Present
|
|
|
Interest
|
|
|
|
|
|
|
value of the
|
|
|
expense
|
|
|
Total
|
|
|
value of the
|
|
|
expense
|
|
|
Total
|
|
|
|
minimum
|
|
|
relating to
|
|
|
minimum
|
|
|
minimum
|
|
|
relating to
|
|
|
minimum
|
|
|
|
lease
|
|
|
future
|
|
|
lease
|
|
|
lease
|
|
|
future
|
|
|
lease
|
|
|
|
payments
|
|
|
periods
|
|
|
payments
|
|
|
payments
|
|
|
periods
|
|
|
payments
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
Within 1 year
|
|
|
85
|
|
|
|
10
|
|
|
|
95
|
|
|
|
105
|
|
|
|
20
|
|
|
|
125
|
|
After 1 year but within 2 years
|
|
|
90
|
|
|
|
5
|
|
|
|
95
|
|
|
|
105
|
|
|
|
14
|
|
|
|
119
|
|
After 2 years but within 5 years
|
|
|
70
|
|
|
|
1
|
|
|
|
71
|
|
|
|
183
|
|
|
|
8
|
|
|
|
191
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
160
|
|
|
|
6
|
|
|
|
166
|
|
|
|
288
|
|
|
|
22
|
|
|
|
310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
245
|
|
|
|
16
|
|
|
|
261
|
|
|
|
393
|
|
|
|
42
|
|
|
|
435
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2012, the Company had obligations under finance leases repayable as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company
|
|
|
|
2012
|
|
|
2011
|
|
|
|
Present
|
|
|
Interest
|
|
|
|
|
|
Present
|
|
|
Interest
|
|
|
|
|
|
|
value of the
|
|
|
expense
|
|
|
Total
|
|
|
value of the
|
|
|
expense
|
|
|
Total
|
|
|
|
minimum
|
|
|
relating to
|
|
|
minimum
|
|
|
minimum
|
|
|
relating to
|
|
|
minimum
|
|
|
|
lease
|
|
|
future
|
|
|
lease
|
|
|
lease
|
|
|
future
|
|
|
lease
|
|
|
|
payments
|
|
|
periods
|
|
|
payments
|
|
|
payments
|
|
|
periods
|
|
|
payments
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
Within 1 year
|
|
|
85
|
|
|
|
10
|
|
|
|
95
|
|
|
|
87
|
|
|
|
14
|
|
|
|
101
|
|
After 1 year but within 2 years
|
|
|
90
|
|
|
|
5
|
|
|
|
95
|
|
|
|
85
|
|
|
|
10
|
|
|
|
95
|
|
After 2 years but within 5 years
|
|
|
70
|
|
|
|
1
|
|
|
|
71
|
|
|
|
160
|
|
|
|
7
|
|
|
|
167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
160
|
|
|
|
6
|
|
|
|
166
|
|
|
|
245
|
|
|
|
17
|
|
|
|
262
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
245
|
|
|
|
16
|
|
|
|
261
|
|
|
|
332
|
|
|
|
31
|
|
|
|
363
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
110
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
26
|
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
|
|
(a)
|
Reconciliation of profit before taxation to net cash inflow generated from operations
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
Profit before taxation
|
|
|
3,748,562
|
|
|
|
372,869
|
|
Depreciation of owned fixed assets
|
|
|
187,396
|
|
|
|
217,790
|
|
Depreciation of fixed assets held under finance lease
|
|
|
141
|
|
|
|
407
|
|
Depreciation capitalised as programme costs
|
|
|
(1,632
|
)
|
|
|
|
|
Amortisation of deferred expenditure
|
|
|
29,902
|
|
|
|
37,873
|
|
Intangible assets written off
|
|
|
2,450
|
|
|
|
|
|
Interest income
|
|
|
(17,241
|
)
|
|
|
(3,366
|
)
|
Interest element of finance lease
|
|
|
19
|
|
|
|
30
|
|
(Gain)/loss on disposal of fixed assets
|
|
|
(1,999
|
)
|
|
|
1,008
|
|
Equity settled share-based transactions
|
|
|
10,480
|
|
|
|
4,652
|
|
Valuation gains on investment property
|
|
|
(18,200
|
)
|
|
|
|
|
Gain on sale of discontinued operations
|
|
|
(3,520,088
|
)
|
|
|
|
|
Amortisation of intangible assets
|
|
|
5,217
|
|
|
|
|
|
Write-off of upfront costs upon settlement of long-term bank loan
|
|
|
|
|
|
|
1,251
|
|
Change in fair value of derivative financial instrument
|
|
|
(1,901
|
)
|
|
|
271
|
|
Other borrowing costs
|
|
|
3,763
|
|
|
|
3,473
|
|
Amortisation of upfront cost on long-term bank loan
|
|
|
|
|
|
|
182
|
|
Interest expenses on bank borrowings
|
|
|
|
|
|
|
1,152
|
|
|
|
|
|
|
|
|
|
|
Net cash inflow before working capital changes
|
|
|
426,869
|
|
|
|
637,592
|
|
(Increase)/decrease in long-term receivable and prepayment
|
|
|
(716
|
)
|
|
|
1,073
|
|
(Increase)/decrease in accounts receivable, other receivables, deposits and prepayments, inventories
|
|
|
(108,169
|
)
|
|
|
26,543
|
|
Increase in deferred expenditure
|
|
|
(22,245
|
)
|
|
|
(46,896
|
)
|
Increase in programme costs
|
|
|
(85,985
|
)
|
|
|
|
|
Decrease in accounts payable, other payables, accrued charges and deposits received
|
|
|
(19,181
|
)
|
|
|
(9,490
|
)
|
Decrease in deferred services revenue
|
|
|
(5,646
|
)
|
|
|
(19,911
|
)
|
|
|
|
|
|
|
|
|
|
Net cash inflow generated from operations
|
|
|
184,927
|
|
|
|
588,911
|
|
|
|
|
|
|
|
|
|
|
111
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
26
|
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
(continued)
|
|
(b)
|
Analysis of financing activities during the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
Obligations
|
|
|
|
|
|
|
(including share
|
|
|
under
|
|
|
|
|
|
|
premium and
|
|
|
finance
|
|
|
10-year
|
|
|
|
capital reserve)
|
|
|
lease
|
|
|
senior notes
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
Balance at 1 September 2010
|
|
|
1,172,561
|
|
|
|
605
|
|
|
|
123,567
|
|
Share issued upon exercise of share options
|
|
|
7,232
|
|
|
|
|
|
|
|
|
|
Repayment of capital element of finance lease
|
|
|
|
|
|
|
(212
|
)
|
|
|
|
|
Repayment of long-term bank loan
|
|
|
|
|
|
|
|
|
|
|
(125,000
|
)
|
Write-off of upfront costs upon settlement of long-term bank loan
|
|
|
|
|
|
|
|
|
|
|
1,251
|
|
Amortisation of upfront cost on bank loan
|
|
|
|
|
|
|
|
|
|
|
182
|
|
Equity settled share-based transactions
|
|
|
4,652
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 31 August 2011
|
|
|
1,184,445
|
|
|
|
393
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 1 September 2011
|
|
|
1,184,445
|
|
|
|
393
|
|
|
|
|
|
Share issued upon exercise of share options
|
|
|
75,177
|
|
|
|
|
|
|
|
|
|
Repayment of capital element of finance lease
|
|
|
|
|
|
|
(99
|
)
|
|
|
|
|
Disposal of Telecom Business
|
|
|
|
|
|
|
(49
|
)
|
|
|
|
|
Equity settled share-based transactions
|
|
|
10,480
|
|
|
|
|
|
|
|
|
|
Share options lapsed
|
|
|
(1,195
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 31 August 2012
|
|
|
1,268,907
|
|
|
|
245
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exposure to credit, liquidity and interest rate risks arises in the normal course of the Groups business. These risks are limited by
the Groups financial management policies and practices described below.
The
Groups credit risk is primarily attributable to trade and other receivables. Management has a credit policy in place and the exposure to the credit risk is monitored on an ongoing basis.
In respect of trade and other receivables, credit evaluations are performed on all customers requiring credit over a certain amount. These
evaluations focus on the customers past history of making payments when due and current ability to pay, and take into account information specific to the customer as well as pertaining to the economic environment in which the customer locates.
These receivables are due within 30 days from the date of billing. Customers with receivables that are more than 3 months overdue are requested to settle all outstanding balances before any further credit is granted. The Group generally does not
obtain collateral from customers.
The Groups exposure to credit risk is influenced mainly by individual characteristics
of each customer. The default risk of the country in which customer locates also has an influence on credit risk but to a lesser extent. Concentrations of credit risk with respect to accounts receivable are limited due to the Groups customer
base being large and unrelated. As such, management does not expect any significant losses of accounts receivable that have not been provided for by way of allowances as disclosed in note 18.
The maximum exposure to credit risk is represented by the carrying amount of each financial asset after deducting any impairment
allowance, in the balance sheet. Except for the financial guarantee given by the Group as disclosed in note 28, the Group does not provide any other guarantees which expose the Group to credit risk. The maximum exposure to credit risk in respect of
these financial guarantees at the balance sheet date is disclosed in note 28.
Further quantitative disclosures in respect of
the Groups exposure to credit risk arising from accounts receivable are set out in note 18.
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
112
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
27
|
FINANCIAL INSTRUMENTS
(continued)
|
Prudent
liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of credit facilities and the ability to close out market positions. To cope with the funding requirement
of future business expansion and development, the Group aims to maintain flexibility in funding by keeping adequate free cash and credit lines available.
The Group determines that there is no significant liquidity risk in view of our adequate funds and unutilised banking facilities.
The following table details the remaining contractual maturities at the balance sheet date of the Groups and the Companys financial liabilities, which are based on undiscounted cash flows
(including interest) and the earliest date the Group and the Company can be required to pay.
Group
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
More than
|
|
|
More than
|
|
|
|
|
|
Total
|
|
|
|
|
|
More than
|
|
|
More than
|
|
|
|
|
|
|
contractual
|
|
|
Within
|
|
|
1 year but
|
|
|
2 years but
|
|
|
|
|
|
contractual
|
|
|
Within
|
|
|
1 year but
|
|
|
2 years but
|
|
|
|
Carrying
|
|
|
undiscounted
|
|
|
1 year or
|
|
|
less than
|
|
|
less than
|
|
|
Carrying
|
|
|
undiscounted
|
|
|
1 year or
|
|
|
less than
|
|
|
less than
|
|
|
|
amount
|
|
|
cash flow
|
|
|
on demand
|
|
|
2 years
|
|
|
5 years
|
|
|
amount
|
|
|
cash flow
|
|
|
on demand
|
|
|
2 years
|
|
|
5 years
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank overdrafts unsecured
|
|
|
3,026
|
|
|
|
3,026
|
|
|
|
3,026
|
|
|
|
|
|
|
|
|
|
|
|
845
|
|
|
|
845
|
|
|
|
845
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
5,371
|
|
|
|
5,371
|
|
|
|
5,371
|
|
|
|
|
|
|
|
|
|
|
|
17,419
|
|
|
|
17,419
|
|
|
|
17,419
|
|
|
|
|
|
|
|
|
|
Other payables and accrued charges
|
|
|
31,118
|
|
|
|
31,118
|
|
|
|
31,118
|
|
|
|
|
|
|
|
|
|
|
|
209,585
|
|
|
|
209,585
|
|
|
|
209,585
|
|
|
|
|
|
|
|
|
|
Deposits received
|
|
|
2,259
|
|
|
|
2,259
|
|
|
|
2,259
|
|
|
|
|
|
|
|
|
|
|
|
26,969
|
|
|
|
26,969
|
|
|
|
26,969
|
|
|
|
|
|
|
|
|
|
Obligations under finance leases
|
|
|
85
|
|
|
|
95
|
|
|
|
95
|
|
|
|
|
|
|
|
|
|
|
|
105
|
|
|
|
125
|
|
|
|
125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instrument
|
|
|
9,663
|
|
|
|
10,060
|
|
|
|
4,619
|
|
|
|
4,174
|
|
|
|
1,267
|
|
|
|
11,564
|
|
|
|
12,590
|
|
|
|
4,716
|
|
|
|
4,000
|
|
|
|
3,874
|
|
Obligations under finance leases
|
|
|
160
|
|
|
|
166
|
|
|
|
|
|
|
|
95
|
|
|
|
71
|
|
|
|
288
|
|
|
|
310
|
|
|
|
|
|
|
|
119
|
|
|
|
191
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
51,682
|
|
|
|
52,095
|
|
|
|
46,488
|
|
|
|
4,269
|
|
|
|
1,338
|
|
|
|
266,775
|
|
|
|
267,843
|
|
|
|
259,659
|
|
|
|
4,119
|
|
|
|
4,065
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
113
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
27
|
FINANCIAL INSTRUMENTS
(continued)
|
|
(b)
|
Liquidity risk (continued)
|
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
More than
|
|
|
More than
|
|
|
|
|
|
Total
|
|
|
|
|
|
More than
|
|
|
More than
|
|
|
|
|
|
|
contractual
|
|
|
Within
|
|
|
1 year but
|
|
|
2 years but
|
|
|
|
|
|
contractual
|
|
|
Within
|
|
|
1 year but
|
|
|
2 years but
|
|
|
|
Carrying
|
|
|
undiscounted
|
|
|
1 year or
|
|
|
less than
|
|
|
less than
|
|
|
Carrying
|
|
|
undiscounted
|
|
|
1 year or
|
|
|
less than
|
|
|
less than
|
|
|
|
amount
|
|
|
cash flow
|
|
|
on demand
|
|
|
2 years
|
|
|
5 years
|
|
|
amount
|
|
|
cash flow
|
|
|
on demand
|
|
|
2 years
|
|
|
5 years
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank overdrafts unsecured
|
|
|
3,026
|
|
|
|
3,026
|
|
|
|
3,026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts due to subsidiaries
|
|
|
700
|
|
|
|
700
|
|
|
|
700
|
|
|
|
|
|
|
|
|
|
|
|
10,830
|
|
|
|
10,830
|
|
|
|
10,830
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,721
|
|
|
|
2,721
|
|
|
|
2,721
|
|
|
|
|
|
|
|
|
|
Other payables and accrued charges
|
|
|
15,418
|
|
|
|
15,418
|
|
|
|
15,418
|
|
|
|
|
|
|
|
|
|
|
|
22,863
|
|
|
|
22,863
|
|
|
|
22,863
|
|
|
|
|
|
|
|
|
|
Deposits received
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,038
|
|
|
|
8,038
|
|
|
|
8,038
|
|
|
|
|
|
|
|
|
|
Obligations under finance leases
|
|
|
85
|
|
|
|
95
|
|
|
|
95
|
|
|
|
|
|
|
|
|
|
|
|
87
|
|
|
|
101
|
|
|
|
101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instrument
|
|
|
9,663
|
|
|
|
10,060
|
|
|
|
4,619
|
|
|
|
4,174
|
|
|
|
1,267
|
|
|
|
11,564
|
|
|
|
12,590
|
|
|
|
4,716
|
|
|
|
4,000
|
|
|
|
3,874
|
|
Obligations under finance leases
|
|
|
160
|
|
|
|
166
|
|
|
|
|
|
|
|
95
|
|
|
|
71
|
|
|
|
245
|
|
|
|
262
|
|
|
|
|
|
|
|
95
|
|
|
|
167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,052
|
|
|
|
29,465
|
|
|
|
23,858
|
|
|
|
4,269
|
|
|
|
1,338
|
|
|
|
56,348
|
|
|
|
57,405
|
|
|
|
49,269
|
|
|
|
4,095
|
|
|
|
4,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
Groups interest-rate risk arose mainly from the 5-year interest rate swap contract with a HK$175,000,000 notional amount as at 31 August 2012 and 2011. The Group will pay a fixed rate interest on the notional amount on a quarterly basis,
and receive a floating interest rate at HIBOR rate.
Sensitivity analysis
The Groups profit attributable to shareholders would increase by approximately HK$1,750,000 (2011: HK$1,750,000) in response to a
100 basis-points increase in market interest rates applicable as at 31 August 2012, with all other variables held constant. The analysis performed including the effect of the Groups interest rate swap contract as disclosed in note 24 to
the financial statements.
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
114
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
27
|
FINANCIAL INSTRUMENTS
(continued)
|
|
(d)
|
Foreign currency risk
|
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 U.S. 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. The Group
did not have significant foreign currency risk at the balance sheet date.
Financial
instrument carried at fair value
The following table presents the carrying value of financial instrument measured at fair
value at the balance sheet date across the three levels of the fair value hierarchy defined in IFRS/HKFRS 7, Financial Instruments: Disclosures, with the fair value of each financial instrument categorised in its entirety based on the lowest level
of input that is significant to that fair value measurement. The levels are defined as follows:
|
|
|
Level 1 (highest level): fair values measured using quoted prices (unadjusted) in active markets for identical financial instruments
|
|
|
|
Level 2: fair values measured using quoted prices in active markets for similar financial instruments, or using valuation techniques in which all
significant inputs are directly or indirectly based on observable market data
|
|
|
|
Level 3 (lowest level): fair values measured using valuation techniques in which any significant input is not based on observable market data
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group and the Company
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
Liability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instrument:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swap
|
|
|
|
|
|
|
9,663
|
|
|
|
|
|
|
|
9,663
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group and the Company
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
Liability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instrument:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swap
|
|
|
|
|
|
|
11,564
|
|
|
|
|
|
|
|
11,564
|
|
115
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
27
|
FINANCIAL INSTRUMENTS
(continued)
|
|
(f)
|
Estimation of fair values
|
Fair value of financial instruments is estimated as follows:
|
|
|
Trade receivables less impairment provision and account payables are assumed to approximate their fair values.
|
|
|
|
The fair value of the interest rate swap is determined based on the discounted cash flow technique which takes into account estimated amount that the
Group would receive or pay to terminate the swap at the balance sheet date, taking into account current interest rates and the current creditworthiness of the swap counterparties. Where discounted cash flow techniques are used, estimated future cash
flows are based on managements best estimates and the discount rate is a market related rate for a similar instrument at the balance sheet date.
|
28
|
CONTINGENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group
|
|
|
The Company
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
Bank guarantees provided to suppliers
|
|
|
|
|
|
|
1,330
|
|
|
|
|
|
|
|
1,300
|
|
Bank guarantee in lieu of payment of utility deposits
|
|
|
1,950
|
|
|
|
5,572
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,950
|
|
|
|
6,902
|
|
|
|
|
|
|
|
1,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at 31 August 2012, HK$1,950,000 (2011: HK$6,902,000) of the HK$23,260,000 (2011: HK$38,900,000)
total banking facility was utilised by the Company and the subsidiaries.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group
|
|
|
The Company
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
Purchase of telecommunications, computer and office equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contracted but not provided for
|
|
|
4,958
|
|
|
|
141,432
|
|
|
|
3,119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction of Multimedia Production and Distribution City
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Authorised but not contracted for
|
|
|
827,401
|
|
|
|
600,000
|
|
|
|
|
|
|
|
|
|
Contracted but not provided for
|
|
|
41,659
|
|
|
|
|
|
|
|
2,743
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Others
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contracted but not provided for
|
|
|
|
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
116
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
29
|
COMMITMENTS
(continued)
|
|
(b)
|
Commitments under operating leases
|
At 31 August 2012 and 2011, the Group and the Company has future aggregate minimum lease payments under non-cancellable operating leases as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group
|
|
|
The Company
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
Leases in respect of land and buildings which are payable:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Within 1 year
|
|
|
5,373
|
|
|
|
27,679
|
|
|
|
|
|
|
|
|
|
After 1 year but within 5 years
|
|
|
2,294
|
|
|
|
20,642
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,667
|
|
|
|
48,321
|
|
|
|
|
|
|
|
|
|
Leases in respect of telecommunications facilities and computer equipment which are payable:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Within 1 year
|
|
|
|
|
|
|
63,300
|
|
|
|
|
|
|
|
168
|
|
After 1 year but within 5 years
|
|
|
|
|
|
|
17,103
|
|
|
|
|
|
|
|
5
|
|
After 5 years
|
|
|
|
|
|
|
3,211
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
83,614
|
|
|
|
|
|
|
|
173
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,667
|
|
|
|
131,935
|
|
|
|
|
|
|
|
173
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c)
|
Programme fee commitments
|
The Group entered into several long-term agreements with programme content providers for rights to use certain programme contents and with
certain production-related Talents for future production in the Groups multimedia production business and IP-TV. Minimum amounts of programme fees and other production-related costs to be paid by the Group are analysed as follows:
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
Programme fee in respect of programme rights which are payable:
|
|
|
|
|
|
|
|
|
|
|
|
Within 1 year
|
|
|
96,613
|
|
|
|
25,777
|
|
After 1 year but within 5 years
|
|
|
106,669
|
|
|
|
27,197
|
|
|
|
|
|
|
|
|
|
|
|
|
|
203,282
|
|
|
|
52,974
|
|
|
|
|
|
|
|
|
|
|
117
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
30
|
MATERIAL RELATED PARTY TRANSACTIONS
|
In addition to the transactions and balances disclosed elsewhere in these financial statements, the Group entered into the following material related party transactions.
Key management personnel remuneration
Remuneration for key management personnel, including amounts paid to the Companys Directors as disclosed in note 11(a) and certain of the highest paid Talents as disclosed in note 11(b), is as
follows:
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
HK$000
|
|
|
HK$000
|
|
Short-term Talent benefits
|
|
|
176,852
|
|
|
|
35,979
|
|
Post-employment benefits
|
|
|
2,488
|
|
|
|
2,616
|
|
Equity compensation benefits
|
|
|
9,546
|
|
|
|
4,652
|
|
|
|
|
|
|
|
|
|
|
|
|
|
188,886
|
|
|
|
43,247
|
|
|
|
|
|
|
|
|
|
|
31
|
ACCOUNTING ESTIMATES AND JUDGEMENTS
|
Key sources of estimation uncertainty
Notes 12, 14 and 27 contain
information about the assumptions and risk factors relating to fair value of share options, investment property and financial instruments. Other key sources of estimation uncertainty are as follows:
|
(a)
|
Provision for programme cost
|
If circumstances indicate that the carrying amount of programmes cost may not be fully recovered, provision for programme cost to write down the amount to net realisable values is recognised as an expense
in the period the write down occurs.
If
circumstances indicate that the carrying value of property, plant and equipment and intangible assets may not be fully recoverable, these assets may be considered impaired, and an impairment loss may be recognised in accordance with IAS/HKAS 36,
Impairment of assets. In assessing whether there is any indication that an asset may be impaired, the Group considers all readily available information from both internal and external source. When there is adverse change in circumstance, additional
impairment may be required.
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
118
|
Notes to the Financial Statements
(Expressed in Hong Kong dollars)
32
|
POSSIBLE IMPACT OF AMENDMENTS, NEW STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE FOR THE YEAR ENDED 31 AUGUST 2012
|
Up to the date of issue of these financial statements, 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 these financial statements.
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
1 January 2013
|
|
|
|
|
IFRS/HKFRS 12
|
|
Disclosure of interest in other entities
|
|
|
1 January 2013
|
|
|
|
|
IFRS/HKFRS 13
|
|
Fair value measurement
|
|
|
1 January 2013
|
|
|
|
|
IAS/HKAS 27
|
|
Separate financial statements (2011)
|
|
|
1 January 2013
|
|
|
|
|
Amendments to IFRS/HKFRS 7
|
|
Financial instruments: Disclosures
Offsetting financial assets and financial liabilities
|
|
|
1 July 2013
|
|
|
|
|
Amendments to IAS/HKAS 32
|
|
Financial instruments: Presentation
Offsetting financial assets and financial liabilities
|
|
|
1 January 2014
|
|
|
|
|
IFRS/HKFRS 9
|
|
Financial instruments
|
|
|
1 January 2015
|
|
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.
119
Five-Year Financial Summary
(Expressed in Hong Kong dollars)
RESULTS, ASSETS AND LIABILITIES
The following table summarises the consolidated results, assets and liabilities of the Group for the five years ended 31 August 2012.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
|
HK$000
|
|
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Turnover
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
3,762
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations
|
|
|
1,433,775
|
|
|
|
1,681,458
|
|
|
|
1,574,687
|
|
|
|
1,478,239
|
|
|
|
1,302,981
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,437,537
|
|
|
|
1,681,458
|
|
|
|
1,574,687
|
|
|
|
1,478,239
|
|
|
|
1,302,981
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/profit after taxation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
(73,820
|
)
|
|
|
(32,110
|
)
|
|
|
9,029
|
|
|
|
31,189
|
|
|
|
(380
|
)
|
Discontinued operations
|
|
|
251,606
|
|
|
|
346,025
|
|
|
|
207,837
|
|
|
|
181,640
|
|
|
|
125,570
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
177,786
|
|
|
|
313,915
|
|
|
|
216,866
|
|
|
|
212,829
|
|
|
|
125,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of discontinued operations
|
|
|
3,520,088
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/profit for the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
(73,820
|
)
|
|
|
(32,110
|
)
|
|
|
9,029
|
|
|
|
31,189
|
|
|
|
(380
|
)
|
Discontinued operations
|
|
|
3,771,694
|
|
|
|
346,025
|
|
|
|
207,837
|
|
|
|
181,640
|
|
|
|
125,570
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,697,874
|
|
|
|
313,915
|
|
|
|
216,866
|
|
|
|
212,829
|
|
|
|
125,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
|
|
|
|
1,066
|
|
|
|
1,066
|
|
|
|
1,066
|
|
|
|
1,066
|
|
Fixed assets
|
|
|
477,141
|
|
|
|
1,642,701
|
|
|
|
1,431,813
|
|
|
|
1,302,380
|
|
|
|
1,231,399
|
|
Intangible assets
|
|
|
311,726
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long term receivable and prepayment
|
|
|
284
|
|
|
|
4,101
|
|
|
|
5,174
|
|
|
|
6,091
|
|
|
|
5,586
|
|
Deferred tax asset
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,335
|
|
Deferred expenditure
|
|
|
|
|
|
|
44,635
|
|
|
|
35,612
|
|
|
|
49,460
|
|
|
|
56,095
|
|
Current assets
|
|
|
2,748,205
|
|
|
|
571,959
|
|
|
|
777,884
|
|
|
|
431,411
|
|
|
|
772,929
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
3,537,356
|
|
|
|
2,264,462
|
|
|
|
2,251,549
|
|
|
|
1,790,408
|
|
|
|
2,093,410
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
42,794
|
|
|
|
343,099
|
|
|
|
362,364
|
|
|
|
383,056
|
|
|
|
372,369
|
|
Non-current liabilities
|
|
|
11,169
|
|
|
|
123,982
|
|
|
|
200,646
|
|
|
|
178,825
|
|
|
|
688,434
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
53,963
|
|
|
|
467,081
|
|
|
|
563,010
|
|
|
|
561,881
|
|
|
|
1,060,803
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets
|
|
|
3,483,393
|
|
|
|
1,797,381
|
|
|
|
1,688,539
|
|
|
|
1,228,527
|
|
|
|
1,032,607
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
City Telecom (H.K.) Limited Annual Report 2012
|
|
120
|
Corporate Information
FINANCIAL CALENDAR
Full-year Results
Announced on 21 November 2012
Annual General Meeting
31 December 2012
LISTING
City Telecom (H.K.)
Limiteds shares are listed under the stock code 1137 on The Stock Exchange of Hong Kong Limited and in the form of American Depositary Receipts (each representing 20 ordinary shares of the Company) on the Nasdaq Stock Market in
U.S. under the ticker symbol CTEL.
Executive Directors
Mr. WONG Wai Kay, Ricky
3,4
(Chairman)
Mr. CHEUNG Chi Kin, Paul
3,5
(Vice Chairman)
Ms. TO Wai Bing
3
(Chief Executive Officer)
Ms. WONG Nga Lai, Alice
3,5
(Chief Financial Officer)
Non-executive Director
Dr. CHENG Mo Chi, Moses
7,9
Independent Non-executive Directors
Mr. LEE Hon Ying, John
1,7,8
Dr. CHAN Kin Man
2,7,9
Mr. PEH Jefferson Tun Lu
2,5,6,9
1
|
Chairman of Audit
Committee
|
2
|
Members of Audit
Committee
|
3
|
Members of
Executive Committee
|
4
|
Chairman of
Investment Committee
|
5
|
Members of
Investment Committee
|
6
|
Chairman of
Nomination Committee
|
7
|
Members of
Nomination Committee
|
8
|
Chairman of
Remuneration Committee
|
9
|
Members of
Remuneration Committee
|
Company Secretary
Ms. WONG Nga Lai, Alice
Authorised Representatives
Mr. WONG Wai Kay, Ricky
Mr. CHEUNG Chi Kin,
Paul
Registered Office
13th Floor
Trans Asia Centre
18 Kin Hong Street
Kwai Chung, New Territories, Hong Kong
Legal Adviser to the Company as to U.S. and Hong Kong Laws
Latham & Watkins
18th Floor, One Exchange Square
8 Connaught Place, Central
Hong Kong
Auditors
KPMG
Certified Public Accountants
8th Floor, Princes Building
10 Chater
Road
Central, Hong Kong
Share
Registrar
Computershare Hong Kong Investor Services Limited
46th Floor, Hopewell Centre
183 Queens Road East, Wanchai
Hong Kong
American Depositary Bank
The Bank of New York Mellon Corporation
101 Barclay Street, 22nd Floor
New York, NY 10286 USA
Principal Bankers
Citibank, N.A.
DBS Bank Ltd., Hong Kong Branch
The
Hongkong and Shanghai Banking Corporation Limited
Website
www.ctigroup.com.hk
The Aggregation of Talents CREATIVE PROFESSIONALS City Telecom embraces more than 500
backstage talents and signed up approximately 220 artistes.
THE AGGREGATION OF TALENTS OUR ARTISTES
JOHN CHIANG SO WING HONG WILLIAM KWOK FUNG SAM LEE LEUNG SIU BING LIEW MEI KWAN
PRUDENCE ?SHEK SAU TSANG WAI KUEN CHAU KA YEE
The Aggregation of Talents OUR ARTISTES WONG HE KWAN KELVIN AI WAI KATE YEUNG WONG TSZ
CHING ADRIAN KATHY CHOU TSUN WAI LAWRENCE LOK YING KWAN CHAN JASON
CHAN ON YING LO HOI PANG CHAN MANNOR YIN TERENCE TZU WEI CHIANG CHO MAN CHEUNG CHUNG
CHI YUEN WAH HUANG GRACE LAU HO LUNG WILFRED
THE AGGREGATION OF TALENTS OUR ARTISTES
POON CHAN LEUNG YU MO LIN CHAN YU SUM SAM YING CHEONG YAU CHARLES WONG URSULE ZAC KOO
CHAN SIU PONG LI YU YEUNG EDDIE LAU YUK CHUI
The Aggregation of Talents OUR ARTISTES SIN HO YING FUNG SO BOR TSANG KWOK CHEUNG
LEANNE HO LUI YAU WAI PAK BIU LEUNG PO KI WONG CHING CHAN YUEN WAI CALINDA LWUNG KIN PING NG YUEN YEE BONNIE WONG
LAI PETER TANG KIN MING LUI YAU FAI PATRICK TSE YUET MAY CHAN KWAN VIVI LEE KWAN PO WAI
EMILY LUI HEI SHERMING YIU MAK CHI LOK BRYANT CHEN CHAI PING MARIA BONDY CHIU
The Aggregation of Talents OUR ARTISTES CHAN KA LOK WONG MEI KI MAGGIE TSE CHI LUN PANG
KWOK LEUNG PETER CHAN WING YIN ANITA ANN HO SHAM KIT YEE YAN NG LI FUNG WONG CHAK FUNG JONES LEE LI HUNG KIT
PAU HONG YI CHERRY RACHEL LAM LI KA LUN TSZ YUEN JASON LAM MA WING YAN WINNIE FAN CHOI
YEE WU KWING LUNG DANIEL KWOK LU HEI LOY YOE BIU LAW KWUN FUNG
The Aggregation of Talents OUR ARTISTES LEE RIKKO OI KEI KOO AYALA CARLOS ERNESTO CHAN
TAN TAN EMILY WONG CHAN MAN CHING SHUM WINNIE TSE SHAN SHAN TING LOK SZE LO MAN KIT SIMON CHEUNG KIT LIN WONG KWUN BUN EUNICE HO
WONG MAN PIU WONG YING JOYCE CHEUNG YICK CHAN SZE WAI EVA GUTIERREZ RAY ANTHONY ANNIE
CHONG PAU HIU WAH TING CHE WAI CAMY CHENG KA SANG LUVIN KWAN WAI LUN WONG FUNG KING CANDY
The Aggregation of Talents LEE CHEUK LING KAREN KWONG CHOR FAI TONY LENA WONG CHUI YEE
TWEETY CHENG SHU FUNG NG WAI SHAN LAM YING HUNG PANG KA LAI ANGELA LEE WONG SANG CHEUNG CANDY SHUET KWAN LI ANNA HO MAN KIT
LUK CHUN KONG ALAN FU CHOR WAI HUI MING CHI WONG KING WAI PATRICK CHAN PUI SZE TSANG
AMY LEI SIN HANG JACKY WONG LING YAN KAWAII KWAN YI TUNG CHAN LEI MAN QUEENIE CHOW TSZ LUNG THOMAS CHU YUEN YEE CANDY
The Aggregation of Talents ? OUR ARTISTES LAI CHUN YE HO TING YAN JIM PING HEI CHIU MAN
TUNG KONG FAI AMOS TO WONG KA HIM JACKY CHALK NORTH LUI KA FAI JIANG XIAO JIE LUEN JEREMY YU CHOI LAM
HO HING FAI RICKSEN TAM YU TIN YAN ALISON CHIU TSUN MING PAUL CHONG SHIU LUN HUI CHUN
HO KA CHUN CHEUNG KA WAI WONG SIU PING LEE YIU TONG GARY WONG HO TING NG HOI LAM
The Aggregation of Talents ? OUR ARTISTES CHAN SZE MAN LI TSZ KI VIVIAN LAU YI CHING
CHEUNG HOK LEUNG TSANG KAI LUN YEUNG HUNG CHUN JACK HAU KIN MAN TANG BOK HIN VECTRA KWOK WING TUNG CHEUNG HUNG HEI CHAN ROCKY CHAN CHIK WING
LAM HOI YEE CHENG PAN HO TIM KWOK CHEUNG NGAR LAI MARK CHAN LAW CHIU CHUNG CHIU SIN
HANG LEUNG KIN HANG
Where the English and the Chinese texts con?ict, the English text prevails Concept and
design: Phoenix Communications Limited Printing: iOne Financial Press Limited.Website: www.ione.com.hk
City Telecom (H.K.) Limited 13th Floor, Trans Asia Centre, 18 Kin Hong Street Kwai
Chung, New Territories, Hong Kong
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