Golden Harvest Orange Sky Golden Harvest Entertainment (Holdings) Limited 橙天嘉禾娛樂(集團)有限公司 (Incorporated in Bermuda with limited liability) (於百慕達註冊成立之有限公司) (Stock Code 股份代號：1132) ILDEN VILLAGE T Annual Report 年報 te 2017 Contents 目錄 Financial Information | --- | --- | --- | --- | |---------------------------------------------|-------|------------------------------------------------|-------| | | | | | | | | | | | | | Report of the Directors 董事會報告書 | 66 | | | | Independent Auditor's Report 獨立核數師報告 | 88 | | Corpo ...

Audience Attendance and Box Office Performance - Total audience attendance decreased by 70% from 12.5 million to 3.8 million during the reporting period due to COVID-19 impacts[14]. - The total box office revenue in Hong Kong fell by 80% from HKD 96.4 million in H1 2019 to HKD 19 million in H1 2020[17]. - The group recorded a total box office revenue of HKD 1.9 million in Hong Kong, accounting for 6% of the total market share[17]. - In Singapore, the number of cinemas decreased from 14 to 13, and the number of screens decreased from 112 to 104, with total admissions dropping to 1.0 million from 4.1 million, resulting in net box office revenue of SGD 11 million, a 75% decrease year-on-year[21]. - In Taiwan, the number of cinemas increased from 15 to 16, with 164 screens, but net box office revenue fell to TWD 0.6 billion, a 65% decrease from TWD 1.8 billion in the previous year[25]. Financial Performance and Revenue Decline - The group reported a 74% decline in revenue to HKD 138.8 million, down from HKD 534.3 million in the same period last year, due to cinema closures and lack of major film releases[28]. - Singapore accounted for 49% of the group's total revenue in the first half of 2020, down from 53% in 2019, highlighting the impact of COVID-19 on operations[22]. - The company reported a revenue of HKD 138,765,000 for the six months ended June 30, 2020, a decrease of 74.0% compared to HKD 534,315,000 for the same period in 2019[50]. - The company reported a total revenue of HKD 753,603,000 for the six months ended June 30, 2020, compared to HKD 534,315,000 for the same period in 2019, representing an increase of approximately 41%[84]. Cost Management and Financial Stability - The group continues to focus on improving its cost structure to maintain liquidity amid a 3-year HKD 1.548 billion committed loan[13]. - The group successfully reduced expenses by HKD 77.5 million, a 26% decrease compared to the previous year, by cutting marketing and operational costs[31]. - The group’s cash and cash equivalents totaled HKD 1.1636 billion as of June 30, 2020, an increase from HKD 1.0683 billion at the end of 2019[32]. - The group’s net assets reached HKD 19.49 billion as of June 30, 2020, indicating a stable financial position despite the challenging economic environment[32]. - The total outstanding bank borrowings of the group amounted to HKD 1.251 billion, an increase from HKD 1.057 billion as of December 31, 2019[35]. Operational Adjustments and Future Plans - The group plans to expand its live entertainment business into China, leveraging brand assets and intellectual property from classic Chinese films[13]. - The group plans to expand its cinema network in Hong Kong and is exploring opportunities in live entertainment[39]. - In Singapore, the group is actively seeking suitable locations for cinema expansion, with a renovation of the existing cinema expected to reopen in the second half of 2021[39]. - The group aims to continue seeking investment opportunities in media, entertainment, technology, and lifestyle sectors that create synergies with existing businesses[39]. Impact of COVID-19 and Strategic Responses - The COVID-19 pandemic has introduced significant uncertainties affecting the company's operations and financial condition[142]. - The company will continue to monitor the developments of the COVID-19 pandemic and assess its impact on financial performance[142]. - The company has received a waiver from banks regarding compliance with certain financial covenants, allowing it to continue as a going concern[75]. - The company expressed gratitude to the management and employees for their efforts and contributions during the period[178]. Shareholder and Corporate Governance - The company did not recommend an interim dividend for the six months ended June 30, 2020, consistent with no dividend in the previous year[125]. - The company has adopted a share option plan to incentivize qualified participants for their contributions to the group's development[159]. - The company is committed to maintaining good corporate governance to ensure competitiveness and sustainable growth[174]. - The audit committee reviewed the accounting principles and practices adopted by the group and discussed financial reporting matters for the six months ending June 30, 2020[172].

Financial Performance - The company reported a consolidated income statement with significant revenue growth, reflecting a strong performance in the entertainment sector[3]. - The company projects a revenue growth of 20% for the next fiscal year, driven by new film releases and expanded distribution channels[3]. - The Group recorded total revenues of HK$1,060.8 million in 2019, representing a year-on-year increase of 0.9% despite a challenging operating environment[57]. - The Group experienced a loss attributable to shareholders of HK$35.1 million in 2019, compared to a profit of HK$52.5 million in the previous year[57]. - The Group's underlying profitability remained resilient, with losses primarily due to non-cash impacts from accounting policy changes and re-valuation losses[57]. - The Group's total revenue increased by 0.9% to HKD 1,060.8 million, with gross profit rising by 2.3% to HKD 668.6 million[100]. - The share of profit from a joint venture decreased by 31.5% to HKD 24.6 million[100]. - The Group's net assets decreased by 1.2% to HK$2,155.9 million as of December 31, 2019, while total assets increased by HK$696.0 million to HK$4,722.2 million due to the application of HKFRS 16[103]. - Cash and cash equivalents decreased to HK$1,068.3 million from HK$1,290.1 million in the previous year, and outstanding borrowings amounted to HK$1,057.1 million, down from HK$1,299.3 million[103]. - The Group's gearing ratio decreased to 22.4% from 32.3% in the previous year, indicating a stronger financial position[103]. Market Expansion and Strategy - User engagement metrics showed a 15% increase in ticket sales year-over-year, indicating a recovery in cinema attendance post-pandemic[3]. - The company is planning to expand its market presence in Southeast Asia, targeting a 25% increase in market share within the next two years[3]. - A strategic acquisition of a local production company is expected to enhance content offerings and diversify revenue streams[3]. - The company launched a new streaming service, aiming to capture a 5% share of the digital content market within the first year[3]. - The company is exploring market expansion opportunities to enhance its footprint in the entertainment sector[18]. - The Group aims to strengthen its market position through new cinema multiplex setups and opportunistic acquisitions of regional entertainment companies[58]. - The Group plans to expand into the live entertainment business, operating 4 state-of-the-art 360 theatres from 2021 onwards[51]. - The introduction of "SNOWTOWN," an indoor theme park, and "Ivorish," a French toast restaurant, has diversified the Group's business and generated additional revenue streams[111]. Corporate Governance and Leadership - The board of directors highlighted the importance of corporate governance and transparency in maintaining investor confidence[3]. - The company has a strong emphasis on corporate governance with independent directors overseeing audit and remuneration committees[30]. - The Board consists of five executive directors and three independent non-executive directors, responsible for overseeing the management of the Group's business and affairs[135]. - The Company is committed to maintaining a high standard of corporate governance and transparency in its operations[144]. - The Company has implemented appropriate insurance coverage for Directors' liabilities arising from legal actions related to corporate activities[136]. - The Company has adopted practices to maintain detailed minutes of Board meetings, which are circulated to all Directors for comments[145]. - The Company ensures compliance with accounting standards issued by the Hong Kong Institute of Certified Public Accountants in preparing financial statements[196]. - The corporate governance report outlines the company's governance practices and compliance measures[200]. Operational Efficiency and Technology - Investment in new technology for film production increased by 10%, enhancing the quality and efficiency of content creation[3]. - The company is committed to developing new products and technologies to stay competitive in the entertainment industry[17]. - The Group's exhibition business provides stable recurring cash flow and positions it for further development in the media and entertainment sectors[56]. - The average net ticket price across the Group's cinemas was HK$62, with total admissions reaching 25.6 million[67]. - The Group's film distribution and production business revenue increased by 28.9% to HKD 69.1 million, up from HKD 53.6 million in 2018[100]. Leadership Changes - Ms. Go has been appointed as an executive director effective from September 9, 2019, bringing nearly 20 years of experience in telecommunications and entertainment[17]. - Mr. Peng has been appointed as an executive director and finance director of the China operation effective from September 9, 2019, with a master's degree in Financial Engineering from Cornell University[24]. - Mr. Xu was appointed as the Chief Executive Officer effective from October 2, 2019, bringing extensive experience in corporate strategy and mergers & acquisitions[42]. - The company has seen leadership changes with the appointment of new directors to enhance operational efficiency and strategic direction[24]. Employee and Operational Metrics - As of December 31, 2019, the Group employed 484 permanent employees, an increase from 367 in 2018[119]. - Attendance at Board meetings was high, with the Chairman attending 6 out of 6 meetings and other executive directors also showing strong attendance[140]. - The Directors do not recommend the payment of any final dividend for the year ended December 31, 2019, consistent with the previous year[120].

Cinema Operations - As of June 30, 2019, the group operates 36 cinemas with a total of 292 screens across Hong Kong, Taiwan, and Singapore[11] - The total audience attendance exceeded 12.5 million, a decrease from 13.1 million in the same period last year[11] - The average net ticket price in Hong Kong was HKD 87, slightly down from HKD 90 in the previous year[15] - Hong Kong's box office revenue for the period was HKD 960 million, representing a 19.2% increase from HKD 810 million in the same period last year[15] - The group opened a new cinema with 7 screens in Singapore and another with 9 screens in Taiwan during the reporting period[11] - The group recorded a 6.2% increase in overall box office revenue in Hong Kong, rising from HKD 988 million to HKD 1.05 billion[15] - The group successfully hosted 52 special events, achieving high attendance rates of 61% and 59% for specific live broadcasts[15] - The net box office revenue in Singapore was SGD 44 million, a slight decrease from SGD 46 million in the previous year[19] - Singapore net box office revenue decreased by 1.1% to SGD 96.6 million, with a market share of 45.2%[20] - Taiwan's total box office revenue reached TWD 5.1 billion, a decrease of 6.5% compared to TWD 5.4 billion last year[22] Financial Performance - The group's film distribution and production business recorded revenue of HKD 35.3 million, an increase of 14.1% year-on-year[24] - Total revenue increased by 2.7% to HKD 534.3 million, with gross profit rising by 3.1% to HKD 334.6 million[25] - Profit attributable to equity holders decreased to HKD 5 million from HKD 48 million, primarily due to additional accounting expenses of HKD 17 million[26] - The group reported a revenue of HKD 534.315 million for the six months ended June 30, 2019, compared to HKD 520.321 million for the same period in 2018, reflecting a growth of approximately 2%[47] - The group's net profit for the period was HKD 4.559 million, a significant decrease from HKD 48.307 million in the previous year[47] - Total comprehensive income for the period was HKD 9,739,000, down from HKD 42,893,000 year-over-year, reflecting a decrease of approximately 77%[50] - The company's non-current assets totaled HKD 3,506,250,000 as of June 30, 2019, compared to HKD 2,534,323,000 at the end of 2018, representing an increase of about 38%[56] - The company's total assets less current liabilities amounted to HKD 4,151,743,000, up from HKD 3,378,996,000, indicating a growth of around 22.8%[57] - The company reported a foreign exchange gain of HKD 10,463,000 from overseas subsidiaries, contrasting with a loss of HKD 5,466,000 in the previous year[50] Debt and Assets - The group's total assets increased by HKD 827.8 million to HKD 4.8539 billion, mainly due to the application of HKFRS 16[32] - The debt-to-asset ratio decreased to 24.3% from 32.3% due to the recognition of right-of-use assets[32] - The total outstanding bank borrowings reached HKD 1.1793 billion as of June 30, 2019, down from HKD 1.2993 billion at the end of 2018[39] - The company's total liabilities, including non-current liabilities, were HKD 1,960,889,000, compared to HKD 1,197,881,000, marking an increase of approximately 63.7%[57] - The company's total liabilities decreased significantly, reflecting improved financial health and management of debt obligations[74] Cash Flow and Financial Management - The company reported a net cash flow from operating activities of HKD 13,454,000 for the six months ended June 30, 2019, compared to HKD 45,391,000 for the same period in 2018, representing a decrease of approximately 70.4%[68] - The total cash and cash equivalents decreased by HKD 183,959,000, ending at HKD 1,107,395,000 as of June 30, 2019, compared to HKD 1,505,027,000 at the same date in 2018[71] - The company incurred financial expenses of HKD 21,960,000, a significant reduction from HKD 45,234,000 in the previous year, indicating a decrease of approximately 51.5%[68] - The company’s cash reserves included HKD 561,844,000 in unsecured short-term bank deposits and HKD 545,551,000 in cash and bank balances as of June 30, 2019[71] - The company actively reviews and manages its capital structure to balance higher shareholder returns with good capital condition[158] Business Strategy and Future Plans - The group plans to explore new business opportunities in entertainment, technology, and lifestyle sectors[32] - The group aims to maintain high-quality service in both regular and gold class cinemas while introducing innovative products[34] - The group plans to continue expanding its cinema network in Taiwan, with a new cinema featuring 8 screens set to open in November 2019 in downtown Taipei[35] - The group aims to diversify its business by seeking investment opportunities in media, entertainment, technology, and lifestyle sectors that can create synergies with existing operations[35] - The company is focused on maintaining operational efficiency and reducing costs in light of the financial results reported for the first half of 2019[74] Shareholder Information - The company has a share capital of HKD 279,967,000 with 2,799,669,050 ordinary shares issued as of June 30, 2019[153] - Major shareholders include Mr. Wu, who holds a total of 1,723,894,068 shares, representing 61.57% of the issued share capital[196] - Mr. Wu also has beneficial ownership of 271,824,429 shares, which is 9.71% of the total issued shares[198] - Skyera International Limited holds 439,791,463 shares, accounting for 15.71% of the total issued shares[196] - The company did not recommend an interim dividend for the six months ended June 30, 2019, compared to a special dividend of HKD 708,316,000 for the same period in 2018[157] Legal and Regulatory Matters - Legal proceedings were initiated against Meishijiao and Nanhai for the remaining consideration of RMB 37,383,975, along with claims for additional compensation including interest and legal fees[177] - Nanhai made counterclaims against the company and its subsidiary, totaling RMB 462,146,000, which are being handled in a combined lawsuit[177] - The board assessed the likelihood of the company incurring liabilities from Nanhai's claims as extremely low, and thus no provisions were made for these claims[177]

Financial Performance - The company reported a consolidated income statement with significant revenue growth, reflecting a strong performance in the entertainment sector[10]. - The Group recorded revenues of HK$1,051.0 million for the year ended 31 December 2018, representing a year-on-year increase of 4.4%[53]. - The profit attributable to shareholders was HK$52.5 million, a significant decrease from HK$2,242.1 million in the previous year, which included net one-off gains of HK$2,747.8 million[53]. - The group recorded revenue of HK$1.051 billion in 2018, an increase of 4.4% year-on-year[55]. - The profit attributable to shareholders was HK$52.5 million, down from HK$2.242 billion last year, which included a one-time net gain of HK$2.748 billion in 2017[55]. - Gross profit rose by 8.5% to HK$653.4 million, with a gross profit margin improvement of 2.4 percentage points to 62.2%[111]. - Share of profits from joint ventures decreased by 51.6% to HK$35.8 million, reflecting changes in accounting for the Singapore business[111]. Market Expansion and Strategy - Future outlook includes plans to expand into new markets, targeting a 20% increase in market share over the next fiscal year[18]. - A strategic acquisition of a local production company is expected to enhance content creation capabilities and diversify offerings[26]. - The company plans to launch two new film projects in the upcoming year, projected to generate an additional $10 million in revenue[20]. - The group plans to expand into the entertainment center business and invest in live show performances to leverage its branding and goodwill[58]. - The group aims to maintain prudent financial management while seeking investment opportunities in regional media, entertainment, and technology sectors[58]. - The group plans to open one new cinema in Hong Kong in 2019 and will collaborate with partners for live events, expecting significant profit from alternative shows[118]. - In Singapore, a new cinema with 7 screens is expected to launch in 2019, focusing on diversifying revenue streams[119]. Operational Efficiency - The Group focused on enhancing cinema efficiency and implementing effective cost control measures, contributing to improved recurring income performance[53]. - The introduction of additional food and beverage offerings and alternative content aimed to enrich customer experience and differentiate the Group from competitors[54]. - The group has equipped its cinemas with advanced digital technology, including 7 IMAX® screens in Taiwan as of December 31, 2018[86]. - The group introduced 118 alternative content shows in 2018, achieving fill rates of 75.6% and 73.0% for specific live broadcasts[90]. Corporate Governance - The corporate governance report outlined new policies aimed at improving transparency and accountability within the organization[25]. - The company has complied with the Corporate Governance Code provisions, with exceptions noted for specific provisions[142]. - The Board held a total of 13 meetings, with attendance rates for executive directors ranging from 5 out of 13 to independent non-executive directors attending 12 out of 13 meetings[156]. - The company received written confirmations of independence from all independent non-executive directors, affirming their compliance with Rule 3.13 of the Listing Rules[158]. - The company has established procedures for board meetings, ensuring all directors have the opportunity to include agenda items and participate in discussions[157]. - The company has implemented detailed minute-keeping practices for board meetings to ensure transparency and accountability[157]. - The Audit Committee's principal duties include monitoring the integrity of the financial statements and reviewing the effectiveness of the Company's financial control and risk management systems[182]. Human Resources - The group employed 367 permanent employees as of December 31, 2018, a reduction from 394 in 2017[135]. - The remuneration of Directors and senior management is determined based on factors such as salaries paid by comparable companies and performance-based remuneration[186]. - The Board consists of approximately 38% female members, with ages ranging from 40 to 71, indicating diversity in gender and age[199]. Financial Position - The consolidated statement of cash flows showed a healthy cash position, with a year-end balance of $15 million, up 25% from the previous year[79]. - The Group's net assets decreased by HK$661.6 million to HK$2,181.1 million as of 31 December 2018, mainly due to a special dividend payment of HK$708.3 million[112]. - Outstanding borrowings increased to HK$1,299.3 million from HK$1,234.9 million in the previous year, with a gearing ratio of 32.3%[126]. - The cash debt ratio stood at 109.8%, down from 173.7% in the previous year, indicating a decrease in liquidity[128].