Market Performance - IMAX China achieved a market share of 3.9% in 2023, up from 3.4% in 2022, with a total box office revenue of RMB 11.9 billion (USD 1.7 billion) for local language films, a 50% increase compared to 2019[6][9][14]. - The film "Oppenheimer" contributed 30% of its total box office in the Greater China market, while "The First Part of Fengshen" and "The First Slam Dunk" each accounted for 10%[6][15]. - The company reported record box office revenues during the Spring Festival and summer seasons, with "The Wandering Earth 2" achieving the highest box office for a local language film[8][13]. - The box office for IMAX films in Greater China reached $239.5 million in 2023, up from $162.7 million in 2022[25]. - The revenue from Chinese-language films accounted for 61.5% of the box office in the fiscal year 2023, compared to 58.8% in 2022, indicating a growing preference for local content[64]. Film Offerings and Screenings - In 2023, IMAX China screened a total of 80 films, the highest in its history, with 57 films released in mainland China and 23 in Hong Kong and Taiwan[14]. - The number of IMAX films released in Greater China rose to 80 in 2023, compared to 45 in 2022, indicating a strong expansion in film offerings[133]. - The number of Hollywood films screened in mainland China increased to 22 in fiscal year 2023 from 10 in fiscal year 2022[80]. Revenue and Financial Performance - IMAX China recorded revenue of $87 million in the fiscal year 2023, an increase of $13.7 million compared to 2022[29]. - The total revenue for the fiscal year 2023 was $86.982 million, an increase from $73.330 million in 2022[112]. - The company reported a net other income of $0.2 million in 2023, recovering some losses from previous film investments[119]. - The company reported a total comprehensive income of $24.682 million for 2023, compared to a comprehensive loss of $8.712 million in 2022[124]. - The company recorded a profit of $27.5 million for fiscal year 2023, up from $10.8 million in fiscal year 2022[170]. Profitability and Margins - Adjusted profit for IMAX China was $29.8 million in 2023, compared to $12.4 million in 2022[29]. - The gross profit for technology products and services was $33.212 million, with a gross margin of 54.5% in 2023, up from 47.3% in 2022[115]. - The adjusted profit margin improved significantly to 34.3% in 2023 from 16.9% in 2022, indicating enhanced profitability[198]. Expansion and Network Development - IMAX China installed 22 new IMAX laser systems in collaboration with Hengdian Film and Television, aiming to increase the number of IMAX theaters in Greater China to over 1,000[7]. - The number of IMAX cinema systems in Greater China reached 1,013, surpassing the milestone of 1,000 cinemas, with 206 systems under contract[18]. - The company signed contracts for 28 new cinemas in 2023, including the largest system agreement in four years with 22 new laser systems[18]. - The company aims to continue expanding its network and enhancing partnerships with local filmmakers to strengthen its market position in 2024[9][10]. Revenue Sources and Business Model - The majority of the company's revenue is derived from mainland China, which is expected to be the primary source of future growth[60]. - The company has revised its reporting segments to include content solutions and technology products and services, reflecting a strategic shift in its business model[61]. - Revenue from content solutions for the fiscal year 2023 was $25.522 million, accounting for 29.4% of total revenue, up from $14.908 million (20.3%) in 2022[112]. - Revenue from technology products and services reached $60.898 million in 2023, representing 70.0% of total revenue, compared to $58.285 million (79.5%) in 2022[112]. Cash Flow and Financial Health - The net cash generated from operating activities for the fiscal year 2023 was approximately $12.5 million, a significant increase from $1.2 million in 2022, reflecting a growth of over 950%[181][193]. - The company anticipates continued growth in operating cash flow as the IMAX cinema network recovers and expands post-pandemic[193]. - The company's capital debt ratio decreased from 40.0% in 2022 to 25.1% in 2023, primarily due to an increase in equity of $21.3 million and a reduction in borrowings by $12.9 million[198][200]. Challenges and Market Conditions - Future revenue and cash flow may continue to be adversely affected by the pandemic and its impact on consumer behavior[79]. - The company has delayed several IMAX system installations due to ongoing uncertainties in the market[77]. - Approximately 29% of the uncompleted theater contracts are under sales and rental arrangements, 27% under full revenue-sharing arrangements, and 44% under mixed revenue-sharing arrangements[91].

Financial Performance - IMAX China reported total revenue of $86,982,000 for the year ended December 31, 2023, representing a 18.7% increase from $73,330,000 in 2022[5]. - The operating profit for the year was $32,227,000, up from $14,410,000 in the previous year, indicating a significant growth of 123.5%[5]. - Net profit attributable to the company's owners reached $27,501,000, compared to $10,758,000 in 2022, marking an increase of 155.5%[5]. - Basic and diluted earnings per share were both $0.08, up from $0.03 in the previous year[5]. - The total gross profit for the company was $54,533 million in 2023, up from $39,697 million in 2022, representing an increase of about 37.4%[19]. - The company reported a pre-tax profit of $33,673 million for the year ended December 31, 2023, compared to $15,281 million in 2022, reflecting a significant increase of approximately 120.7%[19]. - The net profit for the year ended December 31, 2023, was $27,501 million, up from $10,758 million in 2022, indicating an increase of 155%[31]. - The adjusted profit for the fiscal year 2023 was $29.8 million, compared to $12.4 million in 2022, reflecting a substantial increase[91]. - The operating profit margin improved to 37.1% in 2023 from 19.7% in 2022, indicating enhanced operational efficiency[89]. Revenue Segments - Revenue for the content solutions segment reached $25.522 million in 2023, up from $14.908 million in 2022, representing a growth of approximately 71.5%[18]. - Revenue for the technology products and services segment was $60.898 million in 2023, compared to $58.285 million in 2022, reflecting an increase of about 4.5%[18]. - Revenue from content solutions was $25.522 million, accounting for 29.4% of total revenue, up from $14.908 million (20.3%) in 2022[79]. - Revenue from technology products and services was $60.898 million, representing 70.0% of total revenue, compared to $58.285 million (79.5%) in 2022[79]. Expenses and Liabilities - Total expenses for the year ended December 31, 2023, amounted to $55,663 million, compared to $54,450 million in 2022, reflecting an increase of 2.2%[5]. - The total depreciation and amortization expenses for the year ended December 31, 2023, were $15.457 million, compared to $14.842 million in 2022, reflecting a rise of about 4.1%[25]. - Employee salaries and benefits increased to $11,443 million in 2023 from $9,478 million in 2022, representing a growth of 20.7%[5]. - Advertising and marketing expenses rose to $3,585 million in 2023, up from $2,954 million in 2022, reflecting an increase of 21.3%[5]. - Total liabilities decreased significantly to $63,905,000 from $93,331,000, a reduction of 31.6%[9][10]. Assets and Cash Flow - Total assets decreased to $318,276,000 as of December 31, 2023, from $326,403,000 in 2022, a decline of 2.9%[7][10]. - Cash and cash equivalents were reported at $62,711,000, down from $74,972,000 in 2022, a decrease of 16.3%[7]. - The net cash generated from operating activities for the fiscal year 2023 was approximately $12.5 million, a significant increase from $1.2 million in fiscal year 2022, reflecting a recovery in the IMAX cinema network post-pandemic[128][129]. - The net cash used in investing activities for fiscal year 2023 was approximately $3.8 million, primarily related to the installation of IMAX cinema equipment and acquisition of property, plant, and equipment[130]. - The net cash used in financing activities for fiscal year 2023 was approximately $19.7 million, mainly due to repayment of loans and dividend payments to shareholders[132]. Market Expansion and Strategy - The company plans to continue expanding its market presence in Greater China, focusing on digital cinema technology[11]. - IMAX China is actively pursuing new product development and technological advancements to enhance its cinema offerings[11]. - The company has expanded its IMAX cinema network to 807 locations in Greater China, with 206 additional cinemas under contract[50]. - The company plans to continue its strategy of collaborating with local filmmakers to produce "IMAX special shoots" in 2024 and beyond[52]. - The company aims to increase the number of Chinese films screened annually and the percentage of box office revenue generated from these films[58]. Risks and Challenges - The company faces risks from changes in the overall political, social, and economic conditions in Greater China, which could negatively impact future revenue and cash flow[71]. - Global inflationary pressures and supply chain disruptions could significantly increase the company's costs, affecting overall operational expenses[72]. - The company relies on commercial film exhibitors to purchase or lease IMAX systems, and any reduction in their business or unfavorable economic terms could negatively impact revenue growth[169]. - The company has exposure to foreign exchange rate fluctuations, with most revenues denominated in USD and expenses in CAD, which may affect profitability[175]. Corporate Governance and Shareholder Relations - The company is committed to maintaining high standards of corporate governance to protect shareholder interests and enhance corporate value[148]. - The board of directors did not recommend the payment of a final dividend for the year ended December 31, 2023[152]. - IMAX Corporation, the company's controlling shareholder, owns 71.55% of the issued share capital as of the announcement date[153]. Film and Content Strategy - The company screened 95 new IMAX films globally in 2023, relying heavily on third-party producers for content[168]. - The number of local language films released in 2023 increased to 59, up from 36 in 2022, with a notable rise in Chinese films from 15 to 28[158]. - The company has signed agreements with international film studios to convert their films for IMAX format, but the selection of films may not guarantee box office success in specific markets[169]. - The company plans to release an additional 24 films in 2024, including major titles like "Dune 2" and "Kung Fu Panda 4," with several being shot specifically for IMAX[159].

Financial Performance - IMAX China reported a significant recovery in operations with the resumption of normal cinema operations in the first half of 2023 following the easing of COVID-19 restrictions[10]. - Total revenue for the first half of the fiscal year 2023 was $45,342 thousand, a 38.6% increase from $32,713 thousand in the same period of 2022[19]. - Adjusted profit for the first half of 2023 was $15,085 thousand, significantly higher than $2,109 thousand in the same period of 2022[21]. - The company reported a net profit attributable to shareholders of $13,876 thousand, compared to $766 thousand in the first half of 2022[19]. - Gross profit for the first half of 2023 was $28,718 thousand, with a gross margin of 63.3%, compared to $18,625 thousand and 56.9% in the same period of 2022[19]. - Operating profit surged to $16,429 thousand, compared to $2,124 thousand in the prior year, reflecting a significant increase of 675.5%[176]. - The company reported a profit of $13,876,000 for the period, contributing to a total comprehensive income of $6,865,000 after foreign currency translation adjustments[180]. Revenue Segments - The company generated revenue primarily from two segments: content solutions and technology products and services, with a notable increase in IMAX box office revenue from Hollywood and Chinese films[8]. - Content Solutions revenue reached $14,178 thousand, accounting for 31.3% of total revenue, compared to $6,519 thousand and 19.9% in the prior year[11]. - Technology Products and Services revenue was $30,896 thousand, representing 68.1% of total revenue, up from $26,112 thousand and 79.8% year-over-year[11]. - IMAX's revenue from content solutions is based on a percentage of box office receipts from its cinema network, which has shown improvement as cinema operations normalize[9]. - Technology products and services revenue grew from $26.1 million in the first half of fiscal 2022 to $30.9 million in the first half of fiscal 2023, reflecting an 18.4% increase driven by higher sales and revenue-sharing arrangements[25]. Challenges and Risks - The company faced challenges with overdue payments from some cinema partners due to financial difficulties caused by the pandemic, impacting cash flow and revenue recognition[10]. - Future revenue and cash flow remain uncertain due to potential ongoing impacts from COVID-19 and changing consumer behavior[10]. - The company continues to monitor the evolving economic environment and its effects on cinema partners' financial stability and payment capabilities[10]. - The company has delayed installations of several IMAX systems due to pandemic-related disruptions, which may affect future revenue streams[10]. Cash Flow and Assets - Cash flow from operating activities for the first half of 2023 was $12.0 million, a turnaround from a cash outflow of $4.2 million in the same period of 2022[55][57]. - As of June 30, 2023, current assets totaled $180.4 million, up from $174.2 million as of December 31, 2022, primarily due to an increase in trade and other receivables by $7.2 million[52]. - The net cash and cash equivalents balance as of June 30, 2023, was $73.6 million, a slight decrease from $75.0 million at the end of 2022[53]. - The company reported a foreign currency translation adjustment loss of $7,011 thousand, an improvement from a loss of $12,519 thousand in the previous year[176]. Corporate Governance and Management - The company has committed to high standards of corporate governance to protect shareholder interests and enhance corporate value[78]. - The Compensation Committee reviewed proposed amendments to the stock option plan, restricted share unit plan, and performance share unit plan, recommending approval to the board[84]. - Daniel Wade Manwaring has been appointed as the CEO effective January 9, 2023, succeeding the previous CEO[173]. - The company appointed Mr. Daniel Manwaring as CEO effective January 9, 2023[15]. Shareholder Information - IMAX Corporation announced a proposal to acquire all outstanding shares of IMAX China for approximately $124 million, representing a 49% premium over the average closing price over the last 30 trading days[67]. - As of June 30, 2023, IMAX Corporation holds 243,262,600 shares, representing approximately 71.63% of the company's equity[142]. - The company has a total of 15,890,436 options and awards available under its long-term incentive plan as of January 1, 2023, which was updated to 33,959,314 shares on June 7, 2023[145]. Credit Risk and Financial Management - The expected credit loss provision recorded for the six months ended June 30, 2023, was $0.8 million, an increase from $0.6 million in 2022, reflecting a decline in credit quality due to the global COVID-19 pandemic[193]. - The company has categorized its customers into four credit quality categories, with "Credit Outstanding" indicating good relationships and timely payments[192]. - The credit risk associated with other receivables from third parties and related parties is considered low, with provisions only for expected losses over a 12-month period[193]. - The financial risk management plan aims to mitigate market risks, including foreign exchange and interest rate risks, as approved by the board of directors[189].

Revenue Growth - Revenue for the six months ended June 30, 2023, was $45,342 million, representing a 38.6% increase from $32,713 million in the same period of 2022[3]. - For the six months ended June 30, 2023, total revenue from reportable segments was $45.074 million, up from $32.631 million in the same period of 2022, representing an increase of approximately 38%[20]. - Total revenue for the first half of 2023 reached $184.925 million, compared to $134.004 million in the same period of 2022, marking a 38.2% increase[120]. - Total revenue for the six months ended June 30, 2023, was $59.3 million, up from $47.1 million in 2022, representing a 25.0% increase[173]. Profitability - Gross profit for the same period was $28,718 million, up 54.3% from $18,625 million year-over-year[4]. - Operating profit surged to $16,429 million, compared to $2,124 million in the prior year, marking a significant increase of 675.5%[5]. - Profit attributable to owners of the company reached $13,876 million, a substantial rise from $766 million in the previous year[6]. - The company reported a net profit for the first half of fiscal 2023 of $13.9 million, compared to a profit of $0.8 million in the first half of fiscal 2022[83]. Earnings Per Share - Basic and diluted earnings per share were both $0.04, compared to $0.00 for the same period last year[6]. - The company reported a basic and diluted earnings per share of $0.15 for Q2 2023, compared to a loss of $0.05 per share in Q2 2022[121]. Financial Position - Total assets as of June 30, 2023, were $319,350 million, a decrease from $326,403 million at the end of 2022[8]. - Total liabilities decreased to $83,950 million from $93,331 million at the end of 2022, indicating improved financial health[12]. - The company reported cash and cash equivalents of $73,559 million, slightly down from $74,972 million at the end of 2022[9]. - As of June 30, 2023, the company had total equity of $42.7 million, with no interim dividend declared for the six months ended June 30, 2023[104][105]. Segment Performance - The content solutions segment generated revenue of $14.178 million for the six months ended June 30, 2023, compared to $6.519 million in 2022, reflecting a growth of about 117%[20]. - The technology products and services segment reported revenue of $30.896 million for the six months ended June 30, 2023, compared to $26.112 million in 2022, indicating an increase of approximately 18%[20]. - The content solutions segment generated $14.178 million, accounting for 31.3% of total revenue, compared to $6.519 million and 19.9% in the previous year[46]. - The technology products and services segment contributed $30.896 million, representing 68.1% of total revenue, up from $26.112 million and 79.8% in the prior year[46]. Cash Flow and Investments - In the first half of the 2023 fiscal year, the company reported a net cash inflow from operating activities of approximately $12.0 million, compared to a net cash outflow of $4.2 million in the same period of 2022[91][92]. - Cash used in investing activities for the first half of 2023 was approximately $1.8 million, primarily related to the installation of IMAX cinema equipment[93]. - Cash used in financing activities for the first half of 2023 amounted to approximately $9.7 million, mainly due to dividend payments of $5.1 million and loan repayments of $3.9 million[95]. Taxation - The total income tax expense for the six months ended June 30, 2023, was 2,997 million, compared to 2,038 million for the same period in 2022, indicating an increase of approximately 47.2%[27]. - The company recorded a tax expense of $8.3 million for the six months ended June 30, 2023, compared to $5.7 million in 2022, reflecting a 45.6% increase[178]. Challenges and Market Conditions - The company faced challenges in revenue collection due to financial difficulties experienced by some exhibitor partners as a result of the COVID-19 pandemic[45]. - The impact of the COVID-19 pandemic on the company's business and financial performance remains uncertain, depending on various unpredictable factors[44]. - Management is optimistic about the recovery of the cinema industry in China, with a strong lineup of films scheduled for the remainder of 2023[44]. Shareholder Actions - The company declared a dividend of $5,087 million for the year-end dividend of 2022, which is $0.015 per share, while no dividend was proposed for the six months ending June 30, 2023[38]. - IMAX Corporation announced a proposal to acquire all outstanding shares of IMAX China at approximately HKD 10 per share, representing a premium of about 49% over the average closing price for the last 30 trading days[99]. Accounting and Reporting - The company has not adopted several new accounting standards that are effective from January 1, 2024, which are not expected to have a significant impact on future reporting periods[18]. - The company revised its internal segment reporting to include two reportable segments: content solutions and technology products and services, reflecting a strategic shift in its operational focus[40].

Box Office Performance - IMAX China achieved a record box office of RMB 231 million during the Spring Festival, a year-on-year increase of 54%[3] - As of February 19, 2023, IMAX has generated over RMB 86 million in box office revenue in mainland China, surpassing half of the total box office for the entire year of 2022[3] - The average box office share for IMAX films during their opening weekend in 2022 was 17%, an increase from 14% in the previous year[3] - IMAX China's total box office in 2022 decreased by 32% to $163 million due to pandemic-related cinema closures and a decline in film releases[6] - The box office contribution from Hollywood films in China reached 17% in 2022, up from 14% in 2021[6] - IMAX's box office for the film "Avatar: The Way of Water" exceeded $52 million in China, marking the second highest in IMAX history[6] - The number of IMAX theaters in Greater China reached 794, with 204 systems under contract as of December 31, 2022[8] - IMAX票房占比在中国市场上升至6%，其中《长津湖》成为中国影史票房最高影片，总票房达人民币57.8亿元[19] - 《阿凡达：水之道》在中国市场的IMAX票房占比达到22%，创下好莱坞影片在中国首映的纪录[19] - IMAX的本地语言影片《流浪地球2》票房为人民币39.4亿元，IMAX票房占比为9%[19] Financial Performance - IMAX's net profit recommendation for the year is approximately USD 5.1 million, with a dividend payout ratio of 50%[4] - The adjusted net profit for 2022 was $12.4 million, despite a 35% decline in revenue to $73.3 million[16] - IMAX's total revenue for the fiscal year 2022 was $73.33 million, a decrease from $112.80 million in 2021[67] - Total revenue decreased from $112.8 million in fiscal year 2021 to $73.3 million in fiscal year 2022, a decline of 35.0%[79] - The company reported a significant increase in user data metrics, indicating a growing audience for its offerings[141] - The total comprehensive income attributable to the company's owners for fiscal year 2022 was a loss of $8.7 million, compared to a profit of $47.0 million in fiscal year 2021[76] - The company recorded a net loss of $8.7 million in comprehensive income for FY2022, compared to a comprehensive income of $47.0 million in FY2021[110] - The income tax expense for 2022 was $4.5 million, a decrease from $12.3 million in 2021[75] Revenue Streams - Revenue is primarily generated from two segments: IMAX technology network and IMAX technology sales and maintenance[64] - IMAX technology network revenue includes income from IMAX DMR films and revenue-sharing arrangements with exhibitors[65] - IMAX technology sales and maintenance revenue includes fixed income from sales and leasing arrangements, maintenance services, and aftermarket sales[66] - IMAX's technology sales and maintenance revenue is not directly tied to box office results, indicating a diversified revenue stream[42] - The revenue from IMAX DMR films was $14.91 million in 2022, accounting for 20.3% of total revenue, compared to $21.75 million and 19.3% in 2021[67] - IMAX technology network revenue fell from $39.4 million in fiscal year 2021 to $25.3 million in fiscal year 2022, a decrease of 35.8%[80] - Revenue share arrangements decreased from $17.6 million in fiscal year 2021 to $10.4 million in fiscal year 2022, a reduction of 40.9%[83] - IMAX technology sales and maintenance revenue declined from $73.0 million in fiscal year 2021 to $47.9 million in fiscal year 2022, a decrease of 34.4%[84] Market Expansion and Strategy - IMAX plans to release a more diverse slate of films in 2023, including "The King of the Sky" and "The Legend of the Gods" series[4] - IMAX China is positioned to benefit from the resurgence of Hollywood films in the Chinese market, with several major titles scheduled for release in 2023[3] - The company plans to expand its IMAX theater network in mainland China, including the rollout of IMAX laser technology and additional laser cinema system products[46] - The company aims to increase the number of Chinese-language films screened annually and the percentage of total box office revenue derived from these films[45] - The company has established partnerships with over 80 exhibitors, including major players like Wanda Film and Alibaba Pictures, to enhance its market presence[44] - The company plans to promote revenue-sharing arrangements to high-quality exhibitors with a successful track record and significant box office potential[57] - The company has identified about 1,400 IMAX regions in Greater China, where typically only one IMAX theater will be installed per region[55] Management and Governance - Richard Gelfond has been the non-executive chairman since May 27, 2015, and is the CEO of IMAX Corporation, providing strategic guidance[136] - The board includes independent directors such as Jin Yu Xi and John Marshal Davison, contributing to corporate governance and oversight[136] - The leadership team has extensive experience in the entertainment and finance sectors, enhancing the company's strategic direction[138] - The company is committed to maintaining high standards of corporate governance and transparency in its operations[142] - The board's diverse expertise supports the company's long-term growth and adaptation to market changes[136] Challenges and Risks - The overall economic and market conditions in mainland China may reduce revenue from existing IMAX systems and demand for new IMAX systems, impacting future income and cash flow[58] - A decline in consumer discretionary income due to geopolitical tensions, inflation, or other factors could negatively affect consumer demand for IMAX movie viewings[59] - The ability to maintain pricing and profit margins is crucial, as fixed costs related to IMAX technology may lead to adverse impacts on profitability if revenue decreases significantly[60] - The company acknowledges that economic downturns may increase the risk of customers not accepting the delivery of IMAX theater systems[55] Technology and Innovation - The IMAX laser network currently covers 104 theaters, enhancing the viewing experience with higher resolution and better picture quality[43] - The company emphasizes digital transformation and innovation in its cinema offerings, aligning with industry trends[138] - IMAX's focus on developing new products and technologies to enhance the cinematic experience is a key part of its future outlook[143] Dividends and Shareholder Returns - The company plans to pay a final dividend of $0.015 per share, reflecting a payout ratio of 50%[16] - The company declared a final dividend of $0.015 per share for the fiscal year 2022, expected to be paid on or around June 23, 2023, subject to shareholder approval[156] - The interim dividend for the first half of fiscal year 2022 was $0.001 per share, equivalent to $0.008 HKD[156] - The final dividend for the fiscal year 2021 was $0.027 per share, equivalent to $0.210 HKD[156]

Financial Performance - Total box office revenue for IMAX films reached $76.3 million in the first half of 2022, a decrease of 43% compared to the same period in 2021 due to COVID-19 related cinema closures in China[9]. - For the first half of the 2022 fiscal year, total revenue was $32,713 thousand, a decrease of 38.8% compared to $53,431 thousand in the same period of 2021[10]. - IMAX DMR film revenue was $6,519 thousand, representing 19.9% of total revenue, down from $11,493 thousand or 21.5% in the previous year[10]. - Revenue from IMAX system sales and maintenance was $20,945 thousand, accounting for 64.0% of total revenue, compared to $31,686 thousand or 59.3% in the prior year[10]. - The company reported a net loss of $0.6 million due to expected credit loss provisions primarily related to trade receivables impacted by cinema closures in China[15]. - The company reported a net loss attributable to shareholders of $11.75 million in the first half of fiscal 2022, compared to a profit of $25.44 million in the same period of fiscal 2021[20]. - Adjusted profit for the first half of fiscal 2022 was $2.1 million, down from $21.3 million in the same period of fiscal 2021[22]. - Gross profit for IMAX DMR films was $5,180 thousand with a gross margin of 79.5%, compared to $9,284 thousand and 80.8% in the previous year[13]. - Gross profit decreased from $33.1 million in the first half of fiscal 2021 to $18.6 million in the first half of fiscal 2022, with a gross margin decline from 62.0% to 56.9%[42]. - The company recorded a total comprehensive loss of $(11,753,000) for the period, primarily due to foreign exchange losses[186]. Revenue Sources - The company’s revenue is primarily derived from three main categories: IMAX technology network, IMAX technology sales and maintenance, and new business plans and others[6]. - IMAX technology sales and maintenance revenue includes fixed income from sales and leasing arrangements, maintenance services, and aftermarket sales, which are not directly tied to box office results[8]. - The company’s new business plans and other revenues encompass all income related to developing and/or startup non-core business activities[9]. - The company has implemented a mixed revenue sharing arrangement with cinema partners, which includes both fixed and variable rental income based on box office performance[7]. Expenses and Losses - Total sales, general, and administrative expenses were $9,545 thousand, which is 29.2% of total revenue, up from $7,723 thousand or 14.5% in the same period last year[14]. - Other operating expenses amounted to $1.9 million, representing 5% of total revenue, compared to $3.0 million in the previous year[16]. - Selling, general, and administrative expenses rose from $7.7 million in the first half of fiscal 2021 to $9.5 million in the first half of fiscal 2022, an increase of 23.4%[50]. - The net loss from expected credit loss provisions was $0.6 million in the first half of fiscal 2022, compared to a reversal of $2.6 million in the first half of fiscal 2021[51]. Cash Flow and Assets - Cash and cash equivalents decreased from $97.7 million as of December 31, 2021, to $76.9 million as of June 30, 2022, a decline of $20.8 million[56]. - Current assets decreased from $178.7 million as of December 31, 2021, to $171.6 million as of June 30, 2022[56]. - The company experienced a net cash outflow from operating activities of approximately $4.2 million, compared to a net cash inflow of $16.1 million in the same period of 2021, representing a decrease of 126%[60][61]. - The company incurred a net cash outflow from investing activities of approximately $7.5 million in the first half of 2022, primarily related to film investments of $4.7 million and $2.7 million for installing IMAX cinema equipment[62]. - The net cash outflow from financing activities for the first half of 2022 was approximately $6.3 million, mainly due to repayment of loans of $3.6 million and share repurchases of $1.8 million[64]. Market Conditions and Risks - The ongoing impact of the COVID-19 pandemic on the company’s business and financial performance will depend on various unpredictable factors, including the duration and extent of the pandemic and government responses[9]. - The company faces interest rate risk on floating-rate borrowings, with a potential impact of less than $1,000 on after-tax profit for a 10 basis point change in interest rates[198]. - The financial performance of the company is subject to various unpredictable factors related to the ongoing COVID-19 pandemic, including the duration and extent of the pandemic and government responses[196]. - The company’s operations are primarily exposed to foreign exchange risks involving USD and RMB, with most assets and liabilities denominated in these currencies[198]. Shareholder and Management Information - The board proposed an interim dividend of $0.001 per share (equivalent to HK$0.008) for the first half of the fiscal year 2022[78]. - As of June 30, 2022, the total equity of the company was a deficit of $8.1 million, affecting the ability to distribute dividends[79]. - The company has established a board committee to manage and oversee specific affairs of the group[91]. - The company has a structured reward mechanism that ties compensation to the group's annual performance[158]. Agreements and Licensing - The company entered into an agreement with IMAX Corporation to develop and expand the Enhanced business in Greater China, which includes licensing fees of 5% on certain revenues[72]. - The trademark licensing agreement can be renewed for an additional 25 years based on fair market value licensing fees not exceeding 6% of total applicable revenue[103]. - IMAX Corporation has entered into a trademark licensing agreement with a duration of 25 years, which is renewable, to utilize the "IMAX" brand in Greater China[104]. - The DMR service agreements provide a long-term revenue source and cost certainty for the company by ensuring access to DMR conversion services[119]. Employee and Compensation Plans - The long-term incentive plan allows for a total of 35,532,500 shares to be issued as rewards under the plan[159]. - The company has a plan for restricted stock units that vests 100% on March 12, 2022[173]. - The total number of restricted stock units granted to employees in 2020 was 239,470, with 119,736 units exercised by June 30, 2022[172]. - The performance conditions for the units granted from January 1, 2020, to December 31, 2022, must be met for full or partial vesting following the announcement of the company's 2022 financial results[177].

Financial Performance - Revenue and adjusted net profit for 2021 reached $112.8 million and $41.7 million respectively, nearly returning to pre-pandemic levels[3]. - Operating cash flow for 2021 was $30 million, demonstrating strong financial performance despite ongoing pandemic challenges[3]. - In 2021, IMAX China recorded a total revenue of $112.8 million, representing a 116% year-over-year increase, and achieved an adjusted net profit of $42 million, compared to a net loss of $4.6 million in 2020[21]. - The gross profit for IMAX China reached $68.2 million in 2021, reflecting a 252.4% increase compared to $19.3 million in 2020, with a gross margin of 60.4%[42]. - The net profit for the year was $38.2 million, a significant turnaround from a net loss of $26.7 million in 2020, resulting in a net profit margin of 33.9%[42]. - Total box office revenue for IMAX China was $239.5 million in 2021, up 141.3% from $99.2 million in 2020, with an average box office per screen of $328[42]. - IMAX's technology network revenue increased by 159% to $39 million, with box office recovery reaching $239 million and a revenue share increase to 16.4%, up 110 basis points year-over-year[15]. - The company reported a net reversal of financial asset impairments of $4.0 million in 2021, compared to a loss of $10.9 million in 2020[82]. - The company recorded a cash and cash equivalents increase of $9.3 million in fiscal year 2021, compared to a decrease of $0.8 million in fiscal year 2020[127]. Market Expansion - IMAX China expanded its network to 783 screens, with an additional 215 screens under contract, approaching a milestone of 1,000 cinemas[3]. - The company installed 57 new and upgraded systems in 2021, compared to 42 installations in 2020, contributing to a total of 783 theaters in over 210 cities across Greater China[12]. - The number of IMAX theaters in Greater China increased from 745 on December 31, 2020, to 783 on December 31, 2021[60]. - The company anticipates that the total number of screens in China will exceed 100,000 by 2025, driven by urbanization and increasing purchasing power[63]. - The company has identified approximately 1,400 IMAX regions in Greater China, where typically only one IMAX theater will be installed per region[62]. - The company plans to expand its theater network in China by introducing IMAX laser technology and additional laser cinema systems to replace and upgrade existing IMAX xenon theaters[53]. Film Performance - Local language films generated box office revenue of $150 million, highlighted by record-breaking performances during the Chinese New Year and National Day[3]. - IMAX's contribution to the opening weekend box office of "The Battle at Lake Changjin" was nearly 6%, with the film grossing over RMB 5.7 billion, becoming the highest-grossing film in Chinese history[3]. - The box office for local language films reached $150 million, a 30% increase compared to 2019, with significant contributions from films like "Detective Chinatown 3" and "The Battle at Lake Changjin" which broke multiple records[7]. - IMAX films generated a total box office of $239 million in 2021, an increase of $140 million (141%) compared to 2020, including a record $136 million for Chinese films[55]. - The average box office share for local language films during opening weekends rose to approximately 4.6%, compared to 3.6% in 2019[7]. - IMAX's market share for Hollywood sequels continues to grow, with significant contributions from films like "No Time to Die" (15%), "F9" (9%), and "Godzilla vs. Kong" (12%)[4]. Dividend and Shareholder Returns - The company announced a proposed final dividend of approximately $9.2 million, increasing the payout ratio from 33% to 50%[4]. - The board proposed a final dividend of $0.027 per share for 2021, reflecting an increase in the payout ratio from 33% to 50% of net profit[21]. - The company declared a final dividend of USD 0.027 per share (approximately HKD 0.210) for the fiscal year 2021, pending shareholder approval[168]. Technology and Innovation - IMAX's unique end-to-end technology and strong brand association with blockbuster films position it as a preferred partner for local filmmakers in China[3]. - IMAX's laser network now covers 79 theaters, providing higher resolution and better image quality, which is expected to drive the next wave of upgrades in the Greater China commercial IMAX network[51]. - The company has shifted its focus to Chinese-language films due to delays in Hollywood releases, indicating a strategic pivot in response to market conditions[48]. - The IMAX technology network's revenue model includes three segments: IMAX DMR films, revenue-sharing arrangements, and sales and rental agreements, allowing for a diversified income stream[47]. Strategic Partnerships and Collaborations - The company has established partnerships with approximately 80 exhibitors, including major players like Wanda Film and Alibaba Pictures, enhancing its market presence[52]. - The revenue-sharing model allows exhibitors to expand their IMAX networks more rapidly by reducing upfront costs, aligning the interests of IMAX and its partners[47]. - The company continues to collaborate with local filmmakers to create IMAX-certified films, which has led to record box office results for Chinese-language films in the fiscal year 2021[49]. Management and Governance - Richard Gelfond has been the Chairman and Non-Executive Director since May 27, 2015, and has been a key shareholder and CEO of IMAX Corporation since 2009, providing strategic guidance[149]. - Chen Yuanpeng has been the CEO since December 9, 2019, focusing on expanding the company's leadership in the Greater China region[150]. - The company aims to enhance its market presence and operational strategies under the guidance of its executive team, including a focus on new product development and technology[152]. - The leadership team has a diverse background in the film and entertainment industry, contributing to strategic decision-making and operational management[153]. Risks and Challenges - The impact of the COVID-19 pandemic on IMAX's business and financial performance remains uncertain and dependent on various unpredictable factors, including the duration of the pandemic and government responses[54]. - The company faces risks from changes in laws and regulations, currency fluctuations, and economic downturns, which could impact future revenue and cash flow[67]. - The company does not currently hedge against currency fluctuations, which could adversely affect profitability if the USD/CNY exchange rate rises significantly[71]. Future Outlook - The company expects a favorable start to 2022 with unprecedented Hollywood films scheduled for release in China, including sequels to "Thor," "Doctor Strange," and "Jurassic World"[4]. - The company anticipates continued growth in the Chinese market, which is expected to be a major source of future revenue[46]. - The company plans to promote revenue-sharing arrangements to exhibitors with strong box office potential and successful track records[66].

Financial Performance - Total revenue for the six months ended June 30, 2021, was $53.431 million, a significant increase from $6.662 million in the same period of 2020[6]. - Gross profit for the same period was $33.123 million, compared to a gross loss of $4.042 million in 2020, resulting in a gross margin of 62.0%[6]. - The company reported a net profit of $19.198 million for the first half of 2021, a turnaround from a net loss of $35.248 million in 2020, with a net profit margin of 35.9%[6]. - Adjusted EBITDA for the first half of 2021 was $33.797 million, representing an adjusted EBITDA margin of 63.3%, compared to an adjusted EBITDA loss of $13.424 million in 2020[6]. - Operating profit improved to $24.96 million in the first half of the 2021 fiscal year from a loss of $22.4 million in the first half of the 2020 fiscal year[22]. - Adjusted profit for the first half of the 2021 fiscal year was $21.31 million, compared to a loss of $15.51 million in the first half of the 2020 fiscal year[24]. - The company recorded a total comprehensive income of $25.436 million for the six months ended June 30, 2021, compared to a total comprehensive loss of $40.460 million in the prior year[181]. Revenue Sources - Total box office revenue reached $132.828 million, a substantial increase from $7.393 million in the prior year[6]. - IMAX DMR film revenue was $11.493 million, accounting for 21.5% of total revenue, compared to $701, which was 10.5% of total revenue in the first half of 2020[12]. - IMAX technology network revenue rose from $1.1 million in the first half of the 2020 fiscal year to $21.7 million in the first half of the 2021 fiscal year, primarily due to a $125.4 million increase in box office revenue[26]. - Revenue share arrangements and contingent rents generated $10.210 million, representing 19.1% of total revenue, compared to $419, which was 6.3% of total revenue in the first half of 2020[12]. - IMAX technology sales and maintenance revenue increased from $5.4 million in the first half of fiscal 2020 to $31.7 million in the first half of fiscal 2021[30]. Operational Metrics - The company installed a total of 23 cinema systems in the first half of 2021, compared to 3 systems in the same period of 2020[6]. - The number of IMAX theaters grew from 714 in the first half of the 2020 fiscal year to 759 in the first half of the 2021 fiscal year, representing a 6.3% increase[27]. - The average revenue per new system from sales and rental arrangements increased from $1.2 million to $1.5 million, attributed to installations from large clients[33]. - The installation and maintenance business in mainland China returned to pre-pandemic levels as of June 30, 2021, with potential future impacts from COVID-19 outbreaks still a concern[11]. Cash Flow and Assets - The cash and cash equivalents balance as of June 30, 2021, was $115.25 million, up from $88.47 million as of December 31, 2020, reflecting a net increase of $26.78 million during the period[63]. - The company reported a net cash inflow from operating activities of approximately $16.1 million for the first half of the 2021 fiscal year, compared to a net cash outflow of $3.8 million in the same period of 2020[64]. - Investment activities generated a net cash inflow of approximately $15.0 million in the first half of 2021, mainly from the sale of investments, offset by $2.7 million invested in installing IMAX cinema equipment[66]. - As of June 30, 2021, the company's total current liabilities increased to $62.10 million as of June 30, 2021, from $59.48 million as of December 31, 2020, reflecting a rise of approximately 2.7%[60]. Financial Risks and Management - Financial risks include market risks (foreign exchange and interest rate risks), credit risks, and liquidity risks, which the company actively manages[191]. - The group faces foreign exchange risk primarily involving USD and RMB, with a potential impact of approximately $0.3 million on net performance if RMB appreciates/depreciates by 10% against USD[192]. - The group's floating-rate borrowings are exposed to interest rate risk, with a potential change of about $4,000 in after-tax profit for a 10 basis point change in interest rates[193]. - The company has implemented measures to support local film partners facing financial difficulties due to the pandemic, including waiving maintenance fees during theater closures[191]. Shareholder and Corporate Governance - The board recommended an interim dividend of USD 0.028 per share (approximately HKD 0.217) for the first half of the 2021 fiscal year[79]. - IMAX Corporation is the controlling shareholder of IMAX Barbados, which holds over 10% of the company's equity, thus qualifying as a related party under listing rules[96]. - The company is committed to complying with the listing rules regarding related party transactions, including reporting and independent shareholder approval as necessary[97]. - The company has maintained the required public float as per the listing rules throughout the reporting period[89]. Employee and Compensation Policies - The company aims to attract and retain talent through a compensation policy linked to annual performance[157]. - The total number of restricted stock units granted as of June 30, 2021, is 2,281,669, with 780,408 units vested and 592,379 units exercised[172]. - The performance-linked restricted stock units are subject to performance conditions over a three-year period, with potential additional units based on achieving an average annual EBITDA growth rate exceeding 12.5%[176]. Agreements and Contracts - The technology licensing agreement grants IMAX Shanghai Multimedia exclusive rights in China and IMAX Hong Kong in Hong Kong, Macau, and Taiwan for 25 years, renewable[109]. - The DMR service agreement has a term of 25 years, with an option to renew for an additional 25 years[117]. - The main issuance agreement allows IMAX Shanghai Multimedia and IMAX Hong Kong to screen Hollywood films in IMAX format, with fees based on a percentage of box office revenue[138].

Financial Performance - Total box office revenue for 2020 decreased by 72.9% to $99.2 million due to cinema closures and delayed Hollywood releases[9]. - The revenue for the Greater China region in the fiscal year 2020 was $52.3 million, a decrease of 57.9% year-over-year, with an adjusted net loss of $4.6 million[21]. - IMAX China reported total revenue of $52.33 million for 2020, a decrease of 57.9% compared to $124.29 million in 2019[47]. - The gross profit for 2020 was $19.35 million, down 74.8% from $76.65 million in the previous year, resulting in a gross margin of 37.0%[47]. - The company experienced a net loss of $26.74 million in 2020, representing a 162.3% increase in losses compared to a profit of $42.89 million in 2019[47]. - Adjusted EBITDA for 2020 was $7.78 million, a decline of 88.7% from $68.83 million in 2019, with an adjusted EBITDA margin of 14.9%[47]. - The company incurred a tax expense of $18.1 million in FY2020, up from $12.0 million in FY2019[86]. - The total comprehensive loss attributable to the company’s owners for FY2020 was $(14.7) million, compared to a comprehensive income of $36.6 million in FY2019[86]. Box Office and Market Share - In 2020, IMAX China generated box office revenue of approximately RMB 9.2 million, increasing market share from 2.8% to 3.6% compared to the same period last year[4]. - The market share of local films in IMAX increased to 2.7% in 2020, up 70 basis points from the previous year[4]. - The box office for the first weekend of the Chinese New Year broke records, increasing by approximately 45% compared to 2019[4]. - The Chinese Spring Festival box office reached a record of RMB 7.8 billion, with attendance of 160 million people[9]. - The revenue share from Chinese-language films increased from 31.4% to 66.3% year-over-year due to the pandemic's impact on Hollywood film releases[53]. - The top ten box office films in China for 2020 were all Chinese-language films, which were part of the IMAX lineup[68]. Network Expansion - IMAX China signed agreements with 38 theaters during the year, including 20 with Wanda and 12 with Jin Yi[4]. - The company expanded its network to 745 theaters across over 200 cities, achieving a penetration rate of 1.2%, an increase of 20 basis points year-on-year[4]. - IMAX China expects to reach over 1,000 theaters with 251 additional systems under contract by the end of 2020[6]. - The IMAX network in Greater China reached 996 theaters, with 251 systems under contract as of December 31, 2020[12]. - The number of IMAX cinema systems in the backlog decreased from 253 as of December 31, 2019, to 251 as of December 31, 2020[65]. - The number of IMAX cinemas under revenue-sharing agreements increased from 463 as of December 31, 2019, to 482 as of December 31, 2020[67]. Technology and Innovation - IMAX's laser projection system enhances the viewing experience with higher brightness, improved contrast, and a wider color gamut, contributing to its competitive advantage in the market[29]. - IMAX's laser system was installed in 8 new theaters and upgraded in 3 existing theaters in 2020, expanding the IMAX laser network to 50 theaters[55]. - The company specializes in digital and film animation technology within the entertainment industry[164]. - The company is focused on developing new technologies and products to enhance the cinematic experience, aligning with industry trends[156]. Strategic Focus and Partnerships - The company collaborates with approximately 80 exhibitors, including major players like Wanda Film and Guangzhou Jin Yi, leveraging unique relationships with Hollywood studios[56]. - IMAX's strategic focus remains on Chinese-language films, which resonate well with local audiences, especially in lower-tier cities[53]. - The company aims to enhance strategic revenue-sharing arrangements with exhibitor partners, which are expected to yield significant returns[58]. - The company plans to promote revenue-sharing arrangements to high-quality cinema operators with proven box office potential[70]. Cash Flow and Financial Management - The company continues to implement proactive cash management measures to preserve sufficient cash amid uncertainties related to the pandemic[60]. - The net cash generated from operating activities for the fiscal year 2020 was approximately $9.2 million, a significant decrease from $39.3 million in 2019[128]. - The company plans to utilize existing liquidity and raise additional funds as needed to support ongoing operations and administrative expenses[127]. - The company has drawn RMB 50 million (approximately $7.6 million) from its unsecured revolving credit facility as of December 31, 2020[137]. Leadership and Governance - The company aims to expand its leadership and participation in the Greater China region under the management of its CEO, Chen Yuanpeng[152]. - The board of directors includes members with extensive experience in the film and entertainment industry, contributing to strategic guidance and operational management[150]. - The company has a strong leadership team with significant experience in the film and entertainment sectors, contributing to its operational strategies[153][154]. Dividend and Shareholder Returns - The board proposed a final dividend of $0.02 per share for 2020, consistent with the previous year, and plans to increase the payout ratio from 33% to 50% starting in 2021[21]. - The company declared a final dividend of USD 0.02 per share, equivalent to approximately HKD 0.155 per share, for the fiscal year 2020[170]. Challenges and Risks - The pandemic significantly impacted the company's revenue, profit, and operating cash flow, leading to a substantial decline in total box office revenue[60]. - The company assessed the recoverability of receivables, resulting in an expected credit loss provision of $10.9 million for the year 2020[61]. - The performance of new IMAX cinemas is closely tied to the real estate market, with potential demand fluctuations impacting business outlook[71].

Financial Performance - Total revenue for the six months ended June 30, 2020, was $6.662 million, a decrease of 88.8% compared to $59.256 million for the same period in 2019[6]. - Gross loss for the same period was $(4.042) million, resulting in a gross loss margin of (60.7%), down from a gross profit margin of 69.3% in 2019[6]. - Net loss for the period was $(35.248) million, representing a net loss margin of (529.1%), compared to a net loss margin of 40.4% in 2019[6]. - Adjusted EBITDA for the six months was $(13.424) million, with an adjusted EBITDA margin of (201.5%), down from 64.2% in the previous year[6]. - Total box office revenue for the period was $7.393 million, a significant decline from $235.959 million in the same period of 2019[6]. - The adjusted loss per share for the period was $(0.10), compared to a profit of $0.07 per share in the same period of 2019[6]. - The company reported a significant increase in costs related to revenue-sharing arrangements, with a cost of $6,586 thousand for revenue-sharing arrangements, reflecting a 1,571.8% increase from the previous year[15]. - The company reported a net cash outflow from operating activities of approximately $3.8 million for the first half of the 2020 fiscal year, compared to a net inflow of $17.1 million in the same period of 2019[63][64]. - The company experienced a pre-tax loss of $21.7 million for the first half of 2020, highlighting the financial impact of operational challenges during this period[64]. - The total comprehensive loss for the period was $40,460 thousand, reflecting a significant increase from the previous year's loss[182]. Revenue Sources - IMAX technology sales and maintenance revenue is not directly linked to box office results, indicating a shift in revenue generation strategy[10]. - IMAX DMR film revenue dropped to $701 thousand, accounting for 10.5% of total revenue, down from $17,921 thousand and 30.2% in the prior year[13]. - IMAX technology network revenue fell by 96.7% from $33.7 million in the first half of the 2019 fiscal year to $1.1 million in the first half of the 2020 fiscal year[26]. - Revenue share arrangements and contingent rents fell by 97.3% from $15.8 million in the first half of the 2019 fiscal year to $0.4 million in the first half of the 2020 fiscal year[29]. - IMAX DMR film gross profit decreased from $15.3 million in the first half of fiscal 2019 to $0.7 million in the first half of fiscal 2020, a decline of 95.6%[47]. - The gross profit from revenue-sharing arrangements turned from a profit of $10.1 million in the first half of fiscal 2019 to a loss of $6.2 million in the first half of fiscal 2020, a decrease of 161.3%[48]. Operational Challenges - The company anticipates ongoing challenges even after theaters reopen, as consumer habits and spending may take time to return to normal[11]. - The impact of COVID-19 led to the closure of approximately 700 IMAX theaters in mainland China, resulting in a significant drop in revenue and operating cash flow[187]. - The company continues to face uncertainties related to the pandemic, which may affect its operational and financial performance in the near future[187]. - The company has implemented significant cash preservation measures, including reducing employee hours and minimizing non-essential capital expenditures, to manage the financial impact of the pandemic[11]. - The company anticipates that the recovery of consumer spending on movies may be delayed, impacting its ability to generate significant box office revenue[187]. Cash Flow and Liquidity - The cash and cash equivalents balance as of June 30, 2020, was $74.1 million, a decrease of $15.3 million from $89.3 million on December 31, 2019, with significant reductions in USD and RMB holdings[61]. - Operating cash flow for the six months ended June 30, 2020, was $(3,819) thousand, a significant decrease from $17,125 thousand in the same period of 2019, reflecting a decline due to the pandemic[183]. - The total cash flow from financing activities was $(8,983) thousand for the six months ended June 30, 2020, compared to $(19,247) thousand in the same period of 2019, showing a reduction in financing outflows[183]. - The company has drawn RMB 1.7 million from its unsecured revolving financing of up to RMB 200 million as of June 30, 2020, with no other bank borrowings or commitments[73]. - The total current liabilities decreased to $40.5 million as of June 30, 2020, from $43.5 million on December 31, 2019, indicating improved liquidity management[60]. Shareholder and Equity Information - The company declared an interim dividend of $0.02 per share for the first half of the 2020 fiscal year, equivalent to approximately HKD 0.155 per share[79]. - The company repurchased a total of 906,400 shares during the six months ended June 30, 2020, with a total expenditure of HKD 11,885,233.59[84]. - As of June 30, 2020, the company's total equity was $211,277 thousand, down from $259,031 thousand as of December 31, 2019, indicating a decrease of approximately 18.4%[182]. - The total number of shares that may be issued under the long-term incentive plan is capped at 35,532,500 shares[156]. - The company has approximately 108 employees, all located in Greater China, and aims to attract and retain talent through its compensation policy[155]. Related Party Transactions - The company engaged in related party transactions with IMAX Corporation, which is considered a related party under the listing rules[93]. - IMAX Shanghai Multimedia and IMAX Corporation entered into a personnel secondment agreement effective from August 11, 2011, lasting 25 years until October 28, 2036[94]. - The maximum annual fee for the personnel secondment agreement is set at $5,800,000 for the fiscal years 2018, 2019, and 2020[96]. - IMAX Corporation received approximately $210,000 under the trademark licensing agreement for the six months ended June 30, 2020[103]. - The company has received exemptions from compliance with certain listing rules regarding related party transactions, including DMR software licensing agreements and equipment supply contracts[146]. Risk Management - The group faces foreign exchange risk primarily related to transactions denominated in currencies other than its functional currency, mainly involving USD and RMB[188]. - The group has not changed its risk management policies since the end of the previous year[188]. - Management believes that the credit risk associated with trade receivables from product sales is not significant[191]. - The group expects limited credit risk from bank deposits and receivables from related companies due to their placement in banks with good credit ratings[192]. - The group monitors short-term and long-term liquidity needs through rolling forecasts to ensure sufficient cash and easily convertible securities for operational needs[193].