万华媒体(00426) - 2019 - 年度财报

Company Information The report provides essential company details including board members, committee members, company secretary, principal bankers, and auditors - The report provides a list of the company's board members, members of various committees (Audit, Remuneration, Nomination), and basic company information such as the company secretary, principal bankers, auditor, and registered office[3][4] Chairman's Statement Summary and Outlook Chairperson Ms. Zhang Cong noted a challenging year due to Hong Kong's economic slowdown impacting advertising spending, yet the Group advanced digital transformation, innovated advertising solutions, and retrained staff - Facing challenges from the slowdown in Hong Kong's GDP growth (from 3.8% to 3.0%), the Group is committed to the digital transformation of the media industry[7] - Business highlights include MING's becoming an independent publication, positioned as a high-end trend media, and two artists under management winning awards in ViuTV's talent shows, achieving results in artist management[8] - To optimize resource allocation and control costs, the Group sold its mainland China businesses (Beijing Wanhua Advertising and Beijing New Era Runcheng Technology) to local management[11] - Future strategy will continue to streamline non-core assets, focus on digital media platforms, and seek new strategic business investments to enhance synergy[12] Annual Highlights This section visually showcases the Group's key media brands, including MING PAO WEEKLY, MING WATCH, MING'S, and TopGear - This section visually showcases the Group's key media brands, including MING PAO WEEKLY, MING WATCH, MING'S, and TopGear[15][16][17][18] Management Discussion and Analysis Performance Summary This fiscal year, the Group's revenue from continuing operations increased by 3.8% to HKD 98.6 million, and loss after tax narrowed by 41% to HKD 12.11 million 2018/19 Fiscal Year Key Financial Indicators | Indicator | 2019 Fiscal Year (HKD Thousand) | 2018 Fiscal Year (HKD Thousand) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue from Continuing Operations | 98,600 | 94,971 | +3.8% | | Loss After Tax | (12,107) | (20,550) | +41% (Loss narrowed) | | Loss from Continuing Operations | (5,429) | (12,526) | +56.7% (Loss narrowed) | Business Review All business segments showed improvement, with Entertainment and Lifestyle achieving profitability and Watch and Automotive narrowing losses due to cost control and digital advertising growth Entertainment and Lifestyle Business This segment's revenue grew by 4.5% to HKD 81.46 million, turning a profit of HKD 2.75 million from a previous loss, driven by digital advertising and cost control Entertainment and Lifestyle Business Performance | Indicator | 2019 Fiscal Year (HKD Thousand) | 2018 Fiscal Year (HKD Thousand) | Change | | :--- | :--- | :--- | :--- | | Revenue | 81,461 | 77,953 (Estimated) | +4.5% | | Segment Result | 2,746 (Profit) | (6,518) (Loss) | Turned profitable | Watch and Automotive Business and Others This segment's revenue slightly increased by 0.7% to HKD 17.14 million, with segment loss narrowing from HKD 3.63 million to HKD 1.45 million due to reduced operating costs Watch and Automotive Business and Others Performance | Indicator | 2019 Fiscal Year (HKD Thousand) | 2018 Fiscal Year (HKD Thousand) | Change | | :--- | :--- | :--- | :--- | | Revenue | 17,139 | 17,018 | +0.7% | | Segment Loss | (1,453) | (3,627) | Loss narrowed | - Artists under the Group's artist management company, "Top Talent Production Limited," won second place in ViuTV's "King Maker" and first place in "Advertising Queen," successfully entering the entertainment industry and enhancing their commercial performance potential[23] Discontinued Operations The Group announced the disposal of Beijing Wanhua Advertising Co., Ltd. and Beijing New Era Runcheng Technology Consulting Co., Ltd. on July 20, 2018, thereby ceasing its business operations in mainland China - The Group has sold all its mainland China businesses to concentrate resources[25] Outlook Management anticipates a challenging new fiscal year due to the ongoing US-China trade war impacting business confidence, focusing on digital product enhancement, advertising innovation, and operational efficiency - The new fiscal year is expected to be challenging, primarily due to the impact of the US-China trade war on business confidence[27] - The Group's strategic focus is on improving digital products, enhancing digital advertising, recruiting digital talent, and increasing operational efficiency[27] Liquidity, Financial Resources, and Gearing Ratio At fiscal year-end, the Group's net current assets were HKD 23.69 million, total equity was HKD 54.05 million, and with no bank borrowings, the gearing ratio was zero, indicating a robust financial position Financial Position Overview (As at March 31, 2019) | Indicator | Amount (HKD Thousand) | | :--- | :--- | | Net Current Assets | 23,690 | | Total Equity Attributable to Owners | 54,052 | | Bank Borrowings | 0 | | Gearing Ratio | 0 | Employees As of March 31, 2019, the Group had approximately 152 employees, a decrease from 193 in the prior year, reflecting business adjustments and resource optimization - The number of employees decreased from 193 to 152, a year-on-year decrease of approximately 21%[37] Directors' Report Principal Activities and Results The company primarily engages in investment holding, with the Board not recommending any dividend payment for the current fiscal year, and distributable reserves totaling HKD 97.66 million - The principal activity of the Company is investment holding[40] - The Directors do not recommend the payment of any dividend for the year ended March 31, 2019[43] - As at March 31, 2019, the Company's total distributable reserves amounted to HKD 97.661 million[45] Directors' and Major Shareholders' Interests The report details board members, changes, service contracts, and shareholdings of directors and major shareholders in the company and its associated corporations, with Comwell Investment Limited holding 73.01% of shares - Tan Sri Dato' Tiong Hiew King resigned as a Non-executive Director on April 1, 2019[49] Major Shareholder's Shareholding (As at March 31, 2019) | Shareholder Name | Number of Shares Held | Capacity | Percentage of Issued Ordinary Shares | | :--- | :--- | :--- | :--- | | Comwell Investment Limited | 292,700,000 | Beneficial Owner | 73.01% | - Comwell Investment Limited is an indirect wholly-owned subsidiary of Media Chinese International Limited[69] Competing Business The report states that while the holding company, Media Chinese International, operates in media, its publications and readership differ from the Group's, ensuring no substantive competition and independent operation - The Board believes that despite the holding company, Media Chinese International, being in the media industry, its business does not compete with the Group's due to distinct publication content and readership, ensuring clear business boundaries[80] Corporate Governance Report Compliance Status The company has adopted and consistently complied with the Code Provisions of the Hong Kong Corporate Governance Code throughout the fiscal year, with all directors confirming compliance with securities trading standards - The Company has consistently complied with the Code Provisions of the Corporate Governance Code throughout the fiscal year[84] Governance Structure The Board of Directors has an Executive Committee, Remuneration Committee, Nomination Committee, and Audit Committee, with detailed compositions and functions ensuring checks and balances and professional decision-making - The Board of Directors has four main committees: Executive Committee, Remuneration Committee, Nomination Committee, and Audit Committee[99][101][104][109] - The Audit Committee, composed of three independent non-executive directors, oversees the relationship with external auditors, reviews financial information, and evaluates internal control systems[109][110] Risk Management and Internal Control The Board is responsible for establishing and maintaining robust risk management and internal control systems, with systematic procedures for identifying, assessing, and managing significant risks, reviewed and deemed effective during the year - The Board confirms its responsibility to ensure the establishment and maintenance of effective risk management and internal control systems[125] - The Group's risk management process is implemented step-by-step, with risks identified by departmental heads, reviewed by the risk management unit, and ultimately monitored by the Executive Committee (as the Risk Management Committee) which reports to the Board[126][128] - The Board has reviewed and concluded that the Group has adopted effective risk management and internal control systems to safeguard shareholders' investments and Group assets[130][131] Independent Auditor's Report Audit Opinion PricewaterhouseCoopers issued an unmodified opinion on the consolidated financial statements, affirming they fairly present the Group's financial position, performance, and cash flows as of March 31, 2019, in accordance with IFRS - The auditor believes the consolidated financial statements fairly present the Group's financial position, performance, and cash flows, and are properly prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance[138] Key Audit Matters A key audit matter involved assessing the carrying value of the trademark for the "Ming Pao Weekly" cash-generating unit, where management's judgment on impairment reversal was evaluated and deemed supported by evidence - A key audit matter concerns the impairment assessment of the trademark's carrying value (HKD 4.8 million) for the Ming Pao Weekly cash-generating unit[144] - Management assessed indications for reversal of past impairment losses but, after further judgment, concluded that estimates used to determine recoverable amounts (e.g., growth rates, discount rates) remained unchanged, thus not supporting a reversal; the auditor reviewed this and found the conclusion reasonable[144][145][146] Consolidated Financial Statements Consolidated Statement of Profit or Loss This fiscal year, the Group's revenue was HKD 98.6 million, a 3.8% year-on-year increase, with total loss for the year significantly narrowing to HKD 12.11 million from HKD 20.55 million last year, and basic loss per share at HKD 3.0 cents Consolidated Statement of Profit or Loss Summary (For the year ended March 31) | Indicator (HKD Thousand) | 2019 | 2018 (Restated) | | :--- | :--- | :--- | | Revenue (Continuing Operations) | 98,600 | 94,971 | | Operating Loss (Continuing Operations) | (5,217) | (12,924) | | Loss for the Year (Continuing Operations) | (5,429) | (12,526) | | Loss for the Year (Discontinued Operations) | (6,678) | (8,024) | | Total Loss for the Year | (12,107) | (20,550) | | Basic Loss Per Share (HK cents) | (3.0) | (5.1) | Consolidated Statement of Financial Position At fiscal year-end, the Group's total assets were HKD 70.94 million, a significant decrease from HKD 131.49 million last year, primarily due to fair value changes in financial assets, with total liabilities at HKD 16.89 million and total equity at HKD 54.05 million Consolidated Statement of Financial Position Summary (As at March 31) | Indicator (HKD Thousand) | 2019 | 2018 | | :--- | :--- | :--- | | Total Assets | 70,943 | 131,486 | | Non-current Assets | 30,416 | 78,511 | | Current Assets | 40,527 | 52,975 | | Total Liabilities | 16,891 | 19,795 | | Current Liabilities | 16,837 | 19,745 | | Total Equity | 54,052 | 111,691 | Consolidated Statement of Cash Flows This fiscal year saw a net cash outflow from operating activities of HKD 7.48 million, a reduction from the prior year, with net cash inflow from investing activities of HKD 0.63 million, and year-end cash and cash equivalents balance of HKD 22.84 million Consolidated Statement of Cash Flows Summary (For the year ended March 31) | Indicator (HKD Thousand) | 2019 | 2018 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (7,481) | (11,161) | | Net Cash From Investing Activities | 628 | 1,668 | | Net Decrease in Cash and Cash Equivalents | (6,853) | (9,493) | | Cash and Cash Equivalents at Year End | 22,843 | 29,761 | Notes to the Consolidated Financial Statements Summary of Significant Accounting Policies The consolidated financial statements are prepared under IFRS, with new standards like IFRS 9 and IFRS 15 applied this year, impacting financial asset classification and revenue recognition without restating comparative figures - This year, IFRS 9 and IFRS 15 were first adopted, changing accounting policies for financial asset classification, measurement, impairment, and revenue recognition[176][184] Revenue and Segment Information The Group's continuing operations are primarily divided into "Entertainment and Lifestyle" and "Watch and Automotive and Others" segments in Hong Kong and Taiwan, with the former being the main revenue source (82.6%) and now profitable 2019 Fiscal Year Segment Results (HKD Thousand) | Segment (Continuing Operations) | Revenue | Segment Profit/(Loss) | | :--- | :--- | :--- | | Entertainment and Lifestyle Business | 81,461 | 2,746 | | Watch and Automotive Business and Others | 17,139 | (1,453) | | Subtotal | 98,600 | 1,293 | Disposal of Subsidiaries and Discontinued Operations This year, the Group disposed of its two mainland China subsidiaries (Beijing Wanhua Advertising and Beijing Runcheng Technology), formally ceasing its magazine business in mainland China, resulting in a HKD 1.64 million loss on disposal and HKD 5.04 million pre-tax loss from discontinued operations - The Group disposed of Beijing Wanhua Advertising and Beijing Runcheng Technology, ceasing its mainland China operations[296] Discontinued Operations Performance (HKD Thousand) | Indicator | 2019 | 2018 | | :--- | :--- | :--- | | Loss After Income Tax | (5,037) | (8,024) | | Net Loss on Disposal of Subsidiaries | (1,641) | - | | Total Loss from Discontinued Operations | (6,678) | (8,024) | Related Party Transactions The Group engages in various ordinary course business transactions with its ultimate parent company, Media Chinese International, and its fellow subsidiaries, including administrative support, IT services, office leases, and distribution support, all conducted on a cost-reimbursement or market-reference basis - Key related party transactions include payments to fellow subsidiaries for administrative support and IT services (HKD 5.34 million) and office lease fees (HKD 2.58 million)[341][342] Five-Year Financial Summary Five-Year Financial Data Over the past five years, the Group's revenue consistently declined from HKD 179.25 million in FY2015 to HKD 98.6 million this fiscal year, with continuous losses and a significant decrease in total assets, reflecting industry challenges and business contraction Five-Year Performance and Balance Sheet Summary (HKD Thousand) | For the year ended March 31 | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 98,600 | 94,971 | 104,094 | 137,247 | 179,248 | | Loss Attributable to Owners | (12,107) | (20,550) | (62,019) | (15,605) | (11,072) | | Total Assets | 70,943 | 131,486 | 85,124 | 147,887 | 167,740 | | Capital and Reserves Attributable to Owners | 54,052 | 111,691 | 85,052 | 147,773 | 167,495 |