FINANCIAL on Sundays. Furthermore, a new police TV drama, Tiger Cubs was scheduled on Saturday and Sunday

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  • FINANCIAL HIGHLIGHTS

    Six months ended 30 June 2012 2011 Change

    Performance Earnings per share Interim dividend per share

    Turnover - Hong Kong TV broadcasting - Programme licensing and distribution - Overseas satellite pay TV operations - Taiwan operations - Channel operations - Other activities - Inter-segment elimination

    Total expenses Share of losses of associates Profi t attributable to equity holders

    Total assets Total liabilities Total equity Number of issued shares Ratios Current ratio Gearing

    HK$1.94 HK$0.60

    HK$’mil

    1,335 463 187 428 54 76 (92 ) 2,451 (1,451 ) - 850

    30 June 2012 HK$’mil

    8,924 1,735 7,189 438,000,000

    4.0 3.0%

    HK$1.64 HK$0.45

    HK$’mil

    1,293 425 193 419 58 62 (85 ) 2,365 (1,338 ) (29 ) 719

    31 December 2011 HK$’mil

    8,834 1,741 7,093 438,000,000

    4.2 3.1%

    +18% +33%

    +3% +9% -3% +2% -7% +23% +8% +4%

    +8% -100% +18%

    +1% 0% +1%

    YEAR

    6,000

    5,000

    4,000

    3,000

    2,000

    1,000

    0

    HK $’

    m ill

    io n

    HK $’

    m ill

    io n

    1st Half 2nd Half

    Turnover

    Profit Attributable to Equity Holders of the Company

    YEAR

    1,800

    1,600

    1,400

    1,200

    1,000

    800

    600

    400

    200

    0

    20092008 2010 2011 2012

    20092008 2010 2011 2012

    1st Half 2nd Half

    Turnover by Operating Segment

    Hong Kong TV broadcasting 54% (54%)

    Programme licensing and distribution 16% (15%)

    Overseas satellite pay TV operations 8% (8%)

    Taiwan operations 17% (18%)

    Other activities 3% (3%)

    Channel operations 2% (2%)

    Reportable Segment Profit by Operating Segment

    Hong Kong TV broadcasting 46% (51%)

    Programme licensing and distribution 30% (27%)

    Overseas satellite pay TV operations 4% (5%)Taiwan

    operations 18% (14%)

    Channel operations 1% (2%)

    Other activities 1% (1%)

    % relating to 1st half of 2011 are shown in brackets % relating to 1st half of 2011 are shown in brackets

  • 1Television Broadcasts Limited Interim Report 2012

    CONTENTS

    2 CORPORATE INFORMATION

    4 CHAIRMAN’S STATEMENT

    REVIEW OF OPERATIONS

    5 Hong Kong TV Broadcasting

    7 Digital Business Development

    8 Other Hong Kong Operations

    8 International Operations

    10 Financial Review

    13 CORPORATE GOVERNANCE AND OTHER INFORMATION

    FINANCIAL INFORMATION

    20 Interim Financial Information

    41 Report on Review of Interim Financial Information

  • 2 Television Broadcasts Limited Interim Report 2012

    CORPORATE INFORMATION CORPORATE INFORMATION

    CHAIRMAN EMERITUS Sir Run Run SHAW, G.B.M.

    EXECUTIVE CHAIRMAN Dr. Norman LEUNG Nai Pang, G.B.S., LL.D., J.P. (appointed on 1 January 2012)

    BOARD OF DIRECTORS

    EXECUTIVE DIRECTORS

    Dr. Norman LEUNG Nai Pang, Executive Chairman

    Mark LEE Po On, Group General Manager

    NON-EXECUTIVE DIRECTORS

    Mona FONG (re-designated as a Non-executive Director on 1 April 2012)

    Kevin LO Chung Ping

    Dr. Charles CHAN Kwok Keung

    Cher WANG Hsiueh Hong

    Jonathan Milton NELSON

    Anthony LEE Hsien Pin (appointed on 3 February 2012)

    CHEN Wen Chi (appointed on 3 February 2012)

    INDEPENDENT NON-EXECUTIVE DIRECTORS

    Dr. CHOW Yei Ching, G.B.S.

    Edward CHENG Wai Sun, S.B.S., J.P.

    Chien LEE

    Gordon SIU Kwing Chue, G.B.S., J.P.

    ALTERNATE DIRECTORS

    Dr. Allan YAP, Alternate Director to Dr. Charles Chan Kwok Keung

    Harvey CHANG Hsiao Wei, Alternate Director to Cher Wang Hsiueh Hong (appointed on 3 February 2012)

    SUN Tao, Alternate Director to Jonathan Milton Nelson (appointed on 18 June 2012)

    BOARD COMMITTEES

    EXECUTIVE COMMITTEE

    Dr. Norman LEUNG Nai Pang, Chairman

    Mark LEE Po On

    Mona FONG

    Kevin LO Chung Ping

    Dr. Charles CHAN Kwok Keung (appointed on 21 March 2012)

    CHEN Wen Chi (appointed on 21 March 2012)

    AUDIT COMMITTEE

    Gordon SIU Kwing Chue, Chairman

    Chien LEE

    Kevin LO Chung Ping

    REMUNERATION COMMITTEE

    Chien LEE, Chairman

    Edward CHENG Wai Sun

    Gordon SIU Kwing Chue

    NOMINATION COMMITTEE (established on 21 March 2012)

    Dr. CHOW Yei Ching, Chairman

    Anthony LEE Hsien Pin

    Edward CHENG Wai Sun

    EXECUTIVE OFFICERS

    SENIOR MANAGEMENT

    Mark LEE Po On, Group General Manager

    CHEONG Shin Keong, General Manager – Broadcasting

    COMPANY SECRETARY

    Adrian MAK Yau Kee

  • 3Television Broadcasts Limited Interim Report 2012

    REGISTERED OFFICE TVB City, 77 Chun Choi Street

    Tseung Kwan O Industrial Estate

    Kowloon, Hong Kong

    AUDITOR PricewaterhouseCoopers

    22/F, Prince’s Building

    Central, Hong Kong

    PRINCIPAL BANKERS Shanghai and Commercial Bank Limited

    The Bank of East Asia, Limited

    The Hongkong and Shanghai Banking Corporation Limited

    SHARE REGISTRARS AND TRANSFER OFFICE Computershare Hong Kong Investor Services Limited

    Rooms 1712-1716, 17th Floor

    Hopewell Centre

    183 Queen’s Road East

    Wan Chai, Hong Kong

    AMERICAN DEPOSITARY RECEIPTS The Bank of New York Mellon

    PO Box 358516

    Pittsburgh, PA 15252-8516

    USA

    STOCK CODES Ordinary Shares

    The Stock Exchange of Hong Kong 00511

    Reuters 0511.HK

    Bloomberg 511 HK

    ADR Level 1 Programme TVBCY

    WEBSITE www.tvb.com

  • 4 Television Broadcasts Limited Interim Report 2012

    CHAIRMAN’S STATEMENT CHAIRMAN’S STATEMENT

    The Board of Directors of Television Broadcasts Limited (“Board”) is pleased to present the 2012 interim report and condensed consolidated financial information for the six months ended 30 June 2012 (“Period”) of Television Broadcasts Limited (“Company” or “TVB”) and its subsidiaries (collectively, “Group”), which are set out on pages 20 to 40 to this report.

    RESULTS AND INTERIM DIVIDEND For the Period, the Group’s turnover increased by 4% from HK$2,365 million to HK$2,451 million, and the profit before income tax increased by 1% from HK$1,025 million to HK$1,031 million. The Group’s profit attributable to equity holders increased by 18% from HK$719 million to HK$850 million, giving an earnings per share of HK$1.94 (2011: HK$1.64). I am very pleased to report that this represents another record profit attributable to equity holders for the first half of a year.

    An interim dividend of HK$0.60 (2011: HK$0.45) per share has been declared for the 438,000,000 shares in issue of HK$0.05 each in respect of the Period. This interim dividend will be paid to shareholders on or around 5 October 2012, whose names are recorded on the Register of Members on 26 September 2012.

    BUSINESS AND OUTLOOK We continued to invest and produce drama serials and a wide genre of programmes to engage our audience in Hong Kong. During the Period, we succeeded in further increasing our ratings and market share for Jade and Pearl channels over last year. We saw a growth of 5.7% in advertising revenue from terrestrial TV broadcasting in Hong Kong over the same period of last year.

    Under the current inflation cycle in Hong Kong, we reviewed and adjusted in July the salaries and wages of our employees to keep pace with the living cost increases and to award our better performers. These efforts, although gave rise to increase in costs, helped maintain a robust workforce. We will continue to develop the television industry through our development programmes for script writers and artistic talents who will become an important part of our production team in the years to come.

    On 8 August 2012 and after receiving the final approval and a business licence certificate from the relevant PRC authorities, we commenced our joint venture with the Shanghai Media Group and China Media Capital to further our business development including programme licensing and distribution business in mainland China. This marked the beginning of a very significant step forward for our business operations in the Mainland. I would like to wish the joint venture every success, and look forward to working closely with our partners in this venture.

    Norman Leung Nai Pang Executive Chairman

    Hong Kong, 22 August 2012

  • 5Television Broadcasts Limited Interim Report 2012

    REVIEW OF OPERATIONS

    HONG KONG TV BROADCASTING

    TV ADVERTISING

    Advertising revenue from Hong Kong terrestrial TV broadcasting for the Period grew by 5.7% from HK$1,206 million to HK$1,274 million. Growth in revenue from the second quarter of 2012 was significant, given that the second quarter is usually a quiet quarter amongst the four quarters.

    Spending in skin care/cosmetic products continued to show modest growth, and milk powder spending maintained its low double-digit growth. Digital/electronics equipment (cameras, mobile phones, tablet computers), restaurants and supermarket/stores contributed strong advertising revenue. With the exception of lending services/finance companies, spending in financial services categories (including banks and credit card