Annual Report 2003 - Clear Media

OUR GOAL IS TO BE
THE BEST
AND
THE MOST SUCCESSFUL
OUTDOOR ADVERTISING COMPANY
IN CHINA
Contents
Fact Sheet at a Glance 2
Corporate Profile 3
Letter from the Chairman 4
Interview with the CEO 7
Management Discussion and Analysis 12
• Business Review
• Operations Review
• Financial Review
Corporate Governance Report 28
FAQ 38
The Power of Our Network 40
Biographies of Directors 42
Report of the Directors 47
Report of the Auditors 60
Consolidated Profit and Loss Account 61
Consolidated Balance Sheet 62
Consolidated Summary Statement of Changes in Equity 63
Consolidated Cash Flow Statement 64
Balance Sheet 65
Notes to Financial Statements 66
Notice of Annual General Meeting 90
Glossary 93
Financial Summary 95
Corporate Information 96

FACT SHEET AT A GLANCE
31.8%
The Public
14.1%
The Capital Group
Companies,Inc.
6.0%
Outdoor Media
China,Inc.
48.1%
Clear Channel
Outdoor,Inc.
Shareholding Structure
As of 31 December 2003
SHAREHOLDER INFORMATION AS OF 31 DECEMBER 2003
Clear Channel Outdoor, Inc. 48.1%
The Public 31.8%
The Capital Group Companies, Inc. 14.1%
Outdoor Media China, Inc. 6.0%
NOMINAL VALUE:
HK$0.1 per share
LISTING:
Main Board of
The Stock Exchange of Hong Kong Limited
LISTING DATE: 19 December 2001
ORDINARY SHARES
Share outstanding as of 31 December 2003
501,608,500 shares
Free Float
159,612,000 shares
MARKET CAPITALIZATION
At HK$5.10 per share
HK$2.6 billion
(based on closing price on 31 December 2003)
STOCK CODE
Hong Kong Stock Exchange 100
Reuters
0100.HK
Bloomberg
100 HK
FINANCIAL YEAR END
31 December
Clear Media Limited
Annual Report 2003
02

CORPORATE PROFILE
Clear Media
is the largest outdoor media company in China
listed on the main board of
The Stock Exchange of Hong Kong, and
derives 100%
of its revenue from the PRC. One of our unique
strengths is our strong shareholder base –
a union of Clear Channel (NYSE: CCU),
the world’s largest outdoor media company, and
White Horse, a renowned diversified company in China.
In the past six years of operation, Clear Media has
created a standardized bus shelter network that
covers 30 key cities and reaches the most affluent consumers
in China. The Group enjoys an average 50+% market share
in all key cities and serves leading international
and local advertisers.
THE AGE OF
CONSUMERS
03

LETTER FROM THE CHAIRMAN
Clear Media Limited
Annual Report 2003
04

LETTER FROM THE CHAIRMAN
Dear Fellow Shareholders,
2003 was a year of striking local contrasts with global implications – challenging us in the first
half with SARS and thrilling us in the second half with the triumphant space journey of Yang
Liwei, China’s first astronaut/taikonaut.
What remained constant in 2003 was Clear Media’s market leadership in times of both trial
and triumph. Our earnings were $16.3 cents per share, which is up 15% over last year, driven
by solid double-digit growth with a strong and sustainable EBITDA margin of 40+% and a net
profit margin of 15+%. For the sixth year in a row!
Consistent with the operating philosophy of our largest shareholder, Clear Channel Worldwide
(NYSE: CCU), we believe free cash flow is an important metric in determining a company’s
ability to provide value to shareholders. Clear Media reached this milestone in 2003 and we
will keep the momentum of this free cash flow machine going so that it continues to pay off for
years to come.
China’s market development is evolving so rapidly that the Brand Revolution is dawning into
The Age of Consumers. This promises to be an era of tremendous growth for both global and
local brands in China – with global brands reinventing themselves to be more relevant to local
tastes, and local brands spreading nationwide on their way to worldwide release and recognition.
Throughout these dynamic changes, our reason for being remains constant – to connect
consumers and brands in the dazzling street theater of today’s Chinese cities. In the PRC, as
the “glocalization” of brands accelerates in the Middle Kingdom, our world-class media network,
covering the country’s thirty key cities, continues to reach the most affluent consumers where
they work, live and play.
• For thirsty consumers, brands that refresh and recharge this go-go generation.
• For hungry consumers, brands that fuel life in the fast lane.
• For mobile consumers, brands that meet the lifestyle needs of movers & shakers.
• For youthful consumers, brands that groove to the hip-hop beat of life in the city.
• For health-conscious consumers, brands that keep them looking and feeling their best.
• And for fashion-conscious consumers, we’re moving brands from the catwalk to the sidewalk.
All these consumer types and more coexist in the marvelous tapestry that is today’s China.
Whether advertisers are trying to reach the fast-track or the laid-back, the powerful advantage
of our standardized network is our ability to mix and match panels, locations and cities to
ensure the right message meets the right buyers. We're always on, we're always there, and
we’re always reaching consumers – one individual at a time.
THE AGE OF
CONSUMERS
05

LETTER FROM THE CHAIRMAN
Outdoor advertising continues to be the fastest-growing medium in China and the only media
sector in which foreign ownership is allowed. Integrating the global expertise of Clear Channel
Worldwide with the local knowledge of a trusted partner, our mass media network of choice
continues to thrive.
Our 2004 action plan calls for
• Continuing our focus on China’s most affluent and influential consumers.
• Offering innovative “slice-and-dice” packages to our advertisers to meet strategic needs
and targeted ad campaigns.
• Increasing the occupancy of our panels and the overall yield of our assets.
• Employing a core-plus-more strategy where we identify and aggressively launch into media
segments that complement our core business.
• Leading the much-needed consolidation of our industry.
Clear Media is the gold standard for outdoor advertising in China. And because our success is
built on a formula that benefits everyone, the Age of Consumers will be a Golden Age for our
shareholders, advertisers, employees, consumers, and the communities we serve.
To paraphrase a famous expression: We ain’t seen nothin’ yet. Clear Media is pleased to be an
integral part of this sea of change in consumerism. Our commitment to capitalizing on this
momentum to provide long-term, superior value to all our constituents will remain constant
in China’s rapidly changing market landscape.
We are especially grateful to you, our shareholder. It is your trust and support that gives us the
inspiration to dream and the power to succeed. Thank you!
Steven Yung
Chairman of the Board
Clear Media Limited
Hong Kong, 26 February 2004
Clear Media Limited
Annual Report 2003
06

INTERVIEW WITH THE CEO
THE AGE OF
CONSUMERS
07

INTERVIEW WITH THE CEO
Q: 2003 was a dramatic year. What were the highlights for Clear Media?
A: Many industries experienced ups and downs in 2003, and this was the most difficult
year I’ve had since joining the Company in 1998. In the beginning of this year, the SARS
outbreak and the war in Iraq dealt a harsh blow to the recovering global economy. The fastdeveloping
advertising industry was one of the first industries to be affected and was caught in
an economic trough for the third year in a row.
However, it is encouraging that Clear Media was still able to maintain stable growth in 2003
while others in the industry lagged behind. The annual turnover, EBITDA and EBITDA margin
recorded an increase of 14%, 16% and 1%, respectively, demonstrating the diligence of our
staff members, from the sales force to the management team. As the leading outdoor media
company in the PRC, we endeavor to satisfy the needs of our clients through the utilization of
our leading position, our unique understanding of and insight into the market, and our flexible
measures in coping with market changes and client demands, such as strengthening the
communication between our sales team and our clients, and launching a new advertisement/
network portfolio. In addition, we launched innovative scrollers and three-dimensional
(“3-D”) display panels in Shanghai and Guangzhou, which not only emphasized the messages of
the advertisers, but also injected vitality into the market and accelerated our development in
the PRC’s outdoor advertising market.
Q: Were there any substantial changes in the client mix and, if so, why?
A: Clear Media offers a cost-effective outdoor advertising platform that enables advertisers
to capture new business opportunities by efficiently delivering their messages to target
consumers. Leveraging on its extensive standardized network, Clear Media continued to develop
its client base. Last year, the number of clients with orders over RMB5 million increased from
9 to 18, while clients with orders over RMB3 million increased from 31 to 47. This remarkable
performance reflects the recognition and support we enjoy from advertisers across the country.
For Clear Media’s client mix by industry, all domestic and international brands grew, especially
in the second half of 2003, when the five top advertising industries were telecommunications,
beverages, cosmetics and toiletries, pharmaceuticals, and home appliances. Fashion,
automobiles, and banking and financial services recorded the fastest growth during this time,
because of enhanced living standards in the PRC and an increase in commercial activities.
Clear Media Limited
Annual Report 2003
08

INTERVIEW WITH THE CEO
Q: How did Clear Media develop in different cities in 2003? Are markets
in the key cities becoming saturated? Is there room for growth? And what
are the differences in the Company’s development strategies between key
cities and mid-tier cities?
A: On average, the market share of Clear Media was over 50%, with a 95% share in Guangzhou
and Shanghai. However, outstanding market share does not mean market saturation. Clear Media
continues to develop with a view to maintaining stable and impressive growth. In Guangzhou,
urban reconstruction pushed commercial and transportation networks towards the city fringe,
accelerating the building of new bus shelters and the renovation of existing bus shelters. The
modernized facilities and improved appearance spurred further development of Clear Media’s
bus shelter network. Because the economy and living standards in Shanghai are improving, we
were able to extend our core business in the second half of 2003 to include taxi stand advertising,
enabling our advertisers to deliver their messages to a more affluent target audience.
For development in mid-tier cities, Nanjing, Hangzhou and Xian achieved the best results. We
expect economic development in mid-tier cities to approach that of key cities and for advertisers
to begin entering these markets in larger numbers; therefore, we plan to strengthen our sales
team in mid-tier cities and set up more sales centers.
Q: In September 2003, the PRC government announced the “Interim
Procedures for Advertisement Broadcasting Management in Radio
Broadcasting and Television” (“Procedures”), which regulate television
advertising. What effect will they have on the advertising market?
A: The newly implemented “Procedures” restrict the length, content, time slot and format
of product demonstrations and advertising messages, reducing opportunities for advertisers to
reach their target audience and promote the sale of new products. Clear Media bus shelters are
always-on and always in step with consumer behavior. Furthermore, whereas advertising is an
interruption to regular programming on television, the advertisements themselves are the content
of our show, making outdoor the best platform for reaching out-of-home consumers.
THE AGE OF
CONSUMERS
09

INTERVIEW WITH THE CEO
Q: What are the trends for future development and competition in
outdoor advertising in the PRC?
A: Local and foreign brands are looking to capture every business opportunity in this “Age
of Consumers” in the PRC, making advertising one of the most flourishing industries. Media
companies of all sizes would like to enter the industry, which sharpens the competition. As
brand evolution continues, savvy consumers are no longer concentrated in a few large cities
and advertisers are targeting consumers with spending power in mid-tier cities. We believe
only experienced enterprises with modern advertising creatives and a good sales network can
effectively reach a wide range of consumers. Clear Media’s nationwide standardized network
satisfies the needs of advertisers. We expect consolidation of the advertising industry to continue,
with small and mid-cap operators being eliminated or acquired while large-scale enterprises
continue to lead the market.
As the market develops, demands of the advertisers and consumers will increase. The scale and
efficiency of a company’s network and its service quality will be the keys to success. Clear Media
will strengthen its network coverage and penetration and enhance the capabilities of its sales
team by recruiting experienced professionals and thoroughly training them. Meanwhile, we will
develop new products and explore new outdoor media formats so that we can offer our advertisers
creative, practical products that they can use to satisfy the needs of their consumers.
Q: What will be the emphasis of the development plan in 2004?
A: In 2004, Clear Media will continue to focus on the development of its bus shelter
business. With robust economic development in China, the future of the outdoor advertising
industry is very promising. With its comprehensive standardized network, Clear Media has
been the pioneer and leader in the market. Our nationwide network offers the most direct,
effective and influential advertising channel available. In addition to increasing the number of
our advertising panels and extending our network coverage, we will strive to enhance the
efficiency of our existing network, and develop new products and innovative display panels.
Clear Media will capture appropriate opportunities in new media business development in order
to become a more comprehensive outdoor media supplier and continue our unrivalled success.
Clear Media Limited
Annual Report 2003
10

INTERVIEW WITH THE CEO
Q: What is the strategy for further growth in 2004? As advertising
expenditure by domestic and foreign enterprises increases in 2004, can
Clear Media’s network cope with the increased demand?
A: We are confident of the promising future of the domestic outdoor advertising industry.
According to the orders currently in hand, the number of clients and the contract sums are
increasing, representing advertisers’ recognition of the value of our standardized, nationwide
network. Clear Media will cooperate with domestic and foreign brands to realize the potential
of the outdoor advertising market. Our target this year is to add 3,000 additional advertising
panels. We will actively seek suitable acquisition opportunities to ensure stable network
expansion and to achieve our goals. To meet the increasing demand of advertisers for innovative
advertising panels, we will strengthen the development and launch of creative products while
considering the development of new outdoor media.
Q: Are there any specific financial goals or strategies, such as reducing
accounts receivable?
A: We endeavor to maintain a sound and solid financial foundation. In 2003, we successfully
improved our cash management and, for the first time, recorded a positive cash flow of
HK$50 million. We established a special team last year to improve our cash collection and
restructured the commission policy of our sales team. Monitoring was intensified during the
outbreak of SARS to ensure better cash collection. The average accounts receivable outstanding
days from independent third parties for 2003 decreased from 143 days at year-end 2002, to
129 days at year-end 2003. We will focus on maintaining average accounts receivable outstanding
days at below 120 days. Despite the expiration of our preferential tax rate last year, which
resulted in an increase in our corporate income tax rate as well as an increase in our net
interest expense, our overall financial situation was not materially affected. The net profit in
2003 still recorded an impressive growth of 15% and the Company successfully sustained six
years of consecutive growth in turnover, EBITDA and net profit.
We enjoy strong support from our shareholders and will always emphasize their interests.
THE AGE OF
CONSUMERS
11

BEVERAGE
Thirsty consumers in the world’s largest market
now have the pleasure of seeing international
brands alongside their favorite local beverages.
To reach choosy consumers, advertisers
are choosing Clear Media’s unparalleled
reach and frequency in the best locations
of all major cities.
Clear Media Limited
Annual Report 2003
12

MANAGEMENT DISCUSSION AND ANALYSIS
THE AGE OF
CONSUMERS
13

MANAGEMENT DISCUSSION AND ANALYSIS
INDUSTRY OVERVIEW
2003 has been a year of both challenge and accomplishment for China and the world.
On the financial side, SARS took a heavy toll on economic activities in China and the Asia-
Pacific region. In line with this trend, spending on advertising fell, with nearly all industries
and media sectors affected. But as SARS gradually subsided and China sent its first man into
the space in the second half of the year, there was an increase in China’s economic and business
activities. It is expected that China’s adspend will grow more than 10% over last year’s total,
significantly outperforming the rest of the world.
Adspend is once again climbing and outdoor advertising is still one of the best choices for both
foreign and domestic brands. New regulations and a change in marketing approaches boost the
outlook for the outdoor market further. Advertisers are re-evaluating their options and outdoor
advertising is always-on, always-there advertising that meets consumers when they’re most
susceptible to the message on the street, in the car, on the bike, waiting for the bus.
ADSPEND ON DIFFERENT MEDIA
25.58%
22.50%
38.39%
2002
43.90%
2001
2.42%
11.06%
22.55%
2.2%
10.1%
TV
Newspaper/
21.30% Magazine
Outdoor
Radio
Others
Source:Advertising Branch of SAIC
GROWTH OF OUTDOOR ADSPEND
Adspend (RMB million)
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
880
1,540
CAGR: 20%
2,540
2,530
2,700
4,070
4,730
5,770
7,430
8,040
9,990
0
92 93 94 95 96 97 98 99 00 01 02
GROWTH OF ADSPEND
Adspend (RMB billion)
100
90
80
70
60
50
40
30
20
10
0
92 93 94 95 96 97 98 99 00 01 02
Source:Advertising Branch of SAIC
6.79
13.41
20.03
27.33
36.66
46.2
53.78
62.21
71.27
79.49
90.32
CHINA OUTDOOR INDUSTRY (2003)
19%
56%
18%
Billboard
Transit
Street Furniture
Others
7%
Source:China Outdoor Data Corporation
Clear Media Limited
Annual Report 2003
14

MANAGEMENT DISCUSSION AND ANALYSIS
OPERATIONS OVERVIEW
Bus Shelter Advertising
With over 17,600 12-sheet-equivalent panels spanning 30 cities across China, Clear Media has
the country’s most extensive standardized bus shelter network.
CITY HIGHLIGHTS: BY CONTRIBUTIONTO
BUS SHELTER ADVERTISING REVENUE
Revenue (HK$ million)
% of Turnover
Beijing 75 16
Chengdu 26 5
Guangzhou 77 16
Hangzhou 20 4
Kunmin 14 3
Nanjing 22 5
Shanghai 64 13
Shenzhen 28 6
Wuhan 14 3
Xi’an 16 1
The construction plan of new panels in 2003 was disrupted by SARS in the second quarter,
and the relocation of bus routes in Guangzhou has caused short-term reduction of effective
panels available for sales in the fourth quarter. The total number of 12-sheet-equivalent panels
was 17,637 as of 31 December 2003.
The total number of 12-equivalent panels in key cities accounted for 35% in 2003 (2002: 37%);
while sales in these key cities were 51% of total sales in 2003 (2002: 55%).
Key Cities: Beijing, Shanghai, Guangzhou and Shenzhen
The Group’s panels in the key cities of Beijing, Shanghai, Guangzhou and Shenzhen accounted
for 35% (2002: 37%) of the network’s total.
Operations in key cities are as follows:
Beijing
In Beijing, the Group acquired over 200 advertising panels in the second half of 2003. We have
further acquired over 300 panels in February 2004, and our market share has increased to 45%.
THE AGE OF
CONSUMERS
15

MANAGEMENT DISCUSSION AND ANALYSIS
Shanghai
In 2003, the Group launched the first scroller system applied in bus shelters in China and
response from clients was very good. Average selling price for the scroller system was around
30% higher than for static shelters.
The Group’s market share in Shanghai was 98% in terms of number of panels (2002: 98%). In
the second half of 2003, we obtained an exclusive concession in Shanghai to build and operate
new taxi stands. The Group intends to build a total of 1,500 panels in the next two years. This
business development not only opens up a new market segment but enables the Company to
reach a more affluent group of consumers, particularly those in the luxury goods sector.
Guangzhou
Operations in Guangzhou was affected by the city’s town planning initiatives in the fourth quarter
of 2003. The bus route relocation effectively reduced the number of panels available for sales in
the short run. However, we successfully negotiated better terms for new panels. Leveraging on
our leadership in Guangzhou, we managed to increase the average selling price. Most of the bus
shelters were relocated to new routes by the end of 2003. We have acquired over 300 panels in
Guangzhou in February 2004 and, as a result, our market share increased to 100%.
The Group also launched the first 3-D panels in Guangzhou in 2003, and has received positive
responses from advertisers looking for innovative media solutions. Not only can these panels be
put to greater creative use, they also help improve the occupancy and yield of smaller size panels.
MARKET SHARE INTHETOP 10 CITIES
City
Market share
Beijing 1
Shanghai
Shenzhen
Guangzhou 2
28%
45%
98%
100%
Chengdu
Hangzhou
Kunmin
Nanjing
Wuhan
Xi’an
40%
53%
67%
97%
91%
97%
Notes
1. After Beijing’s acquisition of 300 bus shelters in
Feb 2004, the market share in Beijing will
increase to 45%.
2. After Guuangzhou’s acuqisition of 300 bus
shelters in Feb 2004, the market share in
Guangzhou will increase to 100%.
CLEAR MEDIA'S CLIENT MIX IN 2003 (BY INDUSTRY)
Telecommunication
Beverages
Cosmetics &
Toiletries
Others
Pharmaceuticals
Home Appliances
Information Technology
Food
Leisure &
Entertainment
Finance
Tobacco
Transportation
4.9%
5.9%
1.3%
2.4%
4%
6.1%
0.1%
6.2%
27.3%
12.3%
12.2%
17.3%
Transportation 1
Tobacco 6
Finance 12
Leisure & Entertainment
Food
Information Technology
Home Appliances
Pharmaceuticals
Others
Cosmetics & Toiletries
Beverages
Telecommunication
20
24
30
30
29
60
59
Revenue (HK$ million)
84
133
Clear Media Limited
Annual Report 2003
16

MANAGEMENT DISCUSSION AND ANALYSIS
Mid-tier Cities
The Group has 11,469 panels spanning 26 mid-tier cities across China, with sales from those
cities accounting for 49% of the Group’s bus shelter sales in 2003 (2002: 45%). The most
outstanding performers in this mid-tier sector are Nanjing and Hangzhou in which the Company
has a market share of 91% and 97%, and an average occupancy rate of 79% and 78%, respectively.
New Advertising Formats
The new advertising format still only accounts for 2.5% of the total sales (2002: 5.4%). The
Group has made arrangements to facilitate the new format operations including the subcontracting
of some of the operations to third parties and jointly operate some of the advertising
panels with the shopping mall owners in exchange for the waiver of rental, electricity and
other operating costs. The Group believes that such arrangement is beneficial and will further
enhance the competitiveness of the media.
The Group owns a small number of unipoles in Beijing, Shanghai and surrounding areas, all of
them located on or near major highways. The Group has no plans to expand this business until
related government regulations develop.
Outlook
Global brands and advertising agencies increasingly look to China’s burgeoning consumer power
as a source of growth. China’s accession to WTO, the upcoming 2008 Beijing Olympics and
the 2010 Shanghai Expo all act as catalysts for a continuing increase in advertising spending.
Following the implementation of new “Regulations of Television and Advertisement
Broadcasting”, advertisers are re-evaluating their options and outdoor advertising stands to
benefit the most.
The Company, with its leading market position, extensive and standardized network, strong
financial capability and promising track record, enjoys absolute advantages over its competitors
in capitalizing on new opportunities. These are our key strategies in 2004:
• We will improve average occupancy rate to above 70% and increase our rate card by an
average of 8% in key cities.
• We will accelerate organic and acquisition growth by adding 3,000 panels to our current
portfolio and further increase our market share in key cities.
• We will broaden our product portfolio to include key outdoor media segments that
compliment our core street furniture business.
THE AGE OF
CONSUMERS
17

BEAUTY
The new affluence of Chinese consumers
has created a new interest in health
and beauty – and produced a wide choice of
local and global products to meet
their desires. Savvy advertisers are
appealing to millions of consumers through
the nationwide coverage of the
Clear Media network.
Clear Media Limited
Annual Report 2003
18

MANAGEMENT DISCUSSION AND ANALYSIS
THE AGE OF
CONSUMERS
19

MANAGEMENT DISCUSSION AND ANALYSIS
FINANCIAL REVIEW
Turnover
The Group’s turnover in 2003 amounted to HK$488 million, representing an increase of 14%
compared with fiscal year 2002. This is mainly due to the increasing revenue of the Group’s
core business, bus shelter advertising. All of the Group’s turnover was derived from China.
The Group’s core bus shelter advertising business continued to perform well. Total bus shelter
sales increased by 18% from HK$404 million in 2002 to HK$476 million in 2003. This was
due to a 14% increase in weighted average number of shelters, a 2% increase in occupancy
rate from 68% in 2002 to 70% in 2003, and a 1% increase in average selling price.
Sales in Beijing in 2003 were HK$75 million, representing only a 1% increase over the 2002
figure of HK$74 million. Though the average number of shelters increased by 7% and the average
selling price increased by 2%, the occupancy rate dropped from 86% in 2002 to 80% in 2003
due mainly to the impact of SARS in the first half. Despite that, the average occupancy rate for
Beijing rebounded to 88% in the second half of 2003, from 70% in the first half. The lower-thanaverage
performance in the second quarter affected the overall performance in 2003.
Sales in Shanghai increased by 10% to HK$64 million in 2003 from HK$58 million in 2002.
This is mainly the results of the increase in occupancy rate from 68% in 2002 to 75% in 2003,
with the average number of shelters remaining about the same level. Sales rebounded after
SARS in the second half resulting from the Group’s efforts to improve the flexibility of our
sales packages and enhance client support. Pent-up demand helped increase the average selling
price in the second half by 24%, bringing the 2003 average selling prices at about the same
level as 2002.
Guangzhou has experienced the highest increase in sales at 25%. This is mainly the result of a
9% increase in the average selling price, despite the fact that there was a short-term reduction
in the effective number of panels in the fourth quarter under the bus routes relocation scheme
in Guangzhou. Most of the bus shelters were either reinstalled or relocated to new routes.
TURNOVER BY OPERATION IN 2003 TURNOVER BY GEOGRAPHICAL LOCATION IN 2003
1.20%
1.29%
16%
49%
13%
Beijing
Shanghai
Guangzhou
Shenzhen
Others
Bus Shelter
POS
Unipole
97.50%
6%
16%
Clear Media Limited
Annual Report 2003
20

MANAGEMENT DISCUSSION AND ANALYSIS
Revenues from POS and unipole advertising decreased from HK$23 million to HK$12 million
in 2003 as the Group arranged to either subcontract out the operation or jointly operate the
media with third parties in exchange for a reduction in direct costs including rental and
electricity charges. The Group expects these two business segments to remain small in relation
to our core bus shelter business.
EBITDA
The Group’s earnings before interest, tax, depreciation and amortisation (“EBITDA”) has
increased to HK$209 million in 2003 from HK$180 million in 2002. The Group’s EBITDA
margin increased to 43% in 2003 (2002: 42%). It is noteworthy, however, that the EBITDA
margin for the bus shelter business, the Group’s primary focus, remains stable at 48%
(2002: 48%) despite the increase in costs associated with the large number of advertising
panels built and acquired during the year. The Group has successfully implemented various
cost-saving measures, including re-negotiation of rentals on new panels and electricity, as well
as deploying cost-saving techniques on advertising panels.
Expenses
During the year under review, direct operating costs, which include electricity, rental
maintenance, increased by 6% to HK$146 million (2002: HK$137 million). However, it should
be noted that direct costs on a per unit basis have dropped significantly compared to 2002 as a
result of cost-saving measures implemented in 2003. In 2002, sales and cultural levies were at
4% due to one-off rebates, but the levy was back to a normal 8.5% in 2003. The expansion of
the Group’s bus shelter network has also resulted in higher amortisation of concession rights
which increased to HK$93 million in 2003 from HK$86 million in 2002. To strengthen our
sales capability and better serve our increasing client list, the Group has also increased the
number of sales and marketing staff by 23, bringing the total sales and marketing head count to
217 in 2003 (2002: 194) which resulted in higher selling expenses, such as sales staff salary,
travelling and other related expenses. Control of traveling and entertainment expenses, coupled
with gains on other investments, resulted in lower SG&A expenses which accounted for 19%
of sales in 2003 (2002: 22%).
COST BREAKDOWN
2002 2003
HK$'000
HK$'000
5,536 Depreciation of owned assets
7,193
34,089
Selling expenses
37,621
59,323
Adminstrative expenses
55,422
Amortisation of concession rights and
depreciation of POS
Direct operating costs
153,283
88,391
95,703
186,437
THE AGE OF
CONSUMERS
21

MANAGEMENT DISCUSSION AND ANALYSIS
Taxation
The Group’s taxation charge reached approximately HK$14 million, compared to approximately
HK$9 million last year; this is mainly due to the higher PRC corporate income tax rate from
7.5% to 15% after the expiry of the Group’s tax privilege program.
EBIT
EBIT improved by 23% from HK$86 million in 2002 to HK$106 million in 2003 as a result of
higher EBITDA.
Net Profit
Net profit grew by 15% to HK$82 million in 2003 from HK$71 million in 2002, despite a
higher corporate income tax rate of 15% in 2003 after the expiry of the tax privilege program
(2002: 7.5%). In addition, net interest expenses in 2003 were HK$2 million versus
a net interest income of HK$1 million in 2002. Net profit margin however stayed at a
healthy 17% (2002: 17%).
Liquidity and Financial Resources
The Group financed its operations and investing activities with internally generated cash flow,
balanced with proceeds from the Company’s IPO and bank loans.
Cashflow
Net cash from operating activities improved substantially to HK$135 million as of 31 December
2003 from HK$84 million as of 31 December 2002, largely due to the increase in operating
profits and strengthening of cash management.
Cash from investing activities amounted to an outflow of approximately HK$137 million in 2003
compared to an outflow of HK$359 million in the previous year. A total of HK$138 million was
paid in 2003 to build and acquire bus shelter advertising displays and HK$5 million was paid to
acquire fixed assets.
Cashflow Data
2003 2002
Year end 31 December HK$’000 HK$’000
Cash generated from operations 157,765 100,577
Interest paid (8,072) (8,627)
Income taxes paid (14,216) (7,624)
Net cash from operating activities 135,477 84,326
Cash outflow from investing activities (137,257) (359,292)
Cash outflow from financing activities (39,961) (267,287)
Net decrease in cash and cash equivalents (41,741) (542,253)
Cash and cash equivalents at beginning of the year 267,158 809,411
Effect of foreign exchange rate changes (587) –
Cash and cash equivalents at year end 224,830 267,158
Clear Media Limited
Annual Report 2003
22

MANAGEMENT DISCUSSION AND ANALYSIS
Net cash outflow from financing activities amounted to HK$40 million in 2003
(2002: HK$267 million), reflecting the net increase of bank loans of HK$20 million and the
increase in pledged time deposits of HK$60 million.
The Group experienced positive free cash flow from its operations of HK$50 million
(2002: negative free cash flow of HK$198 million). The Group considers free cash flow (defined
as EBITDA less cash outflow on capital expenditure, less income tax and net interest expense)
to be an important measure of a company’s ability to provide value to shareholders. By presenting
free cash flow, the Group intends to provide investors with a better understanding of the
Group’s ability to repay debts, make acquisitions and grow organically.
Accounts Receivable
The Group’s accounts receivable balance due from 3rd parties increased from HK$114 million
in 2002 to HK$168 million in 2003. However, it should be noted that subsequent to the year
end, the Group has further collected about HK$60 million pertaining to accounts receivable
outstanding at 31 December 2003. None of the accounts receivable balance is due from
connected persons, as defined in the Listing Rules. Average accounts receivable outstanding
days was 129 days in 2003, substantially reduced from 154 days as of 30 June 2003 and
143 days in 2002. Key measures were taken by the Group during the year to reduce the
receivables level, including linking commissions of sales staff to cash collection, the formation
of a dedicated collection team and implementation of a stringent policy on sales to new clients.
Amounts due from Guangdong White Horse Advertising Company Limited (“GWH”) also
reduced substantially from HK$50 million in 2002 to HK$26 million in 2003. The percentage
of the Group’s business from GWH dropped 8% in 2003 (2002: 16%).
The Group has a standard general provisioning policy on doubtful debts that is based on a preset
formula on the total outstanding debts owed by our customers, and the policy has been consistently
applied and reviewed by the Board of Directors and our auditors. In overview, for our small-to
medium-sized customers, general provisions ranging from 25% to 100% on the balance
outstanding are created based on the aging profile. For major customers, specific provisions are
assessed on a case-by-case basis. For customers where legal action has been or will be taken,
provision is created to the extent of any balance that we believed is not recoverable. Our credit
control committee closely monitors and takes steps to further reduce the receivables balances.
Prepayments, Deposits and Other Receivables
Increase in prepayments, deposits and other receivables was due mainly to advance payment to
suppliers for the construction of bus shelters as well as notes receivable from customers.
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MANAGEMENT DISCUSSION AND ANALYSIS
Accounts Payable
Total payables and accruals as of 31 December 2003 were HK$143 million, compared with
HK$132 million as of 31 December 2002. It would be inappropriate to give turnover days
against sales as the payable is more closely related to capital expenditure incurred in bus shelters.
Borrowings and Gearing
As of 31 December 2003, the Group had pledged time deposits of HK$126 million,
US$6 million (approximately HK$47 million) to banks as security for outstanding secured
short-term bank loans of RMB173 million (approximately HK$162 million) at rates ranging
from 4.8% to 5.3%. Unsecured bank loans outstanding as of 31 December 2003 totaled
RMB10 million (approximately HK$9 million) which bore interest at 5.3%. All of the Group’s
bank borrowings were repayable within one year.
The debt-to-equity ratio, defined as a percentage of net interest bearing borrowings over
shareholders’ fund, of the Group was 1% as of 31 December 2003 compared to 1% in 2002.
As of 31 December 2003, the Group’s total cash and bank balances amounted to
HK$225 million (2002: HK$267 million).
Share Capital and Shareholders’ Funds
During the year, the Company’s issued and fully paid share capital remained unchanged.
Shareholders’ funds as of 31 December 2003 increased by 6% to HK$1,288 million from
HK$1,210 million in 2002. The Group’s reserves amounted to HK$1,238 million compared
to HK$1,160 million recorded in previous year. During the year under review, there was no
share repurchase.
Exposure to Foreign Exchange Risk
Our only investment in China is the operating vehicle of the Group, the WHA Joint Venture,
which conducts business only within China. Apart from interest payable, repayment of foreign
currency loans obtained to finance our operating vehicle’s operations, and any potential future
dividend to be declared by our operating vehicle to its shareholders, most of our turnover,
capital investment and expenses are denominated in Renminbi. As of today, we have not
experienced difficulties in obtaining government approvals to make foreign exchange purchases
when the need arises. During the period under review, we have not issued any financial
instruments for hedging purposes.
Capital Expenditure
To strengthen the Group’s leading position as an outdoor media company in China, the Group
actively acquired concession rights and built bus shelters to expand its network. For the year
ended 31 December 2003, bus shelters concession rights increased by HK$119 million
(2002: HK$309 million) and fixed assets increased by HK$5 million (2002: HK$14 million).
Clear Media Limited
Annual Report 2003
24

MANAGEMENT DISCUSSION AND ANALYSIS
Use of IPO Proceeds
The proceeds from the IPO and Over-allotment after deducting related expenses paid were
HK$648 million and HK$9 million, respectively. For the year ended 31 December 2003,
approximately HK$138 million was used to finance our bus shelter expansion. The remaining
HK$117 million of the proceeds is deposited in bank accounts in Hong Kong.
Material Acquisitions and Disposals
During the year under review, there was no material acquisition or disposal of any subsidiary,
associate or joint venture of the Group.
Employment, Training and Development
As of 31 December 2003, the Group had a total of 295 employees, an increase of 13 employees
over the same period in 2002, and total staff costs amounted to 9% of total turnover, compared
to 8% in 2002. The major increase is the number of sales and marketing staff, which grew
from 194 in 2002 to 217 in 2003. This is in line with the Group’s policy to improve sales
support to our expanding outdoor media network in China. Training courses and conferences
FULL-TIME EMPLOYEES IN 2003
74%
Sales & Marketing
Operations
Concession Relations
Management &
Administration
12%
Sales & Marketing 18
6%
8%
Operations
Concession Relations
25
35
Management & Administration 217
are regularly organized for employees throughout the year to improve and update their
knowledge on their specific job requirements. Employees are remunerated based on their
performance, experience and the prevailing industry practices, with compensation policies
and packages being reviewed on a regular basis. Bonuses are linked to both the performance of
the Group and to individual performance as recognition of value creation. Aligning individual
interests with the Group, share options are granted to senior management.
Charge of the Group Assets
There is no charge on the Group’s assets during the year under review other than time deposits
of US$6 million (approximately HK$47 million) and HK$126 million pledged to secure shortterm
bank loans of RMB173 million (approximately HK$162 million) and time deposits of
RMB29 million (approximately HK$27 million) pledged as securities for bills payable of
RMB29 million (approximately HK$27 million).
Contingent Liabilities
The Group is not aware of any major contingent liabilities that will cause substantial change to
the Group’s operations.
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MANAGEMENT DISCUSSION AND ANALYSIS
Clear Media Limited
Annual Report 2003
26

MOBILE
Business professionals looking for mobile solutions
and up-and-comers wanting trendy handsets all
look to advertising for information on the latest
technology. Clear Media uses the cost-effective
power of its standardized network across
all key cities to get the word out.
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CORPORATE GOVERNANCE REPORT
Clear Media is pledged to fostering and upholding high standards of corporate governance –
the principles of transparent, responsible and value-driven management and control of a
company. It is the Company’s responsibility and commitment to enhance the confidence of
current and future shareholders, investors, employees, business partners and the public in
both national and international markets. The Directors’ overriding objective is to maximize
shareholders’ long-term value within an appropriate framework which protects the rights and
interests of shareholders and ensures that Clear Media is properly managed.
The Directors are committed to the principles underpinning best practice in corporate governance.
This is supported by a company-wide commitment to high standards of business ethics.
The Company Secretary is responsible to the Board for ensuring that Board procedures are
followed and that applicable laws and regulations are complied with. These include obligations
on Directors relating to disclosure of interests in securities, disclosure of any conflict of interest
in a transaction involving Clear Media, prohibitions on dealing in securities, and restrictions
on disclosure of price-sensitive information.
Clear Media has adopted a code of conduct which sets out the main corporate governance practices.
Board of Directors
The Bye-laws of the Company provides that there shall be not fewer than two Directors; and
no maximum limit has been laid down.
The present Board of Directors comprises seven non-executive Directors and four executive
Directors. Names, details and qualifications of Directors appear in the latter part of this Report.
Though the Chairman of the Board is an executive Director, the pre-dominance of non-executive
Directors ensures the independence of the Board from management.
Seven formal Board meetings were held during the year. Meeting agendas are settled by the
Chairman of the Board to ensure adequate coverage of financial, strategic and major risk areas
throughout the year.
At every Annual General Meeting (AGM), one third of the Directors (other than the Chairman
and Chief Executive Officer), or the nearest number to one third, shall retire from Office and
be eligible for re-election. A Director appointed since the most recent AGM shall hold office
only until the next general meeting and shall then be eligible for re-election. The Directors to
retire each year shall be the Directors longest in office since being elected or re-elected. The
nomination committee will advise the Board the re-appointment of any non-executive director
at the conclusion of his or her specified term of office which is usually three years.
The Board is accountable to shareholders. Its key responsibilities include the formulation of
long-term business directions and strategies, monitoring of internal control, review of financial
statements, and approval of capital expenditures and annual budget. The management is
delegated with the authority to make decisions on daily operations related to the Company’s
Clear Media Limited
Annual Report 2003
28

CORPORATE GOVERNANCE REPORT
business affairs. The Board reviews the performance of the management to ensure company
policies are carried out properly and the business is run smoothly in the best interests of Clear
Media and its stakeholders.
The posts of Chairman and Chief Executive Officer (CEO) are separate. There is a clear distinction
between their responsibilities. The Chairman is responsible for the Company’s overall business
directions and coordination between the Board and the Company’s management, and the CEO is
responsible for the business operations and executions of decisions made by the Board.
Directors are entitled to seek independent professional advice at the Company’s expense in
connection with their duties and responsibilities as Directors, subject to the prior consent of
the Chairman.
To assist in fulfilling its responsibilities and to allow detailed consideration of various issues,
the Board has established a remuneration committee, an audit committee, a nomination
committee and a capital expenditure committee under the Code of Best Practice under the
Listing Rules of The Hong Kong Stock Exchange. Each Committee has its own charter setting
out the authority delegated to it by the Board and the manner in which the Committee is to
operate.
Remuneration Committee
The Remuneration Committee consists of no fewer than three members appointed from among
the directors, the majority of whom are non-executive directors, in order to ensure
independence and objectivity. Presently, it includes Roger Parry (Chairman), Peter Cosgrove
and Jonathan Bevan as non-executive directors, and Desmond Murray and Wang Shou Zhi as
independent non-executive directors. The Remuneration Committee is responsible for making
recommendations to the Board regarding the Company’s framework of executive remuneration
and for determining on behalf of the Board specific remuneration packages and conditions of
employment for specific directors. The Chief Executive Officer shall be invited to attend
meetings to discuss the performance of executive directors and make proposals as necessary,
and will also report to the Committee on significant group-wide changes in salary structure
and conditions affecting other employees at the senior executive level.
Three meetings were held during the year. The duties of the committee are:
• to make recommendations to the Board regarding the Company’s framework of executive
remuneration and its costs, and to determine on behalf of the Board specific remuneration
packages and conditions of employment (including pension rights for executive directors);
• to determine the terms of any compensation package in the event of early termination of
the contract of any executive director; and
• to make recommendations to the Board regarding the content of the Board’s annual report
to shareholders on directors’ remuneration (including the Company’s policy on executive
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CORPORATE GOVERNANCE REPORT
Audit Committee
The Audit Committee is comprised of not fewer than three non-executive directors appointed
from among the directors, with the majority being independent, to preserve the integrity and
objectivity of its work. Presently, it includes two independent non-executive directors,
Desmond Murray (Chairman) and Wang Shou Zhi and non-executive director Peter Cosgrove.
The primary duties of the audit committee are to review and supervise the financial reporting
process and internal control system of the Group and to provide advice and recommendations
to the Board. It meets to review the completeness, accuracy and fairness of the financial
statements of the Company and to consider the nature and scope of internal and external audit
reviews, as well as the effectiveness of the systems of internal control. The Audit Committee
scrutinizes the nature and extent of any non-audit work undertaken by the Company’s auditors.
Internal control systems have been designed to allow the Board to monitor the Company’s
overall financial position and to protect its assets. The purpose is to ensure against material
financial misstatement or loss. The Directors are responsible for these systems, and must ensure
that appropriate authorities and guidelines are in place.
Three meetings were held during the year. The main functions of the committee are:
• to consider the appointment of the external auditor, the audit fee, and any questions of
resignation or dismissal;
• to review the half-year and annual financial statements before submission to the Board;
• to discuss problems and reservations arising from the interim and final audits, and any
matters the auditor may wish to discuss (in the absence of management, where necessary);
• to review the external auditor’s management letter and management’s response;
• to review the company’s internal control system;
• to consider the major findings of internal investigations and management’s response.
Nomination Committee
The Nomination Committee was set up in February 2004, and it consists of no fewer than
three members appointed from amongst the directors, the majority of whom are non-executive
directors, in order to ensure independence and objectivity. Presently, it includes executive
director Steven Yung (Chairman), non-executive directors Roger Parry and Peter Cosgrove,
and independent directors Wang Shou Zhi and Desmond Murray. The Nomination Committee
is responsible for making recommendations to the Board regarding the appointment of directors
and senior management, and its key responsibilities are:
• to review the composition of the Board, including the skills knowledge and experience of
the board, and to consider and advise the Board of any changes that may be required to
achieve a balanced and appropriately qualified Board and the independence of any present
or proposed non-executive directors;
Clear Media Limited
Annual Report 2003
30

CORPORATE GOVERNANCE REPORT
achieve a balanced and appropriately qualified Board and the independence of any present
or proposed non-executive directors;
• to satisfy itself that plans are in place for orderly succession for appointments to the Board
and other senior positions, and to search for, consider and make recommendations to the
Board in relation to the appointment of Directors, including the position of Chairman;
• to re-appoint any non-executive director at the conclusion of his or her specified term
of office;
• to consider the time commitments required of non-executive directors, individually
and collectively;
• to deal with any matters relating to the continuation in office as a director or any director
at any time;
• to recommend to the Chairman the membership of the Board Committees of the Board,
and the chairmanships thereof;
• to prepare suitable job descriptions and letters of appointment in relation to the Board
and, if appropriate, chairmanship and membership of Board Committees.
Capital Expenditure Committee
The Company has set up a Capital Expenditure Committee with the objective to review capital
expenditure plan proposed by the Company’s management team. This committee will send
the reviewed plan to the Board for its approval. The committee members include senior staff
from the Finance and Sales Departments and a member of the Board.
Ethical Standards
All Directors, executives and employees are expected to abide by laws and regulations, respect
confidentiality and the proper handling of information, and act with the highest standards of
honesty, integrity, objectivity and ethics in all dealings with each other, Clear Media,
competitors, customers and the community.
Environment
The Board is aware of the responsibilities of Clear Media in relation to environmental concerns
and the Company has added tremendous value to the quality of lifestyle in the communities
that it serves. Clear Media’s extensive bus shelter network offers protection from the wind,
sun and rain, while also beautifying the environment. The Company also ensures that the
health and safety of employees is protected. The Company also, upon availability, donates
around 10% of its advertising display panels to local municipal governments to help promote
community events.
Open Communication
Every member of Clear Media has a duty to act in good faith in the best interests of the
shareholders. Therefore, the Company sets a policy of open communication and full disclosure
to make sure shareholders are well represented and fully informed, in order to maximize their
values and returns in the long run. Clear Media is committed to providing adequate channels
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CORPORATE GOVERNANCE REPORT
• The Company reports to its shareholders twice a year. Annual and interim results are
announced as early as possible to keep shareholders informed of the performance and
operations of the Company.
• An annual report and an interim report are produced for each results announcement. With
the Company’s dedicated effort to provide shareholders and investors with transparent
and thorough information, the annual reports of Clear Media have been widely recognized
in the community. The Annual Report 2002, themed “Brand Revolution,” won a number
of international awards which include:
– 2003 International ARC Awards
Gold Award (Overall Annual Report)
Honors Awards (Cover Photo/Design)
– Platinum PR Awards 2003
Honorable Mention
– 17th Annual International MERCURY 2003 Awards
Silver Award (Annual Reports – Overall Presentation: Media)
• The Annual General Meeting (AGM) provides a very good opportunity for the Board and the
management to communicate with shareholders. The Chairman, Board members and the auditor
make every effort to attend the meeting and answer shareholders’ questions.
• The Internet provides an ideal medium to make information on the Company available, in
addition to the more traditional methods of financial reports and press releases. The Clear
Media website, www.clear-media.net, includes a ‘Corporate Governance’ section which
offers extensive company information to shareholders and other stakeholders. For those
who do not have Internet access, hard copies of the website information are available upon
request to the Company Secretary.
• In August, the Company launched its first corporate e-newsletter, Clear Focus, to keep its
stakeholders informed of the latest developments of Clear Media and the outdoor advertising
industry. The second issue followed in December and the Company will continue this
publication on a regular basis. The e-newsletters have been uploaded onto the company website
and directly emailed to investors and analysts in the financial market.
• Shareholders and other stakeholders are also welcome to express their opinions directly to
the Company Secretary.
Understanding general market concerns about the extent of disclosure by listed companies,
we will continue to enhance the disclosure of financial information to improve corporate
transparency and stakeholder trust.
Clear Media Limited
Annual Report 2003
32

CORPORATE GOVERNANCE REPORT
Investor Relations
Clear Media has a wide base of investors and is committed to cultivating high standards of
investor relations through regular and open communications.
As a result of our efforts in investor relations, Clear Media has become a widely covered stock,
with key brokerage and investment houses regularly publishing research on the Company. The
management is encouraged by the extent and depth of this coverage and is committed to
fostering an even closer working relationship with the investment community in order to
increase its understanding of the Company.
During 2003, the Company demonstrated this commitment by involving senior management
in frequent meetings with research analysts and institutional investors. They also participated
in a significant number of local, regional and global investor conferences as set out in Figure 1.
Apart from institutional investors, the Company also values the interests of minority
shareholders. We believe that the press can act as an effective communications channel between
the Company and the shareholders among the public. Therefore, we maintain frequent contact
and close relationships with the local and regional press. In June 2003, the Company invited
journalists to a site visit in Guangzhou to promote their understanding of the operations and
scale of Clear Media’s advertising network. Via wide press reportage, shareholders are informed
of Clear Media’s latest developments.
Consistent with our efforts to provide high-quality and timely disclosures of the Company’s
operations and financial information, we continually upgrade the investor information section
of our corporate website. This enables the investment community to access up-to-date
information about the Company in a quick and user-friendly manner.
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CORPORATE GOVERNANCE REPORT
Clear Media’s Participation in Investor Relations Activities in 2003 (Figure 1)
Month Organizer Activity Location
January UBS Warburg Greater China Conference Shanghai
February SalomonSmith Hong Kong/China Telecom & Media Hong Kong
Barney
Corporate Day
Deutsche Bank China In & Out Conference Shanghai
Annual Results Announcement – Hong Kong
Analyst presentation
Post Annual Results roadshow
Hong Kong
March CLSA Charter Jet Tour Qingdao
Post Annual Results roadshow
Hong Kong/
Singapore
June UBS Warburg Investor Luncheon Hong Kong
July Deutsche Bank CEPA Luncheon Presentation Hong Kong
August Interim Results Announcement – Hong Kong
Analyst presentation
Post Interim Results roadshow
Hong Kong
September CLSA Investors’ Confernece Hong Kong
JP Morgan Asia Equity Conference New York
Post Interim Results roadshow
Singapore/Tokyo
October UBS Warburg China Forum New York
ING Barings China Small-Cap Corporate Day Hong Kong/
Singapore
November Morgan Stanley Asia Pacific Conference Singapore
BNP Peregrine China Economic Development Forum Chengdu
Clear Media Limited
Annual Report 2003
34

CORPORATE GOVERNANCE REPORT
Media Analysts
BNP Paribas Peregrine Securities Limited
Isabella Kwok
Email: isabella.kwok@peregrine.bnpparibas.com
Cazenove & Co. (Singapore) Pte. Limited
Adrian Foulger
Email: adrian.foulger@cazenove.com
Citigroup Global Markets Asia Limited
Xue Lan
Email: lan.xue@citigroup.com
CITIC Frontier China Research Limited
Cindy Wei
Email: cindywei@citicfrontier.com
Credit Suisse First Boston (Hong Kong)
Limited
Marisa Ho
Email: marisa.ho@csfb.com
Christopher Fang
Email: christopher.h.fang@csfb.com
CLSA Limited
Danie Schutte
Email: danie.schutte@clsa.com
DBS Vickers (HK) Limited
Charles Law
Email: charles.law@hk.dbsvickers.com
Deutsche Bank AG Hong Kong Branch
Vineet Sharma
Email: vineet.sharma@db.com
GK Goh Securities (HK) Limited
Renee Tai
Email: tai.renee@gkgoh.com
Goldman Sachs (Asia) LLC
James Mitchell
Email: james.mitchell@gs.com
HSBC Securities (Asia) Limited
Anne Ling
Email: anneling@hsbc.com.hk
ICEA Securities Asia Limited
Alice Leung
Email: awsleung@icea.com.hk
ING Securities Limited
Andrew Kuet
Email: andrew.kuet@asia.ing.com
JP Morgan Securities Singapore Private
Limited
Andrew Swan
Email: andrew.w.swan@jpmorgan.com
KGI Asia Ltd.
Patrick Sin
Email: psin@kgia.com
Kim Eng Securities (Hong Kong) Ltd.
Joe Wong
Email: joewong@kimeng.com.hk
Lehman Brothers Asia Limited
Stephen McKeever
Email: smckeeve@lehman.com
Lim Hwee Ghee
Email: hweeghee.lim@lehman.com
Merrill Lynch (Asia Pacific) Limited
Simon Cheung
Email: simon_cheung@ml.com
Morgan Stanley Dean Witter Asia Limited
Min Yan Liu
Email: minyan.liu@morganstanley.com
Tai Fook Research Limited
Hu Wen Wei
Email: wwhu@taifook.com
UBS Warburg
Joe Zhang
Email: joe.zhang@ubsw.com
UOB Kay Hian (Hong Kong) Ltd.
Tommy Ho
Email: tommy.ho@uobkayhian.com
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CORPORATE GOVERNANCE REPORT
Clear Media Limited
Annual Report 2003
36

SERVICE
INDUSTRY
Whatever you’re selling, good service can set
your company apart from the competition.
We know, because the service quality
offered by our 300-strong sales-and-marketing
team helps Clear Media grow its leadership
position in the competitive field of outdoor
advertising year after year.
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FAQ
Q: What is your target occupancy rate and what are your strategies for
boosting occupancy in the future?
A: Our target is to drive the occupancy rate to an average of 70%, where efficiency of
operations will be realized. Right now, our occupancy rates in various cities are satisfactory
and, given the strong industry outlook, we are confident that we can achieve even higher
occupancy rates in the future. There are three factors to achieving this goal:
• Better customer service based on understanding and anticipating the needs of advertisers
and consumers.
• Effective, creative products that help brands stand out in the market.
• Flexible booking policies – order booking for the full year will be open to advertisers, who
will book according to their needs. This early booking system offers better visibility in
occupancy trends and order flows, so the sales force will know which part they should
work on further to improve occupancy rate, as well as the yield of the panels.
Q: Clear Media considers its standardized, national network a major
strength. How does that work for you?
A: Standardized panels allow our advertisers to create the same sized advertisements
whether they’re advertising in one city or 30. Our recent work for Meng Niu is a good example
of our response time and coverage. When Yang Liwei rocketed into space in October 2003,
Clear Media helped Meng Niu, a sponsor for this historic space project, launch a nationwide
ad campaign to show the brand’s support for China’s first astronaut. In just seven days, their
ads appeared all across China.
Q: How do you measure the effectiveness of Clear Media’s outdoor
advertising network?
A: Our sales teams conduct after-sales studies for our customers. This tells us and our
customers how effective their advertising and placement are, as well as giving us a competitive
edge over media companies not offering this service. Continued support from a wide range of
domestic and international brands have proved the effectiveness of our network and contributed
to our strong business track record.
Clear Media Limited
Annual Report 2003
38

FAQ
Q: How do you sustain profitable growth?
A: We owe our sixth consecutive year of profitable growth to our ability to leverage local
knowledge with international expertise. We continue to expand using a two-pronged strategy
of organic growth and aggressive acquisitions. The longer we maintain our leadership role in
the outdoor advertising industry, the more we are trusted by advertisers and city governments.
And because we are open to exploring new products that fit with our core business and satisfy
advertisers’ needs for innovation and creative advertising solutions, we will always be fresh.
Q: Why is Clear Media attractive to investors?
A: Six consecutive years of growth and profitability helps – and we are transparent:
investors can see how we operate. Although China’s vast consumer population is attractive
to investors, all media companies in China, except the outdoor segment, are state-owned.
Clear Media has a proven track record of high growth and high return in the past six years,
with many more years to come. In addition, Clear Media is a publicly traded company with
strict standards of corporate governance, so investors can get answers to their questions
before committing themselves.
Q: Why is Clear Media the choice of advertisers?
A : Standardization, coverage, quality and innovation. Our advertising panels are
standardized on one size, which means that advertisers can produce identical posters for
advertising across the network. Our network is national, offering one-stop service to advertisers
who want to cover one, 10 or 30 cities. We take excellent care of our street furniture to
maintain our professional presentation of their message. And we are always looking for new
advertising media to display their messages. With our always-on network, advertisers know
their advertising works 24 hours a day, every day.
Q What is the significance of “free cash flow”?
A: Clear Media recorded its first positive free cash flow for the financial year of 2003, and
it demonstrates our strong financial position achieved under our prudent strategies.
Free cash flow is defined as EBITDA, less interest expense, taxes, and all capital expenditures.
Clear Media considers free cash flow to be an important measure of a company’s ability to
provide value to shareholders. By presenting this figure, we intend to provide investors a
better understanding of the company’s ability to pay a dividend, pay down debt, make
acquisitions and invest in its businesses.
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THE POWER OF OUR NETWORK
On October 20, 2003,
the world witnessed the historic launch of
China’s first astronaut into space.
Minutes after he returned to earth,
Clear Media launched
the celebratory outdoor campaign of the leading
Chinese dairy brand MENGNIU
in 26 cities across China.
Both accomplishments were achieved
through planning, teamwork and
precision. Clear Media was able to roll
out a campaign across 26 cities virtually
simultaneously because of the power of
our standardized network. We all have our
roles to play in life and, for companies
looking to launch new products and
services, our accomplishment will have its
own historical importance in the
development of China’s future.
Clear Media Limited
Clear Media Limited
Annual Report 2003
Annual Report 2003
40
40

THE POWER OF OUR NETWORK
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THE AGE OF
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CONSUMERS
41
41

BIOGRAPHIES OF DIRECTORS
Steven Yung Roger Parry
Peter Cosgrove Han Zi Jing
Steven Yung
Chairman and Executive Director
Mr. Yung, aged 54, brings extensive experience from multinational companies and the media
sector. Before joining Clear Media as Chairman, Mr. Yung was President of ACNielsen Media
International and, earlier, as Regional Managing Director for North Asia. Prior to that, Mr. Yung
also held senior management positions with The Coca-Cola Company in the U.S. and in Asia.
Roger Parry
Deputy Chairman and Non-Executive Director
Mr. Parry, aged 50, has been the Chief Executive Officer of Clear Channel International,
which runs Clear Channel Communications’ businesses in Europe, Asia and Africa since 1998.
Prior to that, he was a management consultant at McKinsey & Co. He is also a Non-Executive
Director of Johnston Press Plc, iTouch Plc, Jazz FM Plc, New Media Spart Plc, and Future
Network Plc, and a Trustee of Shakespeare’s Global Trust. He was educated at Oxford University
and Bristol University. Since March 2004, Mr. Parry was appointed Deputy Chairman of
Clear Media.
Peter Cosgrove
Deputy Chairman and Non-Executive Director
Mr. Cosgrove, aged 50, has over 20 years’ experience in the outdoor advertising industry. He
is serving as Chairman of the Outdoor Division of APN News & Media Limited, the largest
outdoor advertising business in Australia and New Zealand, and Buspak Advertising (Hong
Kong) Limited. For the past ten years, Mr. Cosgrove has sat as a Director on the main board of
Independent News & Media Plc, the largest newspaper group in Ireland, South Africa and
New Zealand. In 1988, Mr. Cosgrove was named “Australian Entrepreneur of the Year” by
Australian Business Magazine.
Han Zi Jing
Chief Executive Officer and Executive Director
Mr. Han, aged 48, has been with Clear Media since 1998. Before that, he was General Manager
of Guangdong White Horse Group Corporation, a diversified company with interests ranging
from property to medical equipment. Mr. Han was also Director of the Hong Kong Overseas
Representative Office of China Science and Technology Association, a liaison body between
the PRC Government and the international science and technology communities. Mr. Han
has a Bachelor’s degree and graduated from a post-graduate course at the South China Normal
University. He is a brother of Mr. Han Zi Dian.
Clear Media Limited
Annual Report 2003
42

BIOGRAPHIES OF DIRECTORS
Teo Hong Kiong Zou Nan Feng Mark Mays
Teo Hong Kiong
Chief Financial Officer and Executive Director
Mr. Teo, aged 39, joined Clear Media in 1998 from PricewaterhouseCoopers in Singapore and
Beijing, where he held senior positions. He graduated from the National University of Singapore
and is a Certified Public Accountant in Singapore.
Zou Nan Feng
Director of Business Development and Executive Director
Mr. Zou, aged 51, has been Director of Business Development of Clear Media since 1999.
Before that, he was the Deputy General Manager of Guangdong White Horse Group
Corporation. Mr. Zou graduated from the Guangdong Shaoguan Education College.
Mark Mays
Non-Executive Director
Mr. Mays, aged 40, is the President and Chief Operating Officer of Clear Channel, a global
leader in the out-of-home advertising and entertainment industry with radio and television
stations, live event arrangements and outdoor displays in 64 countries around the world. In
addition to his executive role, Mr. Mays is active in a variety of professional and civil activities.
He has taken a leadership role with the Greater San Antonio Chamber of Commerce and
Junior Achievement San Antonio Chapter. Nationally, he has served as a Director on the Radio
Board of the National Association of Broadcasters. Mr. Mays holds a B.A. in Economics and
Mathematics from Vanderbilt University and an M.B.A. from Columbia University.
THE AGE OF
CONSUMERS
43

BIOGRAPHIES OF DIRECTORS
Coline McConville
Jonathan Bevan
Han Zi Dian
Coline McConville
Non-Executive Director
Ms. McConville, aged 39, joined Clear Channel in 1998 and is currently Chief Executive
Officer of Clear Channel International for Europe. Before that, she was a management
consultant for LEK in Germany and McKinsey & Co. in Australia and the U.K. She is also a
Non-Executive Director of Halifax Bank of Scotland Plc. Ms. McConville graduated in Law
and Jurisprudence from the University of New South Wales and holds an M.B.A. from Harvard
Business School. Ms. McConville resigned as Non-executive Director of Clear Media in
December 2003 but remains as an alternate to Mr. Jonathan Bevan.
Jonathan Bevan
Non-Executive Director
Mr. Bevan, aged 33, joined Clear Media in December 2003 to replace Ms. Coline McConville
on the Board as a Non-executive Director. Mr. Bevan is Senior Vice President – Operations of
Clear Channel International. Prior to joining Clear Channel in 1998, he had been trained as a
Chartered Accountant with Coopers & Lybrand (now PricewaterhouseCoopers) and has
acquired extensive auditing experience. He graduated in Economics and Accounting from
Bristol University in the United Kingdom.
Han Zi Dian
Non-Executive Director
Mr. Han, aged 40, is one of the founders of the bus shelter advertising business acquired by
Hainan White Horse Advertising Media Investment Company Limited in April 1998. He is
also General Manager of White Horse Advertising, one of China’s leading domestic advertising
agencies, and is an honorary lecturer at the Design Faculty of the Guangzhou Art College. He
has 16 years’ experience in the advertising industry and was voted by News Weekly as one of
the “Top 10 Advertising Persons from 1979-1999” in China. Mr. Han is the Vice Chairman of
the China International Advertising Association. He graduated from the Design Faculty of
Guangzhou Arts College. He is a brother of Mr. Han Zi Jing.
Clear Media Limited
Annual Report 2003
44

BIOGRAPHIES OF DIRECTORS
Pedro Man
Desmond Murray
Wang Shou Zhi
Pedro Man
Independent Non-Executive Director
Mr. Man, aged 50, has been the President of Starbucks Coffee Asia Pacific Limited since 1999
and is responsible for overseeing the expansion of Starbucks in the region. Before that, he
spent eight years as Vice President of Pillsbury Asia Pacific Limited, managing the Häagen-
Dazs business in the Far East. Mr. Man holds a BSc. in Chemistry from Simon Fraser University
in British Columbia and an M.B.A. from the University of British Columbia. Mr. Man resigned
as Chairman of the Company’s Audit Committee and as an Independent Non-executive Director
in May 2003.
Desmond Murray
Independent Non-Executive Director
Mr. Murray, aged 49, has been appointed as Independent Non-executive Director and Chairman
of the Company’s Audit Committee to replace Mr. Pedro Man in May 2003. Mr. Murray
previously worked in the audit and business services advisory. He was an audit partner in the
PricewaterhouseCoopers Hong Kong, most recently focused on internal auditing and corporate
governance. Mr. Murray has extensive experience in advising boards and audit committees of
companies listed in Hong Kong, China, as well as throughout the region.
Wang Shou Zhi
Independent Non-Executive Director
Professor Wang, aged 57, has been researching design history for over 20 years and has been a
professor in the Department of Liberal Arts & Sciences in Art Center College of Design in
Pasadena, California since 1998. He has acted as Chief Advisor to China’s Industrial Design
Association, China’s National Advertising Association and the National Graphic Design
Association. He obtained his post-graduate degree from the Graduate School of
Wuhan University.
THE AGE OF
CONSUMERS
45

FINANCIAL SECTION
Report of the Directors 47
Report of the Auditors 60
Consolidated Profit and Loss Account 61
Consolidated Balance Sheet 62
Consolidated Summary Statement of Changes in Equity 63
Consolidated Cash Flow Statement 64
Balance Sheet 65
Notes to Financial Statements 66
Notice of Annual General Meeting 90
Glossary 93
Financial Summary 95
Corporate Information 96
Clear Media Limited
Annual Report 2003
46

REPORT REPORT OF OF THE DIRECTORS
The directors of Clear Media Limited (the “Company”) are pleased to present their report together with the audited
financial statements of the Company and its subsidiaries (collectively referred to as the “Group”) for the year ended
31 December 2003.
Principal Activities
The principal activity of the Company is investment holding. Details of the principal activities of the subsidiaries are
set out in note 14 to the financial statements. There were no significant changes in the nature of the Group’s principal
activities during the year.
Results and Dividends
The Group’s profit for the year ended 31 December 2003 and the state of affairs of the Company and the Group at
that date are set out in the financial statements on pages 61 to 89.
The directors do not recommend the payment of any dividend in respect of the year.
Use of Proceeds from the Company’s Initial Public Offering
Upon the listing of the Company’s shares on the Stock Exchange on 19 December 2001 and the subsequent issue of
shares on 11 January 2002, the proceeds, after the netting of related expenses paid and payable, were approximately
HK$648 million and HK$9 million, respectively. As at 1 January 2003, a total amount of HK$402 million was
utilised. For the year ended 31 December 2003, a further amount of approximately HK$138 million was used to
finance bus shelter expansion. The remaining HK$117 million is deposited in bank accounts with banks in Hong Kong.
THE AGE OF
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47

REPORT OF THE DIRECTORS
Summary Financial Information
The following is a summary of the published combined results and of the assets, liabilities and minority interests of
the Group prepared on the basis set out in the note below:
Year ended 31 December
2003
HK$’000
2002
HK$’000
2001
HK$’000
2000
HK$’000
1999
HK$’000
RESULTS
Turnover 488,175 426,916 355,004 260,038 169,782
Profit before tax 103,736 87,575 70,843 46,318 28,954
Tax (13,502) (8,772) (6,579) (2,433) –
Minority interests (8,450) (7,697) (5,358) (2,195) (1,471)
Net profit from ordinary activities
attributable to shareholders 81,784 71,106 58,906 41,690 27,483
2003
HK$’000
2002
HK$’000
2001
HK$’000
2000
HK$’000
1999
HK$’000
ASSETS, LIABILITIES AND
MINORITY INTERESTS
Non-current assets 913,222 915,498 707,419 477,902 408,355
Current assets 710,832 609,554 1,139,174 403,779 327,859
Current liabilities (325,715) (299,270) (700,562) (515,494) (417,192)
Non-current liabilities – (2,936) (15,165) (9,014) (5,110)
Minority interests (9,966) (13,096) (1,058) (2,195) (1,471)
1,288,373 1,209,750 1,129,808 354,978 312,441
NOTE: The summary of the combined results of the Group for the two years ended 31 December 2000 and the combined balance sheets of the
Group as at 31 December 1999 and 2000 have been extracted from the Company’s prospectus dated 10 December 2001. The results of
the Group for the years ended 31 December 2002 and 2003 and its assets, liabilities and minority interests as at those dates are those set
out on pages 61 to 89 of the financial statements, respectively, and are presented on the basis set out in note 3 to the financial statements.
Fixed Assets and Concession Rights
Details of movements in the fixed assets and concession rights of the Group for the year ended 31 December 2003
are set out in notes 13 and 15 to the financial statements, respectively.
Share Capital and Share Options
There were no movements in either the Company’s authorised or issued share capital during the year. Details of
movements in the Company’s share options for the year ended 31 December 2003, together with the reasons
therefor, and details of the Company’s share option schemes are set out in note 23 to the financial statements.
Reserves
Details of movements in the reserves of the Company and the Group during the year are set out in note 24 to the
financial statements.
Clear Media Limited
Annual Report 2003
48

REPORT OF THE DIRECTORS
Distributable Reserves
As at 31 December 2003, the Company’s share premium, contributed surplus and retained profits accounts available
for cash distribution and/or distribution in specie amounted to HK$1,099,596,000. In accordance with the Bermuda
Companies Act 1981, the Company’s contributed surplus may be distributed in certain circumstances.
Pre-emptive Rights
There are no provisions for pre-emptive rights under the Company’s bye-laws or the laws of Bermuda, being the
jurisdiction in which the Company was incorporated, which would oblige the Company to offer new shares on a pro
rata basis to existing shareholders.
Purchase, Redemption or Sale of Listed Securities of the Company
The Company’s shares were listed on the Stock Exchange on 19 December 2001. Neither the Company, nor any of
its subsidiaries, purchased, redeemed or sold any of the Company’s listed securities during the year and up to the
date of this report.
Charitable Contributions
During the year, the Group did not make any charitable contributions (2002: Nil).
Major Advertisers and Suppliers
Sales to the Group’s five largest advertisers accounted for less than 30% of the Group’s turnover for the year.
Payment to the Group's five largest suppliers who provides goods and services which are specific to the Group's
business and which are required on a regular basis to enable the Group to continue to supply or service its customers;
accounted for less than 30% of the Group's total payment to suppliers for the year.
None of the directors or any of their associates, or any shareholders (which, to the best knowledge of the directors,
own more than 5% of the Company’s issued share capital) had any beneficial interest in the Group’s five largest
advertisers and/or suppliers.
Connected Transactions
The Group entered into the following continuing connected transactions during the year ended 31 December 2003
and a waiver was granted by the Stock Exchange from the connected transaction requirements under Chapter 14 of
the Rules Governing the Listing of Securities on The Stock Exchange (the “Listing Rules”) in 2001:
(a) The Group entered into a Framework Agreement (the “Framework Agreement”) with Hainan White Horse
Advertising Company Limited (“Hainan White Horse”), a company established in the People’s Republic of China
(the “PRC”) with a 20% shareholding in one of the Group’s subsidiaries, Hainan White Horse Advertising Media
Investment Company Limited (the “WHA Joint Venture”) and Maintenance Services Agreements (the “Maintenance
Services Agreements”) with 24 companies in which Mr. Han Zi Dian, a director of the Company, has an ability
to exercise management influence (collectively referred to as the “White Horse Companies”).
Under the Framework Agreement, Hainan White Horse has agreed to procure the White Horse Companies to
perform cleaning, maintenance and other related services to the WHA Joint Venture. The Maintenance Services
Agreements are for a fixed term of 10 years. The maintenance fees payable consist of a pre-determined base cost
and an incentive payment which is based on the Group’s discretion and awarded to those White Horse Companies
that meet certain quality and performance criteria set by the WHA Joint Venture.
THE AGE OF
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49

REPORT OF THE DIRECTORS
Connected Transactions
(continued)
(b) A portion of the advertising revenue generated by the WHA Joint Venture was booked through Guangdong
White Horse Advertising Company Limited (“GWH”), a company in which Mr. Han Zi Dian, a director of the
Company, has an ability to exercise significant direct or indirect influence over the management. In 2001, the
WHA Joint Venture and GWH entered into an agreement which documents an arrangement between the parties
relating to advertising commission which has been in place since January 1999. Under this agreement,
notwithstanding the terms and conditions of the advertising agency agreements between them, to the extent
that GWH does not settle the amounts due from it relating to any advertising agency agreements within 12
months, GWH would not be entitled to retain any agency commission at the standard rate of 15%.
During the year, GWH provided certain services for the design of sales and marketing materials, posters and
promotion booklets (“creative services”) to the Group on a non-exclusive basis. These transactions were entered
into on terms no less favourable than those available to or from independent third parties.
The independent non-executive directors confirmed that all the connected transactions:
(a) had been entered into, and the agreements governing those transactions were entered into, by the Group in the
ordinary and usual course of business;
(b) had been conducted either (i) on normal commercial terms (which expression shall be applied by reference to
transactions of a similar nature and to be made by similar entities); or (ii) if there are not sufficient comparable
transactions to judge whether they are on normal commercial terms, on terms no less favourable than terms
available to or from independent third parties, as appropriate; and
(c) had been entered into either (i) in accordance with the relevant agreements governing them on terms that are
fair and reasonable and in the interests of our shareholders as a whole; or (ii) (where there are no such agreements)
on terms no less favourable than those available to or from independent third parties, as appropriate.
The independent non-executive directors further confirmed that:
(a) the maintenance fees payable by the Group to the White Horse Companies in relation to the Maintenance Services
Arrangements did not exceed 15% of the annual turnover of the Group; and
(b) the value of sales from GWH and the advertising commission payable by the Group to GWH in relation to the
advertising commission arrangement did not exceed 40% and 7% of the annual turnover of the Group,
respectively.
The auditors of the Group have reviewed the connected transactions and confirmed to the directors that:
(a) the transactions have received the approval of the board of directors;
(b) the transactions were entered into in accordance with the pricing policies as stated in the Company’s financial
statements;
(c) the transactions were entered into in accordance with the relevant agreements governing those transactions or if
there are no such agreements, on terms no less favourable than those available to or from independent third
parties; and
(d) have not exceeded the caps set out in the respective paragraphs above.
Clear Media Limited
Annual Report 2003
50

REPORT OF THE DIRECTORS
Connected Transactions
(continued)
The Group also had the following connected transactions during the year ended 31 December 2001:
(a) Trademark Licence Agreement
(i) The WHA Joint Venture entered into a Trademark Licence Agreement with Guangdong White Horse Development
Parent Company (“Guangdong White Horse”) dated 30 November 2001 whereby Guangdong White Horse
agreed to grant to the WHA Joint Venture a licence to use the “White Horse” trademark in whole or in part or to
display any patterns, words, logos or marks of the trademark for outdoor advertising in the PRC. Provided that
Outdoor Media China, Inc. (“OMC”), a shareholder of the Company and an international company incorporated
under the laws of Western Samoa, and/or Mr. Han Zi Jing, a director of the Company and his associates has at
least a 10% direct or indirect interest in the Company, the licence shall be on an exclusive basis and Guangdong
White Horse will not have any termination rights. Upon OMC and/or its associates reducing its/their interests
to less than a 10% direct or indirect interest in the Company, the licence will become non-exclusive and be
limited to a period of five years starting from the date OMC and/or Mr. Han Zi Jing and his associates cease to
hold at least a 10% direct or indirect interest in the Company. The licence is renewable at the option of Guangdong
White Horse at the expiry of the licence. The grant of the licence was for RMB1.00 but otherwise was royaltyfree.
On 1 November 2003, Guangdong White Horse entered into an Addendum to the Trademark Licence Agreement
agreeing to lower the terms from the 10% direct or indirect interest in the Company to 5% with all other terms
and conditions remaining unchanged.
(ii) The WHA Joint Venture entered into a Trademark Licence Agreement and Transfer Agreement with GWH dated
30 November 2001 whereby GWH assigns the “Feng Shen Bang”, “Qing Tian Bang” and “Ming Deng Bang”
trademarks to the WHA Joint Venture. The annual licence fee is RMB1.00. The agreement will remain in force
until all the trademarks are registered in the name of the WHA Joint Venture.
(iii)The Company entered into two Trademark Licence Agreements with Clear Channel Communications, Inc. and
Clear Channel International Limited both on 28 November 2001 whereby the Company and members of the
Group are granted the licence to use the “Adshel” and “Clear Channel” names, logos, symbols, emblems, insignia
and other identifying materials for use in the outdoor advertising business in the PRC. The licence is for a term
of five years. Upon the expiry of the licence, it is renewable at the option of Clear Channel Communications,
Inc. and Clear Channel International Limited. The licence was granted for HK$1.00 but otherwise was royaltyfree.
(b) Option agreement
On 30 November 2001, China Outdoor Media Investment (Hong Kong) Company Limited (“China Outdoor Media
(HK)”) and Hainan White Horse entered into an option agreement which would provide China Outdoor Media
(HK) an option to purchase the whole or part of Hainan White Horse’s 20% interest in the WHA Joint Venture. The
option may only be exercised when PRC laws and regulations permit China Outdoor Media (HK)’s shareholding in
the WHA Joint Venture to be higher than 80%. The price to be paid on the exercise of the option is RMB5,000,000
for the entire 20% interest or a proportionate amount if the option is exercised in respect of a smaller percentage
interest in the WHA Joint Venture. The agreement is for a term of 30 years.
Please refer to note 29 to the financial statements for a summary of the connected transactions.
THE AGE OF
CONSUMERS
51

REPORT OF THE DIRECTORS
Directors
The directors of the Company during the year and up to the date of this report were:
Executive directors:
Steven Yung
Han Zi Jing
Teo Hong Kiong
Zou Nan Feng
Non-executive directors:
Peter Cosgrove
Mark Mays
Roger Parry
Coline McConville (resigned on 18 December 2003, but remained as an alternate director to Jonathan Bevan)
Han Zi Dian
Chin Oi Ling Lenna (alternate director to Mr. Mark Mays)
Tim Maunder (alternate director to Mr. Roger Parry)
Jonathan Bevan (appointed on 18 December 2003)
Zhang Huai Jun (appointed as an alternate director to Mr. Han Zi Dian on 18 December 2003)
Independent non-executive directors:
Pedro Man (resigned on 28 May 2003)
Wang Shou Zhi
Desmond Murray (appointed on 20 March 2003)
In accordance with clause 87 of the Company’s bye-laws, one-third of the directors will retire by rotation and, being
eligible, will offer themselves for re-election at the forthcoming annual general meeting.
The directors of the Company, including the independent non-executive directors, but excluding the chairman of
the board of directors and the chief executive of the Company, are subject to retirement by rotation and re-election
in accordance with the provisions of the Company’s bye-laws.
Directors’ and Senior Management’s Biographies
Biographical details of the directors of the Company and the senior management of the Group are set out on pages
42 to 45 of the annual report.
Directors’ Service Contracts
Each of the executive directors has entered into a service agreement with the Company for an initial term of three
years commencing from 30 November 2001, which will continue thereafter until terminated by not less than three
months’ notice in writing served by either party to the other.
Apart from the foregoing, no director proposed for re-election at the forthcoming annual general meeting has a
service contract with the Company which is not determinable by the Company within one year without payment of
compensation, other than statutory compensation.
Clear Media Limited
Annual Report 2003
52

REPORT OF THE DIRECTORS
Directors’ Interests in Contracts
Save as disclosed in note 7 to the financial statements, no director had a significant beneficial interest, either directly
or indirectly, in any contract of significance to the business of the Group to which the Company, or any of its
subsidiary or holding company or a subsidiary of the Company’s holding company was a party during or at the end
of the year.
Directors’ and Chief Executive’s Interests and Short Positions in Shares
At 31 December 2003, the interests and short positions of the directors, the chief executive or their associates in
the share capital of the Company or its associated corporations (within the meaning of Part XV of the Securities and
Futures Ordinance (the “SFO”)), as recorded in the register required to be kept by the Company pursuant to
Section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to the Model
Code for Securities Transactions by Directors of Listed Issuers, were as follows:
Long positions in ordinary shares of the Company as at 31 December 2003:
Number of shares held, capacity and nature of interest
Percentage
Through
of the
Directly spouse or Through Company’s
beneficially minor controlled Beneficiary issued
Name of director owned children corporation of a trust Total share capital
Han Zi Jing – – 30,000,000 – 30,000,000 6.0%
NOTE: The 30,000,000 shares are held by Outdoor Media China, Inc. (“OMC”), a company incorporated in Western Samoa of Offshore
Chambers. As at 31 December 2003, Mr. Han Zi Jing held approximately 94.5% of the issued share capital of Golden Profits Consultants
Limited, which is the beneficial holder of 100% of the shares in OMC. The effective interest of Mr. Han in OMC is therefore 94.5%.
Save as disclosed above, none of the directors and chief executive had registered an interest or short position in the
shares, underlying shares of the Company or any of its associated corporations that was required to be recorded
pursuant to Section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to
the Model Code for Securities Transactions by Directors of Listed Issuers.
Directors’ Rights to Acquire Shares
Apart from as disclosed under the headings “Directors and Chief Executive’s interests and short positions in shares”
above and in the “Share option schemes” below, at no time during the year were rights to acquire benefits by means
of the acquisition of shares in the Company granted to any director, or their respective spouse or minor children, or
were any such rights exercised by them; or was the Company, or any of its subsidiaries a party to any arrangement
to enable the directors to acquire such rights in any other body corporate.
THE AGE OF
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53

REPORT OF THE DIRECTORS
Share Option Schemes
The Company operates a share option scheme (the “Scheme”) for the purpose of providing incentives and rewards to
eligible participants who contribute to the Group’s operations. Under the Scheme, the directors may, at their
discretion, invite any employees, directors or consultants of any company in the Group to acquire options. The
Scheme became effective on 28 November 2001 and, unless otherwise cancelled or amended, will remain in force
for seven years from that date.
The maximum number of shares in respect of which options may be granted under the Scheme and under any other
share option scheme of the Company pursuant to which options may from time to time be granted to directors,
consultants, and/or employees of any company in the Group, shall initially not exceed 10% of the relevant class of
securities of the Company in issue excluding, for this purpose, shares issued on the exercise of options under the
Scheme and any other share option scheme of the Company. Upon the grant of options for shares up to 10% of the
relevant class of securities of the Company and subject to the approval of the shareholders of the Company in
general meetings, the maximum number of shares to be issued under this scheme when aggregated with securities
to be issued under any other share option scheme of the Group, may be increased by the board of directors provided
that the number of shares to be issued upon the exercise of all outstanding options does not exceed 30% of the
relevant class of securities in issue from time to time.
No option may be granted to any person such that the total number of shares issued and to be issued upon the
exercise of options granted and to be granted to such person in any 12-month period up to the date of the latest
grant exceeds 1% of the issued share capital of the Company from time to time.
An option may be exercised in accordance with the terms of the Scheme at any time during the option period (and
not more than seven years after the date of grant). The option period will be determined by the board of directors
and communicated to each grantee. The board of directors may provide restrictions on the period during which the
options may be exercised. There are no performance targets which must be achieved before any of the options can
be exercised except for the share options granted on 28 May 2003 and 19 November 2003. For the share options
granted on 28 May 2003 and 19 November 2003, the options will not become vested at the end of the third year
after the grant date unless the Company has achieved an average annual earnings per share growth of 5% each year
for the first three full financial years after the grant date. However, the board of directors retains discretion to
accelerate the vesting of fixed term options in the event that certain performance targets are met.
The subscription price for the Company’s shares under the Scheme will be a price determined by the board of
directors and notified to each grantee. The subscription price will be the highest of: (i) the nominal value of a share;
and (ii) the closing price of the shares as stated in the Stock Exchange’s daily quotation sheet on the date of grant,
which must be a business day; and (iii) the average closing price of the shares as stated in the Stock Exchange’s daily
quotation sheets for the five business days immediately preceding the date of grant. An option shall be deemed to
have been granted and accepted by an eligible participant (as defined in the Scheme) and to have taken effect when
the acceptance form as described in the Scheme is completed, signed and returned by the grantee with a remittance
in favour of the Company of HK$1.00 by way of consideration for the grant.
As at 31 December 2003, the number of shares issuable under share options granted under the Scheme was
24,016,000, which represented 5% of the Company’s shares in issue as at that date. The maximum number of shares
issuable under share options may be granted to each eligible participant in the Scheme within any 12-month period
up to the date of the latest grant, is limited to 1% of the shares of the Company in issue at any time. Any further
grant of share options in excess of this limit is subject to the shareholders’ approval in a general meeting.
Clear Media Limited
Annual Report 2003
54

REPORT OF THE DIRECTORS
Share Option Schemes
(continued)
On 28 November 2001, the Company also adopted a pre-IPO share option scheme (the “Pre-IPO share option
scheme”) conditionally as described in the Company’s prospectus dated 10 December 2001. The principal terms of
the Pre-IPO share option scheme are substantially the same as the terms of the Scheme except that:
(a) Employees, directors and consultants of the Group who have contributed substantially to the growth of the
Group and to the initial public offering or full-time employees and directors of the Group are eligible to participate
in the Pre-IPO share option scheme;
(b) The subscription price for the shares under the Pre-IPO share option scheme shall be equal to the offer price;
and
(c) The Pre-IPO share option scheme will remain in force for a period commencing on the date on which the Pre-
IPO share option scheme is conditionally adopted by the shareholders of the Company and ending on the day
immediately prior to 19 December 2001, after which period no further options will be granted but in all other
respects the provisions of the Pre-IPO share option scheme shall remain in full force and effect.
As at 31 December 2003, the number of shares issuable under share options granted under the Pre-IPO share
option scheme was 18,034,000, which represented 4% of the Company’s shares in issue as at that date. The maximum
number of shares issuable under share options to each eligible participant in the Pre-IPO share option scheme
within any 12-month period is limited to 1% of the shares of the Company in issue at any time. Any further grant of
share options in excess of this limit is subject to the shareholders’ approval in a general meeting.
The following share options granted under the Pre-IPO share option scheme at the beginning of the year and the
Scheme during the year for a consideration of HK$1.00 per grant are set out below:
Number of share options Price of the Company’s shares ***
Exercise At grant At exercise
Name or Type of At the Granted Exercised Lapsed Cancelled At the end Date of price per date of date of
category of share option beginning of during during during during of grant of Exercise share** options options
participant scheme the year the year the year the year the year the year share options* period HK$ HK$ HK$
Director
Pre-IPO share
29/11/2004 to
Steven Yung option scheme 2,500,000 – – – – 2,500,000 28/11/2001 28/11/2008 5.89 – –
30/6/2005 to
The Scheme 1,250,000 – – – – 1,250,000 29/06/2002 29/06/2009 5.51 5.3 –
28/05/2006 to
The Scheme – 1,400,000 – – – 1,400,000 28/05/2003 27/05/2010 3.51 3.5 –
3,750,000 1,400,000 – – – 5,150,000
Pre-IPO share
29/11/2001 to
Peter Cosgrove option scheme 1,250,000 – – – – 1,250,000 28/11/2001 28/11/2008 5.89 – –
30/06/2005 to
The Scheme 625,000 – – – – 625,000 29/06/2002 29/06/2009 5.51 5.3 –
28/05/2006 to
The Scheme – 704,000 – – – 704,000 28/05/2003 27/05/2010 3.51 3.5 –
1,875,000 704,000 – – – 2,579,000
THE AGE OF
CONSUMERS
55

REPORT OF THE DIRECTORS
Share Option Schemes
(continued)
Number of share options Price of the Company’s shares ***
Exercise At grant At exercise
Name or Type of At the Granted Exercised Lapsed Cancelled At the end Date of price per date of date of
category of share option beginning of during during during during of grant of Exercise share** options options
participant scheme the year the year the year the year the year the year share options* period HK$ HK$ HK$
Director
Pre-IPO share
29/11/2004 to
Han Zi Jing option scheme 3,334,000 – – – – 3,334,000 28/11/2001 28/11/2008 5.89 – –
30/06/2005 to
The Scheme 1,666,000 – – – – 1,666,000 29/06/2002 29/06/2009 5.51 5.3 –
28/05/2006 to
The Scheme – 1,900,000 – – – 1,900,000 28/05/2003 27/05/2010 3.51 3.5 –
20/11/2006 to
The Scheme – 1,000,000 – – – 1,000,000 19/11/2003 19/11/2010 5.35 5.35 –
5,000,000 2,900,000 – – – 7,900,000
Pre-IPO share
29/11/2004 to
Teo Hong Kiong option scheme 1,200,000 – – – – 1,200,000 28/11/2001 28/11/2008 5.89 – –
30/06/2005 to
The Scheme 600,000 – – – – 600,000 29/06/2002 29/06/2009 5.51 5.3 –
28/05/2006 to
The Scheme – 670,000 – – – 670,000 28/05/2003 27/05/2010 3.51 3.5 –
1,800,000 670,000 – – – 2,470,000
Pre-IPO share
29/11/2004 to
Zou Nan Feng option scheme 800,000 – – – – 800,000 28/11/2001 28/11/2008 5.89 – –
30/06/2005 to
The Scheme 400,000 – – – – 400,000 29/06/2002 29/06/2009 5.51 5.3 –
28/05/2006 to
The Scheme – 666,000 – – – 666,000 28/05/2003 27/05/2010 3.51 3.5 –
1,200,000 666,000 – – – 1,866,000
Pre-IPO share
29/11/2004 to
Zhang Huai Jun**** option scheme 350,000 – – – – 350,000 28/11/2001 28/11/2008 5.89 – –
30/06/2005 to
The Scheme 175,000 – – – – 175,000 29/06/2002 29/06/2009 5.51 5.3 –
28/05/2006 to
The Scheme – 666,000 – – – 666,000 28/05/2003 27/05/2010 3.51 3.5 –
525,000 666,000 – – – 1,191,000
Clear Media Limited
Annual Report 2003
56

REPORT OF THE DIRECTORS
Share Option Schemes
(continued)
Number of share options Price of the Company’s shares ***
Exercise At grant At exercise
Name or Type of At the Granted Exercised Lapsed Cancelled At the end Date of price per date of date of
category of share option beginning of during during during during of grant of Exercise share** options options
participant scheme the year the year the year the year the year the year share options* period HK$ HK$ HK$
Others
Pre-IPO share
29/11/2004 to
Members of senior option scheme 10,400,000 – – 1,800,000 – 8,600,000 28/11/2001 28/11/2008 5.89 – –
management and
30/06/2005 to
other employees of The Scheme 5,200,000 – – 900,000 – 4,300,000 29/06/2002 29/06/2009 5.51 5.3 –
the Group****
28/05/2006 to
The Scheme – 5,994,000 – – – 5,994,000 28/05/2003 27/05/2010 3.51 3.5 –
20/11/2006 to
The Scheme – 2,000,000 – – – 2,000,000 19/11/2003 19/11/2010 5.35 5.35 –
15,600,000 7,994,000 – 2,700,000 – 20,894,000
Pre-IPO share
In aggregate option scheme 19,834,000 – – 1,800,000 – 18,034,000
The Scheme 9,916,000 – – 900,000 – 9,016,000
The Scheme – 12,000,000 – – – 12,000,000
The Scheme – 3,000,000 – – – 3,000,000
29,750,000 15,000,000 – 2,700,000 – 42,050,000
* The vesting period of the share options is from the date of the grant until the commencement of the exercise period except for:
(i) For the share options granted under the Pre-IPO share option scheme, 33% of the options granted will vest at the end of the first full
financial year (the “Period”) after the grant date if the Company achieves a 20% growth in its earnings before interest, tax, depreciation,
and amortisation (the “EBITDA”) during the Period. Further, 66.7% of the options granted will vest at the end of the second full
financial year after grant if the Company achieves a compounded annual growth rate of 20% in its EBITDA during the first two full
financial years after the grant date.
(ii) For the share options granted on 28 May 2003 and 19 November 2003, the options will not become vested at the end of the third year
after the grant date unless the Company has achieved an average annual earnings per share growth of 5% each year for the first three full
financial years after the grant date.
** The exercise price of the share options is subject to adjustment in the case of rights or bonus issues, or other similar changes in the
Company’s share capital.
*** The price of the Company’s shares disclosed as at the date of the grant of the share options is the Stock Exchange closing price on the trading
day immediately prior to the date of the grant of the options. The price of the Company’s shares disclosed as at the date of the exercise of the
share options is the weighted average of the Stock Exchange closing prices over all of the exercises of options within the disclosure line.
**** Mr. Zhang Huai Jun was appointed as an alternate director to Mr. Han Zi Dian on 18 December 2003. The share options granted to him are
disclosed separately and disclosure of share options under the members of senior management and other employees of the Group category
has been restated to conform with the change.
The financial impact of the share options granted is not recorded in the Company’s or the Group’s balance sheet
until such time as the options are exercised, and no charge is recorded in the profit and loss account or balance sheet
for their cost. Upon the exercise of the share options, the resulting shares issued are recorded by the Company as
additional share capital at the nominal value of the shares, and the excess of the exercise price per share over the
nominal value of the shares is recorded by the Company in the share premium account. Options which are cancelled
prior to their exercise date are deleted from the register of outstanding options.
The directors do not consider it appropriate to disclose a theoretical value of the share options granted during the
year to the directors and members of senior management and other employees of the Group, because in the absence
of a readily available market value of the share options on the ordinary shares of the Company, the directors were
unable to arrive at an accurate assessment of the value of these share options.
THE AGE OF
CONSUMERS
57

REPORT OF THE DIRECTORS
Share Option Schemes
(continued)
Apart from the foregoing, at no time during the year ended 31 December 2003 was the Company, or any of its
subsidiaries, a party to any arrangement to enable the directors or any of their spouse or minor children to acquire
benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.
Substantial Shareholders’ and Other persons’ Interests and Short Positions
in Shares and Underlying Shares
As at 31 December 2003, the following interests and short positions of 5% or more in the issued share capital and
share options of the Company were recorded in the register of interests required to be kept by the Company
pursuant to Section 336 of the SFO:
Long positions:
Percentage of
the Company’s
Number of issued share
Name shares held capital
Clear Channel Outdoor, Inc. 241,337,500 48.1%
The Capital Group Companies, Inc. 70,659,000 14.1%
Outdoor Media China, Inc. 30,000,000 6.0%
Save as disclosed above, no person or corporation, other than directors and chief executive of the Company, whose
interests are set out in the section “Directors and chief executive’s interests or short positions in the shares or
underlying shares” above, had registered an interest of short position in the shares or underlying shares of the
Company that was required to be recorded pursuant to Section 336 of the SFO.
Post Balance Sheet Event
Details of the significant post balance sheet event of the Group are set out in note 28 to the financial statements.
Code of Best Practice
In the opinion of the directors, the Company complied with the Code of Best Practice (the “Code”), as set out in
Appendix 14 of the Listing Rules throughout the accounting period covered by the annual report, except that the
independent non-executive directors of the Company are not appointed for a specific term as required by paragraph
7 of the Code, but are subject to retirement by rotation and re-election at the annual general meeting of the Company
in accordance with the Company’s bye-laws.
The Company will also adopt a Code of Conduct regarding securities transactions by directors and appoint an
additional independent non-executive director in due course in order to be in compliance with the Amendments to
the Listing Rules Relating to Corporate Governance Issues and Consultation Conclusion on Proposed Amendments
to the Listing Rules Relating to Initial Listing Criteria and Listing Obligations released by the Stock Exchange.
Audit Committee
The Company established an Audit Committee (the “Committee”) on 28 November 2001 with written terms of
reference in compliance with the Code, as set out in Appendix 14 of the Listing Rules. The primary duties of the
Committee are to review and supervise the financial reporting process and internal control systems of the Group.
The Committee comprises the two independent non-executive directors and a non-executive director. The Group’s
financial statements for the year ended 31 December 2003 have been reviewed by the Committee, who are of the
opinion that such statements comply with applicable accounting standards, the Listing Rules and legal requirements
and that adequate disclosures have been made therein.
Clear Media Limited
Annual Report 2003
58

REPORT OF THE DIRECTORS
Remuneration Committee
The Company established a Remuneration Committee on 28 November 2001 with written terms of reference. The
Remuneration Committee shall make recommendations to the board of directors on the Company’s framework of
executive remuneration and determine on behalf of the board of directors specific remuneration packages and
conditions of employment for the executive directors.
Executive Committee
The Company established an Executive Committee on 21 January 2002 with written terms of reference. The Executive
Committee shall review the Company’s operations and report to the board of directors on a regular basis.
Nomination Committee
The Nomination Committee has set up in February 2004 with written terms of reference. The Nomination Committee
is responsible for making recommendations to the Board regarding the appointment of directors and senior
management.
Capital Expenditure Committee
The Company has set up a Capital Expenditure Committee with an objective to review capital expenditure plan
proposed by the Company’s management team. This committee will send the reviewed plan to the Board for its
approval. The committee members include senior staff from the Finance and Sales Departments and a member of
the Board.
Material Legal Proceedings
As at 31 December 2003, the Company was not involved in any material litigation or arbitration and no material
litigation or claim was pending or threatened or made against the Company as far as the board of directors was aware
of, except for the litigation mentioned as below:
A claim for specific performance and damages has been made against a subsidiary of the Group for alleged breach of
contract. On 28 November 2001, OMC, Clear Channel Outdoor, Inc. ("CCO"), China Outdoor Media (HK) and
the Company, entered into a Deed of Indemnity. Under the terms of the Deed of Indemnity, OMC and CCO have
covenanted and undertaken to indemnify the Group against all claims (whether of not successful, compromised or
otherwise settled), actions, damages, penalties, liabilities, legal fees, enforcement costs and expenses incurred by
the Group in respect of the claim.
Auditors
Ernst & Young retire and a resolution for their reappointment as auditors of the Company will be proposed at the
forthcoming annual general meeting.
ON BEHALF OF THE BOARD
Steven Yung
Chairman and Executive Director
Hong Kong
26 February 2004
THE AGE OF
CONSUMERS
59

REPORT OF THE AUDITORS
To the members
Clear Media Limited
(Incorporated in Bermuda with limited liability)
We have audited the financial statements on pages 61 to 89 which have been prepared in accordance with accounting
principles generally accepted in Hong Kong.
Respective responsibilities of directors and auditors
The Company’s directors are responsible for the preparation of financial statements which give a true and fair view.
In preparing financial statements which give a true and fair view it is fundamental that appropriate accounting
policies are selected and applied consistently.
It is our responsibility to form an independent opinion, based on our audit, on those financial statements and to
report our opinion solely to you, as a body, in accordance with Section 90 of the Bermuda Companies Act 1981, and
for no other purpose. We do not assume responsibility towards or accept liability to any other person for the
contents of this report.
Basis of opinion
We conducted our audit in accordance with Statements of Auditing Standards issued by the Hong Kong Society of
Accountants. An audit includes an examination, on a test basis, of evidence relevant to the amounts and disclosures
in the financial statements. It also includes an assessment of the significant estimates and judgments made by the
directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to
the Company’s and the Group’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered
necessary in order to provide us with sufficient evidence to give reasonable assurance as to whether the financial
statements are free from material misstatement. In forming our opinion we also evaluated the overall adequacy of
the presentation of information in the financial statements. We believe that our audit provides a reasonable basis for
our opinion.
Opinion
In our opinion the financial statements give a true and fair view of the state of affairs of the Company and of the
Group as at 31 December 2003 and of the profit and cash flows of the Group for the year then ended and have been
properly prepared in accordance with the disclosure requirements of the Hong Kong Companies Ordinance.
Ernst & Young
Certified Public Accountants
Hong Kong
26 February 2004
Clear Media Limited
Annual Report 2003
60

CONSOLIDATED PROFIT AND LOSS ACCOUNT
Year ended 31 December 2003
2003 2002
Notes HK$'000 HK$'000
TURNOVER 5 488,175 426,916
Cost of sales (282,140) (241,674)
Gross profit 206,035 185,242
Other revenue 5 6,066 8,935
Selling and distribution costs (37,621) (34,089)
Administrative expenses (62,615) (64,859)
PROFIT FROM OPERATING ACTIVITIES 6 111,865 95,229
Finance costs 9 (8,129) (7,654)
PROFIT BEFORE TAX 103,736 87,575
Tax 10 (13,502) (8,772)
PROFIT BEFORE MINORITY INTERESTS 90,234 78,803
Minority interests (8,450) (7,697)
NET PROFIT FROM ORDINARY ACTIVITIES 11
ATTRIBUTABLE TO SHAREHOLDERS 81,784 71,106
EARNINGS PER SHARE 12
Basic 16.30 cents 14.18 cents
Diluted 16.26 cents N/A
THE AGE OF
CONSUMERS
61

CONSOLIDATED BALANCE SHEET
31 December 2003
2003 2002
Notes HK$'000 HK$'000
NON-CURRENT ASSETS
Fixed assets 13 51,261 69,430
Concession rights 15 861,612 846,068
Deferred tax assets 22 349 –
913,222 915,498
CURRENT ASSETS
Accounts receivable 16 167,794 113,612
Prepayments, deposits and other receivables 17 82,185 37,345
Due from related parties 18 26,174 51,417
Short term investments 19 10,349 –
Pledged time deposits 20 199,500 140,022
Cash and bank balances 224,830 267,158
710,832 609,554
CURRENT LIABILITIES
Interest-bearing bank borrowings 21 171,718 152,201
Other payables and accruals 142,686 132,269
Deferred income 3,147 9,207
Tax payable 8,164 5,593
325,715 299,270
NET CURRENT ASSETS 385,117 310,284
TOTAL ASSETS LESS CURRENT LIABILITIES 1,298,339 1,225,782
NON-CURRENT LIABILITIES
Deferred tax liabilities 22 – 2,936
MINORITY INTERESTS 9,966 13,096
1,288,373 1,209,750
CAPITAL AND RESERVES
Issued capital 23 50,161 50,161
Reserves 24 1,238,212 1,159,589
1,288,373 1,209,750
Steven Yung
Director
Han Zi Jing
Director
Clear Media Limited
Annual Report 2003
62

CONSOLIDATED SUMMARY STATEMENT OF CHANGES IN EQUITY
Year ended 31 December 2003
2003 2002
Note HK$'000 HK$'000
TOTAL EQUITY
Balance at beginning of year 1,209,750 1,129,798
Issue of shares, including share premium – 9,471
Share issue expenses – (427)
Exchange differences on translation of
the financial statements of a foreign entity,
and net gains and losses not recognised
in the consolidated profit and loss account 24 (3,161) (198)
Net profit for the year from ordinary activities
attributable to shareholders 81,784 71,106
Balance at end of year 1,288,373 1,209,750
THE AGE OF
CONSUMERS
63

CONSOLIDATED CASH FLOW STATEMENT
Year ended 31 December 2003
2003 2002
Notes HK$'000 HK$'000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax 103,736 87,575
Adjustments for:
Unrealised gain on short term investments 6 (1,852) –
Loss on disposal of fixed assets 6 588 –
Depreciation of owned assets excluding point-of-sale 6 7,193 5,536
Amortisation of concession rights
and depreciation of point-of-sale 6 95,703 88,391
Foreign exchange (gains)/losses, net 6 587 (198)
Finance costs 9 8,129 7,654
Interest income 5 (6,066) (8,934)
Operating profit before working capital changes 208,018 180,024
Increase in accounts receivable (54,182) (28,119)
Increase in prepayments, deposits and other receivables (27,211) (30,676)
Decrease in amounts due from related parties 25,243 2,777
Increase/(decrease) in other payables and accruals 20,454 (24,887)
Increase/(decrease) in deferred income (6,060) 5,283
Decrease in an amount due to a shareholder – (3,825)
Increase in short term investments (8,497) –
Cash generated from operations 157,765 100,577
Interest paid (8,072) (8,627)
Income taxes paid (14,216) (7,624)
Net cash from operating activities 135,477 84,326
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of fixed assets 25(a) (5,451) (17,280)
Additions to concession rights 25(b) (137,682) (353,819)
Interest received 5,876 11,807
Net cash used in investing activities (137,257) (359,292)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of share capital – 9,044
Share issue expenses paid – (32,563)
New bank loans 181,102 132,880
Repayment of bank loans (161,585) (412,135)
(Increase)/decrease in pledged time deposits (59,478) 35,487
Net cash used in financing activities (39,961) (267,287)
NET DECREASE IN CASH AND CASH
EQUIVALENTS (41,741) (542,253)
Cash and cash equivalents at beginning of year 25(c) 267,158 809,411
Effect of foreign exchange rate changes, net (587) –
CASH AND CASH EQUIVALENTS AT END
OF YEAR 25(c) 224,830 267,158
Clear Media Limited
Annual Report 2003
64

BALANCE SHEET
31 December 2003
2003 2002
Notes HK$'000 HK$'000
NON-CURRENT ASSETS
Interests in subsidiaries 14 938,452 916,166
CURRENT ASSETS
Prepayments, deposits and other receivables 4,061 581
Cash and bank balances 207,263 233,641
211,324 234,222
CURRENT LIABILITIES
Other payables and accruals 19 4,824
NET CURRENT ASSETS 211,305 229,398
1,149,757 1,145,564
CAPITAL AND RESERVES
Issued capital 23 50,161 50,161
Reserves 24 1,099,596 1,095,403
1,149,757 1,145,564
Steven Yung
Director
Han Zi Jing
Director
THE AGE OF
CONSUMERS
65

NOTES NOTES TO FINANCIAL TO STATEMENTS
31
31
December
December
2003
2003
1. Corporate Information
The registered office of the Company is located at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda.
The principal activity of the Company is investment holding. Details of the principal activities of the Company’s
subsidiaries are set out in note 14 to the financial statements. There were no significant changes in the nature of the
subsidiaries’ principal activities during the year.
2. Impact of a Revised Statement of Standard Accounting Practice (“SSAP”)
The revised SSAP 12 “Income taxes” is effective for the first time for the current year’s financial statements. The
SSAP prescribes new accounting measurement and disclosure practices. The major effects on the Group’s accounting
policies and on the amounts disclosed in these financial statements of adopting this SSAP, which has had a significant
effect on the financial statements are described as follows:
The SSAP prescribes the accounting for income taxes payable or recoverable, arising from the taxable profit for the
current period (current tax); and income taxes payable or recoverable in future periods, principally arising from
taxable and deductible temporary differences and the carryforward of unused tax losses (deferred tax).
The SSAP has had impact for financial statements on the amounts recorded for income taxes of the Group for the
current year, and related notes disclosures are now more extensive than previously required. These are detailed in
notes 10 and 22 to the financial statements and include a reconciliation between the accounting profit and the tax
expense for the year.
3. Summary of Significant Accounting Policies
Basis of preparation
These financial statements have been prepared in accordance with Hong Kong Statements of Standard Accounting
Practice, accounting principles generally accepted in Hong Kong and the disclosure requirements of the Hong Kong
Companies Ordinance. They have been prepared under the historical cost convention, except for the periodic
remeasurement of equity investments, as further explained below.
Basis of consolidation
The consolidated financial statements include the financial statements of the Company and its subsidiaries for the
year ended 31 December 2003. The results of the subsidiaries acquired or disposed of during the year are consolidated
from or to their effective dates of acquisition or disposal, respectively. All significant intercompany transactions and
balances within the Group are eliminated on consolidation.
Minority interests represent the interests of outside shareholders in the results and net assets of the Company’s
subsidiaries.
Subsidiaries
A subsidiary is a company whose financial and operating policies the Company controls, directly or indirectly, so as
to obtain benefits from its activities.
The results of subsidiaries are included in the Company’s profit and loss account to the extent of dividends received
and receivable. The Company’s interests in subsidiaries are stated at cost less any impairment losses.
Clear Media Limited
Annual Report 2003
66

NOTES TO FINANCIAL STATEMENTS
31 December 2003
3. Summary of Significant Accounting Policies
(continued)
Joint venture companies
A joint venture is a company set up by contractual arrangement, whereby the Group and other parties undertake an
economic activity. The joint venture company operates as a separate entity in which the Group and the other parties
have an interest.
The joint venture agreement between the venturers stipulates the capital contributions of the joint venture parties,
the duration of the joint venture and the basis on which the assets are to be realised upon its dissolution. The profits
and losses from the joint venture company’s operations and any distributions of surplus assets are shared by the
venturers, either in proportion to their respective capital contributions, or in accordance with the terms of the joint
venture agreement.
A joint venture company is treated as:
(a) a subsidiary, if the Company has unilateral control, directly or indirectly, over the joint venture company;
(b) a jointly-controlled entity, if the Company does not have unilateral control, but has joint control, directly or
indirectly, over the joint venture company;
(c) an associate, if the Company does not have unilateral or joint control, but holds, directly or indirectly, generally
not less than 20% of the joint venture company’s registered capital and is in a position to exercise significant
influence over the joint venture company; or
(d) a long term investment, if the Company holds, directly or indirectly, less than 20% of the joint venture company’s
registered capital and has neither joint control of, nor is in a position to exercise significant influence over, the
joint venture company.
Related parties
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party, or
exercise significant influence over the other party in making financial and operating decisions. Parties are also
considered to be related if they are subject to common control or common significant influence. Related parties
may be individuals or corporate entities.
Impairment of assets
An assessment is made at each balance sheet date of whether there is any indication of impairment of any asset, or
whether there is any indication that an impairment loss previously recognised for an asset in prior years may no
longer exist or may have decreased. If any such indication exists, the asset’s recoverable amount is estimated. An
asset’s recoverable amount is calculated as the higher of the asset’s value in use or its net selling price.
An impairment of loss is recognised only if the carrying amount of an asset exceeds its recoverable amount. An
impairment loss is charged to the profit and loss account in the period in which it arises, unless the asset is carried
at a revalued amount, when the impairment loss is accounted for in accordance with the relevant accounting policy
for the revalued asset.
THE AGE OF
CONSUMERS
67

NOTES TO FINANCIAL STATEMENTS
31 December 2003
3. Summary of Significant Accounting Policies
(continued)
Impairment of assets (continued)
A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine
the recoverable amount of an asset, however not to an amount higher than the carrying amount that would have
been determined (net of any depreciation/amortisation), had no impairment loss been recognised for the asset in
prior years.
A reversal of an impairment loss is credited to the profit and loss account in the period in which it arises, unless the
asset is carried at a revalued amount, when the reversal of the impairment loss is accounted for in accordance with
the relevant accounting policy for that revalued asset.
Fixed assets and depreciation
Fixed assets are stated at cost less accumulated depreciation and any impairment losses. The cost of an asset comprises
its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its
intended use. Expenditure incurred after fixed assets have been put into operation, such as repairs and maintenance,
is normally charged to the profit and loss account in the year in which it is incurred. In situations where it can be
clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be
obtained from the use of the fixed asset, the expenditure is capitalised as an additional cost of that asset.
Depreciation is calculated on the straight-line method to write off the cost of each asset over the following estimated
useful lives:
Leasehold improvements
Furniture and equipment
Motor vehicles
Point-of-sale
5 years
5 years
5 years
10 years
The gain or loss on disposal or retirement of a fixed asset recognised in the profit and loss account is the difference
between the net sales proceeds and the carrying amount of the relevant asset.
Point-of-sale represents advertising light boxes installed in shopping malls and other public areas. Expenditure
incurred after point-of-sale has been put into operation, such as repairs and maintenance, is normally charged to the
profit and loss account in the year in which it is incurred. In situations where it can be clearly demonstrated that the
expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of
point-of-sale, the expenditure is capitalised as an additional cost of such point-of-sale.
Construction in progress is stated at cost less any impairment losses, which includes the cost of construction and
other direct costs attributable to the construction of bus shelters, unipoles and point-of-sale. No provision for
depreciation is made for construction in progress until such time as the assets are completed and put into use.
Construction in progress is transferred to concession rights or fixed assets when it is capable of producing rental
income on a commercial basis.
Clear Media Limited
Annual Report 2003
68

NOTES TO FINANCIAL STATEMENTS
31 December 2003
3. Summary of Significant Accounting Policies
(continued)
Concession rights
Concession rights are stated at cost less accumulated amortisation. Concession rights represent the cost of acquiring
operating rights for the placement of advertisements in bus shelters and unipoles in the PRC and include any directly
attributable costs of bringing bus shelters and unipoles to their present condition and location for their intended
use.
Expenditure incurred after bus shelters and unipoles have been put into operation, such as repairs and maintenance,
is normally charged to the profit and loss account in the year in which it is incurred. In situations where it can be
clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be
obtained from the use of bus shelters and unipoles, the expenditure is capitalised as an additional cost of the concession
rights.
Concession rights are amortised on a straight-line and individual basis over the period of the rights, which range
from 5 to 20 years. The average operating right period is 10 years.
Leased assets
Leases that transfer substantially all the rewards and risks of ownership of assets to the Group, other than legal title,
are accounted for as finance leases. At the inception of a finance lease, the cost of the leased asset is capitalised at the
present value of the minimum lease payments and recorded together with the obligation, excluding the interest
element, to reflect the purchase and financing. Assets held under capitalised finance leases are included in fixed
assets and depreciated over the shorter of the lease terms and the estimated useful lives of the assets. The finance
costs of such leases are charged to the profit and loss account so as to provide a constant periodic rate of charge over
the lease terms.
Leases where substantially all the rewards and risks of ownership of assets remain with the lessor are accounted for
as operating leases. Where the Group is the lessor, assets leased by the Group under operating leases are included in
non-current assets and rentals receivable under the operating leases are credited to the profit and loss account on the
straight-line basis over the lease terms. Where the Group is the lessee, rentals payable under the operating leases are
charged to the profit and loss account on the straight-line basis over the lease terms.
Short term investments
Short term investments are investments in equity securities held for trading purposes and are stated at their fair
values on the basis of their quoted market prices at the balance sheet date, on an individual investment basis. The
gains or losses arising from changes in the fair value of a security are credited or charged to the profit and loss
account in the period in which they arise.
Revenue recognition
Revenue is recognised when it is probable that the economic benefits will flow to the Group, and when the revenue
can be measured reliably, on the following bases:
(a) Rental revenue for outdoor advertising spaces, including point-of-sale, on a time proportion basis over the
terms of the agreements; and
(b) Interest income, on a time proportion basis taking into account the principal outstanding and the effective
interest rate applicable.
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69

NOTES TO FINANCIAL STATEMENTS
31 December 2003
3. Summary of Significant Accounting Policies
(continued)
Deferred income
Cumulative billings in excess of revenue attributable to the current year are recorded as deferred income.
Income tax
Income tax comprises current and deferred tax. Income tax is recognised in the profit and loss account or in equity
if it relates to items that are recognised in the same or a different period, directly in equity.
Deferred tax is provided, using the liability method, on all temporary differences at the balance sheet date between
the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all taxable temporary differences:
• except where the deferred tax liability arises from goodwill or the initial recognition of an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the accounting
profit nor taxable profit or loss; and
• in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests
in joint ventures, except where the timing of the reversal of the temporary differences can be controlled and it
is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, carryforward of unused tax assets and
unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences, and the carryforward of unused tax assets and unused tax losses can be utilised:
• except where the deferred tax asset relating to the deductible temporary differences arises from negative goodwill
or the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time
of the transaction, affects neither the accounting profit nor taxable profit or loss; and
• in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests
in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary
differences will reverse in the foreseeable future and taxable profit will be available against which the temporary
differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be
utilised. Conversely, previously unrecognised deferred tax assets are recognised to the extent that it is probable that
sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the
asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the balance sheet date.
Clear Media Limited
Annual Report 2003
70

NOTES TO FINANCIAL STATEMENTS
31 December 2003
3. Summary of Significant Accounting Policies
(continued)
Foreign currencies
Foreign currency transactions are recorded at the applicable rates of exchange ruling at the transaction dates. Monetary
assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates
of exchange ruling at that date. Exchange differences are dealt with in the profit and loss account.
On consolidation, the financial statements of overseas subsidiaries are translated into Hong Kong dollars using the
net investment method. The profit and loss accounts of overseas subsidiaries are translated into Hong Kong dollars
at the weighted average exchange rates for the year. The balance sheets of overseas subsidiaries are translated into
Hong Kong dollars at the exchange rates at the balance sheet date. The resulting translation differences are included
in the exchange fluctuation reserve.
For the purpose of the consolidated cash flow statement, the cash flows of overseas subsidiaries are translated into
Hong Kong dollars at the exchange rates ruling at the dates of the cash flows. Frequently recurring cash flows of
overseas subsidiaries which arise throughout the year are translated into Hong Kong dollars at the weighted average
exchange rates for the year.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, i.e., assets
that necessarily take a substantial period of time to get ready for their intended use, are capitalised as part of the cost
of those assets. Capitalisation of such borrowing costs ceases when the assets are substantially ready for their
intended use.
Pension schemes and costs
The Group operates a defined contribution Mandatory Provident Fund retirement benefits scheme (the “MPF
Scheme”) under the Mandatory Provident Fund Schemes Ordinance, for all of its employees in Hong Kong.
Contributions are made based on a percentage of the employees’ basic salaries, limited to a maximum of HK$1,000
per month, and are charged to the profit and loss account as they become payable in accordance with the rules of the
MPF Scheme. The assets of the MPF Scheme are held separately from those of the Group in an independently
administered fund. The Group’s employer contributions vest fully with the employees when contributed into the
MPF Scheme except for the Group’s employer voluntary contributions, which are refunded to the Group when the
employee leaves employment prior to the contributions vesting fully, in accordance with the rules of the MPF Scheme.
According to the relevant PRC regulations, Hainan White Horse Advertising Media Investment Company Limited,
commencing from 1 July 2001, is required to participate in the employee retirement scheme operated by the
relevant local government bureau in the PRC and to make contributions for its eligible employees. The contributions
to be borne by the Group are calculated at certain percentage on the annual average salary in Guangzhou announced
by the Guangzhou Social Labor Insurance Administration Bureau.
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71

NOTES TO FINANCIAL STATEMENTS
31 December 2003
3. Summary of Significant Accounting Policies
(continued)
Share option schemes
The financial impact of share options granted is not recorded in the Company’s or the Group’s balance sheet until
such time as the options are exercised, and no charge is recorded in the profit and loss account or balance sheet for
their cost. Upon exercise of the share options, the resulting shares issued are recorded by the Company as additional
share capital at the nominal value of the shares, and the excess of the exercise price per share over the nominal value
of the shares is recorded by the Company in the share premium account. Options which are cancelled or which lapse
prior to their exercise date are deleted from the register of outstanding options and have no impact on the profit and
loss account or balance sheet.
4. Segment Information
Segment information is required by SSAP 26 “Segment reporting” to be presented by way of two segment formats:
(i) on a primary segment reporting basis, which for the Group is determined to be by business segment; and (ii) on
a secondary segment reporting basis, where for the Group is determined to be by geographical segment.
Outdoor media sales is the only major business segment of the Group, and comprises the display of advertisements
on bus shelters, unipoles and point-of-sale. Accordingly, no further business segment information is provided.
In determining the Group’s geographical segments, revenues and results are attributed to the segments based on the
location of the customers, and assets are attributed to the segments based on the location of the assets. As the
Group’s major operations and markets are located in the PRC, no further geographical segment information
is provided.
5. Turnover and Revenue
Turnover represents the contract value for the displaying of advertisements on bus shelters, unipoles and point-ofsale,
net of commission and discounts, in the PRC.
An analysis of the Group’s turnover and revenue is as follows:
2003 2002
HK$’000 HK$’000
Turnover 488,175 426,916
Interest income 6,066 8,934
Others – 1
Other revenue 6,066 8,935
Revenue 494,241 435,851
Clear Media Limited
Annual Report 2003
72

NOTES TO FINANCIAL STATEMENTS
31 December 2003
6. Profit from Operating Activities
The Group’s profit from operating activities is arrived at after charging/(crediting):
2003
HK$’000
2002
HK$’000
Cost of services provided 93,813 70,342
Operating lease rentals on bus shelters, unipoles and point-of-sale 92,624 82,941
Amortisation of concession rights and depreciation of point-of-sale 95,703 88,391
Cost of sales 282,140 241,674
Provision for doubtful debts 8,505 8,617
Bad debts written off 10,018 8,216
Auditors’ remuneration 820 780
Depreciation of owned assets, excluding point-of-sale 7,193 5,536
Loss on disposal of fixed assets 588 –
Operating lease rentals on buildings 8,870 7,465
Staff costs (including directors’ remuneration (note 7))
Wages and salaries 41,487 35,245
Pension scheme contributions 165 182
Less: Forfeited contributions – –
Net pension contributions 165 182
41,652 35,427
Unrealised gain on revaluation of short term investments (1,852) –
Foreign exchange losses, net 587 11
Write back of excessive culture levy provision – (20,873)
Interest income (6,066) (8,934)
The Group’s profit from operating activities represents media sales in the PRC.
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73

NOTES TO FINANCIAL STATEMENTS
31 December 2003
7. Directors’ Remuneration
The remuneration of the directors of the Company for the year disclosed pursuant to the Listing Rules and Section
161 of the Hong Kong Companies Ordinance is analysed as follows:
Group
2003
HK$’000
2002
HK$’000
Fees:
Executive directors – –
Non-executive directors 360 360
Independent non-executive directors 327 240
687 600
Other emoluments of executive directors:
Basic salaries, other allowances and benefits in kind 6,299 6,893
Pension scheme contributions 46 48
Other emoluments of non-executive directors:
Basic salaries, other allowances and benefits in kind 1,053 963
Pension scheme contributions 12 12
7,410 7,916
8,097 8,516
The number of directors whose remuneration fell within the following bands is as follows:
Numbers of directors
2003 2002
Nil – HK$1,000,000 11 10
HK$1,000,001 – HK$1,500,000 1 –
HK$1,500,001 – HK$2,000,000 2 2
HK$2,000,001 – HK$2,500,000 1 1
15 13
During the year, discretionary bonuses paid to or receivable by the directors amounted to HK$43,000 (2002:
HK$387,000). No directors waived or agreed to waive any remuneration during the year (2002: Nil). In addition,
no emoluments were paid by the Group to the directors as an inducement to join, or upon joining the Group, or as
a compensation for loss of office (2002: Nil).
During the year, 7,006,000 share options were granted to the directors in respect of their services to the Group,
further details of which are set out under the heading “Share option schemes” in the Report of the Directors on
pages 54 to 58. No value in respect of the share options granted during the year has been charged to profit and loss
account, or is otherwise included in the above directors’ remuneration disclosures.
Clear Media Limited
Annual Report 2003
74

NOTES TO FINANCIAL STATEMENTS
31 December 2003
8. Five Highest Paid Individuals
During the year, all of five highest paid individuals are directors (2002: three) and the details of whose remuneration
are set out above. The details of the remuneration of the remaining two highest paid, non-director individuals in
2002, which both fell within the HK$1,000,001 to HK$1,500,000 band, are as follows:
Group
2003 2002
HK$’000 HK$’000
Basic salaries, other allowances and benefits in kind – 2,735
During the year, the discretionary bonuses paid to or receivable by the five highest paid individuals of the Group
amounted to HK$289,000 (2002: HK$289,000). No emoluments were paid by the Group to any of the five highest
paid individuals as an inducement to join, or upon joining the Group, or as compensation for loss of office (2002:
Nil).
During the year, 6,340,000 share options were granted to the five directors, highest employees in respect of their
services to the Group, further details of which are set out under the heading “Share option schemes” in the Report
of the Directors on pages 54 to 58. No value in respect of the share options granted during the year has been charged
to the profit and loss account, or is otherwise included in the above highest paid employees’ remuneration disclosures.
9. Finance Costs
Group
2003 2002
HK$’000 HK$’000
Interest on bank loans wholly repayable within five years 8,129 7,654
10. Tax
Hong Kong profits tax has not been provided at the rate of 17.5% (2002: 16.0%) on the estimated assessable profits
arising in Hong Kong during the year. The increased Hong Kong profits tax rate became effective from the year of
assessment 2003/2004, and so is applicable to the assessable profits arising in Hong Kong for the whole of the year
ended 31 December 2003. Taxes on profits assessable elsewhere have been calculated at the rates of tax prevailing in
the countries in which the Group operates, based on existing legislation, interpretations and practices in respect
thereof.
Group
2003
HK$’000
2002
HK$’000
Group:
Current – Hong Kong – –
Current – PRC corporate income tax 16,787 8,772
Deferred (note 22) (3,285) –
Total tax charge for the year 13,502 8,772
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75

NOTES TO FINANCIAL STATEMENTS
31 December 2003
10. Tax
(continued)
A reconciliation of the tax expense applicable to profit before tax using the statutory rates for the countries in which
the Company and its subsidiaries are domiciled to the tax expense at the effective tax rates, and a reconciliation of
the applicable rates (i.e., the statutory tax rates) to the effective tax rates, are as follows:
Group
2003 2002
HK$’000 HK$’000
Profit before tax 103,736 87,575
Calculated at a tax rate of 15.0% (2002: 7.5%) 15,560 6,568
Higher income tax rates for Hong Kong at 17.5% (2002: 16.0%) 150 179
Income not subject to tax (2,676) (4,032)
Expenses not deductible for tax 3,318 3,447
Utilisation of previously unrecognised tax losses (17) –
Tax loss not recognised 452 2,610
Deferred tax (note 22) (3,285) –
At effective income tax rate of 13.0% (2002: 10.0%) 13,502 8,772
According to the Income Tax Law of the PRC on Enterprises with Foreign Investment and Foreign Enterprises, the
WHA Joint Venture, a subsidiary of the Company established in the Hainan Special Economic Zone of the PRC, is
subject to corporate income tax at a rate of 15%, and is exempt from PRC corporate income tax for the first
profitable year of its operations, and thereafter, is eligible for 50% relief from PRC corporate income tax for the
following two years. As the current year was the fourth statutory profitable year of the WHA Joint Venture, corporation
income tax for the current year has been calculated at the rate of 15% on its assessable profits arising in the PRC.
11. Net Profit from Ordinary Activities Attributable to Shareholders
The net profit from ordinary activities attributable to shareholders dealt with in the financial statements of the
Company for the year ended 31 December 2003 was approximately HK$4,193,000 (2002: HK$1,126,000).
12. Earnings Per Share
The calculation of basic earnings per share is based on the net profit from ordinary activities attributable to shareholders
for the year of HK$81,784,000 (2002: HK$71,106,000) and the weighted average of 501,608,500 (2002:
501,564,445) ordinary shares.
The weighted average number of ordinary shares of the Company used to calculate the basic earnings per share for
the year ended 31 December 2002 included 500,000,500 ordinary shares brought forward at the beginning of that
year and 1,608,000 ordinary shares issued in 2002.
The calculation of diluted earnings per share is based on the net profit from ordinary activities attributable to
shareholders for the year of HK$81,784,000 (2002: HK$71,106,000). The weighted average number of ordinary
shares used in the calculation is the 501,608,500 (2002: 501,564,445) ordinary shares, as used in the basic earnings
per share calculation; and the weighted average of 1,341,933 (2002: Nil) ordinary shares assumed to have been
issued at no consideration on the deemed exercise of all share options with dilutive effect during the year.
Diluted earnings per share amount for the year ended 31 December 2002, has not been disclosed as the share
options had no dilutive effects throughout that year.
Clear Media Limited
Annual Report 2003
76

NOTES TO FINANCIAL STATEMENTS
31 December 2003
13. Fixed Assets
Group
Leasehold Furniture and Motor Point-of- Construction
improvements equipment vehicles sale in progress Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Cost:
At beginning of year 9,066 17,158 11,030 30,773 20,202 88,229
Additions 700 2,694 1,378 679 7,195 12,646
Transfer to concession rights – – – – (20,202) (20,202)
Disposals – – – (152) – (152)
Exchange realignment (36) (71) (45) (133) – (285)
At 31 December 2003 9,730 19,781 12,363 31,167 7,195 80,236
Accumulated depreciation:
At beginning of year (6,571) (6,445) (3,259) (2,524) – (18,799)
Provided during the year (1,609) (3,354) (2,230) (3,118) – (10,311)
Disposals – – – 29 – 29
Exchange realignment 31 39 16 20 – 106
At 31 December 2003 (8,149) (9,760) (5,473) (5,593) – (28,975)
Net book value:
At 31 December 2003 1,581 10,021 6,890 25,574 7,195 51,261
At 31 December 2002 2,495 10,713 7,771 28,249 20,202 69,430
Construction in progress represents bus shelters, unipoles and point-of-sale under construction.
14. Interests in Subsidiaries
Company
2003
HK$’000
2002
HK$’000
Unlisted shares, at cost 487,273 487,273
Due from subsidiaries 451,179 428,893
938,452 916,166
The amounts due from subsidiaries are unsecured, interest-free and have no fixed terms of repayment, expect for
loans to subsidiaries amounted to HK$260 million (2002: HK$220 million), bear interest at a rate of 5% per
annum.
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77

NOTES TO FINANCIAL STATEMENTS
31 December 2003
14. Interests in Subsidiaries
(continued)
Particulars of the subsidiaries of the Company as at 31 December 2003 were as follows:
Place of Nominal value of Percentage of
incorporation/ issued and fully equity attributable
registration and paid-up share/ to the Company
Name operations registered capital Direct Indirect Principal activities
China Outdoor Media British Virgin Ordinary HK$34,465 100 – Investment holding
Investment, Inc.
Islands
China Outdoor Media Hong Kong Ordinary HK$1,000 100 – Investment holding
Investment (Hong Kong)
Company Limited
(“China Outdoor Media
(HK)”)
Hainan White Horse People’s Republic US$21,850,000/ 80 – Operation of outdoor
Advertising Media of China (“PRC”) US$60,000,000 (Note) advertising business
Investment Company
Limited (the “WHA
Joint Venture”)
Note:
The WHA Joint Venture was established in the PRC on 24 March 1998 as a Sino-foreign equity joint venture in the PRC with a tenure of
10 years. Under the terms of the original joint venture agreement, China Outdoor Media (HK), Ming Wai Holdings Limited (“Ming
Wai”), a wholly-owned subsidiary of Clear Channel Outdoor, Inc. (“Clear Channel Outdoor”), which is a shareholder of the Company,
and Hainan White Horse Advertising Company Limited (“Hainan White Horse”) were the joint venture partners of the WHA Joint
Venture. China Outdoor Media (HK), Ming Wai and Hainan White Horse were entitled to 90%, 5% and 5%, respectively, of the profits
of the WHA Joint Venture.
Pursuant to a reorganisation which took place before the listing of the Company on the Stock Exchange, Ming Wai transferred its 5%
interest in the WHA Joint Venture to China Outdoor Media (HK). Accordingly, the minority interest of the WHA Joint Venture represented
the capital contributed by Hainan White Horse and its 5% share of the profits of the WHA Joint Venture.
China Outdoor Media (HK) and Hainan White Horse entered into a revised joint venture agreement on 6 April 2001. According to the
revised joint venture agreement, the WHA Joint Venture changed its legal structure from a Sino-foreign equity joint venture to a Sino-foreign
co-operative joint venture. The registered capital of the WHA Joint Venture was increased from HK$100,000,000 to
US$60,000,000 and the tenure has been extended from 10 years to 30 years. Hainan White Horse and China Outdoor Media (HK) share
20% and 80% interests in the WHA Joint Venture, respectively. It is agreed that for the fiscal years 2001 to 2005 (both years inclusive),
China Outdoor Media (HK) will be entitled to 90% of the profits after tax of the WHA Joint Venture. For the fiscal year 2006 and
onwards, China Outdoor Media (HK) will be only entitled to 80% of the profits after tax of the WHA Joint Venture. The revised joint
venture agreement was approved by the State Foreign Economic and Trade Commission of Hainan Province on 27 June 2001. According
to the agreement entered into by China Outdoor Media (HK) and Hainan White Horse on 3 September 2001, their shares in the profits
of the WHA Joint Venture for the period from 1 January 2001 to 30 June 2001 were 95% and 5%, respectively.
Clear Media Limited
Annual Report 2003
78

NOTES TO FINANCIAL STATEMENTS
31 December 2003
15. Concession Rights
Group
HK$’000
Cost:
At beginning of year 1,089,242
Additions 91,595
Transfer from construction in progress 20,202
Disposals (797)
Exchange realignment (4,320)
At 31 December 2003 1,195,922
Accumulated amortisation:
At beginning of year (243,174)
Provided during the year (92,585)
Disposals 332
Exchange realignment 1,117
At 31 December 2003 (334,310)
Net book value:
At 31 December 2003 861,612
At 31 December 2002 846,068
16. Accounts Receivable
The Group’s trading terms with its customers are mainly on credit, except for new customers, where payment in
advance is normally required. The credit period is generally for a period of 90 days. Each customer has a maximum
credit limit. The Group seeks to maintain strict control over its outstanding receivables. Overdue balances are
reviewed regularly by senior management.
An aged analysis of accounts receivable is as follows:
Group
2003
HK$’000
2002
HK$’000
Outstanding balance aged:
Current to 90 days 96,855 77,673
91 days to 180 days 31,151 14,451
Over 180 days 48,293 30,105
176,299 122,229
Less: Provision of doubtful debts (8,505) (8,617)
Total accounts receivable, net 167,794 113,612
17. Prepayments, Deposits and Other Receivables
Other receivables included one piece of land located at the PRC obtained from a customer approximately amounted
to HK$7 million. The transfer of legal title of the land is still under process.
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79

NOTES TO FINANCIAL STATEMENTS
31 December 2003
18. Due from Related Parties
Group
Maximum amount
Name HK$’000 HK$’000 HK$’000
31 December
2003
outstanding
during the year
31 December
2002
Guangdong White Horse Advertising
Company Limited (“GWH”) 26,174 61,573 49,804
Guangdong White Horse Outdoor
Advertising Company Limited – 1,613 1,613
26,174 51,417
The balances with the related parties are unsecured, interest-free and have no fixed terms of repayment.
19. Short Term Investments
Group
2003
HK$’000
2002
HK$’000
Listed equity investments, at market value:
Hong Kong 10,349 –
The market value of the above short term investments at the date of approval of these financial statements was
approximately HK$12,415,000.
20. Pledged Time Deposits
At 31 December 2003, the Group had pledged time deposits of US$6,067,000 (equivalent to approximately
HK$46,750,000) (2002: US$5,900,000 (equivalent to approximately HK$46,022,000) and HK$125,910,000 (2002:
HK$94,000,000) to banks as securities for short term bank loans of RMB173,000,000 (2002: RMB143,000,000).
At 31 December 2003, the Group had pledged deposits of RMB28,603,000 (equivalent to approximately
HK$26,840,000) to bank as securities for bills payable of RMB28,653,000 (equivalent to approximately
HK$26,886,000).
At the balance sheet date, the cash and bank balances of the Group denominated in Renminbi (“RMB”) amounted to
HK$43,285,000 (2002: HK$31,994,000). The RMB is not freely convertible into other currencies, however, under
Mainland China’s Foreign Exchange Control Regulations and Administration of Settlement, Sale and Payment of
Foreign Exchange Regulations, the Group is permitted to exchange RMB for other currencies through banks
authorised to conduct foreign exchange business.
Clear Media Limited
Annual Report 2003
80

NOTES TO FINANCIAL STATEMENTS
31 December 2003
21. Interest-bearing Bank Borrowings
Group
Notes
2003
HK$’000
2002
HK$’000
Bank loans repayable within one year:
Secured (i) 162,334 134,766
Unsecured (ii) 9,384 17,435
171,718 152,201
NOTES:
(i) As at 31 December 2003, the Group’s short term bank loans of RMB173,000,000 (equivalent to approximately HK$162,334,000) were
secured by time deposits of US$6,067,000 (equivalent to approximately HK$46,750,000) and HK$125,910,000 and were subject to interest
rates ranging from 4.8% to 5.3% per annum.
As at 31 December 2002, the Group’s short term bank loans of RMB143, 000,000 (equivalent to approximately HK$134,766,000) were
secured by time deposits of US$5,900,000 (equivalent to approximately HK$46,022,000) and HK$94,000,000 and were subject to interest
rates ranging from 4.8% to 5.3% per annum.
(ii) As at 31 December 2003, the Group’s short term bank loan of RMB10,000,000 (equivalent to approximately HK$9,384,000) bore interest at
a rate of 5.3% per annum and was unsecured.
As at 31 December 2002, the Group’s short term bank loan of RMB18,500,000 (equivalent to approximately HK$17,435,000) bore interest
at a rate of 4.5% per annum and was unsecured. This loan was fully settled during the current year.
22. Deferred Tax
Deferred tax liabilities
Group
Accelerated Accelerated
tax
tax
depreciation depreciation
2003 2002
HK$’000 HK$’000
Balance at beginning of year (2,936) (2,936)
Deferred tax credited to profit and loss account
during the year – note 10 1,500 –
Gross deferred tax liabilities at end of year (1,436) (2,936)
Deferred tax assets
Group
Deductible Deductible
temporary temporary
differences differences
2003 2002
HK$’000 HK$’000
Balance at beginning of year – –
Deferred tax credited to profit and loss account
during the year – note 10 1,785 –
Gross deferred tax assets at end of year 1,785 –
Net deferred tax assets/(liabilities) 349 (2,936)
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81

NOTES TO FINANCIAL STATEMENTS
31 December 2003
22. Deferred Tax
(continued)
The Group’s provision for deferred tax is made in respect of temporary differences arising in the statutory financial
statements of the WHA Joint Venture.
The Group has tax losses arising in Hong Kong of HK$18,539,000 (2002: HK$16,232,000) that are available
indefinitely for offsetting against future taxable profits of the companies in which the losses arose. Deferred tax
assets have not been recognised in respect of these losses as they have arisen in subsidiaries that have been lossmaking
for some time.
At 31 December 2003, there is no significant unrecognised deferred tax liability (2002: Nil) for taxes that would be
payable on the unremitted earnings of certain of the Group’s subsidiaries, or a joint venture as the Group has no
liability to additional tax should such amounts be remitted due to the availability of double tax relief.
SSAP 12 (Revised) was adopted during the year, as further explained in note 2 to the financial statements.
23. Share Capital
Shares
2003
HK$’000
2002
HK$’000
Authorised:
700,000,000 ordinary shares of HK$0.10 each 70,000 70,000
Issued and fully paid:
501,608,500 ordinary shares of HK$0.10 each 50,161 50,161
Share options
The Company operates a share option scheme (the “Scheme”) for the purpose of providing incentives and rewards to
eligible participants who contribute to the Group’s operations. Under the Scheme, the directors may, at their
discretion, invite any employees, directors or consultants of any company in the Group to acquire options. The
Scheme became effective on 28 November 2001 and, unless otherwise cancelled or amended, will remain in force
for seven years from that date.
The maximum number of shares in respect of which options may be granted under the Scheme and under any other
share option scheme of the Company pursuant to which options may from time to time be granted to directors,
consultants, and/or employees of any company in the Group, shall initially not exceed 10% of the relevant class of
securities of the Company in issue excluding, for this purpose, shares issued on the exercise of options under the
Scheme and any other share option scheme of the Company. Upon the grant of options for shares up to 10% of the
relevant class of securities of the Company and subject to the approval of the shareholders of the Company in
general meetings, the maximum number of shares to be issued under this scheme when aggregated with securities
to be issued under any other share option scheme of the Group, may be increased by the board of directors provided
that the number of shares to be issued upon the exercise of all outstanding options does not exceed 30% of the
relevant class of securities in issue from time to time.
Clear Media Limited
Annual Report 2003
82

NOTES TO FINANCIAL STATEMENTS
31 December 2003
23. Share Capital
(continued)
Share options (continued)
No option may be granted to any person such that the total number of shares issued and to be issued upon the
exercise of options granted and to be granted to such person in any 12-month period up to the date of the latest
grant exceeds 1% of the issued share capital of the Company from time to time.
An option may be exercised in accordance with the terms of the Scheme at any time during the option period and
not more than seven years after the date of grant. The option period will be determined by the board of directors
and communicated to each grantee. The board of directors may provide restrictions on the period during which the
options may be exercised. There are no performance targets which must be achieved before any of the options can
be exercised, except for the share options granted on 28 May 2003 and 19 November 2003, further details of which
are set out under the heading “Share Option Schemes” in the Report of Directors on pages 54 to 58. However, the
board of directors retains discretion to accelerate the vesting of fixed term options in the event that certain
performance targets are met.
In addition, on 28 November 2001, the Company adopted a Pre-IPO share option scheme conditionally as described
in the Company’s prospectus dated 10 December 2001. The principal terms of the Pre-IPO share option scheme are
substantially the same as the terms of the Scheme except that:
(a) Employees, directors and consultants of the Group who have contributed substantially to the growth of the
Group and to the initial public offering or full-time employees and directors of the Group are eligible to participate
in the Pre-IPO share option scheme;
(b) The subscription price for the shares under the Pre-IPO share option scheme shall be equal to the offer price;
and
(c) The Pre-IPO share option scheme will remain in force for a period commencing on the date on which the Pre-
IPO share option scheme is conditionally adopted by the shareholders of the Company and ending on the day
immediately prior to 19 December 2001, after which period no further options will be granted but in all other
respects the provisions of the Pre-IPO share options scheme shall remain in full force and effect.
THE AGE OF
CONSUMERS
83

NOTES TO FINANCIAL STATEMENTS
31 December 2003
23. Share Capital
(continued)
Share options (continued)
The movements in the number of share options to subscribe for shares in the Company during the year were as
follows:
Number of Number of Number of Number of
share options share options share options share options Exercise
Share option outstanding at granted during lapsed during outstanding at price Exercise
scheme 1 January 2003 the year the year 31 December 2003 HK$ period
Pre-IPO share
29/11/04 to
option scheme 19,834,000 – 1,800,000 18,034,000 5.89 28/11/08
30/06/05 to
The Scheme 9,916,000 – 900,000 9,016,000 5.51 29/06/09
28/05/06 to
The Scheme – 12,000,000 – 12,000,000 3.51 27/05/10
20/11/06 to
The Scheme – 3,000,000 – 3,000,000 5.35 19/11/10
29,750,000 15,000,000 2,700,000 42,050,000
At the balance sheet date, the Company had 42,050,000 share options outstanding. The exercise in full of the
remaining share options would, under the present capital structure of the Company, result in the issue of 42,050,000
additional ordinary shares of HK$0.10 each in the Company and proceeds, before relevant share issue expenses, of
approximately HK$214,068,000.
Clear Media Limited
Annual Report 2003
84

NOTES TO FINANCIAL STATEMENTS
31 December 2003
24. Reserves
Group
Share Contributed Exchange Revaluation
premium surplus fluctuation reserve Retained
account (Note(a)) reserve (Note(a)) profits Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
At 1 January 2002 635,544 271,531 783 79,476 92,464 1,079,798
Issue of share capital 9,310 – – – – 9,310
Share issue expenses (427) – – – – (427)
Translation exchange
differences arising
on consolidation
of a subsidiary – – (198) – – (198)
Transfer – 79,476 – (79,476) – –
Net profit for the year – – – – 71,106 71,106
At 1 January 2003 644,427 351,007 585 – 163,570 1,159,589
Translation exchange
differences arising
on consolidation
of a subsidiary – – (3,161) – – (3,161)
Net profit for the year – – – – 81,784 81,784
At 31 December 2003 644,427 351,007 (2,576) – 245,354 1,238,212
Company
Share Contributed
premium surplus Retained
account (Note(b)) profits Total
HK$’000 HK$’000 HK$’000 HK$’000
At 1 January 2002 635,544 449,773 77 1,085,394
Net profit for the year – – 1,126 1,126
Issue of share capital 9,310 – – 9,310
Share issue expenses (427) – – (427)
At 1 January 2003 644,427 449,773 1,203 1,095,403
Net profit for the year – – 4,193 4,193
At 31 December 2003 644,427 449,773 5,396 1,099,596
THE AGE OF
CONSUMERS
85

NOTES TO FINANCIAL STATEMENTS
31 December 2003
24. Reserves
(continued)
NOTES:
(a) The contributed surplus of the Group represents the difference between the nominal value of share capital of the subsidiaries acquired pursuant
to the Group Reorganisation on 28 November 2001, over the nominal value of the shares in the Company issued in exchange therefor; and the
revaluation surplus arose pursuant to an investment and shareholders’ agreement dated 23 April 1998 in relation to certain concession rights
transferred. The revaluation reserve is treated as the cost of the assets acquired, and accordingly the related account has been transferred to the
contributed surplus.
(b) The contributed surplus of the Company represents the difference between the then combined net asset value of the subsidiaries acquired
pursuant to the same reorganisation over the nominal value of the shares of the Company’s shares issued in exchange therefor.
Under the Bermuda Companies Act 1981, the Company may make distributions to its shareholders out of the contributed surplus under
certain circumstances.
25. Notes to the Consolidated Cash Flow Statement
(a) Fixed assets
During the current year, the Group paid HK$5,451,000 (2002: HK$17,280,000) to acquire fixed assets.
(b) Concession rights
During the current year, the Group paid HK$101,829,000 to acquire concession rights and to settle the outstanding
liability for the acquisition of concession rights brought forward from the prior year of HK$35,853,000.
During the prior year, the Group paid HK$309,484,000 to acquire concession rights to settle the outstanding
liability for the acquisition of concession rights brought forward from the prior year of HK$44,335,000.
(c) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand and balances with banks. Cash and cash equivalents included in the
consolidated cash flow statement comprise the following balance sheet amounts:
Group
2003 2002
HK$’000 HK$’000
Cash on hand and balances with banks 224,830 267,158
Clear Media Limited
Annual Report 2003
86

NOTES TO FINANCIAL STATEMENTS
31 December 2003
26. Commitments
(a) Capital commitments
Group
2003
HK$’000
2002
HK$’000
Contracted, but not provided for:
The construction of shelters for
which concession rights are held 16,420 10,528
(b) Commitments under operating leases
The Group leases certain of its office buildings and concession rights under operating lease arrangements. Leases for
office buildings are negotiated for terms ranging from 1 to 9 years, and those concession rights are negotiated for
terms ranging from 5 to 20 years.
At the balance sheet date, the Group had total future minimum lease payments under non-cancellable operating
leases falling due as follows:
Group
2003
HK$’000
2002
HK$’000
Within one year 119,940 108,140
In the second to fifth years, inclusive 412,133 424,221
After five years 262,813 321,090
794,886 853,451
27. Contingent Liabilities
(a) At the balance sheet date, contingent liabilities not provided for in the financial statements were as follows:
Group
2003 2002
HK$’000 HK$’000
Bills discounted with recourse – 7,068
(b) A claim for specific performance and damages has been made against a subsidiary of the Group for alleged breach
of contract. On 28 November 2001, Outdoor Media China Inc., (“OMC”), Clear Channel Outdoor, Inc. (“CCO”),
China Outdoor Media (HK) and the Company, entered into a Deed of Indemnity. Under the terms of the Deed
of Indemnity, OMC and CCO have covenanted and undertaken to indemnify the Group against all claims (whether
of not successful, compromised or otherwise settled), actions, damages, penalties, liabilities, legal fees,
enforcement costs and expenses incurred by the Group in respect of the claim.
28. Post Balance Sheet Event
In February 2004, the Group has acquired over 300 bus shelters in Beijing and Guangzhou, respectively.
THE AGE OF
CONSUMERS
87

NOTES TO FINANCIAL STATEMENTS
31 December 2003
29. Related Party Transactions
In addition to those transactions and balances detailed elsewhere in these financial statements, the Group had the
following significant transactions with related parties during the year:
Notes
2003
HK$’000
2002
HK$’000
Agency commission paid to GWH, a company
in which Mr. Han Zi Dian, a director of the
Company, has an ability to exercise direct or
indirect influence over the management (i) 4,602 12,375
Sales to GWH (ii) 38,546 70,125
Bus shelter maintenance and display fees payable
to companies in which Mr. Han Zi Dian, a director
of the Company, has an ability to exercise
management influence (iii) 21,623 21,222
Creative services fees payable to GWH (iv) 810 3,770
NOTES:
(i) The agency commission paid to GWH was based on the standard percentage of gross rental revenue for outdoor advertising spaces payable to
other major third party agencies used by the Group.
(ii) The sales to GWH were made according to published prices and conditions similar to those offered to the major customers of the Group.
(iii) The WHA Joint Venture has entered into various agreements with the companies in which Mr. Han Zi Dian, a director of the Company, has an
ability to exercise management influence, for maintaining bus shelters and displaying posters in the PRC. The fees are proportional to the
number of bus shelters in each of these cities and are subject to a minimum fixed amount.
(iv) The WHA Joint Venture had entered into a creative services agreement, which was expired on 31 December 2002, with GWH, whereby GWH
agreed to provide certain creative design and production services to the Group on a non-exclusive basis.
During the year, GWH provided creative services to the Group on a non-exclusive basis. These transactions were entered into on terms no less
favourable than those available to or from independent third parties.
Other than the above, the Group entered into various trademark licence agreements and an option agreement in
2001 as follows:
(i) The WHA Joint Venture entered into a Trademark Licence Agreement with Guangdong White Horse Development
Parent Company (“Guangdong White Horse”), dated 30 November 2001 whereby Guangdong White Horse
agreed to grant to the WHA Joint Venture a licence to use the “White Horse” trademark in whole or in part or to
display any patterns, words, logos or marks of the trademark for outdoor advertising in the PRC. The licence is
renewable at the option of Guangdong White Horse at the expiry of the licence. The grant of the licence was for
RMB1.00 but otherwise was royalty-free.
On 1 November 2003, Guangdong White Horse entered into an Addendum to the Trademark Licence Agreement
agreeing to lower the terms from the 10% direct or indirect interest in the Company to 5% with all other terms
and conditions remaining unchanged.
(ii) The WHA Joint Venture entered into a Trademark Licence Agreement and Transfer Agreement with GWH dated
30 November 2001 whereby GWH is to assign certain trademarks to the WHA Joint Venture. The annual licence
fee is RMB1.00. The agreement will remain in force until all the trademarks are registered in the name of the
WHA Joint Venture.
Clear Media Limited
Annual Report 2003
88

NOTES TO FINANCIAL STATEMENTS
31 December 2003
29. Related Party Transactions
(continued)
(iii)The Company has entered into two Trademark Licence Agreements with Clear Channel Communications, Inc.,
the holding company of a shareholder of the Company, and Clear Channel International Limited, a subsidiary of
Clear Channel Communications, Inc., respectively dated 28 November 2001 whereby the Company and members
of the Group are granted the licence to use certain names, logos, symbols, emblems, insignia and other identifying
materials for use in the outdoor advertising business in the PRC. The licence is for a term of five years. Upon the
expiry of the licence, it is renewable at the option of Clear Channel Communications, Inc. and Clear Channel
International Limited. The licence was granted for HK$1.00 but otherwise was royalty-free.
(iv)On 30 November 2001, China Outdoor Media (HK) and Hainan White Horse, a company with a 20% shareholding
in the WHA Joint Venture, entered into an option agreement which would provide China Outdoor Media (HK)
an option to purchase the whole or part of Hainan White Horse’s 20% interest in the WHA Joint Venture. The
option may only be exercised when PRC laws and regulations permit China Outdoor Media (HK)’s shareholding
in the WHA Joint Venture to be higher than 80%. The price to be paid on exercise of the option is RMB5,000,000
for the entire 20% interest or a proportionate amount if the option is exercised in respect of a smaller percentage
interest in the WHA Joint Venture. The agreement is for a term of 30 years.
Further details of the transactions are also included in notes (a) and (b) in the section headed “Connected transactions”
in the Report of Directors on page 51.
30. Approval of the Financial Statements
The financial statements were approved and authorised for issue by the board of directors on 26 February 2004.
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89

NOTICE NOTICE OF ANNUAL OF GENERAL MEETING MEETING
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Clear Media Limited (the “Company”) will be
held at Alexandra Room, 2/F., Mandarin Oriental, 5 Connaught Road, Central, Hong Kong at 10:00 a.m. on 28
May 2004, for the following purposes:
As ordinary business:
1. To receive and consider the audited financial statements and the Reports of the Directors and of the Auditors for
the year ended 31 December 2003.
2. To re-elect retiring Directors who retire by rotation and to authorise the Board of Directors to fix the Directors’
remuneration.
3. To appoint auditors and to authorise the Board of Directors to fix their remuneration.
And as Special Business, to consider and, if thought fit, to pass the following as ordinary resolutions:
4. “THAT:
(a) subject to paragraphs (b) and (c) below, the exercise by the Directors during the Relevant Period (as hereinafter
defined) of all the powers of the Company to purchase shares of HK$0.10 each in the capital of the Company
(“Shares”) on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) or any other stock exchange
recognised for this purpose by the Securities and Futures Commission of Hong Kong and the Stock Exchange
in accordance with all applicable laws including the Hong Kong Code on Share Repurchases and the Rules
Governing the Listing of Securities on the Stock Exchange (the “Listing Rules”) as amended from time to
time be and is hereby generally and unconditionally approved;
(b) the aggregate nominal amount of Shares which may be purchased or agreed conditionally or unconditionally
to be purchased by the Directors pursuant to the approval in paragraph (a) above shall not exceed 10 per cent
of the aggregate nominal amount of the share capital of the Company in issue at the date of passing this
Resolution, and the said approval shall be limited accordingly;
(c) for the purposes of this Resolution:
“Relevant Period” means the period from the passing of this Resolution until the earliest of:
(i) the conclusion of the next annual general meeting of the Company;
(ii) the expiry of the period within which the next annual general meeting of the Company is required by the
Company’s bye-laws (the “Bye-laws”) or the Companies Ordinance to be held; and
(iii)the revocation or variation of the authority given to the Directors under this Resolution by ordinary
resolution of the Company’s shareholders in general meeting.”
5. “THAT:
(a) subject to paragraph (c) below, the exercise by the Directors during the Relevant Period (as hereinafter
defined) of all the powers of the Company to allot, issue and deal with additional Shares and to make or grant
offers, agreements and options which might require the exercise of such powers be and are hereby generally
and unconditionally approved;
(b) the approval in paragraph (a) shall authorise the Directors during the Relevant Period to make or grant
offers, agreements and options which might require the exercise of such powers after the end of the Relevant
Period;
Clear Media Limited
Annual Report 2003
90

NOTICE OF ANNUAL GENERAL MEETING
(c) the aggregate nominal amount of share capital allotted, issued and dealt with or agreed conditionally or
unconditionally to be allotted, issued and dealt with (whether pursuant to an option or otherwise) by the
Directors pursuant to the approval in paragraph 5(a) above, otherwise than pursuant to (i) a Rights Issue (as
hereinafter defined), (ii) the exercise of options granted under any share option scheme adopted by the
Company or (iii) any scrip dividend or similar arrangement providing for the allotment of Shares in lieu of
the whole or part of a dividend on Shares in accordance with the Bye-laws of the Company, shall not exceed
the aggregate of 20 per cent of the aggregate nominal amount of the share capital of the Company in issue at
the date of passing this Resolution and the said approval shall be limited accordingly; and
(d) for the purposes of this Resolution:
“Relevant Period” means the period from the passing of this Resolution until the earliest of:
(i) the conclusion of the next annual general meeting of the Company;
(ii) the expiry of the period within which the next annual general meeting of the Company is required by the
Bye-laws or the Companies Ordinance to be held; and
(iii)the revocation or variation of the authority given to the Directors under this Resolution by ordinary
resolution of the Company’s shareholders in general meeting; and
“Rights Issue” means an offer of shares open for a period fixed by the Directors to holders of Shares on the
register of members on a fixed record date in proportion to their then holdings of such Shares (subject to
such exclusion or other arrangements as the Directors may deem necessary or expedient in relation to
fractional entitlements or having regard to any legal or practical restrictions or obligations under the laws of,
or the requirements of, any recognised regulatory body or any stock exchange in any territory applicable to
the Company) and an offer, allotment or issue of shares by way of rights shall be construed accordingly.”
6. “THAT subject to the passing of Resolutions 4 and 5 set out in this notice of Annual General Meeting, the
aggregate nominal amount of shares which are to be purchased by the Company pursuant to the authority
granted to the Directors under Resolution 5 set out in this notice of Annual General Meeting shall be added to
the aggregate nominal amount of share capital that may be allotted or agreed to be allotted by the Directors
pursuant to Resolution 4 set out in this notice of Annual General Meeting.”
Hong Kong, 26 February 2004
Principal Place of Business in Hong Kong:
3205 Windsor House
311 Gloucester Road
Causeway Bay
Hong Kong
By Order of the Board
Gary Ng Pui Wah
Company Secretary
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91

NOTICE OF ANNUAL GENERAL MEETING
Notes:
1. Any member of the Company entitled to attend and vote at the above Annual General Meeting is entitled to appoint one or more proxies to
attend and, on a poll, vote in his stead. A proxy needs not be a member of the Company.
2. In order to be valid, a form of proxy, together with the power of attorney or other authority (if any) under which it is signed, or a notarially
certified copy thereof, must be deposited at the Company’s branch share registrar in Hong Kong, Tengis Limited, Ground Floor, Bank of East
Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong not less than 48 hours before the time for holding the above Annual
General Meeting. Completion and return of a form of proxy will not preclude a member from attending and voting in person if he is subsequently
able to be present.
3. In relation to the Ordinary Resolution set out in item 4 of the Notice, the Directors wish to state that they will exercise the powers conferred
thereby to repurchase Shares in circumstances which they deem appropriate or for the benefit of the shareholders. The Explanatory Statement
containing the information necessary to enable the shareholders to make an informed decision on whether to vote for or against the resolution
to approve the repurchase by the Company of its own Shares, as required by the Listing Rules will be set out in a separate letter from the
Company to be enclosed with the 2003 Annual Report.
4. In relation to the Ordinary Resolution set out in item 5 of the Notice, the Directors wish to state that they have no immediate plans to issue any
new shares of the Company. Approval is being sought from the shareholders as a general mandate for the purposes of Section 57B of the
Companies Ordinance and the Listing Rules.
5. For the purposes of holding the Annual General Meeting of the Company on 28 May 2004, the Register of Members of the Company will be
closed from 26 May 2004 to 28 May 2004 both days inclusive, during which period no transfer of shares will be effected. All transfers
accompanied by the relevant shares certificates must be lodged with the Company’s branch share registrar in Hong Kong, Tengis Limited,
Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong not later than 4:00 p.m. on 25 May 2004.
Clear Media Limited
Annual Report 2003
92

GLOSSARY
accounts payable
accounts receivable
average accounts receivable
outstanding days
accounts receivable turnover
unipoles
bus shelter
CAGR
concession rights
cost-per-thousand
display panel
EBITDA
EBITDA margin
IRR
liquidity
media
Money owed to vendors.
Money owed by customers.
The weighted average number of days for which the balance owing by
customer is outstanding.
The ratio of net credit sales to average accounts receivable, a measure of
how quickly customers pay their bills.
Large-format advertising displays intended for viewing at extended
distances, generally more than 50 feet. Unipole displays include, but are
not limited to, 30-sheet posters, 8-sheet posters, vinyl-wrapped posters,
bulletins, wall murals, and stadia or arena signage.
Refers to a bus shelter, taxi stand or road sign. These three are grouped
together because their operational requirements, and the marketing and
sales efforts for them, are essentially the same.
Compounded annual growth rate. The formula for calculating CAGR is
(Current Value/Base Value)^(1/# of years) – 1.
Bus shelter concessions are granted by entities authorised by local
governmental agencies in China which have control over the construction
and management of bus shelters. Companies granted concession rights
pay an annual fixed rental fee to these entities.
Cost-per-thousand (CPM) impressions refers to the cost of reaching a
thousand people and is a standard measure of the cost-effectiveness of
advertising.
An advertising display unit within a bus shelter upon which the same
advertisement is posted on both sides.
Earnings before interest, tax, depreciation or amortisation.
Equal to EBITDA divided by turnover. EBITDA margin measures the
extent to which cash operating expenses use up revenue.
Internal Rate of Return (also called dollar-weighted rate of return). The
present value of future cash flows plus the final market value of an
investment or business opportunity equal the current market price of
the investment or opportunity.
current assets / current liabilities.
Advertising outlets for advertising – including radio, outdoor, television,
Internet, magazines, newspapers and direct mail.
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93

GLOSSARY
medium
outdoor advertising
point-of-sale
price earnings (P/E) ratio
reach
The industry term used to describe one of the media advertising outlets,
e.g. “television is usually the most expensive advertising medium,” or,
where the context requires, an individual product offered in respect of
such media.
One of the advertising media that communicates to people when they
are outside their homes, and includes advertising on billboards, advertising
on and in public transportation vehicles and terminals, advertising panels
in airports and malls, and advertising on street furniture.
A form of advertising at retail locations that is designed to reduce or
eliminate the time between a consumer’s awareness of advertising and
his decision to make a purchase, e.g. putting the offer right next to the
product so purchase decisions (and sales) can be made immediately.
Advertisers distinguish point-of-sale advertising in their promotional
budget.
market price as at balance sheet date/earnings per share.
An industry-accepted term which describes the potential effectiveness
of a media advertising schedule by reflecting the number of different
people who hear or see a commercial campaign.
return on asset (net profits attributable to the shareholders / average assets) x 100%
return on equity (net profits attributable to the shareholders / total equity) x 100%
SDI Ordinance
street furniture/street
furniture displays
transit
12-sheet equivalent
frequency
gearing ratio
The Securities (Disclosure of Interests) Ordinance (Chapter 396 of the
Laws of Hong Kong).
Includes such forms of outdoor advertising as bus shelters, taxi stands,
road signs, phone kiosks, information and newspaper stands, public
toilets, free-standing information panels, benches and street lights.
Advertising displays affixed to moving vehicles or positioned in the
common areas of transit stations, terminals and airports.
One actual 12-sheet panel, or two 6-sheet panels, or three 4-sheet panels.
An industry-accepted method of judging the potential effectiveness of a
medium. Frequency reflects the average number of times that an
individual is exposed to an advertising message during a specific period
of time.
The ratio of a company’s net debts to its total equity. (net debts / total
equity) x 100%
Clear Media Limited
Annual Report 2003
94

FINANCIAL SUMMARY
2003 2002 2001 2000 1999
RESULTS (HK$’000)
Turnover 488,175 426,916 355,004 260,038 169,782
EBITDA 208,694 180,222 153,556 110,636 72,758
EBIT 105,799 86,295 86,315 61,021 36,223
Net profit 81,784 71,106 58,906 41,690 27,483
CONSOLIDATED BALANCE
SHEET DATA (HK$’000)
Current assets 710,832 609,554 1,139,174 403,779 327,859
Current liabilities 325,715 299,270 700,562 515,494 417,192
Shareholders’ equity 1,288,373 1,209,750 1,129,798 354,978 312,441
CASH FLOW DATA (HK$’000)
Operating cashflow 157,765 100,577 247,894 122,274 52,895
FINANCIAL RATIOS
Return on equity (%) 6.3 5.9 5.2 11.7 8.8
Current ratio (times) 2.18 2.04 1.63 0.78 0.79
EBITDA margin (%) 42.7 42.2 43.3 42.5 42.9
Net profit margin (%) 16.8 16.7 16.6 16.0 16.2
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95

CORPORATE INFORMATION
Business Area : Outdoor Media
Directors : Steven Yung
Han Zi Jing
Roger Parry
Peter Cosgrove
Teo Hong Kiong
Zou Nan Feng
Mark Mays
Han Zi Dian
Jonathan Bevan
Desmond Murray
Wang Shou Zhi
Company Secretary :
Gary Ng
Head Office : Room 3205
32/F Windsor House
311 Gloucester Road
Causeway Bay
Hong Kong
Registered Office : Clarendon House
2 Church Street
Hamilton HM 11
Bermuda
Auditors : Ernst & Young
Principal Bankers : HSBC, Shanghai Pudong
Development Bank
Principal Share : Butterfield Corporate
Registrar
Services Limited
11 Rosebank Centre
Bermudiana Road
Hamilton Bermuda
Hong Kong Share : Tengis Limited
Registrar
G/F Bank of East Asia
Harbor View Center
56 Gloucester Road
Wanchai
Hong Kong
Authorized : Steven Yung
Representatives Gary Ng
Investor Relations : Gary Ng
Contact
PR Consultant : iPR ASIA LTD
Corporate Website : www.clear-media.net
Legal Advisors : Hong Kong and
United States Law
Freshfields Bruckhaus
Deringer
PRC Law
King & Wood PRC
Lawyers
Bermuda Law
Conyers Dill & Pearman
Clear Media Limited
Annual Report 2003
96