Annual Report 2003 - Clear Media

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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. THE AGE OF CONSUMERS 79
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OUR GOAL IS TO BE THE BEST AND THE
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CORPORATE PROFILE Clear Media is th
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LETTER FROM THE CHAIRMAN Dear Fello
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INTERVIEW WITH THE CEO THE AGE OF C
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INTERVIEW WITH THE CEO Q: How did C
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INTERVIEW WITH THE CEO Q: What is t
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MANAGEMENT DISCUSSION AND ANALYSIS
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Page 69 and 70: BALANCE SHEET 31 December 2003 2003
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Annual Report 2003 - Clear Media

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