See : Interim Report 2019/2020

CONTENTS

Management Discussion and Analysis	2
Condensed Consolidated Statement of Profit or Loss
and Other Comprehensive Income	7
Condensed Consolidated Statement of
Financial Position	9
Condensed Consolidated Statement of Changes
in Equity	11
Condensed Consolidated Statement of Cash Flows	12
Notes to the Condensed Consolidated
Financial Statements	13
Directors' and Chief Executives' Interests and Short
Positions in Securities	35
Other Persons' Interests and Short Positions
in Securities	37
Corporate Governance and Other Information	38

MANAGEMENT DISCUSSION AND ANALYSIS

Emperor Culture Group Limited (the "Company") and its subsidiaries (collectively referred to as the "Group") principally engage in entertainment, media and cultural development businesses, particularly in Greater China, which include

(i) cinema operation; and (ii) investment in films and a variety of cultural events.

MARKET REVIEW

In recent years, the government of mainland China has been increasing its investment in the cultural industry, leading to a rapid development of the industry within the nation. In December 2018, China Film Administration has issued the "Opinions on Accelerating the Construction of Cinemas to Promote the Prosperity and Development of the Film Market", aiming to enhance the film industry. According to the China Movie Data Information Network, China's movie box office revenue increased by 14.3% to RMB32.8 billion (2018: RMB28.7 billion) during the six months ended 31 December 2019 (the "Period"). The number of cinema screens in China reached over 68,000 (2018: 62,000), maintaining its position as the world's number one country.

FINANCIAL REVIEW

Overall Review

During the Period, the Group's total revenue increased by 30.6% to HK$96.1 million (2018: HK$73.6 million), which was contributed by the increase in income from box-office takings for film exhibition. Due to the commencement of operation of a number of new cinemas during the Period which resulted in an increase in selling and distribution expenses, a loss for the Period attributable to the owners of the Company of HK$94.8 million (2018: HK$77.4 million) was recorded. Basic loss per share was HK$0.03 (2018: HK$0.02).

Liquidity and Financial Resources

The Group continued to fund its operations and capital expenditure during the Period by cash generated internally from its operations. As at 31 December 2019, the Group's cash and cash equivalents amounted to HK$42.9 million (30 June 2019: HK$166.5 million), which are mainly denominated in Hong Kong dollars and Renminbi.

As at 31 December 2019, amounts due to non-controlling interests and related companies totalled HK$43.6 million (30 June 2019: HK$43.6 million) and HK$6.0 million (30 June 2019: HK$5.7 million), respectively. They were denominated in Hong Kong dollars and Renminbi, unsecured, interest-free and repayable on demand. The gearing ratio of the Group (expressed as a percentage of total borrowings over net asset value) was 8.0% (30 June 2019: 7.0%).

2	Emperor Culture Group Limited Interim Report 2019/2020

MANAGEMENT DISCUSSION AND ANALYSIS (Continued)

FINANCIAL REVIEW (Continued)

Exposure to Fluctuation in Exchange Rates and Related Hedges

The Group's cash and bank balances, income and expenditure are primarily denominated in Hong Kong dollars and Renminbi. The carrying amount of the Group's Renminbi denominated monetary net assets was less than 10.0% of its net assets as at 31 December 2019. In view of the recent volatility of foreign currency rate of Renminbi, the board of directors of the Company (the "Board" or "Directors") will closely monitor the Group's exposure to fluctuations in foreign exchange rates and take appropriate actions, if necessary, to mitigate the risk.

Mandatory Unconditional Cash Offer

Upon completion of acquisition of 585,980,000 issued shares of the Company (the "Shares") by Emperor Culture Group Holdings Limited (the "Offeror"), the controlling shareholder of the Company, from Win World Profits Limited, an associate of and a party acting in concert with the Offeror and several independent third parties on 12 November 2019, the Offeror and parties acting in concert with it were interested in approximately 51.35% of the entire issued share capital of the Company.

Pursuant to Rule 26.1 of the Code on Takeovers and Mergers issued by the Securities and Futures Commission of Hong Kong, the Offeror was required to make a mandatory unconditional cash offer (the "Offer") for all the Shares, other than those already owned and/or agreed to be acquired by the Offeror or parties acting in concert with it (the "Offer Share(s)"). The offer price for each Offer Share was HK$0.08 in cash and the Offer was unconditional in all respects.

From the commencement of the offer period and up to the closing date of the Offer (i.e. 10 January 2020) ("Closing Date"), the Offeror has made on-market purchases of an aggregate of 217,760,000 Shares, representing approximately 6.78% of the total issued Shares. During the offer period, there were valid acceptances in respect of 503,373,094 Offer Shares under the Offer, representing approximately 15.67% of the Shares as at the Closing Date of the Offer. Taking into account the valid acceptances in respect of the aforesaid Offer Shares under the Offer, the Offeror and parties acting in concert with it held an aggregate of 2,371,313,094 Shares, representing approximately 73.80% of the Shares of the Company right after the close of the Offer.

Interim Report 2019/2020 Emperor Culture Group Limited

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MANAGEMENT DISCUSSION AND ANALYSIS (Continued)

FINANCIAL REVIEW (Continued)

Mandatory Unconditional Cash Offer (Continued)

Details of the Offer were set out in the joint announcements made by the Company and the Offeror dated 15 November 2019 and 10 January 2020, as well as in the composite document issued by the Company and the Offeror dated 20 December 2019.

BUSINESS REVIEW

Film Exhibition

During the Period, with the commencement of operation of 6 new cinemas in mainland China, Hong Kong and Malaysia, revenue from the film exhibition segment increased significantly by 40.9% to HK$96.1 million (2018: HK$68.2 million). As at 31 December 2019, the Group ran 11 (2018: 5) cinemas in mainland China, Hong Kong and Malaysia under "Emperor Cinemas", offering a total of 95 (2018: 54) houses with more than 12,400 (2018: 6,200) seats, all of which are situated in strategic locations providing premium entertainment services. The details of the film exhibition network as at 31 December 2019 are as follows:

		No. of houses	No. of seats
Mainland China
1.	Emperor Group Centre, Beijing	10	1,154
2.	Shin Kong Place, Chongqing	18	2,298
3.	MixC, Hefei	13	1,980
4.	East Pacific Shopping Mall, Shenzhen	9	458
5.	Shanshan Outlet Plaza, Ganzhou	9	1,500
6.	Wenjiang Shin Kong Place, Chengdu	10	1,836
Hong Kong
7.	New Town Commercial Arcade, Tuen Mun	4	385
8.	MOSTown, Ma On Shan	4	435
9.	iSQUARE, Tsim Sha Tsui	5	979
10.	Citywalk, Tsuen Wan	5	669
Malaysia
11.	R&F Mall Johor Bahru	8	743
Total	95	12,437

4	Emperor Culture Group Limited Interim Report 2019/2020

MANAGEMENT DISCUSSION AND ANALYSIS (Continued)

BUSINESS REVIEW (Continued)

Film Exhibition (Continued)

Located in either large-scale commercial and entertainment complex or upscale residential areas, the cinemas of the Group are positioned as high-end premium cinemas equipped with advanced technologies including IMAX® theatre system, ScreenX, 4DX or MX4D motion systems, D-Box seats and Dolby Atmos audio system. They also feature VIP houses and VIP lounges, where the audiences can enjoy premium and exclusive entertainment services.

The "Emperor Cinemas" in iSQUARE, Tsim Sha Tsui, Hong Kong, which commenced operation in December 2019, features VIP house "the CORONET", offering guests a 5-star experience in an intimate setting, coupled with gourmet delights prepared by master chefs. Each chair features a service button, enabling service ambassadors to promptly attend to guests during screenings. In addition, its IMAX® House has the biggest IMAX® with Laser screen in Hong Kong, together with a new-generation IMAX® with Laser projection system, creating a remarkable visual experience for audiences.

Investment in Films and Cultural Events

During the Period, the segment did not generate any distribution and licensing income from animation business as it was disposed of in June 2019. Hence, the segment revenue was nil (2018: HK$5.4 million) for the Period.

PROSPECTS

Riding on the development of the film industry, the Group has dedicated considerable efforts to developing its film exhibition business in various locations in recent years, and has established a strategic network comprising 11 cinemas in mainland China, Hong Kong and Malaysia. Going forward, the Group will continue to source premium locations in mainland China and Hong Kong in order to expand its film exhibition business.

Interim Report 2019/2020 Emperor Culture Group Limited

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MANAGEMENT DISCUSSION AND ANALYSIS (Continued)

PROSPECTS (Continued)

In view of audiences' pursuit of total experience, the Group will strive to curate best-in-class entertainment with exquisite contents, experiences and taste for its audiences. The Group will focus on enhancing hardware as well as delivering excellent services, in order to increase the competitiveness of its cinemas, whilst boosting customer loyalty. The Group will also continue to roll out branding and marketing campaigns, to enhance its brand exposure and maximise the reach to target customer groups. In the light of an unfavourable business environment in the near term, the Group will implement more promotions, to drive ticket sales.

In November 2019, "Emperor" was recognised as a well-known trademark in mainland China, and had obtained cross-class protection from the National Intellectual Property Administration, affirming Emperor Group's wide acknowledgement in China and its brand value. Leveraging its long established "Emperor" brand label as well as synergy with Emperor Entertainment Group artistes, the Group will strive to further enhance the promotion of its cinemas via different media, in order to strengthen its position in the industry and maintain stable business growth in the long-term.

EMPLOYEES AND REMUNERATION POLICY

As at 31 December 2019, the Group's number of employees was 584 (30 June 2019: 333). Total staff costs including the Directors' remuneration during the Period were HK$32.5 million (2018: HK$18.3 million). Employees' remuneration was determined in accordance with individual's responsibility, competence and skills, experience and performance as well as market pay level. Staff benefits include medical and life insurance, provident funds and other competitive fringe benefits. The Company adopted a share option scheme to provide incentive or rewards to staff.

INTERIM DIVIDEND

The Board has resolved not to declare any interim dividend for the Period (2018: Nil).

6	Emperor Culture Group Limited Interim Report 2019/2020

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the six months ended 31 December 2019

The Board announces the unaudited condensed consolidated results of the Group for the Period together with the comparative figures for the corresponding period in 2018 as set out below:

		Six months ended
		31 December
		2019	2018
		(Unaudited)	(Unaudited)
	Notes	HK$'000	HK$'000
Revenue	3	96,062	73,580
Cost of sales		(38,815)	(34,399)
Gross profit		57,247	39,181
Other income and gains		3,113	2,629
Selling and distribution expenses		(103,138)	(58,475)
Administrative expenses		(28,919)	(22,325)
Other operating expenses		-	(28,393)
Change in fair value of financial
assets at fair value through profit
or loss		(4,724)	(13,045)
Finance costs	6	(22,553)	(874)
Loss before taxation	5	(98,974)	(81,302)
Income tax	7	-	-
Loss for the period		(98,974)	(81,302)

Interim Report 2019/2020 Emperor Culture Group Limited

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CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (Continued)

For the six months ended 31 December 2019

		Six months ended
		31 December
		2019	2018
		(Unaudited)	(Unaudited)
	Note	HK$'000	HK$'000
Other comprehensive loss for the
period
Item that may be reclassified
subsequently to profit or loss:
Exchange differences arising on
translation of foreign operations		(4,189)	(8,048)
Other comprehensive loss for the
period, net of tax		(4,189)	(8,048)
Total comprehensive loss
for the period		(103,163)	(89,350)
Loss for the period attributable to:
Owners of the Company		(94,807)	(77,399)
Non-controlling interests		(4,167)	(3,903)
		(98,974)	(81,302)
Total comprehensive loss for the
period attributable to:
Owners of the Company		(98,611)	(84,404)
Non-controlling interests		(4,552)	(4,946)
		(103,163)	(89,350)
Loss per share attributable to
owners of the Company:	9
- Basic and diluted		HK$(0.03)	HK$(0.02)

8	Emperor Culture Group Limited Interim Report 2019/2020

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2019

		As at
		31 December	30 June
		2019		2019
		(Unaudited)	(Audited)
	Notes	HK$'000	HK$'000
Non-current assets
Property, plant and equipment	10	555,876		262,699
Right-of-use assets		1,018,734		-
Deposits paid		41,817		56,002
		1,616,427		318,701
Current assets
Inventories		1,734		641
Trade receivables	11	4,374		4,761
Other receivables, deposits
and prepayments		54,248		38,922
Financial assets at fair value
through profit or loss		6,919		170,783
Cash and cash equivalents		42,908		166,465
		110,183		381,572
Current liabilities
Trade and other payables	12	102,315		40,776
Contract liabilities		14,338		11,128
Amounts due to related companies		5,987		5,651
Amount due to non-controlling
interests		43,589		43,589
Lease liabilities		44,802		-
		211,031		101,144

Interim Report 2019/2020 Emperor Culture Group Limited

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CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued)

As at 31 December 2019

	As at
	31 December	30 June
	2019		2019
	(Unaudited)	(Audited)
	HK$'000	HK$'000
Net current (liabilities) assets	(100,848)		280,428
Total assets less current liabilities	1,515,579		599,129
Non-current liabilities
Lease liabilities	998,234		-
Net assets	517,345		599,129
Capital and reserves attributable to
owners of the Company
Share capital	32,133		32,133
Reserves	514,153		591,385
	546,286		623,518
Non-controlling interests	(28,941)		(24,389)
Total equity	517,345		599,129

10	Emperor Culture Group Limited Interim Report 2019/2020

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 31 December 2019

			Attributable to owners of the Company
			Capital					Non-
	Share	Share redemption Contributed	Exchange Accumulated		controlling	Total
	capital	premium	reserve	surplus	reserve	losses	Total	interests	equity
	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000
At 1 July 2018 (Audited)	32,133	912,843	50	58,658	186	(251,164)	752,706	(11,566)	741,140
Loss for the period	-	-	-	-	-	(77,399)	(77,399)	(3,903)	(81,302)
Other comprehensive loss
for the period	-	-	-	-	(7,005)	-	(7,005)	(1,043)	(8,048)
Total comprehensive loss
for the period	-	-	-	-	(7,005)	(77,399)	(84,404)	(4,946)	(89,350)
At 31 December 2018
(Unaudited)	32,133	912,843	50	58,658	(6,819)	(328,563)	668,302	(16,512)	651,790
At 30 June 2019 (Audited)	32,133	912,843	50	58,658	(7,247)	(372,919)	623,518	(24,389)	599,129
Effect of adoption of
HKFRS 16	-	-	-	-	-	21,379	21,379	-	21,379
At 1 July 2019 (Restated)
(Unaudited)	32,133	912,843	50	58,658	(7,247)	(351,540)	644,897	(24,389)	620,508
Loss for the period	-	-	-	-	-	(94,807)	(94,807)	(4,167)	(98,974)
Other comprehensive loss
for the period	-	-	-	-	(3,804)	-	(3,804)	(385)	(4,189)
Total comprehensive loss
for the period	-	-	-	-	(3,804)	(94,807)	(98,611)	(4,552)	(103,163)
At 31 December 2019
(Unaudited)	32,133	912,843	50	58,658	(11,051)	(446,347)	546,286	(28,941)	517,345

Interim Report 2019/2020 Emperor Culture Group Limited

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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 31 December 2019

	Six months ended
	31 December
	2019	2018
	(Unaudited)	(Unaudited)
	HK$'000	HK$'000
Net cash from/(used in) operating activities	141,626	(26,862)
Net cash used in investing activities	(243,734)	(4,724)
Net cash (used in)/from financing activities	(20,138)	11,798
Net decrease in cash and cash equivalents	(122,246)	(19,788)
Effect of foreign exchange rate changes	(1,311)	(3,496)
Cash and cash equivalents at the beginning
of the reporting period	166,465	264,142
Cash and cash equivalents at the end of the
reporting period	42,908	240,858

12	Emperor Culture Group Limited Interim Report 2019/2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 31 December 2019

1. BASIS OF PREPARATION

The unaudited condensed consolidated financial statements for the Period have been prepared in accordance with the Hong Kong Accounting Standard ("HKAS") 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants and with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities (the "Listing Rules") on The Stock Exchange of Hong Kong Limited (the "Stock Exchange").

In preparing these condensed consolidated financial statements, the Directors have careful consideration to the future liquidity of the Group in the light of the Group incurring a loss of HK$98,974,000 for the Period and as of 31 December 2019, the Group's current liabilities exceeded its current assets by HK$100,848,000. The condensed consolidated financial statements have been prepared on a going concern basis as the Group has obtained a loan facility from a related party in amount of HK$1,200,000,000 with a fixed repayment term of 2 years and a revolving loan facility from a bank in amount of HK$20,000,000. The Group is actively negotiating with another bank to obtain an additional new financing and other source of funding. The Directors believe that in obtaining these new financing facilities, it will be able to provide continuing financial support to the Group. The Directors will also closely monitor the operation, cash flows and capital expenditure of the Group and consider to make appropriate actions such as fund raising activities as and when required to cope with its need. Accordingly, the Directors are satisfied that it is appropriate to prepare the condensed consolidated financial statements on a going concern basis.

The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual consolidated financial statements for the year ended 30 June 2019.

Certain comparative figures have been reclassified to be consistent with the current period's presentation.

Interim Report 2019/2020 Emperor Culture Group Limited

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2019

2. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

The accounting policies adopted in the preparation of the interim condensed consolidated financial information are consistent with those applied in the preparation of the Group's annual consolidated financial statements for the year ended 30 June 2019, except for the adoption of the new and revised Hong Kong Financial Reporting Standards ("HKFRSs") effective as of 1 July 2019.

HKFRS 16	Leases
HK(IFRIC)-Int 23	Uncertainty over Income Tax Treatments
Amendments to HKFRS 9	Prepayment Features with Negative
	Compensation
Amendments to HKAS 19	Plan Amendment, Curtailment or
	Settlement
Amendments to HKAS 28	Long-term Interests in Associates and
	Joint Ventures
Annual Improvements	Amendments to HKFRS 3, HKFRS 11,
2015-2017 Cycle	HKAS 12 and HKAS 23

Other than as explained below regarding the impact of HKFRS 16 Leases, the new and amendments to HKFRSs are not relevant to the preparation of the Group's interim condensed consolidated financial information. The nature and impact of this new HKFRS are described below:

HKFRS 16 replaces HKAS 17 Leases, HK(IFRIC)-Int 4 Determining whether an Arrangement contains a Lease, HK(SIC)-Int 15 Operating Leases - Incentives and HK(SIC)-Int 27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model. Lessor accounting under HKFRS 16 is substantially unchanged from HKAS 17. Lessors will continue to classify leases as either operating or finance leases using similar principles as in HKAS 17. Therefore, HKFRS 16 did not have any financial impact on leases where the Group is the lessor.

14	Emperor Culture Group Limited Interim Report 2019/2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2019

2. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

(Continued)

The Group adopted HKFRS 16 using the modified retrospective method of adoption with the date of initial application of 1 July 2019. Under this method, the standard is applied retrospectively with the cumulative effect of initial adoption as an adjustment to the opening balance of accumulated losses as at 1 July 2019, and the comparative information was not restated and continues to be reported under HKAS 17.

New definition of a lease

Under HKFRS 16, a contract is, or contains a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration. Control is conveyed where the customer has both the right to obtain substantially all of the economic benefits from use of the identified asset and the right to direct the use of the identified asset. The Group elected to use the transition practical expedient allowing the standard to be applied only to contracts that were previously identified as leases applying HKAS 17 and HK(IFRIC)-Int 4 at the date of initial application. Contracts that were not identified as leases under HKAS 17 and HK(IFRIC)-Int 4 were not reassessed. Therefore, the definition of a lease under HKFRS 16 has been applied only to contracts entered into or changed on or after 1 July 2019.

At inception or on reassessment of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease and non-lease component on the basis of their standard-alone prices. A practical expedient is available to a lessee, which the Group has adopted, not to separate non-lease components and to account for the lease and the associated non-lease components (e.g., property management services for leases of properties) as a single lease component.

Interim Report 2019/2020 Emperor Culture Group Limited

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2019

2. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

(Continued)

As a lessee - Leases previously classified as operating leases Nature of the effect of adoption of HKFRS 16

The Group has lease contracts for various items of property, machinery and other equipment. As a lessee, the Group previously classified leases as either finance leases or operating leases based on the assessment of whether the lease transferred substantially all the rewards and risks of ownership of assets to the Group. Under HKFRS 16, the Group applies a single approach to recognise and measure right-of-use assets and lease liabilities for all leases, except for two elective exemptions for leases of low value assets (elected on a lease by lease basis) and short-term leases (elected by class of underlying asset). The Group has elected not to recognise right-of-use assets and lease liabilities for (i) leases of low-value assets (e.g., equipment); and (ii) leases, that at the commencement date, have a lease term of 12 months or less. Instead, the Group recognises the lease payments associated with those leases as an expense on a straight-line basis over the lease term.

Impacts on transition

Lease liabilities as at 1 July 2019 were recognised based on the present value of the remaining lease payments, discounted using the incremental borrowing rate as at 1 July 2019 and presented separately in the unaudited condensed consolidated statement of financial position.

The right-of-use assets were measured at the amount of the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to the lease recognised in the unaudited condensed consolidated statement of financial position immediately before 1 July 2019. All these assets were assessed for any impairment based on HKAS 36 on that date. The Group elected to present the right-of-use assets separately in the unaudited condensed consolidated statement of financial position.

The Group has used the following elective practical expedients when applying HKFRS 16 as at 1 July 2019:

• Applied the short-term lease exemptions to leases with a lease term that ends within 12 months from the date of initial application
• Used hindsight in determining the lease term where the contract contains options to extend/terminate the lease

16	Emperor Culture Group Limited Interim Report 2019/2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2019

2. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

(Continued)

As a lessee - Leases previously classified as operating leases (Continued)

Impacts on transition (Continued)

The impacts arising from the adoption of HKFRS 16 as at 1 July 2019 are as follows:

	Increase/
	(decrease)
	(Unaudited)
	HK$'000
Assets
Increase in right-of-use assets	637,778
Decrease in deposits paid	(7,673)
Increase in total assets	630,105
Liabilities
Decrease in trade and other payables	(21,379)
Increase in lease liabilities	630,105
Increase in total liabilities	608,726
Decrease in accumulated losses	(21,379)

The lease liabilities as at 1 July 2019 reconciled to the operating lease commitments as at 30 June 2019 is as follows:

		HK$'000
Operating lease commitments as at 30 June 2019 (Audited)	1,876,307
Add:	Payments for optional extension periods not
	recognised as at 30 June 2019	147,760
Less:	Lease commitments not yet commenced	(1,151,551)
	Lease liabilities discounted at weighted average
	incremental borrowing rate of 5%	(242,411)
Lease liabilities as at 1 July 2019 (Unaudited)	630,105

Interim Report 2019/2020 Emperor Culture Group Limited

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2019

2. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

(Continued)

As a lessee - Leases previously classified as operating leases (Continued)

Summary of new accounting policies

The accounting policy for leases as disclosed in the annual financial statements for the year ended 30 June 2019 is replaced with the following new accounting policies upon adoption of HKFRS 16 from 1 July 2019:

Right-of-use assets

Right-of-use assets are recognised at the commencement date of the lease. Right-of-use assets are measured at cost, less any accumulated depreciation and any impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use assets are depreciated on a straight-line basis over the shorter of the estimated useful life and the lease term.

Lease liabilities

Lease liabilities are recognised at the commencement date of the lease at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for termination of a lease, if the lease term reflects the Group exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognised as an expense in the period in which the event or condition that triggers the payment occurs.

18	Emperor Culture Group Limited Interim Report 2019/2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2019

2. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

(Continued)

As a lessee - Leases previously classified as operating leases (Continued)

Summary of new accounting policies (Continued)

Lease liabilities(Continued)

In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in future lease payments arising from change in an index or rate, a change in the lease term, a change in the in-substance fixed lease payments or a change in assessment to purchase the underlying asset.

Significant judgement in determining the lease term of contracts with renewal options

The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.

The Group has the option, under some of its leases, to lease properties for additional terms from 2 to 6 years. The Group applies judgement in evaluating whether it is reasonably certain to exercise the option to renew. It considers all relevant factors that create an economic incentive for it to exercise the renewal. After the lease commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within the control of the Group and affects its ability to exercise the option to renew.

The Group included the renewal period as part of the lease term for leases of properties due to the significance of these assets to its operations. These leases have a short non-cancellable period and there will be a significant negative effect on production if a replacement is not readily available.

Interim Report 2019/2020 Emperor Culture Group Limited

19

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2019

2. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

(Continued)

As a lessee - Leases previously classified as operating leases (Continued)

Amounts recognised in the interim condensed consolidated statement of financial position and profit or loss

The carrying amounts of the Group's right-of-use assets and lease liabilities, and the movement during the Period are as follow:

	Right-of-use	Lease
	assets	liabilities
	(Unaudited)	(Unaudited)
	HK$'000	HK$'000
At 1 July 2019	637,778	630,105
Additions (note)	428,826	417,399
Depreciation charge	(41,395)	-
Interest expense	-	22,553
Payments	-	(20,546)
Exchange realignment	(6,475)	(6,475)
At 31 December 2019	1,018,734	1,043,036

Note: Additions of right-of-use assets

Under the section headed "Right-of-use assets" in the summary of new accounting policies, right-of-use assets are recognised at the commencement date of the lease. Under HKFRS 16, the commencement date of the lease is defined as the date on which a lessor makes an underlying asset available for use by a lessee. Since the Group took possession of, or was given control over, the use of the assets after 1 July 2019, the relevant lease payments under the term of the leases were recognised by the Group as additions for the Period.

As the relevant lease contractual documents were entered into by the Group before the adoption of HKFRS 16, the lease arrangements were treated as operating leases when complying with the Listing Rules as at the date of such documents. The Company is not required to re-comply with the Listing Rules in relation to the notifiable transactions for such relevant leases after the adoption of HKFRS 16.

20	Emperor Culture Group Limited Interim Report 2019/2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2019

3. REVENUE

An analysis of the Group's revenue is as follows:

	Six months ended
	31 December	31 December
	2019	2018
	(Unaudited)	(Unaudited)
	HK$'000	HK$'000
Recognised at a point in time:
Income from cinema operation	96,062	68,171
Recognised over time:
Income from film and TV programme
investment and production and others	-	5,409
Revenue from contracts with customers	96,062	73,580

4. SEGMENT INFORMATION

For the purposes of resource allocation and assessment of segment performance, information reported to the Executive Directors of the Company, being the chief operating decision maker ("CODM"), focus on types of goods or services delivered or provided.

In the prior year, the Group reorganised its internal reporting structure which resulted in changes in the composition of its reportable segments. In accordance with the way in which information is now reported internally to the CODM for purpose of resource allocation and performance assessment and the streamlining of certain reportable segments, the financial information of the Group's "Film, TV programme investment and production and others" and "Event investment and others" segments are now reported within "Investment in films and cultural events" segment while "Investment in securities" segment is no longer a part of an operating segment. Prior corresponding period's segment disclosures have been represented to conform with the current period's presentation.

Interim Report 2019/2020 Emperor Culture Group Limited

21

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2019

4. SEGMENT INFORMATION (Continued)

In the manner consistent with the way in which information is reported internally to the CODM for the purposes of resource allocation and performance assessment, the business activities of the Group are organised into the following operating segments:

• Cinema operation
• Investment in films and cultural events (including investments in film and event projects; and production, distribution and licensing of animated TV episodes and theatrical films)

Information regarding the above segments is reported as below:

Segment revenue and results

For the six months ended 31 December 2019

		Investment
	Cinema	in films and
	operation	cultural events	Consolidated
	(Unaudited)	(Unaudited)	(Unaudited)
	HK$'000	HK$'000	HK$'000
Segment revenue	96,062	-	96,062
Segment results	(68,688)	(34)	(68,722)
Bank interest income				281
Unallocated corporate expenses				(3,256)
Change in fair value of financial
assets at fair value through profit
or loss ("FVTPL")				(4,724)
Finance cost				(22,553)
Loss before taxation				(98,974)

22	Emperor Culture Group Limited Interim Report 2019/2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2019

4. SEGMENT INFORMATION (Continued)

Segment revenue and results (Continued)

For the six months ended 31 December 2018

		Investment
	Cinema	in films and
	operation	cultural events	Consolidated
	(Unaudited)	(Unaudited)	(Unaudited)
	HK$'000	HK$'000	HK$'000
Segment revenue	68,171	5,409	73,580
Segment results	(33,680)	(32,643)	(66,323)
Bank interest income				1,472
Gain on fair value change in
respect of contingent
consideration receivable				654
Unallocated corporate expenses				(3,186)
Change in fair value of financial
assets at FVTPL				(13,045)
Finance cost				(874)
Loss before taxation				(81,302)

Segment revenue reported above represents revenue generated from external customers. There is no inter-segment revenue for the Period (2018: Nil).

Segment results represent the loss suffered by each segment without allocation of bank interest income, central administration costs which mainly include Directors' emoluments and corporate legal and professional fees, fair value changes in respect of contingent consideration receivable and financial assets at FVTPL, and finance costs. This is the measure reported to the CODM for the purposes of resource allocation and assessment of segment performance.

No analysis of the Group's assets and liabilities by operating and reportable segments is disclosed as it is not regularly provided to the Executive Directors for review.

Other than the segment information disclosed above, there was no other information reviewed by the CODM for both periods.

Interim Report 2019/2020 Emperor Culture Group Limited

23

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2019

5. LOSS BEFORE TAXATION

	Six months ended
	31 December
	2019	2018
	(Unaudited)	(Unaudited)
	HK$'000	HK$'000
Loss before taxation has been arrived at
after charging/(crediting):
Amortisation of film and TV programme
rights (included in cost of sales)	-	4,696
Amortisation of intangible assets
(included in administrative expenses)	-	1,008
Cost of investments in film production
(included in cost of sales)	-	1,494
Depreciation of property, plant
and equipment	20,471	17,303
Depreciation of right-of-use assets	41,395	-
Impairment loss recognised in respect of:
- goodwill*	-	28,273
- investments in film production*	-	120
Bank interest income	(281)	(1,472)
Gain on fair value change in respect of
contingent consideration receivable
(included in other income and gains)	-	(654)

• The aggregation of these items for the six months ended 31 December 2018 were included in "Other operating expenses" in the condensed consolidated statement of profit or loss and other comprehensive income.

24	Emperor Culture Group Limited Interim Report 2019/2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2019

6. FINANCE COSTS

Six months ended

31 December

2019 2018 (Unaudited) (Unaudited)

HK$'000 HK$'000

Interest expenses on:
- lease liabilities	22,553	-
- other loan	-	874
	22,553	874

7. INCOME TAX

No provision for Hong Kong Profits Tax, Enterprise Income Tax of the People's Republic of China (the "PRC"), Macau Complementary Income Tax and Malaysia Corporate Income Tax has been made as the Group has no assessable profits arising in Hong Kong, the PRC, Macau and Malaysia for both periods.

8. DIVIDENDS

The Board has resolved not to declare any interim dividend for the Period (2018: Nil).

9. LOSS PER SHARE ATTRIBUTABLE TO OWNERS OF THE

COMPANY

The calculations of the basic and diluted loss per share attributable to owners of the Company are based on the following data:

Six months ended

31 December

2019 2018 (Unaudited) (Unaudited)

HK$'000 HK$'000

Loss
Loss for the period attributable to owners
of the Company for the purpose of
basic and diluted loss per share	(94,807)	(77,399)

Interim Report 2019/2020 Emperor Culture Group Limited

25

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2019

9. LOSS PER SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY (Continued)

Six months ended

31 December

2019 2018 (Unaudited) (Unaudited)

'000 '000

Number of shares
Weighted average number of ordinary
shares in issue for the purpose of
basic and diluted loss per share	3,213,341	3,213,341

The Company had no potentially dilutive ordinary shares in issue during both periods.

10. MOVEMENT OF PROPERTY, PLANT AND EQUIPMENT

	HK$'000
Carrying amount
At 1 July 2019 (Audited)	262,699
Additions	316,968
Depreciation charge	(20,471)
Exchange realignment	(3,320)
At 31 December 2019 (Unaudited)	555,876

26	Emperor Culture Group Limited Interim Report 2019/2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2019

11. TRADE RECEIVABLES

As at

31 December 30 June

2019 2019

(Unaudited) (Audited)

HK$'000 HK$'000

Trade receivables, net

4,374

4,761

The Group allows an average credit periods of 30 to 180 days (2018: 30 to 180 days) to its customers. The ageing analysis of the trade receivables of the Group based on the invoice date at the end of the reporting period is as follows:

	As at
	31 December	30 June
	2019		2019
	(Unaudited)	(Audited)
	HK$'000	HK$'000
0 - 90 days	4,363		4,734
91 - 180 days	11		408
Over 180 days	381		-
	4,755		5,142
Less: Allowance for expected credit losses	(381)		(381)
	4,374		4,761

Interim Report 2019/2020 Emperor Culture Group Limited

27

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2019

12. TRADE AND OTHER PAYABLES

	As at
	31 December	30 June
	2019		2019
	(Unaudited)	(Audited)
	HK$'000	HK$'000
Trade payables	12,870		8,678
Accruals	6,354		19,061
Other payables (note)	83,091		13,037
	102,315		40,776

Note:

Other payables mainly comprise of HK$80,818,000 (30 June 2019: HK$7,865,000) for consideration payable to independent third parties for enhancement and expansion of cinemas.

The following is an ageing analysis of trade payables of the Group based on the invoice date at the end of the reporting period:

	As at
	31 December	30 June
	2019		2019
	(Unaudited)	(Audited)
	HK$'000	HK$'000
0 - 90 days	12,351		8,678
91 - 180 days	519		-
	12,870		8,678

28	Emperor Culture Group Limited Interim Report 2019/2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2019

13. CAPITAL COMMITMENTS

	As at
	31 December	30 June
	2019	2019
	(Unaudited)	(Audited)
	HK$'000	HK$'000
Contracted for but not provided in the
condensed consolidated financial
statements, net of amounts paid, in
respect of acquisition of property, plant
and equipment	43,990	175,616

14. RELATED PARTY TRANSACTIONS

1. During the Period, the Group had the following significant transactions with related parties:

	Six months ended
	31 December
	2019	2018
	(Unaudited)	(Unaudited)
	HK$'000	HK$'000
Company secretarial fee to a related
company (note (i))	100	100
Consultancy fee to a related
company (note (ii))	691	2
Lease payments to related companies	6,481	-
(note (ii))
Professional service fee to a related
company (note (ii))	240	240
Purchase of furniture from a related
company (note (ii))	4,057	6
Reimbursement of administrative
expenses to a related company	6,170	2,686
(note (ii))
Rental expenses to related companies	-	7,247
(note (ii))
Sales of merchandising goods to
related parties (note (iii))	396	708

Interim Report 2019/2020 Emperor Culture Group Limited

29

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2019

14. RELATED PARTY TRANSACTIONS (Continued)

1. (Continued)
   Notes:
2. 1. This related company is ultimately controlled by a Director.
   2. These related companies are ultimately controlled by the relevant private discretionary trusts of which Dr. Yeung Sau Shing, Albert ("Dr. Albert Yeung") is the founder of the trusts.
   3. These related parties included companies stated in note (ii), a Director and Dr. Albert Yeung.
3. The key management personnel of the Company are the Directors and the total remunerations paid to them during the Period are set out below:

Six months ended

31 December

2019 2018 (Unaudited) (Unaudited)

HK$'000 HK$'000

Fees

830

802

1. At the end of the reporting period, the Group had the following balances with related parties:

	As at	30 June
	31 December
	2019		2019
	(Unaudited)	(Audited)
	HK$'000	HK$'000
Amounts due to related companies	5,987		5,651
Amount due to non-controlling
interests	43,589		43,589

30	Emperor Culture Group Limited Interim Report 2019/2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2019

15. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS

Some of the Group's financial assets are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets are determined (in particular, the valuation technique(s) and inputs used), as well as the level of the fair value hierarchy into which the fair value measurements are categorised (levels 1 to 3) based on the degree to which the inputs to the fair value measurements are observable.

• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active market for identical assets or liabilities;
• Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Interim Report 2019/2020 Emperor Culture Group Limited

31

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2019

15. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS

(Continued)

Fair value of the Group's financial assets that are measured at fair value on a recurring basis

	Fair value as at
	31 December	30 June	Fair value	Valuation technique(s)	Significant
Financial assets	2019	2019	hierarchy	and key input(s)	unobservable input(s)
	(Unaudited)	(Audited)
	HK$'000	HK$'000
Financial assets at
FVTPL:
- Equity securities	1,388	5,814	Level 1	Quoted bid prices in an	N/A
listed in Hong				active market
Kong (note)
- Investments in	5,531	164,969	Level 3	Income approach - in	Discount rate, which
film production				this approach, the	was cost of debt of
				discounted cash flow	5.07% (30 June 2019:
				method was used to	cost of equity of
				capture the present	20.21% determined
				value of the expected	using a capital asset
				future economic	pricing model and
				benefits to be derived	cost of debt of
				from the investments,	5.07%)
				based on an

appropriate discount rate

32	Emperor Culture Group Limited Interim Report 2019/2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2019

15. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS

(Continued)

Note:

Other than the fair value of the listed securities as at 31 December 2019 disclosed above, the Group had an investment in the listed securities of a Hong Kong listed company of which the trading of its shares was suspended since July 2019 due to non-compliance with the Listing Rules. The Stock Exchange has given the notice of resumption guidance to this listed company. However, it has not fulfilled the resumption conditions up to the date of this interim report. In addition, the listed company received three winding up petitions (the "Petitions") in November 2019 from three corporate noteholders in relation to the outstanding overdue indebtedness arising from the notes issued by it. The potential effect of the Petitions under the applicable laws and regulations might further extend the suspension of trading in respect of the listed company's shares.

Having considered that the resumption of trading of shares of the listed company is uncertain and there is a possible winding up order granted by the High Court of Hong Kong Special Administrative Region to the listed company if the dismissal of the Petitions is failed, the Directors have determined to write off the entire amount of its fair value of HK$4,212,000 as at 30 June 2019 in profit or loss.

Sensitivity analysis of Level 3 fair value measurement of financial asset

An increase in the discount rate used in isolation would result in a decrease in fair value of investments in film production, and vice versa. A 5% change in the discount rate holding all other variables constant would change the fair value of investments in film production by HK$8,000 (30 June 2019: HK$52,000).

Interim Report 2019/2020 Emperor Culture Group Limited

33

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2019

15. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS

(Continued)

Reconciliation of Level 3 fair value measurement of financial asset

	Investments
	in film
	production
	HK$'000
At 1 July 2018 (Audited)	181,589
Transfer to other receivable	(135)
Amount received	(8,503)
Decrease in fair value	(7,982)
At 30 June 2019 and 1 July 2019 (Audited)	164,969
Amount received	(159,140)
Decrease in fair value	(298)
At 31 December 2019 (Unaudited)	5,531

There were no transfers of fair value measurements between Level 1 and Level 2 and no transfers into or out of Level 3 during the Period and the year ended 30 June 2019.

The Directors consider that the carrying amounts of the Group's other financial assets and financial liabilities recorded at amortised cost at the end of each reporting period reasonably approximate their corresponding fair values.

34	Emperor Culture Group Limited Interim Report 2019/2020

DIRECTORS' AND CHIEF EXECUTIVES' INTERESTS AND SHORT POSITIONS IN SECURITIES

As at 31 December 2019, the following Directors and chief executives of the Company had or were deemed or taken to have interests and short positions in the following shares, underlying shares and debentures of the Company or its associated corporation(s) (within the meaning of Part XV of the Securities and Futures Ordinance ("SFO")) as recorded in the register maintained 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 of the Listing Rules ("Model Code"):

(A) LONG POSITIONS INTERESTS IN THE COMPANY

Ordinary shares of HK$0.01 each of the Company (the "Shares")

		Number of
	Capacity/Nature of	issued Shares	% of issued
Name of Director	interests	held	voting Shares
Mr. Yeung Ching	Eligible beneficiary of	1,862,700,000	57.97%
Loong, Alexander	a private trust
("Mr. Alex Yeung")

Note:

These Shares were held by Emperor Culture Group Holdings Limited, a wholly- owned subsidiary of Albert Yeung Entertainment Holdings Limited ("AY Entertainment Holdings"). AY Entertainment Holdings is held by Alto Trust Limited in trust for a private discretionary trust under which Mr. Alex Yeung is one of the eligible beneficiaries.

Interim Report 2019/2020 Emperor Culture Group Limited

35

DIRECTORS' AND CHIEF EXECUTIVES' INTERESTS AND SHORT POSITIONS IN SECURITIES (Continued)

1. LONG POSITIONS INTERESTS IN ASSOCIATED CORPORATIONS OF THE COMPANY
2. 1. Ordinary shares

	Name of		Number of	% of issued
Name of	associated	Capacity/Nature	shares	voting
Director	corporation	of interests	interested	shares
Ms. Fan Man	Emperor International	Beneficial owner	10,500,000	0.29%
Seung,	Holdings Limited
Vanessa	("Emperor
	International")
Mr. Alex Yeung	Emperor International	Eligible beneficiary of a	2,747,610,489	74.71%
		private trust	(Note)
	Emperor Entertainment	Eligible beneficiary of a	851,352,845	68.94%
	Hotel Limited	private trust	(Note)
	Emperor Watch &	Eligible beneficiary of a	4,290,850,000	63.29%
	Jewellery Limited	private trust	(Note)
	Ulferts International	Eligible beneficiary of a	600,000,000	75.00%
	Limited	private trust	(Note)

Note:

These shares were ultimately owned by respective private discretionary trusts. Mr. Alex Yeung had deemed interests in the same shares by being one of the eligible beneficiaries of such private trusts.

(ii) Debentures
			Capacity/	Amount of
		Name of associated	Nature	Debentures
	Name of Director	corporation	of interests	held
	Mr. Wong Chi Fai	Emperor International	Interest of	HK$2,000,000
			controlled
			corporation

36	Emperor Culture Group Limited Interim Report 2019/2020

DIRECTORS' AND CHIEF EXECUTIVES' INTERESTS AND SHORT POSITIONS IN SECURITIES (Continued)

(B) LONG POSITIONS INTERESTS IN ASSOCIATED CORPORATIONS OF THE COMPANY (Continued)

Save as disclosed above, as at 31 December 2019, none of the Directors nor chief executives of the Company had any interests or short positions in any Shares, underlying Shares and debentures of the Company or any of its associated corporation(s) (within the meaning of Part XV of the SFO).

OTHER PERSONS' INTERESTS AND SHORT POSITIONS IN SECURITIES

As at 31 December 2019, so far as is known to any Directors or chief executives of the Company, the persons or corporations (other than a Director or a chief executive of the Company) who had, or were deemed or taken to have an interest and short positions in the Shares or underlying Shares as recorded in the register required to be kept by the Company under Section 336 of the SFO ("DI Register") were as follows:

LONG POSITIONS IN SHARES OF THE COMPANY

		Number of
	Capacity/Nature	issued	% of issued
Name	of interests	Shares held	voting Shares
AY Entertainment	Interest in a	1,862,700,000	57.97%
Holdings	controlled	(Note 1)
	corporation
Alto Trust Limited	Trustee of a	1,862,700,000	57.97%
	private trust	(Note 1)
Dr. Albert Yeung	Founder of a	1,862,700,000	57.97%
	private trust	(Note 1)
Ms. Luk Siu Man,	Interest of spouse	1,862,700,000	57.97%
Semon ("Ms. Semon		(Note 2)
Luk")

Interim Report 2019/2020 Emperor Culture Group Limited

37

OTHER PERSONS' INTERESTS AND

SHORT POSITIONS IN SECURITIES

LONG POSITIONS IN SHARES OF THE COMPANY (Continued)

Notes:

1. These Shares were the same shares of which Mr. Alex Yeung had deemed interests as set out under the Part (A) of the section of "Directors' and Chief Executives' Interests and Short Positions in Securities" above.
2. Ms. Semon Luk is the spouse of Dr. Albert Yeung.

All interests stated above represent long position. As at 31 December 2019, no short positions were recorded in the DI Register.

Save as disclosed above, as at 31 December 2019, the Directors or chief executives of the Company were not aware of any other persons or corporations (other than the Directors and chief executives of the Company) who had, or were deemed or taken to have, any interests or short positions in Shares or underlying Shares as recorded in the DI Register.

CORPORATE GOVERNANCE AND OTHER

INFORMATION

SHARE OPTIONS

The Company has adopted a share option scheme on 8 November 2011 ("Share Option Scheme") under which the Directors may, at their discretion, grant options to employees, including any director of the Company or its subsidiaries to subscribe for Shares, subject to the term and conditions stipulated therein. No option was granted under the Share Option Scheme since its adoption.

38	Emperor Culture Group Limited Interim Report 2019/2020

CORPORATE GOVERNANCE AND OTHER

INFORMATION

CORPORATE GOVERNANCE CODE

The Company had complied throughout the Period with all the code provisions of the Corporate Governance Code as set out in Appendix 14 of the Listing Rules.

MODEL CODE FOR SECURITIES TRANSACTIONS

The Company had adopted the Model Code as set out in the Appendix 10 of the Listing Rules as its code of conduct regarding Directors' securities transactions. Having made specific enquiry to the Directors, all of them confirmed that they have complied with the required standard of dealings as set out in the Model Code throughout the Period.

Relevant employees who are likely to be in possession of unpublished price- sensitive information of the Group are also subject to compliance with written guidelines in line with the Model Code. No incident of non-compliance by relevant employees was noted during the Period.

REVIEW OF INTERIM REPORT

The condensed consolidated financial statements of the Group for the Period as set out in this interim report have not been audited nor reviewed by the Company's auditor, Ernst & Young, but this report has been reviewed by the audit committee of the Company, which comprises the three independent non- executive Directors of the Company.

CHANGE OF INFORMATION OF DIRECTORS

The Company is not aware of any changes in the Directors' information which is required to be disclosed pursuant to Rule 13.51B(1) of the Listing Rules since the date of the Annual Report 2018/2019.

Interim Report 2019/2020 Emperor Culture Group Limited

39

CORPORATE GOVERNANCE AND OTHER

INFORMATION (Continued)

PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES

Neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company's listed securities during the Period.

By order of the Board

Emperor Culture Group Limited

Fan Man Seung, Vanessa

Chairperson

Hong Kong, 25 February 2020

As at the date hereof, the Board comprises:

Executive Directors:	Ms. Fan Man Seung, Vanessa
	Mr. Wong Chi Fai
	Mr. Yeung Ching Loong, Alexander
	Ms. Shirley Percy Hughes
Independent Non-executive Directors:	Ms. Chan Sim Ling, Irene
	Mr. Ho Tat Kuen
	Ms. Tam Sau Ying

This Interim Report (in both English and Chinese versions) is available to any shareholder of the Company either in printed form or on the websites of the Stock Exchange (https://www.hkexnews.hk) and the Company (https://www. empculture.com). In order to protect the environment, the Company highly recommends shareholders to elect to receive electronic copy of this Interim Report. Shareholders may have the right to change their choice of receipt of our future Corporate Communications at any time by reasonable notice in writing to the Company or the Company's Hong Kong Branch Share Registrar, Tricor Tengis Limited, by post at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong or by email at [e-mail].

40	Emperor Culture Group Limited Interim Report 2019/2020