SCMP : FINAL RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2013

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

The Directors of SCMP Group Limited (the "Company") are pleased to announce the consolidated final results of the Company and its group of companies (the "Group") for the year ended 31 December 2013 as follows:

Notes HK$'000 HK$'000 HK$'000 (Restated) (Restated)

Property, plant and equipment 3 565,527 521,674 544,064

Investment properties 4 1,720,600 1,633,200 1,462,550

Intangible assets 160,449 122,825 19,589

Deposits paid for property, plant

and equipment 140 38,676 - Investment in associates 56,384 57,746 53,870

Available-for-sale financial assets 214,877 225,241 190,252

Defined benefit plan's assets 64,530 3,030 30,054

Deferred income tax assets 668 272 429

749,962 685,707 683,352

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Notes HK$'000 HK$'000 HK$'000 (Restated) (Restated)

Share capital 6 156,106 156,095 156,095

Reserves 2,882,606 2,696,051 2,467,736

Proposed dividend 65,564 70,248 62,438

2,948,170 2,766,299 2,530,174

Accounts payable and accrued

liabilities 7 237,890 183,659 158,737

Amounts due to associates 2,782 2,615 2,864

Subscriptions in advance 28,208 26,689 24,870

Current income tax liabilities 18,180 8,908 5,634

Loan from a non-controlling

shareholder - 9,000 -

287,060 230,871 192,105

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Notes HK$'000 HK$'000 (Restated)

Other income 11,240 8,390

Staff costs (504,940) (395,363) Cost of production materials (182,645) (170,587) Rental and utilities (31,315) (25,588) Depreciation and amortisation (60,794) (55,027) Advertising and promotion (42,779) (38,736) Other operating expenses (162,732) (157,797) Fair value gain on investment properties 87,168 170,650

Net finance income 4,221 4,818

Share of profits of associates 7,519 6,773

Income tax expense 8 (27,490) (33,991)

Remeasurement of defined benefit plan

obligation 76,150 (14,948) Items that may be reclassified subsequently

to profit or loss:

Fair value (loss)/gain on available-for-sale

financial assets (14,601) 34,981

Currency translation difference (2,753) 6,732

(17,354) 41,713

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Notes HK$'000 HK$'000 (Restated)

Shareholders of the Company 223,733 316,281

Non-controlling interests 20,341 16,871

Shareholders of the Company 282,529 343,046

Non-controlling interests 20,341 16,871

Basic 14.33 cents 20.26 cents

Diluted 14.32 cents 20.26 cents

HK$'000 HK$'000

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Year ended 31 December 2013

Balance at 1 January 2012,

HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000

as previously reported 156,095 40,971 803,234 83,927 1,634,417 2,718,644 22,785 2,741,429

Adjustment for change in accounting policy

(note 1) - - - - (32,375) (32,375) - (32,375)

Balance at 1 January 2012, as restated 156,095 40,971 803,234 83,927 1,602,042 2,686,269 22,785 2,709,054

Profit for the year, as restated - - - - 316,281 316,281 16,871 333,152

Other comprehensive income, as restated - - - 41,713 (14,948) 26,765 - 26,765

Employee share-based compensation benefits - - - 2,345 - 2,345 - 2,345

Adjustment for change in accounting policy

Profit for the year - - - - 223,733 223,733 20,341 244,074

Other comprehensive income - - - (17,354) 76,150 58,796 - 58,796

Employee share-based compensation benefits - - - 656 - 656 - 656

Dividends declared and paid - - - - (101,469) (101,469) (12,000) (113,469)

Shares issued upon exercise of share options 11 155 - - - 166 - 166

Non-controlling interest arising on business

combination - - - - - - 4 4

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(a) Basis of preparation
The financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards ("HKFRS"). They have been prepared under the historical cost convention, as modified by the revaluation of investment properties and available-for-sale financial assets.
(b) Changes in accounting policy and disclosures
(i) The following new/revised standards and amendment to existing standards that are relevant to the Group are mandatory for the first time for the financial year beginning 1 January 2013.
HKAS 1 (amendment) 'Presentation of financial statements - Presentation of items of other comprehensive income'
HKAS 1 (amendment) require entities to present the items of other comprehensive income that would be reclassified to profit or loss in the future if certain conditions are met separately from those that would never be reclassified to profit or loss. The Group's presentation of other comprehensive income in these financial statements has been modified accordingly.
HKAS 19 (revised) 'Employee benefits'
HKAS 19 (revised) introduces a number of amendments to the accounting for defined benefit plans. Among them, HKAS 19 (revised) eliminates the "corridor method" under which the recognition of actuarial gains and losses relating to defined benefit schemes could be deferred and recognised in profit or loss over the expected average remaining service lives of employees. Under the revised standard, all actuarial gains and losses are required to be recognised immediately in other comprehensive income. HKAS 19 (revised) also changed the basis for determining income from plan assets from expected return to interest income calculated at the liability discount rate, and requires immediate recognition of past service cost, whether vested or not.
There is a new term "remeasurements". This is made up of actuarial gains and losses, the difference between actual investment returns and the return implied by the net interest cost.
The Group has adopted this amendment retrospectively for the financial year ended
31 December 2013, with the accumulated effects of the change in accounting policy recognised in retained profits. The effects of adoption are disclosed as follows.
As previously reported
Effect of adopting
HKAS 19 (revised) As restated
Consolidated balance sheet as at
1 January 2012

HK$'000 HK$'000 HK$'000

Defined benefit plan's assets 62,429 (32,375) 30,054
Retained profits 1,634,417 (32,375) 1,602,042
Consolidated balance sheet as at
31 December 2012

Consolidated statement of comprehensive income for the year ended 31 December 2012

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(b) Changes in accounting policy and disclosures (continued) HKFRS 10 'Consolidated financial statements'
HKFRS 10 builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company. The standard provides additional guidance to assist in the determination of control where this is difficult to assess. The adoption of this standard does not have any impact on these consolidated financial statements.
HKFRS 12 'Disclosure of interests in other entities'
HKFRS 12 includes the disclosure requirements for all forms of interests in other entities, including subsidiaries, joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. Further details of the Group's investments in subsidiaries and associates are set out in the annual report.
HKFRS 13 'Fair value measurement'
HKFRS 13 aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across HKFRSs. The requirements, which are largely aligned between HKFRSs and US GAAP, do not extend the use of fair value accounting but providing guidance on how it should be applied where its use is already required or permitted by other standards within HKFRSs.
(ii) New standards, amendments and interpretations, that are relevant to the Group, have been issued but are not effective for the financial year beginning 1 January 2013 and have not been early adopted.
Applicable for accounting periods beginning on / after
HKFRS 7 and HKFRS 9 (amendments), 'Mandatory
effective date and transition disclosures' 1 January 2015
HKFRS 9, 'Financial Instruments' 1 January 2015
HKAS 32 (amendment), 'Financial instruments:
Presentation' on asset and liability offsetting 1 January 2014
The Group will adopt the above new or revised standards, amendments and interpretations to existing standards as and when they become effective. The Group has already commenced the assessment of the impact to the Group and is not yet in a position to state whether these would have a significant impact on its results of operations and financial position.

The chief operating decision-maker has been identified as the Chief Executive Officer of the Group, who reviews the Group's internal reporting in order to assess performance and allocate resources. Management has determined the operating segments based on these reports.
The Group has three reportable segments: newspaper, magazine and property. Newspaper segment is engaged in the publication of South China Morning Post, Sunday Morning Post and other related print and digital publications. It derives its revenue mainly from advertising and sales of newspapers. Magazine segment is engaged in the publication of various magazines in Chinese language and related print and digital publications. Its revenue is derived from advertising and sales of magazines. Property segment holds various commercial and industrial properties in Hong Kong. It also owns advertising billboards for outdoor advertising. It derives revenue through leasing out its properties and billboards.

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The chief operating decision-maker assesses the performance of the operating segments based on a number of measures, including adjusted EBITDA (defined as earnings before interest, tax, depreciation and amortisation, other income and fair value gain on investment properties) and profit or loss after tax. The Group considers that the measurement principles for profit or loss after tax are most consistent with those used in measuring the corresponding amounts in the Group's financial statements. Hence, profit or loss after tax is used for reporting segment profit or loss.
The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies except that interest in the profit or loss of an associate is accounted for on the basis of dividend received or receivable in segment profit or loss while such interest is accounted for under the equity method in the Group's consolidated financial statements.
The Group's reportable segments are strategic business units that offer different products and services. They are managed separately because each business requires different marketing strategies. Transactions between reportable segments are accounted for on arm's length basis.
Turnover consists of revenue from all of the Group's reportable segments, which comprise newspaper, magazine and property, as well as other segments whose contributions to the Group's revenue and profit or loss are below the quantitative threshold for separate disclosures. The turnover for the year ended
31 December 2013 and 2012 were HK$1,146,621,000 and HK$1,019,610,000 respectively.
Revenue from newspapers, magazines and other publications included revenue of HK$5,501,000 (2012: HK$4,989,000) arising from exchanges of goods or services with third parties.
Substantially all the activities of the Group are based in Hong Kong and below is segment information by reportable segments:

HK$'000 HK$'000 HK$'000 HK$'000 HK$'000

For the year ended 31 December 2012
Newspaper Magazine Property Others Total HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 (Restated) (Restated)
Total segment revenue 773,640 218,846 35,885 - 1,028,371
Inter-segment revenue (981) (5,770) (2,010) - (8,761)

Revenue from external customers 772,659 213,076 33,875 - 1,019,610
Finance income 3,306 13 - 1,499 4,818
Depreciation and amortisation (45,149) (4,350) (5,528) - (55,027)
Income tax (17,118) (11,259) (4,059) - (32,436)

Reportable segment profit 84,714 54,173 188,966 4,322 332,175

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HK$'000 HK$'000 HK$'000 HK$'000 HK$'000

For the year ended 31 December 2012

Capital expenditure 70,938 2,280 363 - 73,581

HK$'000 HK$'000 (Restated)

Profit for reportable segments
Profit for other segments
Reconciling items:
Share of profits of associates under equity method of

2,168 977

Profit for the year 244,074 333,152

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subsidiaries - - 1,924 - 1,924

At 31 December 2013
Cost 420,375 842,416 172,260 1,653 1,436,704
Accumulated depreciation and

impairment losses (131,954) (638,029) (101,194) - (871,177)

HK$'000 HK$'000

At 1 January 1,633,200 1,462,550
Additions 232 - Fair value gain 87,168 170,650

At 31 December 1,720,600 1,633,200

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The Group allows an average credit period of 7 to 90 days to its trade customers and an ageing analysis of accounts receivable is as follows:

HK$'000 % HK$'000 %

Current 169,988 54.7 153,240 55.0
Less than 30 days past due 26,920 8.7 21,144 7.5
31 to 60 days past due 63,928 20.6 55,135 19.8
61 to 90 days past due 36,398 11.7 33,940 12.2

Over 90 days past due 13,276 4.3 15,278 5.5

Total 310,510 100.0 278,737 100.0
Less: Allowance for
impairment (2,763) (3,575)

Number of

shares Amount
Authorised: Ordinary shares of

HK$'000 HK$'000

HK$0.10 each 5,000,000,000 500,000 5,000,000,000 500,000
Issued and fully paid:
Opening balance 1,560,945,596 156,095 1,560,945,596 156,095
Shares issued under share

option scheme 112,000 11 - -

Ending balance 1,561,057,596 156,106 1,560,945,596 156,095
Pursuant to the employee share option scheme of the Group, 112,000 options were exercised during the year ended 31 December 2013 which resulted in the equal number of shares being issued (2012: Nil), with cash proceeds of HK$166,000 (2012: Nil).

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