Hong Kong’s economy continued to improve steadily in 2010. The GDP growth in Mainland China and Hong Kong also supported the economic recovery. The demand for printing products from external buyers maintained stable growth, which was mainly stimulated by the constant momentum of the global economic recovery.

During the period under review, the Group’s printing business recorded a satisfactory profit by successfully controlling its costs. Although the profit margin of the printing business has decreased due to the impact of persistently rising inflation and labor cost, the Group has upheld “Green Production” as our direction in the future. We will continue to increase our investment in “Green Production” and promote the development of green products.

To tackle the impacts of rising costs, the management will continue to increase production efficiency, improve product quality, focus on employees’ training and develop products with higher added values. Every year, the Group regularly invited professionals to train our employees. In addition, we are also constantly importing new printing machines and expanding the production lines with a view to achieving “total quality management”. Another important achievement is the adjustment of the customer base of the printing business in order to realize diversification, which included expanding Mainland China’s domestic market, efforts in expanding our share in the green product market, developing new products and seeking potential customers from new overseas markets such as Russia, Middle East and South America.

As to the entertainment business, the Group recorded a stable growth in the financial year. For example, we hosted more concerts and shows such as “Neway Music Live 2010 – Hot Stars Party” and “2011 – Chi Lam in Concert”. Return from the entertainment business gradually improved. In particular, the artiste management segment recorded extraordinary results. During the period, the Group successfully promoted the brand and reputation of our artistes and the entertainment business in general.

We successfully added a new member, i.e. Stephanie, Cheng Yung, a popular and famous artiste/singer, to Star Entertainment (Universe) Limited (“SEU”) in December 2010. In addition, we signed a cooperation agreement with a Taiwan entertainment company that covers Michael Wong, one of their artistes. These newcomers will certainly benefit the Group. In August 2010, SEU also entered into a Sales and Distribution Agreement with JV Entertainment Productions Ltd. Pursuant to the Agreement, SEU is appointed as the worldwide sole and exclusive distributor. It owns various brands such as Crown Record and JVE. The collaboration created new competitive edges for both parties and achieved a “win-win” combination.

The Group will continue to focus on opportunities in Mainland China so as to add value to our entertainment business. “The Great Rescue”, a TV series in Mainland China jointly invested by the Group and shot in collaboration with CCTV, has already been broadcasted and was highly praised. The relevant income will be reflected in the results for the year 2011/2012. The second TV series produced with CCTV, namely “Shot Hole”, has also been broadcasted in June 2011. We believe our business relationship with CCTV will bring synergy and benefits to both parties.

Looking forward, the Group will continue to develop the entertainment business and diversify into new areas. We will introduce new elements with high values, achieve synergy and provide stimulus to the entertainment business.

Finally, I would like to express my heartfelt appreciation to our employees for their contributions to the Group. I would also like to express my deepest gratitude to our shareholders and investors for their support. We will continue to create value and make contribution to the Group as our vision is “to be the most valued and innovative leader in the selected fields we serve”, which has also been our motto that encourages all of us.

SUEK Ka Lun, Ernie
Chairman

Hong Kong
29 June 2011