SinoMedia Holding Limited — Interim / Quarterly Report 2015

Sep 10, 2015

INTERIM REPORT 2 0 1 5

STOCK CODE 00623

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Contents

Corporate Information	2
Financial Summary	3
Management Discussion and Analysis	4
Consolidated Statement of Proft or Loss	12
Consolidated Statement of Proft or Loss
and Other Comprehensive Income	13
Consolidated Statement of
Financial Position	14
Consolidated Statement of
Changes in Equity	16
Condensed Consolidated
Cash Flow Statement	17
Notes to the Unaudited Interim
Financial Report	18
Other Information	31

Corporate Information

EXECUTIVE DIRECTORS

Mr. Chen Xin (Chairman) Ms. Liu Jinlan Mr. Li Zongzhou

NON-EXECUTIVE DIRECTORS

COMPANY SECRETARY

Mr. Wang Yingda

AUTHORISED REPRESENTATIVES

Mr. Chen Xin Mr. Wang Yingda

Mr. He Hui David

PRINCIPLE PLACE OF BUSINESS

INDEPENDENT NON-EXECUTIVE DIRECTORS

Mr. Qi Daqing Mr. Lian Yuming Ms. Wang Xin

7/F, The Place — SinoMedia Tower, No. 9 Guanghua Road, Chaoyang District, Beijing, PRC

Unit 15D, Xintian International Plaza, No. 450 Fushan Road, Pudong New District, Shanghai, PRC

AUDIT COMMITTEE

Mr. Qi Daqing (Chairman) Mr. Lian Yuming Ms. Wang Xin

REGISTERED OFFICE OF THE COMPANY

Unit 402, 4th Floor, Fairmont House, No. 8 Cotton Tree Drive, Admiralty, Hong Kong

REMUNERATION COMMITTEE

Ms. Wang Xin (Chairman) Mr. Chen Xin Mr. Lian Yuming

AUDITORS

KPMG

SHARE REGISTRAR

NOMINATION COMMITTEE

Mr. Chen Xin (Chairman) Mr. Lian Yuming Ms. Wang Xin

Boardroom Share Registrars (HK) Limited 31/F, 148 Electric Road, North Point, Hong Kong

WEBSITE

www.sinomedia.com.hk

COMPLIANCE COMMITTEE

Mr. Li Zongzhou (Chairman) Mr. Wang Yingda

2 SinoMedia Holding Limited Interim Report 2015

Financial Summary

	For the		For the
	six months ended	six months ended
RMB’000	30 June 2015	30 June 2014		Change(%)
Revenue	619,010		836,428	-26%
Proft from operations	49,172		249,012	-80%
Proft attributable to equity shareholders
of the Company	35,433		179,214	-80%
Earnings per share(RMB)
— Basic	0.062		0.319	-81%
— Diluted	0.061		0.308	-80%

Revenue:

	For the	For the
	six months ended	six months ended
RMB’000	30 June 2015	30 June 2014	Change(%)
Media resources management	598,437	787,454	-24%
Integrated brand communication services	(1,610)	10,739	N/A
Internet media and content operations	8,287	22,146	-63%
Rental income	22,930	28,862	-21%
Sales taxes and surcharges	(9,034)	(12,773)	-29%
Revenue	619,010	836,428

Turnover:

	For the	For the
	six months ended	six months ended
RMB’000	30 June 2015	30 June 2014	Change(%)
Media resources management	598,437	787,454	-24%
Integrated brand communication services	590,416	1,031,986	-43%
Internet media and content operations	8,287	22,146	-63%
Rental income	22,930	28,862	-21%
Sales taxes and surcharges	(9,034)	(12,773)	-29%
Turnover	1,211,036	1,857,675

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SinoMedia Holding Limited Interim Report 2015

Management Discussion and Analysis

ABOUT THE GROUP

During the period under review, as a result of the cutback of advertising spending by brands resulting from a slowdown in the macroeconomic growth in China, the Group recorded a decline in income and net profit. In spite of grim challenges, the Group strived to secure the solid market share of its core business and continued to advance the healthy development of its new media business.

In the first half of 2015, the domestic and foreign economies remained complicated, and the global economic recovery was twistingly slow. The GDP in China grew by 7% year-on-year. Notwithstanding that, the economic development reform was still in progress and the industry structure was under continuous optimal adjustment. Besides, there was room for further improvement in the domestic demand structure and the foundation for economic recovery needed further consolidation. In respect of advertising industry in which the Group operates, the industry has entered into a new adjustment period along with the “new normal” stage of the economy. Policies favorable to the media and culture industry were introduced in succession. The integration of “Internet +” established an extensive trend of internet-based development for the culture industry. Meanwhile, the advertising market was relatively “calm”. Internet advertising slowed down its growth after several years of rapid development, while TV advertising was in an overall downturn. Owing to the slowdown in economic growth, the impact brought by the new media as well as the shrinkage of the TV media viewership, the total spending on TV advertising experienced its first decline. The proportion of the increase in TV advertising budget by advertisers hit bottom since 2009.

BUSINESS OVERVIEW

TV Advertising and Branding Services

1. TV Media Resources Management

During the period under review, the Group had approximately 5,529 minutes of advertising resources on a total of 15 programmes on channels including CCTV-1 (General)/CCTV-News (Chinese), CCTV-4 (Chinese International, including Europe and the US) and CCTV-7 (Military and Agriculture), with exclusive underwriting rights mainly covering news, politics, agriculture, culture and other topics. Its specific media resources include the “Night News” (晚間新聞) on CCTV-1 (General), “News 30” (新聞30分) jointly broadcasted on CCTV-1 (General)/CCTV-News (Chinese), programs including “China News” (中國新聞), “Today’s Focus” (今日關注), “Across the Straits” (海峽兩岸), “Exposition of Chinese Cultural Relics” (國寶檔案) and “China Showbiz” (中國文 藝) on CCTV-4 (Chinese International, including Europe and the US), and programs including “Zhi Fu Jing” (致 富經), “Focus on the Three Agricultural Issues” (聚焦三農), “Daily Agricultural News” (每日農經) and “The Rural World” (鄉村大世界) on CCTV-7 (Military and Agriculture). In terms of clientele, the Group maintained its stable client base in the areas of domestic and foreign tourism as well as transportation, and strived to develop new clients and sales channels.

4 SinoMedia Holding Limited Interim Report 2015

2. Integrated Brand Communication Services

During the period under review, the Group proactively modified its development strategy for the business, so as to enhance the service standards with close monitor on trade receivables, reflecting the Group’s global view on its financial management capability. The Group continued to serve clients such as Ping An Insurance (Group) Company of China, Ltd., Shanghai Pudong Development Bank Co., Ltd., Midea Group, Huiyuan Group, Jiangsu King’s Luck Brewery Joint-Stock Co., Ltd. and McDonald’s, and were also engaged by Inner Mongolia Yili Industrial Group Co., Ltd. and Beijing Xiaoju Keji Co., Ltd. (滴滴打車) for its TV advertising placement agency business. The service capability and strength of the “SinoMedia” brand continued its healthy development.

Internet Media and Content Operations

I. Internet Media

1. www.boosj.com ( 播視網 )

As the only video website focusing on healthy lifestyle in China, boosj.com proactively advocated healthy lifestyle for all citizens with the motto “Live a Life, Move it up”. During the period under review, boosj. com precisely targeted at the prevailing market of urban healthy entertainment culture with its acute market sense. Focusing on the “Square Dance Vertical Channel”, boosj.com built a featured video content platform featuring “Children Dance Channel”, “Yoga Channel” and “PC Games Channel”, and recorded a Daily Page View (DPV) of nearly 2 million (Source: internal data) with clear user segments. Among which, contents from the online channel “Square Dance” integrated with offline local activities and formed a follower chain, thus amplifying the overall influence of the platform. Also, numerous innovative operation strategies were introduced for users and partners upstream and downstream along the industry chain. The Group has a clear blueprint in the development of a healthy lifestyle internet media platform under the brand name of “boosj.com”.

2. www.lotour.com ( 樂途旅遊網 )

During the period under review, lotour.com well positioned its business feature as “a website of travel inspiration” and unveiled the competitive differentiation of non-online travel agent (OTA) travel websites. In line with such positioning, webpage redesign and content reorganisation brought outstanding performance in terms of users. As the monthly cumulative UV remained in a steady growth, the monthly cumulative PV almost reached 100 million, representing a nearly 70% growth as compared with the beginning of the year (Source: internal data, June 2015). Besides, Lotour Self-drive Channel, a professional travel channel launched in January 2015, served as an online community for self-drive buffs and provided detailed self-drive guides and routes for drivers. It collaborated with Cadillac and other brand names and organized offline self-drive events, so as to enhance user experience and raise the brand value of lotour.com.

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SinoMedia Holding Limited Interim Report 2015

Management Discussion and Analysis

3. www.wugu.com.cn ( 吾谷網 )

As agricultural products have entered the “Internet +” era, wugu.com.cn maintained its leading position in the area of agricultural product service platform. Since its launch in 2012, wugu.com.cn has been exploring the field of agricultural information services. Adhering to its philosophy of “unearth the value of agriculture and create opportunities for agriculture”, wugu.com.cn progressively became a strong pioneer of information service platform in the industry. During the period under review, wugu.com.cn and Beijing Municipal Commission of Rural Affairs reached an intention of strategic cooperation on “One Village, One Product (一村一品)” multi-screen mutually beneficial integrated communications. It practically explored marketing for local agricultural products from the origin. It was recognized as the “Advanced Unit of Social Power Participating in Building a New Socialist Countryside” (社會力量參與社會主義新農村建設之先進集 體) in Beijing. Meanwhile, specialised offline activities of wugu.com.cn played a solid role in the industry and built synergy with the Group’s TV media advertising sales team of agriculture programmes.

II. Content Operations

During the period under review, despite the impact of the cutback of advertising spending, the Group’s advertising and creative content production team leveraged on its creativity and actively participated in the bidding of visual projects of tourist destinations and various enterprises. The team provided creative and film production of promotional videos for Yiwu Municipal Publicity Department, Administrative Committee of Jiuhuashan, China United Property Insurance Company Limited and Beijing Zhong Fu Le Cai Technology Co., Ltd. (北京中福樂彩科技有限公司).

Moreover, the Group’s Public Service Brand Operation Center continued its support for the “SinoMedia’s Charity” project with an aim to deliver public service philosophy and promote public service in daily life. Also, original public service works served as a rock-steady bridge to demonstrate positive energy for public welfare. During the period under review, public service advertisements “Come Home — Stay Together” and “Say No to Secondhand Smoke — a Portrait of Dad” under the “SinoMedia’s Charity” project were granted the First Prize and Second Prize of Beijing PSA Selected Works respectively.

6 SinoMedia Holding Limited Interim Report 2015

FINANCIAL REVIEW

Revenue and Profit Attributable to the Equity Shareholders of the Company

For the six months ended 30 June 2015, the Group recorded revenue of RMB619,010 thousand, representing a decrease of 26% from RMB836,428 thousand for the same period last year.

Revenue details for the period under review are as follows:

• I. Revenue recorded from media resources management was RMB598,437 thousand, a decrease of 24% from RMB787,454 thousand for the same period last year. Such decrease in revenue was mainly attributable to the budget cutback by advertisers and the dispersed spending on advertising placement due to the impact of the slowdown in domestic macroeconomic growth. Consequently, the Group’s sales of advertising resources in terms of minutes sold and average sales rate decreased as compared with the same period last year. During the second half of the year, the Group will promote its sales by means of targeted media promotions and optimized media portfolio, thus enhancing the revenue of this business segment.

• II. Turnover recorded from integrated brand communication services was RMB590,416 thousand, a decrease of 43% from RMB1,031,986 thousand for the same period last year. Under the International Accounting Standards, the Group’s revenue is credited as net commission with relevant procurement costs deducted from turnover if the Group procures media resources in the capacity of an agent for clients. On this basis, no revenue was generated from this business for the first half of the year. The commission income receivable from the media suppliers will be recognised in the second half of the year. As a result of the cutback of advertising budget by clients, the turnover of this business decreased from the same period last year. In order to increase the revenue of this business segment, the Group will further optimize its clientele structure, broaden its industry coverage, enhance its professional services and capture more quality clients.

• III. Revenue recorded from Internet media and content operations was RMB8,287 thousand in total, down 63% from RMB22,146 thousand for the same period last year. Revenue from creative production of commercial advertisements recorded a decrease as compared with the same period last year due to the influence of the reduction in the contract amount and number of contracts with clients. Yet, the Group actively acquired new clientele resources through bidding while maintaining its existing clientele. In the mean time, the Group will continue to intensify its efforts and promotion on its internet projects, explore mutual interests of its internet users, thus increasing the contribution of the revenue from the internet platform operation to the overall revenue of the Group.

• IV. Rental income was RMB22,930 thousand, down 21% from RMB28,862 thousand for the same period last year. As a part of the office premises was temporarily vacant owing to the change of tenants, revenue from this business slightly decreased from the same period last year.

SinoMedia Holding Limited Interim Report 2015 7

Management Discussion and Analysis

During the period under review, both the revenue from core businesses and gross profit margin decreased from the same period last year, but the costs and expenses were properly controlled. The profit attributable to equity shareholders of the Company for the six months ended 30 June 2015 amounted to RMB35,433 thousand, representing a year-on-year decrease of 80% from RMB179,214 thousand for the same period last year.

Operating Expenses

For the six months ended 30 June 2015, the Group’s operating expenses were RMB71,292 thousand in aggregate, representing a year-on-year decrease of 14% from RMB82,721 thousand for the same period last year, and accounted for 11.5% of the Group’s revenue (the same period last year: 9.9%). The Group maintained stable budget management for operating expenses, while total operating expenses and the ratio of expenses remained at a reasonable level.

Operating expenses include the followings:

• I. Selling and marketing expenses amounted to RMB20,364 thousand, showing a decrease of approximately RMB7,537 thousand from RMB27,901 thousand for the same period last year, and accounted for 3.3% of the Group’s revenue (the same period last year: 3.3%). The decrease in selling and marketing expenses was mainly due to: (1) the decrease of approximately RMB4,858 thousand in the performance-based pay for marketing personnel incurred by the decline in revenue; and (2) the Group’s strict budget control on expenses such as promotional and marketing expenses, conference expenses, entertainment expenses and travelling expenses, which decreased by approximately RMB3,341 thousand from the same period last year.

• II. General and administrative expenses amounted to RMB50,928 thousand, representing a decrease of approximately RMB3,892 thousand from RMB54,820 thousand for the same period last year, and accounted for 8.2% of the Group’s revenue (same period last year: 6.6%). The decrease in general and administrative expenses was mainly due to the fact that: (1) as the Group’s results in 2014 fell below the original expectation, labor costs like year-end bonuses for non-marketing staff were reduced correspondingly, representing a decrease of approximately RMB4,045 thousand over the same period last year; (2) expenses such as the office expenses, travelling expenses and entertainment expenses reduced by approximately RMB2,119 thousand over the same period last year; (3) based on the principle of prudence, the Group conducted a revaluation on the goodwill of its internet media platforms generated through mergers and acquisitions. After proper assessment procedures, impairment amounted to RMB4,560 thousand was provided for goodwill.

Significant Investments, Acquisitions and Disposals

During the period under review, there were no significant investments, acquisitions or disposals by the Group.

8 SinoMedia Holding Limited Interim Report 2015

Liquidity and Financial Resources

The Group continued to maintain a more adequate liquidity with overall healthy financial position. As at 30 June 2015, the Group’s cash and bank balances amounted to RMB728,555 thousand (31 December 2014: RMB801,773 thousand), of which approximately 74% was denominated in Renminbi and the remaining 26% in HK dollars and other currencies. Bank time deposits maturing over three months held by the Group in Renminbi amounted to RMB31,100 thousand (31 December 2014: RMB30,692 thousand). As the Group’s cash and bank balances was essentially flat as compared to the end of last year, the cash and bank balances were adequate for day-to-day business operations and were able to meet the requirements for funding future development. During the period, details of the cash flows status were as follows:

• I. Net cash outflow from operating activities was RMB72,061 thousand (RMB372,956 thousand for the same period last year). The net outflow was mainly attributable to: (1) hindered by the extension of the settlement cycle of advertising clients, trade debtors increased approximately RMB38,941 thousand over the end of last year; (2) as the media agency costs which should have been prepaid at the end of last year were deferred to 2015, the Group’s prepayments to media suppliers of media agency costs increased by approximately RMB83,311 thousand over the end of last year. The Group will enhanced its collection efforts of long aging debtors and actively follow up on the overdue debts. Meanwhile, we strictly control the approval and management over delayed client payment for advertisements to maintain a healthy working capital;

• II. Net cash inflow from investing activities was RMB147,571 thousand (net cash outflow of RMB254,535 thousand for the same period last year), which was mainly attributable to the deposits pledged to the bank, which were included in the credit facilities secured by deposits in the Mainland China, amounting to approximately RMB147,705 thousand were matured;

• III. Net cash outflow from financing activities was RMB142,271 thousand (net cash inflow of RMB152,243 thousand for the same period last year), which was mainly the repayment of a short-term borrowing of RMB145,152 thousand obtained through credit facilities secured by deposits in the Mainland China.

As at 30 June 2015, the Group’s total assets amounted to RMB2,242,611 thousand, which consisted of equity attributable to equity shareholders of the Company of RMB1,577,751 thousand and non-controlling interests of RMB12,139 thousand. As at 30 June 2015, the Group did not have any bank loans.

The majority of the Group’s turnover, expenses, and capital investments were denominated in RMB.

SinoMedia Holding Limited Interim Report 2015 9

Management Discussion and Analysis

Human Resources

As at 30 June 2015, the Group had a total of about 500 employees, a decrease from the beginning of the year. To encourage new and current staff to be innovative and pragmatic, the Group established several talent development and incentive plans. “Star Program” for sales and marketing was launched in the first half of the year and achieved outstanding results in developing and training talented salesmen, while Management Trainee Program was continued to develop to meet the demand of talents under the diversified business development of the Group. In addition, to focus on the main concern of the staff — career development and training, the Group enhanced its overall investment in professional training. As compared to the same period last year, the variety of training courses and the total training time were increased significantly, and the satisfaction of staff also continued to rise. At the same time, emphasis on the organisation and improvement of the career development path to establish a more comprehensive career development and planning for the Group’s employees. For talent introduction and incentives, the Group continued to provide employees with an incentive and remuneration policy that was competitive. Through accurate positioning and market research, the Group’s remuneration system were able to show strong market competitiveness in all segments, allowing more professionals to enjoy great opportunity for development and munificent rewards in the Group. We provided employees with splendid and flexible benefit schemes such as insurance, housing provident fund, medical check-ups, overseas travel, professional salon and holiday gifts; provided senior employees with Project Manager Training Program for integrated development as well as provided senior management team with EMBA learning and development plan. Accordingly, we satisfied diverse needs of employees in each stage of their career path and ultimately strived to establish a competitive talent development platform. In order to align the personal interests of employees with those of shareholders, share options are granted to employees under the Company’s share option schemes. Share options that were granted and remained unexercised as of the end of the period totalled 22,653,500 units.

INDUSTRY AND GROUP OUTLOOK

According to ZenithOptimedia’s latest Advertising Expenditure Forecasts 2015 , the estimated advertising expenditure in 2015 and 2016 were reduced by 0.5% and 0.3% respectively, due primarily to the deepening economic recession in Russia and other Eastern European countries as well as the slowdown in economic growth in China.

China’s economy started to enter a stable period after years of rapid growth. The advertising market in China slowed down accordingly, yet its growth rate is still maintained at a healthy level. According to CTR’s market research report, in early 2015, advertisers’ confidence on economic development and consumption was enhanced as compared with the same period last year. Regarding the allocation of marketing budget structure, the proportion of digital marketing and terminal promotion substantially increased and inter-media marketing was widely adopted by clients. In face of the limited budget for marketing expenses of clients, the total advertising spend in TV media as of April 2015 still represented the majority share of the whole advertising market at 87.51% (Source: Nielsen, May 2015) despite more challenges and pressures on traditional media, with TV as the dominant player, as compared to other new marketing approaches.

10 SinoMedia Holding Limited Interim Report 2015

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Accordingly, adhering to its established strategies, the Group strives to establish a “TV + Internet” inter-screen communication platform. The Group commits to provide clients with leading and excellent marketing proposals as well as swiftly dominant the market with our current projects in the areas of agriculture, tourism and healthy lifestyle. Specifically, staring in the second half of the year, the Group will proceed to integrate high-quality media resources and focus on the introduction of technology in order to achieve digital marketing as a whole. For agriculture, wugu. com.cn will be working on projects with the TV media advertising sales team specialising in agriculture to form core competitiveness. For tourism, pursuit further while the influence of lotour.com in the industry was greatly enhanced and further expands the market share. In terms of the concept of healthy lifestyle, boosj.com will focus on video communication with healthy lifestyle content and intend to develop the economic chain of healthy industry while building up popularity of the “boosj.com” brand.

SinoMedia Holding Limited Interim Report 2015 11

Consolidated Statement of Profit or Loss

For the six months ended 30 June 2015 — unaudited (Expressed in Renminbi)

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Six months ended 30 June
2015 2014
Note RMB’000 RMB’000
Revenue 619,010 836,428
Cost of services (498,687) (577,239)
Gross profit 120,323 259,189
Other revenue 4 141 72,544
Selling and marketing expenses (20,364) (27,901)
General and administrative expenses (50,928) (54,820)
Profit from operations 49,172 249,012
Finance income 5(a) 17,166 9,568
Finance costs 5(a) (8,884) (2,793)
Net finance income 8,282 6,775
Share of (loss)/profit of associates (80) 2,604
Profit before taxation 57,374 258,391
Income tax 6 (25,517) (79,956)
Profit for the period 31,857 178,435
Attributable to:
Equity shareholders of the Company 35,433 179,214
Non-controlling interests (3,576) (779)
Profit for the period 31,857 178,435
Earnings per share 7
Basic earnings per share (RMB) 0.062 0.319
Diluted earnings per share (RMB) 0.061 0.308
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The notes on pages 18 to 30 form part of this interim financial report. Details of dividends payable to equity shareholders of the Company are set out in note 13(a).

12 SinoMedia Holding Limited Interim Report 2015

For the six months ended 30 June 2015 — unaudited (Expressed in Renminbi)

Consolidated Statement of Profit or Loss and Other Comprehensive Income

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Six months ended 30 June
2015 2014
RMB’000 RMB’000
Profit for the period 31,857 178,435
Other comprehensive income for the period
(after tax and reclassification adjustments) (6,457) 1,421
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of financial statements
of the Company and overseas subsidiaries (6,457) 1,421
Other comprehensive income for the period (6,457) 1,421
Total comprehensive income for the period 25,400 179,856
Attributable to:
Equity shareholders of the Company 28,976 180,635
Non-controlling interests (3,576) (779)
Total comprehensive income for the period 25,400 179,856
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The notes on pages 18 to 30 are an integral part of this interim financial report.

SinoMedia Holding Limited Interim Report 2015 13

Consolidated Statement of Financial Position

At 30 June 2015 — unaudited (Expressed in Renminbi)

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At 30 June At 31 December
2015 2014
Note RMB’000 RMB’000
Non-current assets
Property, plant and equipment 8 266,637 272,555
Investment property 8 622,551 629,949
Intangible assets 39,278 39,955
Goodwill 9 13,455 18,015
Interest in associate 6,770 6,850
Trade and other receivables 10 2,250 2,550
Deferred tax assets 2,256 6,186
953,197 976,060
Current assets
—
Other current financial asset 4,157
Trade and other receivables 10 525,281 427,567
Restricted deposits 4,478 152,183
Time deposits with original maturity over three months 31,100 30,692
Cash and cash equivalents 11 728,555 801,773
1,289,414 1,416,372
Current liabilities
Trade and other payables 12 629,422 517,855
Bank loans — 145,152
Current taxation 21,384 49,571
Other current financial liability — 534
650,806 713,112
Net current assets 638,608 703,260
Total assets less current liabilities 1,591,805 1,679,320
Non-current liability
Deferred tax liability 1,915 —
NET ASSETS 1,589,890 1,679,320
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14 SinoMedia Holding Limited Interim Report 2015

	At 30 June At 31 December 2015 2014 RMB’000 RMB’000
	CAPITAL AND RESERVES Share capital 510,981 500,734 Reserves 1,066,770 1,168,674
	Total equity attributable to equity shareholders of the Company 1,577,751 1,669,408 Non-controlling interests 12,139 9,912
	TOTAL EQUITY 1,589,890 1,679,320

The notes on pages 18 to 30 are an integral part of this interim financial report.

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SinoMedia Holding Limited Interim Report 2015

Consolidated Statement of Changes in Equity

For the six months ended 30 June 2015 — unaudited

(Expressed in Renminbi)

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Attributable to equity shareholders of the Company
Capital Non-
Share Share redemption Capital Statutory Translation Other Retained controlling Total
capital premium reserve reserve reserve reserve reserves profits Total interests equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January 2014 172 485,213 22 27,669 82,632 (4,586) (9,338) 896,366 1,478,150 27,216 1,505,366
Changes in equity for the six months ended
30 June 2014:
Profit for the period — — — — — — — 179,214 179,214 (779) 178,435
Other comprehensive income — — — — — 1,421 — — 1,421 — 1,421
Total comprehensive income for the period — — — — — 1,421 — 179,214 180,635 (779) 179,856
Equity-settled share-based transactions — — — 1,412 — — — — 1,412 — 1,412
Contribution from non-controlling interests — — — — — — — — — 68 68
Dividends declared in respect of the previous period
— — — — — — — —
(note 13(a)) (147,908) (147,908) (147,908)
Transition to no-par value regime 494,463 (494,441) (22) — — — — — — — —
Shares issued under share option scheme 1 9,228 — (2,864) — — — — 6,365 — 6,365
Balance at 30 June 2014 494,636 — — 26,217 82,632 (3,165) (9,338) 927,672 1,518,654 26,505 1,545,159
Changes in equity for the six months ended
31 December 2014:
Profit for the period — — — — — — — 127,357 127,357 94 127,451
Other comprehensive income — — — — — 1,880 — — 1,880 — 1,880
Total comprehensive income for the period — — — — — 1,880 — 127,357 129,237 94 129,331
Equity-settled share-based transactions — — — 701 — — — — 701 — 701
Contribution from non-controlling interests — — — 167 — — — — 167 — 167
Acquisiton of non-controlling interests — — — — — — 11,646 4,681 16,327 (16,327) —
— — — — — — — — —
Dividends declared in respect of the current period (360) (360)
Appropriation to reserves — — — — 7,842 — — (7,842) — — —
Shares issued under share option scheme 6,098 — — (1,776) — — — — 4,322 — 4,322
Balance at 31 December 2014 500,734 — — 25,309 90,474 (1,285) 2,308 1,051,868 1,669,408 9,912 1,679,320
Balance at 1 January 2015 500,734 — — 25,309 90,474 (1,285) 2,308 1,051,868 1,669,408 9,912 1,679,320
Changes in equity for the six months ended
30 June 2015:
Profit for the period — — — — — — — 35,433 35,433 (3,576) 31,857
Other comprehensive income — — — — — (6,457) — — (6,457) — (6,457)
Total comprehensive income for the period — — — — — (6,457) — 35,433 28,976 (3,576) 25,400
Equity-settled share-based transactions — — — (558) — — — — (558) — (558)
Adjustment of non-controlling interests — — — — — — — (5,803) (5,803) 5,803 —
Dividends declared in respect of the current period — — — — — — — (121,848) (121,848) — (121,848)
Shares issued under share option scheme 10,247 — — (2,671) — — — — 7,576 — 7,576
Balance at 30 June 2015 510,981 — — 22,080 90,474 (7,742) 2,308 959,650 1,577,751 12,139 1,589,890
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The notes on pages 18 to 30 are an integral part of this interim financial report.

16 SinoMedia Holding Limited Interim Report 2015

Condensed Consolidated Cash Flow Statement

For the six months ended 30 June 2015 — unaudited (Expressed in Renminbi)

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Six months ended 30 June
2015 2014
Note RMB’000 RMB’000
Operating activities
Cash used in operations (24,202) (272,878)
Tax paid (47,859) (100,078)
Net cash used in operating activities (72,061) (372,956)
Investing activities
Payment for purchase of property, plant and equipment (10,589) (81,742)
Proceeds from/(Payment of) restricted cash 147,705 (146,225)
Other cash flows arising from investing activities 10,455 (26,568)
Net cash generated from/(used in) investing activities 147,571 (254,535)
Financing activities
(Repayment of)/Proceeds from bank loans (145,152) 146,050
Other cash flows arising from financing activities 2,881 6,193
Net cash (used in)/generated from financing activities (142,271) 152,243
Net decrease in cash and cash equivalents (66,761) (475,248)
Cash and cash equivalents at 1 January 11 801,773 1,070,106
Effect of foreign exchange rates changes (6,457) 1,386
Cash and cash equivalents at 30 June 11 728,555 596,244
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The notes on pages 18 to 30 are an integral part of this interim financial report.

SinoMedia Holding Limited Interim Report 2015 17

Notes to the Unaudited Interim Financial Report

(Expressed in Renminbi unless otherwise indicated)

1 BASIS OF PREPARATION

This interim financial report has been prepared in accordance with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, including compliance with International Accounting Standard (“IAS”) 34, Interim financial reporting , issued by the International Accounting Standards Board (“IASB”) and Hong Kong Accounting Standard (“HKAS”) 34, Interim financial reporting, issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”). It was authorized for issue on 19 August 2015.

The interim financial report has been prepared in accordance with the same accounting policies adopted by SinoMedia Holding Limited (the “Company”) and its subsidiaries (together referred to as the “Group”) in the 2014 annual financial statements, except for the accounting policy changes that are expected to be reflected in the 2015 annual financial statements. Details of any changes in accounting policies as required by accounting standards are set out in note 2. In addition, the 2015 annual financial statements will be the first issued financial statements in which the group makes an explicit and unreserved statement of compliance with HKFRSs in order to comply with section 380 of the Hong Kong Companies Ordinance (Cap. 622). Therefore, in preparing this interim financial report management has given due consideration to the requirements of HKFRS 1, Firsttime Adoption of Hong Kong Financial Reporting Standards.

For this purpose the date of the Group’s transition to HKFRSs was determined to be 1 January 2014, being the beginning of the earliest period for which the Group presents full comparative information in this interim financial report and will present comparative information in the annual financial statements for the year ending 31 December 2015. With due regard to the Group’s accounting policies in previous periods and the requirements of HKFRS 1, management has concluded that no adjustments were required to the amounts reported under IFRSs as at the date of transition to HKFRSs or in respect of the six months ended 30 June 2015. Accordingly, this interim financial report continues to include a statement of compliance with IAS 34 as well as including for the first time a statement of compliance with HKAS 34, without adjustment to the Group’s financial position, the Group’s financial performance or cash flows either at the date of transition to HKFRSs or at the end of the latest period presented in accordance with IFRSs.

The preparation of an interim financial report in conformity with IAS 34 and HKAS 34 requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses on a year to date basis. Actual results may differ from these estimates.

This interim financial report contains condensed consolidated financial statements and selected explanatory notes. The notes include an explanation of events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the 2014 annual financial statements. The condensed consolidated interim financial statements and notes thereon do not include all of the information required for full set of financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) and Hong Kong Financial Reporting Standards (“HKFRS”). This interim financial report is unaudited.

18 SinoMedia Holding Limited Interim Report 2015

1 BASIS OF PREPARATION (CONTINUED)

The financial information relating to the financial year ended 31 December 2014 that is included in the interim financial report as comparative information does not constitute the company’s statutory annual consolidated financial statements for that financial year but is derived from those financial statements. Further information relating to these statutory financial statements disclosed in accordance with section 436 of the Hong Kong Companies Ordinance (Cap. 622) is as follows:

The Company has delivered the financial statements for the year ended 31 December 2014 to the Registrar of Companies in accordance with section 662(3) of, and Part 3 of Schedule 6 to, the Companies Ordinance.

The Company’s auditor has reported on those financial statements. The auditor’s report was unqualified; did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying its report; and did not contain a statement under section 406(2), 407(2) or (3) of the Companies Ordinance (or under their equivalent requirements found in section 141 of the predecessor Companies Ordinance (Cap.32)).

2 CHANGES IN ACCOUNTING POLICIES

The IASB has issued the following amendments to IFRSs that are first effective for the current accounting period of the Group and the Company. The equivalent amendments to HKFRSs consequently issued by the HKICPA as a result of these developments have the same effective date as those issued by the IASB and are in all material aspects identical to the pronouncements issued by the IASB. Of these, the following developments are relevant to the Group’s financial statements:

• Annual Improvements to IFRSs/HKFRSs 2010–2012 Cycle

• Annual Improvements to IFRSs/HKFRSs 2011–2013 Cycle

None of these developments have had a material effect on how the Group’s results and financial position for the current or prior periods have been prepared or presented. The Group has not applied any new standard or interpretation that is not yet effective for the current accounting period.

3 SEGMENT REPORTING

In a manner consistent with the way in which information is reported internally to the Group’s most senior executive management for the purposes of resources allocation and performance assessment, the Group has determined and presented a single reportable segment to disclose information as a whole about its services, geographical areas, and major customers.

SinoMedia Holding Limited Interim Report 2015 19

(Expressed in Renminbi unless otherwise indicated)

Notes to the Unaudited Interim Financial Report

4 OTHER REVENUE

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Six months ended 30 June
2015 2014
RMB’000 RMB’000
Government grant 125 40,000
—
Gain on disposal of other non-current financial asset 32,500
Others 16 44
141 72,544
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5 PROFIT BEFORE TAXATION

(a) Finance income and costs

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Six months ended 30 June
2015 2014
RMB’000 RMB’000
Interest income on bank deposits 12,495 8,861
Net foreign exchange gain 4,137 306
Changes in fair value of derivative financial instruments 534 401
Finance income 17,166 9,568
Changes in fair value of derivative financial instruments (4,157) (832)
Others (4,727) (1,961)
Finance costs (8,884) (2,793)
Net finance income 8,282 6,775
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20 SinoMedia Holding Limited Interim Report 2015

5 PROFIT BEFORE TAXATION (CONTINUED)

(b) Other items

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Six months ended 30 June
2015 2014
RMB’000 RMB’000
Amortisation 2,308 1,911
Depreciation 13,626 14,820
Impairment losses on bad and doubtful accounts (1,028) (81)
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6 INCOME TAX

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Six months ended 30 June
2015 2014
RMB’000 RMB’000
Current tax — PRC Income tax 19,672 67,680
Deferred taxation 5,845 12,276
25,517 79,956
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No provision has been made for Hong Kong profits tax as the Company and its subsidiary in Hong Kong did not have assessable profit subject to Hong Kong profits tax during the six months ended 30 June 2015 and 2014.

No provision has been made for Singapore income tax as the Company’s subsidiary in Singapore did not have assessable profit subject to Singapore income tax during the six months ended 30 June 2015 and 2014.

Pursuant to the currently applicable income tax rules and the PRC regulations, the Group’s entities in the PRC were liable to the PRC Corporate Income Tax at a rate of 25%, except that Beijing Lotour Huicheng Internet Technology Company Limited was at a rate of 15%, during the six months ended 30 June 2015 (six months ended 30 June 2014: 15%).

SinoMedia Holding Limited Interim Report 2015 21

Notes to the Unaudited Interim Financial Report

(Expressed in Renminbi unless otherwise indicated)

7 EARNINGS PER SHARE

(a) Basic earnings per share

The calculation of basic earnings per share is based on the profit attributable to ordinary equity shareholders of the Company of RMB35,433 thousand (six months ended 30 June 2014: RMB179,214 thousand) and the weighted average number of ordinary shares of 568,918,987 (2014: 562,428,531 shares) in issue during the interim period.

(b) Diluted earnings per share

The calculation of diluted earnings per share is based on the profit attributable to ordinary equity shareholders of the Company of RMB35,433 thousand (six months ended 30 June 2014: RMB179,214 thousand) and the weighted average number of ordinary shares of 578,814,259 (2014: 581,550,955 shares).

8 PROPERTY, PLANT AND EQUIPMENT AND INVESTMENT PROPERTY

During the six months ended 30 June 2015, the Group acquired items of property, plant and equipment with a cost of RMB506 thousand (six months ended 30 June 2014: RMB1,198 thousand) and not acquired any items of investment property (six months ended 30 June 2014: RMB125 thousand). Items of property, plant and equipment with a net book value of RMB196 thousand were disposed of during the six months ended 30 June 2015, resulting in a loss on disposal of RMB196 thousand (six months ended 30 June 2014: nil).

22 SinoMedia Holding Limited Interim Report 2015

9 GOODWILL

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The Group
RMB’000
Cost
At 1 January 2014, 31 December 2014 and 30 June 2015 23,644
Accumulated impairment losses
—
At 1 January 2014
Impairment loss 5,629
At 31 December 2014 5,629
At 1 January 2015 5,629
Impairment loss 4,560
At 30 June 2015 10,189
Carrying amount
At 30 June 2015 13,455
At 31 December 2014 18,015
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SinoMedia Holding Limited Interim Report 2015 23

Notes to the Unaudited Interim Financial Report

(Expressed in Renminbi unless otherwise indicated)

10 TRADE AND OTHER RECEIVABLES

As of the end of the reporting period, the ageing analysis of trade debtors and bills receivable (which are included in trade and other receivables), is as follows:

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At 30 June At 31 December
2015 2014
RMB’000 RMB’000
Non-current assets
Trade and other receivables 2,250 2,550
Current assets
Within 3 months 51,749 52,111
3 to 6 months 31,103 29,675
6 to 12 months 37,875 1,134
Over 12 months 78,030 80,387
Total trade and bills receivable 198,757 163,307
Less: allowance for doubtful debts (70,052) (71,080)
Trade and bills receivable, net of allowance for doubtful debts 128,705 92,227
Prepayments and deposits to media suppliers 366,025 291,904
Advances to employees 4,067 2,372
Other debtors and prepayments 36,730 51,310
Less: allowance for doubtful debts of other debtors (10,246) (10,246)
525,281 427,567
527,531 430,117
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Credit terms are granted to the customers, depending on credit assessment carried out by management on an individual basis. The credit terms for trade receivables are generally from nil to 90 days.

24 SinoMedia Holding Limited Interim Report 2015

11 CASH AND CASH EQUIVALENTS

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At 30 June At 31 December
2015 2014
RMB’000 RMB’000
Cash and bank balances 764,133 984,648
Less:
Time deposit with original maturity over three months (31,100) (30,692)
Restricted deposits (4,478) (152,183)
Cash and cash equivalents 728,555 801,773
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12 TRADE AND OTHER PAYABLES

As of the end of the reporting period, the ageing analysis of trade creditors (which are included in trade and other payables), is as follows:

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At 30 June At 31 December
2015 2014
RMB’000 RMB’000
Due within 3 months 6 326
Due after 3 months but within 6 months — 330
Due after 6 months but within 12 months 6,329 16,300
Total trade payables 6,335 16,956
Advances from customers 438,061 407,929
Payroll and welfare expenses payables 12,601 19,197
Other tax payables 6,778 16,587
Other payables and accrued charges 42,793 56,180
—
Dividends payable due to equity shareholders of the Company 121,848
Dividends payable due to non-controlling interests of a subsidiary 1,006 1,006
629,422 517,855
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SinoMedia Holding Limited Interim Report 2015 25

Notes to the Unaudited Interim Financial Report (Expressed in Renminbi unless otherwise indicated)

13 CAPITAL, RESERVES AND DIVIDENDS

(a) Dividends

• (i) Dividends payable to equity shareholders of the Company attributable to the interim period

No dividend attributable to the interim period has been declared and paid by the Company.

• (ii) Dividends payable to equity shareholders of the Company attributable to the previous financial year approved during the interim period

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Six months ended 30 June
2015 2014
RMB’000 RMB’000
Final dividend in respect of the previous financial year,
approved during the following interim period,
of approximately RMB10.64 cents per share
(six months ended 30 June 2014:
approximately RMB13.01 cents per share) 60,924 73,954
Special dividend in respect of the previous
financial year, approved during the following
interim period, of approximately RMB10.64 cents
per share (six months ended 30 June 2014:
approximately RMB13.01 cents per share) 60,924 73,954
121,848 147,908
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Dividends attributable to the previous financial year were fully paid in July 2015 (2014: July).

(b) Purchase of own shares

During the interim period ended 30 June 2015, the Company did not repurchase any of its own shares on The Stock Exchange of Hong Kong Limited.

26 SinoMedia Holding Limited Interim Report 2015

14 FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS

(a) Financial assets and liabilities measured at fair value

(i) Fair value hierarchy

The following table presents the fair value of the Group’s financial instruments measured at the end of the reporting period on a recurring basis, categorized into the three-level fair value hierarchy as defined in IFRS 13, Fair value measurement . The level into which a fair value measurement is classified is determined with reference to the observability and significance of the inputs used in the valuation technique as follows:

• Level 1 valuations: Fair value measured using only Level 1 inputs i.e. unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date

• Level 2 valuations: Fair value measured using Level 2 inputs i.e. observable inputs which fail to meet Level 1, and not using significant unobservable inputs. Unobservable inputs are inputs for which market data are not available

• Level 3 valuations: Fair value measured using significant unobservable inputs

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Fair value measurements as at
30 June 2015 categorised into
Fair value at
30 June
2015 Level 1 Level 2 Level 3
RMB’000 RMB’000 RMB’000 RMB’000
Recurring fair value measurement
Financial asset
Other non-current financial asset
Available-for-sale equity securities
— Ftuan.com — — — —
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SinoMedia Holding Limited Interim Report 2015 27

Notes to the Unaudited Interim Financial Report (Expressed in Renminbi unless otherwise indicated)

14 FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS (CONTINUED)

• (a) Financial assets and liabilities measured at fair value (continued)

(i) Fair value hierarchy (continued)

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Fair value measurements as at
31 December 2014 categorised into
Fair value at
31 December
2014 Level 1 Level 2 Level 3
RMB’000 RMB’000 RMB’000 RMB’000
Recurring fair value measurement
Financial assets
Other current financial asset
Derivative financial instrument
— —
— Foreign exchange forward 4,157 4,157
Other non-current financial asset
Available-for-sale equity securities
— Ftuan.com — — — —
Financial liability
Other current financial liability
Derivative financial instrument
— Foreign exchange forward 534 534 — —
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During the six months ended 30 June 2015, there were no transfers between Level 1 and Level 2, or transfers into or out of Level 3 (2014: nil). The Group’s policy is to recognise transfers between levels of fair value hierarchy as at the end of the reporting period in which they occur.

(b) Fair value of financial instruments carried at other than fair value

The carrying amounts of the Group’s and the Company’s financial instruments carried at cost or amortized cost are not materially different from their fair values as at 30 June 2015 and 30 June 2014.

28 SinoMedia Holding Limited Interim Report 2015

15 CAPITAL COMMITMENTS OUTSTANDING NOT PROVIDED FOR IN THE INTERIM FINANCIAL REPORT

As at 30 June 2015, the Group and the Company did not have any significant capital commitments.

16 CONTINGENT ASSETS AND LIABILITIES

As at 30 June 2015, the Group and the Company did not have any significant contingent assets and liabilities.

17 MATERIAL RELATED PARTY TRANSACTIONS

(a) Transactions with other related parties

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Six months ended 30 June
2015 2014
Note RMB’000 RMB’000
Rental of office (i) 361 361
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(i) CTV Golden Bridge International Media Group Company Limited, a subsidiary of the Company, rented an office from Shanghai CTV Golden Bridge International Culture and Communication Company Limited, which was effectively controlled by the ultimate controlling shareholder of the Group, at a price of RMB361 thousand for the six months ended 30 June 2015 and RMB361 thousand for the six months ended 30 June 2014. The amount of rent charged under the lease was determined with reference to amounts charged by Shanghai CTV Golden Bridge International Culture and Communication Company Limited to third parties.

(b) Outstanding balance with related parties

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At 30 June At 31 December
2015 2014
RMB’000 RMB’000
Rental of office 361 722
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The balance represents non-cancellable rentals payable by the Group to Ms. Liu Jinlan and Shanghai CTV Golden Bridge International Culture and Communication Company Limited for the rentals of 2015.

SinoMedia Holding Limited Interim Report 2015 29

Notes to the Unaudited Interim Financial Report

(Expressed in Renminbi unless otherwise indicated)

18 NON-ADJUSTING EVENTS AFTER THE REPORTING PERIOD

On 10 June 2015, Golden Bridge International Culture Limited, Merger Holding Service Company Limited, United Marine Enterprise Company Limited, Digital Finance Service Company Limited and Sinomedia Investment Ltd. which are indirectly wholly-owned by Equity Trustee Limited, as trustee of certain discretionary trusts founded by Mr. Chen Xin and Ms. Liu Jinlan, have entered into a non-legally binding memorandum of understanding (the “MOU”) with an independent third party (“Independent Third Party”). Pursuant to the MOU, the Independent Third Party or its nominee(s) intends to purchase the shares in the issued share capital of the Company, which represent approximately 53.4% of the total issued share capital of the Company (“Proposed Transaction”).

The Group may undertake an asset reorganisation (“Asset Reorganisation”) before or upon completion of the Proposed Transaction. Upon to the interim financial report date, the Proposed Transaction and the Asset Reorganisation are still in negotiation with the Independent Third Party.

30

SinoMedia Holding Limited Interim Report 2015

Other Information

DIRECTORS’ INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND DEBENTURES

As at 30 June 2015, the interests and short positions of the directors and chief executive of the Company in the shares, underlying shares and debentures of the Company and its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (the “SFO”)), which were required to be (a) notified to the Company and The Stock Exchange of Hong Kong Limited (“Stock Exchange”) pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they are taken or deemed to have under such provisions of the SFO); or (b) recorded in the register required to be kept by the Company under Section 352 of the SFO; or (c) as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) as set out in Appendix 10 to the Rules Governing the Listing of Securities on the Stock Exchange (the “Listing Rules”) were as follows:

(i) Interests in the Company — Long Positions

				Number of
				underlying			Approximate
				shares held		percentage of
			Number of	under equity			issued share
Name of			ordinary	derivatives			capital of the
director	Nature of interest		shares held	(Note 1)	Total		Company
Liu Jinlan	Founder of		257,428,169	4,400,000	261,828,169		45.69%
	discretionary trust,		(Note 2)
	benefciary of trust and
	benefcial interest
Chen Xin	Founder of		257,428,165	—	257,428,165		44.92%
	discretionary trust and		(Note 3)
	benefciary of trust
Li Zongzhou	Benefcial interest		—	2,500,000	2,500,000		0.44%
Qi Daqing	Benefcial interest		—	260,000	260,000		0.05%
Lian Yuming	Benefcial interest		—	200,000	200,000		0.03%
WangXin	Benefcial interest		—	200,000	200,000		0.03%

Notes:

1. Details of the underlying shares are set out in the section headed “Share Option Schemes” in this report.

2. Under the SFO, Liu Jinlan is deemed to be interested in 257,428,169 shares of the Company. These shares are held by three discretionary trusts, namely UME Trust, DFS (No. 2) Trust and CLH Trust, all founded by Liu Jinlan. In respect of 209,941,513 shares therein held by CLH Trust, Liu Jinlan is also a beneficiary of the trust.

3. Under the SFO, Chen Xin is deemed to be interested in 257,428,165 shares of the Company. These shares are held by three discretionary trusts, namely MHS Trust, DFS (No. 1) Trust and CLH Trust, all founded by Chen Xin. In respect of 209,941,513 shares therein held by CLH Trust, Chen Xin is also a beneficiary of the trust.

SinoMedia Holding Limited Interim Report 2015 31

Other Information

DIRECTORS’ INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND DEBENTURES (CONTINUED)

(ii) Interests in associated corporations of the Company — Long Positions

					Approximate
					percentage of
					issued share
					capital of the
Name of					associated
director	Name of associated corporation		Nature of interest		corporation
Liu Jinlan	CLH Holding Limited		Founder of discretionary trust		100%
	Golden Bridge International Culture Limited		Corporate interest		100%
	Golden Bridge Int’l Advertising Holdings Limited		Corporate interest		100%
	CTV Golden Bridge International Media Group Co., Ltd.		Corporate interest		0.3%
Chen Xin	CLH Holding Limited		Founder of discretionary trust		100%
	Golden Bridge International Culture Limited		Corporate interest		100%
	Golden Bridge Int’l AdvertisingHoldings Limited		Corporate interest		100%

Apart from the foregoing, as at 30 June 2015, none of the directors and chief executive of the Company had any interests or short positions in the shares, underlying shares and debenture of the Company and its associated corporations (within the meaning of Part XV of the SFO), which were required to be (a) notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they are taken or deemed to have under such provisions of the SFO); or (b) recorded in the register required to be kept by the Company under Section 352 of the SFO; or (c) as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code.

SHARE OPTION SCHEMES

The Company has adopted share option schemes on 29 June 2007 (the “Pre-IPO Scheme”) and 27 May 2008 (the “Post-IPO Scheme”) respectively, whereby the directors of the Company have been authorised, at their discretion, to invite any full time employee, director or any person approved by the board or shareholders of the Company to take up options (the “Pre-IPO Options” and the “Post-IPO Options”, respectively) to subscribe for shares of the Company. No further options were and will be granted under the Pre-IPO Scheme after the listing of the shares of the Company. The Post-IPO Scheme shall be valid and effective for a period of ten years ending on 7 July 2018.

The total number of securities available for issue under both the Pre-IPO Scheme and the Post-IPO Scheme as at 30 June 2015 was 22,653,500 shares which represented approximately 4% of the issued share capital of the Company as at 30 June 2015.

32 SinoMedia Holding Limited Interim Report 2015

SHARE OPTION SCHEMES (CONTINUED)

Movements of the share options under the share option schemes for the six months ended 30 June 2015 are as follows:

		No. of								No. of
		options		No. of		No. of		No. of		options
	outstanding			options		options		options	outstanding
		as at		granted		exercised		forfeited		as at
		1 January		during the		during the		during the		30 June		Exercise		Exercise
		2015		period		period		period		2015	Date ofgrant	price		period
Directors
Liu Jinlan		3,200,000		—		—		—		3,200,000	10 July 2007	RMB1.56		Note 2
		1,200,000		—		—		—		1,200,000	2 July 2010	HKD1.84		Note 4
Li Zongzhou		1,600,000		—		—		—		1,600,000	10 July 2007	RMB1.56		Note 1
		900,000		—		—		—		900,000	2 July 2010	HKD1.84		Note 4
He Hui David		600,000		—		(600,000)		—		—	2 July 2010	HKD1.84		Note 4
Qi Daqing		260,000		—		—		—		260,000	17 September 2009	HKD1.49		Note 3
Lian Yuming		200,000		—		—		—		200,000	29 August 2011	HKD2.62		Note 4
Wang Xin		200,000		—		—		—		200,000	11 September 2012	HKD3.22		Note 4
Employees
in aggregate		6,288,000		—		(128,000)		(640,000)		5,520,000	4 July 2007 to	RMB1.56		Note 1
											7 March 2008
		400,000		—		—		—		400,000	17 September 2009	HKD1.49		Note 3
		7,705,500		—		(3,682,000)		—		4,023,500	2 July 2010	HKD1.84		Note 4
		125,000		—		—		(125,000)		—	22 November 2010	HKD2.82		Note 4
		713,000		—		(63,000)		—		650,000	6 December 2010	HKD2.88		Note 4
		395,000		—		—		(75,000)		320,000	29 August 2011	HKD2.62		Note 4
		800,000		—		—		—		800,000	9 January 2012	HKD2.36		Note 4
		820,000		—		(300,000)		(80,000)		440,000	11 September 2012	HKD3.22		Note 4
		620,000		—		(80,000)		(160,000)		380,000	12 April 2013	HKD4.31		Note 4
		1,680,000		—		—		(200,000)		1,480,000	19 July 2013	HKD6.86		Note 4
		1,080,000		—		—		—		1,080,000	10 September 2014	HKD5.50		Note 4

SinoMedia Holding Limited Interim Report 2015 33

Other Information

SHARE OPTION SCHEMES (CONTINUED)

Notes:

1. A holder of Pre-IPO Options may exercise a maximum of 25% of the total number of the Pre-IPO Options granted after the lapse of 365 days from the acceptance of the Pre-IPO Options. Subsequently, for every full year of continuous service with the Company, the holder may exercise a maximum of another 25% of the total number of the Pre-IPO Options granted, up to ten years from the date of grant.

Pre-IPO Options granted to Li Zongzhou are exercisable from 8 January 2009 to 9 July 2017, subject to the vesting requirement mentioned above. Exercisable period of the Pre-IPO Options granted to employees of the Group commenced on 8 January 2009 and to be expired on a date ranging from 3 July 2017 to 6 March 2018 (depending on their respective dates of grant of the option) is also subject to the vesting requirement mentioned above.

1. An exception to the vesting requirement mentioned in note (1) above is that Liu Jinlan may exercise a maximum of 50% of the total number of the Pre-IPO Options granted after the lapse of 365 days from the acceptance of the options. Subsequently, for every full year of continuous service with the Company, Liu Jinlan may exercise a maximum of another 25% of the total number of the options granted, up to ten years from the date of grant.

Pre-IPO Options granted to Liu Jinlan are exercisable from 8 January 2009 to 9 July 2017, subject to the vesting requirement mentioned above.

1. A holder of Post-IPO Options may exercise a maximum of 25% of the total number of the Post-IPO Options granted from his acceptance of the Post-IPO Options. Subsequently, for every full year of continuous service with the Company, the holder may exercise a maximum of another 25% of the total number of the Post-IPO Options granted, up to eight years from the date of grant.

2. A holder of Post-IPO Options may exercise a maximum of 25% of the total number of the Post-IPO Options granted after the lapse of one full year from the date of grant of the Post-IPO Options. Subsequently, for every full year of continuous service with the Company, the holder may exercise a maximum of another 25% of the total number of the Post-IPO Options granted, up to eight years from the date of grant.

34 SinoMedia Holding Limited Interim Report 2015

SUBSTANTIAL SHAREHOLDERS’ INTERESTS IN SHARES AND UNDERLYING SHARES — LONG POSITIONS

As at 30 June 2015, so far as known to the directors and chief executive of the Company, the following corporations (other than a director or chief executive of the Company) had, or were deemed or taken to have interests or short position in the shares or underlying shares of the Company, which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO:

			Total number of
			ordinary	% of total
Substantial shareholder	Nature of interest		shares held	issued shares
Equity Trustee Limited	Trustee_(Note 1)_		304,914,821	53.21%
CLH HoldingLimited	Corporate interest_(Note 2)_		209,941,513	36.63%

Notes:

1. Equity Trustee Limited is deemed to be interested in 304,914,821 shares of the Company as it is the trustee of CLH Trust (shares held by Golden Bridge International Culture Limited), MHS Trust (shares held by Merger Holding Service Company Limited), UME Trust (shares held by United Marine Enterprise Company Limited), DFS (No. 1) Trust (shares held by Digital Finance Service Company Limited) and DFS (No. 2) Trust (shares held by SinoMedia Investment Ltd.).

2. These shares are directly held by Golden Bridge International Culture Limited which is a wholly owned subsidiary of Golden Bridge Int’l Advertising Holdings Limited which in turn is a wholly owned subsidiary of CLH Holding Limited. CLH Holding Limited is deemed to be interested in 209,941,513 shares of the Company held by Golden Bridge International Culture Limited.

Save as disclosed above, so far as known to the directors and chief executive of the Company, as at 30 June 2015, there was no other persons or corporations (other than a director or chief executive of the Company) who had any interests or short position in the shares or underlying shares of the Company, which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO.

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

During the six months ended 30 June 2015, neither the Company nor any of its subsidiaries had purchased, sold or redeemed any of the Company’s listed securities.

CORPORATE GOVERNANCE PRACTICES

During the six months ended 30 June 2015, the Company had complied with all the applicable provisions of the Corporate Governance Code as set out in Appendix 14 to the Listing Rules, save for the deviation from code provision A.6.7.

SinoMedia Holding Limited Interim Report 2015 35

Other Information

CORPORATE GOVERNANCE PRACTICES (CONTINUED)

Under Code Provision A.6.7, independent non-executive directors and other non-executive directors should attend general meetings and develop a balanced understanding of the views of the shareholders. Due to other pre-arranged business engagements which must be attended to by Mr. Qi Daqing, the independent non-executive director of the Company, he was not able to be present at the annual general meeting of the Company held on 10 June 2015.

MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS

The Company has adopted the Model Code as its own code of conduct regarding directors’ securities transactions.

Having been made specific enquiry, the directors of the Company confirmed that they have complied with the required standard set out in the Model Code during the six months ended 30 June 2015.

AUDIT COMMITTEE

The Audit Committee has, together with the management of the Company, reviewed the Group’s unaudited consolidated financial statements and the interim report for the six months ended 30 June 2015, including the accounting principles and practices adopted by the Group.

36 SinoMedia Holding Limited Interim Report 2015