TOM Group Limited — Interim / Quarterly Report 2015

Sep 9, 2015

Interim Report 2015

Contents

• 2 Definitions

• 4 Corporate Information

• 5 Chairman’s Statement

• 6 Management’s Discussion and Analysis

• 10 Independent Review Report

• 11 Interim Financial Information

• 18 Notes to the Condensed Consolidated Interim Financial Information

• 36 Disclosure of Interests

• 40 Corporate Governance

• 41 Other Information

1

TOM Group Limited

Interim Report 2015

Definitions

“Board” means the board of Directors “CKH” means Cheung Kong (Holdings) Limited, a company incorporated in Hong Kong with limited liability, whose listing status on the Stock Exchange was replaced by CKHH on 18 March 2015 “CKHH” means CK Hutchison Holdings Limited, an exempted company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Main Board of the Stock Exchange on 18 March 2015 (Stock Code: 0001) “CKPH” means Cheung Kong Property Holdings Limited, an exempted company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Main Board of the Stock Exchange on 3 June 2015 (Stock Code: 1113) “Company” or “TOM” means TOM Group Limited, an exempted company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Main Board of the Stock Exchange (Stock Code: 2383) “Corporate Governance Code” means the Code sets out in Appendix 14 to the Listing Rules “Director(s)” means the director(s) of the Company “GMV” means Gross Merchandise Value, the total value of all orders handled or processed through Ule Group’s platform which include multiple websites, mobile applications and PC applications, regardless of whether the orders are consummated, goods and services returned or not “Group” or “TOM Group” means the Company and its subsidiaries “HWL” means Hutchison Whampoa Limited, a company incorporated in Hong Kong with limited liability, whose shares ceased to be listed on the Stock Exchange on 3 June 2015 “Listing Rules” means the Rules Governing the Listing of Securities on the Stock Exchange

2

TOM Group Limited

Interim Report 2015

Definitions

“Mainland” or “PRC” means The People’s Republic of China, excluding Hong Kong, Macau and Taiwan “Model Code” means Model Code for Securities Transactions by Directors of Listed Issuers contained in Appendix 10 to the Listing Rules “Rubikloud” means Rubikloud Technologies Inc., a corporation incorporated in Canada “SFO” means the Securities and Futures Ordinance, Chapter 571 of the Laws of Hong Kong “Stock Exchange” means The Stock Exchange of Hong Kong Limited “Ule Group” means Ule Holdings Limited and its subsidiaries “WeLab” means WeLab Holdings Limited, a BVI business company incorporated in the British Virgin Islands with limited liability

3

TOM Group Limited

Interim Report 2015

Corporate Information

Board of Directors Chairman Frank John Sixt

Executive Directors Yeung Kwok Mung Mak Soek Fun, Angela

Audit Committee

Cheong Ying Chew, Henry (Committee Chairman) James Sha Lee Pui Ling, Angelina Ip Yuk-keung, Albert

Principal Share Registrar

Maples Corporate Services Limited P.O. Box 309 Ugland House Grand Cayman KY1-1104 Cayman Islands

Remuneration Committee

Non-executive Directors Chang Pui Vee, Debbie Ip Tak Chuen, Edmond Lee Pui Ling, Angelina

Independent Non-executive Directors Cheong Ying Chew, Henry James Sha Ip Yuk-keung, Albert

Alternate Director

Chow Woo Mo Fong, Susan (Alternate to Frank John Sixt)

Company Secretary Mak Soek Fun, Angela

Authorised Representatives Yeung Kwok Mung Mak Soek Fun, Angela

Cheong Ying Chew, Henry (Committee Chairman) Frank John Sixt Ip Yuk-keung, Albert Chow Woo Mo Fong, Susan (Alternate to Frank John Sixt)

Auditor

PricewaterhouseCoopers

Registered Office

P. O. Box 309 Ugland House Grand Cayman KY1-1104 Cayman Islands

Head Office and Principal

Place of Business

Rooms 1601-05, 16/F. China Resources Building 26 Harbour Road Wanchai Hong Kong Tel: (852) 2121 7838 Fax: (852) 2186 7711

Branch Share Registrar

Computershare Hong Kong Investor Services Limited Rooms 1712–1716, 17/F. Hopewell Centre 183 Queen’s Road East Wanchai Hong Kong

Principal Bankers

The Hongkong and Shanghai Banking Corporation Limited Bank of China (Hong Kong) Limited DBS Bank Limited Industrial and Commercial Bank of China (Asia) Limited

Website Address

www.tomgroup.com

Stock Code

2383

4

TOM Group Limited

Interim Report 2015

Chairman’s Statement

I am pleased to announce the results of TOM Group Limited and its subsidiaries (the “Group”) for the six months ended 30 June 2015.

For the six months to 30 June 2015, the Group reported revenues of HK$642 million and operating loss of HK$102 million, 4% lower than for the same period last year. Loss attributable to shareholders, including disposal gains, was HK$78 million.

The combination of the Mainland government’s efforts in encouraging domestic consumption and the rapid expansion of Internet access in rural areas of the Mainland has created a unique opportunity for Ule (www.ule.com), our e-commerce joint venture with China Post. During the reporting period, Ule continued to grow rapidly, with gross merchandise value (GMV) reaching RMB6.56 billion, a 183% year-on-year growth. The business has achieved last year’s full year GMV in six months.

Ule continues to expand its footprint in rural areas. As at the end of June, more than 80,000 of China Post’s branded franchised stores in rural parts of most provinces across the Mainland had joined Ule’s e-commerce platform. These stores offer a wide range of products and services, from agricultural to electronics to rural finance products, meeting the daily needs of local consumers and improving their quality of life. Ule also offers supply opportunities to brand owners to reach rural customers via its offline-to-online/mobile platform, bridging the rural and urban gap.

Our Mobile Internet Group reported revenues of HK$23 million. The management of the division has implemented cost control measures to streamline its operation. Segment loss narrowed 51% from the same period last year.

The Publishing Group maintained stable revenues of HK$454 million and increased segment profit 16% to HK$28 million.

The Outdoor Media Group and the Television and Entertainment Group reported revenues of HK$84 million and HK$73 million respectively in the period.

Going forward, TOM Group will maintain financial and operating discipline in its core business and focus on the continuing growth of Ule in the second half of 2015.

I would like to take this opportunity to thank the management and all the staff of TOM Group for their hard work and dedication.

Frank John Sixt Chairman

Hong Kong, 14 August 2015

5

TOM Group Limited

Interim Report 2015

Management’s Discussion and Analysis

Financial Highlights

	For the six months ended	For the six months ended
	30 June 2015	30 June 2014
	HK$’000	HK$’000
Consolidated revenue	641,825	726,679
Operating loss#before disposal gain*	(101,551)	(105,556)
Gain on disposal of long-term investments*	56,460	174,995
(Loss)/profit attributable to equity holders of the Company	(77,749)	29,458
(Loss)/earnings per share (HK cents)	(2.00)	0.76

• Including share of results of investments accounted for using the equity method

• 2015: Gain on disposal of an investment accounted for using the equity method (HK$50,147,000) and an available-for-sale financial asset (HK$6,313,000)

• 2014: Gain on disposal of investments accounted for using the equity method (HK$174,995,000)

Business Review

In the past few years, the Group has been continuously enhancing our business portfolio and reconfiguring resources to strategically invest in the technology-centric and high growth e-commerce, Internet finance and big data analytics sectors, seizing the fast growing opportunities of the Mainland government’s “rural digitisation” and “Internet+” strategy.

E-Commerce: delivering strong operating KPIs

As the Mainland government is seeking to boost rural economy, rural e-commerce emerged to be a growing trend. During the review period, Ule continued its rapid growth momentum on its rural e-commerce business and delivered strong operating results.

Leveraging on the extensive network of China Post, the Ule rural e-commerce platform has covered more than 80,000 rural outlets, increased more than double from 40,000 outlets as at the end of last year. These outlets offer diversified offline and online services from concierge service to online sales of agriculture produce in most of the provinces across the nation, enabling villagers to fulfil their daily needs within the local villages from shopping, selling to financing and starting their own businesses. During the review period, Ule’s GMV jumped 183% from RMB2.31 billion to RMB6.56 billion and has achieved last year’s full year GMV in six months.

6

TOM Group Limited

Interim Report 2015

Management’s Discussion and Analysis

Investments in WeLab and Rubikloud: both achieved rapid growth

The Group invested in WeLab, a Hong Kong based online consumer finance company, and Rubikloud, a Canadian based company specialising in retail intelligence, in 2014 and 2015 respectively.

WeLab recorded 750,000 members and US$450 million in loan applications. Loan volume jumped 5 times year-on-year in Hong Kong and grew 5.8 times quarter-on-quarter in Mainland China. Driven by WeLab’s proprietary WeDefend risk management technology, the company reported zero percentage of fraud loss in China. WeLab is also partnering with Ule, major mobile phone manufacturers and social networks to further expand its China Internet finance business.

Rubikloud has been rapidly expanding its technology footprint in automated analytics and machine learning. Notable client achievements include the adoption of Rubikloud into several global health and beauty retailers. The company reported 10 times growth in revenue processed from US$1 billion to US$10 billion and 8 times growth in macro retail database. Additionally, Rubikloud and Ule have partnered to bring real-time data analytics and product recommendations into rural China.

Business Operations Enhanced

The Mobile Internet Group continued to enhance its operating efficiency and improve resources allocation to focus on incubating mobile games. The streamlined operation reported revenues of HK$23 million, with segment loss significantly reduced by 51% year-on-year. The advertising environment of traditional media in Mainland China and Taiwan continues to be challenging and competitive. However, the Publishing Group still maintained its market leader position with reported revenues of HK$454 million and segment profit increased 16% to HK$28 million. The Outdoor Media Group’s revenues amounted to HK$84 million as the business performance was affected by weak outdoor advertising market during the reporting period. The Television and Entertainment Group reported revenues at HK$73 million and continued to focus on operating efficiency and efficient use of resources.

For the six months ended 30 June 2015, the Group’s revenue was HK$642 million; operating expenses reduced 12% from the same period last year. Gross margin expanded from 33% the same period last year to 35%. Loss attributable to shareholders, including disposal gains and share of results of associated companies, was HK$78 million.

7

TOM Group Limited

Interim Report 2015

Management’s Discussion and Analysis

Liquidity and Financial Resources

As at 30 June 2015, TOM Group had cash and bank balances, excluding pledged deposits, of approximately HK$464 million. A total of HK$3,430 million financing facilities were available, of which HK$2,542 million had been utilised as at 30 June 2015, to finance the Group’s investment, capital expenditures and for working capital purposes.

Total borrowings of TOM Group amounted to approximately HK$2,542 million as at 30 June 2015. These included long-term bank loans of approximately HK$2,412 million and short-term bank loans of approximately HK$130 million. The gearing ratio (Debts/(Debts + Equity)) of TOM Group was 86% as at 30 June 2015, compared to 82% as at 31 December 2014.

As at 30 June 2015, the Group had net current assets of approximately HK$437 million, 4% higher than balance of approximately HK$418 million as at 31 December 2014. As at 30 June 2015, the current ratio (Current assets/Current liabilities) of TOM Group was 1.49, compared to 1.45 as at 31 December 2014.

For the first six months of 2015, net cash used in operating activities amounted to HK$53 million, 42% lower than HK$91 million in the same period of 2014. Net cash outflow used in investing activities was HK$77 million, mainly included capital expenditures of HK$67 million and an investment of HK$16 million; partially offset by proceeds from disposal of fixed assets of HK$3 million and dividend received of HK$3 million.

Charges on Group Assets

As at 30 June 2015, the Group had restricted cash amounting to HK$4 million, being bank deposits mainly pledged in favour of certain publishing distributors in Taiwan as retainer fee for potential sales return.

Foreign Exchange Exposure

In general, it is the Group’s policy for each operating entity to borrow in local currencies, where necessary, to minimise currency risk.

Contingent Liabilities

As at 30 June 2015, TOM Group had no significant contingent liabilities.

Employee Information

As at 30 June 2015, TOM Group had approximately 1,835 full-time employees. For the first six months of the year, employee costs, including Directors’ emoluments, totalled HK$223 million. The Group’s employment and remuneration policies remained the same as detailed in the Annual Report for the year ended 31 December 2014.

8

TOM Group Limited

Interim Report 2015

Management’s Discussion and Analysis

Past Performance and Forward-looking Statements

The performance and the results of operations of the Group contained in this 2015 Interim Report are historical in nature, and past performance is no guarantee of the future results of the Group. Any forward-looking statements and opinions contained in this 2015 Interim Report are based on current plans, estimates and projections, and therefore involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements and opinions. The Group, the Directors, employees and agents of the Group assume (a) no obligation to correct or update the forward-looking statements or opinions contained in this 2015 Interim Report; and (b) no liability in the event that any of the forward-looking statements or opinions do not materialise or turn out to be incorrect.

Disclaimer:

Non-GAAP measures

Certain non-GAAP (generally accepted accounting principles) measures, such as operating profit/(loss) including share of results of investments accounted for using the equity method and segment profit/(loss) excluding gain on disposal of long-term investments, are used for assessing the Group’s performance. These non-GAAP measures are not expressly permitted measures under GAAP in Hong Kong and may not be comparable to similarly titled measures for other companies. Accordingly, such non-GAAP measures should not be considered as an alternative to operating income as an indicator of the operating performance of the Group or as an alternative to cash flows from operating activities as a measure of liquidity. The use of non-GAAP measures is provided solely to enhance the overall understanding of the Group’s current financial performance. Additionally, since the Group has historically reported certain non-GAAP results to investors, it is considered the inclusion of non-GAAP measures provides consistency in the Group’s financial reporting.

9

TOM Group Limited

Interim Report 2015

Independent Review Report

REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION TO THE BOARD OF DIRECTORS OF TOM GROUP LIMITED (incorporated in the Cayman Islands with limited liability)

Introduction

We have reviewed the interim financial information set out on pages 11 to 35, which comprises the condensed consolidated interim statement of financial position of TOM Group Limited (the “Company”) and its subsidiaries (together, the “Group”) as at 30 June 2015 and the related condensed consolidated interim income statement, interim statement of comprehensive income, interim statement of changes in equity and interim statement of cash flows for the six-month period then ended, and a summary of significant accounting policies and other explanatory notes. The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited require the preparation of a report on interim financial information to be in compliance with the relevant provisions thereof and Hong Kong Accounting Standard 34 “Interim Financial Reporting” issued by the Hong Kong Institute of Certified Public Accountants. The directors of the Company are responsible for the preparation and presentation of this interim financial information in accordance with Hong Kong Accounting Standard 34 “Interim Financial Reporting”. Our responsibility is to express a conclusion on this interim financial information based on our review and to report our conclusion solely to you, as a body, in accordance with our agreed terms of engagement and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.

Scope of Review

We conducted our review in accordance with Hong Kong Standard on Review Engagements 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Hong Kong Institute of Certified Public Accountants. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim financial information is not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34 “Interim Financial Reporting”.

PricewaterhouseCoopers

Certified Public Accountants

Hong Kong, 14 August 2015

10

TOM Group Limited

Interim Report 2015

Interim Financial Information

Condensed Consolidated Interim Income Statement

For the six months ended 30 June 2015

		Unaudited
		Six months ended	30 June
		2015	2014
	Note	HK$’000	HK$’000
Revenue	5	641,825	726,679
Cost of sales		(420,458)	(489,983)
Selling and marketing expenses		(92,764)	(108,594)
Administrative expenses		(72,928)	(79,894)
Other operating expenses		(107,026)	(120,760)
Other gains, net		1,251	1,610
Gain on disposal of long-term investments	6	56,460	174,995
Share of profits less losses of investments
accounted for using the equity method	15	(51,451)	(34,614)
	7	(45,091)	69,439
Finance income	8	3,431	4,939
Finance costs	8	(35,534)	(34,830)
Finance costs, net	8	(32,103)	(29,891)
(Loss)/profit before taxation		(77,194)	39,548
Taxation	9	(9,314)	927
(Loss)/profit for the period		(86,508)	40,475
Attributable to:
– Non-controlling interests		(8,759)	11,017
– Equity holders of the Company		(77,749)	29,458
(Loss)/earnings per share attributable to equity
holders of the Company during the period
Basic and diluted	11	HK(2.00) cents	HK0.76 cents

11

TOM Group Limited

Interim Report 2015

Interim Financial Information

Condensed Consolidated Interim Statement of Comprehensive Income

For the six months ended 30 June 2015

	Unaudited Six months ended 30 June 2015 2014 HK$’000 HK$’000	Unaudited Six months ended 30 June 2015 2014 HK$’000 HK$’000
(Loss)/profit for the period Items that may be subsequently reclassified to income statement: Revaluation surplus on available-for-sale financial assets Gain previously in exchange reserve related to an associated company disposed during the period recognised in income statement Exchange translation differences Other comprehensive expense for the period, net of tax Total comprehensive (expense)/income for the period Total comprehensive (expense)/income for the period attributable to: – Non-controlling interests – Equity holders of the Company	(86,508) – (13,514) 1,137 (12,377) (98,885) (5,799) (93,086)	40,475 2,899 – (26,199)
		(23,300)
		17,175
		7,349
		9,826

12

TOM Group Limited

Interim Report 2015

Interim Financial Information

Condensed Consolidated Interim Statement of Financial Position

As at 30 June 2015

Note	Unaudited Audited 30 June 31 December 2015 2014 HK$’000 HK$’000	Unaudited Audited 30 June 31 December 2015 2014 HK$’000 HK$’000
ASSETS AND LIABILITIES Non-current assets Fixed assets 12 Goodwill 13 Other intangible assets 14 Investments accounted for using the equity method 15 Available-for-sale financial assets Advance to an investee company Deferred tax assets Other non-current assets Current assets Inventories Trade and other receivables 16 Restricted cash 17 Cash and cash equivalents Current liabilities Trade and other payables 18 Taxation payable Long-term bank loans – current portion 19 Short-term bank loans 19 Net current assets Total assets less current liabilities	116,851 644,926 77,810 1,447,770 72,315 2,183 36,866 7,277 2,405,998 115,387 738,814 3,825 463,849 1,321,875 676,297 35,739 42,985 129,958 884,979 436,896 2,842,894	122,337 644,778 81,129 1,520,101 58,149 2,183 35,811 8,246
		2,472,734
		110,456 689,638 3,680 535,505
		1,339,279
		731,338 35,446 26,219 127,816
		920,819
		418,460
		2,891,194

13

TOM Group Limited

Interim Report 2015

Interim Financial Information

Condensed Consolidated Interim Statement of Financial Position

As at 30 June 2015

Note	Unaudited Audited 30 June 31 December 2015 2014 HK$’000 HK$’000	Unaudited Audited 30 June 31 December 2015 2014 HK$’000 HK$’000
Non-current liabilities Deferred tax liabilities Non-current portion of long-term bank loans 19 Pension obligations Net assets EQUITY Equity attributable to the Company’s equity holders Share capital 20 Deficits Own shares held Non-controlling interests Total equity	9,777 2,368,868 35,864 2,414,509 428,385 389,328 (364,114) (6,244) 18,970 409,415 428,385	8,602 2,316,681 34,910
		2,360,193
		531,001
		389,328 (157,618) (6,244)
		225,466 305,535
		531,001

14

TOM Group Limited

Interim Report 2015

Interim Financial Information

Condensed Consolidated Interim Statement of Changes in Equity

For the six months ended 30 June 2015

				Unaudited	Unaudited	Unaudited	Unaudited			Total shareholders’ funds HK$’000	Non- controlling interests HK$’000	Total equity HK$’000
				Attributable to equity holders of the Company
	Share capital HK$’000	Own shares held HK$’000	Share premium HK$’000	Capital reserve HK$’000	Capital redemption reserve HK$’000	General reserve HK$’000	Available- for-sale financial assets reserve HK$’000	Exchange reserve HK$’000	Accumulated losses HK$’000
Balance at 1 January 2015 Comprehensive income: Loss for the period Other comprehensive income: Gain previously in exchange reserve related to an associated company disposed during the period recognised in income statement Exchange translation differences Total comprehensive expense for the period ended 30 June 2015 Transactions with equity holders: Dividend paid to non-controlling interests Contributions from non-controlling interests Acquisition of additional interests in a subsidiary Dilution of non-controlling interests upon capital injection in a subsidiary Transactions with equity holders Balance at 30 June 2015	389,328 – – – – – – – – – 389,328	(6,244) – – – – – – – – – (6,244)	3,625,981 – – – – – – – – – 3,625,981	(11,186) – – – – – – 9 (113,419) (113,410) (124,596)	776 – – – – – – – – – 776	152,423 – – – – – – – – – 152,423	11,017 – – – – – – – – – 11,017	780,237 – (13,514) (1,823) (15,337) – – – – – 764,900	(4,716,866) (77,749) – – (77,749) – – – – – (4,794,615)	225,466 (77,749) (13,514) (1,823) (93,086) – – 9 (113,419) (113,410) 18,970	305,535 (8,759) – 2,960 (5,799) (4,289) 941 (392) 113,419 109,679 409,415	531,001
												(86,508) (13,514) 1,137
												(98,885)
												(4,289) 941 (383) –
												(3,731)
												428,385

15

TOM Group Limited

Interim Report 2015

Interim Financial Information

Condensed Consolidated Interim Statement of Changes in Equity

For the six months ended 30 June 2015

				Unaudited	Unaudited	Unaudited	Unaudited			Total shareholders’ funds HK$’000	Non- controlling interests HK$’000	Total equity HK$’000
				Attributable to equity		holders of the Company
	Share capital HK$’000	Own shares held HK$’000	Share premium HK$’000	Capital reserve HK$’000	Capital redemption reserve HK$’000	General reserve HK$’000	Available- for-sale financial assets reserve HK$’000	Exchange reserve HK$’000	Accumulated losses HK$’000
Balance at 1 January 2014 Comprehensive income: Profit for the period Other comprehensive income: Revaluation surplus on available-for-sale financial assets Exchange translation differences Total comprehensive income/(expense) for the period ended 30 June 2014 Transactions with equity holders: Dividend paid to non-controlling interests Contributions from non-controlling interests Transactions with equity holders Balance at 30 June 2014	389,328 – – – – – – – 389,328	(6,244) – – – – – – – (6,244)	3,625,981 – – – – – – – 3,625,981	(11,186) – – – – – – – (11,186)	776 – – – – – – – 776	150,542 – – – – – – – 150,542	8,012 – 2,899 – 2,899 – – – 10,911	790,965 – – (22,531) (22,531) – – – 768,434	(4,631,882) 29,458 – – 29,458 – – – (4,602,424)	316,292 29,458 2,899 (22,531) 9,826 – – – 326,118	311,025 11,017 – (3,668) 7,349 (2,368) 938 (1,430) 316,944	627,317
												40,475 2,899 (26,199)
												17,175
												(2,368) 938
												(1,430)
												643,062

16

TOM Group Limited

Interim Report 2015

Interim Financial Information

Condensed Consolidated Interim Statement of Cash Flows

For the six months ended 30 June 2015

Note

Unaudited Six months ended 30 June 2015 2014 HK$’000 HK$’000 (22,029) (61,577) (22,767) (21,026) (8,455) (8,870) (53,251) (91,473) (66,599) (67,726) (383) – 2,531 428 (15,600) (31,152) 2,887 2,477 (77,164) (95,973) 150,120 338,440 (83,467) (190,532) (5,742) (16,904) (4,289) (2,368) (145) (920) 56,477 127,716 (73,938) (59,730) 535,505 695,179 2,282 (15,772) 463,849 619,677

Cash flows from operating activities Net cash outflow from operations Interest paid Overseas taxation paid Net cash used in operating activities Cash flows from investing activities Capital expenditure Acquisition of additional interests in a subsidiary Proceeds from disposal of fixed assets Capital investment in an available-for-sale financial asset Dividends received Net cash used in investing activities Cash flows from financing activities New bank loans 19 Loan repayments 19 Loan arrangement fee paid Dividends paid to non-controlling interests Increase in restricted cash 17 Net cash from financing activities Decrease in cash and cash equivalents Cash and cash equivalents at 1 January Exchange adjustment Cash and cash equivalents at 30 June

(22,029) (22,767) (8,455) (53,251) (66,599) (383) 2,531 (15,600) 2,887 (77,164) 150,120 (83,467) (5,742) (4,289) (145) 56,477 (73,938) 535,505 2,282 463,849

17

TOM Group Limited

Interim Report 2015

Notes to the Condensed Consolidated Interim Financial Information

1 Basis of preparation

This unaudited condensed consolidated interim financial information for the six months ended 30 June 2015 has been prepared in accordance with Hong Kong Accounting Standard (“HKAS”) 34 “Interim Financial Reporting” issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”) and applicable disclosure requirements of the Listing Rules.

The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2014, which have been prepared in accordance with Hong Kong Financial Reporting Standards (“HKFRS”).

2 Accounting policies

The accounting policies and methods of computation used in the preparation of this condensed consolidated interim financial information are consistent with those used in 2014 annual financial statements, except for the adoption of amendments to standards which are relevant to the operations of the Group and mandatory for annual periods beginning 1 January 2015.

The adoption of these amendments to standards does not have a material impact on the Group’s accounting policies.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

3 Critical accounting estimates and judgements

The preparation of this condensed consolidated interim financial information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing this condensed consolidated interim financial information, the significant judgements made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2014.

18

TOM Group Limited

Interim Report 2015

Notes to the Condensed Consolidated Interim Financial Information

4 Financial risk management

(a) Financial risk factors

The Group’s activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including cash flow interest rate risk, currency risk and price risk).

The condensed consolidated interim financial information do not include all financial risk management information and disclosures required in the annual financial statements, and should be read in conjunction with the Group’s annual financial statements as at 31 December 2014.

There have been no changes in the risk management policies since the year ended 31 December 2014.

(b) Fair value estimation

The table below analyses financial instruments carried at fair value. The different levels have been defined as follows:

• Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).

• Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).

• Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

The following table presents the Group’s assets and liabilities that are measured at fair value.

	Level 1 HK$’000
As at 30 June 2015 Assets Available-for-sale financial assets – Equity securities Total assets Total liabilities	14,879
	14,879
	–

19

TOM Group Limited

Interim Report 2015

Notes to the Condensed Consolidated Interim Financial Information

4 Financial risk management (Continued)

(b) Fair value estimation (Continued)

Level 1 HK$’000

As at 31 December 2014

Assets Available-for-sale financial assets – Equity securities Total assets Total liabilities	14,879
	14,879
	–

5 Segment information

The Group has five reportable operating segments:

• E-Commerce Group – provision of services to users using the mobile and Internetbased marketplace and provision of technical services for online trading platform.

• Mobile Internet Group – provision of mobile Internet services, online advertising and commercial enterprise solutions.

• Publishing Group – magazine and book circulation, sales of publication advertising and other related products.

• Outdoor Media Group – advertising sales of outdoor media assets and provision of outdoor media services.

• Television and Entertainment Group – advertising sales in relation to satellite television channel operations, production of broadcasting programmes and provision of media sales, event production and marketing services.

Sales between segments are carried out at arm’s length.

20

TOM Group Limited

Interim Report 2015

Notes to the Condensed Consolidated Interim Financial Information

5 Segment information (Continued)

The segment results for the six months ended 30 June 2015 are as follows:

				Unaudited Six months ended 30 June 2015	Unaudited Six months ended 30 June 2015	Unaudited Six months ended 30 June 2015	Total HK$’000
		E-Commerce Group HK$’000	Mobile Internet Group HK$’000	Publishing Group HK$’000	Television Outdoor and Media Entertainment Group Group HK$’000 HK$’000
Gross segment revenue Inter-segment revenue Net revenue from external customers Segment profit/(loss) before amortisation and depreciation Amortisation and depreciation Segment profit/(loss) Other material items: Gain on disposal of long-term investments Share of profits less losses of investments accounted for using the equity method Finance costs: Finance income Finance expenses (note a) Segment profit/(loss) before taxation Unallocated corporate expenses Loss before taxation Expenditure for operating segment non-current assets Unallocated expenditure for non-current assets Total expenditure for non-current assets		7,607 – 7,607 4,696 – 4,696 – (50,756) (50,756) 4 – 4 (46,056) –	22,510 – 22,510 (15,474) (2,537) (18,011) – 191 191 2,676 – 2,676 (15,144) 2,065	454,427 – 454,427 86,443 (58,723) 27,720 56,460 (886) 55,574 193 (2,254) (2,061) 81,233 52,432	84,238 – 84,238 22 (10,666) (10,644) – – – 504 – 504 (10,140) 3,183	73,172 (129) 73,043 (14,357) (3,549) (17,906) – – – 54 (10,064) (10,010) (27,916) 3,177	641,954 (129) 641,825 61,330 (75,475) (14,145) 56,460 (51,451) 5,009 3,431 (12,318) (8,887) (18,023) (59,171) (77,194) 60,857 5,742 66,599

Note (a): Inter-segment interest expense amounted to HK$9,123,000 was included in the finance expenses.

21

TOM Group Limited

Interim Report 2015

Notes to the Condensed Consolidated Interim Financial Information

5 Segment information (Continued)

The segment results for the six months ended 30 June 2014 are as follows:

				Unaudited Six months ended 30 June 2014	Unaudited Six months ended 30 June 2014
		E-Commerce Group HK$’000	Mobile Internet Group HK$’000	Publishing Group HK$’000	Outdoor Media Group HK$’000	Television and Entertainment Group HK$’000	Total HK$’000
Gross segment revenue Inter-segment revenue Net revenue from external customers Segment profit/(loss) before amortisation and depreciation Amortisation and depreciation Segment profit/(loss) Other material non-cash items: Gain on disposal of long-term investments Share of profits less losses of investments accounted for using the equity method Finance costs: Finance income (note a) Finance expenses (note a) Segment profit/(loss) before taxation Unallocated corporate expenses Profit before taxation Expenditure for operating segment non-current assets Unallocated expenditure for non-current assets Total expenditure for non-current assets		1,870 – 1,870 (3,768) (57) (3,825) 174,995 (19,203) 155,792 44 – 44 152,011 –	46,799 – 46,799 (31,685) (4,884) (36,569) – (140) (140) 3,705 – 3,705 (33,004) 785	454,960 – 454,960 79,524 (55,683) 23,841 – (15,271) (15,271) 9,565 (5,147) 4,418 12,988 55,049	115,810 – 115,810 3,437 (10,298) (6,861) – – – 561 – 561 (6,300) 6,733	107,579 (339) 107,240 (10,909) (5,696) (16,605) – – – 37 (9,353) (9,316) (25,921) 5,154	727,018 (339)
							726,679
							36,599 (76,618)
							(40,019)
							174,995 (34,614)
							140,381
							13,912 (14,500)
							(588)
							99,774 (60,226)
							39,548
							67,721 5
							67,726

Note (a): Inter-segment interest income and inter-segment interest expenses amounted to HK$9,261,000 and HK$9,883,000 were included in the finance income and finance expenses respectively.

22

TOM Group Limited

Interim Report 2015

Notes to the Condensed Consolidated Interim Financial Information

5 Segment information (Continued)

The segment assets and liabilities at 30 June 2015 are as follows:

	Unaudited As at 30 June 2015	Total HK$’000
	Television Mobile Outdoor and E-Commerce Internet Publishing Media Entertainment Group Group Group Group Group HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Segment assets Investments accounted for using the equity method Unallocated assets Total assets Segment liabilities Unallocated liabilities: Corporate liabilities Current taxation Deferred taxation Borrowings Total liabilities	114,112 478,789 1,212,791 288,602 147,811 1,445,319 4,537 (2,086) – – 28,894 96,963 348,195 103,400 45,602	2,242,105 1,447,770 37,998 3,727,873 623,054 89,107 35,739 9,777 2,541,811 3,299,488

The segment assets and liabilities at 31 December 2014 are as follows:

	Audited As at 31 December 2014
	Television Mobile Outdoor and E-Commerce Internet Publishing Media Entertainment Group Group Group Group Group HK$’000 HK$’000 HK$’000 HK$’000 HK$’000	Total HK$’000
Segment assets Investments accounted for using the equity method Unallocated assets Total assets Segment liabilities Unallocated liabilities: Corporate liabilities Current taxation Deferred taxation Borrowings Total liabilities	111,047 500,183 1,185,292 299,588 142,409 1,496,192 4,346 19,563 – – 29,866 105,731 362,483 104,643 42,616	2,238,519 1,520,101 53,393
		3,812,013
		645,339 120,909 35,446 8,602 2,470,716
		3,281,012

The unallocated assets represent the corporate assets. The unallocated liabilities represent the corporate liabilities in addition to operating segment taxation payable, deferred tax liabilities and borrowings which are managed on a central basis.

23

TOM Group Limited

Interim Report 2015

Notes to the Condensed Consolidated Interim Financial Information

6 Gain on disposal of long-term investments

	Unaudited Six months ended 30 June 2015 2014 HK$’000 HK$’000 Note (a) Note (b)	Unaudited Six months ended 30 June 2015 2014 HK$’000 HK$’000 Note (a) Note (b)
Gain on disposal of investments accounted for using the equity method Gain on disposal of an available-for-sale financial asset	50,147 6,313 56,460	174,995 –
		174,995

Notes:

• (a) In May 2015, a subsidiary of the Group entered into an agreement to dispose its entire interests in China Popular Computer Week Management Company Limited (“PCW”), an associated company, and Chongqing Zhongkepu Media Development Joint Stock Company Limited (“ZKP”), an available-for-sale financial asset, at a total consideration of approximately RMB21 million. Upon the disposal of equity interests in PCW and ZKP, a write back on consideration payable of RMB30 million is recognised and included in gain on disposal of investments accounted for using the equity method.

• (b) On 16 January 2014, a joint venture, held as to 49% by a non-wholly owned subsidiary of the Group, signed a shareholders’ agreement and a subscription agreement with several investors. Pursuant to the subscription agreement, the joint venture agreed to allot and issue and the investors agreed on a several basis to subscribe for certain Series A Preferred Shares representing 13.25% of the total share capital of the joint venture on a fully diluted basis at the aggregate investors’ subscription price of US$110 million. Following completion of the investors’ subscription, the former joint venture became an associated company of the Group, held as to 42.51% by a non-wholly owned subsidiary of the Group, 44.24% by the joint venture partner and 13.25% by investors on a fully diluted basis. The Group recognised a dilution gain of HK$174,995,000 in the consolidated income statement for the period on this disposal. Net gain attributable to equity holders of the Company amounted to HK$157,499,000.

24

TOM Group Limited

Interim Report 2015

Notes to the Condensed Consolidated Interim Financial Information

7 Operating (loss)/profit

Operating (loss)/profit is stated after charging/crediting the following:

	Unaudited Six months ended 30 June 2015 2014 HK$’000 HK$’000	Unaudited Six months ended 30 June 2015 2014 HK$’000 HK$’000
Charging: Depreciation of fixed assets (note 12) Amortisation of other intangible assets (note 14) Exchange loss, net Crediting: Gain on disposal of fixed assets Dividend income from available-for-sale financial assets Exchange gain, net	22,867 53,070 964 1,828 387 –	27,209 49,772 –
		169 314 1,127

8 Finance costs, net

	Unaudited Six months ended 30 June 2015 2014 HK$’000 HK$’000	Unaudited Six months ended 30 June 2015 2014 HK$’000 HK$’000
Interest and borrowing costs on bank loans Interest on other loans Less: Bank interest income	34,593 941 35,534 (3,431) 32,103	33,892 938
		34,830 (4,939)
		29,891

25

TOM Group Limited

Interim Report 2015

Notes to the Condensed Consolidated Interim Financial Information

9 Taxation

Hong Kong profits tax has been provided at the rate of 16.5% (2014: 16.5%) on the estimated assessable profits for the period. Taxation on overseas profits has been calculated on the estimated assessable profits for the period at the rates of taxation prevailing in the countries in which the Group operates.

The amount of taxation charged/(credited) to the condensed consolidated interim income statement represents:

	Unaudited Six months ended 30 June 2015 2014 HK$’000 HK$’000	Unaudited Six months ended 30 June 2015 2014 HK$’000 HK$’000
Overseas taxation Under/(over)-provision in prior years Deferred taxation Taxation charge/(credit)	8,415 178 721 9,314	7,078 (8,906) 901
		(927)

Income tax expense is recognised based on management’s estimate of the weighted average annual income tax rate expected for the full financial year.

10 Dividends

No dividends had been paid or declared by the Company for the six months ended 30 June 2015 (2014: Nil).

11 (Loss)/earnings per share

(a) Basic

The calculation of the basic (loss)/earnings per share is based on consolidated loss attributable to the equity holders of the Company of HK$77,749,000 (2014: profit of HK$29,458,000) and the weighted average of 3,893,270,558 (2014: 3,893,270,558) ordinary shares in issue during the period.

(b) Diluted

Diluted loss per share is equal to the basic loss per share for the period ended 30 June 2015 as the option scheme was expired on 22 July 2014. Diluted earnings per share is equal to the basic earnings per share for the period ended 30 June 2014 as all the outstanding share options granted by the Company were lapsed.

26

TOM Group Limited

Interim Report 2015

Notes to the Condensed Consolidated Interim Financial Information

12 Fixed assets

During the period, major fixed assets acquired by the Group were leasehold improvement amounting to HK$8,656,000 and computer equipment amounting to HK$5,776,000.

13		HK$’000 142,315 14,512 (259) (27,209) (2,834) 126,525
	Net book value At 1 January 2014 Additions Disposals Depreciation charge Exchange adjustment At 30 June 2014 (unaudited) Net book value At 1 January 2015 Additions Disposals Depreciation charge Exchange adjustment At 30 June 2015 (unaudited) Goodwill
		122,337 18,073 (703) (22,867) 11 116,851
		HK$’000 646,914 (2,291) 644,623
	At 1 January 2014 Exchange adjustment At 30 June 2014 (unaudited) At 1 January 2015 Exchange adjustment At 30 June 2015 (unaudited)
		644,778 148 644,926

27

TOM Group Limited

Interim Report 2015

Notes to the Condensed Consolidated Interim Financial Information

14 Other intangible assets

	Concession rights HK$’000	Trademarks Programme and Publishing and film domain rights rights names HK$’000 HK$’000 HK$’000	Trademarks Programme and Publishing and film domain rights rights names HK$’000 HK$’000 HK$’000	Trademarks Programme and Publishing and film domain rights rights names HK$’000 HK$’000 HK$’000	Total HK$’000 88,023 53,214 (49,772) (1,495) 89,970
At 1 January 2014 Additions Amortisation charge Exchange adjustment At 30 June 2014 (unaudited) At 1 January 2015 Additions Amortisation charge Exchange adjustment At 30 June 2015 (unaudited)	7,324 – (537) (204) 6,583	75,769 48,884 (45,172) (429) 79,052	3,592 4,330 (4,006) (820) 3,096	1,338 – (57) (42) 1,239
	6,101 – (534) (22) 5,545	72,349 45,937 (50,487) 1,235 69,034	2,097 2,589 (2,010) – 2,676	582 – (39) 12 555	81,129 48,526 (53,070) 1,225 77,810

15 Investments accounted for using the equity method

The amounts recognised in the statement of financial position are as follows:

	Unaudited Audited 30 June 31 December 2015 2014 HK$’000 HK$’000	Unaudited Audited 30 June 31 December 2015 2014 HK$’000 HK$’000
Associated companies	1,447,770	1,520,101

28

TOM Group Limited

Interim Report 2015

Notes to the Condensed Consolidated Interim Financial Information

15 Investments accounted for using the equity method (Continued)

The amounts recognised in the income statement are as follows:

	Unaudited Six months ended 30 June 2015 2014 HK$’000 HK$’000 (51,451) (30,507) – (4,107) (51,451) (34,614)
Associated companies Joint ventures	(51,451) – (51,451)

(a) Interests in associated companies Movement in interests in associated companies during the period:

	Unaudited 2015 2014 HK$’000 HK$’000 1,520,101 45,261 – 1,203,075 – 347,512 (18,357) – (51,451) (30,507) (2,500) (2,163) (23) (1,179) 1,447,770 1,561,999
At 1 January Transfer from interests in joint ventures (note 6(b)) Increase in share capital of an associated company (note 6(b)) Carrying value of interest in an associated company disposed of (note 6(a)) Share of profits less losses Dividend paid Exchange adjustment At 30 June (unaudited)	1,520,101 – – (18,357) (51,451) (2,500) (23) 1,447,770

29

TOM Group Limited

Interim Report 2015

Notes to the Condensed Consolidated Interim Financial Information

15 Investments accounted for using the equity method (Continued)

(b) Interests in joint ventures

Movement in interests in joint ventures during the period:

At 1 January Share of losses Carrying value of certain interests in joint ventures disposed of (note 6(b)) Transfer to interests in associated companies (note 6(b)) At 30 June (unaudited) Trade and other receivables		Unaudited 2015 2014 HK$’000 HK$’000	Unaudited 2015 2014 HK$’000 HK$’000
		– 1,390,709 – (4,107) – (183,527) – (1,203,075) – – Unaudited Audited 30 June 31 December 2015 2014 HK$’000 HK$’000	1,390,709 (4,107) (183,527) (1,203,075)
			–
Trade receivables Prepayments, deposits and other receivables		353,146 385,668 738,814	340,702 348,936
			689,638

16 Trade and other receivables

The Group has established credit policies for customers in each of its businesses. The average credit period granted for trade receivables ranges from 30 to 150 days. The Group’s turnover is determined in accordance with terms specified in the contracts governing the relevant transactions. The carrying values of trade and other receivables approximate their fair values.

30

TOM Group Limited

Interim Report 2015

Notes to the Condensed Consolidated Interim Financial Information

16 Trade and other receivables (Continued)

The ageing analyses of the Group’s trade receivables were as follows:

	Unaudited Audited 30 June 31 December 2015 2014 HK$’000 HK$’000 86,918 99,419 87,450 78,188 57,370 64,121 185,276 199,341 417,014 441,069 (63,868) (100,367) 353,146 340,702 50 19,599 353,096 321,103 353,146 340,702
Current 31-60 days 61-90 days Over 90 days Less: Provision for impairment Represented by: Receivables from related companies Receivables from third parties	86,918 87,450 57,370 185,276 417,014 (63,868) 353,146 50 353,096 353,146

17 Restricted cash

As at 30 June 2015, the restricted cash was mainly pledged in favour of certain publishing distributors in Taiwan as retainer fee for potential sales return (31 December 2014: Same).

31

TOM Group Limited

Interim Report 2015

Notes to the Condensed Consolidated Interim Financial Information

18 Trade and other payables

	Unaudited Audited 30 June 31 December 2015 2014 HK$’000 HK$’000	Unaudited Audited 30 June 31 December 2015 2014 HK$’000 HK$’000
Trade payables Other payables and accruals	148,904 527,393 676,297	151,853 579,485
		731,338

The carrying values of trade and other payables approximate their fair values.

The ageing analyses of the Group’s trade payables were as follows:

	Unaudited Audited 30 June 31 December 2015 2014 HK$’000 HK$’000	Unaudited Audited 30 June 31 December 2015 2014 HK$’000 HK$’000
Current 31-60 days 61-90 days Over 90 days Represented by: Payable to third parties	35,500 31,043 12,227 70,134 148,904 148,904	46,268 22,660 11,538 71,387
		151,853
		151,853

32

TOM Group Limited

Interim Report 2015

Notes to the Condensed Consolidated Interim Financial Information

19 Movements in borrowings

	Short-term bank loans HK$’000	Short-term bank loans HK$’000	Long-term bank loans HK$’000	Total HK$’000 2,320,757 338,440 (190,532) (913) 2,467,752
As at 1 January 2014 Borrowings Repayments Exchange adjustment As at 30 June 2014 (unaudited) As at 1 January 2015 Borrowings Repayments Exchange adjustment As at 30 June 2015 (unaudited) Share capital	171,138 103,440 (95,682) (462) 178,434		2,149,619 235,000 (94,850) (451) 2,289,318
	127,816 75,120 (75,120) 2,142 129,958		2,342,900 75,000 (8,347) 2,300 2,411,853	2,470,716 150,120 (83,467) 4,442 2,541,811
Authorised: As at 1 January and 30 June 2014 and 1 January and 30 June 2015 Issued and fully paid: As at 1 January and 30 June 2014 and 1 January and 30 June 2015		5,000,000,000 3,893,270,558

20 Share capital

21 Pledge of assets

Save as disclosed in note 17, the Group has no pledge of assets as at 30 June 2015 (31 December 2014: Nil).

22 Contingent liabilities

As at 30 June 2015, the Group had no significant contingent liabilities.

33

TOM Group Limited

Interim Report 2015

Notes to the Condensed Consolidated Interim Financial Information

23 Capital commitments

The Group’s maximum capital commitments as at 30 June 2015 are as follows:

	Unaudited Audited 30 June 31 December 2015 2014 HK$’000 HK$’000	Unaudited Audited 30 June 31 December 2015 2014 HK$’000 HK$’000
Capital injection for an investment – Contracted but not provided for Acquisition of fixed assets and other intangible assets – Authorised but not contracted for	7,500 52,541 60,041	7,500 73,203
		80,703

24 Related party transactions

A summary of significant related party transactions, in addition to those disclosed in note 16 to the condensed consolidated interim financial information, is set out below:

(a) Sales of goods and services

For	Unaudited the six months ended 30 June 2015 2014 HK$’000 HK$’000	Unaudited the six months ended 30 June 2015 2014 HK$’000 HK$’000
Sales to – HWL and its subsidiaries and joint ventures – Non-controlling interests of subsidiaries and their subsidiaries – Associated companies	21,854 370 7,255	29,001 127 721

34

TOM Group Limited

Interim Report 2015

Notes to the Condensed Consolidated Interim Financial Information

24 Related party transactions (Continued)

(b) Purchase of goods and services

For	Unaudited the six months ended 30 June 2015 2014 HK$’000 HK$’000	Unaudited the six months ended 30 June 2015 2014 HK$’000 HK$’000
Purchase of services payable to – Non-controlling interests of a subsidiary Rental payable to – A subsidiary of CKH – Non-controlling interests of subsidiaries and their subsidiaries Service fees payable to – HWL and its subsidiaries – CKHH and its subsidiaries Property reinstatement costs payable to – A subsidiary of CKH	6,517 6,136 1,232 1,139 242 4,564	6,541 7,363 610 2,253 – –

(c) Two substantial shareholders of the Company granted guarantees to the Company at an guarantee fee equivalent to 0.5% per annum (2014: Same) for loan facilities amounting to HK$2,900 million (2014: Same). During the period, guarantee fee amounted to approximately HK$5,619,000 was paid by the Company (2014: HK$5,234,000) to these substantial shareholders.

(d) Key management compensation

During the period ended 30 June 2015, no transactions have been entered into with the directors of the Company (being the key management personnel) other than the emoluments paid to them (being key management personnel compensation) (2014: Nil).

25 Approval of interim financial information

The condensed consolidated interim financial information was approved by the Board of Directors on 14 August 2015.

35

TOM Group Limited

Interim Report 2015

Disclosure of Interests

Directors’ Interests and Short Positions in Shares, Underlying Shares and Debentures

As at 30 June 2015, the interests or short positions of the Directors and chief executive in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were 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 which were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein, or which were required, pursuant to the Model Code, to be notified to the Company and the Stock Exchange, were as follows:

Long positions in the shares of the Company

Name of Directors Capacity	Number of shares of the Company Approximate Personal Family Corporate Other percentage of Interests Interests Interests Interests Total shareholding
Yeung Kwok Mung Interest of spouse Mak Soek Fun, Angela Beneficial owner	– 30,000 – – 30,000 Below 0.01% 44,000 – – – 44,000 Below 0.01%

Save as disclosed above, as at 30 June 2015, none of the Directors or chief executive of the Company had any interests or short positions in any shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which would have to be 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 which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or which were required, pursuant to the Model Code, to be notified to the Company and the Stock Exchange.

36

TOM Group Limited

Interim Report 2015

Disclosure of Interests

Interests and Short Positions of Substantial Shareholders

As at 30 June 2015, the persons or corporations (not being a Director or chief executive) who had interests or short positions in the shares and underlying shares of the Company as recorded in the register required to be kept under section 336 of the SFO or had otherwise notified to the Company were as follows:

			Approximate
		No. of shares of	percentage of
Name	Capacity	the Company held	shareholding
CKHH	Interest of	1,429,024,545 (L)	36.70%
	controlled	(Notes 1 & 2)
	corporations
CKH	Interest of	1,429,024,545 (L)	36.70%
	controlled	(Notes 1 & 2)
	corporations
Cheung Kong Investment	Interest of	476,341,182 (L)	12.23%
Company Limited	controlled	(Note 1)
	corporations
Cheung Kong Holdings	Interest of	476,341,182 (L)	12.23%
(China) Limited	controlled	(Note 1)
	corporations
Sunnylink Enterprises Limited	Interest of a	476,341,182 (L)	12.23%
	controlled	(Note 1)
	corporation
Romefield Limited	Beneficial	476,341,182 (L)	12.23%
	owner	(Note 1)
CK Global Investments Limited	Interest of	952,683,363 (L)	24.47%
	controlled	(Note 2)
	corporations
HWL	Interest of	952,683,363 (L)	24.47%
	controlled	(Note 2)
	corporations

37

TOM Group Limited

Interim Report 2015

Disclosure of Interests

			Approximate
		No. of shares of	percentage of
Name	Capacity	the Company held	shareholding
Hutchison International Limited	Interest of a	952,683,363 (L)	24.47%
	controlled	(Note 2)
	corporation
Easterhouse Limited	Beneficial	952,683,363 (L)	24.47%
	owner	(Note 2)
Chau Hoi Shuen	Interest of	995,078,363 (L)	25.55%
	controlled	(Notes 3 & 4)
	corporations
Composers International Limited	Interest of	995,078,363 (L)	25.55%
	controlled	(Notes 3 & 4)
	corporations
Cranwood Company Limited	Beneficial	995,078,363 (L)	25.55%
	owner & interest	(Notes 3 & 4)
	of controlled
	corporations
Schumann International Limited	Beneficial	580,000,000 (L)	14.90%
	owner	(Notes 3 & 4)
Handel International Limited	Beneficial	348,000,000 (L)	8.94%
	owner	(Notes 3 & 4)
Lin Tian Maw	Beneficial	413,308,000 (L)	10.62%
	owner, interest
	of child under
	18 and/or spouse
	& interest of
	controlled
	corporations

(L) denotes a long position

38

TOM Group Limited

Interim Report 2015

Disclosure of Interests

Notes:

• (1) Romefield Limited is a wholly-owned subsidiary of Sunnylink Enterprises Limited, which in turn is a wholly-owned subsidiary of Cheung Kong Holdings (China) Limited. Cheung Kong Holdings (China) Limited is a wholly-owned subsidiary of Cheung Kong Investment Company Limited, which in turn is a wholly-owned subsidiary of CKH. CKH is a wholly-owned subsidiary of CKHH.

By virtue of the SFO, Cheung Kong Investment Company Limited, Cheung Kong Holdings (China) Limited and Sunnylink Enterprises Limited are all deemed to be interested in the 476,341,182 shares of the Company held by Romefield Limited.

• (2) Easterhouse Limited is a wholly-owned subsidiary of Hutchison International Limited, which in turn is a wholly-owned subsidiary of HWL. HWL is a non wholly-owned subsidiary of CK Global Investments Limited, which in turn is a wholly-owned subsidiary of CKHH. By virtue of the SFO, CKHH, CK Global Investments Limited, HWL and Hutchison International Limited are deemed to be interested in the 952,683,363 shares of the Company held by Easterhouse Limited.

In addition, subsidiaries of CKH are entitled to exercise or control the exercise of more than one-third of the voting power at the general meetings of HWL. By virtue of the SFO, CKHH and CKH are all deemed to be interested in the 476,341,182 shares of the Company and 952,683,363 shares of the Company held by Romefield Limited and Easterhouse Limited respectively.

• (3) Schumann International Limited and Handel International Limited are companies controlled by Cranwood Company Limited, which in turn is a wholly-owned subsidiary of Composers International Limited. Ms. Chau Hoi Shuen is entitled to exercise more than one-third of the voting power at the general meetings of Cranwood Company Limited.

By virtue of the SFO, Cranwood Company Limited is deemed to be interested in the 580,000,000 shares of the Company and 348,000,000 shares of the Company held by Schumann International Limited and Handel International Limited respectively in addition to 67,078,363 shares of the Company held by itself.

By virtue of the SFO, Ms. Chau Hoi Shuen and Composers International Limited are deemed to be interested in 67,078,363 shares of the Company, 580,000,000 shares of the Company and 348,000,000 shares of the Company held by Cranwood Company Limited, Schumann International Limited and Handel International Limited respectively.

• (4) Cranwood Company Limited, Schumann International Limited and Handel International Limited have charged 67,078,363 shares of the Company, 580,000,000 shares of the Company and 348,000,000 shares of the Company respectively in favour of HWL on 16 December 2013.

Save as disclosed above, as at 30 June 2015, the Directors are not aware of any other person or corporation having an interest or short position in the shares and underlying shares of the Company representing 5% or more of the issued share capital of the Company.

39

TOM Group Limited

Interim Report 2015

Corporate Governance

Audit Committee

The Company has established an audit committee (“Audit Committee”) in January 2000. Written terms of reference in compliance with the Listing Rules have been adopted for the Audit Committee.

The primary duties of the Audit Committee are to review and supervise the financial reporting process and internal control procedures of the Group. The Audit Committee comprises three Independent Non-executive Directors, namely, Mr. Cheong Ying Chew, Henry, Mr. James Sha and Mr. Ip Yuk-keung, Albert and a Non-executive Director, namely, Mrs. Lee Pui Ling, Angelina. Mr. Cheong Ying Chew, Henry is the chairman of the Audit Committee.

The unaudited condensed consolidated interim financial information of the Group for the six months ended 30 June 2015 has been reviewed by the Audit Committee.

Corporate Governance Code

The Company has complied with all the code provisions of the Corporate Governance Code throughout the six months ended 30 June 2015, save and except Code Provision A.5 of the Corporate Governance Code.

The Company has considered the merits of establishing a nomination committee but is of the view that it is in the best interests of the Company that the Board collectively reviews, deliberates on and approves the structure, size and composition of the Board and the appointment of any new Director. The Board is tasked with ensuring that it has a balanced composition of skills and experience appropriate for the requirements of the businesses of the Group and that appropriate individuals with the relevant expertise and leadership qualities are appointed to the Board to complement the capabilities of the existing Directors. In addition, the Board as a whole is also responsible for reviewing the succession plan for the Directors.

Model Code for Securities Transactions by Directors

The Company has adopted the Model Code as the Group’s code of conduct regarding Directors’ securities transactions. In response to specific enquiry made with the Directors, all Directors confirmed that they have complied with the required standard as set out in the Model Code during the six months ended 30 June 2015.

40

TOM Group Limited

Interim Report 2015

Other Information

Purchase, Sale or Redemption of Securities

During the six months ended 30 June 2015, neither the Company nor any of its subsidiaries has purchased or sold any of the Company’s listed shares. In addition, the Company has not redeemed any of its listed shares during the period.

Change in Other Information of Directors

Pursuant to Rule 13.51B of the Listing Rules, the changes in information of Directors of the Company subsequent to the date of the 2014 Annual Report of the Company are set out below:

Name of Directors

Details of the Changes

Frank John Sixt

Appointed as non-executive director of CKHH on 9 January 2015

Re-designated from non-executive director to executive director, group finance director and deputy managing director of CKHH on 3 June 2015

Re-designated from non-executive director to director of CKH on 3 June 2015

Re-designated from executive director and group finance director to director of HWL on 8 June 2015

Appointed as alternate director of HK Electric Investments Manager Limited as the trustee-manager of HK Electric Investments, and HK Electric Investments Limited on 9 June 2015

Ip Tak Chuen, Edmond

Re-designated from director to executive director and appointed as deputy managing director of CKPH on 26 February 2015

Resigned as non-executive director of ARA Asset Management (Fortune) Limited as the manager of Fortune Real Estate Investment Trust on 1 June 2015

Appointed as member of executive committee of CKPH on 3 June 2015

Ceased to be member of executive committee of CKHH on 3 June 2015

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TOM Group Limited

Interim Report 2015

Other Information

Re-designated from deputy managing director and executive director to director of CKH on 3 June 2015

Resigned as non-executive director of AVIC International Holding (HK) Limited on 23 June 2015

Cheong Ying Chew, Henry

Appointed as independent non-executive director of CKPH on 26 February 2015

Appointed as independent non-executive director of CKHH on 18 March 2015

Ceased to be member of the Securities and Futures Appeals Tribunal on 31 March 2015

Resigned as independent non-executive director of Creative Energy Solutions Holdings Limited on 6 May 2015

Ceased to be member of the Advisory Committee of the Securities and Futures Commission on 31 May 2015

Resigned as independent non-executive director of CKHH on 3 June 2015

Resigned as independent non-executive director of CKH on 3 June 2015

Ip Yuk-keung, Albert Appointed as research fellow of the Institute for Financial Economics at Singapore Management University on 2 April 2015

Appointed as independent non-executive director of Hopewell Holdings Limited on 10 April 2015

Resigned as a member of the management subcommittee of the Boys’ and Girls’ Clubs Association of Hong Kong on 28 April 2015

Chow Woo Mo Fong, Susan Appointed as executive director and group deputy managing director of CKHH on 3 June 2015

Re-designated from executive director and deputy group managing director to director of HWL on 8 June 2015

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TOM Group Limited

Interim Report 2015