TOM Group Limited - Interim / Quarterly Report 2017

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2 Definitions
4 Corporate Information
5 Chairman’s Statement
6 Management’s Discussion and Analysis
11 Independent Review Report
12 Interim Financial Information
20 Notes to the Condensed Consolidated Interim Financial Information
41 Disclosure of Interests
45 Corporate Governance
46 Other Information

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TOM Group Limited Interim Report 2017

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Definitions

has the meaning ascribed to it in the Listing Rules

“Associates”

means the board of Directors

“Board”

“China Post” means China Post Group Limited, a state-owned enterprise of the PRC, and its subsidiaries (its subsidiary Telpo Philatelic Company Limited is the entity that is the shareholder of Ule) “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) “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 Corporate Governance Code as set 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

2 TOM Group Limited Interim Report 2017

Definitions

“Listing Rules”

“Main Board”

“Mainland” or “PRC”

“Media Business”

“Model Code”

“Rubikloud”

“SFO”

“Stock Exchange”

“Technology Platform and Investments”
“Ule” or “Ule Group”

“WeLab”

means the Rules Governing the Listing of Securities on the Stock Exchange

means the main board of the Stock Exchange

means The People’s Republic of China, excluding Hong Kong, Macau and Taiwan

means two reportable operating segments of Publishing Group and Advertising Group

means Model Code for Securities Transactions by Directors of Listed Issuers contained in Appendix 10 to the Listing Rules

means Rubikloud Technologies Inc., a corporation incorporated in Canada

means the Securities and Futures Ordinance, Chapter 571 of the Laws of Hong Kong

means The Stock Exchange of Hong Kong Limited

means three reportable operating segments of E-Commerce Group, Social Network Group and Mobile Internet Group; and investments in Fintech and Big Data Analytics sectors

means Ule Holdings Limited and its subsidiaries

means WeLab Holdings Limited, a BVI business company incorporated in the British Virgin Islands with limited liability

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TOM Group Limited 3 Interim Report 2017

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Corporate Information

Board of Directors

Audit Committee

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

Chairman

Frank John Sixt

Executive Directors Yeung Kwok Mung Mak Soek Fun, Angela

Remuneration Committee

Cheong Ying Chew, Henry (Committee Chairman) Frank John Sixt Ip Yuk-keung, Albert Lai Kai Ming, Dominic (Alternate to Frank John Sixt)

Non-executive Directors Chang Pui Vee, Debbie Lee Pui Ling, Angelina

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

Auditor

PricewaterhouseCoopers

Alternate Director

Registered Office

Lai Kai Ming, Dominic (Alternate to Frank John Sixt)

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

Company Secretary Mak Soek Fun, Angela

Head Office and Principal

Authorised Representatives

Yeung Kwok Mung Mak Soek Fun, Angela

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

Principal Share Registrar

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

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 Industrial and Commercial Bank of China (Asia) Limited Bank of China (Hong Kong) Limited DBS Bank Ltd., Hong Kong Branch Citibank, N.A., Hong Kong Branch United Overseas Bank Limited

Website Address

www.tomgroup.com

Stock Code

2383

4 TOM Group Limited Interim Report 2017

Chairman’s Statement

For the six months ended 30 June 2017, the Group continued to focus on its strategic transformation and realignment of priorities to invest in e-commerce, fintech and big data analytics sectors. The Group reported revenue from continuing operations of HK$456 million. Gross revenue from the Group’s Technology Platform and Investments was HK$53 million. The Group’s Media Business, represented by Publishing and Advertising business units, recorded gross revenue of HK$404 million. Including share of loss from associated companies of HK$58 million and non-recurring impairment charges of HK$22 million, the Group’s loss before net finance costs and taxation was HK$111 million. Loss attributable to shareholders was HK$138 million.

Ule (www.ule.com), a joint venture with China Post, continued its growth momentum and delivered operational performance metrics during the review period. Ule reported an increase in its GMV to over RMB47 billion and as at the end of June 2017, with more than 400,000 retail stores in rural China on Ule’s e-commerce platform.

Pixnet, the Group’s social network business, experienced steady growth during the period. Gross revenue increased 8% to HK$37 million with segment profit of HK$2 million.

Amidst tough operating environment in Taiwan, the Publishing Group maintained its market leadership position in traditional publishing. During the period, gross revenue was HK$359 million with segment profit of HK$21 million.

The Group’s traditional advertising business in Mainland China continued to be adversely affected by the deteriorating market conditions and certain government town planning initiatives. During the period, the Group accelerated its restructuring efforts in traditional media businesses and exited from certain non-performing business units. Gross revenue of our Advertising Group was HK$46 million and segment loss was HK$19 million.

Going forward, TOM Group will continue to streamline its cost with prudent financial and operating discipline, invest in technology businesses and accelerate the restructuring of its traditional advertising business portfolio in the second half of 2017.

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

Frank John Sixt Chairman

Hong Kong, 2 August 2017

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TOM Group Limited Interim Report 2017

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Management’s Discussion and Analysis

Financial Highlights

Financial Highlights
	For the six months ended
	30 June	30 June
	2017	2016
	HK$’000	HK$’000
		(Restated)*
Continuing Operations:
Consolidated revenue	455,781	510,289
Loss(1)before impairment charges(2)	(88,867)	(81,332)
Assets impairment(2)	(22,249)	–
Loss attributable to equity holders of the Company
– before discontinued operations	(138,305)	(104,032)
– after discontinued operations	(138,305)	(129,067)
Loss per share (HK cents)
– before discontinued operations	(3.55)	(2.67)
– after discontinued operations	(3.55)	(3.32)

(1) Loss before net finance costs and taxation (including share of results of investments accounted for using the equity method)

(2) 2017: Provision for impairment of an available-for-sale financial asset (HK$12,243,000) held by the Mobile Internet Group and impairment of certain fixed assets (HK$10,006,000) of the outdoor media operation under the Advertising Group

* By the end of 2016, the Group ceased the television operations which were mainly engaged in advertising sales in relation to satellite television channel operations and production of broadcasting programmes in Mainland China. As a result, the condensed consolidated interim financial information for the first half of 2016 had been restated accordingly to conform with the current period presentation

6 TOM Group Limited Interim Report 2017

Management’s Discussion and Analysis

Business Review

During the reporting period, TOM Group continued its strategic transformation journey and attained steady progress in its high growth and technology-centric investments to create value for the Company. Gross revenue from the Group’s Technology Platform and Investments was HK$53 million, a slight increase from the previous period. Meanwhile, the Group continued to restructure its Media Business which recorded gross revenue of HK$404 million with segment profit of HK$2 million amid tough operating environment in traditional advertising market.

Technology Platform and Investments – continue growth trajectory with impressive results

The Group is pleased with the swift growth and development of its major investments which delivered promising results during the period.

In 2014, TOM Group invested in WeLab, a fast growing fintech company offering online and seamless mobile finance services in Hong Kong and China. In 2016, WeLab was named in a KPMG-sponsored report as one of the top 100 fintech companies in the world - #6 in China and #33 globally. WeLab experienced tremendous top-line growth in first half of 2017, growing 5 times compared to first half of 2016. WeLab has facilitated more than US$1.4 billion in loans since its inception in 2013. Similar to its loan portfolio growth, WeLab’s user base grew significantly, reaching 20 million users. During this period, WeLab launched a strategic partnership with Postal Savings Bank of China to provide mobile lending solutions to its customers through its extensive network of more than 40,000 branches. WeLab plans to extend its reach further by launching more partnerships with banks going forward. Meanwhile, in Hong Kong, WeLab showcases its use of technology to improve the borrowing experience when it launched the Artificial Intelligence Balance Transfer product, the first AI-powered loan product in the market.

Rubikloud, a machine learning platform for retail which TOM Group invested in 2015, has continued to grow rapidly during the review period. The company has been winning large retail deals across the world, including a major project with A.S. Watson and a contract with a US$5.5 billion beauty retailer Ulta Beauty , utilising its machine learning products and services. With its valuable data analytics and intelligence, Rubikloud is able to help its existing retail clients to make an average of around 30% improvements in inventory stockouts and forecasting revenue across all categories of goods. Going forward, Rubikloud will continue to grow its client base including cooperation with world renowned technology giants. The company is on track to double its revenue for a third straight year.

Ule, our e-commerce joint venture with China Post, continued to record strong operating performance. During the review period, more than 400,000 retail stores in rural China have joined Ule’s e-commerce platform. According to information provided by Ule, its GMV exceeded RMB47 billion by the end of June in 2017.

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TOM Group Limited 7 Interim Report 2017

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Management’s Discussion and Analysis

During the review period, the Group continued to invest in growing Pixnet, our Social Network business. Pixnet is amongst the top social media portals in Taiwan with 5.9 million members and 6.2 million unique visitors per day. Gross revenue of Pixnet increased 8% to HK$37 million and segment profit was HK$2 million during the review period when it continued to reinvest its profits to grow the business.

Media Business – maintaining leadership in publishing operation; accelerating restructuring efforts on traditional advertising business

The Group’s traditional publishing business maintained its market leadership position in Taiwan and showed resilience amid tough operating environment during the review period. Gross revenue and segment profit was HK$359 million and HK$21 million respectively.

During the period, the Group restructured its traditional advertising business portfolio and discontinued some non-performing outdoor media businesses to reduce loss. Our total available outdoor media assets reduced 35% to about 37,000 square metres. Overall, the Group’s Advertising business recorded gross revenue of HK$46 million and segment loss of HK$19 million.

For the six months ended 30 June 2017, the Group’s revenue from continuing operations was HK$456 million. During the review period, the Group has made an impairment of its investment in a German-based peer-to-peer insurance platform in view of its lower valuation. Including share of loss from associated companies of HK$58 million and impairments of certain outdoor media assets and investment securities totalling HK$22 million, the Group’s loss before net finance costs and taxation was HK$111 million. Loss attributable to shareholders was HK$138 million.

Going forward, the Group will continue to invest in technology businesses and create long-term value for our shareholders.

Liquidity and Financial Resources

As at 30 June 2017, TOM Group had cash and bank balances, excluding pledged deposits, of approximately HK$373 million. A total of HK$3,509 million financing facilities were available, of which HK$2,735 million, or 78%, had been utilised as at 30 June 2017, to finance the Group’s investment, capital expenditures and for working capital purposes.

Total borrowings of TOM Group amounted to approximately HK$2,735 million as at 30 June 2017, of which HK$2,526 million and HK$209 million equivalent is denominated in Hong Kong dollar and New Taiwan dollar respectively. The borrowings included long-term bank loans of approximately HK$2,674 million (including portion repayable within one year) and short-term bank loans of approximately HK$61 million. All bank loans bore floating interest rates. The gearing ratio (Debts/(Debts + Equity)) of TOM Group was 109% as at 30 June 2017, compared to 104% as at 31 December 2016.

8 TOM Group Limited Interim Report 2017

Management’s Discussion and Analysis

As at 30 June 2017, the Group had net current assets of approximately HK$378 million, as compared to balance of approximately HK$396 million as at 31 December 2016. As at 30 June 2017, the current ratio (Current assets/Current liabilities) of TOM Group was 1.60, at similar level of 1.61 as at 31 December 2016.

For the first six months of 2017, net cash used in operating activities after interest and taxation paid was HK$16 million, 43% lower than HK$29 million for the same period of 2016. Net cash used in investing activities was HK$46 million, mainly included capital expenditures of HK$50 million; partially offset by net proceeds from disposal of subsidiaries of HK$1 million and dividends received of HK$3 million.

Charges on Group Assets

As at 30 June 2017, the Group had restricted cash amounting to HK$8 million, being bank deposits mainly pledged in favour of certain publishing distributors as retainer fee for potential sales return, and banks as security for credit card and advance receipt, and quality assurance for government projects in Taiwan, and also the courts for legal proceedings in Mainland China.

Contingent Liabilities

As at 30 June 2017, the Group had no significant contingent liabilities.

Subsequent Events

There is no subsequent event after the reporting period which has material impact to the condensed consolidated interim financial information of the Group.

Foreign Exchange Exposure

The Group’s operations principally locate in Mainland China and Taiwan, with transactions and related working capital denominated in Renminbi and New Taiwan dollar respectively. In general, it is the Group’s policy for each operating entity to borrow in their local currencies, where necessary, to minimise currency risk. Overall, the Group is not exposed to significant foreign exchange risk; however, the Group will monitor this risk on an ongoing basis.

Employee Information

As at 30 June 2017, TOM Group had approximately 1,500 full-time employees (excluding approximately 500 full-time employees of Ule, an associated company of TOM). For the first six months of the year, employee costs, including Directors’ emoluments, totalled HK$187 million. The Group’s employment and remuneration policies remained the same as detailed in the Annual Report for the year ended 31 December 2016.

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TOM Group Limited 9 Interim Report 2017

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Management’s Discussion and Analysis

Past Performance and Forward-looking Statements

The performance and the results of operations of the Group contained in this 2017 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 2017 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 2017 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 profit/(loss) before net finance costs and taxation including share of results of investments accounted for using the equity method and segment profit/(loss) excluding provision for impairment of other assets, 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.

10 TOM Group Limited Interim Report 2017

Independent Review Report

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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 12 to 40, 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 2017 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, 2 August 2017

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TOM Group Limited 11 Interim Report 2017

Interim Financial Information

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Condensed Consolidated Interim Income Statement

For the six months ended 30 June 2017

Note	Unaudited Six months ended 30 June 2017 2016 HK$’000 HK$’000 (Restated)	Unaudited Six months ended 30 June 2017 2016 HK$’000 HK$’000 (Restated)
Continuing operations Revenue 5 Cost of sales Selling and marketing expenses Administrative expenses Other operating expenses Other gains, net Provision for impairment of other assets 6 Share of profits less losses of investments accounted for using the equity method 16 Loss before net finance costs and taxation 7 Finance income Finance costs Finance costs, net 8 Loss before taxation Taxation 9 Loss for the period from continuing operations Discontinued operations Loss for the period from discontinued operations 10 Loss for the period	455,781 (286,282) (73,071) (54,466) (73,454) 1,091 (30,401) (22,249) (52,650) (58,466) (111,116) 1,489 (31,052) (29,563) (140,679) (5,544) (146,223) – (146,223)	510,289
		(318,553) (74,086) (53,367) (77,203) 1,926
		(10,994) –
		(10,994) (70,338)
		(81,332) 1,944 (17,953)
		(16,009)
		(97,341) (11,520)
		(108,861) (25,038)
		(133,899)

12 TOM Group Limited Interim Report 2017

Interim Financial Information

Condensed Consolidated Interim Income Statement

For the six months ended 30 June 2017

Note	Unaudited Six months ended 30 June 2017 2016 HK$’000 HK$’000 (Restated) (7,918) (4,832) (138,305) (129,067) (146,223) (133,899) (138,305) (104,032) – (25,035) (138,305) (129,067) HK(3.55) cents HK(2.67) cents – HK(0.65) cents HK(3.55) cents HK(3.32) cents
Loss for the period attributable to: – Non-controlling interests – Equity holders of the Company Loss for the period attributable to equity holders of the Company – From continuing operations – From discontinued operations Loss per share attributable to equity holders of the Company during the period Basic and diluted 12 – From continuing operations – From discontinued operations	(7,918) (138,305) (146,223) (138,305) – (138,305) HK(3.55) cents – HK(3.55) cents

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TOM Group Limited 13 Interim Report 2017

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Interim Financial Information

Condensed Consolidated Interim Statement of Comprehensive Income

For the six months ended 30 June 2017

	Unaudited Six months ended 30 June 2017 2016 HK$’000 HK$’000 (Restated)	Unaudited Six months ended 30 June 2017 2016 HK$’000 HK$’000 (Restated)
Loss for the period Items that may be subsequently reclassified to income statement: Exchange translation differences Other comprehensive income/(expense) for the period, net of tax Total comprehensive expense for the period Total comprehensive expense for the period attributable to: – Non-controlling interests – Equity holders of the Company Total comprehensive expense for the period attributable to equity holders of the Company: – From continuing operations – From discontinued operations	(146,223) 13,108 13,108 (133,115) (311) (132,804) (131,691) (1,113) (132,804)	(133,899) (14,868)
		(14,868)
		(148,767)
		(4,992)
		(143,775)
		(120,073) (23,702)
		(143,775)

14 TOM Group Limited Interim Report 2017

Interim Financial Information

Condensed Consolidated Interim Statement of Financial Position

As at 30 June 2017

Note	Unaudited 30 June 2017 HK$’000	Audited 31 December 2016 HK$’000 65,508 621,064 75,829 1,242,609 79,671 2,191 36,980 9,323 2,133,175 107,077 556,780 7,488 377,180 1,048,525 541,990 19,416 62,293 28,517 652,216 396,309 2,529,484
ASSETS AND LIABILITIES Non-current assets Fixed assets 13 Goodwill 14 Other intangible assets 15 Investments accounted for using the equity method 16 Available-for-sale financial assets Advance to an investee company Deferred tax assets Other non-current assets Current assets Inventories Trade and other receivables 17 Restricted cash 18 Cash and cash equivalents Current liabilities Trade and other payables 19 Taxation payable Long-term bank loans – current portion 20 Short-term bank loans 20 Net current assets Total assets less current liabilities	44,473 622,635 77,569 1,182,095 68,824 2,191 39,180 5,264 2,042,231 115,202 516,449 8,449 373,393 1,013,493 487,090 21,380 65,732 60,824 635,026 378,467 2,420,698

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TOM Group Limited 15 Interim Report 2017

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Interim Financial Information

Condensed Consolidated Interim Statement of Financial Position

As at 30 June 2017

Note	Unaudited 30 June 2017 HK$’000	Audited 31 December 2016 HK$’000
Non-current liabilities Deferred tax liabilities Long-term bank loans – non-current portion 20 Pension obligations Net liabilities EQUITY Equity attributable to the Company’s equity holders Share capital 21 Deficits Own shares held Non-controlling interests Total deficit	10,251 2,608,165 37,252 2,655,668 (234,970) 389,328 (930,538) (6,244) (547,454) 312,484 (234,970)	8,833 2,579,013 41,610
		2,629,456
		(99,972)
		389,328 (797,709) (6,244)
		(414,625) 314,653
		(99,972)

16 TOM Group Limited Interim Report 2017

Interim Financial Information

For the six months ended 30 June 2017 Unaudited Attributable to equity holders of the Company Share capital Own shares held Share premium Capital reserve Capital redemption reserve General reserve Available- for-sale financial assets reserve Exchange reserve Other reserve Accumulated losses Total shareholders’ deficits Non- controlling interests Total deficit HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Balance at 1 January 2017 389,328 (6,244) 3,625,981 (75,054) 776 158,410 11,017 695,323 6,096 (5,220,258) (414,625) 314,653 (99,972) Comprehensive income: Loss for the period – – – – – – – – – (138,305) (138,305) (7,918) (146,223) Other comprehensive income: Exchange translation differences – – – – – – – 5,501 – – 5,501 7,607 13,108 Total comprehensive income/ (expense) for the period ended 30 June 2017 – – – – – – – 5,501 – (138,305) (132,804) (311) (133,115) Transactions with equity holders: Disposal of subsidiaries – – – – – – – – – – – (1,883) (1,883) Acquisition of additional interests in a subsidiary – – – (25) – – – – – – (25) 25 – Transfer to general reserve – – – – – 16 – – – (16) – – – Transactions with equity holders – – – (25) – 16 – – – (16) (25) (1,858) (1,883) Balance at 30 June 2017 389,328 (6,244) 3,625,981 (75,079) 776 158,426 11,017 700,824 6,096 (5,358,579) (547,454) 312,484 (234,970)	For the six months ended 30 June 2017 Unaudited Attributable to equity holders of the Company Share capital Own shares held Share premium Capital reserve Capital redemption reserve General reserve Available- for-sale financial assets reserve Exchange reserve Other reserve Accumulated losses Total shareholders’ deficits Non- controlling interests Total deficit HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Balance at 1 January 2017 389,328 (6,244) 3,625,981 (75,054) 776 158,410 11,017 695,323 6,096 (5,220,258) (414,625) 314,653 (99,972) Comprehensive income: Loss for the period – – – – – – – – – (138,305) (138,305) (7,918) (146,223) Other comprehensive income: Exchange translation differences – – – – – – – 5,501 – – 5,501 7,607 13,108 Total comprehensive income/ (expense) for the period ended 30 June 2017 – – – – – – – 5,501 – (138,305) (132,804) (311) (133,115) Transactions with equity holders: Disposal of subsidiaries – – – – – – – – – – – (1,883) (1,883) Acquisition of additional interests in a subsidiary – – – (25) – – – – – – (25) 25 – Transfer to general reserve – – – – – 16 – – – (16) – – – Transactions with equity holders – – – (25) – 16 – – – (16) (25) (1,858) (1,883) Balance at 30 June 2017 389,328 (6,244) 3,625,981 (75,079) 776 158,426 11,017 700,824 6,096 (5,358,579) (547,454) 312,484 (234,970)	For the six months ended 30 June 2017 Unaudited Attributable to equity holders of the Company Share capital Own shares held Share premium Capital reserve Capital redemption reserve General reserve Available- for-sale financial assets reserve Exchange reserve Other reserve Accumulated losses Total shareholders’ deficits Non- controlling interests Total deficit HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Balance at 1 January 2017 389,328 (6,244) 3,625,981 (75,054) 776 158,410 11,017 695,323 6,096 (5,220,258) (414,625) 314,653 (99,972) Comprehensive income: Loss for the period – – – – – – – – – (138,305) (138,305) (7,918) (146,223) Other comprehensive income: Exchange translation differences – – – – – – – 5,501 – – 5,501 7,607 13,108 Total comprehensive income/ (expense) for the period ended 30 June 2017 – – – – – – – 5,501 – (138,305) (132,804) (311) (133,115) Transactions with equity holders: Disposal of subsidiaries – – – – – – – – – – – (1,883) (1,883) Acquisition of additional interests in a subsidiary – – – (25) – – – – – – (25) 25 – Transfer to general reserve – – – – – 16 – – – (16) – – – Transactions with equity holders – – – (25) – 16 – – – (16) (25) (1,858) (1,883) Balance at 30 June 2017 389,328 (6,244) 3,625,981 (75,079) 776 158,426 11,017 700,824 6,096 (5,358,579) (547,454) 312,484 (234,970)
		314,653 (7,918) 7,607 (311) (1,883) 25 – (1,858) 312,484
	Total shareholders’ deficits HK$’000	(414,625) (138,305) 5,501 (132,804) – (25) – (25) (547,454)
	Accumulated losses HK$’000	(5,220,258) (138,305) – (138,305) – – (16) (16) (5,358,579)
	Other reserve HK$’000	6,096 – – – – – – – 6,096
	Exchange reserve HK$’000	695,323 – 5,501 5,501 – – – – 700,824
	Available- for-sale financial assets reserve HK$’000	11,017 – – – – – – – 11,017
	General reserve HK$’000	158,410 – – – – – 16 16 158,426
	Capital redemption reserve HK$’000	776 – – – – – – – 776
	Capital reserve HK$’000	(75,054) – – – – (25) – (25) (75,079)
	Share premium HK$’000	3,625,981 – – – – – – – 3,625,981
	Own shares held HK$’000	(6,244) – – – – – – – (6,244)
	Share capital HK$’000	389,328 – – – – – – – 389,328
		Balance at 1 January 2017 Comprehensive income: Loss for the period Other comprehensive income: Exchange translation differences Total comprehensive income/ (expense) for the period ended 30 June 2017 Transactions with equity holders: Disposal of subsidiaries Acquisition of additional interests in a subsidiary Transfer to general reserve Transactions with equity holders Balance at 30 June 2017

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TOM Group Limited 17 Interim Report 2017

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Interim Financial Information

For the six months ended 30 June 2017
Unaudited
Attributable to equity holders of the Company
Share
capital
Own
shares held
Share
premium
Capital
reserve
Capital
redemption
reserve
General
reserve
Available-
for-sale
financial
assets reserve
Exchange
reserve
Other
reserve
Accumulated
losses
Total
shareholders’
deficits
Non-
controlling
interests
Total
equity
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000

Balance at 1 January 2016
389,328
(6,244)
3,625,981
(124,596)
776
155,774
11,017
737,064
–
(4,936,769)
(147,669)
388,332
240,663
Comprehensive income:
Loss for the period
–
–
–
–
–
–
–
–
–
(129,067)
(129,067)
(4,832)
(133,899)
Other comprehensive income:
Exchange translation differences
–
–
–
–
–
–
–
(14,708)
–
–
(14,708)
(160)
(14,868)
Total comprehensive expense for
the period ended 30 June 2016
–
–
–
–
–
–
–
(14,708)
–
(129,067)
(143,775)
(4,992)
(148,767)
Share of other reserve of an investment
accounted for using the equity
method
–
–
–
–
–
–
–
–
6,096
–
6,096
677
6,773
Transactions with equity holders:
Contribution from non-controlling
interests
–
–
–
–
–
–
–
–
–
–
–
943
943
Balance at 30 June 2016
389,328
(6,244)
3,625,981
(124,596)
776
155,774
11,017
722,356
6,096
(5,065,836)
(285,348)
384,960
99,612

18 TOM Group Limited Interim Report 2017

Interim Financial Information

Condensed Consolidated Interim Statement of Cash Flows

For the six months ended 30 June 2017

Note	Unaudited Six months ended 30 June 2017 2016 HK$’000 HK$’000 6,543 (6,443) (20,041) (16,016) (2,876) (6,202) (16,374) (28,661) (50,189) (56,785) 150 131 1,044 – – 3,361 – 10,844 – (17,040) 2,992 2,982 (46,003) (56,507) 103,944 793,152 (50,072) (709,290) (6,305) (22,855) (961) 826 46,606 61,833 (15,771) (23,335) 377,180 466,728 11,984 (4,481) 373,393 438,912
Cash flows from operating activities Net cash inflow/(outflow) from operations Interest paid Overseas taxation paid Net cash used in operating activities Cash flows from investing activities Capital expenditures Proceeds from disposal of fixed assets Disposal of subsidiaries Disposal of a former subsidiary Recovery of a receivable previously written off 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 20 Loan repayments 20 Loan arrangement fee paid (Increase)/decrease in restricted cash 18 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	6,543 (20,041) (2,876) (16,374) (50,189) 150 1,044 – – – 2,992 (46,003) 103,944 (50,072) (6,305) (961) 46,606 (15,771) 377,180 11,984 373,393

Note

Unaudited
Six months ended 30 June
2017
2016
HK$’000
HK$’000
6,543
(6,443)
(20,041)
(16,016)
(2,876)
(6,202)
(16,374)
(28,661)
(50,189)
(56,785)
150
131
1,044
–
–
3,361
–
10,844
–
(17,040)
2,992
2,982
(46,003)
(56,507)
103,944
793,152
(50,072)
(709,290)
(6,305)
(22,855)
(961)
826
46,606
61,833
(15,771)
(23,335)
377,180
466,728
11,984
(4,481)
373,393
438,912

Cash flows from operating activities
Net cash inflow/(outflow) from operations
Interest paid
Overseas taxation paid
Net cash used in operating activities
Cash flows from investing activities
Capital expenditures
Proceeds from disposal of fixed assets
Disposal of subsidiaries
Disposal of a former subsidiary
Recovery of a receivable previously written off
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
20
Loan repayments
20
Loan arrangement fee paid
(Increase)/decrease in restricted cash
18
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

6,543
(20,041)
(2,876)
(16,374)
(50,189)
150
1,044
–
–
–
2,992
(46,003)
103,944
(50,072)
(6,305)
(961)
46,606
(15,771)
377,180
11,984
373,393

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TOM Group Limited 19 Interim Report 2017

Notes to the Condensed Consolidated Interim Financial Information

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1 Basis of preparation

This unaudited condensed consolidated interim financial information for the six months ended 30 June 2017 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 2016, which have been prepared in accordance with Hong Kong Financial Reporting Standards (“HKFRS”).

As at 30 June 2017, the Group had net liabilities of HK$235 million. The Group also has undrawn banking facilities guaranteed by one of its substantial shareholders. In preparing this unaudited condensed consolidated interim financial information, the Group has taken into account all information that could reasonably be expected to be available and has ascertained that the Group has obtained adequate financial resources to support the Group to continue in operational existence for the foreseeable future. Given its availability to the banking facilities, the Group considers it will have adequate financial resources to enable it to operate and meet its liabilities and commitments as and when they fall due within the next twelve months from the end of the reporting period. Accordingly, the Group has prepared this unaudited condensed consolidated interim financial information on a going concern basis.

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 2016 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 2017.

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.

20 TOM Group Limited

Interim Report 2017

Notes to the Condensed Consolidated Interim Financial Information

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 2016.

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, foreign currency risk and price risk).

The condensed consolidated interim financial information does 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 2016.

There have been no changes in the risk management policies since the year ended 31 December 2016.

(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).

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TOM Group Limited 21 Interim Report 2017

Notes to the Condensed Consolidated Interim Financial Information

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4 Financial risk management (Continued)

(b) Fair value estimation (Continued)

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

	Level 1 HK$’000
As at 30 June 2017 (Unaudited) Assets Available-for-sale financial assets – Equity securities Total assets Total liabilities As at 31 December 2016 (Audited) Assets Available-for-sale financial assets – Equity securities Total assets Total liabilities



	14,879

	14,879


	–


	14,879 14,879 –

22 TOM Group Limited

Interim Report 2017

Notes to the Condensed Consolidated Interim Financial Information

5 Segment information

In 2016, the Group was re-positioned as a media and technology company, which resulted in some changes of reportable operating segments. The provision of services of online community and social networking websites and related online advertising were separately reported as an operating segment, namely Social Network Group. The advertising sales of outdoor media assets and provision of outdoor media services; provision of media sales, event production and marketing services were aggregated and reported as an operating segment, namely Advertising Group.

By the end of 2016, the Group ceased the television operations which were classified as the discontinued operations for the year ended 31 December 2016. Further details of the cessation of the television operations are set out in note 10 to the condensed consolidated interim financial information.

As a result, the condensed consolidated interim financial information for the first half of 2016 had been restated accordingly to conform with the current period presentation.

The Group has five reportable operating segments:

Continuing operations

E-Commerce Group – provision of services to users using the mobile and Internet-based marketplace and provision of technical services for e-commerce operations.
Mobile Internet Group – provision of mobile Internet services, online advertising and commercial enterprise solutions.
Social Network Group – provision of services of online community and social networking websites and related online advertising.
Publishing Group – magazine and book circulation, sales of publication advertising and other related products.
Advertising Group – advertising sales of outdoor media assets and provision of outdoor media services; provision of media sales, event production and marketing services.

Discontinued operations

Television Operations – advertising sales in relation to satellite television channel operations and production of broadcasting programmes.

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

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TOM Group Limited 23 Interim Report 2017

Notes to the Condensed Consolidated Interim Financial Information

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5 Segment information (Continued)

The segment results for the six months ended 30 June 2017 are as follows:

	Unaudited Six months ended 30 June 2017	Unaudited Six months ended 30 June 2017	Unaudited Six months ended 30 June 2017	Unaudited Six months ended 30 June 2017	Unaudited Six months ended 30 June 2017	Unaudited Six months ended 30 June 2017	Unaudited Six months ended 30 June 2017
	Continuing				Operations				Discontinued Operations Television Operations HK$’000	Total HK$’000
	Technology Platform and Investments E-Commerce Group Mobile Internet Group Social Network Group Sub-total HK$’000 HK$’000 HK$’000 HK$’000				Media Business		Sub-total HK$’000	Total HK$’000
	E-Commerce Group HK$’000	Mobile Internet Group HK$’000	Social Network Group HK$’000		Publishing Group HK$’000	Advertising Group 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: Provision for impairment of other assets 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 Loss before taxation Expenditure for operating segment non-current assets Unallocated expenditure for non-current assets Total expenditure for non-current assets
	5,780	9,816	37,016	52,612	358,714	45,703	404,417	457,029	–	457,029
	–	–	(768)	(768)	–	(480)	(480)	(1,248)	–	(1,248)

	5,780	9,816	36,248	51,844	358,714	45,223	403,937	455,781	–	455,781


	1,640	(9,949)	2,847	(5,462)	72,704	(11,472)	61,232	55,770	–	55,770
	–	(812)	(1,022)	(1,834)	(51,318)	(7,787)	(59,105)	(60,939)	–	(60,939)

	1,640	(10,761)	1,825	(7,296)	21,386	(19,259)	2,127	(5,169)	–	(5,169)



	–	(12,243)	–	(12,243)	–	(10,006)	(10,006)	(22,249)	–	(22,249)
	(59,584)	176	–	(59,408)	942	–	942	(58,466)	–	(58,466)

	(59,584)	(12,067)	–	(71,651)	942	(10,006)	(9,064)	(80,715)	–	(80,715)


	–	1,025	4	1,029	2,485	278	2,763	3,792	–	3,792
	–	–	(6)	(6)	(1,674)	–	(1,674)	(1,680)	–	(1,680)

	–	1,025	(2)	1,023	811	278	1,089	2,112	–	2,112

	(57,944)	(21,803)	1,823	(77,924)	23,139	(28,987)	(5,848)	(83,772)	–	(83,772)


										(56,907)

										(140,679)


	–	1,450	1,281	2,731	47,426	30	47,456	50,187	–	50,187

										2

										50,189

Note (a):

Inter-segment interest income and inter-segment interest expenses amounted to HK$2,307,000 and HK$6,000 were included in the finance income and finance expenses from continuing operations respectively.

24 TOM Group Limited

Interim Report 2017

Notes to the Condensed Consolidated Interim Financial Information

5 Segment information (Continued)

The segment results for the six months ended 30 June 2016 are as follows:

	Unaudited Six months ended 30 June 2016 (Restated)	Unaudited Six months ended 30 June 2016 (Restated)	Unaudited Six months ended 30 June 2016 (Restated)	Unaudited Six months ended 30 June 2016 (Restated)	Unaudited Six months ended 30 June 2016 (Restated)	Unaudited Six months ended 30 June 2016 (Restated)	Unaudited Six months ended 30 June 2016 (Restated)
	Continuing				Operations			Total HK$’000	Discontinued Operations Television Operations HK$’000	Total HK$’000
	Technology Platform and Investments E-Commerce Group Mobile Internet Group Social Network Group Sub-total HK$’000 HK$’000 HK$’000 HK$’000					Media Business	Sub-total HK$’000
	E-Commerce Group HK$’000	Mobile Internet Group HK$’000	Social Network Group HK$’000		Publishing Group HK$’000	Advertising Group 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 item: 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 Loss before taxation Expenditure for operating segment non-current assets Unallocated expenditure for non-current assets Total expenditure for non-current assets	2,610 – 2,610 (2,516) – (2,516) (70,030) 1 – 1 (72,545) –	14,384 – 14,384 (10,796) (1,025) (11,821) 63 1,366 – 1,366 (10,392) 85	34,129 (693) 33,436 10,904 (1,023) 9,881 – 4 (53) (49) 9,832 1,401	51,123 (693) 50,430 (2,408) (2,048) (4,456) (69,967) 1,371 (53) 1,318 (73,105) 1,486	376,039 – 376,039 88,225 (53,923) 34,302 (371) 2,850 (1,674) 1,176 35,107 54,681	84,000 (180) 83,820 (4,287) (9,050) (13,337) – 352 – 352 (12,985) 82	460,039 (180) 459,859 83,938 (62,973) 20,965 (371) 3,202 (1,674) 1,528 22,122 54,763	511,162 (873) 510,289 81,530 (65,021) 16,509 (70,338) 4,573 (1,727) 2,846 (50,983) 56,249	4,283 – 4,283 (12,833) (1,700) (14,533) – – (10,505) (10,505) (25,038) 536	515,445 (873)
										514,572
										68,697 (66,721)
										1,976
										(70,338)
										4,573 (12,232)
										(7,659)
										(76,021) (46,358)
										(122,379)
										56,785 –
										56,785

Note (a):

Inter-segment interest income and inter-segment interest expenses amounted to HK$2,675,000 and HK$53,000 were included in the finance income and finance expenses from continuing operations respectively.

Inter-segment interest expenses amounted to HK$9,562,000 were included in the finance expenses from discontinued operations.

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TOM Group Limited 25 Interim Report 2017

Notes to the Condensed Consolidated Interim Financial Information

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5 Segment information (Continued)

The segment assets and liabilities at 30 June 2017 are as follows:

		Unaudited As at 30 June 2017
	Continuing	Operations		Discontinued Operations Television Operations HK$’000	Total HK$’000
	Technology Platform and Investments E-Commerce Group Mobile Internet Group Social Network Group Sub-total HK$’000 HK$’000 HK$’000 HK$’000	Media Business Publishing Group Advertising Group Sub-total 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
	104,463 351,671 42,566 498,700	1,133,860 207,754 1,341,614	1,840,314	1,304	1,841,618
	1,174,583 4,909 – 1,179,492	2,603 – 2,603	1,182,095	–	1,182,095
			32,011	–	32,011

			3,054,420	1,304	3,055,724


	23,538 69,146 16,484 109,168	272,238 62,742 334,980	444,148	4,269	448,417

			75,925	–	75,925
			21,336	44	21,380
			10,251	–	10,251
			2,734,721	–	2,734,721

			3,286,381	4,313	3,290,694

26 TOM Group Limited Interim Report 2017

Notes to the Condensed Consolidated Interim Financial Information

5 Segment information (Continued)

The segment assets and liabilities at 31 December 2016 are as follows:

		Audited As at 31 December 2016
	Continuing	Operations	Total HK$’000	Discontinued Operations Television Operations HK$’000	Total HK$’000
	Technology Platform and Investments E-Commerce Group Mobile Internet Group Social Network Group Sub-total HK$’000 HK$’000 HK$’000 HK$’000	Media Business Publishing Group Advertising Group Sub-total HK$’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	99,745 369,078 36,951 505,774 1,234,130 4,686 – 1,238,816 23,873 65,741 17,983 107,597	1,149,376 242,412 1,391,788 3,793 – 3,793 321,190 62,603 383,793	1,897,562 1,242,609 37,732 3,177,903 491,390 81,945 19,372 8,833 2,669,823 3,271,363	3,797 – – 3,797 10,265 – 44 – – 10,309	1,901,359 1,242,609 37,732
					3,181,700
					501,655 81,945 19,416 8,833 2,669,823
					3,281,672

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.

6 Provision for impairment of other assets

The provision made in the current period represented the provision for impairment of an available-for-sale financial asset of HK$12,243,000 (2016: Nil) held by the Mobile Internet Group and certain fixed assets of HK$10,006,000 (2016: Nil) of the outdoor media operation under the Advertising Group. These provisions were made with reference to the reduced estimated recoverable values of respective assets.

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TOM Group Limited 27 Interim Report 2017

Notes to the Condensed Consolidated Interim Financial Information

==> picture [36 x 780] intentionally omitted <==

7 Loss before net finance costs and taxation

Loss before net finance costs and taxation is stated after charging/crediting the following:

		2017	Unaudited Six months ended 30 June Total Continuing operations HK$’000 HK$’000	Unaudited Six months ended 30 June Total Continuing operations HK$’000 HK$’000	2016 (Restated)
	Continuing operations HK$’000	Discontinued operations HK$’000		Continuing operations HK$’000	Discontinued operations HK$’000	Total HK$’000
Charging: Depreciation (note 13) Amortisation of other intangible assets (note 15) Provision for impairment of an available-for-sale financial asset Loss on disposal of fixed assets Exchange loss, net Crediting: Dividend income from available-for-sale financial assets Gain on disposal of subsidiaries (note a) Gain on disposal of a former subsidiary (note b) Gain on disposal of fixed assets Exchange gain, net			15,574 46,396 12,243 – 648 447 1,186 – 106 –	17,791 48,318 574 329 1,006 474 – 3,361 – –	1,018 682 – – – – – – – 15	18,809 49,000 574 329 1,006


	15,574	–
	46,396	–
	12,243	–
	–	–
	648	–

						474 – 3,361 – 15


	447	–
	1,186	–
	–	–
	106	–
	–	–

Notes:

(a) In March 2017, a subsidiary of the Advertising Group entered into an agreement to dispose its entire interests in two subsidiaries engaging in outdoor media business in Shandong, at a consideration of RMB1,000,000 (approximately HK$1,130,000). Upon the disposal of equity interests in the two subsidiaries, a consideration payable of RMB2,500,000 (approximately HK$2,825,000) was written back. As a result, a gain on disposal amounting to approximately HK$1,186,000 (include the write-back of consideration payable) was recognised in the condensed consolidated interim income statement for the period ended 30 June 2017.
(b) In January 2016, the Group recognised a gain upon completion of the disposal of its entire equity interest in a former subsidiary (deconsolidated in 2013) at a consideration of RMB3,060,000 (approximately HK$3,611,000).

28 TOM Group Limited

Interim Report 2017

Notes to the Condensed Consolidated Interim Financial Information

8 Finance costs, net

Finance costs, net
		2017	Unaudited Six months ended 30 June Total Continuing operations HK$’000 HK$’000		2016 (Restated)
	Continuing operations HK$’000	Discontinued operations HK$’000		Continuing operations HK$’000	Discontinued operations HK$’000	Total HK$’000
Interest and borrowing costs on bank loans Interest on other loans Bank interest income Interest income/(expenses) on inter-company loans (note)			(31,052) – 1,489 – (29,563)	(27,515) – 1,944 9,562 (16,009)	– (943) – (9,562) (10,505)	(27,515) (943) 1,944 –
	(31,052)	–
	–	–
	1,489	–
	–	–
						(26,514)
	(29,563)	–

Note:

There was no interest income and interest expenses on inter-company loans between the continuing operations and discontinued operations for the period ended 30 June 2017 (2016: Interest income of HK$9,562,000 and interest expenses of HK$9,562,000 between the continuing operations and discontinued operations were eliminated on consolidation).

9 Taxation

Hong Kong profits tax has been provided for at the rate of 16.5% (2016: 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 to the condensed consolidated interim income statement represents:

	Unaudited Six months ended 30 June 2017 2016 HK$’000 HK$’000	Unaudited Six months ended 30 June 2017 2016 HK$’000 HK$’000
Overseas taxation Under-provision in prior years Deferred taxation Taxation charge	4,113 534 897 5,544	9,106 706 1,708
		11,520

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

No taxation was incurred by discontinued operations for the period ended 30 June 2017 (2016: Nil).

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TOM Group Limited 29 Interim Report 2017

Notes to the Condensed Consolidated Interim Financial Information

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10 Discontinued operations

In view of the television advertising market downturn and the tough regulatory environment, the Group ceased the television operations which were mainly engaged in advertising sales in relation to satellite television channel operations and production of broadcasting programmes in Mainland China by the end of 2016. Accordingly, provision for closure costs of HK$7,636,000 was made in December 2016, of which HK$4,208,000 was utilised during the period ended 30 June 2017.

(i) Analysis of the results of discontinued operations is as follows:

	Unaudited Six months ended 30 June 2017 2016 HK$’000 HK$’000	Unaudited Six months ended 30 June 2017 2016 HK$’000 HK$’000
Revenue (note 5) Operating costs Finance costs (note 8) Loss before taxation from discontinued operations Taxation Loss for the period from discontinued operations Attributable to: Non-controlling interests Equity holders of the Company	– – – – – – – – –	4,283 (18,816) (10,505)
		(25,038) –
		(25,038)
		(3) (25,035)
		(25,038)

30 TOM Group Limited

Interim Report 2017

Notes to the Condensed Consolidated Interim Financial Information

10 Discontinued operations (Continued)

(ii) Net cash flows from discontinued operations are as follows:

	Unaudited Six months ended 30 June 2017 2016 HK$’000 HK$’000 (4,208) (23,857) – (536) 3,043 24,010 (1,165) (383)
Net cash outflows from operating activities Net cash outflows from investing activities Net cash inflows from financing activities (note) Total net cash outflows	(4,208) – 3,043 (1,165)

Note:

During the period ended 30 June 2017, inter-company loans amounted to HK$3,043,000 (2016: HK$24,010,000) provided by the continuing operations to the discontinued operations were included.

11 Dividends

No dividends had been paid or declared by the Company for the six months ended 30 June 2017 (2016: Nil).

12 Loss per share

(a) Basic

Continuing operations

The calculation of basic loss per share is based on consolidated loss from continuing operations attributable to equity holders of the Company of HK$138,305,000 (2016 (restated): HK$104,032,000) and the weighted average of 3,893,270,558 (2016: 3,893,270,558) ordinary shares in issue during the period.

Discontinued operations

The calculation of basic loss per share is based on consolidated loss from discontinued operations attributable to equity holders of the Company of HK$Nil (2016 (restated): HK$25,035,000) and the weighted average of 3,893,270,558 (2016: 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 2017 (2016: Same).

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TOM Group Limited 31 Interim Report 2017

Notes to the Condensed Consolidated Interim Financial Information

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13 Fixed assets

During the period, major fixed assets acquired by the Group were leasehold improvement amounting to HK$1,712,000.

	HK$’000 97,465 5,765 (460) (18,809) (757) 83,204
Net book value At 1 January 2016 Additions Disposals Depreciation charge Exchange adjustment At 30 June 2016 (unaudited) Net book value At 1 January 2017 Additions Disposals Disposals of subsidiaries Depreciation charge Impairment charge (note 6) Exchange adjustment At 30 June 2017 (unaudited)
	65,508
	2,802
	(44)
	(389)
	(15,574)
	(10,006)
	2,176

	44,473

32 TOM Group Limited

Interim Report 2017

Notes to the Condensed Consolidated Interim Financial Information

14 Goodwill

Goodwill
	HK$’000 641,612 (1,604) 640,008
Net book value At 1 January 2016 Exchange adjustment At 30 June 2016 (unaudited) Net book value At 1 January 2017 Exchange adjustment At 30 June 2017 (unaudited)
	621,064
	1,571

	622,635

15 Other intangible assets

	Concession rights HK$’000	Publishing rights HK$’000	Programme and film rights HK$’000	Trademarks and domain names HK$’000	Total HK$’000 75,087 51,020 (49,000) 565 77,672
Net book value At 1 January 2016 Additions Amortisation charge Exchange adjustment At 30 June 2016 (unaudited) Net book value At 1 January 2017 Additions Disposals of subsidiaries Amortisation charge Exchange adjustment At 30 June 2017 (unaudited)	4,809 – (509) (103) 4,197	68,796 50,491 (47,772) 662 72,177	996 529 (682) – 843	486 – (37) 6 455
	3,596	71,810	–	423	75,829
	–	47,387	–	–	47,387
	(3,084)	–	–	–	(3,084)
	(240)	(46,116)	–	(40)	(46,396)
	35	3,774	–	24	3,833

	307	76,855	–	407	77,569

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TOM Group Limited 33 Interim Report 2017

Notes to the Condensed Consolidated Interim Financial Information

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16 Investments accounted for using the equity method

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

	Unaudited 30 June 2017 HK$’000	Audited 31 December 2016 HK$’000
Associated companies	1,182,095	1,242,609

The share of net losses recognised in the condensed consolidated interim income statement are as follows:

	Unaudited Six months ended 30 June 2017 2016 HK$’000 HK$’000	Unaudited Six months ended 30 June 2017 2016 HK$’000 HK$’000
Associated companies	(58,466)	(70,338)

Interests in associated companies

Movement in interests in associated companies during the period:

	Unaudited Six months ended 30 June 2017 2016 HK$’000 HK$’000	Unaudited Six months ended 30 June 2017 2016 HK$’000 HK$’000
At 1 January Share of profits less losses Share of other reserve of an associated company Dividend paid Advance to an associated company Exchange adjustment At 30 June (unaudited)	1,242,609 (58,466) – (2,545) 93 404 1,182,095	1,372,311 (70,338) 6,773 (2,508) 473 (2,976)
		1,303,735

34 TOM Group Limited

Interim Report 2017

Notes to the Condensed Consolidated Interim Financial Information

16 Investments accounted for using the equity method (Continued)

Interests in associated companies (Continued)

Note:

In June 2016, the shareholders of Ule Holdings Limited (“Ule Holdings”), a material associated company of the Group, resolved the launch of share incentive options of Ule Holdings (“Ule Share Incentive Options”). Under the Ule Share Incentive Options, a total of 100,000,000 ordinary shares (based on the current par value of US$0.00001 each) were reserved, of which 43.71% of the Ule Share Incentive Options representing 43,711,860 shares (“Ule Major Shareholder Options”) were approved to be granted to one of Ule Holdings’ major shareholders (“Ule Major Shareholder”), subject to the completion of a deed (“Deed”) signed by Ule Holdings and all of its shareholders, and the remaining 56.29% of the Ule Share Incentive Options representing 56,288,140 shares (“Ule Other Options”) were approved to be granted to directors, employees and consultants of Ule and such other persons contributing to Ule, subject to determination of the details of Ule Other Options by the Ule remuneration committee (“Ule Committee”).

As if the Ule Share Incentive Options are all granted and fully vested, Ule Holdings would be held as to 43.71%, 38.23%, 13.00% and 5.06% by Ule Major Shareholder, a non-wholly owned subsidiary of the Group, certain investors and holders of Ule Other Options respectively on a fully diluted basis.

In June 2016, the Deed was signed by Ule Holdings, the Ule Major Shareholder and remaining shareholders of Ule Holdings, under which it was mutually agreed that Ule Holdings granted Ule Major Shareholder Options to the Ule Major Shareholder for its contributions to Ule’s business over the past years. The Ule Major Shareholder Options granted to the Ule Major Shareholder are only exercisable upon the completion of a qualified initial public offering (“Qualified IPO”) of Ule Holdings. The exercise price of each Ule Major Shareholder Option is at the par value of each share on the exercise date. The Deed will be terminated if the Qualified IPO of Ule Holdings is not completed within 10 years from the date of the Deed. As at 30 June 2017, Ule Major Shareholder Options are not yet exercisable as the Qualified IPO has not occurred. During the period ended 30 June 2016, Ule Holdings recognised the share-based compensation expense in relation to the Ule Major Shareholder Options of approximately RMB13,784,000. The Group’s share of this expense amounted to approximately HK$6,773,000.

Up to date, no option under the Ule Other Options has been granted.

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TOM Group Limited 35 Interim Report 2017

Notes to the Condensed Consolidated Interim Financial Information

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17 Trade and other receivables

Trade and other receivables
	Unaudited 30 June 2017 HK$’000	Audited 31 December 2016 HK$’000
Trade receivables Prepayments, deposits and other receivables	241,538 274,911 516,449	266,280 290,500
		556,780

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 180 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.

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

	Unaudited 30 June 2017 HK$’000	Audited 31 December 2016 HK$’000
Current 31 – 60 days 61 – 90 days Over 90 days Less: Provision for impairment Represented by: Receivables from related companies Receivables from third parties	82,804 66,207 39,823 112,516 301,350 (59,812) 241,538 – 241,538 241,538	100,774 62,527 42,622 123,294
		329,217 (62,937)
		266,280
		50 266,230
		266,280

36 TOM Group Limited

Interim Report 2017

Notes to the Condensed Consolidated Interim Financial Information

18 Restricted cash

At 30 June 2017, NT$27,892,000 (approximately HK$7,143,000) (31 December 2016: NT$28,806,000 (approximately HK$6,991,000)) was pledged in favour of certain publishing distributors as retainer fee for potential sales return, and banks as security for credit card and advance receipt, and quality assurance for government projects in Taiwan, and RMB1,146,000 (approximately HK$1,306,000) (31 December 2016: RMB444,000 (approximately HK$497,000)) was pledged in favour of the courts for legal proceedings in Mainland China.

19 Trade and other payables

Trade and other payables
	Unaudited 30 June 2017 HK$’000	Audited 31 December 2016 HK$’000 102,080 439,910 541,990
Trade payables Other payables and accruals	93,863 393,227 487,090

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 30 June 2017 HK$’000	Audited 31 December 2016 HK$’000 39,301 15,747 4,898 42,134 102,080 102,080
Current 31 – 60 days 61 – 90 days Over 90 days Represented by: Payables to third parties	32,780 13,686 4,552 42,845 93,863 93,863

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TOM Group Limited 37 Interim Report 2017

Notes to the Condensed Consolidated Interim Financial Information

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20 Movements in borrowings

20	Movements in borrowings
21 22		Short-term bank loans HK$’000		Long-term bank loans HK$’000	Total HK$’000 2,570,310 793,152 (709,290) 3,011 2,657,183
	As at 1 January 2016 Borrowings Repayments Exchange adjustment As at 30 June 2016 (unaudited) As at 1 January 2017 Borrowings Repayments Exchange adjustment As at 30 June 2017 (unaudited) Share capital	98,884 131,615 (136,401) 1,383 95,481		2,471,426 661,537 (572,889) 1,628 2,561,702
		28,517		2,641,306	2,669,823
		47,944		56,000	103,944
		(17,287)		(32,785)	(50,072)
		1,650		9,376	11,026

		60,824		2,673,897	2,734,721


			Ordinary shares of HK$0.1 each No. of shares HK$’000 5,000,000,000 500,000 3,893,270,558 389,328
	Company – Authorised At 1 January and 30 June 2016 and 1 January and 30 June 2017 Company – Issued and fully paid At 1 January and 30 June 2016 and 1 January and 30 June 2017 Pledge of assets		5,000,000,000 3,893,270,558

Save as disclosed in note 18, the Group had no pledge of assets as at 30 June 2017 (31 December 2016: Nil).

38 TOM Group Limited

Interim Report 2017

Notes to the Condensed Consolidated Interim Financial Information

23 Contingent liabilities

As at 30 June 2017, the Group had no significant contingent liabilities.

24 Capital commitments

The Group’s maximum capital commitments are as follows:

	Unaudited 30 June 2017 HK$’000	Audited 31 December 2016 HK$’000
Capital injection for an investment – Contracted but not provided for	87	263

25 Related party transactions

A summary of significant related party transactions, in addition to those disclosed in note 17 to the condensed consolidated interim financial information, is set out below:

(a) Sales of goods and services

Sales of goods and services
	Unaudited
	Six months ended 30 June
	2017	2016
	HK$’000	HK$’000
Sales to
– A subsidiary of CKHH	35	1,249
– Associated companies	5,708	2,694

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TOM Group Limited 39 Interim Report 2017

Notes to the Condensed Consolidated Interim Financial Information

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25 Related party transactions (Continued)

(b) Purchase of goods and services

Purchase of goods and services
	Unaudited
	Six months ended 30 June
	2017	2016
	HK$’000	HK$’000
Purchase of services payable to
– Non-controlling interests of a subsidiary	2,280	4,445
Rental payable to
– Non-controlling interests of subsidiaries
and their subsidiaries	581	1,082
Service fees payable to
– CKHH and its subsidiaries	1,880	2,128
Interest expenses payable to
– Non-controlling interests of a subsidiary	–	943

A substantial shareholder of the Company granted guarantees to the Company at a guarantee fee equivalent to 0.5% per annum (2016: Same) for aggregate principal amount outstanding under loan facilities of HK$3,200 million (2016: Same). During the period, guarantee fee amounted to approximately HK$6,211,000 was paid by the Company (2016: HK$6,098,000) to the substantial shareholder.

(c) Key management compensation

During the period ended 30 June 2017, 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) (2016: Nil).

26 Approval of interim financial information

The condensed consolidated interim financial information was approved by the Board of Directors on 2 August 2017.

40 TOM Group Limited Interim Report 2017

Disclosure of Interests

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

As at 30 June 2017, 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 Director Capacity	Number of shares of the Company Personal Family Corporate Other Approximate percentage of interests interests interests interests Total shareholding
Frank John Sixt Beneficial owner Yeung Kwok Mung Interest of spouse Mak Soek Fun, Angela Beneficial owner	492,000 – – – 492,000 0.01% – 30,000 – – 30,000 Below 0.01% 44,000 – – – 44,000 Below 0.01%

Save as disclosed above, as at 30 June 2017, 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 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.

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TOM Group Limited 41 Interim Report 2017

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Disclosure of Interests

Interests and Short Positions of Substantial Shareholders

As at 30 June 2017, 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 Companyheld	shareholding
CKHH	Interest of controlled	1,430,120,545 (L)	36.73%
	corporations	(Notes 1, 2 & 3)
CKH	Interest of controlled	1,430,120,545 (L)	36.73%
	corporations	(Notes 1, 2 & 3)
Cheung Kong Investment	Interest of controlled	476,341,182 (L)	12.23%
Company Limited	corporations	(Note 1)
Cheung Kong Holdings	Interest of controlled	476,341,182 (L)	12.23%
(China) Limited	corporations	(Note 1)
Sunnylink Enterprises	Interest of a controlled	476,341,182 (L)	12.23%
Limited	corporation	(Note 1)
Romefield Limited	Beneficial owner	476,341,182 (L)	12.23%
		(Note 1)
CK Hutchison Global	Interest of controlled	952,683,363 (L)	24.47%
Investments Limited	corporations	(Note 2)
HWL	Interest of controlled	952,683,363 (L)	24.47%
	corporations	(Note 2)
Hutchison International	Interest of a controlled	952,683,363 (L)	24.47%
Limited	corporation	(Note 2)
Easterhouse Limited	Beneficial owner	952,683,363 (L)	24.47%
		(Note 2)

42 TOM Group Limited Interim Report 2017

Disclosure of Interests

			Approximate
		No. of shares of	percentage of
Name	Capacity	the Companyheld	shareholding
Chau Hoi Shuen	Interest of controlled	1,003,432,363 (L)	25.77%
	corporations	(Notes 4, 5 & 6)
Composers International	Interest of controlled	1,003,432,363 (L)	25.77%
Limited	corporations	(Notes 4, 5 & 6)
Cranwood Company	Beneficial owner &	995,078,363 (L)	25.55%
Limited	interest of controlled	(Notes 4 & 6)
	corporations
Schumann International	Beneficial owner	580,000,000 (L)	14.90%
Limited		(Notes 4 & 6)
Handel International	Beneficial owner	348,000,000 (L)	8.94%
Limited		(Notes 4 & 6)
Lin Tian Maw	Beneficial owner,	526,518,000 (L)	13.52%
	interest of child
	under 18 and/or
	spouse & interest of
	controlled corporations

(L) denotes a long position

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, CKHH, CKH, 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.

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TOM Group Limited 43 Interim Report 2017

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Disclosure of Interests

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

(3) A company Casaurina Investments Limited, an Associate of CKH, which in turn is a wholly-owned subsidiary of CKHH, holds 1,096,000 shares of the Company.

By virtue of the SFO, CKHH and CKH are all deemed to be interested in the 1,096,000 shares of the Company held by Casaurina Investments Limited.

(4) Schumann International Limited and Handel International Limited are companies controlled by Cranwood Company Limited (“Cranwood Company Limited (Liberia)”, incorporated in Liberia), which in turn is a wholly-owned subsidiary of Composers International Limited. Composers International Limited is wholly owned by Ms. Chau Hoi Shuen.

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

(5) A company Cranwood Company Limited (“Cranwood Company Limited (BVI)”, incorporated in British Virgin Islands), a wholly-owned subsidiary of Composers International Limited, which in turn is wholly owned by Ms. Chau Hoi Shuen, holds 8,354,000 shares of the Company.

By virtue of the SFO, Ms. Chau Hoi Shuen and Composers International Limited are all deemed to be interested in 8,354,000 shares of the Company held by Cranwood Company Limited (BVI) directly.

(6) Cranwood Company Limited (Liberia), Schumann International Limited, Handel International Limited and Cranwood Company Limited (BVI) have charged 67,078,363, 580,000,000, 348,000,000 and 8,354,000 shares of the Company respectively in favour of CKHH on 21 December 2015.

Save as disclosed above, as at 30 June 2017, 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.

44 TOM Group Limited Interim Report 2017

Corporate Governance

Audit Committee

The Company has established the Audit Committee in January 2000. The Audit Committee currently consists of three Independent Non-executive Directors and one Non-executive Director. The Chairman of the Audit Committee has the appropriate professional qualifications, accounting or related financial management expertise. It is chaired by Mr. Cheong Ying Chew, Henry and the other members include Mr. James Sha, Mrs. Lee Pui Ling, Angelina and Mr. Ip Yuk-keung, Albert. Written terms of reference in compliance with the Listing Rules have been adopted for the Audit Committee.

The principal duties of the Audit Committee include, among other things, overseeing and reviewing the adequacy and effectiveness of the risk management and internal control systems, oversight of the relationship with external auditor, review of the Group’s financial information and monitoring the corporate governance of the Group including compliance with statutory and Listing Rules requirements, reviewing of scope, extent and effectiveness of the activities of the Group’s financial reporting system and internal audit function, engages independent legal and other advisors and conducting investigations as it so determines to be necessary.

The unaudited condensed consolidated interim financial information of the Group for the six months ended 30 June 2017 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 2017, save and except Code Provision A.5 which is with respect to the nomination committee.

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, experience and expertise appropriate for the requirements of the businesses of the Group, with due regard to the benefits of diversity on the Board, 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 2017.

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TOM Group Limited 45 Interim Report 2017

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Other Information

Purchase, Sale or Redemption of Shares

During the six months ended 30 June 2017, neither the Company nor any of its subsidiaries 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.

Public Float

On 30 September 2015, the Board made an announcement regarding the public float of the Company being below the minimum 25% of the total issued share capital of the Company required to be held by the public pursuant to Rule 8.08(1)(a) of the Listing Rules, details of which are as set out in the announcement dated 30 September 2015.

As at the date of this report, based on information available to the Company and within the knowledge of the Directors, the issued share capital of the Company held by the public remains below the minimum public float percentage.

The Company is still in the process of considering steps to restore the public float to 25% so as to be in compliance with the Listing Rules.

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 2016 Annual Report of the Company are set out below:

Name of Director Details of the Changes

Ip Yuk-keung, Albert Ceased to be a Research Fellow of Singapore Management University’s Institute for Financial Economics on 31 March 2016

Appointed as a member of the Advisory Committee on Accounting and Finance at Hong Kong Polytechnic University on 1 April 2017

Appointed as a member of Hong Kong University of Science and Technology Business School on 1 June 2017

46 TOM Group Limited Interim Report 2017

AI assistant

TOM Group Limited — Interim / Quarterly Report 2017

50566_rns_2017-08-29_32638c86-dc13-4afb-b897-4cbfc0bada30.pdf

Contents

Definitions

Definitions

Corporate Information

Board of Directors

Audit Committee

Remuneration Committee

Auditor

Registered Office

Head Office and Principal

Authorised Representatives

Place of Business

Principal Share Registrar

Branch Share Registrar

Principal Bankers

Website Address

Stock Code

Chairman’s Statement

Frank John Sixt Chairman

Management’s Discussion and Analysis

Financial Highlights

Management’s Discussion and Analysis

Business Review

Technology Platform and Investments – continue growth trajectory with impressive results

Management’s Discussion and Analysis

Media Business – maintaining leadership in publishing operation; accelerating restructuring efforts on traditional advertising business

Liquidity and Financial Resources

Management’s Discussion and Analysis

Charges on Group Assets

Contingent Liabilities

Subsequent Events

Foreign Exchange Exposure

Employee Information

Management’s Discussion and Analysis

Past Performance and Forward-looking Statements

Disclaimer:

Non-GAAP measures

Independent Review Report

Introduction

Scope of Review

Conclusion

Condensed Consolidated Interim Income Statement

Interim Financial Information

Condensed Consolidated Interim Income Statement

Interim Financial Information

Condensed Consolidated Interim Statement of Comprehensive Income

Interim Financial Information

Condensed Consolidated Interim Statement of Financial Position

Interim Financial Information

Condensed Consolidated Interim Statement of Financial Position

Interim Financial Information

Interim Financial Information

Interim Financial Information

Condensed Consolidated Interim Statement of Cash Flows

1 Basis of preparation

2 Accounting policies

3 Critical accounting estimates and judgements

4 Financial risk management

(a) Financial risk factors

(b) Fair value estimation

4 Financial risk management (Continued)

(b) Fair value estimation (Continued)

5 Segment information

Continuing operations

Discontinued operations

5 Segment information (Continued)

Note (a):

5 Segment information (Continued)

Note (a):

5 Segment information (Continued)

5 Segment information (Continued)

6 Provision for impairment of other assets

7 Loss before net finance costs and taxation

8 Finance costs, net

9 Taxation

10 Discontinued operations

10 Discontinued operations (Continued)

TOM Group Limited Interim / Quarterly Report 2017