A8 New Media : ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2018

(Incorporated in the Cayman Islands with limited liability)

Stock Code: 00800

ENVIRONMENTAL, SOCIAL AND 2018 GOVERNANCE REPORT

About this Report

OBJECTIVE OF THIS REPORT

This report is the third Environmental, Social and Governance report ("this Report" or "ESG Report") published by A8 New Media Group Limited ("the Company") and its subsidiaries (collectively referred to as the "Group" or "We"). It reflects the Group's commitment to transparency and obligation commitment, and further elaborates the sustainable development plan and performance of the Group.

SCOPE OF THIS REPORT

This Report sets out the performance of the Group in respective areas on environment, society and governance for the 2018 financial year ("the Year"), covering core businesses of the Group - digital entertainment services and property investment business. Property investment segment invests property for rental and management in the People's Republic of China (the "PRC"). As property management had been outsourced to a professional management company, this report does not cover the relevant property management business. However, the Group required that the property management company shall establish and implement relevant environmental and social policies when engaging its service.

For details of the Group's other aspects including corporate governance, regulatory matters, and director's information, please refer to the 2018 annual report of the Company.

PRINCIPLE OF REPORT PREPARATION AND IMPLEMENTATION

This Report is prepared in accordance with the revised Environmental, Social and Governance Reporting Guide published by The Stock Exchange of Hong Kong Limited in December 2015. The content of this Report is determined by a set of systematic procedures. The relevant procedures include: assessing the materiality and relevance of identified environmental and social aspects, preparing and verifying the information reported, and reviewing and responding to the comments from the stakeholders towards this Report.

The Company formed an ESG report working group to optimize and implement the relevant initiatives, and to collect, formulate statistics, and analyze the environmental and social impact in the course of operation of the Group.

A8 New Media Group Limited Environmental, Social and Governance Report 2018

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Statement from the Chairman of the Board

The Group has long been committed to creating values in economic, social and environmental areas for all stakeholders, including its shareholders, employees, and customers and etc. Not only does the Group focus on business development, but also concerns social responsibilities. The Group has been in strict compliance to the corporate governance code, while emphasizing environmental protection, trying its best to reduce pollution to the environment during daily business operation. The Group has hired and trained different talents. The Group treats all its employees with fair and respectful manner, and offers a working environment for them to realise their potentials. During the course of business operation, the Group is committed to complying moral standards and encouraging suppliers and contractors to comply with the level of corporate responsibility standard that is comparable to or higher than that of the Group. The Group deeply understands that community is the soil for enterprises' growth. To realise the mutual flourishment of local community and the Group, we devoted to public affairs, utilising our influence, continuously involve in social welfare activities to benefit the society.

Introduction of A8 New Media Group

A8 New Media Group Limited was founded in May 2000 and listed on the main board of the Hong Kong Stock Exchange in June 2008 (stock code: 00800.HK). The principle business scope of the Group covers digital entertainment services and property investment business. In which, digital entertainment services segment primarily covers music entertainment, games related service, and film and television production in the PRC, and the property investment segment primarily engages in leasing and management in the PRC.

The Group steps into the pan-entertainment industry, and commits in various areas of film and television development, games, cultural industries parks, and online literature. Capitalizing on its extensive and quality IP ("Intellectual Property") accumulated, the Group is committed to building up the IP which is most popular among the new generation in the PRC, by utilizing the resources from its business segments. Surpassing everyone's expectation as always, the Group creates an entertainment platform for young people with a mission of sharing happiness. Emphasizing the core value of "keeping an eye on the young community, honesty, being responsible, sharing happiness, saying no to mediocrity, embracing changes, and complementing one another", the Group is committed to creating a harmonious ecological chain, and proactively pursuing business with collaborators, adhering on innovation, and achieving win-win situation.

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THE PARTICIPATION OF STAKEHOLDERS

The primary stakeholders of the Group includes its shareholders, employees, customers, suppliers, regulatory authorities, local community and etc. The Group attaches great importance to the participation of the stakeholders and understands that each stakeholder has its own expectation on our sustainable development. As such, the Group is devoted to maintaining communications and establishing long-term partnership with the stakeholders through different channels, formulating business policies with reference to such strategies, so as to increase the transparency of the Group and confidence of the stakeholders on the Group's implementation of sustainable development.

Stakeholders	Communication Channels	Expectations and Objectives
Shareholders/investors	General meetings, earnings	Communication of Financial results and
	conference, reports and	business development of the Group
	announcements, etc.
	ESG report	Publishing information of investments
		and contributions made to the
		community, business sustainable
		development matters of the Group
	Direct communication	Significant company matters, business
		development
Government and	Meetings, written reports and	Implementation of government policies,
regulatory authorities	information disclosure	compliance with regulations and
		laws, participation in concerning local
		construction development, business
		credibility and corporate social
		responsibilities
Community	Community charitable and volunteer	Activities which are beneficial to the
	activities	community
Suppliers	Direct communications with games	Continuous improvements and
	research & development companies,	optimization on mobile games content
	customer feedbacks
	Direct communications with film and	Obtaining the scripts of films and
	drama screenwriters and IP owners	dramas, purchasing films and dramas'
		shooting rights of IP
Employees and technical	Training programs	Business knowledge training
team
	Work-life balance activities	Health training
	Regular performance reviews	Implementation and execution of
		sustainable development strategies
Customers	Daily operation/communication	Improving product customer
		satisfaction and enhancing customer
		experience

A8 New Media Group Limited Environmental, Social and Governance Report 2018

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ENVIRONMENTAL

As the principle business of the Group are digital entertainment services and property investment business, no actual impact was created on the environment under normal circumstances. The Group undertakes environmental protection as part of its corporate social responsibilities and advocates corporate culture of resource-conservation and efficiency. The Group tries its best to reduce waste and enhance efficiency in its daily office operation.

EMISSIONS

Regarding aspects of air and greenhouse gas emissions, sewage discharge and generation of hazardous and non-hazardous waste, the Group has strictly complied with laws and regulations of the PRC in relation to environments.

Emissions during the daily operations of the Group mainly comprise wastewater discharges, waste disposal and office electricity consumption from the daily operation of the office and daily work and living of the staff, as well as greenhouse gas emission from use of vehicles by the Group. Waste disposal mainly refers to the non-toxic and non-hazardous solid waste generated from daily work.

Emission of Waste Gases

Emission of waste gases of the Group is mainly attributable to its self-owned vehicle.

Types of emission	Emission volume (kg)
Nitrogen oxides (NOx)	771.89
Sulfur oxides (SOx)	22.23
Particle materials (PM)	52.42

Emission of Greenhouse Gases

To address the emission of greenhouse gases, the Group's reported contents cover two aspects, Aspect 1, which covers the emission of greenhouse gases directly produced by the businesses that are owned or controlled by the Group, which is a vehicle owned by the Group and Aspect 2, which covers the emission of greenhouse gases in respect of the indirect power attributable to the electrical power that is consumed internally/purchased or obtained by the Group.

Total emission of greenhouse gases (kg)	Density (kg/sq.m.)	Emission volume (kg)
Aspect 1	0.58	4,095.81
Aspect 2	58.77	415,630.68

Total emission of greenhouse gases in Aspect 2 increased by 48% compared with 2017 (280,141.65 in 2017), mainly due to the acquisition of 上海木七七網絡科技有限公司 (Shanghai Mu77 Network Technology Co., Ltd.) by the Group in 2018, which resulted in an increase in the office space of the Group.

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