UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM
20-F/A

Amendment
No. 1

(Mark One)



| ̈  | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|-- | ----------------------------------------------------------------------------------------------
|OR
|x  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934          
|   | For the fiscal year ended December 31, 2015.                                                  
|OR
| ̈  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934      
|   | For the transition period from            to           .                                      
|OR
| ̈  | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934   
|   |                                                                                               
|   | Date of event requiring this shell company report                                             



Commission file number: 001-34988



SKY-MOBI
LIMITED

(Exact name of Registrant as specified
in its charter)



N/A(Translation of Registrant’s name into English)



Cayman Islands(Jurisdiction of incorporation or organization)



10/F, Building B, United Mansion
No. 2 Zijinghua Road, Hangzhou
Zhejiang 310013
People’s Republic of China(Address of principal executive offices)



Fischer Xiaodong Chen, Chief Financial
Officer
Tel: +(86) 571-8777-0978
E-mail: ir@sky-mobi.com
Facsimile number: +(86) 571-8775-8616
10/F, Building B, United Mansion
No. 2, Zijinghua Road, Hangzhou
Zhejiang 310013
People’s Republic of China(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)










Securities registered or to be registered
pursuant to Section 12(b) of the Act.





|Title of Each Class                                                                                 |  | Name of Each Exchange on Which Registered
|--------------------------------------------------------------------------------------------------- |  | -----------------------------------------
|American Depositary Shares, each representing eight
common shares of par value US$0.00005 per share |  | NASDAQ Global Market                     





Securities registered or to be registered
pursuant to Section 12(g) of the Act.



NONE(Title of Class)



Securities for which there is a reporting
obligation pursuant to Section 15(d) of the Act.



NONE(Title of Class)










Indicate the number of outstanding shares of each of the issuer’s
classes of capital or common stock as of the close of the period covered by the annual report:



225,845,686 common shares of par value US$0.00005 per
share, as of December 31, 2015.



Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act.  ̈
Yes     x   No



If this report is an annual or transition report, indicate by
check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934.  ̈ Yes     x
  No



Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. x Yes      ̈
  No



Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).  ̈ Yes    
 ̈   No



Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer”
in Rule 12b-2 of the Exchange Act. (Check one):



 ̈ Large
accelerated filer            ̈ Accelerated
filer          x  Non-accelerated
filer



Indicate by check mark which basis of accounting the registrant
has used to prepare the financial statements included in this filing:



| |  ̈ | U.S. GAAP
| | - | ---------



| | x | International Financial Reporting Standards as issued by the International Accounting
Standards Board
| | - | -----------------------------------------------------------------------------------------------------



| |  ̈ | Other
| | - | -----



If “Other” has been checked in response to the previous
question, indicate by check mark which financial statement item the registrant has elected to follow.  ̈  Item 17     ̈  Item 18



If this is an annual report, indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  ̈  Yes     x No



(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)



Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.  ̈  Yes     ̈  No













TABLE OF CONTENTS





|         |                      |  
|-------- | -------------------- | -
|PART III |                      | 1
|         |                      |  
|ITEM 17. | FINANCIAL STATEMENTS | 1
|         |                      |  
|ITEM 18. | FINANCIAL STATEMENTS | 1
|         |                      |  
|ITEM 19. | EXHIBITS             | 1





ii









Amendment No.1

Explanatory Note



Sky-Mobi Limited (the “Company”)
is filing this Form 20-F/A to include in our Annual Report on Form 20-F for the year ended December 31, 2015 (the “Annual
Report”), pursuant to Rule 3-09 of Regulation S-X under the Securities Exchange Act of 1934, as amended, financial
statements and accompanying notes of Shanghai Mihoyo Network Technology Co., Ltd. and its subsidiaries (collectively, “Mihoyo”).
As of December 31, 2013 and 2014 and August 31, 2015, the Company held a 15% equity interest in Mihoyo. On September 1, 2015, the
Company lost significant influence over Mihoyo’s financial and operational policies after its re-organization and its investment
in Mihoyo has been classified as available-for-sale investment based on the carrying value of the investment since then.





Rule 3-09 of Regulation S-X provides
that if a 50%-or-less-owned person accounted for by the equity method meets the first or third condition of the significant subsidiary
tests set forth in Rule 1-02(w) of Regulation S-X, substituting 20% for 10%, separate financial statements for such 50%-or-less-owned
person shall be filed. As Mihoyo met such test as of and for the eight months ended August 31, 2015, the Company has included in
this Form 20-F/A the financial statements as of and for the eight months ended August 31, 2015. Items 17, 18 and 19 included
in the Annual Report are the only portion of the Annual Report being supplemented or amended by this Form 20-F/A.



This Form 20-F/A does not change any
other information set forth in the Annual Report filed by the Company for the year ended December 31, 2015.



In connection with the filing of this Form
20-F/A and pursuant to rules of the Securities and Exchange Commission (the “SEC”), the Company is including currently
dated certifications required by Rules 13a-14(a) and 13a-14(b). Item 19 is also being amended by this Form 20-F/A to file
the consent of the independent auditors related to their opinions contained in this Form 20-F/A. This Form 20-F/A does not otherwise
update any exhibits as originally filed and does not otherwise reflect events occurring after the original filing date of the
Annual Report. Accordingly, this Form 20-F/A should be read in conjunction with any of our filings with the SEC subsequent to
the original filing of the Annual Report.





PART III



| | ITEM 17. | FINANCIAL STATEMENTS
| | -------- | --------------------



We have elected to provide financial statements
pursuant to Item 18.



| | ITEM 18. | FINANCIAL STATEMENTS
| | -------- | --------------------





Please see the financial statements as of and for the eight
months ended August 31, 2015 of Mihoyo beginning on page F-1 of this Form 20-F/A. Mihoyo constituted a significant subsidiary
for the eight months ended August 31, 2015 under IFRS.



| | ITEM 19. | EXHIBITS
| | -------- | --------





Item 19 of our Annual Report on Form 20-F for the year ended
December 31, 2015, filed on April 29, 2016, is amended by the addition of the following exhibits:



|ExhibitNumber |  | Description of Document                                                    
|------------- |  | ---------------------------------------------------------------------------
|              |  |                                                                            
|12.1*         |  | CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|              |  |                                                                            
|12.2*         |  | CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|              |  |                                                                            
|13.1**        |  | CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|              |  |                                                                            
|13.2**        |  | CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|              |  |                                                                            
|15.4*         |  | Consent of Deloitte Touche Tohmatsu Certified Public Accountants LLP       
|              |  |                                                                            



| | * | Filed with this annual report on Form 20-F.
| | - | -------------------------------------------

| | ** | Furnished with this annual report on Form 20-F.
| | -- | -----------------------------------------------



1






SIGNATURES



The registrant hereby certifies that it
meets all of the requirements for filing its annual report on Form 20-F and that it has duly caused and authorized the undersigned
to sign this Amendment No. 1 to the annual report on its behalf.



| | SKY-MOBI LIMITED
| | ----------------
| |                 
| | By:             
| |                 
| |                 



Date: June 30, 2016













SHANGHAI MIHOYO NETWORK TECHNOLOGY CO.,
LTD.



INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS



|                                                                                                                                                                   | PAGE(S) 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------
|                                                                                                                                                                   |         
|Independent Auditors' Report                                                                                                                                       | F-2     
|Consolidated Statement of Profit or Loss and Other Comprehensive Income for the Year Ended December 31, 2013 and 2014 and Eight-month period ended August 31, 2015 | F-3     
|Consolidated Statement of Financial Position as of December 31, 2013 and 2014 and August 31, 2015                                                                  | F-4     
|Consolidated Statement of Changes in Equity for the Year Ended December 31, 2013 and 2014 and Eight-month Period ended August 31, 2015                             | F-5     
|Consolidated Statement of Cash Flows for the Year Ended December 31, 2013 and 2014 and Eight-month period ended August 31, 2015                                    | F-6     
|Notes to the Consolidated Financial Statements                                                                                                                     | F-7-F-26



F-1







INDEPENDENT AUDITORS' REPORT



To the Board of Directors and Shareholders of Shanghai Mihoyo
Network Technology Co., Ltd.



We have audited the accompanying consolidated statement of financial
position of Shanghai Mihoyo Network Technology Co., Ltd. and its subsidiaries (collectively the “Group”) as of August
31, 2015, and the related consolidated statement of profit and loss and comprehensive income, changes in equity, and cash flow
for the eight-month period then ended, and the related notes to the consolidated financial statements.



Management's Responsibility for the Consolidated Financial Statements



Management is responsible for the preparation and fair presentation
of these consolidated financial statements in accordance with International Financial Reporting Standards (“IFRSs”)
as issued by the International Accounting Standards Board ("IASB"); this includes the design, implementation, and maintenance
of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.



Auditors' Responsibility



Our responsibility is to express an opinion on these consolidated
financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the
United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
the consolidated financial statements are free from material misstatement.



An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due
to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Group’s preparation
and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. Accordingly,
we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness
of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial
statements.



We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.



Opinion



In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial position of the Group as of August 31, 2015, and the results of
its operations and its cash flow for the eight-month period then ended in accordance with IFRSs.



/s/ Deloitte Touche Tohmatsu Certified Public Accountants LLP



Shanghai, China



June 30, 2016



F-2







CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME



|                                                          |  |       |  | Year Ended  |       |   | Year Ended  |  |         | Eight months
Ended | 
|--------------------------------------------------------- |  | ----- |  | ----------- | ----- | - | ----------- |  | ------- | ------------------ | 
|                                                          |  |       |  | December 31 |       |   | December 31 |  |         | August 31          | 
|                                                          |  | NOTES |  | 2013        |       |   | 2014        |  |         | 2015               | 
|                                                          |  |       |  | RMB’000     |       |   | RMB’000     |  |         | RMB’000            | 
|                                                          |  |       |  | (Unaudited) |       |   | (Unaudited) |  |         | (Note 2)           | 
|Revenues                                                  |  | 6     |  |             | 1,304 |   |             |  | 113,033 |                    | 
|Cost of revenues                                          |  |       |  |             | (47   | ) |             |  | (19,222 | )                  | 
|Gross profit                                              |  |       |  |             | 1,257 |   |             |  | 93,811  |                    | 
|Research and development expenses                         |  |       |  |             | (926  | ) |             |  | (9,101  | )                  | 
|Sales and marketing expenses                              |  |       |  |             | -     |   |             |  | (4,723  | )                  | 
|General and administration expenses                       |  |       |  |             | (64   | ) |             |  | (2,928  | )                  | 
|Other income and expense                                  |  | 7     |  |             | -     |   |             |  | (28     | )                  | 
|Profit from operations                                    |  |       |  |             | 267   |   |             |  | 77,031  |                    | 
|Other gains and losses                                    |  | 8     |  |             | 17    |   |             |  | 323     |                    | 
|Profit before tax                                         |  | 9     |  |             | 284   |   |             |  | 77,354  |                    | 
|Income tax expense                                        |  | 10    |  |             | -     |   |             |  | -       |                    | 
|Profit and total comprehensive income for the year/period |  |       |  |             | 284   |   |             |  | 77,354  |                    | 
|Profit and total comprehensive income attributable to:    |  |       |  |             |       |   |             |  |         |                    | 
|Owners of the Company                                     |  |       |  |             | 284   |   |             |  | 77,354  |                    | 



F-3







CONSOLIDATED STATEMENT OF FINANCIAL POSITION



|                                                      |  |       |  | December 31 |       |   | December 31 |  |        | August 31 | 
|----------------------------------------------------- |  | ----- |  | ----------- | ----- | - | ----------- |  | ------ | --------- | 
|                                                      |  | NOTES |  | 2013        |       |   | 2014        |  |        | 2015      | 
|                                                      |  |       |  | RMB’000     |       |   | RMB’000     |  |        | RMB’000   | 
|                                                      |  |       |  | (Unaudited) |       |   | (Unaudited) |  |        | (Note 2)  | 
|ASSETS                                                |  |       |  |             |       |   |             |  |        |           | 
|Current assets                                        |  |       |  |             |       |   |             |  |        |           | 
|Cash and cash equivalents                             |  |       |  |             | 501   |   |             |  | 57,484 |           | 
|Term deposit                                          |  |       |  |             | 516   |   |             |  | 1,548  |           | 
|Trade and other receivables                           |  | 12    |  |             | 75    |   |             |  | 16,138 |           | 
|Amounts due from related party                        |  | 15    |  |             | -     |   |             |  | -      |           | 
|Tax recoverable                                       |  | 10    |  |             | -     |   |             |  | 5,970  |           | 
|Available-for-sale financial
    assets at fair value |  |       |  |             | -     |   |             |  | -      |           | 
|Total current assets                                  |  |       |  |             | 1,092 |   |             |  | 81,140 |           | 
|Non-current assets                                    |  |       |  |             |       |   |             |  |        |           | 
|Property and equipment                                |  | 13    |  |             | 63    |   |             |  | 1,076  |           | 
|Other non-current assets                              |  |       |  |             | -     |   |             |  | 30     |           | 
|Total non-current assets                              |  |       |  |             | 63    |   |             |  | 1,106  |           | 
|Total assets                                          |  |       |  |             | 1,155 |   |             |  | 82,246 |           | 
|                                                      |  |       |  |             |       |   |             |  |        |           | 
|EQUITY AND LIABILITIES                                |  |       |  |             |       |   |             |  |        |           | 
|Current liabilities                                   |  |       |  |             |       |   |             |  |        |           | 
|Trade and other payables                              |  | 14    |  |             | 71    |   |             |  | 7,716  |           | 
|Amounts due to related party                          |  | 15    |  |             | 100   |   |             |  | -      |           | 
|Dividend payable                                      |  |       |  |             | -     |   |             |  | -      |           | 
|Deferred revenue                                      |  |       |  |             | -     |   |             |  | 2,438  |           | 
|Total current liabilities                             |  |       |  |             | 171   |   |             |  | 10,154 |           | 
|Non-current liabilities                               |  |       |  |             |       |   |             |  |        |           | 
|Deferred revenue                                      |  |       |  |             | -     |   |             |  | 3,754  |           | 
|Total non-current liabilities                         |  |       |  |             | -     |   |             |  | 3,754  |           | 
|Total liabilities                                     |  |       |  |             | 171   |   |             |  | 13,908 |           | 
|Equity                                                |  |       |  |             |       |   |             |  |        |           | 
|Paid-in capital                                       |  |       |  |             | 1,070 |   |             |  | 1,070  |           | 
|Share premium                                         |  |       |  |             | 30    |   |             |  | 30     |           | 
|Reserve                                               |  |       |  |             | -     |   |             |  | 5,000  |           | 
|(Accumulated deficit) retained earnings               |  |       |  |             | (116  | ) |             |  | 62,238 |           | 
|Equity attributable to owners of the Company          |  |       |  |             | 984   |   |             |  | 68,338 |           | 
|Total equity                                          |  |       |  |             | 984   |   |             |  | 68,338 |           | 
|Total equity and liabilities                          |  |       |  |             | 1,155 |   |             |  | 82,246 |           | 



F-4







CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY





|                                                               |  |         |        |  |         |  |    |                |  |  |                   |  |  | Total equity    |        
|-------------------------------------------------------------- |  | ------- | ------ |  | ------- |  | -- | -------------- |  |  | ----------------- |  |  | --------------- | -------
|                                                               |  |         |        |  |         |  |    |                |  |  | (Accumulated      |  |  | attributable to |        
|                                                               |  | Paid-in |        |  | Share   |  |    |                |  |  | deficit) retained |  |  | owners of       |        
|                                                               |  | capital |        |  | premium |  |    | Reserve (Note) |  |  | earnings          |  |  | the Company     |        
|                                                               |  | RMB’000 |        |  | RMB’000 |  |    | RMB’000        |  |  | RMB’000           |  |  | RMB’000         |        
|                                                               |  |         |        |  |         |  |    |                |  |  |                   |  |  |                 |        
|Balance at January 1, 2013 (unaudited)                         |  |         | 1,070  |  |         |  | 30 |                |  |  | -                 |  |  |                 | (400   
|Profit and total comprehensive income for the year (unaudited) |  |         | -      |  |         |  | -  |                |  |  | -                 |  |  |                 | 284    
|Balance at December 31, 2013 (unaudited)                       |  |         | 1,070  |  |         |  | 30 |                |  |  | -                 |  |  |                 | (116   
|Profit and total comprehensive income for the year (unaudited) |  |         | -      |  |         |  | -  |                |  |  | -                 |  |  |                 | 77,354 
|Appropriation of statutory reserve (unaudited)                 |  |         | -      |  |         |  | -  |                |  |  | 5,000             |  |  |                 | (5,000 
|Payment of dividends (unaudited)                               |  |         | -      |  |         |  | -  |                |  |  | -                 |  |  |                 | (10,000
|Balance at December 31, 2014 (unaudited)                       |  |         | 1,070  |  |         |  | 30 |                |  |  | 5,000             |  |  |                 | 62,238 
|Profit and total comprehensive income for the period           |  |         | -      |  |         |  | -  |                |  |  | -                 |  |  |                 | 92,228 
|Capital injection                                              |  |         | 8,930  |  |         |  | -  |                |  |  | -                 |  |  |                 | -      
|Payment of dividends                                           |  |         | -      |  |         |  | -  |                |  |  | -                 |  |  |                 | (52,000
|Balance at August 31, 2015 (Note 2)                            |  |         | 10,000 |  |         |  | 30 |                |  |  | 5,000             |  |  |                 | 102,466





Note: According to PRC law,
the subsidiary is required to set aside 10% of its after-tax profits each year, if any, to fund a statutory reserve until such
reserve reaches 50% of its registered capital.



F-5







CONSOLIDATED STATEMENT OF CASH FLOWS



|                                                                                          |  | Year Ended  |     |   | Year Ended  |  |         | Eight months
 Ended | 
|----------------------------------------------------------------------------------------- |  | ----------- | --- | - | ----------- |  | ------- | ------------------- | 
|                                                                                          |  | December 31 |     |   | December 31 |  |         | August 31           | 
|                                                                                          |  | 2013        |     |   | 2014        |  |         | 2015                | 
|                                                                                          |  | RMB’000     |     |   | RMB’000     |  |         | RMB’000             | 
|                                                                                          |  | (Unaudited) |     |   | (Unaudited) |  |         | (Note 2)            | 
|Operating activities                                                                      |  |             |     |   |             |  |         |                     | 
|Profit before tax                                                                         |  |             | 284 |   |             |  | 77,354  |                     | 
|Adjustments for:                                                                          |  |             |     |   |             |  |         |                     | 
|Depreciation                                                                              |  |             | 17  |   |             |  | 143     |                     | 
|Loss on disposal of property and equipment                                                |  |             | -   |   |             |  | 28      |                     | 
|Gain from available-for-sale financial assets                                             |  |             | -   |   |             |  | -       |                     | 
|Increase in trade and other receivables                                                   |  |             | (54 | ) |             |  | (16,074 | )                   | 
|Increase in amounts due from related party                                                |  |             | -   |   |             |  | -       |                     | 
|(Increase) decrease in tax recoverable                                                    |  |             | -   |   |             |  | (5,970  | )                   | 
|Increase in trade and other payables                                                      |  |             | 70  |   |             |  | 7,645   |                     | 
|Increase (decrease) in deferred revenue                                                   |  |             | -   |   |             |  | 6,192   |                     | 
|Cash generated from operations                                                            |  |             | 317 |   |             |  | 69,318  |                     | 
|Net cash from operating activities                                                        |  |             | 317 |   |             |  | 69,318  |                     | 
|                                                                                          |  |             |     |   |             |  |         |                     | 
|Investing activities                                                                      |  |             |     |   |             |  |         |                     | 
|Purchases of property and equipment and other long-term assets                            |  |             | (50 | ) |             |  | (1,223  | )                   | 
|Placements of term deposit                                                                |  |             | (16 | ) |             |  | (1,032  | )                   | 
|Withdrawal of term deposit                                                                |  |             | -   |   |             |  | -       |                     | 
|Purchases of available-for-sale investments                                               |  |             | -   |   |             |  | -       |                     | 
|Redemption of available-for-sale investments                                              |  |             | -   |   |             |  | -       |                     | 
|Net cash used in investing activities                                                     |  |             | (66 | ) |             |  | (2,255  | )                   | 
|                                                                                          |  |             |     |   |             |  |         |                     | 
|Financing activities                                                                      |  |             |     |   |             |  |         |                     | 
|Repayment of  amounts due to related party                                                |  |             | -   |   |             |  | (100    | )                   | 
|Capital injection                                                                         |  |             |     |   |             |  | -       |                     | 
|Payment of dividends                                                                      |  |             | -   |   |             |  | (10,000 | )                   | 
|Net cash used in financing activities                                                     |  |             | -   |   |             |  | (10,100 | )                   | 
|                                                                                          |  |             |     |   |             |  |         |                     | 
|Net increase in cash and cash equivalents                                                 |  |             | 251 |   |             |  | 56,963  |                     | 
|Cash and cash equivalents at beginning of year/period                                     |  |             | 250 |   |             |  | 501     |                     | 
|Effect of foreign exchange rate changes on the balance of cash held in foreign currencies |  |             | -   |   |             |  | 20      |                     | 
|Cash and cash equivalents at end of year/period                                           |  |             | 501 |   |             |  | 57,484  |                     | 
|                                                                                          |  |             |     |   |             |  |         |                     | 
|Supplemental information of non-cash transaction:                                         |  |             |     |   |             |  |         |                     | 
|Dividend payable to shareholders                                                          |  |             | -   |   |             |  | -       |                     | 



F-6







SHANGHAI MIHOYO NETWORK TECHNOLOGY CO., LTD.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



| | 1. | ORGANIZATION AND PRINCIPAL ACTIVITIES
| | -- | -------------------------------------



Shanghai Mihoyo Network Technology Co., Ltd.
(the “Company”) was incorporated in Shanghai, the People’s Republic of China (the “PRC”) as a company
with limited liability under the laws of the PRC on February 13, 2012. The Company through its subsidiaries (collectively
referred to as the “Group”) is principally engaged in the developing and operating innovative and high quality animation,
comic, game (ACG) for smartphones.



The consolidated financial statements of the
Group are presented in Renminbi (“RMB”), which is the functional currency of the Company.





The Company has two
wholly-owned subsidiaries as of August 31, 2015. Mihoyo Technology (Shanghai) Co., Ltd was established in Shanghai on July 9,
2014 and Mihoyo Entertainment Limited was established in Hong Kong on August 4, 2015. These companies conduct mobile game
related business.



| | 2. | FIRST-TIME ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRSs")
| | -- | ----------------------------------------------------------------------------



The Company adopts January 1, 2013 as
the date of transition to IFRSs. Previously, the Group prepared its annual consolidated financial statements in accordance
with Accounting Standards for Business Enterprises (“PRC GAAP”).



IFRS 1 requires retrospective
application for all IFRS standards effective at the reporting date except for certain mandatory exceptions and optional
exemptions from retrospective application.



The Group retrospectively apply
those accounting policies in its opening IFRS statement of financial position and throughout all periods presented in its
first IFRS financial statements.







The first-time adoption of IFRSs has
had no material impact on the Group’s consolidated statement of financial position  consolidated statement of profit or
loss and other comprehensive income and consolidated statement of cash flows.



There is no difference in equity nor total
comprehensive income, between the amounts reported in PRC GAAP and the amounts reported in IFRSs at the date of transition to
IFRSs, at August 31, 2015 or during the eight months ended August 31, 2015, whichever applicable. Accordingly, no reconciliation
of equity nor total comprehensive income is presented.



The Company was restructured to a
joint stock company from September 1, 2015 for its domestic listing purpose. From September 1, 2015, one investor of the
Company, Hangzhou Miyi Technologies Co., Ltd (subsidiary of Sky-mobi Limited, or Sky-Mobi), lost the significant influence
over the Company. The consolidated financial statements of the Company is presented as of August 31, 2015 and for the period
then ended pursuant to the SEC Rule 3-09 of Regulation S-X, which requires Sky-mobi to file separate annual financial
statements for its equity- method investee that trips certain significant tests. Since the Company ceased to be an associate
of Sky-Mobi From September 1, 2015, this financial statements only cover the period from January 1, 2015 to August 31, 2015
and amounts presented in the financial statements are not entirely comparable.



| | 3. | SIGNIFICANT ACCOUNTING POLICIES
| | -- | -------------------------------



Statement of compliance



The Group’s consolidated financial statements
comply with IFRSs as issued by the IASB.



F-7







Basis of preparation



The Group’s consolidated financial statements
have been prepared on the historical cost basis except for certain financial instruments, which are measured at fair value as explained
in the accounting policies set out below. Historical cost is generally based on fair value of the consideration given in exchange
of assets, goods or services.



Fair value is the price
that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at
the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In
estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability
if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.
Fair value for measurement and/or disclosure purposes in these consolidated financial statements are determined on such a basis,
except for leasing transactions that are within the scope of IAS 17 Leases, and measurements that have some similarities
to fair value but are not fair value, such as value in use in IAS 36 Impairment of Assets.



In addition, for financial
reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the
fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which
are described as follows:



| | · | Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities
that the entity can access at the measurement date;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable
for the asset or liability, either directly or indirectly; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Level 3 inputs are unobservable inputs for asset or liability.
| | - | --------------------------------------------------------------



The principal accounting policies are set out
below.



Basis of consolidation





The consolidated financial statements incorporate
the financial statements of the Company and its subsidiaries. Control is achieved where the Company:



| | · | has power over the investee;
| | - | ----------------------------

| | · | is exposed, or has rights, to variable returns from its involvement with the investee; and
| | - | ------------------------------------------------------------------------------------------

| | · | has the ability to use its power to affect its returns.
| | - | -------------------------------------------------------



The Group reassesses whether or not it controls
an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.



Consolidation of a subsidiary begins when the
Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Specifically, income and expenses
of a subsidiary acquired or disposed of during the year/period are included in the consolidated statements of profit or loss and
other comprehensive income from the date the Group gains control until the date when the Group ceased to control the subsidiary.



All intragroup assets and liabilities, equity,
income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.



F-8







Revenue
recognition



Revenue is recognised when it is probable that
the economic benefits will flow to the Group, the revenue can be measured reliably and collectability is reasonably assured.



Mobile Game Revenues



(i) Self-operation



The Group primarily operates self-developed
mobile games and generates mobile game revenues from the sale of in-game premium features of mobile phone games that are operated
under the free-for-trial model. The Group sells in-game currency, which will be later used by game players to purchase in-game
premium features and recorded as deferred revenue at first. The in-game premium features, including skills, privileges or other
in-game consumables, features or functionality are consumed immediately by the game players in the games. The Group records revenue
generated from mobile games once the in-game premium features are consumed, on a gross basis, as the Group is acting as the principal
to fulfill all obligations related to the mobile game operation.



(ii) Cooperation



The Group also generates revenues
from cooperating with other mobile games operators, who will operate the games of the Group on third-party’s game
platform or third-party app stores. Other mobile games operators pay fixed license fees to the Group to obtain licenses to
publish and operate the games of the Group in limited years, and will share certain percentage of the revenue generated from
game players with  the Group. The license fees received will be recorded as deferred revenue and recognized into revenue
within the contract period on a straight-line basis. The Group records revenues shared by other mobile operators upon receipt of
monthly statements from these game operators when collectability is reasonably assured.



Promotion revenues



The Group allows content providers and
service providers to sell their mobile applications and other contents to mobile users through its website or games, for
which the Group charges a commission based on a percentage of the revenue earned from those applications or number of active
users. The Group records such promotion revenue upon receipt of monthly statements from
the content providers and service providers when collectability is reasonably assured.



Cost of revenues



Cost of revenues primarily consists of (i)
fees paid to distribution channels, (ii) fees paid to payment channels, (iii) fees paid to third-party service providers. Cost of revenues
also includes staff salaries, utilities, infrastructure maintenance fees, and operating expenses directly related to the operation
of the mobile game platforms.



Leases



Leases are classified as operating leases unless
the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, which would be classified as
finance leases.



The Group as lessee



Operating lease payments are recognized as
expenses on a straight-line basis over the lease term.



F-9







Foreign currencies





In preparing the financial statements of each
individual group entity, transactions in currencies other than the functional currency, which is the currency of the primary economic
environment in which the entity operates, are recorded in the respective entities’ functional currency at the rates of exchange
prevailing on the dates of the transactions. At the end of the reporting period, monetary items denominated in foreign currencies
are retranslated at the rates prevailing at that date. Non-monetary items that are measured in terms of historical cost in a foreign
currency are not retranslated.



Exchange differences arising from the settlement
of monetary items, and the retranslation of monetary items are recognized in profit or loss in the period in which they arise.



Government grants



Government grants are not recognized until
there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received.



Government grants that are receivable as compensation
for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related
costs are recognized in profit or loss in the period in which they become receivable.



Employee benefits



Payments to defined contribution retirement
benefit plan are recognised as an expense when employees has rendered service entitle them to contributions. A liability is recognised
for benefits accruing to employees in respect of wages, salaries and annual leave in the period the related service is rendered
at the undiscounted amount of the benefits to be paid in exchange for the service.



Taxation



Income tax expense represents the sum of the
tax currently payable and deferred tax.



The tax currently payable is based on taxable
profit for the year/period. Taxable profit differs from profit before tax as reported in the consolidated statement of profit or
loss and other comprehensive income because of income or expense that are taxable or deductible in other years and items that are
never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or
substantively enacted by the end of the reporting period.



Deferred tax is recognized on temporary differences
between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases
used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences.
Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable
profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities
are not recognized if the temporary difference arises from the initial recognition (other than in a business combination) of other
assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.



Deferred tax liabilities are recognized for
taxable temporary differences associated with investments in subsidiaries, except where the Group is able to control the reversal
of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred
tax assets arising from deductible temporary differences associated with such investments are only recognized to the extent that
it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences
and they are expected to reverse in the foreseeable future.



The carrying amount of deferred tax assets
is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable
profits will be available to allow all or part of the asset to be recovered.



Deferred tax assets and liabilities are measured
at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realized, based on
tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of
deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects,
at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.



F-10







Current and deferred tax are recognized in
profit or loss.



Research and development expenses



Expenditure on research activities is recognized
as an expense in the period in which it is incurred. An internally-generated intangible asset arising from development (or from
the development phase of an internal project), is recognized if all of the following have been demonstrated:



| | • | the technical feasibility
of completing the intangible asset so that it will be available for use or sale;
| | - | ----------------------------------------------------------------------------------------------------------



| | • | the intention to complete
the intangible asset and use or sell it;
| | - | ------------------------------------------------------------------



| | • | the ability to use or sell
the intangible asset;
| | - | ------------------------------------------------



| | • | how the intangible asset
will generate probable future economic benefits;
| | - | -------------------------------------------------------------------------



| | • | the availability of adequate
technical, financial and other resources to complete the development and to use or sell the intangible asset; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------



| | • | the ability to measure reliably
the expenditure attributable to the intangible asset during its development.
| | - | ------------------------------------------------------------------------------------------------------------



The amount initially recognized for an internally-generated
intangible asset is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria
listed above.



Subsequent to initial recognition, an internally-generated
intangible asset is measured at cost less accumulated amortization and accumulated impairment losses (if any), on the same basis
as intangible assets acquired separately.



The Group currently expenses internal and external
development costs incurred as all current development costs do not fulfill the above conditions.



Property and equipment





Property and equipment are stated in the consolidated
statement of financial position at cost less subsequent accumulated depreciation and accumulated impairment losses, if any.



Depreciation is computed on a straight-line
basis over the following estimated useful lives:



|Electronic equipment   |  | 3 years                                 
|---------------------- |  | ----------------------------------------
|Office equipment       |  | 5 years                                 
|Leasehold improvements |  | the shorter of the lease term or 3 years



The useful lives of the property and equipment
are evaluated annually. An item of property and equipment is derecognized upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset is included in profit
or loss in the period in which the item is derecognized.





F-11











Impairment of tangible assets



At the end of
the reporting period, the Group reviews the carrying amounts of its tangible assets to determine whether there is any indication
that those assets have suffered an impairment loss. If any such indicator exists, the recoverable amount of the asset is estimated
in order to determine the extent of the impairment loss, if any. Recoverable amount is defined as the higher of an asset’s
fair value less costs of disposal and its value in use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced
to its recoverable amount. An impairment loss is recognized as an expense immediately.



When an impairment loss subsequently reverses,
the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying
amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset
in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried
at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.



Cash and cash equivalents/Term deposits



Cash and cash equivalents include cash on hand
and in banks and other short-term highly liquid investments with original maturities of three months or less which are not restricted
as to use. Term deposits represent bank deposits with original maturities of over three months but equal or less than one year
when purchased. Such deposits are available for general use by the Company, which are unrestricted as to withdraw and use.



Financial instruments





Financial assets and financial liabilities
are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial
assets and financial liabilities, other than financial assets or financial liabilities at fair value through profit or loss, are
added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit
or loss are recognized immediately in profit or loss.



Financial assets



The Group’s financial assets are classified
into loans and receivables and available-for-sale financial assets. The classification depends on the nature and purpose of the
financial assets and is determined at the time of initial recognition.



Loans and receivables



Loans
and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. Loans and receivables (including cash and cash equivalent, term deposit, trade and other receivables(excluding
prepayments) and amounts due from related parties), are carried at amortised cost using the effective interest method, less any
identified impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables
where the recognition of interest would be immaterial.



Available-for-sale financial assets (AFS financial assets)



AFS financial assets are non-derivatives that
are either designed as AFS or are not classified as (a) loans and receivables, (b) held-to-maturity investments or (c) financial
assets at fair value through profit or loss.



Bank financial products held by the group
are classified as AFS and stated at fair value at the end of each reporting period with the change in fair value recorded in
other comprehensive income, and reclassified to earnings upon sale of the products. Fair value is determined in the manner described
in note 5.



F-12













Impairment of financial assets





Financial assets are assessed for indicators
of impairment at the end of the reporting period. Financial assets are considered to be impaired where there is objective evidence
that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future
cash flows of the financial assets have been affected. Objective evidence of impairment could include:



| | • | significant financial difficulty of the issuer or counterparty,
| | - | ---------------------------------------------------------------



| | • | default or delinquency in interest or principal payments, or
| | - | ------------------------------------------------------------



| | • | it becoming probable that the borrower will enter bankruptcy or financial reorganization.
| | - | -----------------------------------------------------------------------------------------



For certain categories of financial assets,
such as trade receivables and other receivables, assets that are assessed not to be impaired individually are, in addition, assessed
for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group’s
past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit
period of 60 days and observable changes in national or local economic conditions that correlate with default on receivables
and other receivables.



For financial assets carried at amortized cost,
the amount of loss recognized is the difference between the asset’s carrying amount and the present value of the estimated
future cash flows discounted at the financial asset's original effective interest rate.



The carrying amount of the financial asset
is reduced by the impairment loss directly for all financial assets with the exception of trade and other receivables, where the
carrying amount is reduced through the use of an allowance account. Changes in the carrying amount of the allowance account are
recognized in profit or loss. When a trade and other receivable is considered uncollectible, it is written off against the allowance
account. Subsequent recoveries of amounts previously written off are credited to profit or loss.



For financial assets measured at amortized
cost, if, in a subsequent period, the amount of impairment loss decreases and the decrease can be related objectively to an event
occurring after the impairment loss was recognized, the previously recognized impairment loss is reversed through profit or loss
to the extent that the carrying amount of the asset at the date the impairment is reversed does not exceed what the amortized cost
would have been had the impairment not been recognized.



Financial liabilities and equity instruments



Debt and equity instruments issued by a group
entity are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements
entered into and the definitions of a financial liability and an equity instrument.



An equity instrument is any contract that evidences
a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the Group are
recognized at the proceeds received, net of direct issue costs.



Financial liabilities



Financial liabilities, including trade and
other payables and amounts due to related parties, are subsequently measured at amortized cost, using the effective interest.



Effective interest method



The effective interest method is a method of
calculating the amortized cost of a financial asset or financial liability and of allocating interest income or interest expense
over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments
through the expected life of the financial asset or liability, or, where appropriate, a shorter period, to the net carrying amount
on initial recognition



Interest income and expense is recognized on
an effective interest basis.



F-13







Derecognition



The Group derecognizes a financial asset only
when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially
all the risks and rewards of ownership of the asset to another entity. On derecognition of a financial asset in its entirety, the
difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative
gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognized in profit or loss.



Financial liabilities are derecognized when
the obligation is discharged, cancelled or have expired. The difference between the carrying amount of the financial liability
derecognized and the consideration paid and payable is recognized in profit or loss.



| | 4. | APPLICATION OF NEW AND AMENDMENTS TO INTERNATIONAL FINANCIAL
                                                                                                                                   REPORTING
                                                                                                                                   STANDARDS (IFRSs)
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



In the current period, the Group
has applied a number of amendments to IFRS issued by IASB that are mandatorily effective for an accounting period that begins on
or after January 1, 2015.



| | Amendments to IAS 19 | Defined Benefit Plans: Employee Contributions
| | -------------------- | ---------------------------------------------
| | Amendments to IFRSs  | Annual Improvements to IFRSs 2010- 2012 Cycle
| | Amendments to IFRSs  | Annual Improvements to IFRSs 2011- 2013 Cycle



The application of the amendments
to IFRSs in the current period has had no material impact on the Group's financial performance and positions for the current and
prior years/period and/or on the disclosures set out in these consolidated financial statements.



The Group has not early applied
the following new and amendments to IFRSs that have been issued but are not yet effective:



| | IFRS 9                           | Financial Instruments1                                                                
| | -------------------------------- | --------------------------------------------------------------------------------------
| | IFRS 14                          | Regulatory Deferral Accounts6                                                         
| | IFRS 15                          | Revenue from Contracts with Customers1                                                
| | IFRS 16                          | Leases2                                                                               
| | Amendments to IFRS 11            | Accounting for Acquisitions of Interests in Joint Operations3                         
| | Amendments to IFRS 15            | Clarifications to IFRS 15 Revenue from Contracts with Customers1                      
| | Amendments to IAS 1              | Disclosure Initiative3                                                                
| | Amendments to IAS 16 and IAS 38  | Clarification of Acceptable Methods of Depreciation and Amortisation3                 
| | Amendments to IFRSs              | Annual Improvements to IFRSs 2012-2014 Cycle3                                         
| | Amendments to IFRS 10 and IAS 28 | Sale or Contribution of Assets between an Investor and its Associate or Joint Venture4
| | Amendments to IFRS 10,           | Investment Entities: Applying the Consolidation                                       
| | IFRS 12 and IAS 28               | Exception3                                                                            
| | Amendments to IAS 7              | Disclosure Initiative5                                                                
| | Amendments to IAS 12             | Recognition of Deferred Tax Assets for Unrealised Losses5                             



| | 1 | Effective for annual periods beginning on or after 1 January 2018                        
| | - | -----------------------------------------------------------------------------------------
| | 2 | Effective for annual periods beginning on or after 1 January 2019                        
| | 3 | Effective for annual periods beginning on or after 1 January 2016                        
| | 4 | Effective for annual periods beginning on or after a date to be determined               
| | 5 | Effective for annual periods beginning on or after 1 January 2017                        
| | 6 | Effective for first annual IFRS financial statements beginning on or after 1 January 2016



F-14







Except as disclosed below, the
application of the new and amendments to IFRSs issued but not yet effective has had no material impact on the Group's financial
performance and positions and/or the disclosures when they became effective.



IFRS 9 Financial Instruments



IFRS 9 issued in 2009 introduced
new requirements for the classification and measurement of financial assets. IFRS 9 was subsequently amended in 2010 to include
requirements for the classification and measurement of financial liabilities and for derecognition, and further amended in 2013
to include the new requirements for general hedge accounting. Another revised version of IFRS 9 was issued in 2014 mainly to include
a) impairment requirements for financial assets and b) limited amendments to the classification and measurement requirements by
introducing a 'fair value through other comprehensive income' (FVTOCI) measurement category for certain simple debt instruments.
Key requirements of IFRS 9 are described as follows:



• All recognised financial
assets that are within the scope of IAS 39 Financial Instruments: Recognition and Measurement are subsequently measured at amortized
cost or fair value. Specifically, debt investments that are held within a business model whose objective is to collect the contractual
cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding
are generally measured at amortized cost at the end of subsequent accounting periods. Debt instruments that are held within a business
model whose objective is achieved both by collecting contractual cash flows and selling financial assets, and that have contractual
terms that give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount
outstanding, are generally measured at FVTOCI. All other debt investments and equity investments are measured at their fair value
at the end of subsequent reporting periods. In addition, under IFRS 9, entities may make an irrevocable election to present subsequent
changes in the fair value of an equity investment (that is not held for trading) in other comprehensive income, with only dividend
income generally recognised in profit or loss.



• With regard to the measurement
of financial liabilities designated as at fair value through profit or loss, IFRS 9 requires that the amount of change in the fair
value of the financial liability, that is attributable to changes in the credit risk of that liability is presented in other comprehensive
income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would
create or enlarge an accounting mismatch in profit or loss. Changes in fair value of financial liabilities attributable to change
in the financial liabilities’ credit risk are not subsequently reclassified to profit or loss. Under IAS 39, the entire amount
of the change in the fair value of the financial liability designated as at fair value through profit or loss was presented in
profit or loss.



• In relation to the impairment
of financial assets, IFRS 9 requires an expected credit loss model, as opposed to an incurred credit loss model under IAS 39. The
expected credit loss model requires an entity to account for expected credit losses and changes in those expected credit losses
at each reporting date to reflect changes in credit risk since initial recognition. In other words, it is no longer necessary for
a credit event to have occurred before credit losses are recognised.



•The new general hedge accounting
requirements retain the three types of hedge accounting mechanisms. However, greater flexibility has been introduced to the types
of transactions eligible for hedge accounting, specifically broadening the types of instruments that qualify for hedging instruments
and the types of risk components of non-financial items that are eligible for hedge accounting. In addition, the effectiveness
test has been overhauled and replaced with the principle of an 'economic relationship'. Retrospective assessment of hedge effectiveness
is also no longer required. Enhanced disclosure requirements about an entity's risk management activities have also been introduced.



Based on the Group's financial assets
and financial liabilities as of December 31, 2015, the directors anticipate that the adoption of IFRS 9 in the future will affect
the classification and measurement of the Group's available-for-sale investments and is not likely to have significant impact on
the amounts of the Group's other financial assets and financial liabilities. Regarding the Group's available-for-sale investments,
it is not practicable to provide a reasonable estimate of that effect until a detailed review has been completed.



F-15







IFRS 15 Revenue from Contracts with Customers



In May 2014, IFRS 15 was issued
which establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers.
IFRS 15 will supersede the current revenue recognition guidance including IAS 18 Revenue,IAS 11 Construction Contracts
and the related Interpretations when it becomes effective.



The core principle of IFRS 15 is
that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects
the consideration to which the entity expects to be entitled in exchange for those goods or services. Specifically, the Standard
introduces a 5-step approach to revenue recognition:



Step 1: Identify the contract(s) with a customer.

Step 2: Identify the performance obligations in the contract.

Step 3: Determine the transaction prices.

Step 4: Allocate the transaction price to the performance
obligations in the contract.

Step 5: Recognise revenue when (or as) the entity satisfies
a performance obligation.



Under IFRS 15, an entity recognises
revenue when (or as) a performance obligation is satisfied, i.e. when ‘control’ of the goods or services underlying
the particular performance obligation is transferred to the customer. Far more prescriptive guidance has been added in IFRS 15
to deal with specific scenarios. Furthermore, extensive disclosures are required by IFRS 15.



The directors of the Company anticipate
that the application of IFRS 15 in the future may have an impact on the amounts reported and disclosures made in the Group’s
consolidated financial statements. However, it is not practicable to provide a reasonable estimate of the effect of IFRS 15 until
the Group performs a detailed review.



IFRS 16 Leases



IFRS 16, which upon the effective
date will supersede IAS 17 Leases, introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities
for all leases with a term of more than 12 months, unless the underlying asset is of low value. Specifically, under IFRS 16, a
lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset and a lease liability
representing its obligation to make lease payments. Accordingly, a lessee should recognise depreciation of the right-of-use asset
and interest on the lease liability, and also classifies cash repayments of the lease liability into a principal portion and an
interest portion and presents them in the statement of cash flows. Also, the right-of-use asset and the lease liability are initially
measured on a present value basis. The measurement includes non-cancellable lease payments and also includes payments to be made
in optional periods if the lessee is reasonably certain to exercise an option to extend the lease, or not to exercise an option
to terminate the lease. This accounting treatment is significantly different from the lessee accounting for leases that are classified
as operating leases under the predecessor standard, IAS 17.



In respect of the lessor accounting,
IFRS 16 substantially carries forward the lessor accounting requirements in IAS 17. Accordingly, a lessor continues to classify
its leases as operating leases or finance leases, and to account for those two types of leases differently.



The directors of the Company will
assess the impact of the application of IFRS 16. For the moment, it is not practicable to provide a reasonable estimate of the
effect of the application of IFRS 16 until the Group performs a detailed review.



F-16







|5. | FINANCIAL INSTRUMENTS
|-- | ---------------------



Capital risk management



The primary objective of the Group’s
capital management is to safeguard the Group’s ability to continue as a going concern, so that it can provide an adequate
return to shareholders by pricing its services commensurately with the level of risk. The Group’s overall strategy remains
unchanged during the reporting periods.



The capital structure of the Group consists
of equity attributable to owners of the Company, which includes share capital and reserves.



The Group reviews the capital structure regularly
and considers the cost of capital and the risks associated with each class of capital and, to the extent necessary, balances its
overall capital structure through the repurchase of share and issuance of new shares.



Categories of financial instruments



The carrying amounts of financial assets and
financial liabilities are as follows:



|                                    |  | At December 31, |       |  | At December 31, |  |        | At August 31, | 
|----------------------------------- |  | --------------- | ----- |  | --------------- |  | ------ | ------------- | 
|                                    |  | 2013            |       |  | 2014            |  |        | 2015          | 
|                                    |  | RMB’000         |       |  | RMB’000         |  |        | RMB’000       | 
|                                    |  | (Unaudited)     |       |  | (Unaudited)     |  |        |               | 
|                                    |  |                 |       |  |                 |  |        |               | 
|Financial assets                    |  |                 |       |  |                 |  |        |               | 
|Amortized cost                      |  |                 | 1,092 |  |                 |  | 75,029 |               | 
|Available-for-sale financial assets |  |                 | -     |  |                 |  | -      |               | 
|                                    |  |                 |       |  |                 |  |        |               | 
|Financial liabilities               |  |                 |       |  |                 |  |        |               | 
|Amortized cost                      |  |                 | 104   |  |                 |  | 1,910  |               | 



Financial risk management objectives and policies



Foreign currency risk management



The Group mainly operates in the PRC with most
of its transactions settled in RMB. The foreign currency risk is mainly attributable to the Group’s U.S. dollar (“US$”)
bank account balances. The carrying amount of the US$ bank account balances was approximately nil and RMB9,154,000 and RMB9,850,000
as of December 31, 2013 and 2014 and as of August 31, 2015, respectively. The Group has not used any forward contracts, currency
borrowings or other means to hedge its foreign currency risk exposure.



If the RMB exchange rate against the US$ had
appreciated or depreciated by 5% with all other variables held constant, the carrying value of bank accounts denominated in US$
would have decreased or increased by RMB nil, RMB458,000 and RMB492,000 as of December 31, 2013 and 2014 and as of August 31, 2015,
respectively, with a corresponding decrease or increase in net profit for the respective years/period. The sensitivity analysis
only details the Group’s sensitivity to a 5% appreciation and depreciation in RMB, against the foreign currency, US$. The
5% figure is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents
management’s assessment of the reasonably possible change in foreign exchange rate.



Interest rate risk management



The Group has exposure to cash flow interest
rate risk due to the fluctuation of the variable interest rates associated with its cash and cash equivalents which are based on
prevailing market interest rates. Currently, the Group does not have a specific policy to manage their interest rate risk. The
Group does not have significant exposure to cash flow interest rate risk as of December 31, 2013 and 2014 and as of August
31, 2015 as the interest rates have not fluctuated significantly in recent years.



The Group’s exposure to interest rates
on cash and cash equivalents and term deposit are detailed in the liquidity risk management section of this note.



F-17







Credit risk management



The Group’s maximum exposure to credit
risks is equivalent to the total carrying amount of trade and other receivables, amount due from related parties, cash and cash
equivalents, term deposits and AFS financial assets of RMB1,092,000, RMB75,029,000 and RMB170,971,000 as of December 31, 2013
and 2014 and as of August 31, 2015, respectively.



In order to minimize the credit risk of trade
receivables from mobile game operators and platforms, the Group assesses the credit worthiness of them prior to contracting with
them. The Group further monitors the subsequent performance of them in order to mitigate collection risk going forward. In addition,
the Group reviews the recoverable amount of each individual trade receivable at the end of each reporting period to determine if
provision should be made for uncollectible amounts.



The Group has concentration of credit risks
with exposure limited to certain mobile game operators and platforms. As of December 31, 2013 and 2014 and as of August 31,
2015, five customers accounted for approximately RMB28,000, RMB15,108,000 and RMB 27,776,000, or 100%, 99% and 66% of the Group’s
trade receivables, respectively. The Group closely monitors the subsequent settlement of trade receivables and does not grant long
credit periods to the counterparties.



The Group’s cash and cash equivalents,
term deposits and AFS financial assets are held by large banks established in the PRC. The Group does not expect any losses arising
from non-performance of these financial institutions.



Liquidity risk



The Group monitors and attempts to maintain
a level of cash and cash equivalents adequate to finance the Group’s operations and mitigate the effects of fluctuations
in cash flows.



The following tables present the maturities
of the Group’s financial liabilities based upon the undiscounted cash flows of financial liabilities assuming payment on
the earliest date on which the Group can be required to pay. The table includes both interest, if any, and principal cash flows.



|                               |  | On demand |        |  | Total undiscounted cash flow and carrying amount | 
|------------------------------ |  | --------- | ------ |  | ------------------------------------------------ | 
|                               |  | RMB’000   |        |  | RMB’000                                          | 
|                               |  |           |        |  |                                                  | 
|December 31, 2013(Unaudited)   |  |           |        |  |                                                  | 
|Trade and other payables       |  |           | 4      |  |                                                  | 
|Amounts due to related parties |  |           | 100    |  |                                                  | 
|                               |  |           | 104    |  |                                                  | 
|December 31, 2014(Unaudited)   |  |           |        |  |                                                  | 
|Trade and other payables       |  |           | 1,910  |  |                                                  | 
|Amounts due to related parties |  |           | -      |  |                                                  | 
|                               |  |           | 1,910  |  |                                                  | 
|August 31, 2015                |  |           |        |  |                                                  | 
|Trade and other payables       |  |           | 4,304  |  |                                                  | 
|Amounts due to related parties |  |           | 40,000 |  |                                                  | 
|                               |  |           | 44,304 |  |                                                  | 



F-18











The following table details the Group’s
expected maturity for its non-derivative financial assets. The table has been drawn up based on the undiscounted contractual maturities
of the financial assets including interest that will be earned on those assets. The inclusion of information on non-derivative
financial assets is necessary in order to understand the Company’s liquidity risk management as the liquidity is managed
on a net asset and liability basis.



|                             |  |          |  | Weighted average effective |      |  | Less than 3 months |  |        | 3 months to 1 year |  |  | Total  | 
|---------------------------- |  | -------- |  | -------------------------- | ---- |  | ------------------ |  | ------ | ------------------ |  |  | ------ | 
|                             |  |          |  | %                          |      |  | RMB’000            |  |        | RMB’000            |  |  |        | 
|December 31, 2013(Unaudited) |  |          |  |                            |      |  |                    |  |        |                    |  |  |        | 
|Cash and cash equivalents    |  | Floating |  |                            | 0.35 |  |                    |  | 501    |                    |  |  | -      | 
|Term deposit                 |  | Fixed    |  |                            | 3.08 |  |                    |  | -      |                    |  |  | 516    | 
|                             |  |          |  |                            |      |  |                    |  | 501    |                    |  |  | 516    | 
|                             |  |          |  |                            |      |  |                    |  |        |                    |  |  |        | 
|December 31, 2014(Unaudited) |  |          |  |                            |      |  |                    |  |        |                    |  |  |        | 
|Cash and cash equivalents    |  | Floating |  |                            | 0.35 |  |                    |  | 57,484 |                    |  |  | -      | 
|Term deposit                 |  | Fixed    |  |                            | 3.08 |  |                    |  | -      |                    |  |  | 1,548  | 
|                             |  |          |  |                            |      |  |                    |  | 57,484 |                    |  |  | 1,548  | 
|August 31, 2015              |  |          |  |                            |      |  |                    |  |        |                    |  |  |        | 
|Cash and cash equivalents    |  | Floating |  |                            | 0.35 |  |                    |  | 93,919 |                    |  |  | -      | 
|Term deposit                 |  | Fixed    |  |                            | 3.04 |  |                    |  | -      |                    |  |  | 29,593 | 
|                             |  |          |  |                            |      |  |                    |  | 93,919 |                    |  |  | 29,593 | 



In the management of liquidity risk, the
Group monitors and maintains a level of cash and cash equivalent deemed adequate by the management to finance of the Group’s
operations and mitigate the effects of fluctuations in cash flows.



Fair value



(i) Fair value of the Group's financial
assets that are measured at fair value on a recurring basis



Some of the Group's financial assets are
measured at fair value at the end of each reporting period. The following table gives information about how the fair values of
these financial assets are determined (in particular, the valuation technique and inputs used).



|                      |  | At December 31, |   |  | At December 31, |  |   | At August 31, | 
|--------------------- |  | --------------- | - |  | --------------- |  | - | ------------- | 
|                      |  | 2013            |   |  | 2014            |  |   | 2015          | 
|                      |  | RMB’000         |   |  | RMB’000         |  |   | RMB’000       | 
|                      |  | (Unaudited)     |   |  | (Unaudited)     |  |   |               | 
|Financial assets      |  |                 |   |  |                 |  |   |               | 
|AFS financial assets* |  |                 | - |  |                 |  | - |               | 



* AFS financial assets is in Level 3 of Fair value
Hierarchy that is valued through discounted cash flow. Future cash flows are based on expected return and credit risks of investments
underlying the financial products.



The carrying amounts of all financial assets
(except for the AFS financial assets) and financial liabilities as of December 31, 2013 and 2014 and as of August 31, 2015 are
recorded at amortized cost, using the effective interest method. The directors of the Company consider such amounts approximate
their fair value.



F-19







| | 6. | REVENUES AND SEGMENT INFORMATION
| | -- | --------------------------------



|                      |  | Year Ended  |       |  | Year Ended  |  |         | Eight months Ended | 
|--------------------- |  | ----------- | ----- |  | ----------- |  | ------- | ------------------ | 
|                      |  | December 31 |       |  | December 31 |  |         | August 31          | 
|                      |  | 2013        |       |  | 2014        |  |         | 2015               | 
|                      |  | RMB’000     |       |  | RMB’000     |  |         | RMB’000            | 
|                      |  | (Unaudited) |       |  | (Unaudited) |  |         |                    | 
|                      |  |             |       |  |             |  |         |                    | 
|Mobile games revenues |  |             | 616   |  |             |  | 92,745  |                    | 
|License revenues      |  |             | -     |  |             |  | 12,440  |                    | 
|Promotion revenues    |  |             | 688   |  |             |  | 7,848   |                    | 
|Total                 |  |             | 1,304 |  |             |  | 113,033 |                    | 



Segment information



The Group operates and manages its business
as a single segment. The Group’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews
the revenue analysis by revenues driven from games operating and other revenues and the profit from operation of the Group as a whole
when making decisions about allocating resources and assessing performance of the Group.



Geographical information



All of the Group’s non-current assets
are located in the PRC. Revenues are primarily derived from the PRC, with minimal revenues derived from Southeast Asia, Korea and
other countries. The following table sets forth revenues by geographic area:



|        |  | Year Ended  |       |  | Year Ended  |  |         | Eight months
 Ended | 
|------- |  | ----------- | ----- |  | ----------- |  | ------- | ------------------- | 
|        |  | December 31 |       |  | December 31 |  |         | August 31           | 
|        |  | 2013        |       |  | 2014        |  |         | 2015                | 
|        |  | RMB’000     |       |  | RMB’000     |  |         | RMB’000             | 
|        |  | (Unaudited) |       |  | (Unaudited) |  |         |                     | 
|        |  |             |       |  |             |  |         |                     | 
|PRC     |  | 1,304       |       |  | 106,634     |  |         | 101,070             | 
|Non-PRC |  |             | -     |  |             |  | 6,399   |                     | 
|Total   |  |             | 1,304 |  |             |  | 113,033 |                     | 



Information about major customers



During the year ended December 31,
2013 and 2014 and the eight-month period ended August 31, 2015, customers that individually accounted for over 10% of the Group’s
total revenue are as followed:



|           |  | Year Ended  |     |  |            |  |    | Year Ended  |  |  |            |  |  | Eight months
 Ended |    |   |            | 
|---------- |  | ----------- | --- |  | ---------- |  | -- | ----------- |  |  | ---------- |  |  | ------------------- | -- | - | ---------- | 
|           |  | December 31 |     |  |            |  |    | December 31 |  |  |            |  |  | August 31           |    |   |            | 
|           |  | 2013        |     |  |            |  |    | 2014        |  |  |            |  |  | 2015                |    |   |            | 
|           |  | RMB’000     |     |  | Percentage |  |    | RMB’000     |  |  | Percentage |  |  | RMB’000             |    |   | Percentage | 
|           |  | (Unaudited) |     |  |            |  |    | (Unaudited) |  |  |            |  |  |                     |    |   |            | 
|           |  |             |     |  |            |  |    |             | 
|Customer A |  |             | -   |  |            |  |    |             |  |  | 26,208     |  |  |                     | 23 | % |            | 
|Customer B |  |             | 617 |  |            |  | 47 | %           |  |  | 15,753     |  |  |                     | 14 | % |            | 
|Customer C |  |             | *   |  |            |  |    |             |  |  | 33,340     |  |  |                     | 29 | % |            | 
|Customer D |  |             | 198 |  |            |  | 15 | %           |  |  | -          |  |  |                     |    |   |            | 
|Customer E |  |             | 294 |  |            |  | 23 | %           |  |  | -          |  |  |                     |    |   |            | 



*: Less than 10%.



F-20







| | 7. | OTHER INCOME AND EXPENSES
| | -- | -------------------------



|                 |  | Year Ended  |   |  | Year Ended  |  |     | Eight months
 Ended | 
|---------------- |  | ----------- | - |  | ----------- |  | --- | ------------------- | 
|                 |  | December 31 |   |  | December 31 |  |     | August 31           | 
|                 |  | 2013        |   |  | 2014        |  |     | 2015                | 
|                 |  | RMB’000     |   |  | RMB’000     |  |     | RMB’000             | 
|                 |  | (Unaudited) |   |  | (Unaudited) |  |     |                     | 
|                 |  |             |   |  |             |  |     |                     | 
|Government grant |  |             | - |  |             |  | -   |                     | 
|Others           |  |             | - |  |             |  | (28 | )                   | 
|Total            |  |             | - |  |             |  | (28 | )                   | 



Note: Government grant represents
subsidies granted by PRC local government authorities to the Group — for rewarding their performance in technology
industry. Such grants were unconditional and had been approved by the PRC local government authorities.



| | 8. | OTHER GAINS AND LOSSES
| | -- | ----------------------



|                               |  | Year Ended  |    |   | Year Ended  |  |     | Eight months
 Ended | 
|------------------------------ |  | ----------- | -- | - | ----------- |  | --- | ------------------- | 
|                               |  | December 31 |    |   | December 31 |  |     | August 31           | 
|                               |  | 2013        |    |   | 2014        |  |     | 2015                | 
|                               |  | RMB’000     |    |   | RMB’000     |  |     | RMB’000             | 
|                               |  | (Unaudited) |    |   | (Unaudited) |  |     |                     | 
|                               |  |             |    |   |             |  |     |                     | 
|Interest income                |  |             | 18 |   |             |  | 285 |                     | 
|Gain from AFS financial assets |  |             | -  |   |             |  | -   |                     | 
|Exchange gain                  |  |             | -  |   |             |  | 27  |                     | 
|Others                         |  |             | (1 | ) |             |  | 11  |                     | 
|Total                          |  |             | 17 |   |             |  | 323 |                     | 



| | 9. | PROFIT BEFORE TAX
| | -- | -----------------



|                                                      |  | Year Ended  |     |  | Year Ended  |  |       | Eight months
Ended | 
|----------------------------------------------------- |  | ----------- | --- |  | ----------- |  | ----- | ------------------ | 
|                                                      |  | December 31 |     |  | December 31 |  |       | August 31          | 
|                                                      |  | 2013        |     |  | 2014        |  |       | 2015               | 
|                                                      |  | RMB’000     |     |  | RMB’000     |  |       | RMB’000            | 
|                                                      |  | (Unaudited) |     |  | (Unaudited) |  |       |                    | 
|Profit before tax has been arrived at after charging: |  |             |     |  |             |  |       |                    | 
|Staff salary                                          |  |             | 863 |  |             |  | 7,770 |                    | 
|Defined contribution plans                            |  |             | 13  |  |             |  | 297   |                    | 
|Total staff costs                                     |  |             | 876 |  |             |  | 8,067 |                    | 
|Depreciation of property and equipment                |  |             | 17  |  |             |  | 143   |                    | 
|Loss on disposal of property and equipment            |  |             | -   |  |             |  | 28    |                    | 



F-21







| | 10. | INCOME TAX EXPENSE
| | --- | ------------------



PRC

The statutory income tax rate is 25%.

In 2014, Shanghai Mihoyo
Network Technology Co., Ltd. (“Mihoyo”) was granted the status of "Software Enterprise" under the PRC
tax laws that entitled it to a preferential Enterprise Income Tax ("EIT") rate of two-year EIT exemption from its
first year of profitable operation, after offsetting prior years’ tax losses, and a 50% reduction of its applicable EIT
rate for the succeeding three years. The first profit-making year of Mihoyo was 2014. As a result, Mihoyo was subject to a
tax rate of 0% for calendar year 2014 and 2015, and a tax rate of 12.5% for calendar year 2016, 2017 and 2018. Mihoyo
prepaid RMB5,970,000 income tax to local tax bureau in 2014 before obtaining above stated tax exemption which was recorded as
tax recoverable and this balance was collected back in 2015.



|                          |  |  | Year Ended  |  |  |  | Year Ended  |  |  |  | Eight months
 Ended | 
|------------------------- |  |  | ----------- |  |  |  | ----------- |  |  |  | ------------------- | 
|                          |  |  | December 31 |  |  |  | December 31 |  |  |  | August 31           | 
|                          |  |  | 2013        |  |  |  | 2014        |  |  |  | 2015                | 
|                          |  |  | RMB’000     |  |  |  | RMB’000     |  |  |  | RMB’000             | 
|                          |  |  | (Unaudited) |  |  |  | (Unaudited) |  |  |  |                     | 
|Current tax expense:      |  |  |             |  |  |  |             |  |  |  |                     | 
|PRC enterprise income tax |  |  | -           |  |  |  | -           |  |  |  | -                   | 
|Deferred tax              |  |  | -           |  |  |  | -           |  |  |  | -                   | 
|Total                     |  |  | -           |  |  |  | -           |  |  |  | -                   | 



The tax expense can be reconciled to the profit before
tax per the consolidated statement of profit or loss and other comprehensive income as follows:



|                                                                                                   |  | Year Ended  |     |   | Year Ended  |  |         | Eight months
 Ended | 
|-------------------------------------------------------------------------------------------------- |  | ----------- | --- | - | ----------- |  | ------- | ------------------- | 
|                                                                                                   |  | December 31 |     |   | December 31 |  |         | August 31           | 
|                                                                                                   |  | 2013        |     |   | 2014        |  |         | 2015                | 
|                                                                                                   |  | RMB’000     |     |   | RMB’000     |  |         | RMB’000             | 
|                                                                                                   |  | (Unaudited) |     |   | (Unaudited) |  |         |                     | 
|                                                                                                   |  |             |     |   |             |  |         |                     | 
|Profit before tax                                                                                  |  |             | 284 |   |             |  | 77,354  |                     | 
|Income tax expense at PRC tax rate of 25% (i)                                                      |  |             | 71  |   |             |  | 19,339  |                     | 
|Tax effect of:                                                                                     |  |             |     |   |             |  |         |                     | 
|Non-deductible expenses                                                                            |  |             | -   |   |             |  | 42      |                     | 
|Tax exemption and concession to PRC subsidiaries                                                   |  |             | -   |   |             |  | (19,452 | )                   | 
|Tax effect of unused tax loss not recognized and utilization of tax loss not recognised previously |  |             | (71 | ) |             |  | 71      |                     | 
|Tax expense for the year/period                                                                    |  |             | -   |   |             |  | -       |                     | 



| | (i) | The applicable PRC statutory income tax rate is used since the Group’s taxable income is
generated in the PRC. The applicable PRC income tax rate of 25% was used in the above computation for all reporting periods.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 11. | DIVIDENDS
| | --- | ---------



The Company did not pay and
declare any dividends on ordinary shares in the year ended December 31, 2013 and declared and paid dividends of RMB10,000,000
in the year ended December 31, 2014. In the eight-month period ended August 31, 2015, the company declared dividend of
RMB52,000,000, of which RMB12,000,000 has been pay as of August 31, 2015.



F-22







| | 12. | TRADE AND OTHER RECEIVABLES
| | --- | ---------------------------



|                               |  | At December 31 |    |  | At December 31 |  |        | At August 31 | 
|------------------------------ |  | -------------- | -- |  | -------------- |  | ------ | ------------ | 
|                               |  | 2013           |    |  | 2014           |  |        | 2015         | 
|                               |  | RMB’000        |    |  | RMB’000        |  |        | RMB’000      | 
|                               |  | (Unaudited)    |    |  | (Unaudited)    |  |        |              | 
|Trade receivables              |  |                | 28 |  |                |  | 15,400 |              | 
|Deposits and other receivables |  |                | 47 |  |                |  | 597    |              | 
|Prepayments                    |  |                | -  |  |                |  | 141    |              | 
|Total                          |  |                | 75 |  |                |  | 16,138 |              | 



The trade receivables are all within 6
months and none of them are past due but not impaired.



The Group has not recognized an allowance
for doubtful receivables because there has not been a significant change in credit quality and the amounts are still considered
recoverable. The Group does not hold any collateral or other credit enhancements over these balances.



| | 13. | PROPERTY AND EQUIPMENT
| | --- | ----------------------





|                                 |  | Leasehold improvements |      |   | Electronic equipment |  |       | Office equipment |  |  | Total   |  
|-------------------------------- |  | ---------------------- | ---- | - | -------------------- |  | ----- | ---------------- |  |  | ------- | -
|                                 |  | RMB’000                |      |   | RMB’000              |  |       | RMB’000          |  |  | RMB’000 |  
|Cost:                            |  |                        |      |   |                      |  |       |                  |  |  |         |  
|At January 1, 2013 (Unaudited)   |  |                        | -    |   |                      |  | 33    |                  |  |  | 2       |  
|Additions                        |  |                        | -    |   |                      |  | 50    |                  |  |  | -       |  
|Disposals                        |  |                        | -    |   |                      |  | -     |                  |  |  | -       |  
|At December 31, 2013 (Unaudited) |  |                        | -    |   |                      |  | 83    |                  |  |  | 2       |  
|Additions                        |  |                        | 583  |   |                      |  | 526   |                  |  |  | 75      |  
|Disposals                        |  |                        | -    |   |                      |  | (32   | )                |  |  | -       |  
|At December 31, 2014 (Unaudited) |  |                        | 583  |   |                      |  | 577   |                  |  |  | 77      |  
|Additions                        |  |                        | 80   |   |                      |  | 605   |                  |  |  | 28      |  
|Disposals                        |  |                        | -    |   |                      |  | -     |                  |  |  | -       |  
|At August 31, 2015               |  |                        | 663  |   |                      |  | 1,182 |                  |  |  | 105     |  
|                                 |  |                        |      |   |                      |  |       |                  |  |  |         |  
|Depreciation:                    |  |                        |      |   |                      |  |       |                  |  |  |         |  
|At January 1, 2013 (Unaudited)   |  |                        | -    |   |                      |  | (5    | )                |  |  | -       |  
|Charge for the year              |  |                        | -    |   |                      |  | (16   | )                |  |  | (1      | )
|Eliminated on disposals          |  |                        | -    |   |                      |  | -     |                  |  |  | -       |  
|At December 31, 2013 (Unaudited) |  |                        | -    |   |                      |  | (21   | )                |  |  | (1      | )
|Charge for the year              |  |                        | (49  | ) |                      |  | (91   | )                |  |  | (3      | )
|Eliminated on disposals          |  |                        | -    |   |                      |  | 4     |                  |  |  | -       |  
|At December 31, 2014 (Unaudited) |  |                        | (49  | ) |                      |  | (108  | )                |  |  | (4      | )
|Charge for the year              |  |                        | (154 | ) |                      |  | (182  | )                |  |  | (11     | )
|Eliminated on disposals          |  |                        | -    |   |                      |  | -     |                  |  |  | -       |  
|At August 31, 2015               |  |                        | (203 | ) |                      |  | (290  | )                |  |  | (15     | )
|Carrying values                  |  |                        |      |   |                      |  |       |                  |  |  |         |  
|At December 31, 2013 (Unaudited) |  |                        | -    |   |                      |  | 62    |                  |  |  | 1       |  
|At December 31, 2014 (Unaudited) |  |                        | 534  |   |                      |  | 469   |                  |  |  | 73      |  
|At August 31, 2015               |  |                        | 460  |   |                      |  | 892   |                  |  |  | 90      |  





F-23







| | 14. | TRADE AND OTHER PAYABLES
| | --- | ------------------------



|                                     |  | At December 31, |    |  | At December 31, |  |       | At August 31, | 
|------------------------------------ |  | --------------- | -- |  | --------------- |  | ----- | ------------- | 
|                                     |  | 2013            |    |  | 2014            |  |       | 2015          | 
|                                     |  | RMB’000         |    |  | RMB’000         |  |       | RMB’000       | 
|                                     |  | (Unaudited)     |    |  | (Unaudited)     |  |       |               | 
|                                     |  |                 |    |  |                 |  |       |               | 
|Trade payable                        |  |                 | -  |  |                 |  | 1,774 |               | 
|Accrued payroll and employee welfare |  |                 | -  |  |                 |  | 183   |               | 
|Other taxes payable                  |  |                 | 10 |  |                 |  | 5,592 |               | 
|Accrued expenses                     |  |                 | -  |  |                 |  | 40    |               | 
|Advance from customers               |  |                 | 57 |  |                 |  | 31    |               | 
|Other payables                       |  |                 | 4  |  |                 |  | 96    |               | 
|Total                                |  |                 | 71 |  |                 |  | 7,716 |               | 



| | 15. | RELATED PARTY TRANSACTIONS
| | --- | --------------------------



| | (a) | Related party balances
| | --- | ----------------------



|                                  |  | At December 31, |   |  | At December 31, |  |   | At August 31, | 
|--------------------------------- |  | --------------- | - |  | --------------- |  | - | ------------- | 
|                                  |  | 2013            |   |  | 2014            |  |   | 2015          | 
|                                  |  | RMB’000         |   |  | RMB’000         |  |   | RMB’000       | 
|                                  |  | (Unaudited)     |   |  | (Unaudited)     |  |   |               | 
|Amounts due from related party    |  |                 |   |  |                 |  |   |               | 
|Trade balances                    |  |                 |   |  |                 |  |   |               | 
|—Mihoyo Technology Limited (note) |  |                 | - |  |                 |  | - |               | 



Note: Mihoyo Technology Limited is controlled
by the same individual shareholders of the Group.



The amounts due from related party are trading
in nature. The trade balances are unsecured, non-interest bearing and repayable on contract credit term (i.e.: 6 month).



|                             |  | At December 31 |     |  | At December 31 |  |   | At August 31 | 
|---------------------------- |  | -------------- | --- |  | -------------- |  | - | ------------ | 
|                             |  | 2013           |     |  | 2014           |  |   | 2015         | 
|                             |  | RMB’000        |     |  | RMB’000        |  |   | RMB’000      | 
|                             |  | (Unaudited)    |     |  | (Unaudited)    |  |   |              | 
|Amounts due to related party |  |                |     |  |                |  |   |              | 
|Non-trade balances           |  |                |     |  |                |  |   |              | 
|— Cai Haoyu                  |  |                | 100 |  |                |  | - |              | 



The amounts due to related party are
loan from shareholder in nature. The non-trade balances are unsecured, non-interest bearing and repayable on demand.



F-24







(b) Related party transactions



During the year ended December 31, 2013 and 2014 and the
eight-month period ended August 31, 2015, respectively, significant related party transactions were as follows:

|                            |  | Year Ended  |   |  | Year Ended  |  |   | Eight months
Ended | 
|--------------------------- |  | ----------- | - |  | ----------- |  | - | ------------------ | 
|                            |  | December 31 |   |  | December 31 |  |   | August 31          | 
|                            |  | 2013        |   |  | 2014        |  |   | 2015               | 
|                            |  | RMB’000     |   |  | RMB’000     |  |   | RMB’000            | 
|                            |  | (Unaudited) |   |  | (Unaudited) |  |   |                    | 
|                            |  |             |   |  |             |  |   |                    | 
|Revenues                    |  |             |   |  |             |  |   |                    | 
|— Mihoyo Technology Limited |  |             | - |  |             |  | - |                    | 



(c) Key management compensation



The compensation of directors and other
key management during the years was as follows:



|                          |  | Year Ended  |     |  | Year Ended  |  |       | Eight months
Ended | 
|------------------------- |  | ----------- | --- |  | ----------- |  | ----- | ------------------ | 
|                          |  | December 31 |     |  | December 31 |  |       | August 31          | 
|                          |  | 2013        |     |  | 2014        |  |       | 2015               | 
|                          |  | RMB’000     |     |  | RMB’000     |  |       | RMB’000            | 
|                          |  | (Unaudited) |     |  | (Unaudited) |  |       |                    | 
|                          |  |             |     |  |             |  |       |                    | 
|Salary and other benefits |  |             | 229 |  |             |  | 2,308 | *                  | 



*The
Group has accrued and paid RMB1,656,000 bonus to key management during the year 2014.



16.	OPERATING
LEASES



The Group has operating lease agreements
principally for its office properties and servers in the PRC with lease terms between one to two years. These leases are renewable
upon negotiation.



| | (a) | Payments recognised as an expense
| | --- | ---------------------------------



|                       |  | Year Ended  |    |  | Year Ended  |  |     | Eight months
Ended | 
|---------------------- |  | ----------- | -- |  | ----------- |  | --- | ------------------ | 
|                       |  | December 31 |    |  | December 31 |  |     | August 31          | 
|                       |  | 2013        |    |  | 2014        |  |     | 2015               | 
|                       |  | RMB’000     |    |  | RMB’000     |  |     | RMB’000            | 
|                       |  | (Unaudited) |    |  | (Unaudited) |  |     |                    | 
|                       |  |             |    |  |             |  |     |                    | 
|Minimum lease payments |  |             | 41 |  |             |  | 406 |                    | 



F-25









| | (b) | Non-cancellable operating lease commitment
| | --- | ------------------------------------------



The Group’s commitments for future
minimum lease payments under non-cancelable operating lease agreements are as follows:



|                                        |  | Year Ended  |    |  | Year Ended  |  |       | Eight months
Ended | 
|--------------------------------------- |  | ----------- | -- |  | ----------- |  | ----- | ------------------ | 
|                                        |  | December 31 |    |  | December 31 |  |       | August 31          | 
|                                        |  | 2013        |    |  | 2014        |  |       | 2015               | 
|                                        |  | RMB’000     |    |  | RMB’000     |  |       | RMB’000            | 
|                                        |  | (Unaudited) |    |  | (Unaudited) |  |       |                    | 
|                                        |  |             |    |  |             |  |       |                    | 
|Within one year                         |  |             | 62 |  |             |  | 1,259 |                    | 
|In the second to fifth years, inclusive |  |             | -  |  |             |  | 2,203 |                    | 
|Total                                   |  |             | 62 |  |             |  | 3,462 |                    | 



17.	APPROVAL OF
FINANCIAL STATEMENTS



The financial statements were approved
by the board of directors and authorized for issue on June 30, 2016.



* * * * *



F-26