17.1, Level 17, Tower 2, Bank Rakyat Twin Tower,

No. 33, Jalan Rakyat, 50470 Kuala Lumpur, Malaysia

March 31

2017

December 31

2016

4

Three Months Ended

31 March

Three Months Ended

31 March

FOR THE THREE MONTHS ENDED MARCH 31, 2017

MEDIAN GROUP INC

(Formerly China Media Group Corporation)

Three Months Ended

March 31

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the U.S. Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2016. As permitted under the rules of the SEC for interim reporting, they do not include all information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements for the year ended December 31, 2016 included in the Company Form 10-K filed with the Securities and Exchange Commission.

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of financial position and results of operations for the interim period presented have been included. Operating results for the interim period are not necessary indicative of the results that may be expected for the respective full year.

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

Current taxes are recognized in the statement of income except to the extent that the tax relates to items recognized outside the statement of income, either in other income or directly in equity.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance for deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The accounts of the Company's Hong Kong and Malaysia subsidiaries are maintained in Hong Kong dollars (HK) and Malaysia Ringgit (RM), respectively. Such financial statements are translated into U.S. Dollars (USD) in accordance with ASC 830 “Foreign Currency Translation” which codified Statement of Financial Accounts Standards ("SFAS") No. 52, "Foreign Currency Translation," with the respective currency as the functional currency. According to the Statement, all assets and liabilities were translated at the exchange rate on the balance sheet date, stockholder's equity are translated at the historical rates and statement of operations items are translated at the weighted average exchange rate for the year. The resulting translation adjustments are reported under other comprehensive income in accordance with SFAS No. 130, “Reporting Comprehensive Income”. As of March 31, 2017, the comprehensive loss was $133,290.

The Company does not expect the adoption of any recently issued accounting pronouncements to have a significant impact to its financial position, results of operations or cash flows.

Certain comparative amounts have been reclassified to conform to the current period’s presentation.

On October 17, 2016, the Company issued 120,000,000 shares of the Company to 3 independent parties at a price of $0.011 per share to raise a total cash proceed of approximately $1,320,000. The proceeds for this placement shall be used for working capital of the Company.

March 31

2017

December 31

2016

March 31

2017

December 31

2016

The trade receivables due from related parties which the two of our directors have interests, is non-secured, non-interest bearing and repayable on demand. The funds were advanced to the related parties in respect of paying a deposits under the Master Distribution Agreement (Note 9(b)).

The non-trade receivable amount due from a related party, a director of the Company, is unsecured, non-interest bearing and repayable on demand.

The amounts due to related parties are unsecured, non-interest bearing and repayable on demand. Imputed interest on these amounts is considered insignificant.

March 31

2017

No provision was made for income tax for the three months ended March 31, 2017 and 2016, since the Company and its subsidiaries had significant net operating loss. In the three months ended March 31, 2017 and 2016, the Company and its subsidiaries incurred net operating losses for tax purposes of approximately $58,948 and $173,384, respectively. Total net operating losses carry forward as at March 31, 2017 and 2016, (i) for Federal and State purpose were $12,163,959 and $11,761,918, respectively and (ii) for its entities outside of the United States $59,207 and $152,489. The net operating loss carry-forwards may be used to reduce taxable income through the year 2025. The availability of the Company's net operating loss carry-forwards are subject to limitation if there is a 50% or more change in the ownership of the Company's stock.

There was no significant difference between reportable income tax and statutory income tax. The gross deferred tax asset balance as at March 31, 2017 and December 31, 2016 was approximately $5,038,671 and $5,170,610 respectively. A full valuation allowance has been established against the deferred tax assets, as the utilization of the loss carry-forwards cannot reasonably be assured.

A reconciliation between the income tax computed at the Malaysia statutory rate and the Group's provision for income tax is as follows:

THIS FOLLOWING INFORMATION SPECIFIES CERTAIN FORWARD-LOOKING STATEMENTS OF MANAGEMENT OF THE COMPANY. FORWARD-LOOKING STATEMENTS ARE STATEMENTS THAT ESTIMATE THE HAPPENING OF FUTURE EVENTS AND ARE NOT BASED ON HISTORICAL FACT. FORWARD-LOOKING STATEMENTS MAY BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY, SUCH AS "MAY", "SHALL", "COULD", "EXPECT", "ESTIMATE", "ANTICIPATE", "PREDICT", "PROBABLE", "POSSIBLE", "SHOULD", "CONTINUE", OR SIMILAR TERMS, VARIATIONS OF THOSE TERMS OR THE NEGATIVE OF THOSE TERMS. THE FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATION HAVE BEEN COMPILED BY OUR MANAGEMENT ON THE BASIS OF ASSUMPTIONS MADE BY MANAGEMENT AND CONSIDERED BY MANAGEMENT TO BE REASONABLE. OUR FUTURE OPERATING RESULTS, HOWEVER, ARE IMPOSSIBLE TO PREDICT AND NO REPRESENTATION, GUARANTY, OR WARRANTY IS TO BE INFERRED FROM THOSE FORWARD-LOOKING STATEMENTS.

THE ASSUMPTIONS USED FOR PURPOSES OF THE FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATION REPRESENT ESTIMATES OF FUTURE EVENTS AND ARE SUBJECT TO UNCERTAINTY AS TO POSSIBLE CHANGES IN ECONOMIC, LEGISLATIVE, INDUSTRY, AND OTHER CIRCUMSTANCES. AS A RESULT, THE IDENTIFICATION AND INTERPRETATION OF DATA AND OTHER INFORMATION AND THEIR USE IN DEVELOPING AND SELECTING ASSUMPTIONS FROM AND AMONG REASONABLE ALTERNATIVES REQUIRE THE EXERCISE OF JUDGMENT. TO THE EXTENT THAT THE ASSUMED EVENTS DO NOT OCCUR, THE OUTCOME MAY VARY SUBSTANTIALLY FROM ANTICIPATED OR PROJECTED RESULTS, AND, ACCORDINGLY, NO OPINION IS EXPRESSED ON THE ACHIEVABILITY OF THOSE FORWARD-LOOKING STATEMENTS. WE CANNOT GUARANTY THAT ANY OF THE ASSUMPTIONS RELATING TO THE FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATION ARE ACCURATE, AND WE ASSUME NO OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS.

OUR BUSINESS REVIEW AND FUTURE STRATEGY. The Group has 3 business units namely “Advertising”, “Products and Services” and “Telecommunication and Mobile Computing”. The management has determined to only focus our business in the Telecommunications and Mobile Computing business unit going forward, and have the Advertising and Products and Services business units remain inactive until viable business opportunities are presented.

2015 Products & Services Overview

(i) An advanced set of products and services that will disrupt the market landscape;

(ii) A customer engagement model that is currently not offered by others; and

(iii) A technology superiority and scalability that will support future growth.

Industry Overview and Competition

Telecommunication Market

Asia Pacific

At the end of 2015, 62% of the population in Asia Pacific (2.5 billion individuals) subscribed to mobile services. Growth rates in the region are set to remain above the global average, with Asia Pacific adding more than 600 million new subscribers by 2020. The focus of growth will shift to South and South-East Asia. ⁴

The region is seeing an accelerating technology migration to 4G, with the number of 4G connections increasing by 2.5 times over the course of 2015 and now totaling in excess of 600 million. A number of previously ‘laggard’ markets in Asia Pacific are now migrating to 4G, including the likes of Thailand, Malaysia and the Philippines. This is being driven by a number of factors including ongoing network investments by operators, falling device prices and growing consumer appetite for higher speed mobile.

Revenue growth in the region slowed sharply in 2015, reflecting slowing subscriber growth, a weak macroeconomic backdrop and ongoing competitive pressures in a number of markets. Growth rates should recover in the second half of the decade, due to the positive impact of the migration to 4G on data traffic growth. ¹

For the period ending January 2017, mobile connections as against the country’s population is led by Hong Kong with a penetration rate of 165% followed by Singapore (147%), Indonesia (142%), Malaysia (139%), Thailand (133%), Vietnam (131%) and Philippines (126%). On the other hand, mobile broadband penetration is highest in Singapore (146%) and followed by Thailand (131%), Hong Kong (125%), Malaysia (104%), Indonesia (65%), and Philippines (65%) with the global average 55%.³

On mobile social media penetration, Singapore is ahead with 70% with Hong Kong, Malaysia and Thailand closing in at 66%, 65% and 62% respectively. They are followed by Philippines (52%), Vietnam (43%), and Indonesia (35%) with the global average at 34%. The active M-commerce countries are Thailand (41%), Singapore (40%), Malaysia (38%), Hong Kong (36%), Indonesia (33%), Vietnam (28%) and Philippines (26%).³

Malaysia

The information and communication subsector continued to record a strong growth of 8.7% during the first six months of 2016 (January - June 2015: 9.4%). The communication segment remained as the major contributor to growth, sustaining its pace at 10.1% (January - June 2015: 10.1%) following new and expansion of internet-based applications as well as enhanced data plans. This was supported by growing number of information and communications technology (ICT) devices as well as continuous initiatives to enhance network coverage and communication access. Growth of the subsector was partly driven by infrastructure expansion to cater for the rising demand for reliable and high-speed internet, including 4G Long Term Evolution (LTE) network and fiber optic.²

¹ The Mobile Economy Asia Pacific 2016 - GSMA

² Bank Negara Malaysia Annual Report 2016

³ Digital in 2017 : Southeast Asia – we are social & Hootsuite

⁴ Digital in 2017 : Global Overview – we are social & Hootsuite

The explosive growth of wireless is one of the most striking aspects of the telecom industry since the 1990s. Demand for low-cost and high-value cellular service has been driving the mobile industry towards price wars. As the industry continue to mature, Mobile Network Operators (MNO’s) recognize that future growth depends on the pursuit of new markets beyond the conventional method of direct acquisition of new subscribers. The growth driven by bundled service offerings with slashed rates is only a short-term remedy. A new strategic model through alliances with Mobile Virtual Network Operator (MVNO) offered a far sighted solution. The MVNO model is seen as both, a solution as well as an opportunity for MNOs to pursue new markets that present sustainable growth and retention.

MVNO’s typically do not own a network but lease the network of a service provider that does have a network. An MVNO business consists of managing two key relationships; Mobile Network Operator (MNO) and the end-users. MVNO provides mobile services without owning spectrum and relies on the MNO network infrastructure. Notably, this business arrangement allows smaller service providers to be focused on specific aspects of the mobile business by offering specialized services and enriching the industry service offerings through optimization usage of the network infrastructure.

MVNOs provide lower operational costs for mobile operators through billing, sales, customer service, marketing, increase revenue through new applications, value added services and attractive rates. As such, the opportunity for mobile operators to take advantage of MVNOs generally outweighs the competitive threat.

Plan of operations

OUR PLAN OF OPERATION FOR THE NEXT TWELVE MONTHS.

We hope to generate additional revenues in the next twelve months by engaging business operations through internal growth and through strategic acquisitions and cooperative advertising agreements, as described more fully under "Overview" above.

Financing and funding

REVENUES.

For the three months period ended March 31, 2017, the Group derived $5,866 in revenue, $3,407 in cost of revenue and therefore had $2,459 in gross profit from its operations. For the three months period ended March 31, 2016, the Group derived $20,897 in revenue, $13,618 in cost of revenue and therefore had $7,279 in gross profit from its operations. The decrease in revenue is the result of the expiry of a contract.

OPERATING EXPENSES.

For the three month period ended March 31, 2017, from our continuing operation we had $2,459 in gross profit and our total operating expenses were $42,486, all of which were selling, general and administrative expenses. We also had $21,122 in other income, $43 in finance charges and $40,000 in interest expenses, so that the net loss to our shareholders from operation for the three months period ended March 31, 2017 was $58,948. This was in comparison in the three months period ended March 31, 2016, from our operation we had $7,279 in gross profit and our total operating expenses were $141,048, all of which were selling, general and administrative expenses. The decrease in the administration expenses was the result of the administration expenses in the prior year of a subsidiary that was disposed at the end of last year. We also had $465 in other income, $80 in finance charges and $40,000 in interest expenses, so that the net loss to our shareholders from operation for the three months period ended March 31, 2016 was $173,384.

As at March 31, 2017, the Company had $169,041 in cash and the other current assets consisted of $5,873 in accounts receivables, $115,498 in prepayments and deposits and $880,332 in amount due from a related paries for a total assets of $1,170,744 as of March 31 2017. We also had current liabilities of $1,787,417 which were represented by $837,839 in other payables and accruals, $949,578 due to related parties. We also had $2,000,000 in long-term shareholders loan as at March 31, 2017, making our total liabilities $3,787,417. The working capital balance was a deficit of $613,673 as compared to $545,252 at December 31, 2016. The net cash used in operation was $80,837 during the current quarter as compared to $213,638 in the quarter ended March 31, 2016,

At present the Company does not have sufficient cash resources to provide for all general corporate operations in the foreseeable future. The Company will be required to raise additional capital in order to continue and expand its operations in fiscal 2017.

Chief Executive Officer

Chief Financial Officer