Interim Report for the First Quarter 2016 of Midea Group Co., Ltd.
Midea Group Co., Ltd.
Interim Report for the First Quarter 2016
April 2016
1
Interim Report for the First Quarter 2016 of Midea Group Co., Ltd.
Section I Important Reminders
1.1 The Board of Directors, the Supervisory Committee as well as all the
directors, supervisors and senior management staff of Midea Group Co., Ltd.
(hereinafter referred to as the “Company”) have warranted that this Report
contains no false records, misleading statements or material omissions. And
they shall be jointly and severally liable for the factuality, accuracy and
completeness of the information given in this Report.
1.2 All the directors have attended the Q1 report review board meeting.
1.3 The financial statements contained in this Report have not been audited
by a certified public auditors (CPAs) firm.
1.4 Mr. Fang Hongbo, Chairman of the Board and President of the Company,
and Ms. Yuan Liqun, responsible person for the Company’s financial affairs,
have represented and warranted that the financial statements in this Report
are factual, accurate and complete.
1.5 This Report has been prepared in both Chinese and English. Should there
be any discrepancy between the two versions, the Chinese version shall
prevail.
2
Interim Report for the First Quarter 2016 of Midea Group Co., Ltd.
Section II Financial Highlights & Changes in Shareholders
I Major Accounting Data and Financial Indicators
Does the Company adjust retrospectively or restate accounting data of previous years due to changes in
accounting policy or correction of any accounting error?
□ Yes √ No
Jan.-Mar. 2016 Jan.-Mar. 2015 YoY Change (%)
Sales revenues (RMB’000) 38,341,624 42,426,714 -9.63%
Net profit attributable to shareholders of
3,907,252 3,342,135 16.91%
the Company (RMB’000)
Net profit attributable to shareholders of
the Company after non-recurring gains 3,745,392 3,019,956 24.02%
and losses (RMB’000)
Net cash flows from operating activities
6,595,024 2,498,717 163.94%
(RMB’000)
Basic EPS (RMB / share) 0.92 0.79 16.46%
Diluted EPS (RMB / share) 0.91 0.79 15.19%
Weighted average ROE (%) 7.58% 8.11% -0.53%
31 Mar. 2016 31 Dec. 2015 YoY Change (%)
Total assets (RMB’000) 147,922,589 128,841,935 14.81%
Net assets attributable to shareholders
53,857,579 49,201,852 9.46%
of the Company (RMB’000)
Total number of shares of the Company on the last trading session before disclosure:
Total number of shares of the Company on the last
4,267,391,228
trading session before disclosure (share)
EPS calculated by using the latest number of shares
0.92
(RMB / share)
Items and amounts of non-recurring gains and losses
√ Applicable □ N/A
Unit: RMB’000
Item Jan.-Mar. 2016 Note
Gains/losses from the disposal of non-current assets
-11,114
(including the offset part of asset impairment provisions)
Government grants recognized in the current period, other 209,245
3
Interim Report for the First Quarter 2016 of Midea Group Co., Ltd.
than those closely related to business of the Company and
granted at a fixed amount or quantity in accordance with
certain national standards
Gains/losses arising from changes in fair value of financial
assets and liabilities held for trading, (other than effective
hedging instruments related to the Company’s normal
-174,678
operations), as well as investment gains from disposal of
financial assets and liabilities held for trading and financial
assets available for sale
Other non-operating income and expenses except the
75,333
above items
Less: Income tax 21,115
Minority interests (after tax) -84,189
Total 161,860
Explain the reasons if the Company classifies an item as a non-recurring gain/loss according to the
definition in the Their Securities to the Public—Non-Recurring Gains and Losses>, or classifies any non-recurring gain/loss item mentioned in the said explanatory announcement as a recurring gain/loss item □ Applicable √ N/A No such cases in the Report Period. II Total number of shareholders and shareholdings of the top ten shareholders at the period-end 1. Total number of common shareholders and shareholdings of the top ten common shareholders at the period-end Unit: share Total number of common shareholders at 83,706 the period-end Shareholdings of the top ten common shareholders Number of Pledged or frozen shares Nature of Shareholding Number of Name of shareholder restricted Status of Number of shareholder percentage (%) shares held shares held shares shares Domestic Midea Holding Co., Ltd. non-state-owned 35.06 1,496,250,000 1,496,250,000 Pledged 425,970,000 corporation Rongrui Equity Investment Domestic 7.14 304,500,000 0 4 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. (Zhuhai) Partnership (limited non-state-owned partnership) corporation China Securities Finance State-owned 2.95 125,794,924 0 Co., Ltd. corporation Domestic Fang Hongbo 2.14 91,326,995 90,000,000 individual Tianjin CDH Jiatai Equity Domestic Investment Partnership non-state-owned 1.83 78,000,000 0 (limited partnership) corporation Domestic Huang Jian 1.76 75,000,000 75,000,000 individual Ningbo Maysun Equity Domestic Investment Partnership non-state-owned 1.76 75,000,000 75,000,000 (limited partnership) corporation Domestic Yuan Liqun 1.42 60,500,000 60,000,000 individual Overseas CDH M-Tech (HK) Co., Ltd. 1.41 60,000,000 0 corporation Overseas CDH Spark (HK) Co., Ltd. 1.35 57,500,000 0 corporation Shareholdings of the top ten non-restricted common shareholders Number of non-restricted Type of shares Name of shareholder common shares held at the Type Number period-end Rongrui Equity Investment (Zhuhai) Partnership 304,500,000 RMB ordinary shares 304,500,000 (limited partnership) China Securities Finance Co., Ltd. 125,794,924 RMB ordinary shares 125,794,924 Tianjin CDH Jiatai Equity Investment 78,000,000 RMB ordinary shares 78,000,000 Partnership (limited partnership) CDH M-Tech (HK) Co., Ltd. 60,000,000 RMB ordinary shares 60,000,000 CDH Spark (HK) Co., Ltd. 57,500,000 RMB ordinary shares 57,500,000 Central Huijin Asset Management Ltd. 52,316,600 RMB ordinary shares 52,316,600 Fidelity Investments Management (HK) Ltd.－ 32,724,509 RMB ordinary shares 32,724,509 Clients’ Funds Merrill Lynch International 31,982,064 RMB ordinary shares 31,982,064 Hillhouse Capital Management Limited－HCM 30,115,775 RMB ordinary shares 30,115,775 China Fund 5 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. UBS AG 28,877,444 RMB ordinary shares 28,877,444 Mr. Fang Hongbo and Ms. Yuan Liqun, individual shareholders, both serve as board members and senior executives in Midea Group. CDH Jiatai, CDH M-Tech and CDH Spark are related parties to each other, with a combined stake Explanation of connected relationship or/and of 4.59% in Midea Group. acting-in-concert parties among the The Company has no information on whether there is any connected above-mentioned shareholders relationship among other holders of tradable shares or whether other holders of tradable shares belong to acting-in-concert parties specified in the Administrative Measures for Information Disclosure Regarding Changes of Shareholdings in Listed Companies. Top ten non-restricted common shareholders N/A taking part in securities margin trading (if any) Did any of the top 10 common shareholders or the top 10 non-restricted common shareholders of the Company carry out any agreed buy-back in the Report Period? □ Yes √ No No such cases in the Report Period. 2. Total number of preference shareholders and shareholdings of the top ten preference shareholders at the period-end □ Applicable √ N/A 6 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. Section III Significant Events I Major changes of main items in financial statements and financial indicators within the Report Period, as well as the reasons for the changes √ Applicable □ N/A Unit: RMB’000 31 March 31 March YoY Change Main reasons for the Balance sheet items 2016 2015 (%) changes Mainly due to changes in business Deposits in other banks 1,784,166 4,062,807 -56.09% operations of finance subsidiary Mainly due to changes in the fair Derivative financial assets 8,525 158,822 -94.63% value of derivative financial assets Mainly due to increase of sales Notes receivable 16,899,707 12,889,151 31.12% revenue in 2016Q1 compared to 2015Q4. Mainly due to advance payment of Accounts paid in advance 1,463,917 988,625 48.08% materials Available-for-sale financial Mainly due to increase of equity 5,046,663 3,289,954 53.40% assets investment Mainly due to increase of external Short-term borrowings 9,180,001 3,920,933 134.13% short-term borrowings Customer bank deposits and Mainly due to changes in business Mainly due to banks and other 32,748 52,000 -37.02% operations of finance subsidiary financial institutions Mainly due to changes in the fair Derivative financial liabilities 126,952 33,377 280.36% value of derivative financial liabilities Financial assets sold and Mainly due to changes in business 1,132,410 651,784 73.74% repurchased operations of finance subsidiary Mainly due to the inclusion of bonus Payroll payable 1,327,734 2,229,332 -40.44% in the payable at 2015 year end Mainly due to increase of profit Tax payable 3,409,062 1,607,181 112.11% which results in increase of CIT and VAT Mainly due to increase of short-term Interest payable 12,359 9,343 32.28% borrowings 7 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. Mainly due to increase of payment Dividend payable 12,308 118,851 -89.64% of dividend of subsidiaries Mainly due to increase of advance Other accounts payable 1,489,249 1,139,306 30.72% received Mainly due to temporary decrease Deferred income tax liabilities 23,937 40,464 -40.84% of tax payable Mainly due to changes in profit /loss Other comprehensive income -441,113 -1,071,151 -58.82% of available-for-sale financial assets Jan.-March Jan.-March YoY Change Main reasons for the Income statement items 2016 2015 (%) changes Mainly due to business expansion Interest income 255,072 146,676 73.90% of the finance subsidiary Mainly due to business expansion Interest expenses 132,167 98,854 33.70% of the finance subsidiary Mainly due to increase of interest Financial expenses -282,083 195,783 -244.08% income Mainly due to changes in the fair Gains on fair value changes -239,146 153,581 -255.71% value of derivative financial instruments Mainly due to decrease in the gains Investment gains 253,713 527,790 -51.93% from wealth management products Mainly due to increase in Non-operating income 292,676 94,169 210.80% government subsidies Mainly due to decrease in losses on Non-operating expenses 21,506 43,518 -50.58% disposal of non-current assets Cash flow statement Jan.-March Jan.-March YoY Change Main reasons for the items 2016 2015 (%) changes Net cash flows from operating Mainly due to increase in payment 6,595,024 2,498,717 163.94% activities of receivables Mainly due to increase of wealth Net cash flows from investing -9,560,260 -1,175,369 713.38% management and structured activities deposit Net cash flows from financing Mainly due to increase of 4,802,468 1,325,027 262.44% activities borrowings II Progress, influence and solutions of significant events √ Applicable □ N/A 8 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. 1. The Proposal Regarding Registering and Issuing Super Short-term Commercial Paper was reviewed and approved at the 5th Meeting of the Second Board of Directors on 15 January 2016 and later at the First Extraordinary General Meeting of Shareholders for 2016 on 1 February 2016. With the purpose of diversifying financing channels, optimizing capital structure and improving its liquidity management capability, the Company plans to apply for registering and issuing super short-term commercial papers with an amount not more than RMB 20bn and expiration period not over 270 days, in accordance with the Administrative Measures of the People's Bank of China for Debt Financing Instruments of Non-Financial Enterprises in the Inter-bank Bond Market. On 29 March 2016, National Association of Financial Market Institutional Investors issued the Registration Acceptance Notice, in which it agreed to accept the registration from the Company of an amount of RMB 20bn of super short-term commercial papers (validity of two years starting from the date of the Acceptance Notice. 2. The Company has signed a Memorandum of Understanding with Toshiba Corporation (“Toshiba”) for Strategic Cooperation, in which both companies agree to strengthen their strategic partnership and to jointly explore new growth opportunities. As a result, the two companies signed a Definitive Agreement under which Midea will acquire an 80.1% stake in Toshiba Lifestyle Products & Services Corporation (“TLSC”), the home appliances arm of Toshiba (the “Business” or “Toshiba Home Appliances”), while Toshiba will retain a 19.9% shareholding. The transaction price for the 80.1% stake is approximately JPY53.7 billion (US$473 million). Meanwhile Midea will be licensed to use the Toshiba brand worldwide in relation to the Business for 40 years, and will receive more than 5,000 home appliance related intellectual property assets. The closing of the transaction is subject to customary regulatory filings in China and customary anti-trust clearances in relevant jurisdictions. Overview of the significant event Date of disclosure Website for disclosure Announcement on the Proposed Registering and Issuing 16 January 2016 www.cninfo.com.cn Super Short-term Commercial Paper Announcement Regarding Acquiring The Home Appliance 17 March 2016 www.cninfo.com.cn Business of Toshiba Corporation Announcement on Strengthening Strategic Cooperation with 31 March 2016 www.cninfo.com.cn Toshiba Corporation 9 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. III Undertakings made by the Company and its shareholders interested in 5% or more of the shares of the Company made in the Report Period or subsisting to the Report Period √ Applicable □ N/A Undertaking Undertaking Undertaking Details of undertaking Term Particulars on the performance giver date 1. Undertaking of Midea Holding Ltd. (hereinafter referred to as "Midea Apart from the 1. There has been no violation of this Holding"), and He Xiangjian, respectively the controlling shareholder first item of undertaking. and actual controller of Midea Group Co., Ltd., towards the lock-up undertakings, period of shares. its duration Undertakings He Xiangjian and Midea Holding have undertaken as follows: Within 36 validity spans given in Controlling months from the listing date of Midea Group's stocks, they will neither transfer 36 months offering shareholder, or entrust others to manage their directly and indirectly held shares of Midea from the day of documents or 2013-3-28 actual Group issued prior to this issuance, nor sell them to Midea Group. If they Midea Group’s shareholding controller break the above undertaking, they will assume all liabilities arising therefrom. listing which is alternation 2. Undertaking of Midea Holding and the actual controller He Xiangjian 18 September 2. There is no violation of this undertaking. documents towards the maintenance of the independence of Midea Group. 2013 to He Xiangjian and Midea Holding have undertaken as follows: He Xiangjian, 18 September Midea Holding and their controlled enterprises will remain independent from 2016, all other Midea Group in respect of personnel, finance, assets, business and items are 10 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. institutions, etc. in accordance with relevant laws and regulations and indefinite. regulatory documents. They will faithfully fulfill the above undertaking, and assume the corresponding legal liability. If they fail to fulfill their obligations and responsibilities conferred by the undertaking, they will bear the corresponding legal liabilities according to relevant laws, rules, regulations and regulatory documents. 3. Undertaking of Midea Holding and the actual controller He Xiangjian 3. There has been no violation of this towards avoiding competition within the industry. undertaking. In order to avoid possible competition within the industry between Midea Group and Midea Holding and its controlled enterprises as well as He Xiangjian, his immediate family and his controlled companies, He Xiangjian and Midea Holding have undertaken as follows: (1) None of the entities or individuals mentioned above is or will be engaged in the same or similar business as the existing main business of Midea Group and its controlled companies. They are not or will not engage or participate in such business that is competitive to the existing main business of Midea Group and its controlled companies by controlling other economic entities, institutions or economic organizations; (2) If Midea Group and its controlled companies expand their business on the basis of the existing ones to those where the above mentioned related entities 11 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. or individuals are already performing production and operation, as long as He Xiangjian is still the actual controller of Midea Group, and Midea Holding the controlling shareholder, they will agree on solving the problem of competition within the industry arising therefrom, within a reasonable period; (3) If Midea Group and its controlled companies expand their business scope on the basis of the existing ones to those where the above mentioned related subjects have not gone into production or operation, as long as He Xiangjian is still the actual controller of Midea Group, and Midea Holding the controlling shareholder, they would undertake as not to engage in any business competing with the new ones of Midea Group and its controlled companies; (4) In accordance with effective laws, regulations or other regulatory documents of People's Republic of China, as long as He Xiangjian is identified as the actual controller of Midea Group, and Midea Holding the controlling shareholder, they will not change or terminate this undertaking. (5) He Xiangjian and Midea Holding shall faithfully fulfill the above undertaking, and assume the corresponding legal responsibilities. If they fail to fulfill their obligations and responsibilities conferred by the undertaking, they would bear the corresponding legal responsibilities according to relevant laws, rules, regulations and regulatory documents. 4. Undertaking of Midea Holding and the actual controller He Xiangjian 4. There has been no violation of this 12 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. towards the regulation of related transactions. undertaking. In order to regulate matters of related transactions that may occur in the future between Midea Group and Midea Holding and its controlled companies as well as He Xiangjian, his immediate family and his controlled companies, He Xiangjian and Midea Holding have undertaken as follows: (1) They will regulate any related transactions with Midea Group and its controlled companies using their utmost efforts to reduce them. For unavoidable related transactions with Midea Group and its controlled companies, including but not limited to commodity trading, providing services to each other or as agent, they will sign legal normative agreements with Midea Group, and go through approval procedures in accordance with related laws, regulations, rules, other regulatory documents, and relevant provisions of the Articles of Association of Midea Group. They guarantee to offer fair prices for related transactions, and fulfill the information disclosure obligations in respect of the related transactions according to related laws, regulations, rules, other regulatory documents, and relevant provisions of the Articles of Association of Midea Group. They also guarantee not to illegally transfer funds or profits from Midea Group, or damage the interests of its shareholders at their advantages during the related transactions. (2) They shall fulfill the obligation of withdrawing from voting that involves the 13 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. above mentioned related transactions at the general meeting of Midea Group; (3) The related subject mentioned above shall not require Midea Group to offer more favorable conditions than those to any independent third party in any fair market transactions. (4) In accordance with effective laws, regulations or other regulatory documents of People's Republic of China, as long as He Xiangjian is identified as the actual controller of Midea Group, and Midea Holding the controlling shareholder, they shall not change or terminate this undertaking. (5) He Xiangjian and Midea Holding will faithfully fulfill the above undertaking and assume the corresponding legal liabilities. If they fail to fulfill their obligations and responsibilities conferred by the undertaking, they will bear the corresponding legal responsibilities according to relevant laws, rules, regulations and regulatory documents. 5. Related undertaking by He Xiangjian, the actual controller of Midea 5. So far, this shareholding transfer has not Group, on Midea Trade Union Committee transferring its limited equity brought about any loss caused by any dispute of Midea Group. or potential disputes. There has been no On 4 January , 2001, the Midea Trade Union Committee signed the "Equity violation of this undertaking. Transfer Contract" with five people, i.e. He Xiangjian, Chen Dajiang, Feng Jingmei, Chen Kangning and Liang Jieyin, where it transfered all limited equity of Midea Group (22. 85%) respectively to those five people. According to the 14 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. confirmation letter issued by members of the Midea Trade Union Committee at that time, the equity transfer price was determined after mutual discussion on the basis of their true opinions, therefore there was no dispute or potential dispute. On 28 June, 2013, Foshan Shunde Beijiao General Union, superior department of Midea Trade Union Committee, issued a confirmation letter to the fact that Midea Trade Union Committee funded the establishment of Midea Group Co., Ltd. In addition, the letter also confirmed that the council of Midea Trade Union Committee is entitled to dispose any property of the committee, and such property disposal does not need agreement from all staff committee members. Midea Holding and He Xiangjian, respectively the controlling shareholder and actual controller of Midea Group Co., Ltd. have undertaken as follows: For any loss of Midea Group caused by any dispute or potential dispute arising from the matters of equity transfer mentioned above, they are willing to assume full liability for such loss. 6. Undertakings on Issues about Payment of the Staff Social Insurance 6. So far, the payment of the staff social and the Housing Provident Fund involved in Midea Group's Overall insurance and the housing provident fund has Listing not brought about any controversy or potential Midea Holding and He Xiangjian: Midea Holding have undertaken to be liable disputes. There has been no violation of this 15 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. for (1) paying such expenses and related expenses on time based on the undertaking. requirements of relevant state departments, if Midea Group is required to be liable for the payment of staff social insurance and the housing provident fund and the payment required by relevant state authorities prior to this merger, (2) paying corresponding compensation for all direct and indirect losses incurred by Midea Group and its subsidiaries due to this merger, (3) indemnifying and holding harmless Midea Group and its subsidiaries in time from such expenses where Midea Group and its subsidiaries are required to pay them in advance. 7. Undertakings on issues about asset alteration, asset flaw and house leasing of Midea Group and its subsidiaries 7.1 The Process of Property Ownership Midea Holding and He Xiangjian have undertaken as follows: Certificate: (1) Midea Holding will do its utmost to assist and urge Midea Group (including The Report discloses that the Company is trying to its subsidiaries) to complete renaming procedures of related assets, such as get the Property Ownership Certificate for 177 of its land, houses, trademarks, patents and stock rights, declared in the related properties, which cover an area of 2,148,485.65 files of this merger. Midea Holding will be liable for all compensations of square meters. So far, 51 applications have been losses caused by issues about renaming procedures of related assets approved, the total area covers 1,638,892.27 mentioned above to Midea Group. square meters, which accounts for 76.28% of total (2) Midea Holding shall do its utmost to assist Midea Group (including its area; 11 applications are under process, covering subsidiaries) to apply for ownership certificates of land and property declared an area of 447,465.15 square meters, accounting 16 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. in related files of this merger. for 20.83% of the total area. These 11 properties (3) For those houses without ownership certificates due to incomplete are in possession of ownership certificates have formalities in the past, Midea Holding shall assist Midea Group (including its not brought about any controversy or dispute. controlled subsidiaries) in going through relevant construction-related Another property with an area of 1,966.69 square formalities again and obtaining the corresponding house ownership meters (0.09% of the total area) has been certificates. If the competent authorities require Midea Group to dismantle disposed. The remaining 114 properties, spanning buildings that can not acquire the real estate registration procedures an area of 60,161.54 square meters account for re-application, Midea Holding shall do its utmost to provide assistance and be 2.8% of the total area. These properties are all liable for any related expenses used in dismantling such buildings by Midea small unit size auxiliary facilities such as security Group (including its subsidiaries). booth, transformer room, power room, pump room, (4) Under any circumstances that Midea Group suffers from losses incurred gas station and so on, for which property through no longer using those properties or failing to obtain or collect in time, ownership certificates cannot be granted or applied the ownership certificates of those properties currently being used or any for. So far these 114 properties have not been losses caused by other reasons, Midea Holding shall compensate any loss for required to be dismantled by competent these reasons in time and in full. Midea Holding shall compensate the actual departments so that these buildings are still in loss Midea Group suffers, from any circumstances above resulting from regular use, which has not brought about any penalties subjected to by competent authorities or through claims by any third controversy or any company loss caused by party. disputes. There is no violation of undertakings. (5) Based on issues of defective house leasing declared in related files of this 7.2 The Use of Rental Houses of This Company merger, Midea Holding shall provide sufficient compensations for all economic The Report discloses that as of 31 December 17 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. losses incurred by Midea Group (including its subsidiaries) where the 2012, our company used 113 leasing houses in leasehold relations above become invalid or other disputes occur, which are total, of which our company can't get the property caused by rights claims from a third party or by means of an administrative certificate of 100 leasing houses from the leasing authority exercising a right and therefore results in any economic losses due party. So far the contracts of 92 out of the 113 to eviction from rental houses, or any penalties subjected to by competent rental houses haven't been signed to extend the government departments or any recourse from related parties. leasehold. The property certificates of 1 of the (6) Based on the issues of defective land leasing declared in related files of remaining 21 houses have been obtained while the this merger, when leasehold relations become invalid caused by defects of other 20 certificates haven't been obtained. These land leasing or when other disputes occur, resulting in any economic losses to 20 rental houses haven't rendered our company Midea Group (including its subsidiaries) or through any penalties administered any economic loss or penalty caused by defective by competent government departments. Likewise if the lessor can't property rights, which result in removing to other compensate for losses caused by such defective leasing, Midea Holding shall rental houses. compensate Midea Group for losses caused by such defective land leasing 7.3 Land Use Rights of Leasing Use Midea Holding will compensate any losses of Midea Group where a violation The "Report" discloses that as of 31 December, of guarantees and undertakings referred to previously occurs or such 2012, our company has had one case of using guarantees and undertakings are not consistent with the reality. rental houses, covering a total area of 57,506.95 square meters for which the lessor of the rental land mentioned above did not provide any legal ownership files showing or detailing ownership of this land. So far this rental land has not rendered 18 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. our company any controversy or any loss caused by disputes. There has been no violation of undertakings. 7.4 The Procedures of Renaming Land Owner Under Process Caused by the Alteration of the Company's Name The Report discloses that there are still 10 cases in the process of registering a new land owner caused by changing the company's name of our company and its subsidiaries. So far, five cases have been approved and the other five cases are still under review, which have not rendered any loss to the company. There has been no violation of undertakings. 7.5 Processing the Renaming Procedures of Some Trademarks So far, 8 of the 62 trademarks cases involved in the Report have applied for cancellation of the subjects through their owners and these trademarks shall no longer be in use. The company will not apply for 19 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. the renaming procedures for those trademarks. The renaming procedures of the remaining 54 cases have been processed and this undertaking has been fulfilled. There has been no violation of this undertaking. 36 months from 18 Shareholders of Midea Group, Ningbo Maysun, Fang Hongbo, Huang Jian, September Cai Qiwu, Yuan Liqun, Huang Xiaoming, Li Jianwei, Zheng Weikang, promise 2013, the date Other that since Midea Group is listed on the Shenzhen Stock Exchange Center, the 2013-3-28 of Midea There has been no violation of this shareholders transferal or delegation of others to manage these issued shares who have Group’s listing, undertaking. direct or indirect ownership of Midea Group, has been forbidden for a period of to 18 36 months. Midea Group is not allowed to buy back those shares either. September 2016 1. In strict accordance with the rules of the CSRC, the Shenzhen Stock The Exchange and the Company regarding the use of raised funds, the Company undertakings Undertakings shall have a special account for its raised funds and use the funds only for the shall expire given in time The previously set purposes. 2015-6-15 when the This undertaking has expired. of IPO or Company 2. The funds raised in this private issue (after the issue expenses) shall all be raised funds refinancing used as working capital. have been 3. The Company shall not use the funds raised in this private issue to make used up. 20 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. any financial investment such as purchasing held-for-trading financial assets and available-for-sale financial assets, lending the funds to others and entrusted investments or to directly or indirectly invest in marketable securities. 36 months from the listing Xiaomi Technology has given an undertaking that it shall not transfer the There has been no violation of this Xiaomi shares that it had subscribed for in this private offering of Midea Group within date of this 2015-6-26 undertaking. Technology 36 months from the completion date of this offering (26 June 2015, the listing private date for this offering). offering, i.e. to 26 June 2018 Whether the undertaking Yes is fulfilled in time Specific reasons for failing to fulfill any N/A undertaking and plan for the next step (if any) 21 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. IV Operating result forecast for the year of 2016 Warning of possible loss or considerable YoY change of the accumulated net profit made during the period-start until the end of the next Report Period according to predictions as well as any explanations for these reasons: □ Applicable √ N/A V Securities investment □ Applicable √ N/A No such cases in the Report Period. No such cases in the Report Period. VI Investments in financial derivatives √ Applicable □ N/A Unit: RMB’0,000 Proportion of the closing Related-pa Actual Initial Opening Impairm Closing investment Relation rty Type of gain/loss in Operator investment Start date End date investment ent investment amount in the ship transaction derivative Report amount amount provision amount Company’s or not Period closing net assets Futures Futures No No 748.2 2016-01-01 2016-12-31 748.2 - 555.4 0.01% 635.5 company contracts Forward Bank No No exchange -8,414.4 2016-01-01 2016-12-31 -8,414.4 - -11,961.3 -0.22% -11,142.9 contracts Total -7,666.2 -7,666.2 - -11,405.9 -0.21% -10,507.4 Capital source for derivative investment All the Company’s own funds Disclosure date of the board announcement approving the derivative 2016-03-26 investment (if any) Disclosure date of the general meeting announcement approving the derivative 2016-04-27 investment (if any) 22 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. In order to reduce the price risk of the Company's bulk purchases of raw materials as a result of significant fluctuations in raw material prices, the Company not only carried out futures business for some of the materials, but also made use of bank financial instruments and promoted forex funds business, with the purpose of reducing the risks associated with exchange and interest rate fluctuations, realizing the preservation and appreciation of forex assets, reducing forex liabilities, and achieving locked-in costs. The Company has undertaken extensive evaluation and risk control with regard to derivative investment positions, details of which are as follows: 1. Legal risk: The Company's futures business and forex funds businesses are conducted in compliance with laws and regulations, with clearly defined responsibilities and obligations between the Company and agencies. Control measures: The Company has designated relevant departments with the responsibility for enhancing expertise in laws, regulations and market rules, conducting strict examination and verification of contracts, defining responsibility and obligations, and strengthening compliance checks, so as to ensure that the Company's derivatives investment and position operations meet the requirements of the laws and regulations and internal management system of the Company. 2. Operational risk: Risks caused by imperfect internal processes, staff, systems and external issues may cause the Company to incur losses during the course of its futures business and forex funds business. Control measures: The Company has not only developed relevant management systems that clearly Analysis of risks and control measures of define the assignment of responsibility and approval process for the futures business and forex derivative products held in the Report funds businesses, but has also established a well-developed monitoring mechanism, aimed at Period (including but not limited to market effectively reducing operational risk by strengthening its risk control over the business, risk, liquidity risk, credit risk, operational decision-making and trading processes. risk, legal risk, etc.) 3. Market risk: Uncertainties caused by changes in the prices of bulk commodities and exchange rate fluctuations in foreign exchange markets could lead to greater market risk in the futures business and forex funds business. Meanwhile, the inability to raise sufficient funds in a timely manner in order to establish and maintain hedging positions in futures operations, or forex funds required for performance in forex funds operations that are unable to be credited into account could also result in loss and default risks. Control measures: The futures business and forex funds business of the Company are always conducted by adhering to prudent operation principles. For futures business, futures transaction volumes and applications have been strictly determined according to the requirements for production and operations, and a stop-loss mechanism has been implemented. Furthermore, to determine the prepared margin amount which may be required to be supplemented, a futures risk measuring system has been established to measure and calculate the margin amount already in use, floating gains and losses, margin amount available and margin amount required for intended positions. As for forex funds business, a hierarchical management mechanism has been implemented, whereby the operating unit which has submitted applications for funds business should conduct a risk analysis on the conditions and environment that could affect the operating profit and loss, evaluate the possible greatest revenue and loss, and report the greatest acceptable margin ratio or total margin amount, so that the Company can update the operating status of the funds business on a timely basis thus ensuring the arrangement of proper funds before expiry dates. Changes in market prices or fair values of 1. Profit/loss from futures hedging contracts incurred during the Report Period was RMB 6.36mn; 23 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. the invested derivatives during the Report 2. Profit/loss from forward forex contracts incurred during the Report Period was RMB -111.43mn; Period. Analysis of the derivative’s fair 3. Public quotations in futures market or forward forex quotations announced by Bank of China are value should include the specific methods used in the analysis of the derivatives fair value. of use and the relevant assumptions and parameters. Whether significant changes occurred to the Company’s accounting policy and specific accounting principles of derivatives No change in the Report Period compared to the previous Report Period The Company's independent directors are of the view that: the futures hedging business is an effective instrument for the Company to eliminate price volatility and implement risk prevention measures through enhanced internal controls, thereby improving the operation and management of Specific opinion from independent directors the Company; the Company's foreign exchange risk management capability can be further on the Company’s derivatives investment improved through the forex funds business, so as to maintain and increase the value of foreign and risk control exchange assets; the abovementioned investment in derivatives can help the Company to fully realize its competitive advantages. Therefore, it is practical for the Company to carry out derivatives investment business when the risks are controllable. VIII Visits received during the Report Period √ Applicable □ N/A Date Type of visit Type of visitor Discussions 2016-1-6 A-Share Conference Institution 2016-1-12 A-Share Conference Institution 2016-1-13 A-Share Conference Institution 2016-1-15 Field research Institution 2016-1-15 Teleconference Institution Please refer to Investor Relations Activities from 5 2016-1-20 Teleconference Institution January 2016 to 29 January 2016 on the website of www.cninfo.com.cn 2016-1-21 Teleconference Institution 2016-1-21 Field research Institution 2016-1-26 Field research Institution 2016-1-27 Field research Institution 2016-1-29 Teleconference Institution 24 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. 2016-3-28 Teleconference Institution 2016-1-29 Teleconference Institution IX Irregular provision of guarantees □ Applicable √ N/A No such cases in the Report Period. X Occupation of the Company’s funds by the controlling shareholder or its related parties for non-operating purposes □ Applicable √ N/A No such cases in the Report Period. 25 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. Section IV Financial Statements I Financial statements Balance Sheet Prepared by: Midea Group Co., Ltd. Unit:RMB’000 31-Mar-16 31-Dec-15 Assets Consolidated The Company Consolidated The Company Current assets Cash at bank and on hand 14,147,558 14,394,168 11,861,977 14,213,747 Deposits with central bank 833,379 1,048,045 - - Deposits with banks and 1,784,166 4,062,807 other financial institutions - - Derivative financial assets 8,525 158,822 - - Notes receivable 16,899,707 2,060,037 12,889,151 727,218 Accounts receivable 12,033,730 10,371,718 - - Advances to suppliers 1,463,917 7,626 988,625 8,915 Loans and advances 8,328,088 6,608,705 - - Dividends receivable 17,759 290,245 - - Other receivables 905,834 11,040,251 1,101,339 7,461,039 Inventories 9,931,003 10,448,937 - - Other current assets 43,870,173 26,594,706 33,827,580 21,059,789 Total current assets 110,223,839 54,096,788 93,367,706 43,760,953 Non-current assets Available-for-sale financial 5,046,663 9,000 3,289,954 9,000 assets Long-term equity 2,910,362 23,284,963 2,888,274 23,126,546 investments 26 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. Investment properties 138,894 283,395 150,803 286,272 Fixed assets 18,578,653 1,090,726 18,729,881 1,107,082 Construction in progress 918,436 679,649 954,761 543,588 Intangible assets 3,371,694 245,223 3,392,402 248,482 Goodwill 2,393,066 2,393,066 - - Long-term prepaid 722,748 50,846 781,359 57,393 expenses Deferred income tax assets 2,780,472 1,860 2,223,999 7,961 Other non-current assets 837,762 669,730 - - Total non-current 37,698,750 25,645,662 35,474,229 25,386,324 assets TOTAL ASSETS 147,922,589 79,742,450 128,841,935 69,147,277 Legal representative: Fang Hongbo Person-in-charge of the accounting work: Yuan Liqun Chief of the accounting division: Chen Lihong 27 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. Balance Sheet (Continued) Prepared by: Midea Group Co., Ltd. Unit:RMB’000 Liabilities and Shareholders' 31-Mar-16 31-Dec-15 Equity Consolidated Company Consolidated Company Current liabilities Short-term borrowings 9,180,001 500,000 3,920,933 1,290,000 Borrowings from the Central - - - - Bank Customer deposits and deposits from banks and other financial 32,748 - 52,000 - institutions Derivative financial liabilities 126,952 - 33,377 22,671 Financial assets sold under 1,132,410 repurchase agreements - 651,784 - Notes payable 21,632,455 - 17,078,520 - Accounts payable 19,484,179 7,400 17,448,684 9,403 Advances from customers 4,501,243 - 5,616,361 - Employee benefits payable 1,327,734 12,654 2,229,332 13,411 Taxes payable 3,409,062 101,895 1,607,181 52,656 Interest payable 12,359 294,127 9,343 200,090 Dividends payable 12,308 - 118,851 - Other payables 1,489,249 56,067,554 1,139,306 45,166,453 Current portion of non-current - - - - liabilities Other current liabilities 23,816,443 3,350 22,098,177 5,106 Total current liabilities 86,157,143 56,986,980 72,003,849 46,759,790 Non-current liabilities Long-term borrowings 86,862 - 90,061 - Debentures payable - - - - Payables for specific projects 500 - 500 - Provisions 38,347 3,800 38,893 3,800 Deferred revenue 476,181 - 479,352 - Deferred income tax liabilities 23,937 - 40,464 - 28 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. Other non-current liabilities 157,194 - 157,194 - Total non-current liabilities 783,021 3,800 806,464 3,800 Total liabilities 86,940,164 56,990,780 72,810,313 46,763,590 Shareholders' equity Share capital 4,267,391 4,267,391 4,266,839 4,266,839 Capital surplus 14,629,075 6,484,921 14,511,190 6,370,934 Less: treasury stock - - - - Other comprehensive income - 441,113 20,906 - 1,071,151 21,006 Surplus reserve 1,846,523 1,846,523 1,846,523 1,846,523 General reserve 118,624 - 118,624 - Undistributed profits 33,437,079 10,131,929 29,529,827 9,878,385 Total equity attributable to 53,857,579 22,751,670 49,201,852 22,383,687 shareholders of the parent company Minority interests 7,124,846 - 6,829,770 - Total shareholders' equity 60,982,425 22,751,670 56,031,622 22,383,687 TOTAL LIABILITIES AND 147,922,589 79,742,450 128,841,935 69,147,277 SHAREHOLDERS' EQUITY Legal representative: Fang Hongbo Person-in-charge of the accounting work: Yuan Liqun Chief of the accounting division: Chen Lihong 29 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. Income Statement Prepared by: Midea Group Co., Ltd. Unit: RMB’000 January-March 2016 January-March 2015 Consolidated Company Consolidated Company 1. Total revenue 38,599,501 295,466 42,574,426 126,938 Including: Operating revenue 38,341,624 295,466 42,426,714 126,938 Interest income 255,072 - 146,676 - Fee and commission income 2,805 - 1,036 - 2. Total Cost (33,884,840) (131,125) (38,878,821) (321,308) Less: Cost of sales (26,906,188) (4,792) (31,041,581) (5,132) Interest expenses (132,167) - (98,854) - Fee and commission expenses (666) - (389) - Taxes and surcharges (276,519) (956) (329,870) (441) Selling and distribution expenses (4,977,071) - (5,363,077) - General and administrative expenses (1,662,776) (87,582) (1,607,662) (80,776) Financial expenses – net 282,083 (37,770) (195,783) (235,497) Asset impairment (loss)/reversal (211,536) (25) (241,605) 538 Add: Gains/(losses) on changes in fair value (239,146) 22,673 153,581 (2,885) Investment income 253,713 134,422 527,790 390,493 Including: Share of profit of associates and a joint 81,800 55,455 15,209 1,216 venture 3. Operating profit 4,729,228 321,436 4,376,976 193,238 Add: Non-operating income 292,676 695 94,169 22,027 Including: Gains on disposal of non-current assets 1,423 - 8,650 354 Less: Non-operating expenses (21,506) (2,076) (43,518) (4,334) Including: Losses on disposal of non-current (12,537) - (26,312) (3,734) assets 4. Total profit 5,000,398 320,055 4,427,627 210,931 Less: Income tax expenses (833,631) (66,511) (776,837) (29,961) 5. Net profit 4,166,767 253,544 3,650,790 180,970 Attributable to shareholders of the parent 3,907,252 253,544 3,342,135 180,970 company 30 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. Minority interests 259,515 - 308,655 - 6. Other comprehensive income net of tax 648,965 (100) (2,510) - Attributable to shareholders of the parent 630,038 (100) 93,074 - company (1) Other comprehensive income items which will - - - - not be reclassified subsequently to profit or loss 1)Changes in net liabilities or assets with a - - - - defined benefit plan upon re-measurement 2)Shares in other comprehensive incomes in - - - - investees that cannot be reclassified into gains and losses under the equity method (2) Other comprehensive income items which will 630,038 (100) 93,074 - be reclassified subsequently to profit or loss 1)Share of the other comprehensive income of the (52,591) (100) (5,514) - investee accounted for using equity method which will be reclassified subsequently to profit and loss 2)Changes in fair value of available-for-sale 549,616 (820) financial assets - - 3)Effective portion of cash flow hedging gains or - - - - losses 4)Translation of foreign currency financial 147,624 - 231,232 - statements 5)Foreign-currency financial statement translation (14,611) - (131,824) - difference Attributable to minority shareholders 18,927 - (95,584) - 7. Total comprehensive income 4,815,732 253,444 3,648,280 180,970 Attributable to shareholders of the parent 4,537,290 253,444 3,435,209 180,970 company Attributable to minority shareholders 278,442 - 213,071 - 8. Earnings per share Basic earnings per share (RMB Yuan) 0.92 N/A 0.79 N/A Diluted earnings per share (RMB Yuan) 0.91 N/A 0.79 N/A Legal representative: Fang Hongbo Person-in-charge of the accounting work: Yuan Liqun Chief of the accounting division: Chen Lihong 31 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. Cash Flow Statement Prepared by: Midea Group Co., Ltd. Unit: RMB’000 January-September 2015 January-September 2014 Consolidated Company Consolidated Company 1. Cash flows from operating activities Cash received from sales of goods or rendering of 32,056,847 - 25,578,063 - services Net increase in customer deposits and deposits - - (7,280) - from banks and other financial institutions Net increase in deposits with central bank 270,547 - - - Net increase in borrowing from central bank - - - - Cash received from interest, fee and commission 257,877 - 147,711 - Refund of taxes and surcharges 1,588,785 - 1,121,282 - Cash received relating to other operating activities 1,564,570 9,967,594 1,207,298 6,000,634 Sub-total of cash inflows 35,738,626 9,967,594 28,047,074 6,000,634 Cash paid for goods and services (17,512,729) - (16,100,503) - Net decrease in loans and advances (19,252) - - - Decrease in borrowings from central bank (1,779,265) - (1,115,648) - Net decrease in deposits with central bank - - (151,065) - Cash paid for interest, fee and commission (132,833) - (99,243) - Cash paid to and on behalf of employees (3,254,369) (17,997) (3,472,711) (28,227) Payments of taxes and surcharges (2,003,485) (26,836) (2,000,946) (12,422) Cash paid relating to other operating activities (4,441,669) (3,830,862) (2,608,241) (432,826) Sub-total of cash outflows (29,143,602) (3,875,695) (25,548,357) (473,475) Net cash flows from operating activities 6,595,024 6,091,899 2,498,717 5,527,159 2. Cash flows from investing activities Cash received from disposal of investments 16,846,496 9,282,040 2,380 13,860 Cash received from returns on investments 406,105 556,038 492,989 596,898 32 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. Net cash received from disposal of fixed assets, 2,987 - 8,810 354 intangible assets and other long-term assets - - - - Cash received relating to other investing activities - - - - Sub-total of cash inflows 17,255,588 9,838,078 504,179 611,112 Cash paid to acquire fixed assets, intangible assets (484,331) (148,301) (523,829) (183,971) and other long-term assets Cash paid to acquire investments (26,331,517) (14,046,586) (1,155,719) (475,953) Net cash paid to acquire subsidiaries and other - - - - business units Cash paid to other investment activities - - - - Sub-total of cash outflows (26,815,848) (14,194,887) (1,679,548) (659,924) Net cash flows from investing activities (9,560,260) (4,356,809) (1,175,369) (48,812) 3. Cash flows from financing activities Cash received from capital contributions 19,234 19,234 - - Including: Cash received from capital contributions - - - - by minority shareholders of subsidiaries Cash received from borrowings 7,773,335 500,000 5,883,038 - Cash received relating to other financing activities - - - - Sub-total of cash inflows 7,792,569 519,234 5,883,038 - Cash repayments of borrowings (2,847,658) (1,290,000) (4,433,877) (500,000) Cash payments for interest expenses and (142,443) (261,178) (124,134) (405,234) distribution of dividends or profits Including: Cash payments for dividends or profit to (106,543) - (119,432) - minority shareholders of subsidiaries Cash payments to other financing activities - - - - Sub-total of cash outflows (2,990,101) (1,551,178) (4,558,011) (905,234) Net cash flows from financing activities 4,802,468 (1,031,944) 1,325,027 (905,234) 4. Effect of foreign exchange rate changes on (2,347) - (80,699) - cash and cash equivalents 5. Net decrease in cash and cash equivalents 1,834,885 703,146 2,567,676 4,573,113 Add: Cash and cash equivalents at beginning of 5,187,317 6,245,008 5,272,238 6,879,717 33 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. year 6. Cash and cash equivalents at end of year 7,022,202 6,948,154 7,839,914 11,452,830 Legal representative: Fang Hongbo Person-in-charge of the accounting work: Yuan Liqun Chief of the accounting division: Chen Lihong 34 Interim Report for the First Quarter 2016 of Midea Group Co., Ltd. II Auditor’s report Is this Report audited by a CPAs firm? □ Yes √ No This Report is un-audited by a CPAs firm. Midea Group Co., Ltd. Legal Representative: Fang Hongbo 30 April 2016 35
首页
微信公众号
证券之星APP
