Midea Group Co., Ltd.
2015 Semi-Annual Report
August 2015
Section I Important Notes, Contents and Definitions
The Board of Directors, Board of Supervisors, directors, supervisors and senior
management of Midea Group Co., Ltd. (hereinafter referred to as the
“Company”) hereby guarantee that the information presented in this Report is
truthful, accurate and complete, and shall together be jointly and severally liable
for any false records, misleading statements or material omissions in this Report.
All directors of the Company attended the Board meeting for reviewing this
Report.
The Company plans not to distribute cash dividends or bonus shares or turn
capital reserves into share capital for the first half of 2015.
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 carried in this Report
are truthful, accurate and complete.
This Report has not been audited by a CPAs firm.
The future plans and some other forward-looking statements mentioned in this
Report shall not be regarded as virtual promises of the Company to investors.
Therefore, investors are kindly reminded to pay attention to possible investment
risks.
This Report has been prepared in both Chinese and English. Should there be
any discrepancies or misunderstandings between the two versions, the Chinese
version shall prevail.
2015 Semi-Annual Report of Midea Group Co., Ltd.
Contents
Section I Important Notes, Contents and Definitions ................................................... 2
Section II Corporate Profile .......................................................................................... 3
Section III Summary of Accounting Data and Financial Indicators ............................. 5
Section IV Report of the Board of Directors................................................................. 8
Section V Significant Events ....................................................................................... 33
Section VI Changes in Shares and Information about Shareholders .......................... 54
Section VII Preference Shares ..................................................................................... 60
Section VIII Information about Directors, Supervisors and Senior Management ...... 60
Section IX Financial Report ........................................................................................ 61
Section X Documents Available for Reference ......................................................... 193
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Definitions
Term Definition
Company, the Company or Midea Group Midea Group Co., Ltd.
Little Swan Wuxi Little Swan Company Limited
Xiaomi Technology Xiaomi Technology Co., Ltd.
The CSRC China Securities Regulatory Commission
The Report Period The period from 1 January 2015 to 30 June 2015
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Section II Corporate Profile
I Corporate information
Stock abbreviation Midea Group Stock code 000333
Stock exchange The Shenzhen Stock Exchange
Name of the Company in
美的集团股份有限公司
Chinese
Abbr. of the Company name
美的集团
in Chinese (if any)
Name of the Company in
MIDEA GROUP CO., LTD.
English (if any)
Legal representative Mr. Fang Hongbo
II Contact us
Company Secretary Representative for Securities Affairs
Name Jiang Peng Wang Jing
Midea Headquarters Building, 6 Midea Avenue, Beijiao Town, Shunde District, Foshan City,
Address
Guangdong Province, China
Tel. 0757-26334559 0757-22607708
Fax 0757-26651991
E-mail IR@midea.com
III Other information
1. Ways to contact the Company
Changes in the report period to the registered address, office address and their zip codes, website address and
email address of the Company:
□ Applicable √ Inapplicable
No such changes in the report period. The said information can be found in the 2014 Annual Report.
2. About the media for information disclosure and the place where materials carrying disclosed
information such as this Report are kept
Changes in the report period to the media for information disclosure and the place where materials carrying
disclosed information such as this Report were kept:
□ Applicable √ Inapplicable
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2015 Semi-Annual Report of Midea Group Co., Ltd.
The newspapers designated by the Company for information disclosure, the website designated by the CSRC for
disclosing this Report and the place where materials carrying disclosed information such as this Report were kept
did not change in the report period. The said information can be found in the 2014 Annual Report.
3. Changes in the registered information
Changes in the report period to the registered information:
□ Applicable √ Inapplicable
The registration date and place of the Company, its business license number, taxation registration number and
organizational code did not change in the report period. The said information can be found in the 2014 Annual
Report.
4. Other relevant information
Changes in the report period to other relevant information:
□ Applicable √ Inapplicable
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Section III Summary of Accounting Data and Financial Indicators
I Key accounting data and financial indicators
Retroactive adjustments to or restatements of accounting data due to changes in the accounting policies or
corrections of accounting errors:
□ Yes √ No
Report Period Same period of last year +/-%
Operating revenues (RMB'000) 82,509,143.78 77,330,851.84 6.70%
Net profits attributable to the shareholders
8,324,122.61 6,610,132.76 25.93%
of the Company (RMB'000)
Net profits attributable to the shareholders
of the Company after non-recurring gains 7,433,037.00 6,667,645.57 11.48%
and losses (RMB'000)
Net cash flows from operating activities
8,815,671.89 13,171,462.85 -33.07%
(RMB'000)
Basic earnings per share (RMB/share) 1.97 1.57 25.48%
Diluted earnings per share (RMB/share) 1.96 1.57 24.84%
Weighted average ROE (%) 19.62% 18.97% 0.65%
As at the end of the Report
As at the end of last year +/-%
Period
Total assets (RMB'000) 141,782,687.12 120,292,088.16 17.87%
Net assets attributable to the shareholders
46,154,741.47 39,470,499.84 16.93%
of the Company (RMB'000)
Total share capital of the Company on the last trading session before the disclosure of this Report:
Total share capital of the Company on the last trading session
4,265,714,504
before the disclosure of this Report (share)
Whether the Company's share capital changed and the change affected the owners' equity due to reasons such as
new issues, additional issues, allotments of shares, the exercise of equity incentives and repurchases during the
time from the end of the Report Period to the date when this Report is released:
√ Yes □ No
During the time from the end of the Report Period to the date when this Report is released, the Company made an
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2015 Semi-Annual Report of Midea Group Co., Ltd.
additional issue of 5,183,551 shares as equity incentives and repurchased and cancelled 29,591,644 shares. Up to
the date when this Report is released, the share capital of the Company is 4,265,714,504 shares.
Basic earnings per share based on the latest share capital
1.9514
above (RMB/share)
II Differences in accounting data under the domestic and overseas accounting standards
1. Differences in the net profits and net assets disclosed in the financial reports prepared under the
international and China accounting standards
□ Applicable √ Inapplicable
2. Differences in the net profits and net assets disclosed in the financial reports prepared under the overseas
and China accounting standards
□ Applicable √ Inapplicable
3. Reasons for the differences in accounting data under the domestic and overseas accounting standards
□ Applicable √ Inapplicable
III Items and amounts of non-recurring gains and losses
√ Applicable □ Inapplicable
Unit: RMB'000
Item Amount Note
Gains or losses on disposal of non-current assets (including the offset asset
-45,667.95
impairment provisions)
Government grants accounted for in the gains or losses for the current
485,175.82
period
Gains or losses on entrusted investments or entrusted asset management 682,954.05
Gains or losses on debt restructuring 17.25
Gains or losses on the changes in the fair value of held-for-trading financial
assets and liabilities, as well as investment gains or losses on the disposal
of held-for-trading financial assets and liabilities and available-for-sale 95,856.62
financial assets, except for the effectively hedging business related to
normal business operations of the Company
Impairment provision reversal of the accounts receivable on which the
341.34
impairment test is carried out separately
Non-operating incomes and expense other than the above 82,747.20
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Less: Income tax effects 287,749.72
Minority interests effects (after tax) 122,589.00
Total 891,085.61
Explain the reasons if the Company classifies an item as a non-recurring gain/loss according to the definition in
the , or classifies any non-recurring gain/loss item mentioned in the said
explanatory announcement as a recurrent gain/loss item:
□ Applicable √ Inapplicable
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Section IV Report of the Board of Directors
1 Overview
As China’s economy steadily develops in a “new normal state”, its household appliance industry has stepped into
a new period in operation featuring restructuring as well as product and consumption upgrading. In the new
economies of “Internet Plus”, consumers play a more active role in the purchase and use of household appliances.
Therefore, it has become a core driving force for the continuous growth of household appliance manufacturers to
center on customers and products, increase efficiency and upgrade products, vigorously develop intelligent
products and expand e-commerce channels as well as promote innovation in technology, marketing channels and
service models.
In the first half of 2015, against the backdrop of consumption upgrading, the sub-industries of the household
appliance industry beefed up upgrading in their product structures, which has gradually become a key driving
force for the continuous profit growth in the household appliance industry. According to the AVC data, in the air
conditioner sector, an obvious upgrade trend towards inverter air conditioners and intelligent air conditioners was
observed, with the market share of the former up to 62.7% and that of the latter over 15%. In the field of
refrigerators, the high-end refrigerators, large-capacity refrigerators, air-cooling refrigerators and inverter
refrigerators took up a larger market share, with the air-cooling refrigerators increasing 10.6% to 61.8% in the
total sales, the inverter refrigerators growing 4.1% to 45.3% in the total sales and the four-door refrigerators, a
dark horse, witnessing a year-on-year surge of 261% in its retail sales. In terms of washing machines, the high-end
washing machines, 8.1KG+ washing machines, inverter washing machines and intelligent washing machines has
flourished into four important directions for the development of the washing machine industry; the roller washing
machines has grasped half of the market; and the market shares respectively possessed by the double-tub washing
machines and the single-tub washing machines have been shrinking. As for the kitchen & bathroom appliances
and small household appliances, a rapid growth was reported in the medium and high-end products such as the
side-sucking smoke exhausters, the gas stoves featuring hot fire, high energy efficiency and safety, the robotic
cleaners, the cellwall-breaking food processors and the like.
In the long term, the impetus factors for China’s household appliance industry will remain unchanged, which are
mainly as follows:
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2015 Semi-Annual Report of Midea Group Co., Ltd.
1. As China’s per capita income continues to grow and the new-type urbanization is speeding up, the overall
ownership rate of household appliances is expected to realize a further rise. The urban residents’ per capita income
has reached USD7,000/year in Shanghai, Beijing, Shenzhen, Zhejiang Province, etc. As a result, the increased
income and the rise of young consumers will quicken the coming of a networking, individualized and diversified
time for consumption, and endow the household appliance consumption with much more features we can see in
the goods for daily consumption. The rate of urbanization in China has only reached 54% or so at present with
considerable progress to be made in both quantity and quality. If China’s rate of urbanization could realize the
goal of 60% in 2020, a rural population of more than 100 million would turn themselves into urban residents,
which will definitely stimulate a huge demand for household appliances.
2. The constant and stable demand for renewal from over 1.6 billion units of household appliances in total is an
important impetus for the sales volume. The functional and quality improvements of household appliances in
energy saving, environmental protection, intelligence, Internet and industrial design, will further promote an
upgrade in consumption, optimize product structures and will increase the profitability of household appliance
manufacturers.
3. The trend of “Internet +” has added new genes into the whole household appliance industry chain. Through
thoroughly transforming the value chain of the conventional household appliance manufacturing industry,
re-structuring R&D, production, marketing and user operation, “Internet +” will pose new challenges and bring
new opportunities to the traditional household appliance enterprises. As an important “entrance” to the Internet,
household appliances play a significant role in the whole Internet application. Furthermore, the maturity of
intelligent control technology, electronic information technology, the technology of internet of things, and related
supporting technologies, as well as the popularization of smart mobile end-products, will effectively drive the fast
development of the smart household appliances market triggered by “Internet +”. Intelligent homes have gradually
become a common trend in the industry. Perfecting unconnected high-level intelligent products to provide
integrated solutions for intelligent homes ultimately leads to the creation of an intelligent home platform
eco-chain characterized by integration, cooperation and sharing. There will be enormous growth room for leading
household appliance makers with core resources. According to the AVC forecast, the total output value of
intelligent household appliances will exceed RMB1 trillion by 2020, and figures for intelligent hardware hitting
over RMB600 billion.
4. The O2O model, the Internet popularization of big data application and the rise of mobile consumption will
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2015 Semi-Annual Report of Midea Group Co., Ltd.
continue to promote transformation and upgrade in the marketing channels for home appliance makers. The
information platform for the household appliance industry has taken shape, and the cross-field cooperation
between household appliance and Internet enterprises shows a promising future, suggesting that the new channel
of e-commerce has entered a fast growing stage. According to statistics, in the first half of 2015, the scale of
China’s B2C market for household appliances reached RMB136.1 billion with a year-on-year increase of 64%,
with the online retail sales of major household appliances all growing more than 10% as compared with the same
period of last year.
5. Relying on the huge market supported by a population of 1.4 billion in the vast territory of China, and in
parallel with existing competitive edges in scale, product clusters and complete industrial chains, China’s
household appliances industry will remain competitive around the world. Meanwhile, India, South America,
Africa, Middle East and other emerging markets which have large populations and are in their economic growth
stage, are gradually entering the popularization period of household appliances, consequently providing an
expected growth boost to China’s household appliance exports to these developing countries and thus creating
new opportunities for export and global operations of China’s household appliances.
6. With new conditions and means of competition, the ecology (environment) of the household appliance industry
will further improve and the markets will become increasingly centralized. Relying on their competitive edges
such as the brand, technology, industrial chain, service, channel, the leading household appliance makers are
expected to further increase their market shares and profitability, and as a result promoting orderly competition
and sound progress in the industry.
II Analysis of main business
1. Overview
In the first half of 2015, guided by the three main strategies of “advanced products, efficiency-driven and global
operations”, the Company focused on products and customers, clarified the business structure, simplified the
organizational structure, promoted the organizational restructuring and the establishment of a collaborative
platform and enhanced the innovation mechanism and the R&D capability. As a result, the product reputation and
quality have kept improving, the profitability and operating quality have continued to increase and the competitive
edge with multiple products has been further solidified. In the first half of 2015, the operating revenues of the
Company achieved a year-on-year increase of 6.70%, the net profits attributable to the Company increased
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2015 Semi-Annual Report of Midea Group Co., Ltd.
25.93% as compared with the same period of last year, the general gross margin of 27.43% increased by 1.58
percentage points as compared with the same period of last year, and the overall rate of net profits attributable to
the Company of 10.09% reached a year-on-year increase of 1.54 percentage points as calculated with the same
caliber. In the List of China Top 500 Enterprises in 2015 concluded by Fortune, Midea ranks the 32nd (the first
among the household appliance industry). Meanwhile, Midea has also made itself among the top 500 in the List of
2015 Forbes Top 2000 Enterprises in the World, ranking the 436th.
The main work accomplished in the first six months of 2015 includes the following:
(1) Products and customers as the center, continuous product structure optimization and a steady improvement in
product competitiveness
The Company, according to the basic concept of making better products, insisted on customer research, paid
special attention to user experience, innovated product research and development, resulting to continuous
optimized product structure, stable enhancement of high-end product ratio, and increasingly improved public
praises for products. In addition, a series of new products were put on the market including air conditioner
featuring intelligent temperature control, the children’s air conditioner that could prevent the children from
catching cold, “i young” colorful air conditioner capable of intelligent interaction with MIUI wristband, Auto
Power-on and sleep temperature control, new washing machines with auto throw-in, intelligent roller and quick
washing function, intelligent refrigerator featuring intelligent food management, nutrition management and
intelligent app remote control function, “steam cleaning” extractor hoods with auto high temperature adjustment
and auto extinguishing function, safe stove with children lock, intelligent “DINGFU” rice cooker featuring
multi-stage IH heating and high-temperature steam cooking function, double-filter running water heater capable of
guaranteeing a healthy bath, and water purifier made of medical-grade nano-antibacterial materials with the
2nd-generation dynamic filter element technology etc. to continuously satisfy the consumer’s individualized and
differentiated needs through making competitive quality and differentiation strategy as the weapon to occupy the
market. Most of our products have won various important awards at home and abroad for many times.
(2) Strengthening Core Channel Expanding, the rapid growth of E-business, and the overall upgrading of the
synergy of logistics
By right of the synergy of diversified Midea products, unremitting effort was made to expand the offline strategic
channels including flagship stores, Suning, Gome and regional chain stores (TOP Clients) and the online strategic
channels including Tmall and JD.COM, and to form the synergy of various businesses. As at the end of June in
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2015 Semi-Annual Report of Midea Group Co., Ltd.
2015, Midea flagship stores were over 2100 in total, and realized a coverage scale of 90% in the 3rd- and 4th-class
market; the O2O converged businesses of E-commerce mainly based on flagship stores were gradually being
implemented with the thorough improvement of comprehensive after-sales services. Meanwhile, special effort was
made to deepen the strategic cooperation with more than 80 TOP clients including Suning and Gome, and joint
promotion activities exclusively geared to our brand were carried out on a regular basis to enhance the occupation
rate in the market with continuously increased share.
Centering on the user and product, we further propelled the full-channel strategy layout of Midea’s E-commerce
business, and completely established strategic cooperation with such platform as JD.COM, Tmall, and Suning
E-commerce. As a result, Midea flagship stores relying on various platforms achieved initial success in their
operation. In the first half year of 2015, the retail sales of Midea E-commerce throughout the network exceeded
RMB 7 billion, ranking first in household appliance industry, and 11 single-category products occupied the No. 1
status in the market. We sped up the construction of the internal e-commerce platform, and the brand-new Midea
Shop was formally put into service; besides, preliminary work relating to the establishment of interactive O2O
Platform geared to Users was completed to summarize the internal operation, users, orders and data.
Through making use of the collaborative advantages, emphasis was put on the construction of large logistic
platform for the market and the integration of the full-category branches, agents and online & offline logistics
businesses to implement collaborative storage and integrated delivery through canceling the redundant link
between the branch and the agent. Therefore, a great progress was made to improve the unified logistics operating
ability from the Company to the terminal, and to enhance the monitoring and analysis ability in managing big data
relating to product sales and inventory throughout the process, and the overall user experience was also largely
intensified by means of the improved overlay network, response speed, service quality and “last kilometer”
delivery ability. At the end of June, large logistics platform Guangzhou Project was successfully established to
realize the goal that the client’s order would be launched and entrucked in the same day, and delivered the next
day. Thus, the cost saved for the value chain achieved RMB 5 million per year on the whole, and unremitting
effort would be continuously made to propel the construction of large logistic platforms in more than 5 provinces
so as to establish the logistics system from the terminal to terminal linking storage, main line, branch line and last
kilometer.
(3) Propelling and Carrying forward Smart Home Furnishing & Smart Manufacturing Double Smart Strategy as
well as arranging growth space for new businesses
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Efforts were centralized on positively and pragmatically carrying forward the M-SMART home furnishing
strategy on the basis of the advantage of the most comprehensive product groups and user base of the Company in
the globe, resulting in the transformation from manufacturers of single products to providers with service of
integrated solutions of smart home for clients, and the construction of smart home furnishing scene application
under the Internet + mode. In 2015, the Company improved its internal cooperation and collaboration, and put
more than 80 smart products on the market. By adopting technologies of sense, big data and smart control, the
Company accelerated the construction of the interconnected platform of smart home furnishing for
whole-category household electric appliances, and an initial success was also achieved in setting up the steward
system. The Company opened and integrated with external sides, published smart home furnishing white book,
succeeded in linking M-SMART system with Alibaba, JD.COM and Suning E-commerce platforms as well as the
MIUI OS, and launched Midea APP2.0 for smart home furnishing management to largely simplify relevant
processes and improve user experience.
In August 2015, the Company signed an agreement with Japanese Yaskawa Electric Co., Ltd. ---the tycoon in
manufacturing robots in the world to establish a joint-venture Company specialized in manufacturing industrial
robots and service robots. By right of the mode Smart Manufacturing & Industrial Robot, Midea’s smart
manufacturing skills were completely strengthened. With the rapid development of core elements including servo
motor and the integrated system triggered by industrial robots, Midea B2B industrial space would be further
expanded; the mode of Smart Home Furnishing & Service Robot would propel the fast development and
construction of the ecology of Midea smart home furnishing, and service robot played an important role in
expanding the sensor, artificial intelligence and smart home furnishing businesses and in reinforcing the advantage
of integrated Midea smart home furnishing system and the ecological chain.
(4) Integrating the overseas business platform; strengthening overseas joint-venture cooperation; propelling the
stable growth of self-owned brand and overseas businesses
An international headquarters was established to facilitate the overall planning of overseas self-owned brand
businesses, and to push forward the transition of overseas sales mode from “OEM-oriented” to “OBM-oriented”,
and the organization form from “supporting Chinese export” to “supporting local operation”. At the same time,
special attention was also attached to continuously improve the management rules of self-owned brand, guide the
business department to allocate resources, propel the transformation of overseas sales organization, set up a
platform for operation, management and control, strengthen the integrated working process from the product &
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2015 Semi-Annual Report of Midea Group Co., Ltd.
business department to the overseas Company, and to gradually formulate a second track for developing relevant
self-owned brand businesses. In the first half year, although Europe experienced an unstable economic
environment with sharp fluctuation in exchange rate, a good growth trend remained in the Asia-pacific region and
the Middle East for our self-owned brand. However, our businesses achieved a year-on-year increase of more than
20% in India, Malaysia, the Philippines, UAE and Egypt, and the gross margin equaled that in last year.
Meanwhile, the sales volume earned by OEM export businesses still kept a stable growth trend. Especially such
product as washing machine, refrigerator and dust collector etc. achieved an increase 35-45% higher than the
average increase of the industry.
In addition, continuous effort was made to further deepen the joint-venture cooperation with the leading heating &
ventilation and household appliances tycoons around the globe, and to expand the business development space. In
March 2015, Carrier became a shareholder for Midea central air conditioner Chongqing Base with 35% share
equity for the purpose of expanding the market for large-scale water chilling units and further occupying the
global market with stronger competitive force. In the same month, the Company established a joint-venture
Company together with BOSCH in order to further develop the market for multi-connected machines through
making full use of professional knowledge relating to the multi-connection system accumulated by both
companies and relatively completed regional sales network. In April 2015, Midea declared its cooperation with
SIIX to establish a joint-venture Company, carrying forward high-quality product strategy, expanding the smart
industry, and carrying out in-depth cooperation in such filed as household appliance control, intelligent sensing,
energy management, intelligent security and protection and e-health system.
(5) Increasing R&D input; making a breakthrough in innovation mechanism; establishing a global innovation
center
Centering on the consumer’s needs, we increased relevant R&D investment and improved product development in
order to create a technical R&D system of strong competitive force around the globe and further enhance our
innovation ability. By this June, about 35,000 pieces of Midea products applied for patents, and about 18,000
pieces for authorized patents; Midea made a breakthrough in its innovation mechanism and established a global
innovation center which would not only gear itself to the future and focus on the basic technology’s sharing &
synergism, the research innovation of common technology and core technology, as well as the research,
application & scene building of the artificial intelligence including image identification and speech recognition,
but also be oriented towards the market and user to promote popular and hot products by means of the brand-new
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Internet thinking way and operation mode. In fact, the innovation center would become the incubator for Midea’s
innovative projects including the “A Fresh Start” project for creating a new platform for existing categories and
“The Second Track” project for the cross-boundary innovative product development in such field as health,
intelligence, cosmetics, nutrition and environment protection etc. through breaking through previous
organizational system and development mode, innovating the incentive mechanism and guaranteeing relevant
resources to support innovative businesses.
(6) Promoting the Company’s reconstructing and process transformation; creating an organization form geared to
product and user; launching a high-efficiency operation system
Focusing on the user and product, the Company reconstructed the group’s organizational system, operation
mechanism and process, abandoned the bureaucratic system and centralized department, established a sharing and
open business and function platform, and formed a culture atmosphere featuring Equality, Mutual Trust,
No-boundary and Partner by applying the Internet thinking and method. Besides, seven major platforms for
e-commerce, logistics, service, innovation, finance, purchasing and internationalization were successfully
established by means of integrating relevant businesses and stimulating the effect of synergy.
Efforts were continued to facilitate the work of One Midea, One System and One Standard so as to bridge the
internal and external value chain and set up a market-oriented and high-efficiency operation process system. As an
important basis for the work of One Midea, One System and One Standard, Midea’s 632 Project covering six
major operation systems, three major management platforms, and two major technical platforms began to spread
its impact on the whole group and was widely adopted with Unified Process, Unified Big Data, and Unified IT
System as its goal. The implementation of 632 project by means of the unification of process, data and system
further reinforced the basis for Midea’s management, control and operation, and generally optimized and
improved the group’s diversified businesses from various aspects such as customer experience, management
standards, transparent operation and internal & external collaboration.
(7) Improving the long-term incentive mechanism, and enhancing the Company’s management level
After the stock option incentive plan was carried out to cover more than 600 medium- and high-level management
and core business backbones on the first stage, the 2nd-stage stock option incentive plan was implemented to
cover more than 700 medium-level and core backbones as well. In addition, the 1st-stage Midea “Partner”
share-holding plan was carried forward to cover 31 core management staffs that played a significant role in the
Company’s overall achievement and medium- and long-term development, promoting the status transition from
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Manager to Partner. The behavior of purchasing the Company’s share quota was linked up with corresponding
business achievements, and by means of defining equity attribution by stages and extending the binding mode, the
management layer was stimulated to create great value for the Company in the long run. In May 7 to 18, 2015, a
total of RMB 230 million including the special fund and financing & self-raised capital was used to purchase 6,
483, 800 shares from Midea. Basically, the implementation of “Partner” share-holding plan and stock equity
incentive plan facilitated the construction of the equity structure consistent with the long-term benefit of all
shareholders, and further promoted the optimization of the Company’s management mechanism.
Main work plans for the second half year of 2015 include:
(1) Further accelerate the continuous transformation and upgrade of existing businesses; understand the user’s
needs; improve user experience; push forward high-quality product project; improve product structure; guarantee
the continuous increase of operation efficiency and the stable growth of profit;
(2) Focus on the User and Product, and further promote the Company’s organization reconstructing, process
reconstructing, team reconstructing, performance reconstructing and cultural reconstructing by means of Internet+
thinking mode and method; give the advantage of synergy a full play, and enhance the operation development of
seven major platforms;
(3) Continuously promote the marketing transformation; enhance the construction of the national large-scale
logistics platform; concentrate on the core channel; improve the weak market; guarantee a rapid development for
e-commerce businesses; establish the Midea Terminal-to-Terminal logistics platform;
(4) Focus on the international strategy market; promote Midea’s global businesses by stages; guide and propel
various business departments to establish the professional management and operation system for the
terminal-to-terminal product line covering the headquarters and the overseas companies; stabilize and optimize
OEM project; boost the self-owned brand’s business development;
(5) Continue delicacy management; improve the capital’s turnover efficiency; form new cost advantages; make
continuous effort to enhance lean manufacturing and automation level; promote the efficiency in manufacturing
and the product’s quality;
(6) Stabilize the innovative orientation; promote the development of new products; positively explore and seek
new business development direction; create a second track, and arrange relevant growth space for new businesses
in advance.
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2015 Semi-Annual Report of Midea Group Co., Ltd.
2. YoY movements in key financial data
Unit: RMB’000
Same period of last
Report Period YoY +/- Main reasons for movements
year
Operating revenues 82,509,143.78 77,330,851.84 6.70%
Operating costs 59,878,905.74 57,343,283.31 4.42%
Selling expenses 8,986,099.39 7,623,680.06 17.87%
Administrative expenses 3,604,757.13 3,349,324.40 7.63%
Financial expenses -777.60 -288,553.70 99.73% Decrease in the exchange gains
Income tax expenses 1,808,006.29 1,530,715.47 18.12%
Net cash flows from operating Increase in the loans and advances
8,815,671.89 13,171,462.85 -33.07%
activities granted by the financial subsidiary
Net cash flows from investing
-8,825,100.10 -22,486,720.02 -60.75% Movement in the investment
activities
Net cash flows from financing
272,708.87 4,791,762.54 -94.31% Decrease in the loans secured
activities
Net increase in cash and cash
234,907.88 -4,534,542.85 -105.18% Reasons above
equivalents
Major changes to the profit structure or sources of the Company in the Report Period:
□ Applicable √ Inapplicable
No such cases in the Report Period.
Report Period progress of any development planning in the disclosed documents of the Company such as
share-soliciting prospectuses, offering prospectuses, asset reorganization reports, etc.:
□ Applicable √ Inapplicable
No such cases in the Report Period.
Report Period progress of any operating plans previously disclosed by the Company:
In the Report Period, we moved forward with all of our tasks according to our schedules of the beginning of the
year and progress has been made. For details, see “I Overview” in this section.
III Main business breakdown
Unit: RMB'000
17
2015 Semi-Annual Report of Midea Group Co., Ltd.
YoY
YoY YoY
increase/decrea
Operating Gross profit increase/decrease increase/decrease
Operating cost se in gross
revenue margin (%) in operating in operating cost
profit margin
revenue (%) (%)
(%)
By industry
Manufacturing 75,866,473.43 54,465,377.02 28.21% 6.49% 4.01% 1.72%
Logistics 838,437.50 729,233.60 13.02% -11.51% -15.39% 3.99%
By product
Large household
54,499,203.35 38,401,893.57 29.54% 6.24% 2.62% 2.48%
appliances
Air conditioners
42,816,687.06 29,866,998.57 30.24% 2.70% -2.10% 3.42%
and components
Refrigerators and
6,027,598.60 4,505,284.31 25.26% 20.34% 22.97% -1.60%
components
Washing machines
5,654,917.69 4,029,610.69 28.74% 22.99% 24.05% -0.61%
and components
Small household
19,327,755.83 14,344,267.36 25.78% 8.63% 9.36% -0.49%
appliances
Motors 3,794,178.22 3,283,760.31 13.45% -7.92% -6.39% -1.41%
Logistics 2,063,867.89 1,914,766.39 7.22% 31.23% 37.86% -4.46%
By geographical segment
PRC 49,409,948.21 33,648,370.85 31.90% 10.06% 4.13% 3.87%
Other countries and
27,294,962.72 21,546,239.77 21.06% 0.01% 3.02% -2.30%
regions
In order to help investors learn about the actual scale of operation and operational capability in terms of motors
and logistics, the above mentioned data include the sales of motors and logistics within the Company. Please refer
to the notes to the financial statements in this Report for the data excluding the sales within the Company.
IV Core competitiveness analysis
1. Steadily leading innovation and R&D capabilities
Having been committed to product innovation and research, Midea Group has acquired leading high-end technical
talents within the industry and maintained technical cooperation with leading domestic and foreign research
institutions. Relying on a sound innovation mechanism and sustained strong investment in research resources, the
Group has maintained its advanced level of science and technology at home and abroad. Meanwhile, it has taken
18
2015 Semi-Annual Report of Midea Group Co., Ltd.
the lead in developing and launching a series of innovative products, such as the full DC inverter air conditioner
consuming "1 kWh per night", the “intelligent air conditioners designed for children”, the wristband-controlled air
conditioners, the "intelligent auto-dispensing" washer-dryer, the "Steam Cube" (Zhenglifang) Series microwave
ovens, the IH smart electric rice cooker, the high-temperature steam cleaning range hood and the running water
heater, which are highly recognized within the market.
Midea Group has set up a global innovation center. In light of its wide product range and vast customer base,
Midea put forward the M-Smart Home Appliance Strategy, marking a step ahead in the development of intelligent
products, the provision of complete solutions and the construction of an eco-industrial chain.
2. Broad and stable channel network
By virtue of years of development and layout, Midea Group has formed all-dimensional market coverage. In the
mature first and second-tier markets, the Company has maintained good cooperation relationships with large home
appliance retail chains such as Gome and Suning. While in the extensive third and fourth-tier markets, the
Company uses flagship stores, exclusive shops, traditional channels and new channels as effective supplements.
Already, the Company has achieved full coverage of the first and second-tier markets and over 95% coverage of
the third and fourth-tier markets. Besides, the Company's dominance in branding, products, offline channels and
logistics distribution have also created powerful guarantees for the Company's rapid expansion of its e-commerce
business and channels. In China, Midea Group have established operative long-lasting relationships with a
majority of our original distributors over the years therefore cultivating good brand loyalty. Internationally, Midea
Group has set up a number of overseas branches, opening production bases in six countries, hence accelerating the
construction of its marketing network that covers Southeast Asia, North America, South America, Europe, Middle
East and other potential markets.
3. Integrating capabilities in industry chain collaboration and resource sharing
As the only white goods enterprise with a whole industrial chain and full product line in China, Midea Group has
developed a complete industrial chain combining R&D, manufacturing and sales of key components and finished
products, supported by industry-leading R&D and manufacturing technology of home appliance’s core
components (such as compressors, electrical controls and magnetrons), and based on the powerful capabilities in
the production and logistics services of upstream parts and components, for example, motors. As for the product
line, the Group produces major appliances such as air conditioners, refrigerators, washing machines, and almost
all mainstream small household appliances like microwave ovens, rice cookers, dishwashers and other kitchen &
19
2015 Semi-Annual Report of Midea Group Co., Ltd.
bath appliances, so laying an innately favorable foundation for the provision of integrated solutions to consumers.
After giving comprehensive consideration to regional distribution, supply support, logistics cost and other factors,
the Group conducted systematic planning and rational distribution in productivity and structure while carrying out
the integration of multi-product scale and flexible production, thus enabling the company to be more flexible in
responding to market demands. Meanwhile, the Group has achieved a full sharing of resources and an all-round
coordination in procurement, branding, technology, channels and other aspects because of the advantages of this
whole industry chain and full product line.
4. Sound corporate governance mechanism and effective incentive mechanism
Paying close attention to the construction of a governance framework, its corporate control, the separation of
powers, the centralization and decentralization system, the Group formed a mature management system for
professional managers. The divisional system has been in operation for many years, and its performance-oriented
evaluation and incentive mechanism featuring full decentralization has become a training and growth platform for
the Group's professional managers. The Group's senior management team consists of professional managers who
have been trained and forged in the operation practice of Midea Group. They have been working for Midea for
more than 15 years, so they all have rich industry and management experience, a deep understanding of the home
appliance industry of both China and the world, and an accurate understanding of the industry operating
environment and corporate operation management. The Company's advantages in systems and mechanisms have
laid a solid foundation for the promising, stable and sustaining development of the Company in the future.
Currently, the senior core management team and the key middle-level staff hold a stake of about 10% in the
Company through direct or indirect shareholdings, stock option incentive plans, “partners” shareholding plans and
the like, marking the formulation of an equity architecture with convergent interests comprising the management
level and all shareholders as well as an incentive mechanism featuring a combination of long and short-term
incentives and disciplines.
5. Industry-leading advantages of scale
The Group has a complete industrial chain from air conditioners and refrigerators to washing machines, as well as
a complete group of small household electrical appliances. With 16 production bases that cover 5 regions
including southern, eastern, central, southwestern and northern parts of China, the Group also has production
bases in Vietnam, Belarus, Egypt, Brazil, Argentina and India. The Company ranks forefront both at home and
abroad in terms of production capacity, yield and sales volume of major household appliances.
20
2015 Semi-Annual Report of Midea Group Co., Ltd.
Meanwhile, Midea Group has a strong supply capacity of upstream components of household appliances, with
overall production capacity for nearly 200 million motors, remaining at the forefront of the production and sales
scale of main motor products. Furthermore, the strong transportation and distribution ability of the Group's
logistics sector has provided a powerful guarantee for the development of the company's household appliances
industry.
Midea Group has a large-scale layout in household appliances and related industries, which reinforces the
Company's position at the cutting edge of the industry and protects the Company's comprehensive advantages in
terms of cost control, quality control, resource integration and timeliness of delivery.
V Analysis of investments
1. External equity investments
(1) External investments
□ Applicable √ Inapplicable
No such cases in the Report Period.
(2) The Company's shareholdings in financial corporations
√ Applicable □ Inapplicable
Shareholdi
Shareholdi
ng Gain or loss
Initial Number of Number of ng Carrying value
percentage for the
Type of investment shares held at shares held at percentage as at the end Account Source
Company name at the Report
company amount the beginning of the end of the at the end of the period ing title of shares
beginning Period
(RMB'000) the period period of the (RMB'000)
of the (RMB'000)
period (%)
period (%)
Promote
Golden Eagle Long-ter
r shares
Asset Fund m equity
50,000.00 50,000,000 20.00% 50,000,000 20.00% 30,682.87 2,734.74 in
Management company investme
establish
Co., Ltd. nt
ment
Long-ter
Non-pub
Bank of Jiangsu Commerci m equity
13,220.45 5,232,676 0.00% 5,232,676 0.00% 13,330.45 418.61 lic
Co., Ltd. al bank investme
issue
nt
Hubei Bank Commerci 5,000.00 5,870,266 1.29% 5,870,266 1.29% 5,000.00 Long-ter Non-pub
21
2015 Semi-Annual Report of Midea Group Co., Ltd.
Corporation al bank m equity lic
Limited investme issue
nt
Foshan Shunde
Long-ter
Rural Non-pub
Commerci m equity
Commercial 1,318,539.89 328,874,160 9.40% 373,085,433 9.69% 1,318,539.89 118,394.70 lic
al bank investme
Bank Company issue
nt
Limited
Zhangshu Long-ter
Non-pub
Shunyin County Commerci m equity
6,000.00 6,000,000 6.00% 6,000,000 6.00% 6,000.00 312.00 lic
Bank Company al bank investme
issue
Limited nt
Fengcheng Long-ter
Non-pub
Shunyin County Commerci m equity
6,000.00 6,000,000 6.00% 6,000,000 6.00% 6,000.00 274.16 lic
Bank Company al bank investme
issue
Limited nt
Total 1,398,760.34 401,977,102.00 -- 446,188,375.00 -- 1,379,553.21 122,134.21 -- --
(3) Securities investments
□ Applicable √ Inapplicable
No such cases in the Report Period.
(4) Shareholdings in other listed companies
□ Applicable √ Inapplicable
No shareholdings in other domestic listed companies in the Report Period.
2. Entrusted asset management, derivatives investments and entrusted loans
(1) Entrusted asset management
Unit: RMB'0,000
Whether Actual Actual
Amount
it is a Method principal gain or
Related Value of Commenc provided
Name of related-pa Product Terminatio of amount Projected loss
party or entrusted ement for
trustee rty type n date remuner recovered income amount
not assets date impairme
transactio ation for the for the
nt (if any)
n period period
Bank No No Bank 7,272,380 2015.1.1 2015.6.30 As 7,433,708 68,295.41 68,295.41
22
2015 Semi-Annual Report of Midea Group Co., Ltd.
financial agreed
product
Total 7,272,380 -- -- -- 7,433,708 68,295.41 68,295.41
Source of entrusted assets The Company's own funds
Cumulative amount of principals and
0
revenues overdue
Litigations involved (if applicable) Inapplicable
Disclosure date of the announcement about
the board’s consent for the asset management 2015.03.31
entrustment (if any)
Disclosure date of the announcement about
the general meeting’s consent for the asset 2015.04.22
management entrustment (if any)
(2) Derivatives investments
√ Applicable □ Inapplicable
Unit: RMB'0,000
Ratio of
Wheth investment
Investmen
Rela er it is Amount amount at the
t amount Investment Actual gain
ted a Type of Initial provided end of the
Operating Commence Termination at the amount or loss
party related derivativ investment for period to the
party ment date date beginning at the end of amount for
or -party e amount impairmen Company's
of the the period the period
not transac t (if any) net assets at
period
tion the end of the
period (%)
Futures Futures
No No -327.94 2015.01.01 2015.12.31 -327.94 0.00 0.00 0.00% 860.97
company contracts
Forward
Bank No No forex -19,490.04 2015.01.01 2015.12.31 -19,490.04 0.00 -5,035.26 -0.11% 36,853.94
contracts
Total -19,817.98 -- -- -19,817.98 0.00 -5,035.26 -0.11% 37,714.91
Source of derivatives investment
All from the Company's own funds
funds
Litigation involved (if applicable) Inapplicable
Disclosure date of the
announcement about the board’s 2015.03.31
consent for the derivative
23
2015 Semi-Annual Report of Midea Group Co., Ltd.
investment (if any)
Disclosure date of the
announcement about the general
2015.04.22
meeting’s consent for the derivative
investment (if any)
For the sake of eliminating the cost 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 avoiding the risks of exchange and interest rate fluctuation, realizing the
preservation and appreciation of forex assets, reducing forex liabilities, as well as achieving locked-in
costs. The Company has performed sufficient evaluation and control against derivatives investment and
position risks, details of which are described as follows:
1. Legal risk: The Company's futures business and forex funds businesses shall be conducted in
compliance with laws and regulations, with clearly covenanted responsibility and obligation
relationship between the Company and the agencies.
Control measures: The Company has designated relevant responsible departments to enhance learning
of laws and regulations and market rules, conducted strict examination and verification of contracts,
defined responsibility and obligation well, and strengthened compliance check, 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: Imperfect internal process, staff, systems and external issues may cause the
Risk analysis of positions held in Company to suffer from loss during the course of its futures business and forex funds business.
derivatives during the Reporting Control measures: The Company has not only developed relevant management systems that clearly
Period and explanation of control defined the assignment of responsibility and approval process for the futures business and forex funds
measures (including but not limited business, but also established a comparatively well-developed monitoring mechanism, aiming to
to market risk, liquidity risk, credit effectively reduce operational risk by strengthening risk control over the business, decision-making and
risk, operational risk and legal risk) trading processes.
3. Market risk Uncertainties caused by changes in the prices of bulk commodity and exchange rate
fluctuations in foreign exchange market could lead to greater market risk in the futures business and
forex funds business. Meanwhile, inability to timely raise sufficient funds to establish and maintain
hedging positions in futures operations, or the forex funds required for performance in forex funds
operations being 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 shall always be
conducted by adhering to prudent operation principles. For futures business, the futures transaction
volume and application have been determined strictly according to the requirements of production &
operations, and the stop-loss mechanism has been implemented. Besides, to determine the prepared
margin amount which may be required to be supplemented, the futures risk measuring system has been
established to measure and calculate the margin amount occupied, 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 application for funds business should conduct risk analysis on the conditions and
environment affecting 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
24
2015 Semi-Annual Report of Midea Group Co., Ltd.
operating status of the funds business on a timely basis to ensure proper funds arrangement before the
expiry dates.
Changes in market price or fair
value of derivatives product
1. Gain/loss from futures hedging contracts incurred during the Report Period was RMB8,609,700;
invested during the Report Period:
2. Gain/loss from forward forex contracts incurred during the Report Period was RMB368,539,400;
specific methods used and relevant
3. Public quotations in futures market or forward forex quotations announced by Bank of China are used
assumption and parameter settings
in the analysis of derivatives fair value.
shall be disclosed for analysis of
fair value of derivatives
Explanation of significant changes
in accounting policies and specific
financial accounting principles in
respect of the Company's No changes
derivatives for the Report Period as
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
Special opinions expressed by through enhanced internal control, thereby improving the operation and management of the Company;
independent directors concerning the Company's foreign exchange risk management capability can be further improved through the forex
the Company's derivatives funds business, so as to maintain and increase the value of foreign exchange assets and the
investment and risk control abovementioned investment in derivatives can help the Company to fully bring out its competitive
advantages. Therefore, it is practicable for the Company to carry out derivatives investment business,
and the risks are controllable.
(3) Entrusted loans
□ Applicable √ Inapplicable
No such cases in the Report Period.
3. Use of raised funds
√ Applicable □ Inapplicable
In the Report Period, the Company made a private issue of restrictedly tradable shares of 55,000,000 to Xiaomi
Technology, which were listed with the Shenzhen Stock Exchange dated 26 June 2015. With RMB22.01 for every
share, this private issue has raised a total of RMB1,210,550,000 (all paid in cash). And the net raised funds stand
at RMB1,203,543,228.39 after the issue expense of RMB7,006,771.61 (including the sponsoring and underwriting
fees, the fees for the CPAs, law firm and other intermediary agencies as well as other direct expense).
The funds raised in this private issue have been deposited in the Company’s special account for raised funds. In
25
2015 Semi-Annual Report of Midea Group Co., Ltd.
compliance with the applicable laws, regulations, normative documents and the Company’s rules regarding its
raised funds, the Company will use all the said raised funds for working capital as detailed in its use plan. In
addition, as per the applicable rules of the Shenzhen Stock Exchange, the sponsor institution, the raised funds
deposit bank and the Company will sign a three-party supervision agreement to supervise the use of the raised
funds together.
As at 30 June 2015, RMB523,286,398.87 in the raised funds special account had been used and the balance was
RMB680,256,829.52.
4. Analysis to major subsidiaries and investees
√ Applicable □ Inapplicable
Particulars about major subsidiaries and investees:
Operating Operating
Compan Principal Total assets Net assets Net profits
Registered capital revenues profits
Company name y Industry products or (RMB (RMB (RMB
(RMB'0,000) (RMB (RMB
type services million) million) million)
million) million)
Guangdong Midea Air
Subsidia Manufac
Refrigeration Equipment Co., conditioner RMB85,400 32,099.52 3,190.56 18,367.65 939.27 825.68
ry turing
Ltd. s
Kitchen &
Guangdong Midea Kitchen
Subsidia Manufac bathroom
Appliances Manufacturing Co., USD7,200 7,177.91 2,203.20 5,991.20 693.81 598.48
ry turing electric
Ltd.
appliances
Guangdong Midea Heating & Air
Subsidia Manufac
Ventilation Equipment Co., conditioner RMB30,000 6,046.75 1,073.14 4,947.14 646.72 569.12
ry turing
Ltd. s
Foshan Shunde Midea Electric Small
Subsidia Manufac
Appliance Manufacturing Co., household USD4,200 4,436.24 1,537.45 3,539.82 495.01 428.74
ry turing
Ltd. appliances
Hefei Midea Washing Subsidia Manufac Washing
USD13,552 4,428.62 2,044.26 2,889.16 196.17 163.77
Machines Co., Ltd. ry turing machines
Guangdong Welling Motor Co., Subsidia Manufac
Motors USD4,881 2,647.00 1,289.04 1,617.82 125.31 111.62
Ltd. ry turing
Guangdong Midea Group Air
Subsidia Manufac
Wuhu Refrigeration Equipment conditioner USD692.8 16,350.74 1,291.99 11,528.48 422.68 367.05
ry turing
Co., Ltd. s
Wuhu Midea Kitchen & Subsidia Manufac Kitchen & RMB6,000 3,146.66 420.42 2,957.01 342.13 310.82
26
2015 Semi-Annual Report of Midea Group Co., Ltd.
Bathroom Electric Appliances ry turing Bathroom
Manufacturing Co., Ltd. Electric
Appliances
Guangdong Midea Life Small
Subsidia Manufac
Electric Manufacturing Co., household USD6,926 2,422.07 744.68 847.14 34.58 23.47
ry turing
Ltd. appliances
Foshan Shunde Midea Washing
Subsidia Manufac Dish
Appliance Manufacturing Co., USD4,600 2,578.99 726.62 1,492.30 150.53 133.09
ry turing washers
Ltd.
5. Major investments not financed by raised funds
□ Applicable √ Inapplicable
No such cases in the Report Period.
VI Forecast of business performance from January to September in 2015
Warning about an estimated major change in the aggregate net profit from the beginning of the year to the end of
the next report period compared with the same period in the previous year and explanation for the change:
□ Applicable √ Inapplicable
VII Explanations by the Board of Directors and the Supervisory Committee regarding the
"non-standard auditor’s report" issued by the CPAs firm for the Report Period
□ Applicable √ Inapplicable
VIII Explanations by the Board of Directors regarding the "non-standard auditor’s report"
issued by the CPAs firm for last year
□ Applicable √ Inapplicable
IX Profit distribution plan carried out during the Report Period
Profit distribution plan carried out during the Report Period, especially the execution of or the adjustments to the
parts in the plan about cash dividends and turning capital reserves into share capital:
√ Applicable □ Inapplicable
The 2014 Annual Profit Distribution Plan was carried out during the Report Period, which is detailed as follows:
Based on its total of 4,215,808,472 shares as at 31 December 2014, the Company would distribute a cash dividend
27
2015 Semi-Annual Report of Midea Group Co., Ltd.
of RMB10.00 (taxes included) for every 10 shares of all shareholders. The said plan was reviewed and approved
at the 2014 Annual General Meeting held on 21 April 2015. The book closure date for this profit distribution was
29 April 2015, and the ex-right and ex-dividend date was 30 April 2015. The said plan has been smoothly carried
out.
Special statement about the cash dividend policy
In compliance with the Company’s Articles of Association and the resolution of the
Yes
general meeting:
Specific and clear dividend standard and ratio: Yes
Complete decision-making procedure and mechanism: Yes
Independent directors fulfilled their responsibilities and played their due role: Yes
Minority shareholders have the chance to fully express their opinion and desire and
Yes
their legal rights and interests were fully protected:
In adjustment or alteration of the cash dividend policy, the conditions and procedure
Inapplicable
were in compliance with regulations and transparent:
X Pre-plan for profit distribution and turning capital reserves into share capital for the
Report Period
□ Applicable √ Inapplicable
The Company plans not to distribute cash dividends or bonus shares or turn capital reserves into share capital for
the first half of 2015.
XI Visitors in the Report Period
√ Applicable □ Inapplicable
Type of
Date Place Occasion Visitor
visitor
China Universal Asset Management, Zeal Asset Management, CICC,
Strategy Institutio Value Partners, Matthews International, Och-Ziff, Xijing, Lighthorse
2015-01-08 Hong Kong
meeting n Asset Management, Indus, TPG-AXON Capital, Farallon, Marshall Wace,
Rays Capital, LBN, BAM, Pine River, Full Vision Capital, Primero
Changli Capital, Goldman Sachs, Blackrock, Henderson Global Investors,
Fidelity, Invesco, Cathay Life Insurance, J.P. Morgan Asset Management,
Shanghai Baoyin, Value Partners, Harvest Fund, Temasek, Yiheng
Strategy Institutio
2015-01-12 Shanghai Capital, Protek (HK), Prudence Investment Management, Nomura, The
meeting n
New Idea of Investment, UBS Asset Management, APS Asset
Management, REYHER Investment, Springs Capital, Baring Assets,
BOSVALEN, Panah Fund, Kingsmead, Tiger Pacific, Highbridge,
28
2015 Semi-Annual Report of Midea Group Co., Ltd.
Wellington Management, Sparx, Carrhae Capital, Stone Forest Capital,
Bestinver, Turiyacapital, Comgest, Bernstein, PIMCO, Matthews, Truck,
Broad Peak
The On-Site Institutio Jingyuan Capital, Trivest Investment, Matthews International, SMC China
2015-01-16
Company survey n Fund, Pacific Eagle, BlueCrest, UG, Acorn Capital
The On-Site Institutio
2015-01-21 Stock Department of China Life Insurance Asset
Company survey n
The On-Site Institutio
2015-01-23 GLG
Company survey n
The On-Site Institutio
2015-01-23 Carmignac Gestion
Company survey n
The On-Site Institutio
2015-01-27 Tiger Fund
Company survey n
The Teleconferenc Institutio
2015-01-28 Government of Singapore Investment Corp
Company e n
The On-Site Institutio
2015-01-28 Fedelity
Company survey n
Taiwan SinoPac Securities, Fuh Hwa Securities Investment Trust, Mega
International Investment Trust, Taishin Securities Investment Trust, Fubon
The Teleconferenc Institutio
2015-01-29 Securities Investment Trust, Nan Shan Life Insurance, MassMutual
Company e n
Mercuries Life, CTBC Life Insurance, Fubon Life Insurance, Central
Reinsurance Corporation, Ruiteng Investment
The On-Site Institutio
2015-01-29 China Merchants Securities
Company survey n
The On-Site Institutio
2015-01-29 Nikko Asset
Company survey n
Shenyin & Wanguo Investment Management, Princeton Capital
Management, Value Partners, Blue Pool Capital, Janchor, The Bank of
On-Site Institutio Tokyo-Mitsubishi UFJ Ltd., The Bank of China Life Insurance, Oberweis,
2015-01-30 Hong Kong
survey n Daiwa Asset Investment, VL Asset Investment, Taiping Assets, Xinsheng
Assets, Hong Kong Huguang International Investment, BOSVALEN,
Morgan Stanley, Karst Peak, Primero
The On-Site Institutio
2015-02-02 Putnam Investment Management
Company survey n
The Teleconferenc Institutio
2015-02-04 Yuanta Securities Investment Trust, KGI Securities
Company e n
The On-Site Institutio
2015-02-05 Capital World Investors
Company survey n
The On-Site Institutio
2015-2-6 Singapore Jin Rong Assets
Company survey n
The Teleconferenc Institutio
2015-02-11 Falcon Edge
Company e n
29
2015 Semi-Annual Report of Midea Group Co., Ltd.
The On-Site Institutio
2015-02-11 Merrill Lynch
Company survey n
The Teleconferenc Institutio
2015-02-12 Broad Peak
Company e n
The On-Site Institutio
2015-03-05 Merrill Lynch
Company survey n
The On-Site Institutio
2015-03-10 Kora Capital
Company survey n
The On-Site Institutio Excel Investment, Trilogy Partners, Farallon Capital, Myriad Asset,
2015-03-10
Company survey n Azentus Capital
The On-Site Institutio
2015-03-12 Investec
Company survey n
The On-Site Institutio
2015-03-16 Broad Peak
Company survey n
The On-Site Institutio
2015-03-18 Mercuries Life Insurance
Company survey n
Bank of China Investment Management, CITIC Asset Management
Corporation Ltd, CITICS, CICC, Zheng Xiang Investment, China
Merchants investment Management, Great Wall Fund, Yuan Xin, Golden
Trust Sinopac Fund Management, Galaxy Securities, E Fund,
Aegon-industrial Fund Management, New China Assets, Co-power
Capital, Century Securities, Rongtong Fund, Invesco Great Wall,
Greenwoods Asset, Jin Niu Investment, Harvest Fund, Huili Assets,
ChinaAMC, Huaqiang investment, Citibank, Hanxi Fund, Korea
Investment Trust, Haitong Securities, Guosen Securities, Guotai Junan
Performance Institutio Security Assets Management, GuoDu Securities Institute, Guangzhou
2015-03-31 Shenzhen
seminar n Long Term Investment, GF Securities, Everbright Prudential Fund,
GUANJUN Asset, ICBC Credit Suisse, ICBCI - Circulation Capital,
Gaoyi Capital, Goldman Sachs Gao Hua, ChinaVenture Investment,
Fengling Capital, Soochow Fund, Orient Securities, Daoning Investment,
Springs Capital, Da Hong Assets, Bosera Fund, Essence Securities, Yiheng
Capital, Ward Ferry, Value partners, Trilogy Partners, Sumeru Capital,
Senrigan Capital Group Limited, RCM Asia Pacific Limited, Ozcap,
Overlook capital, Norges, First State, Eton Park Asia Limited, Comgest,
Cloud Ridge Capital, Central Asset, Bosvalen Asset Management, Black
Rock, Axis Capital, APS Asset, etc. (over 120 institutions)
The On-Site Institutio
2015-04-21 Yale Fund
Company survey n
The Teleconferenc Institutio
2015-04-22 Tengyue Fund
Company e n
The Teleconferenc Institutio
2015-04-23 PCC Asset
Company e n
The Teleconferenc Institutio
2015-04-23 Acion Partners
Company e n
30
2015 Semi-Annual Report of Midea Group Co., Ltd.
The On-Site Institutio
2015-04-24 Ginkgo Investment
Company survey n
The Teleconferenc Institutio
2015-04-29 Matthews International
Company e n
IKON Asset, Anbang Asset, Essence Securities, Och-Ziff, Baishan
Investment, Baoyin Investment, Homeo Capital, Broad Capital, Ivy
Capital, Springs Capital, Allianz Global Investors, Deutsche Bank,
Dongjin, Fidelity, Hillhouse Capital, GF Securities, Guotai Junan
Securities, HFT Investment Management, South Korea Investment,
Xingzhi Venture Capital, Honghu Investment, Houde Asset Management,
The Performance Institutio Value Partners, Greenwoods Asset, Neuberger-Berman, Merrill Lynch,
2015-04-29
Company seminar n Qianzhan Investment, Capital Securities, Rongtong Fund, Credit Suisse,
UBS, Ruihui Investment, Shanghai River Fund, Shenyin & Wanguo,
Tengyue Fund, Tianqi Investment, Western Securities, Citibank Hong
Kong, E Fund, Galaxy Securities, Ginkgo Investment, Yuanta Securities,
Yunsong Capital, Changsheng Fund, Chang Xin Asset Management,
CITIC Securities, BOC International, Broad Peak, Diam, East Capital,
EIFINi, Eton Park , HCC , Point72, TRILOJY
The Teleconferenc Institutio
2015-04-29 T. Rowe Price Global
Company e n
The Teleconferenc Institutio
2015-04-30 Tiger Global
Company e n
Shanghai Baoyin, Credit Suisse, SAIF Partners, Goldman Sachs Asia,
The On-Site Institutio Taiping Shengshi Investment, SMAM, GE Asset, Pacific Eagle Asset,
2015-05-07
Company survey n Flowering Tree, GIC, TPG-AXON, Taconic Capital, Neuberger Berman,
Azentus Capital, Noonday, Generation, Indus
Morgan Stanley Asset, Mirae Asset, Eastspring Investments, BOC
Strategy Institutio International, Och-Ziff, Value Partners, Nezu Asia Captial Management,
2015-05-08 Hong Kong
meeting n Citibank, Baring Asset, UBS, Marshall Wace, Allianz, Turiya Capital,
Fidelity
The Teleconferenc Institutio
2015-05-11 Kiara Advisors
Company e n
The On-Site Institutio
2015-05-12 Harding Loevner
Company survey n
Owl Creek Hong Kong Limited, Yulan Capital, Libra Capital, Pacific
Strategy Institutio Eagle Asset, Pinpoint, Value Partners, Xingtai Capital, Mirae Asset,
2015-05-15 Shanghai
meeting n Neuberger Berman, Artisan Partners, AXA, Chang Xin Asset, Munsun
Asset, Truston Asset, Fidelity, Pictet
The On-Site Institutio
2015-05-19 Puxin Asset
Company survey n
Strategy Institutio Columbia Threadneedle, Millennium Management, Fidelite Worldwide
2015-05-20 Singapore
meeting n Investment, JP.Morgan, Flowing Tree, Henderson Global Investors, Broad
31
2015 Semi-Annual Report of Midea Group Co., Ltd.
Peak Investment, Lazard AM, CDP Capital, Carmignac Gestion, Pictet
AM, Pacific Eagle AM, DCG Capital, Indus Capital Partners, Ellis Munro
AM, Henderson Global Investors, Credit Suisse AM, Brandes Investment
Partners, New Silk Road Investment, Truston AM, Eastspring, Truston
AM, Adapa CM
State Investments, Eastspring Investments, Morgan Stanley Investment
Institutio
2015-05-22 Singapore Road show Management, GIC Private Limited, UBS Global AM, GMO LLC, Capital
n
World Investors, Aberdeen AM, Seatown Holdings International Pte Ltd
The On-Site Institutio
2015-06-01 Taiwan Yuanta Securities
Company survey n
The On-Site Institutio
2015-06-04 Cederberg Capital (UK)
Company survey n
The On-Site Institutio
2015-06-04 Gaoguan Investment
Company survey n
Changsheng Fund, CICC Asset Management, APS Asset, Yinhua Fund,
Strategy Institutio
2015-06-05 Nanjing Ping An Asset, Value Partners, China International Fund Management,
meeting n
Broad Peak
The On-Site Institutio
2015-06-05 Dodge & Cox
Company survey n
New Vision AM, Overlook Investment, Primero, Och-Ziff, VL Asset,
Strategy Institutio Foundation AM, Barings, China Asset Management, Springboard,
2015-06-10 Hong Kong
meeting n Rongying Capital, Hamon, Harvest Global, Samsung Asset, Cathay Life,
Trueland Investment, Norges Bank
Strategy Institutio Cathay, Fuh Hwa, Taiwan Life, Fubon Financial, Shin Kong Life, Taishin
2015-06-16 Taiwan
meeting n Holdings, Rellance Securities Investment Trust
Strategy Institutio Nezu Asia Capital, Indus Capital, Eton Park, Wellington, Tiger Pacific,
2015-06-17 Hong Kong
meeting n Viking Global, Marshall Wace, Balyasny AM
The On-Site Institutio
2015-06-23 Somerset Capital Management
Company survey n
The Teleconferenc Institutio
2015-06-26 SAIF Partners
Company e n
Main talking points with investors included: (1) industry and development status; (2)
condition of business and development strategies; (3) periodic report released by other
companies and other contents involved.
Main contents and materials Materials: periodical report, announcement and other information disclosure.
Except institutional investors, the Company pays great attention to communications with
individuals and other minority investors by phone, email and interactive platform in
replying to all questions and suggestions that need special attention.
32
2015 Semi-Annual Report of Midea Group Co., Ltd.
Section V Significant Events
I Corporate governance
The governance of the Company complied with the Company Law and the CSRC requirements in the Report
Period.
II Lawsuits
Material lawsuits and arbitrations
□ Applicable √ Inapplicable
No such cases in the Report Period.
Other lawsuits
□ Applicable √ Inapplicable
III Media criticism
□ Applicable √ Inapplicable
No such cases in the Report Period.
IV Bankruptcy and reorganization
□ Applicable √ Inapplicable
No such cases in the Report Period.
V Asset transactions
1. Acquisition of assets
□ Applicable √ Inapplicable
2. Sale of assets
□ Applicable √ Inapplicable
No such cases in the Report Period.
33
2015 Semi-Annual Report of Midea Group Co., Ltd.
3. Business combination
□ Applicable √ Inapplicable
No such cases in the Report Period.
VI Implementation of any equity incentive plan and its effects
√ Applicable □ Inapplicable
Overview of the First Phase of the Stock Option Incentive Plan:
1. As authorized at the First Special General Meeting for 2014, the Company convened the 26th Meeting of the
First Board of Directors on 27 March 2015, at which the Proposal for the Adjustments to the Incentive Receivers
and Their Exercisable Stock Options of the Stock Option Incentive Plan was reviewed and approved. As such, it
was agreed to adjust the incentive receivers and their exercisable stock options of the Stock Option Incentive Plan
due to the outgo, position changes and failure in the performance appraisal of some incentive receivers. Upon the
adjustments, the incentive receivers decreased from 681 to 626, and their exercisable stock options (entitled but
not yet exercised) were also reduced from 99,862,500 to 90,660,000.
2. On 21 April 2015, the 2014 Annual Profit Distribution Pre-Plan was reviewed and approved at the 2014 Annual
General Meeting, deciding to distribute a cash dividend of RMB10.00 for every 10 shares of all the shareholders
based on the total of 4,215,808,472 shares of the Company. The book closure date was 29 April and the ex-right
and ex-dividend date was 30 April 2015.
As authorized at the First Special General Meeting for 2014, the Company convened the 27th Meeting of the First
Board of Directors on 27 April 2015, at which the Proposal for the Adjustment to the Exercise Price for the First
Phase of the Stock Option Incentive Plan was reviewed and approved. As the said profit distribution pre-plan had
been carried out, the exercise price for the First Phase of the Stock Option Incentive Plan was revised from
RMB18.72 to RMB17.72 per share.
3. On 31 March 2015, the exercise conditions grew mature for the first exercise period of the First Phase of the
Stock Option Incentive Plan. Upon the examination by the Shenzhen Stock Exchange and the Shenzhen branch of
China Securities Depository and Clearing Co., Ltd., the incentive receivers for the First Phase have started to
exercise their stock options since 18 May 2015. Up to the end of the Report Period, 19,314,125 stock options have
been exercised.
Overview of the Second Phase of the Stock Option Incentive Plan:
1. On 27 March 2015, the Second Phase of the Stock Option Incentive Plan (Draft) and its Abstract of Midea
34
2015 Semi-Annual Report of Midea Group Co., Ltd.
Group Co., Ltd. was reviewed and approved at the 26th Meeting of the First Board of Directors, and the incentive
receiver list for the Second Phase of the Stock Option Incentive Plan (Draft) was examined at the 18th Meeting of
the First Supervisory Committee.
2. The Company filed the materials of the Second Phase of the Stock Option Incentive Plan to the CSRC and the
CSRC raised no objection against the materials. On 27 April 2015, the Second Phase of the Stock Option
Incentive Plan (Draft) and its Abstract (Revised) and the Proposal for the Formulation of the Implementation and
Appraisal Measures for the Second Phase of the Stock Option Incentive Plan (Revised) were reviewed and
approved at the 27th Meeting of the First Board of Directors.
3. On 25 May 2015, the Company convened the First Special General Meeting for 2015, at which the Second
Phase of the Stock Option Incentive Plan (Draft) and its Abstract (Revised) of Midea Group Co., Ltd. (the
“Second Phase of the Stock Option Incentive Plan”), the Implementation and Appraisal Measures for the Second
Phase of the Stock Option Incentive Plan (Revised) of Midea Group Co., Ltd., the Proposal for Asking the
General Meeting to Authorize the Board to Handle Mattes Related to the Second Phase of the Stock Option
Incentive Plan and other relevant proposals were reviewed and approved.
4. In light of the authorization by the First Special General Meeting for 2015 and the completion of the aforesaid
2014 Annual Profit Distribution Plan, the Company convened the 28th Meeting of the First Board of Directors on
27 May 2015, at which the Proposal for the Adjustments to the Exercise Price, the Incentive Receiver List and the
Number of Granted Stock Options for the Second Phase of the Stock Option Incentive Plan, the Proposal for the
Determination of the Grant Date for the Second Phase of the Stock Option Incentive Plan and the Proposal for the
Grant-Related Matters for the Second Phase of the Stock Option Incentive Plan were reviewed and approved. As
such, the Company was agreed to grant 83,790,000 stock options to 733 receivers on 27 May 2015 and the
exercise price was adjusted from RMB31.54 to RMB30.54 per share.
VII Significant related-party transactions
1. Related-party transactions arising from routine operation
√ Applicable □ Inapplicable
Type of Transaction Proportion Approve Obtain Index to
Related Contents Over the Way of
Relationsh the Pricing Transact amount in the total d able Disclosure the
transactio of the approve settleme
ip transacti principle ion price (RMB’0,000 amount of transacti market date disclose
n party transaction d line nt
on ) transaction on line price d
35
2015 Semi-Annual Report of Midea Group Co., Ltd.
s of the (RMB’0 for a informa
same kind ,000) transac tion
(%) tion of
the
same
kind
Zhejiang Company Procureme Payment www.cn
Procure Market
nt of - 55,805.58 1.08% 200,000 No after 2015-03-31 info.co
Shangfen controlled ment price
goods delivery m.cn
g by family
Customs
Industrial members As per
clearance
Market the
Holdings of the Services and - 0 0 350 No
price agreeme
logistics
Co., Ltd. actual nt
services
controller
Total -- -- 55,805.58 -- 200,350 -- -- -- --
Details of any sales return of a large
Inapplicable
amount
Give the actual situation in the Report
Period (if any) where a forecast had been
The associated amount limit between the Company and the related parties and the subsidiaries did not
made for the total amounts of routine
exceed the estimated total amounts of routine related-party transactions by type.
related-party transactions by type to occur
in the current period
Reason for any significant difference
between the transaction price and the Inapplicable
market reference price (if applicable)
2. Related-party transactions regarding purchase and sales of assets
□ Applicable √ Inapplicable
No such cases in the Report Period.
3. Related-party transitions arising from joint investments in external parties
□ Applicable √ Inapplicable
No such cases in the Report Period.
4. Credits and liabilities with related parties
□ Applicable √ Inapplicable
36
2015 Semi-Annual Report of Midea Group Co., Ltd.
No such cases in the Report Period.
5. Other related-party transactions
√ Applicable □ Inapplicable
The Proposal for Related-party Transactions Regarding Making Deposits in and Securing Loans from Shunde
Rural Commercial Bank and the Proposal for the Related-Party Transaction Regarding Note Discounting for
Shangfeng Industrial were reviewed and approved at the 2014 Annual General Meeting held on 21 April 2015.
According to the Proposals, in 2015, the deposit balance of the Company in Shunde Rural Commercial Bank shall
not exceed RMB3 billion and neither shall the credit balance provided by the bank to the Company exceed RMB3
billion; and a subsidiary of the Company intends to provide note discounting services for Shangfeng Industrial and
its subsidiaries, with the total amount of discounted notes expected not to exceed RMB1.4 billion and the interest
charged not exceeding RMB30 million.
Index to the announcements about the said related-party transactions disclosed
Announcement title Disclosure date Disclosure website
Proposal for Related-party Transactions Regarding
Making Deposits in and Securing Loans from Shunde 2015-03-31 www.cninfo.com.cn
Rural Commercial Bank
Proposal for the Related-party Transaction Regarding
2015-03-31 www.cninfo.com.cn
Note Discounting for Shangfeng Industrial
VIII Occupation of the Company’s funds for non-operating purposes by the controlling
shareholder and its related parties
□ Applicable √ Inapplicable
IX Significant contracts and their execution
1. Trusteeship, contracting and leasing
(1) Trusteeship
□ Applicable √ Inapplicable
(2) Contracting
□ Applicable √ Inapplicable
37
2015 Semi-Annual Report of Midea Group Co., Ltd.
(3) Leasing
□ Applicable √ Inapplicable
2. Guarantees provided by the Company
√ Applicable □ Inapplicable
Unit: RMB'0,000
Guarantees provided by the Company for external parties (excluding those for subsidiaries)
Disclosure Actual
Guarantee
date of the occurrence Actual
for a
guarantee Line of date (date guarante Type of Term of
Guaranteed party Due or not related
line guarantee of e guarantee guarantee
party or
announce agreement amount
not
ment signing)
Shanxi Huaxiang Group Co., Ltd. 2015-3-31 38,200 2015-1-1 38,200 Warranty 2015-12-31 No No
Total actual external
Total external guarantee line approved during the Report guarantee amount
2,800 2,800
Period (A1) during the Report
Period (A2)
Total actual external
Total approved external guarantee line at the end of the guarantee balance at
38,200 38,200
Report Period (A3) the end of the
Report Period (A4)
Guarantees provided by the Company for its subsidiaries
Disclosure Actual
Guarantee
date of the occurrence Actual
for a
guarantee Line of date (date guarante Type of Term of Due or
Guaranteed party related
line guarantee of e guarantee guarantee not
party or
announce agreement amount
not
ment signing)
Midea Group Finance Co., Ltd. 2015-3-31 950,000 2015-1-1 63,939 Warranty 2015-12-31 No No
Guangdong Midea Refrigeration Equipment
770,000 220,403 Warranty 2015-12-31 No No
Co., Ltd. 2015-3-31 2015-1-1
Guangdong Midea Kitchen Appliances
500,000 121,350 Warranty 2015-12-31 No No
Manufacturing Co., Ltd. 2015-3-31 2015-1-1
Guangdong Witt Vacuum Electronics
43,600 660 Warranty 2015-12-31 No No
Manufacturing Co., Ltd. 2015-3-31 2015-1-1
Guangdong Midea Heating & Ventilation
65,000 5,458 Warranty 2015-12-31 No No
Equipment Co., Ltd. 2015-3-31 2015-1-1
Midea Commercial Air Conditioning 2015-3-31 14,500 2015-1-1 0 Warranty 2015-12-31 No No
38
2015 Semi-Annual Report of Midea Group Co., Ltd.
Equipment Co., Ltd., Guangdong Province
Guangdong Midea Consumer Electric
27,500 306 Warranty 2015-12-31 No No
Manufacturing Co., Ltd. 2015-3-31 2015-1-1
Foshan Shunde Midea Electric Appliance
109,500 636 Warranty 2015-12-31 No No
Manufacturing Co., Ltd. 2015-3-31 2015-1-1
Guangdong Midea Kitchen & Bathroom
10,000 0 Warranty 2015-12-31 No No
Appliances Manufacturing Co., Ltd. 2015-3-31 2015-1-1
Foshan Shunde Midea Drinking
19,300 0 Warranty 2015-12-31 No No
Manufacturing Co., Ltd. 2015-3-31 2015-1-1
Foshan Midea Clear Lake Water Purification
10,000 0 Warranty 2015-12-31 No No
Equipment Manufacturing Co., Ltd. 2015-3-31 2015-1-1
Guangdong Midea Environment Appliances
176,500 20,037 Warranty 2015-12-31 No No
Manufacturing Co., Ltd. 2015-3-31 2015-1-1
Foshan Shunde Midea Washing Appliance
274,800 35,905 Warranty 2015-12-31 No No
Manufacturing Co., Ltd. 2015-3-31 2015-1-1
Guangdong GMCC Refrigeration Equipment
67,800 997 Warranty 2015-12-31 No No
Co., Ltd. 2015-3-31 2015-1-1
Guangdong GMCC Precise Manufacture Co.,
34,000 141 Warranty 2015-12-31 No No
Ltd. 2015-3-31 2015-1-1
Guangdong Welling Motor Co., Ltd. 2015-3-31 65,700 2015-1-1 9,176 Warranty 2015-12-31 No No
Foshan Welling Electronic and Electric
10,000 55 Warranty 2015-12-31 No No
Appliances Co., Ltd. 2015-3-31 2015-1-1
Foshan Welling Washer Motor
92,400 0 Warranty 2015-12-31 No No
Manufacturing Co., Ltd. 2015-3-31 2015-1-1
Ningbo Midea Joint Materials Supply Co.
66,000 9,483 Warranty 2015-12-31 No No
Ltd. 2015-3-31 2015-1-1
Foshan Welling Material Co., Ltd. 2015-3-31 21,000 2015-1-1 2,495 Warranty 2015-12-31 No No
Guangzhou Kaizhao Trading Co., Ltd.
18,000 0 Warranty 2015-12-31 No No
2015-3-31 2015-1-1
Foshan Midea Carrier Refrigeration
46,000 0 Warranty 2015-12-31 No No
Equipment Co., Ltd. 2015-3-31 2015-1-1
Guangdong Midea Group Wuhu
30,000 0 Warranty 2015-12-31 No No
Refrigeration Equipment Co., Ltd. 2015-3-31 2015-1-1
Wuhu GMCC Air Conditioning Equipment
123,000 1,296 Warranty 2015-12-31 No No
Co., Ltd. 2015-3-31 2015-1-1
Hefei Midea Refrigerator Co., Ltd. 2015-3-31 38,000 2015-1-1 2,500 Warranty 2015-12-31 No No
Hubei Midea Refrigerator Co., Ltd. 2015-3-31 10,000 2015-1-1 5 Warranty 2015-12-31 No No
Hefei Hualing Co., Ltd. 2015-3-31 63,000 2015-1-1 235 Warranty 2015-12-31 No No
Guangzhou Midea Hualing Refrigerator 2015-3-31 20,000 2015-1-1 192 Warranty 2015-12-31 No No
39
2015 Semi-Annual Report of Midea Group Co., Ltd.
Equipment Co., Ltd.
Hefei Midea Heating & Ventilation
7,000 0 Warranty 2015-12-31 No No
Equipment Co., Ltd. 2015-3-31 2015-1-1
Wuhu Midea Kitchen & Bathroom Electric
5,000 1,119 Warranty 2015-12-31 No No
Manufacturing Co., Ltd. 2015-3-31 2015-1-1
Wuhu Midea Washing Appliance
12,500 202 Warranty 2015-12-31 No No
Manufacturing Co., Ltd. 2015-3-31 2015-1-1
Anhui GMCC Refrigeration Equipment Co.,
10,000 635 Warranty 2015-12-31 No No
Ltd. 2015-3-31 2015-1-1
Anhui GMCC Precise Manufacture Co., Ltd. 2015-3-31 20,000 2015-1-1 9,190 Warranty 2015-12-31 No No
Welling (Wuhu) Motor Manufacturing Co.,
10,000 49 Warranty 2015-12-31 No No
Ltd. 2015-3-31 2015-1-1
Hefei Midea Washing Machine Co., Ltd. 2015-3-31 40,000 2015-1-1 0 Warranty 2015-12-31 No No
Annto Logistics Co., Ltd. 2015-3-31 20,000 2015-1-1 0 Warranty 2015-12-31 No No
Jiangsu Midea Chunhua Electric Co., Ltd. 2015-3-31 14,000 2015-1-1 0 Warranty 2015-12-31 No No
Jiangxi Midea Guiya Lighting Co., Ltd. 2015-3-31 5,000 2015-1-1 0 Warranty 2015-12-31 No No
Chongqing Midea General Refrigeration
12,000 0 Warranty 2015-12-31 No No
Equipment Co., Ltd. 2015-3-31 2015-1-1
Zhejiang GMCC Compressor Co., Ltd. 2015-3-31 50,000 2015-1-1 - Warranty 2015-12-31 No No
Changzhou Welling Motor Manufacturing
12,500 - Warranty 2015-12-31 No No
Co., Ltd. 2015-3-31 2015-1-1
Midea International Holdings Ltd. 2015-3-31 750,000 2015-1-1 282,529 Warranty 2015-12-31 No No
Midea International Trading Co., Ltd 2015-3-31 70,000 2015-1-1 0 Warranty 2015-12-31 No No
Midea Electric Investment (BVI) Limited 2015-3-31 50,000 2015-1-1 37,904 Warranty 2015-12-31 No No
Calpore Macao Commercial Offshore Ltd. 2015-3-31 30,000 2015-1-1 0 Warranty 2015-12-31 No No
Century Carrier Residential Air-Conditioning
6,300 0 Warranty 2015-12-31 No No
Equipment Co., Ltd. 2015-3-31 2015-1-1
Welling International Hong Kong Limited 2015-3-31 30,500 2015-1-1 0 Warranty 2015-12-31 No No
Welling Macao Commercial Offshore Ltd. 2015-3-31 7,000 2015-1-1 0 Warranty 2015-12-31 No No
Midea Electric Trading (Singapore) Co. Pte.
300,000 146,726 Warranty 2015-12-31 No No
Ltd. 2015-3-31 2015-1-1
Midea Consumer Electric (Vietnam) Co., Ltd. 2015-3-31 30,500 2015-1-1 0 Warranty 2015-12-31 No No
Midea Electrics Netherlands B.V. 2015-3-31 6,300 2015-1-1 0 Warranty 2015-12-31 No No
Midea America Corp. 2015-3-31 6,300 2015-1-1 0 Warranty 2015-12-31 No No
PT Midea Heating and Ventilating Air
2015-3-31 12,600 2015-1-1 3,057 Warranty 2015-12-31 No No
Conditioner Indonesia
40
2015 Semi-Annual Report of Midea Group Co., Ltd.
Midea Malaysia Joint Venture 2015-3-31 3,150 2015-1-1 583 Warranty 2015-12-31 No No
Total actual
guarantee amount
Total guarantee line for subsidiaries approved during the
1,109,357 for subsidiaries 1,109,357
Report Period (B1)
during the Report
Period (B2)
Total actual
guarantee balance
Total approved guarantee line for subsidiaries at the end
977,260 for subsidiaries at 977,260
of the Report Period (B3)
the end of the
Report Period (B4)
Total guarantee amount provided by the Company (total of the above-mentioned two kinds of guarantees)
Total actual
Total guarantee line approved during the Report Period guarantee amount
1,112,157 1,112,157
(A1+B1) during the Report
Period (A2+B2)
Total actual
guarantee balance at
Total approved guarantee line at the end of the Report
1,015,460 the end of the 1,015,460
Period (A3+B3)
Report Period
(A4+B4)
Proportion of the total actual guarantee amount (A4+B4) in net assets of the
22%
Company
Of which:
Amount of guarantees provided for shareholders, the actual controller and their
0.00
related parties (C)
Amount of debt guarantees provided directly or indirectly for entities with a
509,085
liability-to-asset ratio over 70% (D)
Portion of the total guarantee amount in excess of 50% of net assets (E) 0.00
Total amount of the three kinds of guarantees above (C+D+E) 509,085
Joint responsibilities possibly borne for undue guarantees Inapplicable
Provision of external guarantees in breach of the prescribed procedures Inapplicable
3. Other significant contracts
□ Applicable √ Inapplicable
4. Other significant transactions
□ Applicable √ Inapplicable
41
2015 Semi-Annual Report of Midea Group Co., Ltd.
X 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 □ Inapplicable
Undertaki Undertaking
Undertaking Details of undertaking Term Particulars on the performance
ng giver date
1. Undertaking of Midea Holding Ltd. (hereinafter referred to as "Midea Apart from the 1. There has been no violation of this undertaking.
Holding"), and He Xiangjian, respectively the controlling shareholder and actual first item of
controller of Midea Group Co., Ltd., towards the lock-up period of shares. undertakings,
He Xiangjian and Midea Holding have undertaken as follows: Within 36 months from its duration
Undertakings
the listing date of Midea Group's stocks, they will neither transfer or entrust others to validity spans
given in Controllin
manage their directly and indirectly held shares of Midea Group issued prior to this 36 months from
offering g
issuance, nor sell them to Midea Group. If they break the above undertaking, they will the day of
documents or shareholde 2013-3-28
assume all liabilities arising therefrom. Midea Group’s
shareholding r, actual
2. Undertaking of Midea Holding and the actual controller He Xiangjian towards listing which is 2. There is no violation of this undertaking.
alternation controller
the maintenance of the independence of Midea Group. 18 September
documents
He Xiangjian and Midea Holding have undertaken as follows: He Xiangjian, Midea 2013 to
Holding and their controlled enterprises will remain independent from Midea Group in 18 September
respect of personnel, finance, assets, business and institutions, etc. in accordance with 2016, all other
relevant laws and regulations and regulatory documents. They will faithfully fulfill the items are
42
2015 Semi-Annual Report of Midea Group Co., Ltd.
above undertaking, and assume the corresponding legal liability. If they fail to fulfill their indefinite.
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 towards 3. There has been no violation of this undertaking.
avoiding competition within the industry.
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 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
43
2015 Semi-Annual Report of Midea Group Co., Ltd.
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 towards 4. There has been no violation of this undertaking.
the regulation of related transactions.
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
44
2015 Semi-Annual Report of Midea Group Co., Ltd.
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 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
45
2015 Semi-Annual Report of Midea Group Co., Ltd.
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 Group, on 5. So far, this shareholding transfer has not brought
Midea Trade Union Committee transferring its limited equity of Midea Group. about any loss caused by any dispute or potential
On 4 January , 2001, the Midea Trade Union Committee signed the "Equity Transfer disputes. There has been no violation of this
Contract" with five people, i.e. He Xiangjian, Chen Dajiang, Feng Jingmei, Chen undertaking.
Kangning and Liang Jieyin, where it transfered all limited equity of Midea Group (22.
85%) respectively to those five people. According to the 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
46
2015 Semi-Annual Report of Midea Group Co., Ltd.
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 and the
Housing Provident Fund involved in Midea Group's Overall Listing 6. So far, the payment of the staff social insurance
Midea Holding and He Xiangjian: Midea Holding have undertaken to be liable for (1) and the housing provident fund has not brought
paying such expenses and related expenses on time based on the requirements of relevant about any controversy or potential disputes. There
state departments, if Midea Group is required to be liable for the payment of staff social has been no violation of this undertaking.
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 Certificate:
Midea Holding and He Xiangjian have undertaken as follows: The Report discloses that the Company is trying to get
(1) Midea Holding will do its utmost to assist and urge Midea Group (including its the Property Ownership Certificate for 177 of its
subsidiaries) to complete renaming procedures of related assets, such as land, houses, properties, which cover an area of 2,148,485.65 square
47
2015 Semi-Annual Report of Midea Group Co., Ltd.
trademarks, patents and stock rights, declared in the related files of this merger. Midea meters. So far, 51 applications have been approved, the
Holding will be liable for all compensations of losses caused by issues about renaming total area covers 1,638,892.27 square meters, which
procedures of related assets mentioned above to Midea Group. accounts for 76.28% of total area; 11 applications are
(2) Midea Holding shall do its utmost to assist Midea Group (including its subsidiaries) under process, covering an area of 447,465.15 square
to apply for ownership certificates of land and property declared in related files of this meters, accounting for 20.83% of the total area. These
merger. 11 properties are in possession of ownership certificates
(3) For those houses without ownership certificates due to incomplete formalities in the have not brought about any controversy or dispute.
past, Midea Holding shall assist Midea Group (including its controlled subsidiaries) in Another property with an area of 1,966.69 square
going through relevant construction-related formalities again and obtaining the meters (0.09% of the total area) has been disposed. The
corresponding house ownership certificates. If the competent authorities require Midea remaining 114 properties, spanning an area of
Group to dismantle buildings that can not acquire the real estate registration procedures 60,161.54 square meters account for 2.8% of the total
re-application, Midea Holding shall do its utmost to provide assistance and be liable for area. These properties are all small unit size auxiliary
any related expenses used in dismantling such buildings by Midea Group (including its facilities such as security booth, transformer room,
subsidiaries). power room, pump room, gas station and so on, for
(4) Under any circumstances that Midea Group suffers from losses incurred through no which property ownership certificates cannot be granted
longer using those properties or failing to obtain or collect in time, the ownership or applied for. So far these 114 properties have not been
certificates of those properties currently being used or any losses caused by other required to be dismantled by competent departments so
reasons, Midea Holding shall compensate any loss for these reasons in time and in full. that these buildings are still in regular use, which has
Midea Holding shall compensate the actual loss Midea Group suffers, from any not brought about any controversy or any company loss
circumstances above resulting from penalties subjected to by competent authorities or caused by disputes. There is no violation of
48
2015 Semi-Annual Report of Midea Group Co., Ltd.
through claims by any third party. undertakings.
(5) Based on issues of defective house leasing declared in related files of this merger, 7.2 The Use of Rental Houses of This Company
Midea Holding shall provide sufficient compensations for all economic losses incurred The Report discloses that as of 31 December, 2012 , our
by Midea Group (including its subsidiaries) where the leasehold relations above become company used 113 leasing houses in total, of which our
invalid or other disputes occur, which are caused by rights claims from a third party or by company can't get the property certificate of 100 leasing
means of an administrative authority exercising a right and therefore results in any houses from the leasing party. So far the contracts of 81
economic losses due to eviction from rental houses, or any penalties subjected to by out of the 113 rental houses haven't been signed to
competent government departments or any recourse from related parties. extend the leasehold. The property certificates of 2 of
(6) Based on the issues of defective land leasing declared in related files of this merger, the remaining 32 houses have been obtained while the
when leasehold relations become invalid caused by defects of land leasing or when other other 30 certificates haven't been obtained. These 30
disputes occur, resulting in any economic losses to Midea Group (including its rental houses haven't rendered our company any
subsidiaries) or through any penalties administered by competent government economic loss or penalty caused by defective property
departments. Likewise if the lessor can't compensate for losses caused by such defective rights, which result in removing to other rental houses.
leasing, Midea Holding shall compensate Midea Group for losses caused by such 7.3 Land Use Rights of Leasing Use
defective land leasing The "Report" discloses that as of 31 December, 2012,
Midea Holding will compensate any losses of Midea Group where a violation of our company has had one case of using rental houses,
guarantees and undertakings referred to previously occurs or such guarantees and covering a total area of 57,506.95 square meters for
undertakings are not consistent with the reality. 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
49
2015 Semi-Annual Report of Midea Group Co., Ltd.
has not rendered 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 the
renaming procedures for those trademarks. The
50
2015 Semi-Annual Report of Midea Group Co., Ltd.
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 September
Shareholders of Midea Group, Ningbo Maysun, Fang Hongbo, Huang Jian, Cai Qiwu,
2013, the date
Yuan Liqun, Huang Xiaoming, Li Jianwei, Zheng Weikang, promise that since Midea
Other of Midea
Group is listed on the Shenzhen Stock Exchange Center, the transferal or delegation of 2013-3-28
shareholde Group’s listing, There has been no violation of this undertaking.
others to manage these issued shares who have direct or indirect ownership of Midea
rs to 18
Group, has been forbidden for a period of 36 months. Midea Group is not allowed to buy
September
back those shares either.
2016
1. In strict accordance with the rules of the CSRC, the Shenzhen Stock Exchange and the
Company regarding the use of raised funds, the Company shall have a special account for
The
its raised funds and use the funds only for the previously set purposes.
undertakings
2. The funds raised in this private issue (after the issue expenses) shall all be used as
Undertakings The shall expire
working capital. 2015-6-15 There has been no violation of this undertaking.
given in time Company when the raised
3. The Company shall not use the funds raised in this private issue to make any financial
of IPO or funds have been
investment such as purchasing held-for-trading financial assets and available-for-sale
refinancing used up.
financial assets, lending the funds to others and entrusted investments or to directly or
indirectly invest in marketable securities.
Xiaomi Xiaomi Technology has given an undertaking that it shall not transfer the shares that it
2015-6-26 36 months from There has been no violation of this undertaking.
Technolog had subscribed for in this private offering of Midea Group within 36 months from the
51
2015 Semi-Annual Report of Midea Group Co., Ltd.
y completion date of this offering (26 June 2015, the listing date for this offering). the listing date
of this private
offering, i.e. to
26 June 2018
Whether the
undertaking is
Yes
fulfilled in
time
Specific
reasons for
failing to
fulfill any
Inapplicable
undertaking
and plan for
the next step
(if any)
52
2015 Semi-Annual Report of Midea Group Co., Ltd.
XI Engagement and disengagement of the CPAs firm
Has the semi-annual financial report been audited by a CPAs firm?
□ Yes √ No
XII Punishments and rectifications
□ Applicable √ Inapplicable
XIII Delisting risk due to violation of laws or regulations
□ Applicable √ Inapplicable
XIV Other significant events
√ Applicable □ Inapplicable
The Pre-Plan for the First Repo of Some Public Shares was reviewed and approved at the 30th Meeting of the First
Board of Directors on 26 June 2015 and later at the Second Special General Meeting for 2015 on 13 July 2015.
According to the Pre-Plan, the Company would repurchase some of its shares under the price of RMB48.54/share
and the total price for the repo should not exceed RMB1 billion. 29,591,644 shares were bought back during the
period from 21 July 2015 to 31 July 2015, accounting for 0.69% of the Company’s total shares. With the highest
price at RMB35.74/share and the lowest at RMB30.69/share, the total repo price stood at RMB999,997,670.86,
reaching the limit. As such, this repo plan has been carried out. And the Company cancelled the repo shares of
29,591,644 with the Shenzhen branch of China Securities Depository and Clearing Co., Ltd. on 6 August 2015.
53
2015 Semi-Annual Report of Midea Group Co., Ltd.
Section VI Changes in Shares and Particulars about Shareholders
I Changes in shares
Unit: share
Before the change Increase/decrease in the change (+, -) After the change
Capitalizatio
Proporti Bonus Proporti
Number New issue n of capital Other Subtotal Number
on (%) shares on (%)
reserves
I Restricted shares 1,973,072,529 46.80% 55,093,750 0 0 -1,822,529 53,271,221 2,026,343,750 47.23%
1. Shares held by the state 0 0 0 0 0 0 0 0 0.00%
2. Shares held by
0 0 0 0 0 0 0 0 0.00%
state-owned corporations
3. Shares held by other
1,973,072,529 46.80% 55,093,750 0 0 -1,822,529 53,271,221 2,026,343,750 47.23%
domestic investors
Among which: Shares
held by domestic 1,571,250,000 37.27% 55,000,000 0 0 55,000,000 1,626,250,000 37.91%
corporations
Shares held by
401,822,529 9.53% 93,750 0 0 -1,822,529 -1,728,779 400,093,750 9.33%
domestic individuals
4. Shares held by foreign
0 0 0 0 0 0 0 0 0.00%
investors
Among which: Shares
held by foreign 0 0 0 0 0 0 0 0 0.00%
corporations
Shares held by
0 0 0 0 0 0 0 0 0.00%
foreign individuals
II Non-restricted shares 2,242,735,943 53.20% 19,220,375 0 0 1,822,529 21,042,904 2,263,778,847 52.77%
1. RMB ordinary shares 2,242,735,943 53.20% 19,220,375 0 0 1,822,529 21,042,904 2,263,778,847 52.77%
2. Domestically listed
0 0 0 0 0 0 0 0 0.00%
foreign shares
3. Overseas listed foreign
0 0 0 0 0 0 0 0 0.00%
shares
4. Other 0 0 0 0 0 0 0 0 0.00%
III Total shares 4,215,808,472 100.00% 74,314,125 0 0 0 74,314,125 4,290,122,597 100.00%
Reasons for the changes in the shares:
√ Applicable □ Inapplicable
54
2015 Semi-Annual Report of Midea Group Co., Ltd.
1. In the Report Period, the Company made a private offering of 55,000,000 restrictedly tradable shares to Xiaomi
Technology, which were listed on the Shenzhen Stock Exchange on 26 June 2015.
2. On 15 May 2015, the Company disclosed the Indicative Announcement on the Commence of the Self-Decided
Exercise by the Eligible Incentive Receivers for the First Exercise Period for the First Phase of the Stock Option
Incentive Plan. And the exercise of stock options started on 18 May 2015. Up to the end of the Report Period, the
incentive receivers have exercised 19,314,125 stock options in the First Phase of the Stock Option Incentive Plan,
of which 125,000 stock options have been exercised by Company Secretary Jiang Peng on his own decision
(93,750 shares locked up due to the 75% lock-up ratio requirement for the senior executives).
3. In June 2014, with confidence in the Company’s long-term solid growth, Fang Hongbo, Yuan Liqun and Li
Jianwei in the top management of the Company increased their shareholdings in the Company by approximately
2,430,037 shares in total from the secondary market (1,822,529 shares locked up due to the 75% lock-up ratio
requirement for the senior executives). According to the applicable rules, the annual transferable shares for the
senior executives shall be calculated [the transferable shares=(restrictedly tradable shares+non-restrictedly
tradable shares) × 25%] at the first trading day of every year. As such, the aforesaid locked-up shares have been
unlocked for trading at the beginning of 2015.
Approval of changes in the shares:
√ Applicable □ Inapplicable
1. On 20 May 2015, the Issue Review Committee of the CSRC reviewed and approved the Company’s application
for a private offering to Xiaomi Technology.
2. On 11 June 2015, the Company received from the CSRC the Reply Regarding the Approval for the Private
Offering of Midea Group Co., Ltd. (CSRC Permit [2015] No. 1169), approving a private offering of no more than
55,000,000 new shares by the Company to Xiaomi Technology.
Transfer of share ownership:
□ Applicable √ Inapplicable
Effects of the changes in shares on the basic EPS, diluted EPS, net assets per share attributable to the common
shareholders of the Company and other financial indexes for the last year and the last report period:
55
2015 Semi-Annual Report of Midea Group Co., Ltd.
√ Applicable □ Inapplicable
In the Report Period, the total shares of the Company increased from 4,215,808,472 to 4,290,122,597 due to the
19,314,125 stock options exercised by the incentive receivers on their own decision according to the First Phase
of the Stock Option Incentive Plan and the 55,000,000 new shares in the private offering to Xiaomi Technology.
And the effects of these changes in the shares on the basic EPS, diluted EPS, net assets per share attributable to
the common shareholders of the Company and other financial indexes for the last year and the last report period
are as follows:
2014 First half of 2015
Calculated on the previous total
Index Calculated on the new total shares Calculated on the new total shares
shares
Basic EPS 2.49 2.45 1.97
Diluted EPS 2.49 2.45 1.96
Net assets per share 9.36 9.20 10.76
Other information that the Company considers necessary or is required by the securities regulatory authorities to
disclose:
□ Applicable √ Inapplicable
Changes in the total shares, the shareholder structure and the asset and liability structure:
√ Applicable □ Inapplicable
In the Report Period, the total shares of the Company increased from 4,215,808,472 to 4,290,122,597 due to the
19,314,125 stock options exercised by the incentive receivers on their own decision according to the First Phase
of the Stock Option Incentive Plan and the 55,000,000 new shares in the private offering to Xiaomi Technology.
II Total number of shareholders and their shareholdings
Unit: share
Total number of common
Total number of preference shareholders with resumed
shareholders at the end of 86,731 0
voting rights at the period-end (if any)
the Report Period
Shareholdings of the common shareholders with a stake of over 5% or the top 10 common shareholders
56
2015 Semi-Annual Report of Midea Group Co., Ltd.
Sharehol Increase/dec Number of Pledged or frozen
Total shares Number of
Nature of ding rease during non-restricte shares
Name of shareholder held at the restricted
shareholder percenta the Report d shares Status of Number of
period-end shares held
ge (%) Period held shares shares
Domestic
Midea Holding Co., Ltd. non-state-own 34.88 1,496,250,000 1,496,250,000 0 Pledged 238,500,100
ed corporation
Rongrui Equity Investment Domestic
(Zhuhai) Partnership non-state-own 7.10 304,500,000 0 304,500,000
(limited partnership) ed corporation
Domestic
Fang Hongbo 2.13 91,326,995 90, 000,000 1,326,995
individual
Tianjin CDH Jiatai Equity Domestic
Investment Partnership non-state-own 1.82 78,000,000 0 78,000,000
(limited partnership) ed corporation
Domestic
Huang Jian 1.75 75,181,900 75,000,000 181,900
individual
Ningbo Maysun Equity Domestic
Investment Partnership non-state-own 1.75 75,000,000 75,000,000 0
(limited partnership) ed corporation
Domestic
Yuan Liqun 1.41 60,500,000 60,000,000 500,000
individual
CDH M-Tech (HK) Co., Overseas
1.40 60,000,000 0 60,000,000
Ltd. corporation
Overseas
CDH Spark (HK) Co., Ltd. 1.34 57,500,000 0 57,500,000
corporation
Domestic
Xiaomi Technology Co.,
non-state-own 1.28 55,000,000 55,000,000 50,000,000 0
Ltd.
ed corporation
Strategic investors or common corporations
The Company made a private offering of 55,000,000 restrictedly tradable shares to Xiaomi
becoming top-10 shareholders due to
Technology, which were listed on the Shenzhen Stock Exchange on 26 June 2015.
placing of new shares (if any)
Two individual shareholders Mr. Fang Hongbo and Ms. Yuan Liqun, serve as director and
Related-parties or acting-in-concert parties
senior executive in Midea Group. CDH Jiatai, CDH M-Tech and CDH Spark, which hold a
among the shareholders above
total of 4.56% shares in Midea Group, are related parties.
Shareholdings of the top 10 non-restricted common shareholders
Number of non-restricted Type of shares
Name of shareholder
shares held at the period-end Type Number
Rongrui Equity Investment (Zhuhai) Partnership (limited partnership) 304,500,000 RMB ordinary 304,500,000
57
2015 Semi-Annual Report of Midea Group Co., Ltd.
share
Tianjin CDH Jiatai Equity Investment Partnership (limited RMB ordinary
78,000,000 78,000,000
partnership) share
RMB ordinary
CDH M-Tech (HK) Co., Ltd. 60,000,000 60,000,000
share
RMB ordinary
CDH Spark (HK) Co., Ltd. 57,500,000 57,500,000
share
53,849,234 RMB ordinary 53,849,234
Merrill Lynch International
share
51,289,194 RMB ordinary 51,289,194
UBS AG share
41,953,094 RMB ordinary 41,953,094
Deutsche Bank Aktiengesellschaft
share
36,974,378 RMB ordinary 36,974,378
Carmignac Gestion－Carmignac Patrimoine（ETF）
share
33,388,888 RMB ordinary 33,388,888
National Social Security Fund Portfolio 104
share
31,786,204 RMB ordinary 31,786,204
Fidelity Investments Management (HK) Ltd.－Clients’ Funds
share
CDH Jiatai, CDH M-Tech and CDH Spark are related parties.
Apart from that, the Company does not know whether there are
Related-parties or acting-in-concert parties among the top ten other related parties among other shareholders of tradable shares
non-restricted shareholders and between the top ten non-restricted and whether other shareholders of tradable shares belong to parties
shareholders and the top ten shareholders acting in concert as prescribed in the Administrative Measures for
Information Disclosure for Shareholding Alteration in a Listed
Company.
Explanation on the top 10 common shareholders participating in
Inapplicable
securities margin trading (if any)
Note: Up to 14 August 2015, according to the register of shareholders of the Company (the top 100 shareholders) provided by the
Shenzhen branch of China Securities Depository and Clearing Co., Ltd., China Securities Finance Co., Ltd. (CSF) directly holds
76,113,783 shares in the Company, representing a stake of 1.78%, which makes it the Company’s third majority shareholder with
tradable shares. Meanwhile, dozens of funds hold a total of 79,999,000 shares (a stake of 1.90%) in the Company through an asset
management plan of CSF. In addition, Central Huijin Investment Ltd. directly holds 52,316,600 shares in the Company, representing
a stake of 1.23%, which makes it the Company’s sixth majority shareholder with tradable shares. The aforesaid 12 shareholders hold
a total of 208,429,383 shares in the Company, accounting for 4.91% of the Company’s total shares.
Whether any of the top 10 common shareholders or the top 10 non-restricted common shareholders of the
Company conducted any promissory repo during the Report Period:
58
2015 Semi-Annual Report of Midea Group Co., Ltd.
□ Yes √ No
No such cases in the Report Period.
III Change of the controlling shareholder and the actual controller
Change of the controlling shareholder in the Report Period
□ Applicable √ Inapplicable
Change of the actual controller in the Report Period
□ Applicable √ Inapplicable
IV Shareholding increase schemes proposed or implemented by the shareholders and their
acting-in-concert parties during the Report Period
□ Applicable √ Inapplicable
No such cases in the Report Period to the best knowledge of the Company.
59
2015 Semi-Annual Report of Midea Group Co., Ltd.
Section VII Preference Shares
□ Applicable √ Inapplicable
No preference shares in the Report Period.
Section VIII Information about Directors, Supervisors and Senior
Management
I Changes in the shareholdings of the directors, supervisors and senior management
√ Applicable □ Inapplicable
Restricted
Shares Shares Restricted Restricted
Shares held Shares held shares
Incumbe increased in decreased in shares held shares held at
at the at the granted in
Name Office title nt/ the Report the Report at the the
period-begin period-end the Report
Former Period Period period-begin period-end
ning (share) (share) Period
(share) (share) ning (share) (share)
(share)
Incumbe
Li Jianwei Director 50,603,042 0 203,042 50,400,000 0 0 0
nt
Company Incumbe
Jiang Peng 0 125,000 0 125,000 0 0 0
Secretary nt
Total -- -- 50,603,042 125,000 203,042 50,525,000 0 0 0
Note: Company Secretary Jiang Peng increased his shareholdings in the Company during the Report Period for he
exercised on his own decision the stock options granted to him according to the First Phase of the Stock Option
Incentive Plan.
II Changes in the directors, supervisors and senior management
□ Applicable √ Inapplicable
60
2015 Semi-Annual Report of Midea Group Co., Ltd.
Section IX Financial Report
(The 2015 Semi-annual Financial Report of the Company has not been audited by a CPAs firm.)
Consolidated Balance Sheet
Prepared by: Midea Group Co., Ltd. 30 June 2015 Unit: RMB’000
Asset Note Closing balance Opening balance
Current Assets:
Monetary funds 1 14,619,199.45 6,203,282.81
Deposit in Central Bank 2 1,827,040.08 1,279,592.47
Deposit in other banks 3 2,024,431.24 2,126,444.99
Derivative financial
4 14,339.10 162,513.84
assets
Notes receivable 5 26,229,378.71 17,097,233.37
Accounts receivable 6 13,617,075.57 9,362,102.75
Accounts paid in
7 1,813,795.05 1,414,470.45
advance
Loans and advances to
8 8,864,168.57 5,940,800.47
customers
Interest receivable
Dividends receivable 9 53,512.81 45,943.22
Other accounts
10 1,227,915.83 1,180,767.53
receivable
Inventories 11
Non-current assets due
10,209,853.18 15,020,030.26
within 1 year
Other current assets 12
Total current assets
Non-current assets:
Available-for-sale
13 2,257,721.98 1,655,494.72
financial assets
Held-to-maturity
investments
Long-term accounts
receivable
61
2015 Semi-Annual Report of Midea Group Co., Ltd.
Long-term equity
14 906,155.83 951,874.39
investments
Investing properties 15 146,845.84 171,634.90
Fixed assets 16 18,857,466.98 19,521,814.06
Construction in progress 17 673,746.74 661,882.29
Engineering materials
Disposal of fixed assets
Intangible assets 18 3,265,368.09 3,431,958.12
R&D expense
Goodwill 19 2,957,619.51 2,931,791.41
Long-term deferred
20 803,688.22 758,576.10
expenses
Deferred income tax
21 4,181,374.55 3,779,987.55
assets
Other non-current assets 122,852.23
Total non-current assets 34,172,839.97 33,865,013.54
Total assets 141,782,687.12 120,292,088.16
Person-in-charge of
Legal representative: Chief of the accounting
the accounting work:
Fang Hongbo division: Chen Jianwu
Yuan Liqun
Consolidated Balance Sheet (Continued)
Prepared by: Midea Group Co., Ltd. 30 June 2015 Unit: RMB’000
Liabilities and
Note Closing balance Opening balance
shareholders’ equity
Current liabilities:
Short-term borrowings 22 10,346,605.38 6,070,879.03
Borrowings from the
Central Bank
Customer bank deposits
and due to banks and other 23 21,200.85 7,493.81
financial institutions
Intra-group borrowings
Derivative financial
24 155,571.85 74,960.70
liabilities
62
2015 Semi-Annual Report of Midea Group Co., Ltd.
Financial assets sold and
131,807.66
repurchased
Notes payable 25 22,787,992.23 12,648,496.99
Accounts payable 26 19,270,838.33 20,137,454.46
Accounts received in
27 2,868,186.11 3,992,540.46
advance
Payroll payable 28 1,486,339.67 2,199,776.95
Taxes and fares payable 29 4,124,942.46 3,280,150.71
Interest payable 30 39,693.38 22,912.17
Dividends payable 31 292,795.58 93,799.03
Other accounts payable 32 1,120,799.95 1,223,548.76
Non-current liabilities
33
due within 1 year
Other current liabilities 34 25,978,102.27 22,778,936.05
Total current liabilities 88,624,875.72 73,142,849.12
Non-current liabilities:
Long-term borrowings 35 10,575.18 19,205.03
Bonds payable 36 158,501.30 153,026.30
Long-term payables
Specific payables 37 116,311.16 851,825.49
Projected liabilities 38 25,980.02 25,573.83
Deferred revenues 39 371,492.54 342,235.91
Deferred income tax
21 25,525.79 25,917.24
liabilities
Other non-current
liabilities
Total non-current liabilities 708,385.99 1,417,783.80
Total liabilities 89,333,261.71 74,560,632.92
Shareholders’ equity
Share capital 40 4,290,122.60 4,215,808.47
Capital reserves 41 15,311,738.38 13,024,883.19
Less: Treasury stock
Other comprehensive
42 -559,540.66 -774,298.83
income
63
2015 Semi-Annual Report of Midea Group Co., Ltd.
Surplus reserves 43 1,189,791.32 1,189,791.32
Provisions for general
44 40,516.92
risks
Retained profits 45 25,882,112.91 21,814,315.69
Total equity attributable to
46,154,741.47 39,470,499.84
owners of the Company
Minority interests 6,294,683.94 6,260,955.40
Total shareholders’ equity 52,449,425.41 45,731,455.24
Total liabilities and
141,782,687.12 120,292,088.16
shareholders’ equity
Person-in-charge of
Legal representative: Chief of the accounting
the accounting work:
Fang Hongbo division: Chen Jianwu
Yuan Liqun
Consolidated Income Statement
Prepared by: Midea Group Co., Ltd. January-June 2015 Unit: RMB’000
Item Note Current period Same period of last year
I. Operating revenues 82,875,070.41 77,708,218.36
Including: Sales income 1 82,509,143.78 77,330,851.84
Interest income 2 363,832.38 376,858.22
Handling charge and
2,094.25 508.30
commission income
II. Operating costs 73,632,412.38 69,018,279.27
Including: Cost of sales 1 59,878,905.74 57,343,283.31
Interest expenses 2 317,071.49 191,553.43
Handling charge and
3 888.28 727.61
commission expenses
Business tax and surtaxes 4 568,635.77 446,827.77
Selling expenses 5 8,986,099.39 7,623,680.06
Administrative expenses 6 3,604,757.13 3,349,324.40
Financial expenses 7 -777.60 -288,553.70
Asset impairment loss 8 276,832.18 351,436.39
Add: Gain/(loss) from change in fair
9 -217,464.01 -788,353.68
value (“-” for loss)
Investment gains 10 1,181,204.85 426,447.09
64
2015 Semi-Annual Report of Midea Group Co., Ltd.
Including: share of profits in
43,126.51 34,977.39
associates and joint ventures
III. Operating profits 10,206,398.87 8,328,032.50
Add: non-operating income 11 650,591.41 553,423.06
Including: gains from non-current
38,172.48 40,031.43
asset disposal
Less: non-operating expense 12 100,416.37 133,112.02
Including: loss from non-current asset
77,444.62 99,791.39
disposal
IV. Total profits 10,756,573.91 8,748,343.54
Less: Income tax expense 13 1,808,006.29 1,530,715.47
V. Net profit 8,948,567.62 7,217,628.07
Including: Net profit achieved by
combined parties before the
combinations
Attributable to owners of the
8,324,122.61 6,610,132.76
Company
Minority shareholders’ income 624,445.01 607,495.31
VI. After-tax net amount of other
14 123,525.49 -391,206.22
comprehensive incomes
After-tax net amount of other
comprehensive incomes attributable 214,758.17 -424,263.31
to owners of the Company
(I) Other comprehensive
incomes that will not be reclassified
into gains and losses
1. Changes in net liabilities
or assets with a defined benefit plan
upon re-measurement
2. Enjoyable shares in other
comprehensive incomes in investees
that cannot be reclassified into gains
and losses under the equity method
(II) Other comprehensive
incomes that will be reclassified into 214,758.17 -424,263.31
gains and losses
1. Enjoyable shares in other
-5,421.14 2,917.31
comprehensive incomes in investees
65
2015 Semi-Annual Report of Midea Group Co., Ltd.
that will be reclassified into gains and
losses under the equity method
2. Gains and losses on fair
value changes of available-for-sale 10,918.32 -20.83
financial assets
3. Gains and losses on
reclassifying held-to-maturity
investments into available-for-sale
financial assets
4. Effective hedging gains
360,415.30 -397,294.30
and losses on cash flows
5. Foreign-currency
financial statement translation -151,154.31 -29,865.49
difference
6. Other
After-tax net amount of other
comprehensive incomes attributable -91,232.68 33,057.09
to minority shareholders
VII. Total comprehensive incomes 9,072,093.110 6,826,421.85
Attributable to owners of the
8,538,880.78 6,185,869.45
Company
Attributable to minority
533,212.33 640,552.40
shareholders
VIII. Earnings per share
(I) Basic earnings per share XVI 1.97 1.57
(II) Diluted earnings per share XVI 1.96 1.57
Person-in-charge of the
Legal representative: Chief of the accounting division:
accounting work:
Fang Hongbo Chen Jianwu
Yuan Liqun
Consolidated Cash Flow Statement
Prepared by: Midea Group Co., Ltd. January-June 2015 Unit: RMB’000
Item Note Current period Same period of last year
I. Cash flows from operating
activities:
Cash received from sale of
60,039,034.87 50,376,575.36
commodities and rendering of service
66
2015 Semi-Annual Report of Midea Group Co., Ltd.
Net increase of deposits from
13,707.04 216.14
customers and dues from banks
Net increase of loans from the
central bank
Cash received from interest,
365,926.63 377,366.52
handling charges and commissions
Tax refunds received 2,127,729.60 1,916,846.95
Other cash received relating to
1 1,746,301.16 1,235,894.43
operating activities
Subtotal of cash inflows from
64,292,699.30 53,847,189.77
operating activities
Cash paid for goods and services 32,721,673.09 23,640,077.67
Net increase of customer lendings
2,923,618.32 -140,373.38
and advances
Net increase of funds deposited in
the central bank and amount due 349,941.04 -74,239.40
from banks
Cash for paying interest, handling
317,959.77 193,074.20
charges and commissions
Cash paid to and for employees 6,130,766.11 5,562,772.47
Various taxes paid 5,135,145.75 4,432,638.16
Other cash payment relating to
2 7,897,923.33 7,061,777.20
operating activities
Subtotal of cash outflows from
55,477,027.41 40,675,726.92
operating activities
Net cash flows from operating
8,815,671.89 13,171,462.85
activities
II. Cash flows from investing
activities:
Cash received from retraction of
6,736.94 4,001,000.00
investments
Cash received from return on
1,042,100.46 288,626.73
investments
Net cash received from disposal of
fixed assets, intangible assets and 205,285.26 1,116,283.31
other long-term assets
Net cash received from disposal of
67
2015 Semi-Annual Report of Midea Group Co., Ltd.
subsidiaries or other business units
Other cash received relating to
investing activities
Subtotal of cash inflows from
1,254,122.66 5,405,910.04
investing activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 1,166,630.67 1,388,961.92
assets
Cash paid for investment 8,915,487.43 26,488,790.03
Net cash paid to acquire
-2,895.34 14,878.11
subsidiaries and other business units
Other cash payments relating to
investing activities
Subtotal of cash outflows from
10,079,222.76 27,892,630.06
investing activities
Net cash flows from investing
-8,825,100.10 -22,486,720.02
activities
III. Cash flows from financing
activities:
Cash received from capital
1,493,431.29
contributions
Including: Cash received from
minority shareholder investments by 13,459.97
subsidiaries
Cash received from borrowings 12,782,285.41 24,804,161.79
Cash received from issuance of
medium term notes
Cash received from issuance of
short-term financing bonds
Other cash received relating to
financing activities
Subtotal of cash inflows from
14,275,716.70 24,804,161.79
financing activities
Cash repayment of borrowings 9,388,064.09 15,368,031.10
Cash for repaying medium term
1,000,000.00
notes
Cash for repaying short-term
68
2015 Semi-Annual Report of Midea Group Co., Ltd.
financing bonds
Cash paid for interest expenses
4,614,943.74 3,644,368.15
and distribution of dividends or profit
Including: dividends or profit
paid by subsidiaries to minority 378,347.40 268,328.09
shareholders
Other cash payments relating to
financing activities
Sub-total of cash outflows from
14,003,007.83 20,012,399.25
financing activities
Net cash flows from financing
272,708.87 4,791,762.54
activities
IV. Effect of foreign exchange rate
-28,372.78 -11,048.22
changes on cash and cash equivalents
V. Net increase in cash and cash
234,907.88 -4,534,542.85
equivalents
Add: Opening balance of cash
5,272,238.35 16,763,873.80
and cash equivalents
VI. Closing balance of cash and cash
5,507,146.23 12,229,330.95
equivalents
Person-in-charge of
Legal representative: Chief of the accounting division:
the accounting work:
Fang Hongbo Chen Jianwu
Yuan Liqun
69
2015 Semi-Annual Report of Midea Group Co., Ltd.
Consolidated Statement of Changes in Shareholders’ Equity
Prepared by: Midea Group Co., Ltd. January-June 2015 Unit: RMB’000
Current period
Equity attributable to shareholders of the Company
Item Total
Less: Other Preparation Minority interests shareholders’
Capital Specific Surplus Retained
Share capital treasury comprehensive for general equity
reserve reserve reserve profit
stock income risks
I. Balance at the
end of the previous 4,215,808.47 13,024,883.19 -774,298.83 1,189,791.32 21,814,315.69 6,260,955.40 45,731,455.24
year
Add: change of
accounting policy
Correction of
errors in previous 0
periods
Enterprise
merger under the
same control
Other
II. Balance at the
beginning of the 4,215,808.47 13,024,883.19 -774,298.83 1,189,791.32 21,814,315.69 6,260,955.40 45,731,455.24
year
III. Increase/ 74,314.13 2,286,855.19 214,758.17 40,516.92 4,067,797.22 33,728.54 6,717,970.17
70
2015 Semi-Annual Report of Midea Group Co., Ltd.
decrease in the
period (“-” means
decrease)
(I) Total amount
of the
214,758.17 8,324,122.61 533,212.33 9,072,093.11
comprehensive
income
(II) Capital paid
in and reduced by 74,314.13 1,571,763.72 28,635.93 1,674,713.78
owners
1. Capital paid by
74,314.13 1,541,545.15 13,464.34 1,629,323.62
owners
2. Capital increased
by holders of other
equity instruments
3. Amounts of
share-based
payments 30,218.57 15,171.59 45,390.16
recognized in
owners’ equity
4. Other
(III) Profit
40,516.92 -4,256,325.39 -534,219.99 -4,750,028.46
distribution
1. Appropriations
to surplus reserves
71
2015 Semi-Annual Report of Midea Group Co., Ltd.
2. Appropriations
to general risk 40,516.92 -40,516.92
provisions
3. Appropriations
-4,215,808.47 -534,219.99 -4,750,028.46
to owners
4. Other
(IV) Internal
carry-forward of
owners’ equity
1. New
increase of capital
from capital public
reserves
2. New increase of
capital from
surplus reserves
3. Surplus reserves
for making up
losses
4. Other
(V) Specific
reserve
1. Withdrawn for
the period
72
2015 Semi-Annual Report of Midea Group Co., Ltd.
2. Used in the
period
(VI) Other 715,091.47 6,100.27 721,191.74
IV. Closing
4,290,122.60 15,311,738.38 -559,540.66 1,189,791.32 40,516.92 25,882,112.91 6,294,683.94 52,449,425.41
balance
Legal representative: Fang Hongbo Person-in-charge of the accounting work: Yuan Liqun Chief of the accounting division: Chen Jianwu
Consolidated Statement of Changes in Shareholders’ Equity (Continued)
Prepared by: Midea Group Co., Ltd. January-June 2015 Unit: RMB’000
Same period of last year
Equity attributable to shareholders of the Company
Item Total
Less: Other Preparation Minority interests shareholders’
Capital Specific Surplus Retained
Share capital treasury comprehensive for general equity
reserve reserve reserve profit
stock income risks
I. Balance at the
end of the previous 1,686,323.39 15,620,790.78 -334,216.66 569,544.32 15,304,989.21 6,233,131.24 39,080,562.28
year
Add: change of
-54,486.84 54,486.84
accounting policy
Correction of
errors in previous
periods
Enterprise
73
2015 Semi-Annual Report of Midea Group Co., Ltd.
merger under the
same control
Other
II. Balance at the
beginning of the 1,686,323.39 15,566,303.94 -279,729.82 569,544.32 15,304,989.21 6,233,131.24 39,080,562.28
year
III. Increase/
decrease in the
2,529,485.08 -2,541,420.75 -494,569.01 620,247.00 6,509,326.48 27,824.16 6,650,892.96
period (“-” means
decrease)
(I) Total amount
of the
-494,569.01 10,502,220.26 1,042,212.60 11,049,863.85
comprehensive
income
(II) Capital paid
in and reduced by 152,799.76 33,285.23 186,084.99
owners
1. Capital paid by
7,927.91 7,927.91
owners
2. Capital increased
by holders of other
equity instruments
3. Amounts of
share-based 150,991.31 25,357.32 176,348.63
payments
74
2015 Semi-Annual Report of Midea Group Co., Ltd.
recognized in
owners’ equity
4. Other 1,808.45 1,808.45
(III) Profit
620,247.00 -3,992,893.78 -535,379.84 -3,908,026.62
distribution
1. Appropriations
620,247.00 -620,247.00
to surplus reserves
2. Appropriations
to general risk
provisions
3. Appropriations
-3,372,646.78 -535,379.84 -3,908,026.62
to owners
4. Other
(IV) Internal
carry-forward of 2,529,485.08 -2,529,485.08
owners’ equity
1. New
increase of capital
2,529,485.08 -2,529,485.08
from capital public
reserves
2. New increase of
capital from
surplus reserves
3. Surplus reserves
75
2015 Semi-Annual Report of Midea Group Co., Ltd.
for making up
losses
4. Other
(V) Specific
reserve
1. Withdrawn for
the period
2. Used in the
period
(VI) Other -164,735.43 -512,293.83 -677,029.26
IV. Closing
4,215,808.47 13,024,883.19 -774,298.83 1,189,791.32 21,814,315.69 6,260,955.40 45,731,455.24
balance
Legal representative: Fang Hongbo Person-in-charge of the accounting work: Yuan Liqun Chief of the accounting division: Chen Jianwu
76
2015 Semi-Annual Report of Midea Group Co., Ltd.
Balance Sheet of the Company
Prepared by: Midea Group Co., Ltd. 30 June 2015 Unit: RMB’000
Asset Note Closing balance Opening balance
Current Assets:
Monetary funds 22,997,109.64 8,452,623.95
Derivative financial assets 6,571.22
Notes receivable 4,040,598.01 693,828.61
Accounts receivable
Accounts paid in advance 7,360.97 1,102.42
Interest receivable
Dividends receivable 967,484.80 280,771.02
Other accounts receivable 1 3,925,952.78 2,418,306.21
Inventories
Non-current assets due
within 1 year
Other current assets 20,709,941.05 22,892,049.61
Total current assets 52,655,018.47 34,738,681.82
Non-current assets:
Available-for-sale financial
1,218,277.80 1,230,277.80
assets
Held-to-maturity investments
Long-term accounts
receivable
Long-term equity
2 16,945,396.09 16,548,882.73
investments
Investing properties 287,025.23 323,355.75
Fixed assets 1,347,841.97 1,653,024.17
Construction in progress 94,389.83 42,386.34
Engineering materials
Disposal of fixed assets
Intangible assets 261,404.65 280,656.35
R&D expenses
77
2015 Semi-Annual Report of Midea Group Co., Ltd.
Goodwill
Long-term deferred expenses 59,731.03 68,787.68
Deferred income tax assets 302.04 4,483.56
Other non-current assets
Total non-current assets 20,214,368.64 20,151,854.38
Total assets 72,869,387.11 54,890,536.20
Legal representative: Person-in-charge of the accounting work: Chief of the accounting
Fang Hongbo Yuan Liqun division: Chen Jianwu
Balance Sheet of the Company (Continued)
Prepared by: Midea Group Co., Ltd. 30 June 2015 Unit: RMB’000
Liabilities and shareholders’
Note Closing balance Opening balance
equity
Current liabilities:
Short-term borrowings
Derivative financial
liabilities
Notes payable
Accounts payable 3,469.28 2,671.39
Accounts received in
advance
Payroll payable 3,691.69 16,865.00
Taxes and fares payable 116,856.80 51,951.23
Interest payable 171,502.27 217,050.96
Dividends payable
Other accounts payable 52,649,761.67 36,057,338.71
Non-current liabilities due
within 1 year
Other current liabilities
Total current liabilities 52,945,281.71 36,845,932.07
Non-current liabilities:
Long-term borrowings
Bonds payable
78
2015 Semi-Annual Report of Midea Group Co., Ltd.
Long-term payables
Specific payables
Projected liabilities
Deferred income tax
1,642.81
liabilities
Other non-current liabilities
Total non-current liabilities 1,642.81
Total liabilities 52,946,924.52 36,845,932.07
Shareholders’ equity
Share capital 4,290,122.60 4,215,808.47
Capital reserves 6,831,090.74 5,356,080.10
Less: Treasury stock
Other comprehensive income
Surplus reserves 1,189,791.32 1,189,791.32
Retained profits 7,611,457.93 7,282,924.24
Shareholders’ equity 19,922,462.59 18,044,604.13
Total liabilities and
72,869,387.11 54,890,536.20
shareholders’ equity
Legal representative: Person-in-charge of the accounting work: Chief of the accounting
Fang Hongbo Yuan Liqun division: Chen Jianwu
Income Statement of the Company
Prepared by: Midea Group Co., Ltd. January-June 2015 Unit: RMB’000
Item Note Current period Same period of last year
I. Sales income 1 469,983.10 365,575.75
Less: cost of sales 1 14,341.34 8,067.65
Business tax and
937.58 4,834.15
surtaxes
Selling expenses
Administrative
265,620.33 173,013.55
expenses
Financial costs 388,212.87 17,137.16
Asset impairment loss 193.72 -4,436.52
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Add: gain from change in
6,626.00 -8,329.12
fair value
Investment gains 2 4,808,389.03 3,499,071.54
Including: income
form investment on associates 6,062.32 44.77
and joint ventures
II. Operating profits 4,615,692.29 3,657,702.18
Add: non-operating income 50,143.78 8,477.51
Less: non-operating
4,459.28 8,870.09
expense
Including: loss from
3,734.46 8,769.43
non-current asset disposal
III. Total profits 4,661,376.79 3,657,309.60
Less: income tax expense 117,034.63 3,841.65
IV. Net profit 4,544,342.16 3,653,467.95
V. After-tax net amount of other
comprehensive incomes
(I) Other comprehensive
incomes that will not be
reclassified into gains and losses
1. Changes in net liabilities
or assets with a defined benefit
plan upon re-measurement
2. Enjoyable shares in other
comprehensive incomes in
investees that cannot be
reclassified into gains and losses
under the equity method
(II) Other comprehensive
incomes that will be reclassified
into gains and losses
1. Enjoyable shares in other
comprehensive incomes in
investees that will be reclassified
into gains and losses under the
equity method
2. Gains and losses on fair
80
2015 Semi-Annual Report of Midea Group Co., Ltd.
value changes of
available-for-sale financial assets
3. Gains and losses on
reclassifying held-to-maturity
investments into
available-for-sale financial assets
4. Effective hedging gains
and losses on cash flows
5. Foreign-currency
financial statement translation
difference
6. Other
VI. Total comprehensive income 4,544,342.16 3,653,467.95
Legal representative: Person-in-charge of the accounting work: Chief of the accounting
Fang Hongbo Yuan Liqun division: Chen Jianwu
Cash Flow Statement of the Company
Prepared by: Midea Group Co., Ltd. January-June 2015 Unit: RMB’000
Item Note Current period Same period of last year
I. Cash flows from operating activities:
Cash received from sale of
commodities and rendering of service
Tax refunds received
Other cash received relating to
14,694,988.17 19,341,190.68
operating activities
Subtotal of cash inflows from operating
14,694,988.17 19,341,190.68
activities
Cash paid for goods and services
Cash paid to and for employees 145,199.43 27,900.87
Various taxes paid 12,464.53 4,309.27
Other cash payment relating to
1,786,332.95 59,580.27
operating activities
Subtotal of cash outflows from
1,943,996.91 91,790.41
operating activities
Net cash flows from operating activities 12,750,991.26 19,249,400.27
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2015 Semi-Annual Report of Midea Group Co., Ltd.
II. Cash flows from investing activities:
Cash received from retraction of
12,000.00 24,901.98
investments
Cash received from return on
4,004,819.44 2,705,700.46
investments
Net cash received from disposal of
fixed assets, intangible assets and other 354.15 36,984.39
long-term assets
Net cash received from disposal of
subsidiaries or other business units
Other cash received relating to
investing activities
Subtotal of cash inflows from
4,017,173.59 2,767,586.83
investing activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 239,058.60 172,426.07
assets
Cash paid for investment 6,049,973.45 20,875,420.03
Net cash paid to acquire subsidiaries
and other business units
Other cash payments relating to
investing activities
Subtotal of cash outflows from
6,289,032.05 21,047,846.10
investing activities
Net cash flows from investing activities -2,271,858.46 -18,280,259.27
III. Cash flows from financing
activities:
Cash received from capital
1,479,971.31
contributions
Of which: Cash received by
subsidiaries as minority shareholder
investments
Cash received from borrowings 1,100,000.00
Cash received from issuance of
medium term notes
Cash received from issuance of
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2015 Semi-Annual Report of Midea Group Co., Ltd.
short-term financing bonds
Other cash received relating to
financing activities
Subtotal of cash inflows from financing
1,479,,971.31 1,100,000.00
activities
Cash repayment of borrowings 500,000.00 740,000.00
Cash for repaying medium term
1,000,000.00
notes
Cash for repaying short-term
financing bonds
Cash paid for interest expenses and
4,965,193.24 3,670,757.28
distribution of dividends or profit
Of which: Dividends and shares of
profit paid by subsidiaries to minority
shareholders
Other cash payments relating to
financing activities
Sub-total of cash outflows from
5,465,193.24 5,41,757.28
financing activities
Net cash flows from financing activities -3,985,221.93 -4,310,757.28
IV. Effect of foreign exchange rate
-
changes on cash and cash equivalents
V. Net increase in cash and cash
6,493,910.87 -3,341,616.28
equivalents
Add: Opening balance of cash and
6,879,717.05 13,809,135.41
cash equivalents
VI. Closing balance of cash and cash
13,373,627.92 10,467,519.13
equivalents
Legal representative: Person-in-charge of the accounting Chief of the accounting
Fang Hongbo work: Yuan Liqun division: Chen Jianwu
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Statement of Changes in Shareholders’ Equity of the Company
Prepared by: Midea Group Co., Ltd. January-June 2015 Unit: RMB’000
Current period
Item Less: Other
Specific Total shareholders’
Share capital Capital reserve treasury comprehensive Surplus reserve Retained profit
reserve equity
stock income
I. Balance at the end of the
4,215,808.47 5,356,080.10 1,189,791.32 7,282,924.24 18,044,604.13
previous year
Add: change of
accounting policy
Correction of errors in
previous periods
Other
II. Balance at the beginning
4,215,808.47 5,356,080.10 1,189,791.32 7,282,924.24 18,044,604.13
of the year
III. Increase/ decrease in the
74,314.13 1,475,010.64 328,533.69 1,877,858.46
period
(I) Total comprehensive
4,544,342.16 4,544,342.16
incomes
(II) Capital increased and
74,314.13 1,475,010.64 1,549,324.77
reduced by owners
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2015 Semi-Annual Report of Midea Group Co., Ltd.
1. Common shares
74,314.13 1,541,545.15 1,615,859.28
increased by shareholders
2. Capital increased by
holders of other equity
instruments
3. Amounts of share-based
payments recognized in -66,534.51 -66,534.51
owners’ equity
4. Other
(III) Profit distribution -4,215,808.47 -4,215,808.47
1. Appropriations to surplus
reserves
2. Appropriations to owners
-4,215,808.47 -4,215,808.47
(or shareholders)
3. Other
(IV) Internal carry-forward
of owners’ equity
1. New increase of capital
(or share capital) from
capital public reserves
2. New increase of capital
(or share capital) from
surplus reserves
3. Surplus reserves for
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2015 Semi-Annual Report of Midea Group Co., Ltd.
making up losses
4. Other
(V) Specific reserve
1. Withdrawn for the period
2. Used in the period
(VI) Other
IV. Closing balance 4,290,122.60 6,831,090.74 1,189,791.32 7,611,457.93 19,922,462.59
Legal representative: Fang Hongbo Person-in-charge of the accounting work: Yuan Liqun Chief of the
accounting division: Chen Jianwu
Statement of Changes in Shareholders’ Equity of the Company (Continued)
Prepared by: Midea Group Co., Ltd. January-June 2015 Unit: RMB’000
Same period of last year
Item Less: Other
Specific Total shareholders’
Share capital Capital reserve treasury comprehensive Surplus reserve Retained profit
reserve equity
stock income
I. Balance at the end of the
1,686,323.39 7,880,598.46 569,544.32 5,073,348.03 15,209,814.20
previous year
Add: change of
accounting policy
Correction of errors in
previous periods
Other
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2015 Semi-Annual Report of Midea Group Co., Ltd.
II. Balance at the beginning
1,686,323.39 7,880,598.46 569,544.32 5,073,348.03 15,209,814.20
of the year
III. Increase/ decrease in the
2,529,485.08 -2,524,518.36 620,247.00 2,209,576.21 2,834,789.93
period
(I) Total comprehensive
6,202,469.99 6,202,469.99
incomes
(II) Capital increased and
4,966.72 4,966.72
reduced by owners
1. Common shares
increased by shareholders
2. Capital increased by
holders of other equity
instruments
3. Amounts of share-based
payments recognized in 3,105.73 3,105.73
owners’ equity
4. Other 1,860.99 1,860.99
(III) Profit distribution 620,247.00 -3,992,893.78 -3,372,646.78
1. Appropriations to surplus
620,247.00 -620,247.00
reserves
2. Appropriations to owners
-3,372,646.78 -3,372,646.78
(or shareholders)
3. Other
(IV) Internal carry-forward 2,529,485.08 -2,529,485.08
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2015 Semi-Annual Report of Midea Group Co., Ltd.
of owners’ equity
1. New increase of capital
(or share capital) from 2,529,485.08 -2,529,485.08
capital public reserves
2. New increase of capital
(or share capital) from
surplus reserves
3. Surplus reserves for
making up losses
4. Other
(V) Specific reserve
1. Withdrawn for the period
2. Used in the period
(VI) Other
IV. Closing balance 4,215,808.47 5,356,080.10 1,189,791.32 7,282,924.24 18,044,604.13
Legal representative: Fang Hongbo Person-in-charge of the accounting work: Yuan Liqun Chief of the
accounting division: Chen Jianwu
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Midea Group Co., Ltd.
Notes to the Financial Statements
Currency unit: RMB’000
1. Basic Information of Our Company
Midea Group Co. Ltd. (hereinafter referred to as “the Company”) was promoted and set up by the Council of
Trade Unions of GD Midea Group Co. Ltd., and had registered in Foshan Shunde Market Safety Supervision
Bureau on 7 April 2000, of which the headquarter located in Foshan, Guangdong Province. On 29 July 2013,
CSRC issued the “Reply on Approval of Merger of GD Midea Electric Appliance Co. Ltd. by Midea Group Co.
Ltd.”, approving the Company’s issuance of 686,323,389 shares to merge GD Midea Electric Appliance Co. Ltd.
The shares of the Company had been listed for trading in SZSE on 18 September 2013.
On 30 June 2015, the total amount of the shares was of 4,290,122,597 shares (with the book value of RMB1 per
share). Of which, the A share of the circulating shares with restricted conditions was of 2,026,343,750 shares
while the non-restricted was of 2,263,778,847 shares.
The Company belongs to the household appliance industry. And the business scope: Production and business of
home appliances, motors and their parts; import and export of home appliances, home appliances raw materials
and parts (application is handled in accordance with relevant government regulations as products not involved in
state-owned trade management, but involved in quota and license management); IT services; investment
consultancy and management services for companies; development of computer software and hardware;
installation, maintenance and after-sales service of home appliances; design of industrial products; management of
hotels; agency of advertisements; property management; research, development, marketing and promotion of
projects and technologies needed by companies. (Items of business scope covering administrative license should
be run with valid license or certificate of approval). The major products or the labor provided: household electrical
appliances, motor and its components.
The Company included more than one hundred subsidiaries such as Guangdong Midea Refrigeration Equipment
Co., Ltd., Guangdong Midea Group Wuhu Refrigeration Equipment Co., Ltd., and Midea Group Wuhan
Refrigeration Equipment Co., Ltd. into the current consolidated financial statement scope, of which the details,
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2015 Semi-Annual Report of Midea Group Co., Ltd.
please refer to the notes of the changes of the notes of the consolidated scope of the financial statement as well as
the equities of other entities.
II. Preparation basis of the financial statements
(I) Preparation basis
The financial statement prepared according to the ASBE - Basic Standards, each regulation of the specific
accounting standards and the relevant regulations (hereinafter referred to as “ASBE”) issued by Ministry of
Finance on 15 February 2006 and the periods afterwards. The financial statement executed the presentation and
the disclosure according to the requirements of No. 32 of ASBE – Medium-term Financial Report issued by
Ministry of Finance and the financial statement should be read accompanied with the Y2014 financial statement of
the Group. The accounting policies adopted by the financial statement were the same as that adopted by the Group
when preparing the Y2014 financial statement.
The Company’s preparation of the financial statements is based on continuing operations.
(II) Assessment on the constant operating ability
There was no any event or situation which led the assumption of the constant operating within 12 months since
the period-end cause any significant misgiving.
III. Significant accounting policies and accounting estimates
Important reminders: the Company formulated the specific accounting policies and accounting estimates aimed at
the transactions or events such as the bad debt provisions of the receivable accounts, depreciation of the fixed
assets, amortization of intangible assets and the confirm of the revenues according to the actual production and
operating characteristics.
(I) Declaration on compliance with the Accounting Standards for Enterprises
The Company’s financial statements meet the requirements of the Accounting Standards for Enterprises, truthfully
and completely reflecting information on its financial condition, results of operations and cash flows.
(II) Accounting period
The accounting year starts on 1 January and ends on 31 December of Gregorian calendar.
(III) Operating cycle
The operating cycle of the operating business of the Company is fairly short and regards 12 months as the
dividend standard of the mobility of the assets and liabilities.
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2015 Semi-Annual Report of Midea Group Co., Ltd.
(IV) Reporting currency
RMB is adopted as the reporting currency.
(V) Accounting treatment of business combination under common control and not under common control
1. Accounting treatment of business combination under common control
The assets and liabilities that the Company obtains in a business combination are measured on the basis of their
carrying amount of the combined party among the consolidated financial statement of the final control party on
the combining date. As for the balance between the book value amount of the owners’ equities of the combined
party among the consolidated financial statement of the final control party and the book value of paid consolidated
consideration and the total amount of the book value of the shares issued, the additional paid-in capital has been
adjusted. If the additional paid-in capital is insufficient to be offset, the retained earnings are adjusted.
2. Accounting treatment of business combination not under common control
The Company recognizes the positive balance between the combination costs and the fair value of the identifiable
net assets it obtains from the acquiree as business reputation. For the balance between the combination costs and
the fair value of the identifiable net assets the Company obtains from the acquiree, it first reexamines the
measurement of the fair values of the identifiable assets, liabilities and contingent liabilities it obtains from the
acquiree as well as the combination costs; if, after the reexamination, the combination costs are still less than the
fair value of the identifiable net assets it obtains from the acquiree, it records the balance into the profits and
losses of the current period.
(VI) Preparation method of the financial statements
The consolidated financial statements of the parent company involve all its subsidiaries. The consolidated
financial statements is prepared by parent enterprise in accordance with the “Accounting Standard for Business
Enterprises No 33-Consolidated Financial Statements” based on the financial statement of parent enterprise and
subsidiaries, in accordance with other relevant materials, as adjusted long term share investment by equity
method.
(VII) Category of the joint venture arrangement and the accounting treatment of the joint operation
1. Joint venture arrangement classified into joint operation and joint venture enterprises.
2. When the Company is the joint venture party of the joint operating, the following items related to the interests
shares of the joint operation should be confirmed:
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2015 Semi-Annual Report of Midea Group Co., Ltd.
(1) Confirms the assets individually held and confirms the assets jointly held according to the holding portion;
(2) Confirms the liabilities individually undertook and confirms the liabilities jointly undertook according to the
holding portion;
(3) Confirms the revenues occurred from the selling of the output shares of the joint operation enjoyed by the
Company;
(4) Confirms the revenues occurred from the selling of the assets of the joint operation according to the holding
portion of the Company;
(5) Confirms the expenses individually occurred and confirms the expenses occurred from the joint operation
according to the holding portion of the Company.
(VIII) Recognition criteria of cash and cash equivalents
The term “cash” listed in the cash flow statement refers to cash on hand and deposits that are readily available for
payment. The term "cash equivalents" refers to short-term and highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of change in value.
(IX) Translation of foreign currency transactions and statements
1. Translation of foreign currency transactions
At the time of initial recognition of a foreign currency transaction, the amount in the foreign currency is translated
into RMB amount at the spot exchange rate of the transaction date. On the balance sheet date, the foreign currency
monetary items are translated at the spot exchange rate of that day. The balance of exchange arising from the
exchange rate difference, except the exchange balance of principal and interest of foreign currency borrowings
used in acquisition and construction of assets eligible for capitalization, is recorded into the profits and losses at
the current period or other comprehensive income.
2. Translation of foreign currency statements
The asset and liability items in the balance sheets are translated at a spot exchange rate on the balance sheet date.
Among the owner's equity items, except the ones as "undistributed profits", others are translated at the spot
exchange rate at the time when they are incurred. The income and expense items in the profit statements are
translated at the spot exchange rate of the transaction date. The balance arisen from the translation of foreign
currency financial statements in compliance with the aforesaid translation methods is presented separately under
the owner's equity item of the balance sheets.
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2015 Semi-Annual Report of Midea Group Co., Ltd.
(X) Financial instruments
1. Classification of financial assets and liabilities
Financial assets are classified into the following four categories when they are initially recognized: Financial
assets which are measured at their fair values and the variation of which is recorded into the profits and losses of
the current period (including transactional financial assets and the financial assets which are measured at their fair
values and of which the variation is included in the current profits and losses), the investments which will be held
to their maturity, loans and the account receivables, and financial assets available for sale.
Financial liabilities are classified into the following two categories when they are initially recognized: Financial
liabilities measured by fair value and their change is recorded in current profit and loss (including transactional
financial liabilities and the financial liabilities which are measured at their fair values and of which the variation is
included in the current profits and losses), and other financial liabilities.
2. Recognition, measurement and derecognizing conditions of financial assets and liabilities
When the Company becomes a party to a financial instrument, it recognizes a financial asset or financial liability.
Financial assets and liabilities are measured by fair value when they are initially recorded. For financial assets and
liabilities measured by fair value and their change is recorded in current profit and loss, their related transaction
expenses are directly recorded in current profit and loss. For financial assets and liabilities of other categories,
their related transaction expenses are recorded in the initially recognized amount.
The Company makes subsequent measurement on its financial assets according to their fair values, and may not
deduct the transaction expenses that may occur when it disposes of the said financial asset in the future However,
those under the following circumstances are excluded: (1) The investments held until their maturity, loans and
accounts receivable are measured on the basis of the post-amortization costs by adopting the actual interest rate
method; (2) The equity instrument investments for which there is no quotation in the active market and whose fair
value cannot be measured reliably, and the derivative financial assets which are connected with the said equity
instrument and must be settled by delivering the said equity instrument are measured on the basis of their costs.
The Company makes subsequent measurement on its financial liabilities on the basis of the post-amortization
costs by adopting the actual interest rate method, with the exception of those under the following circumstances:
(1) For the financial liabilities measured at their fair values and of which the variation is recorded into the profits
and losses of the current period, they are measured at their fair values, and none of the transaction expenses may
be deducted, which may occur when the financial liabilities are settled in the future; (2) For the derivative
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2015 Semi-Annual Report of Midea Group Co., Ltd.
financial liabilities, which are connected to the equity instrument for which there is no quotation in the active
market and whose fair value cannot be reliably measured, and which must be settled by delivering the equity
instrument, they are measured on the basis of their costs; (3) For the financial guarantee contracts which are not
designated as a financial liability measured at its fair value and the variation thereof is recorded into the profits
and losses of the current period, and for the commitments to grant loans which are not designated to be measured
at the fair value and of which the variation is recorded into the profits and losses of the current period and which
will enjoy an interest rate lower than that of the market, a subsequent measurement is made after they are initially
recognized according to the higher one of the following: i. the amount as determined according to the Accounting
Standards for Enterprises No 13 - Contingencies.; ii. the surplus after accumulative amortization as determined
according to the principles of the Accounting Standards for Enterprises No 14 - Revenues is subtracted from the
initially recognized amount.
The profits and losses arising from the change in the fair value of a financial asset or financial liability are dealt
with according to the following provisions, unless it is related to hedging: (1) The profits and losses, arising from
the change in the fair value of the financial asset or financial liability which is measured at its fair value and of
which the variation is recorded into the profits and losses of the current period, are recorded into the profits and
losses on the changes in fair value. The interests or cash dividends obtained during the holding of assets are
recognized as investment income. Upon disposal, the differences between actual amount received and the amount
initially recorded are recognized as investment income, and the profits and losses on the changes in fair value
account are adjusted into investment income. (2) The change in the fair value of a sellable financial asset is
included in capital reserve. The interest calculated according to the actual interest rate method is recorded into
investment income. The cash dividends of the sellable equity instrument investments are recorded into investment
income when the investee announces the distribution of dividends. Upon disposal, the differences between actual
amount received and the carrying amount deducted of the accumulated amount of changes in the fair value that
has been originally recorded in capital reserve are recognized as investment income.
Financial assets are derecognized as the rights to receive cash flows from the investments have expired, or all
substantial risks and rewards to the ownership have been transferred. When all or part of the current obligation of
the financial liability is discharged, the financial asset or part of it is derecognized subsequently.
3. Recognition and measurement methods of transfer of financial assets
Financial assets are derecognized when the Company has transferred all risks and rewards to the ownership to the
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2015 Semi-Annual Report of Midea Group Co., Ltd.
transferee. When the Company still retains nearly all of the risks and rewards related to the ownership of the
transferred financial asset, it continues to recognize the entire financial asset to be transferred and recognizes the
consideration it receives as a financial liability. If the Company does not transfer or retain nearly all of the risks
and rewards related to the ownership of the financial assets, it deals with them under the following circumstances:
(1) Financial assets are derecognized when the Company has waived its control; (2) If the Company does not
waive its control over the financial asset, the relevant asset and liability are recognized according to the degree
where it is continuously involved in the financial asset to be transferred.
If the transfer of an entire financial asset satisfies the conditions of derecognition, the difference between the
amounts of the following 2 items is recorded in the profits and losses of the current period: (1) The carrying
amount of the financial asset to be transferred; (2) The sum of consideration received from the transfer of financial
assets and accumulated amount of changes in the fair value that has been originally recorded in owner's equity. If
the transfer of partial financial asset satisfies the conditions of derecognition, the entire carrying amount of the
financial asset to be transferred, between the portion who has been derecognized and the portion who has not been
derecognized, is apportioned according to their respective relative fair value, and the difference between the
amounts of the following 2 items is included into the profits and losses of the current period: (1) The carrying
amount of the financial asset to be transferred; (2) The sum of consideration received from the derecognization of
partial financial assets and accumulated amount of changes in the fair value that has been originally recorded in
owner's equity which corresponds to the portion who has been derecognized.
4. Methods for determining fair value of financial assets and liabilities
The Company shall determine fair value of financial assets and liabilities applicable to current circumstance with
sufficient data available and valuation techniques for other information. The Company shall divide the input
values used by valuation techniques into following levels.
(1) First-level input value refers to unadjusted price in active market obtaining same assets or liabilities on
measurement date.
(2) Second-level input value refers to direct or indirect observable input value related to relevant assets or
liabilities except the first-level input value, including quotation of similar assets or liabilities in active market;
quotation of same or similar assets or liabilities in inactive market; and other observable input value besides
quotation, such as observable interest rate and yield curve in normal quotation interval and market verified input
value.
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2015 Semi-Annual Report of Midea Group Co., Ltd.
(3) Third-level input value refers to unobservable input value of relevant assets or liabilities, including
unobservable interest rate or interest rate not verified by observable market data, stock volatility, future cash flow
undertaken by enterprises in the merger and financial forecasting from own data, etc.
5. Impairment test and impairment provision methods of financial assets
(1) The Company carries out an inspection, on the balance sheet day, on the carrying amount of the financial
assets other than those measured at their fair values and of which the variation is recorded into the profits and
losses of the current period. Where there is any objective evidence proving that such financial asset has been
impaired, an impairment provision is made.
(2) As for the held-to-maturity investment, the loans and the account receivables , should tell apart the financial
assets with significant single amounts and individually execute the impairment test; with regard to the financial
assets with insignificant single amounts, an independent impairment test may be carried out, or they may be
included in a combination of financial assets with similar credit risk features so as to carry out an
impairment-related test; where, upon independent test, the financial asset (including those financial assets with
significant single amounts and those with insignificant amounts) has not been impaired, it shall be included in a
combination of financial assets with similar risk features so as to conduct another impairment test. If the test
results indicate there is impairment, should confirm the impairment losses according to the difference of which the
book value higher than the current value of the expected future cash flow.
(3) Available-for-sale financial assets
1) The subjective evidences indicate there is impairment of the available-for-sale debt instruments investment
including:
① A serious financial difficulty occurs to the debtor;
② The debtor breaches any of the contractual stipulations, for example, fails to pay or delays the payment of
interests or the principal;
③ The Company makes any concession to the debtor who is in financial difficulties due to economic or legal
factors etc.;
④ The debtor will probably become bankrupt or carry out other financial reorganizations;
⑤ The debt instruments can no longer continue to be traded in the active market due to serious financial
difficulties of the debtor;
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2015 Semi-Annual Report of Midea Group Co., Ltd.
⑥ Other conditions showing the impairment of the sellable debt instruments.
2) Objective evidences that can prove the impairment of sellable equity instrument investment include that the fair
value of the equity instrument investment drops significantly or not contemporarily.
The Company shall inspect all available-for-sale equity instrument investment individually on balance sheet date.
For equity instrument investment measured by fair value, if the fair value on balance sheet date is lower than 50%
(including 50%) of costs for more than 12 months (including 12 months), it indicates that the impairment has
occurred. If the fair value is lower than 20% (including 20%) no more than 50% on balance sheet date or for more
than 6 months (including 6 months) but no more than 12 months, the Company shall consider other relevant
factors, such as fluctuations in prices, to determine whether impairment occurs for equity instrument investment.
For the equity instrument investment measured by costs, the Company shall consider whether material adverse
change occurs for the technologies, market, economics or legal environment to determine whether impairment
occurs.
When the available-for-sale financial assets measured by fair value are impaired, original accumulating losses
caused by decrease of fair value and directly included in other comprehensive income should be transferred out
and included in impairment loss. When investing the available-for-sale debt instrument with determined
impairment loss, if fair value rebounds related to events after original impairment losses after date, original
impairment losses should be transferred out and included in current profits and losses. For available-for-sale
equity instrument investment with determined impairment loss, the fair value rebounds and includes in other
comprehensive income directly.
When there is impairment of the available-for-sale equity instruments which measured by cost, should confirm the
difference between the book value of the equity instruments investment and the current value confirmed by the
discount of the future cash flow according to the market earnings rate at that moment of the similar financial
assets as the impairment losses and included in the current gains and losses, and once the occurred impairment
losses be confirmed, should not be reserved.
(XI) Accounts receivable
1. Receivables single bad debt provision in significant single amount
The Company recognizes accounts receivable of single
amount, which is no less than RMB500,0 00,000, and
Recognition criteria or amount standard of provision for
other receivables of single amount, which is no less than
bad debt in receivables of significant single amount
RMB50,000,000 as receivables of significant single
amount.
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2015 Semi-Annual Report of Midea Group Co., Ltd.
The Company takes individual impairment test for those
significant receivable accounts to determine the
Method of provision for single bad debt in significant
impairment loss and makes provision for bad debts
single amount
based on the difference between their future cash flow
value and carrying amount.
2. Accounts receivable with provision for bad debts based on the business characteristics
(1) Specific groups and the withdrawal methods of the bad debt provision
Withdrawal method with provision for bad debts based on the business characteristics
Aging group Aging analysis method
The Company takes individual impairment test for those significant
Related come-and-go group within the receivable accounts to determine the impairment loss and makes provision
consolidated scope for bad debts based on the difference between their future cash flow value
and carrying amount.
(2) Aging analysis method
For those receivable portfolios, the Company classifies them as several groups of different credit risk levels by
their age, and determines the proportional provision for bad debts based on the business characteristics:
Age Within six Six months to Over five
1-2 years 2-3 years 3-5 years
Business characteristics months one year years
Air conditioning and the parts 5% 5% 10% 30% 50% 100%
Refrigerator and the parts 5% 5% 10% 30% 50% 100%
Washing machine and the parts 5% 5% 10% 30% 50% 100%
Small home appliances 5% 5% 10% 30% 50% 100%
Logistics and transport 5% 5% 10% 30% 50% 100%
Motor 5% 10% 30% 50% 100%
Others 5% 5% 10% 30% 50% 100%
Midea Carrier Co. Of Latin America, subsidiary of the Company, takes no proportional provision for bad debts in
accounts receivable of within 1 year, but for those of over 1 year as 100.00%, and no for other receivables.
3. Receivables without significant single amount but with single bad debt provision
There significant differences between the future cash flow
value of receivables and that of receivables grouped by credit
Reason for single bad debt provision
risk feature of age as well as of receivables grouped by
specific identification method.
The Company takes individual impairment test for those
Method of bad debt provision significant receivable accounts to determine the impairment
loss and makes provision for bad debts based on the
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2015 Semi-Annual Report of Midea Group Co., Ltd.
difference between their future cash flow value and carrying
amount.
Provision for bad debt is taken for notes receivable, prepayments, interest receivable, long-term receivables, etc.
based on the difference between their future cash flow value and carrying amount.
(XII) Inventories
1. Classification of inventories
Inventories refer to the finished products or merchandise held by the company for sale in ordinary life, products in
process or the materials to be consumed in the process of production or during rendering of labor services.
2. Valuation method of dispatched inventories
The dispatched inventories adopt the first-in first-out method.
3. The recognition basis of the inventories discountable net value
On the balance sheet date, inventories are measured on the basis of the lower one of cost and net realizable value.
The excess of the cost over the net realizable value of each item of inventories or inventory categories is
recognized as the basis for counting and drawing inventory falling price reserves. For inventories directly for sale,
net realizable value is measured on the basis of the estimated selling price less the estimated costs and the relevant
taxes in the ordinary course of business production and operation. For inventories that need processing, net
realizable value is measured on the basis of the estimated selling price of the finished goods less the estimated
costs during processing and the relevant taxes in the ordinary course of business production and operation. On the
balance sheet date, net realizable values are determined by different condition of each item of inventories, where
some portions have the contractual price agreement while the others have not. Net realizable values are then
compared with their corresponding costs to determine the basis for counting and drawing inventory falling price
reserves or the amount of reversal respectively for different proportions.
4. Inventory system
The Company adopts the perpetual inventory system.
5. Amortization methods of low-value consumables and packaging materials
(1) Low-value consumables
Low-value consumables are amortized at a time.
(2) Packaging materials
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Low-value consumables are amortized at a time.
(XIII) Divided as assets held for sale
The Company divided the non-current assets (excluding the financial assets) which meet with the following
conditions as the held-for-sale assets: 1. the component part could be immediately sold merely according to the
general and idiomatic clauses of selling the component part under its current condition; 2. had made resolution on
disposing the component part; 3. had signed the irrevocable transfer agreement with the transfees; 4. the transfer
could be finished probably within 1 year.
(XIV) Long-term equity investment
1. The judgment of the jointly control and significant influence
The term “jointly control” refers to the control jointly owned by the relevant agreements on certain arrangement
and the relevant activities of the arrangement must be decided only after the consensus of the participated party
which had shared control right. The term “significant influence” means having the power to participate in the
formulation of financial and operating policies of the investees, but not the power to control or jointly control the
formulation of these policies together with other parties.
2. Determination of investment cost
The initial investment cost is the obtained share of carrying amounts of shareholders' equity of the party combined
at the combination date, on the condition that a business combination involves entities under common control, and
that the consideration for combination is settled in cash, by way of transfer of non-cash assets, assumption of
liabilities or issuance of equity securities. Capital reserve is adjusted based on the difference between the initial
investment cost of the long-term equity investment and the carrying amounts of the consideration paid for the total
nominal value of shares issued. If the balance of the capital reserve is insufficient, any excess is adjusted to
retained profits.
As for the long-term equity investment formed by the enterprise combination under the same control which
realized by step by step multiple transactions, the Company judges which whether belongs to the “package deal”.
As for those belongs to the “package deal”, should regard each transaction as a transaction which gains the control
right for accounting treatment. As for those not belongs to the “package deal”, should be confirmed as the initial
investment cost according to the shares of the book value of the net assets enjoyed from the combined party after
the combination among the consolidated financial statement of the final control party on the merger date. As for
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2015 Semi-Annual Report of Midea Group Co., Ltd.
the difference between the initial investment cost of the long-term equity investment on the merger date and the
sum of the book value of the long-term equity investment before reaching the combination and the book value of
the newly paid consideration of the further gained shares on the merger date, should adjust the capital reserve; if
the capital reserve is insufficient to dilute, the retained earnings shall be adjusted.
(2) If the long-term equity investment is obtained through a business combination involving entities under
different control, the initial investment cost is the fair value of the consideration paid for combination at the
acquisition date.
Accounting respectively to individual financial statements and consolidated financial statements when the
company obtained the long-term equity investment through a business combination involving entities under
different control:
1) In the individual financial statements, the initial investment cost is determined by the combination of the equity
carrying amount of the combining party before the combination date and the new investment cost at the
combination date.
2) Judge whether belongs to the “package deal” among the consolidated financial statement.
As for those belongs to “package deal”, should regard each transaction as a transaction which gains the control
right for accounting treatment. As for those not belongs to the “package deal”, for the equities held by the
acquirees before the purchase date, should execute the remeasurement according to the fair value of the equity on
the purchase date and the difference between the fair value and the book value should be included into the current
investment income; if the equities held by the acquirees before the purchase date involve with the other
comprehensive income and so on under the measurement of the equity method, the other comprehensive income
and so on related with which should be transferred as the current revenues belongs to the purchase date. But
except for the other comprehensive income occurs from the remeasurement of the net liabilities of the defined
benefit a plan of the investees or the changes of the net assets.
(3) If the long-term equity investment is obtained through means other than a business combination, the initial
investment cost is the actual consideration paid if the investment is obtained by cash, the fair value of the equity
securities issued if the investment is obtained by issuing equity securities, the No. 12 of ABSE-Debt Restructuring
restricted if the investment is obtained by debt restructuring and the No. 7 of ASBE-Exchange of Non-monetary
assets exchanged if the investment is obtained by exchanging the non-monetary assets.
3. Subsequent measurement and the profit and loss determination
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When the Company controls the investment, a long-term equity investment is calculated using the cost method
and adjusted using equity method during consolidated financial statement compilation. As for the long-term equity
investment of the associated enterprises and joint ventures, should adopt the equity method for measurement.
4. Method of using multiple transactions to deal with loss of control over the subsidiary investment
(1) Individual financial statement
As for the disposed equity, should include the difference between the book value and the actual gained cost in the
current gains and losses. As for the residual equity, for those still possess significant influences or execute the
jointly control with other parties on the investees, should be transferred for measured by equity method; for those
no longer could execute the control, jointly control or the significant influences on the investees, should be
confirmed as financial assets and be measured according to the relevant regulations of the No. 22 of
ASBE-Recognition and Measurement of the Financial Instruments.
(2) Consolidated financial statement
1) Step by step disposes the investment of the subsidiaries until lost the control right through multiple transactions
and not belongs to the “package deal”
Before losing the control right, the difference between the disposed cost and the portion of the net assets be
constantly calculated since the purchase date or the merger date correspondingly enjoyed by the subsidiaries of
disposing the long-term equity investment should be adjusted the capital reserve (capital premium), if the capital
premium insufficient to dilute, the retained earnings shall be written down.
When losing the control right on the original subsidiaries, the remaining equity should be re-measured according
to the fair value at the date of losing control. The difference should be included into the investment income in the
period of losing control and the goodwill should be written down at the same time, which is defined as the value
of equity disposal consideration plus the remaining equity fair value and less the share of assets of the original
subsidiary calculated by the original ownership share since the acquisition day. Other comprehensive income
related to the equity investment of the original subsidiary should transfer into the current investment income when
the control power is lost.
2) Step by step disposes the investment of the subsidiaries until lost the control right through multiple transactions
and belongs to the “package deal”
Each transaction should be regarded as a transaction conducted to deal with a subsidiary out of control power.
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However, the balance of shared net assets of the subsidiary corresponding to each disposal cost and investment
before control power loss should be defined as other comprehensive income in the consolidated financial
statements, and should be transferred into the current investment income when the control power is lost.
(XV) Investment property
1. Investment property includes land use rights let out, land use rights held for sale, and buildings let out.
2. Investment property is measured initially based on cost and subsequently based on the cost pattern, and
depreciated or amortized using the same methods for depreciating or amortizing fixed assets and intangible assets.
(XVI) Fixed assets
1. Recognition, measurement and depreciation of fixed assets
Fixed assets represent the tangible assets held for production or supply of goods or services, rental or for
administrative purposes with useful life of over one accounting year. Recognizes the fixed assets when the
economic interests probably inflow and the cost could be reliable measured.
2. Depreciation methods for different types of fixed assets
(1) The Company and subsidiaries (excluding Wuxi Little Swan Company Limited and Midea-Carrier Latin
American Company Limited)
Annual Depreciation
Useful Life Residual Value Rate
Fixed Asset Type Depreciation method Rate
(Years) (%)
(%)
Plant and buildings Straight-line method 20-40 0.00, 5.00 5.00-2.38
Machinery and
Straight-line method 10-18 0.00, 5.00 10.00-5.28
equipment
Motor vehicles Straight-line method 4-12 0.00, 5.00 25.00-7.92
Electronics and other
Straight-line method 3-8 0.00, 5.00 33.33-11.88
equipment
(2) Wuxi Little Swan Co., Ltd., a holding subsidiary of the Company
Estimated Useful Life Estimated Residual Annual Depreciation
Fixed Asset Type Depreciation method
(Years) Value Rate (%) Rate (%)
Plant and buildings Straight-line method 20-35 5.00 2.71-4.75
Machinery and
Straight-line method 10-15 5.00 6.33-9.50
equipment
Electronics
Straight-line method 3-5 5.00 19-31.67
equipment
Motor vehicles Straight-line method 5 5.00 19
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Other equipment Straight-line method 5 5.00 19
(3) Midea-Carrier Latin American Company Limited
Annual
Estimated Useful Life Estimated Residual
Fixed Asset Type Depreciation method depreciation
(Years) Value Rate (%)
Rate (%)
Plant and buildings Straight-line method 25 4.00
Machinery and
Straight-line method 8 12.50
other equipment
(XVII) Construction-in-progress
1. Construction-in-progress is recognized when the inflow of economic benefits is probable and the cost can be
reliably measured, and is measured by the actual cost incurred before it is ready for intended use.
2. Construction-in-progress is transferred into fixed assets when it is ready for intended use based on the actual
cost. For a completed project ready for intended use but with final account unsettled, the asset is transferred into
fixed assets based on estimated value. After the final account of the project has been settled, the Company shall
make adjustment on the previous estimated value based on actual cost, but do not need to adjust the depreciation
retrospectively.
(XVIII) Borrowing costs
1. Capitalization of borrowing costs
Borrowing costs directly attributable to the acquisition, construction or origination of assets qualified for
capitalization are capitalized as part of the cost of those assets. Other borrowing costs are expensed and charged to
current profit or loss when incurred.
2. Timing of borrowing costs capitalization
(1) Borrowing costs shall be capitalized if the following conditions are met at the same time: 1) Capital
expenditures and borrowing costs have been incurred. 2) Construction or production activities that are necessary
to prepare the asset for intended use or sale have commenced.
(2) Capitalization of borrowing costs should be suspended during periods in which abnormal interruption has
lasted for more than three months during the process of construction or production of assets qualified for
capitalization. The borrowing cost incurred during interruption is recognized as current expenses until the
construction or production activities resume.
(3) The capitalization of borrowing costs ceases when the assets qualified for capitalization are constructed or
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produced and ready for intended use or sale.
3. Capitalization rate and capitalized amount of borrowing costs
For specific borrowings used to acquire, construct or produce assets qualified for capitalization, the amount of
interest costs (including amortization of discount or premium determined using the effective interest method)
actually incurred on such borrowings for the period shall be capitalized after deducting any interest earned from
depositing the unused borrowings in the bank or any investment income arising from the temporary investment of
those borrowings during the capitalization period. For general borrowings used to construct or produce assets
qualified for capitalization, the capitalized amount of interests on general borrowings shall be determined on the
basis that the weighted average (of the excess of cumulative assets expenditures over the specific borrowings)
times capitalization rate (of used general borrowings).
(XIX) Intangible asset
1. Intangible assets, including land use rights, non-patented technologies etc., are initially measured based on cost.
2. Intangible assets with definite useful lives are reasonably amortized over their useful lives based on the
anticipated realization pattern of related economic benefits. Intangible assets whose economic benefits realization
pattern cannot be reliably anticipated are amortized using the straight-line method over the useful life specified in
the following table:
Intangible Asset Type Useful Life (Year)
Land use right Beneficial period
Non-patent technologies Period specified in the contract or beneficial period
3. The research expenditures for internal research and development projects are recorded into the profits and
losses of the current period in which they are incurred; the development expenditures for internal research and
development projects can be recognized as intangible assets when they satisfy all the following conditions: (1) It
is feasible technically to finish intangible assets for use or sale; (2) It is intended to finish and use or sell the
intangible assets; (3) Methods for intangible assets to generate economic benefits is proved useful, including being
able to prove that there is a potential market for the products manufactured by applying the intangible assets or for
the intangible assets itself, or that the intangible assets will be used internally; (4) With the support of sufficient
technology, financial resources and other resources, intangible assets can be developed and used or sold; (5)
Expenditures attributable to intangible asset development can be reliably measured.
(XX) Part long-term assets impairment
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If long-term equity investment, investment real estate measured by cost model, fixed assets, construction in
progress, intangible assets with limited service life and other long-term assets are impaired on balance sheet with
obvious evidence, it should estimate the recoverable amount. For business goodwill from business merger and
intangible assets with uncertain service life, no matter there is obvious evidence indicating impairment,
impairment test should be conducted every year. The business goodwill shall, together with the related asset group
or combination of asset group, be subject to the impairment test.
If recoverable amount of above long-term assets is lower than book value of assets, preparation for the impairment
of assets shall be determined by the difference and included in current profits and losses.
(XXI) Long-term unamortized expenses
The expenses for more than 1 year (excluding one year) in amortization period are accounted for in the long-term
prepaid expenses. Long-term unamortized expenses shall be accounted for according to actual amount and
amortized averagely during benefit period or defined period. If the long-term prepaid expenses do not benefit
future accounting period, amortized mortgage value shall be included in current profits and losses.
(XXII) Employee compensation
1. Employee compensation including the short-term compensation, departure welfare, dismission welfare and
other long-term employee compensation
2. Accounting treatment of the short-term compensation
During the accounting period of the employees providing the services for the Company, the actual occurred
short-term compensation should be recognized as liabilities and be included in the current gains and losses or the
relevant capital cost.
3. Accounting treatment of the departure welfare
The departure welfare is divided as defined contribution plans and defined benefit plans
(1) During the accounting period of the employees providing the services for the Company, the payable amount
calculated according to the defined contribution plans should be recognized as liabilities and is included in the
current gains and losses or the relevant capital cost.
(2) Accounting treatment process of defined benefit plans include:
1) According to expected accumulative welfare unit method, unbiased and consistent actuarial assumption are
adopted to estimate demographic variables and financial variables, measure obligations for defined benefit plans
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and determine the obligation period. Meanwhile, obligations for defined benefit plans should be discounted to
determine the present value for defined benefit plans and current service costs.
2) If assets exist for defined benefit plans, the deficit or surplus from obligation present value deducting asset fair
value is determined as net liabilities or net assets. If surplus exists for defined benefit plan, the lower of surplus of
defined benefit plans or asset top limit is measured as net assets of defined benefit plans.
3) At the end of term, payroll cost generated from defined benefit plans is determined as service cost, net
liabilities of defined benefit plans or net interest amount of assets and net liabilities of remeasured defined benefit
plans or changes in net assets. The service cost and net interest of net liabilities or assets of defined benefit plan is
included in current profits and losses or relevant capital cost. Changes in net liabilities or net assets of remeasured
defined benefit plans are included in other comprehensive income and not allowed to be transferred to profits and
losses in subsequent accounting period, but the determined amount of other comprehensive income could be
transferred within the scope of interest.
4. Accounting treatment methods of dismission welfare
Dismission welfare provided to employees adopts the early one that could determine the compensation liabilities
for dismission welfare in following items to be included in current profits and losses: (1) the company could not
unilaterally withdraw the dismission welfare due to termination of labor relations or personnel cutback; (2) the
Company confirms costs or expenses related to reorganization of dismission welfare.
5. Accounting treatment methods of other long-term employee benefits
Other long-term benefits provided to employees meeting the defined contribution plans should be used in
accounting treatment according to defined contribution plans. Besides the long-term benefits, it should be treated
in accounting according to regulations of defined benefit plans. In order to simplify other accounting treatment,
the payroll cost is determined as service cost, net liabilities of other long-term employee benefits or net interest of
net assets and changes from other remeasured net liabilities or net assets of long-term employee benefits. The net
amount is included in current profits and losses or related asset cost.
(XXIII) Estimated liabilities
1. Estimated liabilities are recognized when the Company has a present obligation as a result of contingencies
such as provision of external guarantee, litigation, quality warranty, or onerous contract, and it is probable that an
outflow of economic benefits will be required to settle the obligation and the amount of the obligation expenditure
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can be reliably measured.
2. Estimated liabilities are initially measured at the best estimate of the expenditure required to settle the present
obligation. Carrying amounts of all estimated liabilities are reviewed at each balance sheet date.
(XXIV) Share-based payment
1. Types of share-based payments
It includes equity-settled share-based payment and cash-settled share-based payment.
2. Accounting for implementation, amendment and termination of share-based payments
(1) Equity-settled share-based payment
For equity-settled share-based payment made in return for the rendering of employee services that may be
exercised immediately after the grant, the fair value of such instrument shall, on the date of the grant, be
recognized in relevant costs or expenses with the adjustment in the capital reserve accordingly. For equity-settled
share-based payment made in return for the rendering of employee services that cannot be exercised until the
services are fully rendered during vesting period or specified performance targets are met, on each balance sheet
date within the vesting period, the services acquired in the current period shall, based on the best estimate of the
number of exercisable instruments, be recognized in relevant costs or expenses and the capital reserves shall be
adjusted accordingly at the fair value of such instruments on the date of the grant.
For equity-settled share-based payment made in return of other parties' services and the fair value of the other
parties' services can be reliably measured, it will be measured based on the fair value of the other parties' services
on the date of grant; if the fair value of the other parties' services cannot be reliably measured but the fair value of
equity instruments can be reliably measured, it will be recognized in relevant costs or expenses and the capital
reserves shall be adjusted accordingly at the fair value of such instruments on the date of the grant.
(2) Cash-settled share-based payment
For the cash-settled share-based payment made in return for the rendering of employee services that may be
exercised immediately after the grant, the fair value of the liability incurred by the Company shall, on the date of
the grant, be recognized in relevant costs or expenses and the liabilities shall be increased accordingly. For
cash-settled share-based payment made in return for the rendering of employee services that cannot be exercised
until the services are fully provided during the vesting period or specified performance targets are met, on each
balance sheet date within the vesting period, the services acquired in the current period shall, based on the best
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estimate of the number of exercisable instruments, be recognized in relevant costs or expenses and the
corresponding liabilities at the fair value of the liability incurred by the Company.
(3) Revision and termination of share-based payment plans
If the revision results in an increase in the fair value of the equity instruments granted, the Company shall
recognize the increase in the services rendered accordingly at the increased fair value of the equity instruments. If
the revision results in an increase in the number of equity instruments granted, the Company will recognize the
increase in the services rendered accordingly at the fair value of the increased number of equity instruments. If the
Company revises the vesting conditions on terms favorable to the employees, the Company will take into
consideration of the revised vesting conditions when dealing with the vesting conditions.
If the revision results in a decrease in the fair value of the equity instruments granted, the Company shall continue
recognize the amount of services rendered accordingly at the fair value of the equity instruments on the date of
grant without considering the decrease in the fair value of the equity instruments. If the revision results in a
decrease in the number of equity instruments granted, the Company will account for such decrease by reducing
part of the cancellation of equity instruments granted. If the Company revises the vesting conditions on terms not
favorable to the employees, the Company will not take into consideration of the revised vesting conditions when
dealing with the vesting conditions.
If the Company cancels the equity instruments granted or settles the equity instruments granted during the vesting
period (other than cancellation as a result of failure to satisfy the vesting conditions), such cancellation or
settlement will be treated as accelerated exercisable rights and the original amount in the remaining vesting period
will be recognized immediately.
(XXV) Revenue
1. Revenue recognition principles
(1) Sales of goods
Revenue from sales of goods is recognized when all the following conditions are satisfied: 1) The significant risks
and rewards of product ownership have been transferred to the buyer; 2) The Company maintains neither
managerial right usually associated with ownership nor effective control over products sold; 3) The amount of
revenue can be measured reliably; 4) It is probable that the economic benefits will flow to the Company; 5)
Relevant costs incurred or to be incurred can be measured reliably.
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(2) Rendering of services
For the revenue of rendering of services that may be measured reliably on the balance sheet date (at the same time,
the amount of revenue can be measured reliably; it is probable that related economic benefits will flow to the
Company; the completion schedule may be identified reliably; and related costs incurred or to be incurred can be
measured reliably), it will be recognized upon completion of service. For the revenue of rendering of services that
may not be measured On the balance sheet date, if related service costs incurred are estimated to be compensated,
it will be confirmed as the service costs incurred and be transferred to service costs based on the same amounts; if
related service costs incurred are estimated to be uncompensated, it will be recorded into the profit and loss of the
current period and cannot be recognized.
(3) Transfer of asset use rights
Revenue from transfer of asset use rights is recognized when the relevant economic benefits will probably flow to
the Company, and the amount of revenue can be measured reliably. Interest income is recognized based on the
length of time for which the Company's monetary funds are used by others and the effective interest rate. Income
from usage fee is recognized based on timing and method agreed under relevant contracts or agreements.
2. Revenue recognition methods
(1) Sales of goods
The Company mainly sells household appliances and mechanical productions. The recognition of products for
domestic sale shall meet the following requirements: the Company has transferred the goods to buyers according
to agreed contracts; the revenue of sales of goods has been confirmed; the Company has received payments or
receipt vouchers; and the associated economic benefits may flow in and costs related to the product can be
measured in a reliable way. The recognition of products for export shall meet the following requirements: the
Company has complete customs declaration, transportation and receipt of bill of lading, and determined the sales
revenues of the product; and the Company has received the payment or receipt vouchers, and the associated
economic benefits may flow in and costs related to the product can be measured in a reliable way.
(2) Rendering of services
The Company provides the costumers with various services and the revenue is received after the services have
been finished. The revenue includes repairing revenue, installment revenue, transportation service revenue,
warehousing services revenue and distribution revenue.
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1) The revenue of repairing and installment services is received after being finished.
2) Transportation services mean that the Company provides customers with long-distance road transportation of
goods and arranges for the transportation teams to carry goods based on customer requirements. The revenue is
counted according to contracts and received after the Company reconciles with the customers at the end of each
month.
3) Warehousing services include warehousing services for general goods, capital and goods circulation and spare
parts. In addition, the company also provides value-added services such as inventory and warehouse age analysis,
bar code and returns management and so on. The revenue is counted according to contracts and received after the
Company reconciles with the customers at the end of each month.
4) Distribution services mean that the Company provides the customers with goods loading and unloading,
short-distance distribution. The revenue is counted according to contracts and received after the Company
reconciles with the customers at the end of each month.
(XXVI) Government grants
1. Judgment basis of the asset-related government grants and the accounting treatment
Long-term assets used for construction and production or formed in other ways are recognized as asset-related
government grants. The asset-related government grants should be recognized as deferred income and be average
distributed within the useful life of the relevant assets as well as be included in the current gains and losses.
However, as for the government grants measured according to the nominal amount, should be directly included in
the current gains and losses.
2. Judgment basis of the income-related government grants and the accounting treatment
The government grants other than the asset-related ones are divided as income-related government grants.
Income-related government grants are applied to reimbursement of related costs or losses in subsequent periods
are recognized as deferred income and taken to current profit or loss for the period when the related costs are
recognized. Government grants applied to reimbursement of related costs or losses already incurred are directly
recognized in current profit or loss.
(XXVII) Deferred tax assets or deferred tax liabilities
1. Deferred tax assets or deferred tax liabilities are calculated based on the difference between the carrying
amounts of the assets or liabilities and their tax bases (or the difference between the tax base and the carrying
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amount for items which cannot be recognized as assets or liabilities but whose tax base can be determined under
tax laws), and are calculated at the tax rates expected to apply to the period when assets are recovered or liabilities
are settled.
2. Deferred tax assets are recognized for all deductible temporary differences if it is probable that taxable profit
will be available against which the deductible temporary differences can be utilized. On the balance sheet date,
deferred tax assets unrecognized in prior periods are recognized if there is obvious evidence that it has become
probable that sufficient taxable profit will be available in subsequent periods against which the deductible
temporary differences can be utilized.
3. The carrying amount of deferred tax assets is reviewed On the balance sheet date and written down if it is no
longer probable that sufficient taxable profit will be available against which the deferred tax asset can be utilized.
Such amount is written back if it has become probable that sufficient taxable profit will be available.
4. The Company's current and deferred income taxes are recognized in current profit or loss as tax expense or
profit, excluding income tax arising from business combination or transactions or items directly recognized in
equity.
(XXVIII) Operating leases
When the company acts as the lessee, rental expenses under operating leases are recognized as relevant asset costs
or in current profit or loss using the straight-line method over the lease term, with any initial direct cost incurred
directly recognized to current profit or loss. Contingent rental is charged to current profit or loss when incurred.
When the company acts as the lessor, rental under operating leases are recognized in current profit or loss using
the straight-line method over the lease term, with any initial direct cost incurred directly charged to current profit
or loss, excepting for significant amount which will be capitalized and included in profit or loss in installments.
Contingent rental is charged to current profit or loss when incurred.
(XXIX) Other significant accounting policies and accounting estimates
1. Recognition criteria and accounting treatment methods of discontinuing operation
Any part disposed by the Company or classified as available-for-sale, operating and individual identified meeting
following conditions is regarded as discontinuing operation.
(1) Representing the primary service or a main operating region;
(2) Part of an independent service or disposition plan in a main operating region;
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(3) The part is the subsidiary obtained only for resale.
2. Basis and accounting treatment of the hedge accounting adopted
(1) The hedge business of the Company is cash flow hedges.
2. Hedge accounting is applied to hedges that meet the following conditions: (1) At the beginning of a hedge, the
Company formally designates the hedge relationship (the relationship between the hedging instrument and the
hedged project) and documents regarding the hedge relationship, risk management objectives and its hedging
strategy; (2) Such hedges are expected to be highly effective and comply with the initial risk management strategy
set by the Company for the hedge relationship; (3) For cash flow hedges for expected transactions, such expected
transactions will probably take place and must expose the Company to risks of movement in cash flows that will
eventually affect the profit or loss; (4) The hedge effectiveness can be reliably measured; (5) The hedge
effectiveness is evaluated on an ongoing basis, ensuring the hedge is highly effective in the period in which the
hedge relationship is designated.
A hedge is deemed highly effective if it meets the following conditions at the same time: (1) It is expected at the
inception or for subsequent periods to effectively offset movement in fair value or cash flows arising from the
hedged risks in the period in which the hedge is designated; (2) The actual offset result of the hedge ranges from
80% to 125%.
(3) Hedge accounting treatment
(1) The effective portion of the gain or loss on the hedging instrument is recognized directly in equity, while the
ineffective portion is recognized in current profit or loss.
(2) If the hedged item is an expected transaction for which the Company subsequently recognizes a financial asset
or financial liability, the gain or loss directly recognized in equity is transferred to current profit or loss in the
same period in which the financial asset or financial liability affects the profit or loss. If the Company
subsequently recognizes a non-financial asset or non-financial liability due to the expected transaction, the gain or
loss directly recognized in equity is transferred to the amount initially recognized on the non-financial asset or
non-financial liability. If the Company subsequently recognizes an asset or liability due to the expected
transaction, the gain or loss directly recognized in equity is transferred to current profit or loss in the same period
in which the asset or liability affects the profit or loss.
For other cash flow hedges, the gain or loss on the hedging instrument directly recognized in equity is transferred
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to current profit or loss in the same period in which the hedged, expected transaction affects the profit or loss.
(XXX) Significant accounting policies and accounting estimates changes
1. Significant accounting policies changes
(1) Content and reasons of the changes of accounting policies
The Company and the subsidiary Annto Logistics Co., Ltd. and the subordinate subsidiary, for better indicate the
financial conditions of the Company, had alternated the accounting estimates of the withdrawal proportion of the
bad debt provision of the accounts receivable since the date of the review and approval from the Board of
Directors according to the relevant regulations of the ASBE and the market environment attributed to.
(2) Report projects and amount affected by significant influences
Report projects affected by significant influences Influenced amount Notes
Projects of the balance sheet on 30 June 2015
Accounts receivable 169,359.99
Other accounts receivable 14,718.05
Projects of the income statement of the semi-annual of
Y2015
Losses of the assets impairment 9,203.90
Total amount of the profits -9,203.90
Net profits -7,778.54
IV. Taxation
(I) Main tax types and tax rates
Tax type Basis of taxation Tax rate
Value added tax Sales of goods or provision of services 17%, 6%, 11%, 3%
Business tax Taxation turnover 3%, 5%
Price-based property is subject to 1.2% tax rate after a 30%
Property tax cut in original price. Rent-based is subject to 12% tax rate 1.2%, 12%
for the rental income.
Urban maintenance and
Turnover tax payables 5%, 7%
construction tax
Educational surcharges Turnover tax payables 3%
Local educational
Turnover tax payables 1%, 2%
surcharges
Enterprise income tax Taxable income 12.5%, 15%, 25%
Notes of the corporate tax rate of the significant taxpaying bodies with different tax rate
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Name of the taxpaying bodies Tax rate of income tax
Guangdong GMCC Refrigeration Equipment Co., Ltd. 15%
Midea Group Wuhan Refrigeration Equipment Co., Ltd. 15%
Guangdong Midea Heating & Ventilation Equipment Co.,
15%
Ltd.
Anhui GMCC Refrigeration Equipment Co., Ltd. 15%
Anhui GMCC Precision Manufacturing Co., Ltd. 15%
Guangdong Midea Refrigeration Equipment Co., Ltd. 15%
Hefei Midea Refrigerator Co., Ltd. 15%
Chongqing Midea General Refrigeration Equipment Co,
15%
Ltd.
Hefei Hualing Co., Ltd. 15%
Guangdong Midea Group Wuhu Refrigeration Equipment
15%
Co., Ltd.
Hubei Midea Refrigerator Co., Ltd. 15%
Wuxi Little Swan Holding Co., Ltd. 15%
Foshan Shunde Midea Washing Appliance Manufacturing
15%
Co., Ltd.
Guangdong Witt Vacuum Electronics Manufacturing Co.,
15%
Ltd.
Jiangxi Midea Guiya Lighting Co., Ltd. 15%
Wuhu Midea Kitchen & Bathroom Electric
15%
Manufacturing Co., Ltd.
Wuhu Midea Washing Appliance Manufacturing Co., Ltd. 15%
Annto Logistics Co., Ltd. 15%
Foshan Shunde Midea Electric Appliance Manufacturing
15%
Co., Ltd.
Foshan Welling Washer Motor Manufacturing Co., Ltd. 15%
Guangdong Welling Motor Co., Ltd. 15%
Huaian Welling Motor Co., Ltd. 15%
Welling (Wuhu) Motor Co., Ltd. 15%
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Jiangsu Midea Chunhua Electric Co., Ltd. 15%
Hefei Midea Washing Machine Co., Ltd. 15%
Wuxi Feiling Electronics Co., Ltd. 15%
Wuxi Little Swan Electric Appliance Co., Ltd. 15%
Guangdong Midea Kitchen Appliances Manufacturing
15%
Co., Ltd.
Chongqing Midea Refrigeration Equipment Co., Ltd. 15%
Hefei Midea Heating & Ventilation Equipment Co., Ltd. 15%
Foshan Shunde Midea Electronic and Science
12.5%
&Technology Co., Ltd.
Wuhu Maty Air-Conditioning Equipment Co., Ltd. 15%
Handan Midea Refrigeration Equipment Co., Ltd. 15%
Guangzhou Hualing Refrigeration Equipment Co., Ltd. 15%
(II) Tax preferential treatments
1. On 10 October 2014, Guangdong GMCC Refrigeration Equipment Co., Ltd., a controlled subsidiary of the
Company, was recognized as an enterprise of new and high technology for a valid term of 3 years and granted the
New and High Technology Enterprise Certificate. The certificate number was GR201444000397. The subsidiary
was subject to 15% corporate income tax rate in 2015.
2．On 14 October 2014, Midea Group Wuhan Refrigeration Equipment Co., Ltd., a controlled subsidiary of the
Company, was recognized as an enterprise of new and high technology for a valid term of 3 years and granted the
New and High Technology Enterprise Certificate. The certificate number was GR201442000091. The subsidiary
was subject to 15% corporate income tax rate in 2015.
3. On 26 November 2012, Guangdong Midea Heating & Ventilation Equipment Co., Ltd., a controlled subsidiary
of the Company, was recognized as an enterprise of new and high technology for a valid term of 3 years and
granted the New and High Technology Enterprise Certificate. The certificate number was GR201244000708. The
subsidiary was subject to 15% corporate income tax rate in 2015.
4. On 14 October 2013, Anhui GMCC Refrigeration Equipment Co., Ltd., a controlled subsidiary of the Company,
was recognized as an enterprise of new and high technology for a valid term of 3 years and granted the New and
High Technology Enterprise Certificate. The certificate number was GF201334000093. The subsidiary was
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2015 Semi-Annual Report of Midea Group Co., Ltd.
subject to 15% corporate income tax rate in 2015.
5. On 3 July 2012, Anhui GMCC Precision Manufacturing Co., Ltd., a controlled subsidiary of the Company, was
recognized as an enterprise of new and high technology for a valid term of 3 years and granted the New and High
Technology Enterprise Certificate. The certificate number was GR2012234000097. The certificate had due in
Y2015, and the Company had applied again for the Hi-tech Technology Enterprise of 2015, while during the
process of the approval, each index was met with the application standards with the corporate income tax rate in
2015 was 15%.
6. On 10 October 2014, Guangdong Midea Refrigeration Equipment Co., Ltd. a controlled subsidiary of the
Company, was recognized as an enterprise of new and high technology for a valid term of 3 years and granted the
New and High Technology Enterprise Certificate. The certificate number was GR201444000965. The subsidiary
was subject to 15% corporate income tax rate in 2015.
7. On 21 October 2014, Hefei Midea Refrigerator Co., Ltd., a controlled subsidiary of the Company, was
recognized as an enterprise of new and high technology for a valid term of 3 years and granted the New and High
Technology Enterprise Certificate. The certificate number was GR201434001001. The subsidiary was subject to
15% corporate income tax rate in 2015.
8. On 14 October 2014, Chongqing Midea General Refrigeration Equipment Co, Ltd., a controlled subsidiary of
the Company, was recognized as an enterprise of new and high technology for a valid term of 3 years and granted
the New and High Technology Enterprise Certificate. The certificate number was GF201451100044. The
subsidiary was subject to 15% corporate income tax rate in 2015.
9. On 21 October 2014, Hefei Hualing Co., Ltd., a controlled subsidiary of the Company, was recognized as an
enterprise of new and high technology for a valid term of 3 years and granted the New and High Technology
Enterprise Certificate. The certificate number was GR201434000715. The subsidiary was subject to 15%
corporate income tax rate in 2015.
10. On 21 October 2014, Guangdong Midea Group Wuhu Refrigeration Equipment Co., Ltd., a controlled
subsidiary of the Company, was recognized as an enterprise of new and high technology for a valid term of 3
years and granted the New and High Technology Enterprise Certificate. The certificate number was
GR201434001130. The subsidiary was subject to 15% corporate income tax rate in 2015.
11. On 14 October 2014, Hubei Midea Refrigerator Co., Ltd., a controlled subsidiary of the Company, was
recognized as an enterprise of new and high technology for a valid term of 3 years and granted the New and High
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Technology Enterprise Certificate. The certificate number was GF201442000015. The subsidiary was subject to
15% corporate income tax rate in 2015.
12. On 21 May 2012, Wuxi Little Swan Holding Co., Ltd., a controlled subsidiary of the Company, was
recognized as an enterprise of new and high technology for a valid term of 3 years and granted the New and High
Technology Enterprise Certificate. The certificate number was GF201232000096. The certificate had due in
Y2015, and the Company had applied again for the Hi-tech Technology Enterprise of 2015, while during the
process of the approval, each index was met with the application standards with the corporate income tax rate in
2015 was 15%.
13. On 10 October 2014, Foshan Shunde Midea Washing Appliance Manufacturing Co., Ltd. a controlled
subsidiary of the Company, was recognized as an enterprise of new and high technology for a valid term of 3
years and granted the New and High Technology Enterprise Certificate. The certificate number was
GR201444001324. The subsidiary was subject to 15% corporate income tax rate in 2015.
14. On 10 October 2014, Guangdong Witt Vacuum Electronics Manufacturing Co., Ltd., a controlled subsidiary of
the Company, was recognized as an enterprise of new and high technology for a valid term of 3 years and granted
the New and High Technology Enterprise Certificate. The certificate number was GR201444000159. The
subsidiary was subject to 15% corporate income tax rate in 2015.
15. On 9 April 2014, Jiangxi Midea Guiya Lighting Co., Ltd., a controlled subsidiary of the Company, was
recognized as an enterprise of new and high technology for a valid term of 3 years and granted the New and High
Technology Enterprise Certificate. The certificate number was GR201436000009. The subsidiary was subject to
15% corporate income tax rate in 2015.
16. On 16 October 2014, Wuhu Midea Kitchen & Bathroom Electric Manufacturing Co., Ltd., a controlled
subsidiary of the Company, was recognized as an enterprise of new and high technology for a valid term of 3
years and granted the New and High Technology Enterprise Certificate. The certificate number was
GF201434000129. The subsidiary was subject to 15% corporate income tax rate in 2015.
17. On 15 November 2012, Wuhu Midea Washing Appliance Manufacturing Co., Ltd., a controlled subsidiary of
the Company, was recognized as an enterprise of new and high technology for a valid term of 3 years and granted
the New and High Technology Enterprise Certificate. The certificate number was GR201234000405. The
certificate had due in Y2015, and the Company had applied again for the Hi-tech Technology Enterprise of 2015,
while during the process of the approval, each index was met with the application standards with the corporate
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2015 Semi-Annual Report of Midea Group Co., Ltd.
income tax rate in 2015 was 15%.
18. On 29 June 2014, Annto Logistics, a controlled subsidiary of the Company, was recognized as an enterprise of
new and high technology for a valid term of 3 years and granted the New and High Technology Enterprise
Certificate. The certificate number was GF201234000055. The certificate had due in Y2015, and the Company
had applied again for the Hi-tech Technology Enterprise of 2015 which had passed the reexamination with the
corporate income tax rate in 2015 was 15%.
19. On 26 November 2012, Foshan Shunde Midea Electric Appliance Manufacturing Co., Ltd., a wholly owned
subsidiary of the Company, was recognized as an enterprise of new and high technology for a valid term of 3
years and granted the New and High Technology Enterprise Certificate. The certificate number was
GF201244000587. The certificate had due in Y2015, and the Company had applied again for the Hi-tech
Technology Enterprise of 2015, while during the process of the approval, each index was met with the application
standards with the corporate income tax rate in 2015 was 15%.
20. On 10 October 2014, Foshan Welling Washer Motor Manufacturing Co., Ltd., a wholly owned subsidiary of
the Company, was recognized as an enterprise of new and high technology for a valid term of 3 years and granted
the New and High Technology Enterprise Certificate. The certificate number was GR201444000608. The
subsidiary was subject to 15% corporate income tax rate in 2015.
21. On 10 October 2014, Guangdong Welling Motor Co., Ltd., a wholly owned subsidiary of the Company, was
recognized as an enterprise of new and high technology for a valid term of 3 years and granted the New and High
Technology Enterprise Certificate. The certificate number was GR201444000268. The subsidiary was subject to
15% corporate income tax rate in 2015.
22. On 25 September 2013, Huaian Welling Motor Co., Ltd., a wholly owned subsidiary of the Company, was
recognized as an enterprise of new and high technology for a valid term of 3 years and granted the New and High
Technology Enterprise Certificate. The certificate number was GF201332000124. The subsidiary was subject to
15% corporate income tax rate in 2015.
23. On 2 July 2014, Welling (Wuhu) Motor Co., Ltd., a wholly owned subsidiary of the Company, was recognized
as an enterprise of new and high technology for a valid term of 3 years and granted the New and High Technology
Enterprise Certificate. The certificate number was GR201434000371. The subsidiary was subject to 15%
corporate income tax rate in 2015.
24. On 5 August 2014, Jiangsu Midea Chunhua Electric Co., Ltd., a wholly owned subsidiary of the Company,
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2015 Semi-Annual Report of Midea Group Co., Ltd.
was recognized as an enterprise of new and high technology for a valid term of 3 years and granted the New and
High Technology Enterprise Certificate. The certificate number was GF201432000806. The subsidiary was
subject to 15% corporate income tax rate in 2015.
25. On 2 July 2014, Hefei Midea Washing Machine Co., Ltd. , a wholly owned subsidiary of the Company, was
recognized as an enterprise of new and high technology for a valid term of 3 years and granted the New and High
Technology Enterprise Certificate. The certificate number was GR201434000147. The subsidiary was subject to
15% corporate income tax rate in 2015.
26. On 6 August 2012, Wuxi Feiling Electronics Co., Ltd., a controlled subsidiary of the Company, was
recognized as an enterprise of new and high technology for a valid term of 3 years and granted the New and High
Technology Enterprise Certificate. The certificate number was GR201232000673. The certificate had due in
Y2015, and the Company had applied again for the Hi-tech Technology Enterprise of 2015 which had passed the
reexamination with the corporate income tax rate in 2015 was 15%.
27. On 21 May 2012, Wuxi Little Swan Electric Appliance Co., Ltd., a controlled subsidiary of the Company, was
recognized as an enterprise of new and high technology for a valid term of 3 years and granted the New and High
Technology Enterprise Certificate. The certificate number was GR201232000077. The certificate number was
GR201232000673. The certificate had due in Y2015, and the Company had applied again for the Hi-tech
Technology Enterprise of 2015 which had passed the reexamination with the corporate income tax rate in 2015
was 15%.
28. On 12 September 2012, Guangdong Midea Kitchen Appliances Manufacturing Co., Ltd., a controlled
subsidiary of the Company, was recognized as an enterprise of new and high technology for a valid term of 3
years and granted the New and High Technology Enterprise Certificate. The certificate number was
GF201244000221. The certificate number was GR201232000673. The certificate had due in Y2015, and the
Company had applied again for the Hi-tech Technology Enterprise of 2015 which had passed the reexamination
with the corporate income tax rate in 2015 was 15%.
29. On 3 June 2014, the application of the remission of the corporate income tax of the west development which
put forward by Chongqing Midea Refrigeration Equipment Co., Ltd., had approved by the National Taxation
Bureau of Chongqing Economic and Technological Development Zone. The subsidiary was subject to 15%
corporate income tax rate in 2015.
30. On 16 July 2013, Hefei Midea Heating & Ventilation Equipment Co., Ltd, a controlled subsidiary of the
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Company, was recognized as an enterprise of new and high technology for a valid term of 3 years and granted the
New and High Technology Enterprise Certificate. The certificate number was GR201334000033. The subsidiary
was subject to 15% corporate income tax rate in 2015.
31．Certified by No. (2012) 27 document from Foshan Shunde State Administration of Taxation, the holding
subsidiary, Foshan Shunde Midea Electronic Technology Co., Ltd enjoys the benefits of corporate income tax
reduction and exemption for software enterprise. Before December 31, 2017, the grace period starts from
profit-making year; corporate income tax is exempted in the first and second year and levied half of 25% statutory
tax rate until expiration. The year of 2015 is the fifth profit-making year when corporate income tax is levied by
the tax rate of 12.5%.
32．On 21 October 2014, Wuhu Maty Air-Conditioning Equipment Co., Ltd., a controlled subsidiary of the
Company, was recognized as an enterprise of new and high technology for a valid term of 3 years and granted the
New and High Technology Enterprise Certificate. The certificate number was GR201434001064. The subsidiary
was subject to 15% corporate income tax rate in 2015.
33．On 19 September 2014, Handan Midea Refrigeration Equipment Co., Ltd., a controlled subsidiary of the
Company, was recognized as an enterprise of new and high technology for a valid term of 3 years and granted the
New and High Technology Enterprise Certificate. The certificate number was GR201413000242. The subsidiary
was subject to 15% corporate income tax rate in 2015.
34. On 10 October 2014, Guangzhou Hualing Refrigeration Equipment Co., Ltd. , a controlled subsidiary of the
Company, was recognized as an enterprise of new and high technology for a valid term of 3 years and granted the
New and High Technology Enterprise Certificate. The certificate number was GR201444000463. The subsidiary
was subject to 15% corporate income tax rate in 2015.。
V. Notes to the Items in the Consolidated Financial Statements
(I) Notes to the Consolidated Balance Sheet
1. Cash on hand and in bank
(1) Detailed Information
Items Closing balance Opening balance
Cash in Stock 933.79 1,037.93
Cash in Bank 11,336,729.87 5,505,459.73
Other Currency Fund 3,281,535.79 696,785.15
109
2015 Semi-Annual Report of Midea Group Co., Ltd.
Total 14,619,199.45 6,203,282.81
Of which: total amount deposited in
1,282,969.73 1,177,384.39
overseas
(2) Notes on the funds with restriction on use due to mortgage, pledge or freezing, or deposited overseas, or with
potential risk of capital recovery.
Ending balance of other monetary fund mainly refers to bank acceptance deposits.
2. Deposit in Central Bank
(1) Detailed Information
Items Closing balance Opening balance
Statutory reserves deposited in the central bank 1,627,504.64 1,277,563.60
Excess deposit reserve deposited in the central bank 199,535.44 2,028.87
Total 1,827,040.08 1,279,592.47
(2) Notes on the funds with restriction on use, deposited overseas, or with potential risk of capital recovery
Statutory reserves deposited in the central bank refer to the statutory reserves deposited in the People's Bank of
China in accordance with relevant regulations, which shall not be used for daily operations.
3. Deposit in other banks
Items Closing balance Opening balance
Deposited in domestic banks 2,024,431.24 2,126,444.99
Subtotal 2,024,431.24 2,126,444.99
Less: Provision for bad account
Total 2,024,431.24 2,126,444.99
4. Derivative financial assets
Items Closing balance Opening balance
Derivative financial assets 14,339.10 162,513.84
Total 14,339.10 162,513.84
Ending balance of derivative financial assets mainly refers to the changes in fair value of forward foreign
exchange contracts not yet settled.
5. Notes receivable
(1) Detailed Information
Closing balance Opening balance
Classificat Provision Provision
ion Book balance for bad Book value Book balance for bad Book value
account account
Bank
110
2015 Semi-Annual Report of Midea Group Co., Ltd.
acceptanc 26,229,378.71 26,229,378.71 17,097,233.37 17,097,233.37
e bill
Total
26,229,378.71 26,229,378.71 17,097,233.37 17,097,233.37
(2) Notes of the notes receivable which have been endorsed to others or discounted that had not due on the
balance sheet date
Non-derecognition
Items Derecognition amount at the period-end amount at the
period-end
Bank acceptance bill 30,727,763.61
Subtotal 30,727,763.61
6. Account receivable
(1) Detailed Information
1) Category details
Closing balance
Book balance Provision for bad account
Classification
Proportion Withdrawal Book value
Amount Amount
(%) proportion (%)
Significant single amount
and individual provision
42,200.24 0.29 42,200.24 100.00
for bad debts
Withdraw the bad debt
provision by credit risks
14,448,519.84 99.40 833,040.00 5.77 13,615,479.84
characteristics
Non-significant single
amount and individual
45,249.95 0.31 43,654.22 96.47 1,595.73
provision for bad debts
Total
14,535,970.03 100.00 918,894.46 6.32 13,617,075.57
(Continued)
Closing balance
Book balance Provision for bad account
Classification Withdrawal
Proportion Book value
Amount Amount proportion
(%)
(%)
111
2015 Semi-Annual Report of Midea Group Co., Ltd.
Significant single amount and
individual provision for bad
70,985.01 0.71 45,112.27 63.55 25,872.74
debts
Withdraw the bad debt
provision by credit risks
9,951,637.43 98.99 615,407.42 6.18 9,336,230.01
characteristics
Non-significant single amount
and individual provision for bad
30,657.10 0.30 30,657.10 100.00
debts
Total
10,053,279.54 100.00 691,176.79 6.88 9,362,102.75
2) Accounts receivable with significant single amount but with provision for bad debts by period-end
Withdrawal
Bad debt
Name of the units Book balance provision Withdrawal reason
provision
(%)
Confirmed that
Arcodym Home appliance 42,200.24 42,200.24 100.00 couldn’t be
recovered
Subtotal 42,200.24 42,200.24
3) Accounts receivable in the combination which adopts aging analysis method to determine provision for bad
debt
Closing balance
Age
Book balance Bad debt provision Withdrawal proportion (%)
Within 1 Year 14,233,807.70 647,330.45 4.55
1-2 Years 117,540.34 85,248.27 72.53
2-3 years 39,881.92 33,633.86 84.33
3-5 years 43,509.86 43,047.40 98.94
Over 5 years 23,780.02 23,780.02 100.00
Subtotal 14,448,519.84 833,040.00 5.77
(2) Situation of the bad debt provision withdrawn, recovered or reversed
The amount of the bad debt provision of the period was of RMB293,275,350.
(3) Accounts receivable actually written off in this period
1) The amount of the accounts receivable actually written off in this period was of RMB712,090.
2) List of the significant accounts receivable written off in this period
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Whether due to
Executed
Name of the units Nature Amount Reason associated
write-off process
transactions
Decided by the
Jiangyin Changyi Group Estimated to be
Loans 240.00 Board of No
Co., Ltd. uncollectible
Directors
Decided by the
Hisense (Zhejiang) Estimated to be
Loans 100.01 Board of No
Air-conditioning Co., Ltd. uncollectible
Directors
Decided by the
Estimated to be
AVEST Loans 316.18 Board of No
uncollectible
Directors
Subtotal 656.19
(4) Top 5 of the accounts receivable
The total amount of the top 5 accounts receivable of the closing balance was of RMB1,681,766,490 that was
11.58% of the total amount of the closing balance of the accounts receivable, and the total amount of the
corresponding withdrawn bad debt provision was of RMB84,088,320.
7. Advance payment
(1) Aging analysis
1) Detailed situation
Closing balance
Provision
Aging
Book Balance Proportion (%) for bad Book Value
account
Within 1 Year 1,728,602.52 95.31 1,728,602.52
1-2 Years 63,156.39 3.48 63,156.39
2-3 years 16,390.27 0.90 16,390.27
Over 3 years 5,645.87 0.31 5,645.87
Total 1,813,795.05 100.00 1,813,795.05
(Continued)
Opening balance
Provision
Aging
Book Balance Proportion (%) for bad Book Value
account
113
2015 Semi-Annual Report of Midea Group Co., Ltd.
Within 1 Year 1,298,444.25 91.79 1,298,444.25
1-2 Years 93,716.42 6.63 93,716.42
2-3 years 16,962.10 1.20 16,962.10
Over 3 years 5,347.68 0.38 5,347.68
Total 1,414,470.45 100.00 1,414,470.45
2) Reason for not timely settling advanced payments aged more than 1 year and with significant amount
Name of the unit Closing balance Unsettle reason
Jiangsu Gaoko Logistics Science & Technology Co., Ltd. 3,087.00 Not accepted
Subtotal 3,087.00
(2) Top 5 of the advanced payment
The total amount of the top 5 prepayment of the closing balance was of RMB351,933,190 that was 19.40% of the
total amount of the closing balance of the prepayment.
8. Granting loans and advances
(1) Classified by individual and enterprise distribution
Items Closing balance Opening balance
Individual loans and advances
Company loans and advances 8,953,705.63 6,030,087.31
including: Loan 5,226,969.63 964,523.26
Notes discount 3,726,736.00 5,065,564.05
Total loans and advances 8,953,705.63 6,030,087.31
Less: Provision for loan loss 89,537.06 89,286.84
Total 8,864,168.57 5,940,800.47
(2) Loans and advances classified by guaranty method
Items Closing balance Opening balance
Credit loans 1,052,600.00 110,500.00
Guaranteed loans 4,144,369.64 770,323.26
including: collateral loans
Pledge loans 3,756,735.99 5,149.264.05
Subtotal 8,953,705.63 6,030,087.31
Less: Provision for loan loss 89,537.06 89,286.84
Total 8,864,168.57 5,940,800.47
(3) Changes in loan loss reserves
114
2015 Semi-Annual Report of Midea Group Co., Ltd.
Items Closing balance Opening balance
Beginning Balance 89,286.84 45,818.24
Provision in this period 250.22 43,468.60
Transfer-in in this period
Write-off in this period
Transfer-out in this period
Balance at year end 89,537.06 89,286.84
9. Dividend receivables
Items Closing balance Opening balance
Misr Refrigeration and Air-conditioning
53,512.81 45,943.22
Mfg. Co. S.A.E.
Total 53,512.81 45,943.22
10. Other receivables
(1) Detailed Information
1) Category details
Closing balance
Book balance Bad debt provision
Classification
Proportion Proportion Book value
Amount Amount
(%) (%)
Significant single amount and
226,949.98 17.70% 226,949.98
individual provision for bad debts
Withdraw the bad debt provision by
1,031,771.09 80.46% 54,401.35 5.27% 977,369.74
credit risks characteristics
Non-significant single amount and
23,782.26 1.85% 186.15 0.78% 23,596.11
individual provision for bad debts
Total 1,282,503.33 100.01% 54,587.5 4.26% 1,227,915.83
(Continued)
Opening balance
Book balance Bad debt provision
Classification
Proporti Proportion Book value
Amount Amount
on (%) (%)
Significant single amount and individual
154,562.5 12.62% 154,562.5
provision for bad debts
Withdraw the bad debt provision by 1,069,799.51 87.37% 43,594.48 4.08% 1,026,205.03
115
2015 Semi-Annual Report of Midea Group Co., Ltd.
credit risks characteristics
Non-significant single amount and
101.15 0.01% 101.15 100.00%
individual provision for bad debts
Total 1,224,463.16 100.00% 43,695.63 3.57% 1,180,767.53
2) Other accounts receivable with significant single amount and provision for bad debt
Bad debt Withdrawal
Other Accounts Receivable Book balance Provision reason
provision provision (%)
Come-and-go money 67,824.98
Come-and-go money 159,125
Subtotal 226,949.98
3) Other accounts receivable in the combination which use aging analysis method to determine provisions for bad
debts
Closing balance
Aging Withdrawal
Book balance Bad debt provision
provision (%)
Within 1 Year 933,283.81 39,379.59 4.22
1-2 Years 79,555.51 5,287.94 6.65
2-3 years 1,244.47 330.65 26.57
3-5 years 16,519.34 8,235.20 49.85
Over 5 years 1,167.95 1,167.97 100.00
Subtotal 1,031,771.09 54,401.35 5.27
(2) Situation of the bad debt provision withdrawn, recovered or reversed in this period
The amount of the bad debt provision of the period was of RMB24,606,990.
(3) Accounts receivable actually written off in this period
1) The amount of the other accounts receivable actually written off in this period was of RMB403,650.
(4) Top 5 of the other accounts receivable
Proportion of the
balance of the Bad debt
Name of the units Nature Book balance Aging
other accounts provision
receivable
No. 1 Land funds 347,472.00 Within 1 year 27.09 17,373.60
No. 2 Cash deposit 159,125.00 2-3 years 12.41
116
2015 Semi-Annual Report of Midea Group Co., Ltd.
Exercise accounts
No. 3 67,824.98 Within 1 year 5.29
of share option
No. 4 Subsidy payments 33,916.56 1-2 years 2.64 3,391.66
No. 5 Land funds 27,430.80 Within 1 year 2.14 1,371.54
Total -- 635,769.34 -- 49.57 22,136.80
11. Inventories
(1) Detailed Information
Closing balance
Items
Book balance Price fall preparation Book value
Raw materials 1,765,151.19 25,136.18 1,740,015.01
Materials under consigned
190,016.88 190,016.88
processing
Low-value consumables 12,763.34 12,763.34
Work in process 415,017.35 415,017.35
Goods in stock 7,953,637.11 101,596.51 7,852,040.60
Total 10,336,585.87 126,732.69 10,209,853.18
(Continued)
Opening balance
Items
Book balance Price fall preparation Book value
Raw materials 2,453,511.83 18,436.81 2,435,075.02
Materials under consigned
376,930.37 376,930.37
processing
Low-value consumables 843.51 843.51
Work in process 392,333.54 392,333.54
Goods in stock 11,934,496.06 119,648.24 11,814,847.82
Total 15,158,115.31 138,085.05 15,020,030.26
(2) Inventory Falling Price Reserves
1) Detailed information
Increase Decrease
Items Opening balance Closing balance
Withdrawal Other Reversed or written off Other
Raw materials 18,436.81 27,270.12 20,570.75 25,136.18
Goods in stock 119,648.24 13,970.21 32,021.94 101,596.51
117
2015 Semi-Annual Report of Midea Group Co., Ltd.
Total 138,085.05 41,240.33 52,592.69 126.732.69
2) Specific basis of recognizing the net realizable value and the notes of the reasons of the inventory falling price
reserves reserved or written off in this period
Reason for carrying back Proportion of carried back
Basis of provision for inventory
Items inventory falling price amount in period-end
falling price reserves
reserves inventory balance
Lower of Cost or Net Realizable
Raw Materials Production consuming 0.14
Value Method
Lower of Cost or Net Realizable
Goods in Stock sales 0.05
Value Method
12. Other current assets
Items Closing balance Opening balance
Fees to be Apportioned 681,642.51 493,138.51
Hedging instrument 108,415.34
Margins 374,692.96 4,498.4
Taxes 969,580.14 1,303,175.55
Bank financing* 24,974,806.61 24,793,080
Total 27,109,137.56 26,593,892.46
*The closing balance of the bank financing was the bank financial products purchased by the self-owned
funds.
13. Financial assets available for sale
(1) Detailed information
Closing balance
Items
Book balance Impairment provision Book value
Available-for-sale debt instruments
Available-for-sale equity instruments 2,257,822.28 100.30 2,257,721.98
Of which: measured by fair value 539,001.94 100.30 538,901.64
measured by cost 1,718,820.34 1,718,820.34
Total 2,257,822.28 100.30 2,257,721.98
(Continued)
Opening balance
Items
Book balance Impairment provision Book value
Available-for-sale debt instruments
118
2015 Semi-Annual Report of Midea Group Co., Ltd.
Available-for-sale equity instruments 1,655,595.02 100.30 1,655,494.72
Of which: measured by fair value 1,290.97 100.30 1,190.67
measured by cost 1,654,304.05 1,654,304.05
Total 1,655,595.02 100.30 1,655,494.72
(2) Available-for-sale financial assets measured by fair value at the period-end
Category of available-for-sale Available-for-sale Available-for-sale debt
Subtotal
financial assets equity instruments instruments
Cost of the equity instruments 527,263.45 527,263.45
Fair value 538,901.64 538,901.64 1,190.67
Changed amount of the fair value
accumulatively included in the other 11,738.49 11,738.49
comprehensive income
Depreciation reserve amount 100.30 100.30
(3) Available-for-sale financial assets measured by cost at the period-end
Book balance
Investees Closing
Opening balance Increase Decrease
balance
Bank of Jiangsu Co., Ltd. 13,330.45 13,330.45
Hubei Bank Co., Ltd. 5,000.00 5,000.00
Inner Mongolia Baotou Department Store Co., Ltd. 50.00 50.00
Suzhou People’s Shopping Centre Co., Ltd. 150.00 150.00
Foshan Shunde Rural Commercial Bank Company
1,263,773.60 54,766.29 1,318,539.89
Limited
Zhangshu City Shunyin Rural Bank Co., Ltd. 6,000.00 6,000.00
Fengcheng Shunyin Rural Bank Co., Ltd. 6,000.00 6,000.00
Wanjiang Financial Leasing Co., Ltd. 360,000.00 360,000.00
Yunding Network Technology Co., Ltd. 9,750.00 9,750.00
Subtotal 1,654,304.05 64,516.29 1,718,820.34
(Continued)
Depreciation reserve Sharehol
ding
Cash bonus
proporti
Investees Opening Incre Decre Closing of the
on of the
balance ase ase balance period
investees
(%)
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Bank of Jiangsu Co., Ltd. 418.61
Hubei Bank Co., Ltd. 1.29
Inner Mongolia Baotou Department Store
0.04
Co., Ltd.
Suzhou People’s Shopping Centre Co.,
0.25
Ltd.
Foshan Shunde Rural Commercial Bank
9.40 118,394.70
Company Limited
Zhangshu City Shunyin Rural Bank Co.,
6.00 312.00
Ltd.
Fengcheng Shunyin Rural Bank Co., Ltd. 6.00 274.16
Wanjiang Financial Leasing Co., Ltd. 12.00 28,800.00
Yunding Network Technology Co., Ltd. 13.00
Subtotal -- 148,199.47
(4) Changes of the depreciation reserve of the available-for-sale financial assets
Available-for-sal Available-for-sal
Subtota
Category of available-for-sale financial assets e equity e debt
l
instruments instruments
Amount of the withdrawn impairment at the period-begin
Withdrawn amount of the period 100.30 100.30
Of which: transferred from other comprehensive income
Decreased of the period
Of which: recovered and reserved of the fair value after the
period
Amount of the withdrawn impairment at the period-end 100.30 100.30
14. Long-term equity investment
(1) Classification situation
Closing balance
Items Depreciation
Book balance Book value
reserve
Investment in the associated enterprises 906,155.83 906,155.83
Total 906,155.83 906,155.83
(Continued)
Items Opening balance
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Book balance Depreciation reserve Book value
Investment in the
951,874.39 951,874.39
associated enterprises
Total 951,874.39 951,874.39
(2) Detailed situation
Increase/decrease
Gains and
losses of the
Opening
Investees Additional Decreased investment
balance
investment investment confirmed by
the equity
method
Associated enterprises
Golden Eagle Asset Management Co., Ltd. 27,948.13 2,734.74
Guangzhou Antaida Logistics Co. Ltd. 2,850.04 -123.44
Misr Refrigeration And Air Conditioning
309,822.44 11,563.36
Manufacturing Co.
Shanxi Huaxiang Group Co., Ltd. 248,344.27 24,586.16
Linkgo-HK Limited 24,138.73 -664.69
Foshan Micro Midea Filter Co., Ltd. 25,495.16 3,000.75
(Philippines) CONCEPCION MIDEA INC 18,797.82 -2,202.05
Hefei Royalstar Motor Co., Ltd. 99,957.63 -153.17
Foshan City Shunde District Midea
72,298.05 4,458.12
Micro-Credit Inc.
Midea Micro-Credit Inc. 109,311.06 -2,445.42
PT.MIDEA PLANET INDONESIA 2,372.15
Zhuhai Lidewan Electronics Co., Ltd. 12,911.06 -12,911.06
Total 951,874.39 -12,911.06 43,126.51
(Continued)
Increase/decrease
Adjustment of Cash bonus or
Changes of Withdrawal of
Investees other profits
other depreciation
comprehensive declared to
equities reserve
income issue
Associated enterprises
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Golden Eagle Asset Management Co., Ltd.
Guangzhou Antaida Logistics Co. Ltd.
Misr Refrigeration And Air Conditioning
-5,998.60 - 16,993.04
Manufacturing Co.
Shanxi Huaxiang Group Co., Ltd.
Linkgo-HK Limited
Foshan Micro Midea Filter Co., Ltd. 2,000.00
(Philippines) CONCEPCION MIDEA INC -168.52
Hefei Royalstar Motor Co., Ltd.
Foshan City Shunde District Midea
9,601.40
Micro-Credit Inc.
Midea Micro-Credit Inc. 14,444.56
PT.MIDEA PLANET INDONESIA 745.98
Zhuhai Lidewan Electronics Co., Ltd.
Total -5,421.14 43,039.00
(Continued)
Increase/decrease Closing balance of
Closing
Investees depreciation
Other balance
reserve
Associated enterprises
Golden Eagle Asset Management Co., Ltd. 30,682.87
Guangzhou Antaida Logistics Co. Ltd. 2,726.60
Misr Refrigeration And Air Conditioning
-24,339.15 274,055.01
Manufacturing Co.
Shanxi Huaxiang Group Co., Ltd. 272,930.43
Linkgo-HK Limited 23,474.04
Foshan Micro Midea Filter Co., Ltd. 26,495.91
(Philippines) CONCEPCION MIDEA INC -16.59 16,410.66
Hefei Royalstar Motor Co., Ltd. 99,804.46
Foshan City Shunde District Midea Micro-Credit
67,154.77
Inc.
Midea Micro-Credit Inc. 92,421.08
PT.MIDEA PLANET INDONESIA -3,118.13
Zhuhai Lidewan Electronics Co., Ltd.
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Total -27,473.87 906,155.83
15. Investment properties
Houses and bui
Items Land use right Total
ldings
Original book value
Opening balance 225,279.11 47,569.90 272,849.01
Increased amount of the period 2,515.80 2,515.80
1) Outsourcing 175.80 175.80
2) Transferred from fixed
assets/intangible assets
3) Increased from enterprise merger
4) Other 2,340 2,340.00
Decreased amount of the period 45,600.31 11,096.31 56,696.62
1) Disposal
2) Transferred into fixed
45,600.31 11,096.31 56,696.62
assets/intangible assets
Closing balance 182, 194.60 36, 473.59 218,668.19
(Continued)
Houses and
Item Land use right Total
buildings
Accumulative depreciation and
accumulative amortization
Opening balance 78,693.88 9,944.16 88,638.04
Increased amount of the period 10,117.11 1,870.50 11,987.61
1) Withdrawal or demortization 10,117.11 1,870.50 11,987.61
2) Transferred from fixed
assets/intangible assets
Decreased amount of the period 38,283.89 3,095.48 41,379.37
1) Disposal
2) Transferred into fixed
38,283.89 3,095.48 41,379.37
assets/intangible assets
Closing balance 50,527.10 8,719.18 59,246.28
Depreciation reserve
Opening balance 12,576.07 12,576.07
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Increased amount of the period
1) Withdrawal
Decreased amount of the period
1) Disposal
2) Transferred from others
Closing balance 12,576.07 12,576.07
Book value at the period-end 119,091.43 27,754.41 146,845.84
Book value at the period-begin 134,009.16 37,625.74 171,634.9
16. Fixed Assets
(1) Detailed Information
Electronic
Houses and Machinery Transportatio
Item equipments and Total
buildings equipments n facilities
other
Original book value
Opening balance 14,938,851.13 13,364,556.17 799,461.03 2,220,616.04 31,323,484.37
Increased amount of
265,733.22 724,676.36 4,429.34 196,050.33 1,190,889.25
the period
1) Purchase 72,731.97 587,424.54 1,535.25 194,642.90 856,334.66
2) Transferred from
construction in 147,400.94 137,251.82 284,652.76
progress
3) Increased from
2,894.09 1,407.43 4,301.52
enterprise merger
4) Transferred from
investment 45,600.31 45,600.31
properties
Decreased amount
771,164.92 311,111.49 19,067.87 108,491.16 1,209,835.44
of the period
1) Disposal or
646,236.89 251,462.78 18,827.31 100,025.88 1,016,552.86
scrapping
2) Transferred from
124,928.03 59,648.71 240.56 8,465.28 193,282.58
others
Closing balance 14,433,419.43 13,778,121.04 784,822.5 2,308,175.21 31,304,538.18
(Continued)
Item Houses and Machinery Transportatio Electronic Total
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2015 Semi-Annual Report of Midea Group Co., Ltd.
buildings equipments n facilities equipments and
other
Accumulative
depreciation
Opening balance
2,911,240.00 5,222,779.17 386,332.70 1,536,363.55 10,056,715.42
Increased amount of
the period 860,280.09 1,177,670.37 91,575.49 317,867.83 2,447,393.78
1) Withdrawal
761,173.28 1,177,670.37 91,575.49 317,867.83 2,348,286.97
2) Transferred from
investment
99,106.81 99,106.81
properties
3) Transferred from
enterprise merger
Decreased amount
of the period 70,898.49 384,798.58 61,578.61 203,917.06 721,192.74
1) Disposal or
scrapping 51,050.42 381,612.77 61,578.61 201,150.86 695,392.66
2) Transferred from
others 19,848.07 3,185.81 2,766.20 25,800.08
Closing balance
3,700,621.60 6,015,650.96 416,329.58 1,650,314.32 11,782,916.46
Depreciation reserve
Opening balance
4,550.55 19,133.16 293.97 1,492.00 25,469.68
Increased amount of
the period 12,801.38 4.11 61.49 12,866.98
1) Withdrawal
12,801.38 4.11 61.49 12,866.98
Decreased amount
of the period 632.10 18,538.17 247.06 165.48 19,582.81
1) Disposal or
scrapping 632.10 18,538.17 247.06 165.48 19,582.81
2) Transferred from
others
Closing balance
125
2015 Semi-Annual Report of Midea Group Co., Ltd.
3,918.45 13,396.37 51.02 1,388.01 18,753.85
Book value at the
period-end 11,234,311.08 7,335,508.84 383,080.43 568,913.71 19,521,814.06
Book value at the
period-begin 10,987,264.72 7,544,859.53 506,449.30 533,587.77 19,572,161.32
(2) Fixed assets without issued title certificate
Items Book value Unsettle reason
Chongqing Refrigeration 1 & 2 plants 261,581.09 In progress
Wuhu Annto Logistics Park 241,097.88 In progress
Shenyang Meian Logistics Park 175,510.10 In progress
Hefei Annto Logistics Park 268,556.40 In progress
Chongqing Annto Logistics Park 166,902.93 In progress
Subtotal 1,113,648.40
17. Construction in progress
(1) Detailed Information
Closing balance Opening balance
Name of the
Depreciation Depreciation
projects Book balance Book value Book balance Book value
reserve reserve
GMCC
Compressor 91,949.88 91,949.88 89,066.83 89,066.83
Engineering
Household
Air-conditioner
19,932.30 19,932.30 14,397.00 14,397.00
(Chongqing)
Project
Handan
Air-Conditioner
61,454.24 61,454.24
Expansion
Project
Suzhou Xiang
City Cao Lake 225,233.44 225,233.44 121,599.18 121,599.18
Base Project
Compressor
1,997.77 1,997.77 9,567.02 9,567.02
(Anhui) Project
Guiyang Meian
61,081.56 61,081.56 34,172.59 34,172.59
Project
126
2015 Semi-Annual Report of Midea Group Co., Ltd.
The Fifth
Industrial Zone
Dormitory
95,294.71 95,294.71 83,416.71 83,416.71
Building
Engineering of
Midea
Guangdong
Welling
48,151.79 48,151.79 71,714.45 71,714.45
Construction in
Progress
Headquarters
Innovation 52,995.49 52,995.49 992.00 992.00
Center Project
Hefei Annto
40,340.00 40,340.00
Project
Wuhan Annto
24,151.65 24,151.65
Project
Zhengzhou
26,360.83 26,360.83
Annto Project
Other projects 77,109.80 77,109.80 84,649.79 84,649.79
Total 673,746.74 673,746.74 661,882.29 661,882.29
(2) List of the changes of the significant construction in progress of this period
Opening Transferred in Decreased in Closing
Name of the projects Increase
balance fixed assets others balance
GMCC Compressor
89,066.83 46,487.04 39,371.51 4,232.48 91,949.88
Engineering
Household Air-conditioner
14,397.00 5,535.30 19,932.30
(Chongqing) Project
Handan Air-Conditioner
61,454.24 61,454.24
Expansion Project
Suzhou Xiang City Cao
121,599.18 103,634.26 225,233.44
Lake Base Project
Compressor (Anhui) Project 9,567.02 1,393.16 8,962.41 1,997.77
Guiyang Meian Project 34,172.59 26,908.97 61,081.56
The Fifth Industrial Zone
Dormitory Building 83,416.71 12,724.15 846.15 95,294.71
Engineering of Midea
Guangdong Welling 71,714.45 47,730.93 71,293.59 48,151.79
127
2015 Semi-Annual Report of Midea Group Co., Ltd.
Construction in Progress
Headquarters Innovation
992.00 52,003.49 52,995.49
Center Project
Hefei Annto Project 40,340.00 40,340.00
Wuhan Annto Project 24,151.65 3,163.83 27,315.48
Zhengzhou Annto Project 26,360.83 6,165.82 15,595.42 16,931.23
Other projects 84,649.79 23,756.04 20,320.11 10,975.92 77,109.80
Total 661,882.29 329,502.99 284,652.76 32,985.78 673,746.74
(Continued)
Accumulative Amount of the Capitalized
amount of the capitalized interests rate Resources of the
Name of the projects
capitalized interests of the of the period capital
interests period (%)
GMCC Compressor Engineering Self-financing
Household Air-conditioner
Self-financing
(Chongqing) Project
Handan Air-Conditioner Expansion
Self-financing
Project
Suzhou Xiang City Cao Lake Base
Self-financing
Project
Compressor (Anhui) Project Self-financing
Guiyang Meian Project 2,362.12 1,404.79 6.00 Loans
The Fifth Industrial Zone Dormitory
Self-financing
Building Engineering of Midea
Guangdong Welling Construction in
Self-financing
Progress
Headquarters Innovation Center Project Self-financing
Hefei Annto Project Self-financing
Wuhan Annto Project 1,799.36 192.74 6.00 Loans
Zhengzhou Annto Project 4,612.05 237.26 6.00 Loans
Other projects Self-financing
Total 8,773.53 1,834.79
18. Intangible assets
(1) Detailed information
128
2015 Semi-Annual Report of Midea Group Co., Ltd.
Non-patented
Items Land use right Other Total
technology
Original book value
Opening balance 3,830,963.13 187,224.13 49,822.03 4,068,009.29
Increased amount of
27,287.82 65.48 27,353.30
the period
1) Purchase 16,191.51 65.48 16,256.99
2) Internal R&D
3) Increased in
enterprise merger
4) Transferred from
investment property 11,096.31 11,096.31
and others
Decreased amount
154,918.24 8,043.94 41.48 163,003.66
of the period
1) Disposal 153,724.82 153,724.82
2) Transferred from
others 1,193.42 8,043.94 41.48 9,278.84
Closing balance 3,703,332.71 179,180.19 49,846.03 4,068,009.29
(Continued)
Non-patented
Items Land use right Other Total
technology
Accumulative
amortization
Opening balance 481,906.06 134,744.81 19,400.30 636,051.17
Increased amount of
39,896.16 8,069.08 793,02 48,758.26
the period
1) Withdrawal 36,800.68 8,069.08 793,02 45,662.78
2) Transferred from
investment property 3,095.48 3,095.48
and others
Decreased amount
12,182.81 5,610.11 25.67 17,818.59
of the period
1) Disposal 11,896.04 11,896.04
2) Transferred from
286.77 5,610.11 25.67 5,922.55
others
129
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Closing balance 509,619.41 137,203.78 20,167.65 666,990.84
Depreciation reserve
Opening balance
Increased amount of
the period
1) Withdrawal
Decreased amount
of the period
1) Disposal
2) Transferred from
others
Closing balance
Book value at the
3,193,713.30 41,976.41 29,678.38 3,265,368.09
period-end
Book value at the
3,349,057.07 52,479.32 30,421.73 3,431,958.12
period-begin
19. Goodwill
(1) Original book value of goodwill
Formed Decrease
by the
enterprise Closing
Name of the investees Opening balance
merger in Disposal Other amount
the
period
Wuhu Lexiang Electric Appliance
4,817.20
Co., Ltd. 4,817.20
Guangdong GMCC Compressor Co.,
13,732.33
Ltd. 13,732.33
Guangdong Midea Wuhu
46,787.54
Refrigeration Equipment Co., Ltd. 46,787.54
Guangdong Midea Refrigeration
11,436.08
Equipment Co., Ltd. 11,436.08
Midea Group Wuhan Refrigeration
10,160.73
Equipment Co., Ltd. 10,160.73
Hefei Midea Royalstar Refrigerator
5,259.68
Co., Ltd. 5,259.68
Hefei Royalstar Midea Appliance 9,008.52
130
2015 Semi-Annual Report of Midea Group Co., Ltd.
Marketing Co., Ltd. 9,008.52
Hefei Royalstar Washing Equipment
34,373.76
Manufacturing Co., Ltd. 34,373.76
Chongqing Midea General
8,210.30
Refrigeration Equipment Co., Ltd. 8,210.30
Wuxi Little Swan Company Limited 1,326,932.45
1,326,932.45
Midea Carrier Latin American
1,037,366.70
Company 1,037,366.70
Jiangxi Midea Elegant Lighting Co.,
54,427.28
Ltd. 54,427.28
Calpore Macao Commercial
329,956.93
Offshore Ltd. 329,956.93
Kim Eng Enterprise Co., Ltd. 29,467.39
29,467.39
Other 9,854.52 25,828.10 35,682.62
Total
2,931,791.41 25,828.10 2,957,619.51
(2) Impairment test process, parameters and recognition method of the impairment losses of the goodwill
Our company tests impairment of goodwill based on cash flows, discount rate, and other indicators. After testing
and calculation, the book value of the goodwill which is corresponding to relevant asset groups or combination of
assets groups is not depreciated; therefore it’s unnecessary to prepare provision for goodwill impairment.
(3) Decrease in goodwill
In May 2015, the subsidiary of the Company, Midea Electric Trading (Singapore) Co. Pte. Ltd. purchased the
equities with the difference between the purchased cost and the enjoyed share of the net assets of the acquirees on
the purchase date is included in the goodwill.
20. Long-term unamortized assets
Opening Increase in current Amortized of the Other Closing
Items
balance period current period decreases balance
IT software and
212,152.11 96,225.87 66,749.18 12,621.26 229,007.54
consulting fees
Mould fees 301,516.15 134,365.51 118,478.98 317,402.68
Technical
1,415.09 283.02 1,132.07
getting-started fees
131
2015 Semi-Annual Report of Midea Group Co., Ltd.
Expenses on
improvement of assets 7,388.15 255.19 546.64 7,096.70
under operating lease
Others 236,104.60 125,890.96 89,228.98 23,717.35 249,049.23
Total 758,576.10 356,737.53 275,286.80 36,338.61 803,688.22
21. Deferred income tax assets and deferred tax liabilities
(1) Deferred income tax assets had not been offset
Closing balance Opening balance
Deductible Deferred Deductible Deferred
Items
temporary income tax temporary income tax
differences assets differences assets
Deductible losses
614,180.13 193,054.60 420,646.74 128,425.13
Provision for assets impairment
807,290.35 140,952.15 587,439.08 96,013.22
Workers compensation and dismissal
costs 396,968.57 69,605.18 1,679,405.74 290,303.22
Accrued expenses
23,449,682.80 3,669,655.22 19,641,041.97 3,143,330.25
Unrealized profits of internal transactions
293,217.83 44,414.64 172,023.68 41,586.58
Change of fair value
11,200.94 826.99 253,864.35 15,992.96
Estimated liabilities
25,980.02 3,897.00 25,573.83 3,836.07
Deferred revenue 367,096.63 57,651.32 338,852.58 52,722.28
Others
8,782.96 1,317.45 50,552.55 7,777.84
Total
25,974,400.23 4,181,374.55 23,169,400.52 3,779,987.55
(2) Deferred income tax liabilities had not been offset
Closing balance Opening balance
Deductible Deductible
Deferred income tax liabilities Deferred income Deferred income
temporary temporary
tax liabilities tax liabilities
differences differences
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Change of fair value 101,244.12 25,525.79 101.673.89 25,917.24
Total 101,244.12 25,525.79 101.673.89 25,917.24
22. Short-term borrowings
Items Closing balance Opening balance
Credit Loans 862,359.66 723,606.26
Hypothecated Loans 72,253.87 381,497.53
Guaranteed Loans 2,355,067.16 2,630,494.73
Trade financing 7,056,924.69 2,335,280.51
Total 10,346,605.38 6,070,879.03
23. Deposit taking and deposit taking of interbank
Items Closing balance Opening balance
Deposit taking 21,200.85 7,493.81
Total 21,200.85 7,493.81
24. Derivative financial liabilities
Items Closing balance Opening balance
Derivative financial liabilities 155,571.85 74,960.70
Total 155,571.85 74,960.70
25. Notes payable
Classification Closing balance Opening balance
Bank acceptance bill 22,787,992.23 12,648,496.99
Total 22,787,992.23 12,648,496.99
26. Accounts payable
Aging Closing balance Opening balance
Within 1 Year 18,520,544.25 18,825,285.22
1-2 Years 378,306.74 906,360.45
2-3 years 146,381.64 211,023.92
Over 3 years 225,605.7 194,784.87
Total 19,270,838.33 20,137,454.46
27. Advances from customers
Aging Closing balance Opening balance
Within 1 Year 2,806,257.29 3,798,152.11
133
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1-2 Years 12,050.96 127,180.66
2-3 years 6,126.84 14,382.35
Over 3 years 43,751.02 52,825.34
Total 2,868,186.11 3,992,540.46
28. Employee benefits payable
(1) Detailed information
Items Opening balance Increase Decrease Closing balance
Short-term compensation 2,083,515.11 4,984,014.55 5,678,340.05 1,389,189.61
Departure
welfare—defined 36,924.82 385,207.07 397,360.44 24,771.45
contribution plans
Dismission welfare 79,337.02 48,107.21 55,065.62 72,378.61
Total 2,199,776.95 5,417,328.83 6,130,766.11 1,486,339.67
(2) List of short-term compensation
Items Opening balance Increase Decrease Closing balance
Wages, bonuses, allowances and subsidies 1,941,556.96 4,315,677.64 4,990,231.78 1,267,002.82
Employee welfare fund 77,897.16 231,569.75 250,599.71 58,867.20
Social security charges 21,552.18 192,788.65 199,677.36 14,663.47
Including: medical insurance premium 19,934.72 161,675.73 167,807.33 13,803.12
Premium on work Injury 828.20 17,696.47 17,963.57 561.10
Premium on birth 789.26 13,416.45 13,906.46 299.25
Housing fund 13,548.16 92,661.58 91,116.21 15,093.53
Labor union funds and education funds 18,977.88 20,991.76 21,920.96 18,048.68
Other 9,982.77 130,325.17 124,794.03 15,513.91
Subtotal 2,083,515.11 4,984,014.55 5,678,340.05 1,389,189.61
(3) List of defined contribution plans
Items Opening balance Increase Decrease Closing balance
Basic pension insurance 35,248.33 370,185.2 381,093.94 24,339.59
Unemployment insurance
1,676.49 15,021.87 16,266.50 431.86
premium
Subtotal 36,924.82 385,207.07 397,360.44 24,771.45
29. Taxes payable
Items Closing balance Opening balance
134
2015 Semi-Annual Report of Midea Group Co., Ltd.
Added-value tax 457,631.65 375,167.87
Business tax 10,136.49 7,523.05
Corporate income tax 3,470,472.16 2,721,473.24
Personal income tax deduction and withholding 30,710.30 22,713.69
Housing property tax 25,101.33 29,868.71
Land use tax 16,825.35 14,366.12
City maintenance construction tax 22,517.60 40,701.95
Education surcharge 10,991.33 17,630.65
Local education surcharge 4,742.42 7,783.64
Other 75,813.83 42,921.79
Total 4,124,942.46 3,280,150.71
30. Interests payable
Items Closing balance Opening balance
Enterprise bond interest 6,922.06 8,878.24
Short-term loan interests payable 32,771.32 14,033.93
Total 39,693.38 22,912.17
31. Dividend payables
Items Closing balance Opening balance
Dividends of common shares 292,795.58 93,799.03
Total 292,795.58 93,799.03
32. Other payables
(1) Detailed information
Aging Closing balance Opening balance
Within 1 year 969,930.71 1,091,306.26
1-2 years 104,435.59 7,025.78
2-3 years 22,305.98 90,606.5
Over 3 years 24,127.67 34,610.22
Total 1,120,799.95 1,223,548.76
(2) Other significant accounts payable aging over 1 year
Reasons of unpaid or
Items Closing balance
unreversed
Foshan City Hanyu Investment Development Co., Ltd. 10,000.00 Margin
135
2015 Semi-Annual Report of Midea Group Co., Ltd.
Saiyi Electric Appliance Group Co., Ltd. 3,321.81 Margin
Guangdong Saipu Appliances Manufacturing Co., Ltd. 2,006.00 Margin
Foshan Gaoming Yinyuan Metalwork Co., Ltd. 1,811.00 Margin
Hefei Tatong Gelan Plastic Industry Co., Ltd. 1,810.00 Margin
Subtotal 18,948.81
33. Non-current liabilities due within one year
Items Closing balance Opening balance
Long-term loans within 1 year 611,900.00
Bonds payable due within 1 year
Total 611,900.00
34. Other current liabilities
Items Closing balance Opening balance
Withholding promotion fees 1,224,304.47 986,113.85
Withholding utilities 129,940.67 106,723.68
Withholding sale's returned profits 14,867,867.04 13,428,467.67
Withholding installation maintenance 5,699,450.89 4,231,210.96
Withholding rent 53,967.50 53,978.42
Withholding technology commission 75,883.08 126,984.70
Withholding traffic expenses 649,149.85 358,027.23
Hedging instrument 18,112.13 285,732.99
Withholding other expenses 1,332,581.97 1,074,145.49
U.S. commercial notes 1,926,844.67 2,127,551.06
Total 25,978,102.27 22,778,936.05
35. Long-term loans
Items Closing balance Opening balance
Credit loans 10,575.18 19,205.03
Mortgage loans
Guaranteed loans
Total 10,575.18 19,205.03
36. Bonds payable
(1) Detailed information
Items Closing balance Opening balance
136
2015 Semi-Annual Report of Midea Group Co., Ltd.
Collective bond of 12 Wuhu small and medium enterprises 158,501.30 153,026.30
Total 158,501.30 153,026.30
(2) Changes of the bonds payable (excluding the other financial instruments such as the preferred shares and the
perpetual capital securities divided as financial liabilities)
Opening
Bond name Par value Issue date Bonds period Amount
balance
Collective bond of 12 Wuhu
150,000
small and medium 100.00 2012/7/19 6 years 153,026.30
.00
enterprises
150,000
Subtotal 153,026.30
.00
Issued in Interests withdrawal Overflow Paid in
Closing
Bond name the according to the face discount the
balance
period value amortization period
Collective bond of 12 Wuhu
small and medium 5,475.00
158,501.30
enterprises
Subtotal 5,475.00
158,501.30
37. Special payable
Opening Closing
Items Increase Decrease Formed reason
balance balance
Demolition compensation shall 851,825.49 735,514.33 116,311.16 Demolition
Total 851,825.49 735,514.33 116,311.16
38. Estimated liabilities
Items Closing balance Opening balance Formed reason
Deposit for assurance of
25,980.02 25,573.83 Settlement of loss
product quality
Total 25,980.02 25,573.83
39. Deferred income
Items Opening balance Increase Decrease Closing balance Formed reason
Deferred income 342,235.91 35,817.06 6,560.43 371,492.54
Total 342,235.91 35,817.06 6,560.43 371,492.54
40. Capital stock
137
2015 Semi-Annual Report of Midea Group Co., Ltd.
(1) Detailed information
Items Opening balance Increase Decrease Closing balance
Total amount of shares 4,215,808.47 74,314.13 4,290,122.60
Total 4,215,808.47 74,314.13 4,290,122.60
(2) Other notes
In June 2015, the Company issued the RMB common share (Share A) of 55 million shares with per share of
RMB23.01 for Xiaomi Science & Technology Co., Ltd. as well as the face value of per share was of RMB1.00.
The increase of the other share capital was due to motivate executing rights of the employee equities.
41. Capital reserve
(1) Detailed Information
Items Opening balance Increase Decrease Closing balance
Stock premium 10,391,193.96 1,541,545.15 11,932,739.11
Other capital reserve 2,633,689.23 813,373.02 68,062.98 3,378,999.27
Total 13,024,883.19 2,354,918.17 68,062.98 15,311,738.38
(2) Other notes
1) The increase of the capital reserve-stock premium of the report period was due to the directional seasoned
offering of the Company for Xiaomi.
2) The increase of the other capital reserve of the report period was due to the equity incentive of the employees
granted on 27 May 2015.
42. Other comprehensive income
Amount
Less: the
previous
amount
included in
Amount Attributed Attributed
the other Less:
Opening of the to the to the Closing
Items comprehens income
balance pre-tax parent minority balance
ive income tax
income of company shareholde
with the expenses
the period after tax rs after tax
current
amount in
the gains
and losses
138
2015 Semi-Annual Report of Midea Group Co., Ltd.
Other
comprehensive
income could
not be
re-classified in
the gains and
losses
afterwards
Of which:
changes of
re-measured the
net liabilities
and the net
assets of
defined benefit
plans
Shares enjoyed
by the other
comprehensive
income could
not be
re-classified in
the gains and
losses of the
investees under
the equity
method
Other
comprehensive
income be
-774,298.8 430,163.1 13,878.6 214,758.1 -559,540.6
re-classified in 292,758.99 -91,232.68
3 0 2 7 6
the gains and
losses
afterwards
Of which:
shares enjoyed
by the other
comprehensive
-41,165.72 635.89 6,057.03 -5,421.14 -46,586.86
income be
re-classified in
the gains and
losses of the
139
2015 Semi-Annual Report of Midea Group Co., Ltd.
investees under
the equity
method
Flexible gains
and losses of
the fair value of
the 820.17 11,738.49 968.97 -145.35 10,918.32 -3.45 11,738.49
available-for-sa
le financial
assets
Gains and
losses of the
held-to-maturit
y investment be
re-classified as
available-for-sa
le financial
assets
Effective part
of the gains and -269,153.8 662,346.0 14,023.9 360,415.3
285,732.99 2,173.83 91,261.44
losses of cash 6 9 7 0
flow hedging
Difference of
the foreign
currency -464,799.4 -244,557.3 -151,154.3 -615,953.7
-93,403.06
financial 2 7 1 3
statement
translation
Total of other
-774,298.8 430,163.1 13,878.6 214,758.1 -559,540.6
comprehensive 292,758.99 -91,232.68
3 0 2 7 6
income
43. Surplus reserve
Items Opening balance Increase Decrease Closing balance
Statutory surplus reserve 1,189,791.32 1,189,791.32
Total 1,189,791.32 1,189,791.32
44. General risk preparation
Items Closing balance Opening balance
General risk preparation 40,516.92
140
2015 Semi-Annual Report of Midea Group Co., Ltd.
Total 40,516.92
The Company withdrew the general risk preparation according to the risk assets items of the finance company of
the subsidiaries.
45. Undistributed profits
Withdrawal or
Items Amount
distribution proportion
Undistributed profit at the end of previous period before
21,814,315.69
adjustment
Adjustment of the total undistributed profit at the
beginning of the period (“+” for increase, and “-” for
decrease)
Undistributed profit after adjustment at the begin of this
21,814,315.69
period
Add: net profit attributable to the owners of the parent
8,324,122.61
company for the period
Less: statutory accumulation reserve 10.00%
Discretionary surplus reserve
Appropriation of general risk reserve 40,516.92
Withdrawal of bonus and welfare fund for staff and
workers
Ordinary share dividends payable 4,215,808.47
Common stock dividend transferred to share capital
Others
Undistributed profit end the year 25,882,112.91 15,304,989.21
(II) Notes to the consolidated income statement
1. Operating income/ Operating cost
(1) Detailed information
2015 2014
Items
Income Cost Income Cost
Income of main
76,704,910.93 55,194,610.62 72,187,759.06 53,228,417.90
business
Income of other
6,170,159.48 5,002,254.89 5,520,459.30 4,307,146.45
business
Total 82,875,070.41 60,196,865.51 77,708,218.36 57,535,564.35
141
2015 Semi-Annual Report of Midea Group Co., Ltd.
(2) Main operating incomes and costs (by products)
Category of product 2015 2014
or business Income Cost Income Cost
Large home
54,499,203.35 38,401,893.57 51,299,125.77 37,419,693.85
appliances
Air-conditioner and
42,816,687.06 29,866,998.57 41,692,542.15 30,507,576.85
spare parts
Refrigerator and
6,027,598.60 4,505,284.31 5,008,742.18 3,663,813.70
spare parts
Washing machine
5,654,917.69 4,029,610.69 4,597,841.44 3,248,303.30
and spare parts
Small household
19,327,755.83 14,344,267.36 17,792,284.51 13,116,945.26
electrical appliance
Motor 2,039,514.25 1,719,216.09 2,148,868.18 1,829,908.68
Logistics 838,437.50 729,233.60 947,480.60 861,870.11
Subtotal 76,704,910.93 55,194,610.62 72,187,759.06 53,228,417.90
2. Interest income/expense
Items 2015 2014
Interest income 363,832.38 376,858.22
Granting loans and advances 339,295.12 366,942.90
Including: personal loans and advances
Corporate loans and advances 66,326.78 17,096.17
Notes discount 272,968.34 349,846.73
Deposit in other banks 24,537.26 9,915.32
Interest expense 317,071.49 191,553.43
Interest net income 46,760.89 185,304.79
3. Fees and commission income/expenditure
Items 2015 2014
Settlement business fees and
2,094.25 508.30
commission income
Settlement business fees and
888.28 727.61
commission expenditure
Fees and commissions net income 1,205.97 -219.31
4. Business tax and surcharges
Items 2015 2014
Business tax 21,615.67 15,931.12
City maintenance Construction Tax 314,765.13 241,478.66
142
2015 Semi-Annual Report of Midea Group Co., Ltd.
Education Surcharge and other 232,254.97 189,417.99
Total 568,635.77 446,827.77
5. Selling expenses
Items 2015 2014
Selling expenses 8,986,099.39 7,623,680.06
Total 8,986,099.39 7,623,680.06
6. Administrative expenses
Items 2015 2014
Administrative expense 3,604,757.13 3,349,324.40
Total 3,604,757.13 3,349,324.40
7. Financial expense
Items 2015 2014
Interest expense 64,637.44 67,587.44
Less: interest income 133,341.10 217,234.47
Add: exchange Loss 5,889.86 -223,491.13
Add: others 62,036.20 84,584.46
Total -777.60 -288,553.70
8. Assets impairment losses
Items 2015 2014
Bad debt loss 280,419.06 301,328.25
Inventory falling price loss -3,837.10 32,133.63
Fixed assets impairment loss 13,737.44
Available-for-sale financial assets
impairment loss
Loan impairment loss 250.22 4,237.07
Total 276,832.18 351,436.39
9. Gain on change in fair value
Items 2015 2014
Financial assets measured by fair value with the
-217,464.01 -788,353.68
changes included in the current gains and losses
Including: gains on change in fair value of derivative -217,464.01 -788,353.68
143
2015 Semi-Annual Report of Midea Group Co., Ltd.
financial instruments
Total -217,464.01 -788,353.68
10. Investment income
Sources of generating investment income 2015 2014
Long-term equity investment income
43,126.51 34,977.39
measured using equity method
Investment income obtained from disposal
-8,554.58
of long-term equity investment
Investment income obtained from disposal
of the financial assets measured by fair
313,320.63 131,824.68
value with the changes included in the
current gains and losses
Investment income of the
available-for-sale financial assets during 148,199.47 84,654.96
the holding period
Investment income obtained from disposal
2,158.77
of the available-for-sale financial assets
Financial investment income 682,954.05 174,990.06
Total 1,181,204.85 426,447.09
11. Non-operating income
(1) Detailed information
Amount recorded in current
Items 2015 2014
extraordinary profit and loss
Total gain on disposal of
38,172.48 40,031.43 38,172.48
non-current assets
Including: income to dispose
29,165.76 36,950.36 29,165.76
fixed assets
Gain on disposal of intangible
9,006.72 3,081.07 9,006.72
assets
Income from claim
6,267.09 9,277.21 6,267.09
reimbursement
Reimbursable receipts 21,121.63 19,353.97 21,121.63
Governmental subsidies 509,575.75 459,987.53 485,175.82
Gain from debt restructuring 17.25 1,688.20 17.25
Other incomes 75,437.21 23,084.72 75,437.21
Total 650,591.41 553,423.06 626,191.48
144
2015 Semi-Annual Report of Midea Group Co., Ltd.
12. Non-operating expenses
Amount recorded in current
Items 2015 2014
extraordinary profit and loss
Total loss on disposal of
77,444.62 99,791.39 77,444.62
non-current assets
Including: loss on disposition
77,150.89 99,791.39 77,150.89
fixed assets
Loss on disposal of intangible
293.73 293.73
assets
Fixed assets inventory loss 10,078.02 12,362.93 10,078.02
External donation 3,331.09 8,995.94 3,331.09
Other Expenses 9,562.64 11,961.76 6,669.61
Total 100,416.37 133,112.02 97,523.34
13. Income tax expenses
(1) Detailed information
Items 2015 2014
Income tax expenses of the current
2,262,867.37 2,459,809.78
period
Deferred income tax expenses -454,861.08 -929,094.31
Total 1,808,006.29 1,530,715.47
(2) Accounting profits and the adjustment process of the income tax expenses
Items 2015
Total amount of the profits 10,756,573.91
Income tax expenses calculated according to the statutory/applicable tax rate 2,689,143.48
Influences of adopting different tax rate by the subsidiaries -835,447.52
Influences of the tax rate of the period before adjustment -47,083.95
Influences of the non-taxable income -64,692.78
Influences of the non-deductible cost, expenses and losses 49,080.30
Influences of the deductible loss of the unrecognized deferred income tax
-46.40
assets of the previous using period
Influences of the deductible temporary difference or the deductible loss of the
17,053.16
unrecognized deferred income tax assets at the period-end
Other
Income tax expenses 1,808,006.29
14. Net after-tax amount of other comprehensive income
For the details of the net after-tax amount of other comprehensive income, please refer to the notes to the other
145
2015 Semi-Annual Report of Midea Group Co., Ltd.
comprehensive income of the items of the consolidated balance sheet of the notes of the financial statement.
(III) Notes to Consolidated Cash Flow Statement
1. Other cash received relating to operating activities
Items 2015 2014
Property rental received 10,537.59 24,491.15
Government subsidies received 531,104.14 455,672.43
Interest income 133,681.65 156,813.70
Income from claim reimbursement 25,378.10 24,591.31
Security Money 261,978.64 74,532.25
Intercourse funds 143,997.78
Other incomes 639,623.26 499,793.59
Total 1,746,301.16 1,235,894.43
2. Other cash paid relating to operating activities
Items 2015 2014
Cash paid for management expenses 1,552,194.52 1,626,344.44
Cash paid for sales expenses 6,263,503.17 5,125,931.23
Intercourse funds 194,812.07
Other expenses 82,225.64 114,689.46
Total 7,897,923.33 7,061,777.20
3. Cash paid for the investment
Items 2015 2014
Cash paid for the investment 8,915,487.43 26,488,790.03
Total 8,915,487.43 26,488,790.03
The cash paid for the investment of the period was due to the investment such as purchasing the bank financing.
4. Supplementary information on cash flow statements
(1) Supplementary information on cash flow statements
Supplementary information 2015 2014
1) To adjust the net-profit as cash flow of operating
activities:
Net profit 8,948,567.62 7,217,628.07
Add: Provision for asset impairment 276,832.18 351,436.39
Depreciation of fixed assets and investment property 1,122,983.88 1,176,192.05
Amortization of intangible assets 45,662.78 45,124.17
146
2015 Semi-Annual Report of Midea Group Co., Ltd.
Amortization of long-term deferred expenses 275,286.80 232,750.36
Losses on disposal of fixed assets, intangible assets and
39,272.14 59,759.96
other long-term assets
Fixed asset abandoned losses
The borrowings from central bank -59,709.63
The deposit taking and the deposit taking of interbank 13,707.04 216.14
Decrease of the accounts deposited in central bank and
-349,941.04 74,239.40
the same trade accounts
Increase in discount
Decrease in loans granted -2,923,618.32 140,373.38
Sound value flexible loss 217,464.01 788,353.68
Financing expense 43,254.90 29,010.03
Investment loss -1,181,204.85 -426,447.09
Decrease in deferred income tax assets -406,064.44 -862,823.62
Increase in Deferred Income Tax Liabilities -513.89 -70,684.04
Decrease in inventory 4,849,751.12 5,140,620.78
Decrease in operating items receivable -15,165,695.75 -8,947,160.59
Increase of operating payable 12,896,474.57 8,282,583.41
Others 113,453.14
Net cash flow from operating activities 8,815,671.89 13,171,462.85
(Continued)
Supplementary information 2015 2014
2. Significant investment and financing activities without
cash receipts and payments
Conversion of debt into capital
Convertible bonds due within 1 year
Fixed assets under finance leases
3.Change in cash and cash equivalents
Cash at the end of the period 5,507,146.23 12,229,330.95
Less: amount at the beginning period 5,272,238.35 16,763,873.80
Add: amount of cash equivalents at the end of period
Less: amount of cash equivalents at the beginning period
Net increase in cash and cash equivalents 234,907.88 -4,534,542.85
(2) Net cash amount of obtaining the subsidiaries paid in the current period
Items 2015
Cash or cash equivalents paid of the period for the enterprise merger occurred in the
5,501.79
current period
Less: cash and cash equivalents held by the subsidiaries
8,397.13
on the purchase date
Add: cash and cash equivalents paid of the period for the enterprise merger occurred
147
2015 Semi-Annual Report of Midea Group Co., Ltd.
in the previous period
Obtained the net cash amount paid by the subsidiaries -2,895.34
(3) Composition of cash and cash equivalents
Items 2015 2014
1) Cash 5,507,146.23 12,229,330.95
Including: cash in stock 933.79 1,210.89
Bank deposit available for immediate payment 3,193,004.10 11,668,252.58
Other currency available for immediate payment 89,241.66 258,540.86
Deposit in central bank available for payment 199,535.44
Deposit in other banks 2,024,431.24 301,326.62
Withdraw of deposit from other banks
2) Cash equivalents
Including: bond investment maturing within 3 months
3) Balance of cash and cash equivalents at the end of the
5,507,146.23 12,229,330.95
period
(IV) Other
1. Assets with restricted ownership or usage right
Items Book value at the period-end Restricted reason
Cash deposit and fixed time
Monetary capital 11,336,019.90
deposit
Due from central bank 1,627,504.64 Legal reserve
Notes receivable L/C guarantee
Total 12,963,524.54
2. Foreign currency monetary items
(1) Detailed information
Foreign currency balance Convert into RMB balance
Items Exchange rate convert
at the period-end at the period-end
Monetary capital
Of which: USD 377,194.72 6.1136 2,306,017.65
JPY 173,971.07 0.0501 8,707.60
HKD 172,748.49 0.7886 136,231.19
EUD 23,782.97 6.8699 163,386.63
BRL 28,205.44 1.9709 55,588.92
Dong 21,388,044.70 0.0003 5,997.52
INR 63,271.55 0.0961 6,082.61
148
2015 Semi-Annual Report of Midea Group Co., Ltd.
MYR 7.00 1.6387 11.47
Accounts receivable
Of which: USD 1,163,152.80 6.1136 7,111,050.98
JPY 335,600.78 0.0501 16,797.49
HKD 17,916.70 0.7886 14,129.29
EUD 26,790.47 6.8699 184,047.84
BRL 240,636.17 1.9709 474,259.73
Dong 257,743,248.75 0.0003 72,274.97
INR 1,988,085.61 0.0961 191,124.61
Short-term loans
Of which: USD 882,776.51 6.1136 5,396,942.48
HKD 400,000.00 0.7886 315,444.00
BRL 60,491.57 1.9709 119,220.29
Accounts payable
Of which: USD 232,743.52 6.1136 1,422,900.81
JPY 312,924.56 0.0501 15,662.50
HKD 1,115.99 0.7886 880.08
EUD 496.08 6.8699 3,408.00
BRL 75,256.32 1.9709 148,319.52
Dong 310,696,340.35 0.0003 87,123.79
INR 320,071.36 0.0961 30,770.06
Long-term loans
Of which: BRL 5,079.07 1.9709 10,010.13
VI. Changes of the consolidated scope
(I) Enterprise merger not under the same control
1. Enterprise merger occurred not under the same control in the current period
Obtaining Obtaining
Cost obtained
Obtained time-point of the equity proportion of the method of the
from the equity
equity (%) equity
May 2015 5,501.78 49.00 Purchase
(II) Changes of the consolidated scope with other reasons
1. Increase of the consolidated scope
Obtaining Obtaining
Contribution Contribution
Name of the companies method of the time-point of the
amount proportion
equity equity
149
2015 Semi-Annual Report of Midea Group Co., Ltd.
Midea Group Payment
Establishment March 2015 100,000.00 100.00%
Technology Co. Ltd.
Midea Innovation Investment
Establishment April 2015 50,000.00 100.00%
Co. Ltd.
Shunde District, Foshan City,
Meihui Management Services Establishment May 2015 273,077.20 100.00%
Co. Ltd.
Guangdong Midea SIIX
Establishment June 2015 50,000.00 75.00%
Electronics Co. Ltd.
2. Decrease of the consolidated scope
Disposal Disposal Net profits from the
Net assets on the
Name of the companies method of the time-point of the period-begin to the
disposal date
equity equity disposal date
Consolidation
Ningbo Midea Material Supplies Co., Ltd. January 2015 158,948.29 1.22
by merger
Carrier Transicold Argentina S.A. Written off January 2015
Guangdong Midea Whole Household Consolidation
March 2015 28,048.83 -127.11
Integration Co. Ltd. by merger
Foshan City, Jimei Detection Technology Consolidation
March 2015 25,693.55 4.17
Co. Ltd. by merger
Zhuzhou Annto Logistics Co. Ltd. Written off April 2015 20,507.39 504.13
Zhongshan City, Midea Environmental
Electrical Engineering Product Installation Written off May 2015 4,120.14 -0.84
Services Co. Ltd.
Wuhu Midea Solar Energy Technology Co.
Written off May 2015 28,911.49 -25.38
Ltd.
Maytag International Investment Ⅰ B.V. Written off June 2015 3,358.43
Maytag International Investment Ⅳ B.V. Written off June 2015 3,376.45
VII. Equities among other entities
(I) Equities amount the significant subsidiaries
1. Composition of the significant subsidiaries
Name of the subsidiaries Main operating place Registered place Business nature
GD Midea Holding (Singapore) Trading
Singapore Singapore Commerce
Co., Ltd.
Guangdong Midea HVAC Equipment Co.,
Foshan Foshan Manufacturing
Ltd.
Guangzhou Hualing Refrigeration
Guangzhou Guangzhou Manufacturing
Equipment Co., Ltd.
150
2015 Semi-Annual Report of Midea Group Co., Ltd.
Foshan Shunde Midea Electrothermal
Foshan Foshan Manufacturing
Equipment Manufacturing Co., Ltd.
Ningbo Midea United Material Supply
Ningbo Ningbo Commerce
Co., Ltd.
Anhui GMCC Precision Manufacturing
Wuhu Wuhu Manufacturing
Co., Ltd.
Anhui GMCC Compressor Sales Co., Ltd. Wuhu Wuhu Commerce
Wuhu Midea Life Electric Appliance
Wuhu Wuhu Manufacturing
Manufacturing Co., Ltd.
Guangdong Midea Kitchen Appliance
Foshan Foshan Manufacturing
Manufacturing Co., Ltd.
Hefei Midea Refrigerator Co., Ltd. Hefei Hefei Manufacturing
(Continued)
Shareholding
Name of the subsidiaries proportion (%) Obtaining method
Directly Indirectly
GD Midea Holding (Singapore) Trading
100.00 Establishment
Co., Ltd.
Guangdong Midea HVAC Equipment Co.,
100.00 Establishment
Ltd.
Guangzhou Hualing Refrigeration
75.00 25.00 Establishment
Equipment Co., Ltd.
Foshan Shunde Midea Electrothermal
100.00 Establishment
Equipment Manufacturing Co., Ltd.
Ningbo Midea United Material Supply
100.00 Establishment
Co., Ltd.
Anhui GMCC Precision Manufacturing
95.00 5.00 Establishment
Co., Ltd.
Anhui GMCC Compressor Sales Co., Ltd. 95.00 5.00 Establishment
Wuhu Midea Life Electric Appliance
100.00 Establishment
Manufacturing Co., Ltd.
Enterprise merger
Guangdong Midea Kitchen Appliance
100.00 under the same
Manufacturing Co., Ltd.
control
Enterprise merger not
Hefei Midea Refrigerator Co., Ltd. 75.00 25.00 under the same
control
2. Significant non-wholly-owned subsidiaries
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Dividends
Gains and losses Balance of the
Shareholding declared to
attributed to the equities of the
proportion of distribute to the
Name of the subsidiaries minority minority
minority minority
shareholders of shareholders at the
shareholders (%) shareholders of
the current period period-end
the current period
Guangdong Midea Group Wuhu
20.00 73,762.37 72,324.64 269,043.07
Refrigeration Equipment Co., Ltd.
Midea Group Wuhan Refrigeration
20.00 26,750.71 41,863.39 127,460.56
Equipment Co., Ltd.
Guangdong Midea Refrigeration
20.00 147,356.20 120,062.93 656,093.90
Equipment Co., Ltd.
Wuxi Little Swan Co., Ltd. 47.33 204,587.96 134,700.62 2,105,925.48
Guangdong GMCC Compressor Co.,
40.00 42,118.20 41,019.65 659,020.61
Ltd.
Weiling Holding Limited 31.36 99,501.50 52,548.52 1,149,118.22
3. Main financial information of the significant non-wholly owned subsidiaries
(1) List of assets and liabilities
Closing balance
Name of
Non-current Total of Current Non-current Total of
subsidiaries Current assets
assets assets liabilities liabilities liabilities
Guangdong
Midea Group
Wuhu
Refrigeration 14,796,498.39 1,554,242.08 16,350,740.47 15,058,753.17 15,058,753.17
Equipment Co.,
Ltd.
Midea Group
Wuhan
Refrigeration
2,686,914.46 356,088.26 3,043,002.73 2,405,699.93 2,405,699.93
Equipment Co.,
Ltd.
Guangdong
Midea
Refrigeration 33,429.97
28,716,960.23 3,382,564.54 32,099,524.77 28,875,534.89 28,908,964.86
Equipment Co.,
Ltd.
Wuxi Little
15,469.73
Swan Co., Ltd. 9,682,677.89 1,547,480.23 11,230,158.12 5,848,813.85 5,864,283.58
Guangdong 57.42
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2015 Semi-Annual Report of Midea Group Co., Ltd.
GMCC 3,050,482.84 674,012.33 3,724,495.17 2,076,886.22 2,076,943.64
Compressor
Co., Ltd.
Weiling
Holding 34,689.77
4,892,304.60 1,684,557.39 6,576,861.99 2,903,442.94 2,938,132.71
Limited
(Continued)
Opening balance
Name of
Non-current Total of Current Non-current Total of
subsidiaries Current assets
assets assets liabilities liabilities liabilities
Guangdong
Midea Group
Wuhu
Refrigeration 10,801,029.64 1,247,291.63 12,048,321.27 10,763,058.27 10,763,058.27
Equipment Co.,
Ltd.
Midea Group
Wuhan
Refrigeration
1,643,639.02 322,411.43 1,966,050.45 1,254,919.46 1,254,919.46
Equipment Co.,
Ltd.
Guangdong
Midea
Refrigeration 30,669.97
17,563,389.95 3,368,997.75 20,932,387.70 17,967,667.01 17,998,336.98
Equipment Co.,
Ltd.
Wuxi Little
33,822.49
Swan Co., Ltd. 9,794,839.33 1,643,783.83 11,438,623.16 6,216,176.98 6,249,999.47
Guangdong
GMCC
Compressor 3,556,196.47 650,588.80 4,206,785.27 2,569,820.04 2,569,820.04
Co., Ltd.
Weiling
Holding 37,435.43
4,702,104.07 1,631,599.18 6,333,703.25 2,815,635.23 2,853,070.66
Limited
(2) List of gains and losses and cash flow
2015
Name of subsidiaries Operating Total amount Cash flow from
Net profits
income of the operating
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2015 Semi-Annual Report of Midea Group Co., Ltd.
comprehensive activities
income
Guangdong Midea Group Wuhu
11,528,483.96 367,049.15 367,049.15 -2,332,957.49
Refrigeration Equipment Co., Ltd.
Midea Group Wuhan Refrigeration
4,497,526.79 133,753.55 133,753.55 2,094,865.98
Equipment Co., Ltd.
Guangdong Midea Refrigeration
18,367,647.93 825,684.00 825,077.81 7,713,772.14
Equipment Co., Ltd.
Wuxi Little Swan Co., Ltd. 6,101,903.86 498,509.02 498,482.28 1,365,269.48
Guangdong GMCC Compressor
4,023,165.30 105,295.50 107,590.14 43,551.50
Co., Ltd.
Weiling Holding Limited 3,992,399.47 321,758.80 321,621.44 635,840.19
(Continued)
2014
Total amount
Cash flow from
Name of subsidiaries Operating of
Net profits the operating
income comprehensive
activities
income
Guangdong Midea Group Wuhu
10,756,039.49 217,971.53 217,971.53 2,346,586.17
Refrigeration Equipment Co., Ltd.
Midea Group Wuhan Refrigeration
5,223,359.51 136,653.21 136,653.21 180,727.18
Equipment Co., Ltd.
Guangdong Midea Refrigeration
19,393,786.00 600,067.54 596,788.14 3,563,594.47
Equipment Co., Ltd.
Wuxi Little Swan Co., Ltd. 4,974,057.02 350,363.72 350,589.73 825,104.44
Guangdong GMCC Compressor
3,271,999.73 78,001.90 78,001.90 41,638.08
Co., Ltd.
Weiling Holding Limited 4,120,335.82 303,858.45 305,721.48 210,078.53
(II) Transactions with the shares of the owners’ equities of the subsidiaries changed but still control the
subsidiaries
1. List of the changes of the shares of the owners’ equities of the subsidiaries
Changing Shareholding proportion Shareholding proportion
Name of subsidiaries
time before changes after changes
January
Weiling Holding Limited* 68.68% 68.66%
2015
Weiling Holding Limited* February 68.66% 68.64%
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2015
*The changes of the shares of the owners’ equities of the Company in Weiling Holding Limited were due to the
executing rights of the equity incentive policies of Weiling Holding Limited.
(III) Equities among the joint venture enterprises
1. Significant joint venture enterprises
(1) Basic information
Shareholding Accounting
proportion (%) treatment of the
Name of the joint venture Main operating Registration
Nature investment of
enterprises place place
Directly Indirectly the joint venture
enterprises
Foshan City Shunde District Financial Measured by
Foshan Foshan 30.00
Midea Micro-Credit Inc. industry equity method
Financial Measured by
Midea Micro-Credit Inc. Wuhu Wuhu 16.67 13.33
industry equity method
Misr Refrigeration and Manufactu
Measured by
Air-conditioning Mfg. Co. Cairo Cairo ring 32.50
equity method
S.A.E. industry
Hefei Royalstar Motor Co., Measured by
Hefei Hefei Commerce 49.50 49.50
Ltd. equity method
Manufactu
Shanxi Huaxiang Group Co., Measured by
Linfen Linfen ring 49.00
Ltd. equity method
industry
2. Main financial information of significant joint venture enterprises
Closing balance/2015
Foshan City
Misr Refrigeration
Items Shunde District Midea Shanxi Huaxiang Group Co.,
and Air-conditioning
Midea Micro-Credit Inc. Ltd.
Mfg. Co. S.A.E.
Micro-Credit Inc.
Current assets 420,565.35 1,159,954.54 729,309.13 1,214,577.00
Non-current assets 1,971.23 10,107.13 63,162.51 623,897.50
Total of assets 422,536.58 1,170,061.67 792,471.64 1,838,474.50
Current liabilities 198,687.33 861,991.41 462,640.58 1,119,072.83
Non-current liabilities 14,790.35 118,674.19
Total of liabilities 198,687.33 861,991.41 477,430.93 1,237,747.02
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Equities of minority
8,532.34 87,533.70
shareholders
Owners’ equities attributed
223,849.25 308,070.26 306,508.37 513,193.78
to the parent company
Net assets shares calculated
according to the 67,154.77 92,421.08 99,615.22 251,464.95
shareholding proportion
Book value of the
investment of the equities of 67,154.77 92,421.08 274,055.01 272,930.43
the joint venture enterprises
Operating income 29,066.15 50,547.88 571,429.44 638,009.18
Net profits 15,170.95 4,503.70 43,782.15 49,586.24
Net profits of discontinued
operations
Other comprehensive
-18,457.23
income
Total of comprehensive
15,170.95 4,503.70 25,324.92 49,586.24
income
Shares dividends received
from the joint venture 9,601.40 14,444.56 16,993.04
enterprises
(Continued)
Opening balance/2014
Foshan City
Misr Refrigeration
Items Shunde District Midea Shanxi Huaxiang Group Co.,
and Air-conditioning
Midea Micro-Credit Inc. Ltd.
Mfg. Co. S.A.E.
Micro-Credit Inc.
Current assets 354,707.78 743,765.32 580,036.53 935,622.34
Non-current assets 1,858.73 14,538.13 72,520.86 670,776.40
Total of assets 356,566.51 758,303.45 652,557.39 1,606,398.74
Current liabilities 115,572.99 516,914.76 287,448.00 1,013,633.57
Non-current liabilities 8,652.70 43,107.12
Total of liabilities 115,572.99 516,914.76 296,100.70 1,056,740.69
Equities of minority
14,104.00 81,856.24
shareholders
Owners’ equities attributed
240,993.52 241,388.69 342,352.69 467,801.81
to the parent company
Net assets shares calculated
according to the 72,298.05 108,624.91 111,264.62 229,222.89
shareholding proportion
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Book value of the
investment of the equities of 72,298.05 109,311.06 309,822.44 248,344.27
the joint venture enterprises
Operating income 22,410.78 29,855.45 523,764.16 664,603.78
Net profits 223.21 -3,674.83 40,519.80 49,088.28
Net profits of discontinued
operations
Other comprehensive
10,787.92
income
Total of comprehensive
223.21 -3,674.83 51,307.72 49,088.28
income
Shares dividends received
from the joint venture 28,283.68
enterprises
3. Summary of the financial information of the insignificant joint venture enterprises
Items Closing balance/2015 Opening balance/2014
Joint venture
Total of the investment book
199,594.54 212,098.58
value
Total amount of the
followings calculated
according to the
shareholding proportion
Net profits -1,076.85 4,155.85
Other comprehensive
577.46 -588.77
income
Total amount of the
-499.39 3,567.08
comprehensive income
VIII. Risks related to the financial instruments
The Company should balance the risks and benefits in risk management, minimize negative effects for business
performance and maximize the benefits for shareholders and other equity investors. Based on the risk
management target, the basic strategy for risk management is to define and analyze all possible risks, establish
risk baseline for risk management, monitor all risks reliably and control the risks within agreed limits.
The Company will face all possible risks related to financial instruments during daily activities, including credit
risk, liquidity risk and market risk. The management has reviewed and approved the management policies for
risks, including:
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2015 Semi-Annual Report of Midea Group Co., Ltd.
(I) Credit risk
Credit risk is the possibility of financial loss to one party of financial instruments from failure of fulfillment of
obligations of the other party.
Credit risk is related to accounts receivables, loans, acceptance, internal and external businesses in letter of
guarantee. In order to control the risk, the Company takes following measures:
1. Bank deposit
The Company would deposit the money in financial institutions with high credit rating. Therefore, credit risk is
low.
2. Accounts receivables
The Company would assess the customers for deal on credit. According to credit assessment, customers with good
faith would be approved for transactions. The accounts receivables should be monitored to avoid significant risks
of bad debts.
3. Highest credit risk exposure
Without considering available collateral or other credit enhancement (such as netting agreement of mutual offset
for nonconformance), amount of highest credit risk exposure on balance sheet date refers to book value of book
balance of financial assets deducting depreciation reserves.
4. Overdue and impairment of financial assets
Non-overdue financial assets are those not overdue for principal and interest. Overdue financial assets are those
overdue one day or more for principal and interest. Impaired financial assets are those impaired after individual
impairment test.
Credit risk of financial assets should be assessed according to five credit quality categories classified by China
Banking Regulatory Commission.
Until June 30, 2015, financial assets not overdue or impaired should be classified into normal category according
to five credit quality categories classified by China Banking Regulatory Commission.
(II) Liquidity risk
Liquidity risk refers to that with capital shortage when the Company is fulfilling obligations of cash payment or
payment by other financial assets methods. Liquidity risk comes from financial assets not sold by fair value as
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2015 Semi-Annual Report of Midea Group Co., Ltd.
early as possible; or contractual liabilities unable to be paid; or premature liabilities; or unexpected cash flow.
In order to control the risk, the Company adopts settlement of instruments, bank loans and other financial means
and combines short-term and long-term financing methods to optimize financing structure and balance the
persistence and flexibility. The Company has obtained bank line of credit from multiple commercial banks to
satisfy the requirements of working capital and expenditures.
(III) Market risk
Market risk refers to that fluctuant caused by market price development of fair value of financial instrument or
future cash flow. Market risk includes interest rate risk and foreign exchange risk.
1. Interest rate risk
Interest rate risk refers to that fluctuant caused by market interest rate change of fair value of financial instrument
or future cash flow. Risks related to market interest rate change is related to loans calculated by floating interest
rate.
So far, the risk of change of market rate does not affect the total profit and shareholders’ equity.
2. Foreign exchange risk
Foreign exchange risk is caused by fluctuation in exchange rate. Foreign exchange risk for the Company is related
to foreign currency monetary assets and liabilities. If foreign currency assets and liabilities are unbalanced in the
short term, the Company should buy or sell foreign currency when necessary to ensure the acceptable level of net
risk exposure. The Company’s mainland businesses are using RMB for quoting price. Therefore, foreign exchange
risk undertaken by the Company is not significant.
Refer to the appended notes of foreign exchange monetary items for the foreign exchange financial assets and
liabilities.
IX. Disclosure of the fair value
(I) Detailed information of the fair value of the assets and liabilities measured by fair value at the period-end
Fair value at the period-end
Measurement of Measurement of Measurement of
Items
the first level fair the second level the third level Total
value fair value fair value
Continuous fair value measurement
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Financial assets measured by fair
value with the changes included in
the current gains and losses
1. Trading financial assets 14,339.10 14,339.10
(1) Investment of the liabilities
instruments
(2) Investment of the equity
instruments
(3) Derivative financial assets 14,339.10 14,339.10
2. Available-for-sale financial assets 538,901.64 538,901.64
(1) Investment of the equity
538,901.64 538,901.64
instruments
Total amount of the assets
553,240.74 553,240.74
continuously measured by fair value
Financial liabilities measured by fair
value with the changes included in
the current gains and losses
1. Trading financial liabilities 155,571.85 155,571.85
(1) Issued trading bonds
(2) Derivative financial liabilities 155,571.85 155,571.85
(3) Other
Total amount of the liabilities
155,571.85 155,571.85
continuously measured by fair value
Inconsistent fair value measurement
Held for sale assets
Total amount of the assets
inconsistently measured by fair
value
Total amount of the liabilities
inconsistently measured by fair
value
(II) The items of the continuous and non-continuous first level fair value measurement adopted the market price at
the period-end of the Exchange or the commercial bank as the basis of the fair value measurement.
X. Associated Party and Their Transactions
(I) Associated Party
1. List of the parent company of the Company
(1) Parent company of the Company
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Percentage of
Voting right of the
Name of parent Place of Registered parent company’s
Nature parent company
company Registration capital shareholding rate (%)
(%)
Foshan City
Midea Holding Co., Commer
Shunde 330,000.00 34.88 34.88
Ltd. cial
District
(2) The ultimate controller of the Company is Mr. He Xiangjian.
2. For the details of the subsidiaries of the Company, please refer to the notes of the equities among the other
entities of the notes of the financial statement.
3. List of the joint ventures enterprise of the Company
For the significant joint venture enterprise of the Company, please refer to the notes of the equities among the
other entities of the notes of the financial statement.
4. List of the other related parties of the Company
Relationship of the other related parties with the
Name of other related parties
Company
Foshan Weishang Technology Industry Development
Controlled by the actual controller of the Company
Group Co., Ltd.
Foshan City Midea Household Appliances Co., Ltd. Controlled by the actual controller of the Company
Controlled by direct relative of the ultimate controlling
Hefei City Bainian Molding Technology Co., Ltd.
shareholder of the Company
Controlled by direct relative of the ultimate controlling
Guangdong Wellkey Electric Material Co., Ltd.
shareholder of the Company
Controlled by direct relative of the ultimate controlling
Anhui Wellkey Electric Material Co., Ltd.
shareholder of the Company
Controlled by direct relative of the ultimate controlling
Infore Holding Group Co., Ltd.
shareholder of the Company
Controlled by direct relative of the ultimate controlling
Guangdong Yingke Electronics Co., Ltd.
shareholder of the Company
Foshan City Shunde Midea Development Co., Ltd. Controlled by the actual controller of the Company
Foshan Midea Real Estate Development Co., Ltd. Controlled by the actual controller of the Company
Joint venture of the shareholding subsidiary of the
Shanxi Huaxiang Group Co., Ltd.
Company
Shanxi Huaxiang Tongchuang Casting Co., Ltd. Subsidiary of the Company’s joint-venture company
Guangdong Midea Property Co., Ltd. Controlled by the actual controller of the Company
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Guangdong Meilongbao Wine Co., Ltd. Controlled by the actual controller of the Company
Foshan Shunde Rural Commercial Bank Company
Share held by the Company
Limited
(II) Associated party transactions
1. Associated party transactions in relation to sales of goods, provision and receipt of labor services
(1) Associated party transactions in relation to purchase of goods and receipt of labor service
Transaction
Associated party 2015 2014
content
Hefei City Bainian Molding Technology Co., Purchase
Ltd. commodities
Guangdong Wellkey Electric Material Co., Purchase
394,941.99 247,459.88
Ltd. commodities
Purchase
Foshan Micro Midea Filter Co., Ltd. 79,648.54 59,537.24
commodities
Shanxi Huaxiang Tongchuang Casting Co., Purchase
80,924.50 55,638.59
Ltd. commodities
Purchase
Shanxi Huaxiang Group Co., Ltd. 4,597.01
commodities
Purchase
Guangdong Yingke Electronics Co., Ltd. 4,456.81 70,429.79
commodities
Purchase
Anhui Wellkey Electric Material Co., Ltd. 163,113.76 164,519.36
commodities
Total 723,085.60 602,181.87
(2) Associated party transactions in relation to sales of goods and provision of labor service
Transaction
Associated party 2015 2014
content
Hefei City Bainian Molding Technology Co., Sell
Ltd. commodities
Sell
PT.MIDEA PLANET INDONESIA 19,508.06
commodities
Sell
Anhui Wellkey Electric Material Co., Ltd.
commodities
Guangdong Wellkey Electric Material Co., Sell
944.61
Ltd. commodities
Sell
Guangdong Yingke Electronics Co., Ltd.
commodities
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Total 20,452.67
2. Associated party lease
(1) List of the lease of the Company
Leasing income
Leasing income
Types of recognized of the
Lessee recognized of the
leasing assets same period of last
current period
year
Foshan City Shunde Midea Development Co., Office
Ltd. building
Office
Infore Holding Group Co., Ltd. 1,349.20 1,616.62
building
Office
Midea Holding Co., Ltd. 353.08 350.38
building
Guangdong Meilongbao Wine Co., Ltd. Plant 78.30 127.10
Office
Foshan Micro Midea Filter Co., Ltd. 217.62
building
Office
Guangdong Midea Property Co., Ltd. 2,323.41 2,318.16
building
Foshan City Shunde District Midea Micro-Credit Office
267.01
Inc. building
Guangdong He Xiangjian Philanthropic Office
56.36
Foundation building
3. Deposit of associated funds
Name of the
Associated parties 2015 2014
items
Deposit of
Foshan Shunde Rural Commercial Bank
monetary 12,563,085.61 7,348,418.81
Company Limited
capital
4. Notes discount interests paid by Associated Party
Name of the
Associated parties 2015 2014
items
Notes discount
Anhui Wellkey Electric Material Co., Ltd. 3,924.80 1,137.42
interests
Notes discount Guangdong Wellkey Electric Material Co.,
4,916.05 4,898.67
interests Ltd.
Total 8,840.85 6,036.09
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2015 Semi-Annual Report of Midea Group Co., Ltd.
(III) Associated party accounts receivable and accounts payable
1. Accounts receivables due from associated party
Name of the
Associated parties Closing amount Opening amount
items
Accounts
PT.MIDEA PLANET INDONESIA 4,378.06
receivable
Subtotal 4,378.06
Other
accounts
receivable
Guangdong Midea Property Co., Ltd. 1,164.85
Subtotal 1,164.85
2. Accounts payables due to associated party
Name of the
Associated parties Closing amount Opening amount
items
Accounts
payable
Hefei City Bainian Molding Technology Co., Ltd. 0.88
Guangdong Wellkey Electric Material Co., Ltd. 142,575.52 103,113.58
Foshan Micro Midea Filter Co., Ltd. 1,050.24
Shanxi Huaxiang Group Co., Ltd. 32,537.59 60,495.05
Guangdong Yingke Electronics Co., Ltd. 23,993.32 26,695.69
Anhui Wellkey Electric Material Co., Ltd. 46,619.52 96,658.11
Subtotal 246,776.19 286,963.31
Other
accounts
payable
Guangdong Wellkey Electric Material Co., Ltd. 200.00
Foshan Micro Midea Filter Co., Ltd.
Guangdong Yingke Electronics Co., Ltd. 560.00
Subtotal 760.00
XI. Stock payment
(I) Overall situation of stock payment
1. Detailed information
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Items Number Amount
Total of equity instruments granted in
83,790.00 847,684.27
this period
Total of equity instruments executed
19,314.13 342,246.30
in this period
Total of equity instruments invalid in
this period
The first authorization date was 18 February 2014, the
executive price of RMB18.72; the first exercise schedule:
since the first trading date after 12 months of the authorization
date to the last trading date among the 36 months since the
authorization date with the right proportion of 1/3; the second
exercise schedule: the first trading date after 24 months of the
authorization date to the last trading date among 48 months
since the trading date with the right proportion of 1/3; the third
exercise schedule: since the first trading date after 36 months
of the authorization date to the last trading date among the 60
The scope and the remaining period months since the authorization date with the right proportion
of the contract of the executive price of 1/3;
of the outstanding share option issued The second authorization date was 27 May 2015, the
at the period-end of the Company executive price of RMB30.54; the first exercise schedule:
since the first trading date after 12 months of the authorization
date to the last trading date among the 36 months since the
authorization date with the right proportion of 1/3; the second
exercise schedule: the first trading date after 24 months of the
authorization date to the last trading date among 48 months
since the trading date with the right proportion of 1/3; the third
exercise schedule: since the first trading date after 36 months
of the authorization date to the last trading date among the 60
months since the authorization date with the right proportion
of 1/3;
The scope and the remaining period
of the contract of the executive price
of the outstanding other equity
instruments issued at the period-end
of the Company
(II) List of the share-based payment settled by equity
Confirmation of fair value of equity instruments
Black-Scholes Option Pricing Models
at the grant date
Recognition basis of the number of the vested
Measured according to the expected lapsed option
equity instruments
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2015 Semi-Annual Report of Midea Group Co., Ltd.
Reasons of the significant difference between
the estimates of the current period with that of
the last period
Accumulative amount of the share-based
payment settled by equity and be included in the 249,272.86
capital surplus
Total amount of the expenses recognized
according to the share-based payment settled by 113,453.14
equity of the current period
XII. Commitments and contingencies
(I) Significant commitments
Up to 30 June 2015, there was no any significant commitment needed to be disclosed.
(II) Contingencies
Amount in tax affairs disputes for Brazil subsidiary with 51% shares held by the Company is about 496 million
BRL (some cases are lasted for more than 10 years; above amount involves the principal and interest). Until 30
June 2015, some cases remain at the court. According to judgment of practicing lawyers in Brazil, it would be
likely to win most cases. Besides, original shareholders of Brazil subsidiary have signed the agreement and
promised to compensate the Company according to verdict results in above tax affairs disputes. Maximum
compensation amount is about 220 million BRL.
XIII. Events after the balance sheet date
Naught
XIV. Other significant events
(I) Segment information
1. Recognition basis and accounting treatment of the segment of the report
The Company recognizes the operating segments based on the internal organizational structure, management
requirements, internal report system etc. The operating segments of the Company refer to the components that
satisfy the following conditions at the same time:
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2015 Semi-Annual Report of Midea Group Co., Ltd.
(1) The components can cause revenues and also occurs expenses among the daily activities;
(2) The management layer can periodically assess the operating results of the component for deciding to allot the
resources and assess the performance;
(3) Can acquire the relevant accounting information of the financial conditions, operating results and the cash
flow of the components through analysis.
The Company recognizes the report segments based on the products segments and distributes the assets and
liabilities jointly used by each segment according to the scale proportion within different segments.
2. Financial information of the report segments
Products segments
2015
Items Air conditioning and Refrigerators and Washing machines
Small appliances
parts parts and parts
I. Operating income 46,965,224.32 6,460,838.66 6,135,993.01 19,775,539.04
Of which: external transaction
46,877,053.92 6,455,581.99 6,129,704.41 19,773,346.97
income
Transaction income among the
88,170.40 5,256.67 6,288.60 2,192.07
segments
II. Operating expenses 41,336,355.70 5,947,895.70 5,596,300.55 17,577,826.41
III. Operating profits (losses) 5,628,868.62 512,942.96 539,692.46 2,197,712.63
IV. Total amount of the assets 83,840,421.80 8,748,702.32 11,288,807.74 33,692,910.69
V. Total amount of the
62,952,871.14 4,615,427.26 5,882,185.21 22,166,007.72
liabilities
(Continued)
2015
Items Electric
Logistics Other Offset Total
machine
I. Operating income 3,992,399.46 2,063,887.43 879,639.35 3,398,450.86 82,875,070.41
Of which: external
2,232,470.95 838,438.59 568,473.58 82,875,070.41
transaction income
Transaction income
1,759,928.51 1,225,448.84 311,165.77 3,398,450.86
among the segments
II. Operating expenses 3,701,322.33 2,038,907.82 929,979.04 3,496,175.17 73,632,412.38
III. Operating profits
291,077.13 24,979.61 -50,339.69 -97,724.31 9,242,658.03
(losses)
IV. Total amount of the 7,464,861.50 3,620,940.79 103,220,718.00 110,094,675.72 141,782,687.12
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2015 Semi-Annual Report of Midea Group Co., Ltd.
assets
V. Total amount of the
2,938,132.71 2,356,273.99 82,665,440.41 94,243,076.73 89,333,261.71
liabilities
(Continued)
2014
Items Air conditioning and Refrigerators and Washing machines
Small appliances
parts parts and parts
I. Operating income 45,730,908.83 5,116,460.93 5,014,772.33 18,200,687.82
Of which: external
45,725,950.84 5,108,993.06 5,014,176.48 18,122,438.71
transaction income
Transaction income
4,957.99 7,467.87 595.85 78,249.11
among the segments
II. Operating expenses 40,837,961.18 4,643,341.61 4,612,009.72 15,934,024.11
III. Operating profits
4,892,947.65 473,119.32 402,762.61 2,266,663.71
(losses)
IV. Total amount of the
60,164,050.80 7,738,064.93 9,749,018.01 17,431,634.77
assets
V. Total amount of the
41,264,886.59 5,020,421.49 5,009,297.54 12,798,897.03
liabilities
(Continued)
2014
Items Electric
Logistics Other Offset Total
machine
I. Operating income 4,120,335.82 1,572,766.55 826,828.74 2,874,542.66 77,708,218.36
Of which: external
2,404,253.64 947,480.60 384,925.03 77,708,218.36
transaction income
Transaction income
1,716,082.18 625,285.95 441,903.71 2,874,542.66
among the segments
II. Operating expenses 3,762,376.99 1,557,863.37 514,109.23 2,843,406.94 69,018,279.27
III. Operating profits
357,958.83 14,903.18 312,719.51 31,135.72 8,689,939.09
(losses)
IV. Total amount of the
6,821,221.25 3,678,636.47 74,852,446.07 62,345,514.51 118,089,557.79
assets
V. Total amount of the
2,803,298.94 2,638,086.62 51,737,990.04 45,341,424.36 75,931,453.89
liabilities
(II) Significant transactions and events with influences on the decision of other investors
Naught
XV. Project notes of financial statements of the parent company
(I) Notes on items in the balance sheet of the parent company
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2015 Semi-Annual Report of Midea Group Co., Ltd.
1. Other receivables
(1) Detailed Information
1) Category details
Closing balance
Bad debt
Book balance
Category provision Book value
Proportion
Amount Amount Proportion (%)
(%)
Significant single amount and
individual provision for bad debts 67,824.98 1.73 67,824.98
Withdraw the bad debt provision
by credit risks characteristics 3,835,866.59 97.67 1,208.16 0.03 3,834,658.43
Non-significant single amount and
individual provision for bad debts 23,469.37 0.60 23,469.37
Total
3,927,160.94 100.00 1,208.16 0.03 3,925,952.78
(Continued)
Opening balance
Bad debt
Book balance
Category provision Book value
Proportion
Amount Amount Proportion (%)
(%)
Significant single amount and
individual provision for bad
debts
Withdraw the bad debt provision
by credit risks characteristics 2,419,320.65 100.00 1,014.44 0.04 2,418,306.21
Non-significant single amount
and individual provision for bad
debts
Total 2,419,320.65 100.00 1,014.44 0.04
2,418,306.21
2) Other receivables with provision for bad debt by the aging analysis method in the combination
Closing balance
Aging Provision for bad Withdrawal
Book balance
account proportion (%)
Within 1 year 23,369.29 1,168.47 5.00
169
2015 Semi-Annual Report of Midea Group Co., Ltd.
1 to 2 years 343.10 34.31 10.00
2 to 3 years 17.94 5.38 30.00
Subtotal 23,730.33 1,208.16 5.09
3) Receivables with provision for bad debt by the specific identification method in the combination
Closing balance
Name of the groups Provision for Withdrawal
Book balance
bad account proportion (%)
Related come-and-go groups
3,812,136.26
among the consolidated scope
(2) List of the bad debt provision withdrawn, recovered or reversed
The amount of the reversed bad debt provision was of RMB193720
(3) List of the category of the nature of the other accounts receivable
Nature Closing balance Opening balance
Margin 422.14 488.08
Suspense payment receivable 3,926,738.80 2,418,832.57
Subtotal 3,927,160.94 2,419,320.65
(4) List of the top 5 of other accounts receivable
Proportion to
Name of the the balance of Bad debt
Nature Book balance Aging
entities the accounts provision
receivable (%)
Suspense payment Within 1
No. 1
receivable 1,797,710.93 year 45.78
Suspense payment Within 1
No. 2
receivable 718,800.00 year 18.30
Suspense payment Within 1
No. 3
receivable 604,726.22 year 15.40
Suspense payment Within 1
No. 4
receivable 167,251.50 year 4.26
Suspense payment Within 1
No. 5
receivable 148,800.00 year 3.79
Subtotal
3,437,288.65 87.53
170
2015 Semi-Annual Report of Midea Group Co., Ltd.
2. Long-term equity investment
(1) Detailed information
Closing balance
Items Depreciation
Book balance Book value
reserves
Investment on the subsidiaries 16,696,408.94 16,696,408.94
Investment on the joint venture enterprises 248,987.15 248,987.15
Total 16,945,396.09 16,945,396.09
(Continued)
Opening balance
Items Depreciation
Book balance Book value
reserves
Investment on the subsidiaries 16,288,331.74 16,288,331.74
Investment on the joint venture enterprises 260,550.99 260,550.99
Total 16,548,882.73 16,548,882.73
(2) Investment on the subsidiaries
Investees Opening balance Increase Decrease
Wuxi Little Swan Company Limited 2,639,969.13
Foshan City Midea Household
1,954,935.95
Appliances Group Co., Ltd.
Midea Group Finance Co., Ltd. 1,425,000.00
Hefei Midea HVAC Equipment Co.,
1,045,000.00
Ltd.
Hubei Midea Refrigerator Co., Ltd. 830,239.03
Anhui GMCC Precision
800,000.00
Manufacturing Co., Ltd.
Foshan City Shunde District Midea
749,000.00
Home Appliance Industry Co., Ltd.
Wuhu GMCC Air-Conditioning
726,000.00
Equipment Co., Ltd.
Guangdong Midea Refrigeration
641,920.00
Equipment Co., Ltd.
Annto Logistics Company Limited 626,739.34
Guangdong Midea Commercial Air 569,430.35
171
2015 Semi-Annual Report of Midea Group Co., Ltd.
Conditioning Equipment Co., Ltd.
Ningbo Midea United Material Supply
480,000.00
Co., Ltd.
Guangzhou Hualing Refrigeration
479,408.58
Equipment Co., Ltd.
Guangzhou Midea Hualing
420,000.00
Refrigerator Co., Ltd.
Hefei Royalstar Refrigerator Co., Ltd. 414,685.93
Guangdong Midea Group Wuhu
339,074.28
Refrigeration Equipment Co., Ltd.
Anhui GMCC Refrigeration
308,750.00
Equipment Co., Ltd.
Guangdong Midea HVAC Equipment
270,000.00
Co., Ltd.
Midea Electric Investment (BVI)
236,542.62
Limited
Midea International Corporation
176,974.50
Limited Company
Guangzhou Hualing Air-conditioners
136,745.27
Equipment Co., Ltd.
Foshan City Midea Carrier
120,000.00
Refrigeration Equipment Co., Ltd.
Hefei Midea Material Supplies Co.,
117,000.00
Ltd.
Midea Group E-commerce Co., Ltd. 100,000.00
Anhui GMCC Compressor Sales Co.,
95,000.00
Ltd.
Guangdong GMCC Compressor Co.,
89,787.77
Ltd.
Hefei Hualing Co., Ltd. 88,646.33
Midea Group Wuhan Refrigeration
60,508.23
Equipment Co., Ltd.
Foshan City Midea Material Supplies
54,000.00
Co., Ltd.
Zhejiang GMCC Compressor Co., Ltd. 50,000.00
Wuhu Little Swan Refrigeration
47,500.00
Equipment Co., Ltd.
Chongqing Midea Refrigeration
47,500.00
Equipment Co., Ltd.
Guangdong GMCC Precision
38,437.80
Manufacturing Co., Ltd.
Foshan City Midea Air-conditioners
36,061.94
Industrial Investment Co., Ltd.
172
2015 Semi-Annual Report of Midea Group Co., Ltd.
Chongqing Midea General
31,420.56
Refrigeration Equipment Co., Ltd.
Ningbo Meijia Investment
18,305.20
Management Co., Ltd.
Hefei Royalstar Midea Appliance
14,668.09
Marketing Co., Ltd.
Foshan City Shunde District Midea
9,000.00
Electronic Technology Co., Ltd.
Midea Electric Investment (BVI)
80.84
Limited
Midea Group Payment Technology Co.
100,000.00
Ltd.
Midea Innovation Investment Co. Ltd. 35,000.00
Shunde District, Foshan City, Meihui
273,077.20
Management Services Co. Ltd.
Total 16,288,331.74 408,077.20
(Continued)
Depreciation Closing balance
reserves of the
Investees Closing balance
withdrawn of the depreciation
current period reserves
Wuxi Little Swan Company Limited 2,639,969.13
Foshan City Midea Household
1,954,935.95
Appliances Group Co., Ltd.
Midea Group Finance Co., Ltd. 1,425,000.00
Hefei Midea HVAC Equipment Co.,
1,045,000.00
Ltd.
Hubei Midea Refrigerator Co., Ltd. 830,239.03
Anhui GMCC Precision
800,000.00
Manufacturing Co., Ltd.
Foshan City Shunde District Midea
749,000.00
Home Appliance Industry Co., Ltd.
Wuhu GMCC Air-Conditioning
726,000.00
Equipment Co., Ltd.
Guangdong Midea Refrigeration
641,920.00
Equipment Co., Ltd.
Annto Logistics Company Limited 626,739.34
Guangdong Midea Commercial Air
569,430.35
Conditioning Equipment Co., Ltd.
Ningbo Midea United Material
480,000.00
Supply Co., Ltd.
173
2015 Semi-Annual Report of Midea Group Co., Ltd.
Guangzhou Hualing Refrigeration
479,408.58
Equipment Co., Ltd.
Guangzhou Midea Hualing
420,000.00
Refrigerator Co., Ltd.
Hefei Royalstar Refrigerator Co.,
414,685.93
Ltd.
Guangdong Midea Group Wuhu
339,074.28
Refrigeration Equipment Co., Ltd.
Anhui GMCC Refrigeration
308,750.00
Equipment Co., Ltd.
Guangdong Midea HVAC
270,000.00
Equipment Co., Ltd.
Midea Electric Investment (BVI)
236,542.62
Limited
Midea International Corporation
176,974.50
Limited Company
Guangzhou Hualing
Air-conditioners Equipment Co., 136,745.27
Ltd.
Foshan City Midea Carrier
120,000.00
Refrigeration Equipment Co., Ltd.
Hefei Midea Material Supplies Co.,
117,000.00
Ltd.
Midea Group E-commerce Co., Ltd. 100,000.00
Anhui GMCC Compressor Sales
95,000.00
Co., Ltd.
Guangdong GMCC Compressor
89,787.77
Co., Ltd.
Hefei Hualing Co., Ltd. 88,646.33
Midea Group Wuhan Refrigeration
60,508.23
Equipment Co., Ltd.
Foshan City Midea Material
54,000.00
Supplies Co., Ltd.
Zhejiang GMCC Compressor Co.,
50,000.00
Ltd.
Wuhu Little Swan Refrigeration
47,500.00
Equipment Co., Ltd.
Chongqing Midea Refrigeration
47,500.00
Equipment Co., Ltd.
Guangdong GMCC Precision
38,437.80
Manufacturing Co., Ltd.
Foshan City Midea Air-conditioners
36,061.94
Industrial Investment Co., Ltd.
174
2015 Semi-Annual Report of Midea Group Co., Ltd.
Chongqing Midea General
31,420.56
Refrigeration Equipment Co., Ltd.
Ningbo Meijia Investment
18,305.20
Management Co., Ltd.
Hefei Royalstar Midea Appliance
14,668.09
Marketing Co., Ltd.
Foshan City Shunde District Midea
9,000.00
Electronic Technology Co., Ltd.
Midea Electric Investment (BVI)
80.84
Limited
Midea Group Payment Technology
100,000.00
Co. Ltd.
Midea Innovation Investment Co.
35,000.00
Ltd.
Shunde District, Foshan City,
Meihui Management Services Co. 273,077.20
Ltd.
Total 16,696,408.94
(3) Investment on the joint venture enterprises
Increase/decrease
Gains and
losses of the
Opening Adjustment of other
Investees Additional Negative investment
balance comprehensive
investment investment recognized
income
under the
equity method
Joint venture enterprises
Hefei Royalstar Motor Co., Ltd. 99,957.63 -153.17
Foshan City Shunde District
72,298.05 4,458.12
Midea Micro-Credit Inc.
Midea Micro-Credit Inc. 60,347.18 -977.37
Golden Eagle Asset
27,948.13 2,734.74
Management Co., Ltd.
Subtotal 260,550.99 6,062.32
(Continued)
Increase/decrease Balance
Closing
Investees Changes Cash Withdra of the
Other balance
of other dividends wal of depreciati
175
2015 Semi-Annual Report of Midea Group Co., Ltd.
equities or profits deprecia on
declared to tion reserves
issue reserves at the
period-en
d
Joint venture enterprises
Hefei Royalstar Motor Co.,
99,804.46
Ltd.
Foshan City Shunde
District Midea 9,601.40 67,154.77
Micro-Credit Inc.
Midea Micro-Credit Inc. 8,024.76 51,345.05
Golden Eagle Asset
30,682.87
Management Co., Ltd.
Subtotal 17,626.16 248,987.15
(II) Notes to profit statement of the parent company
1. Operating income/ Operating cost
2015 2014
Items
Income Cost Income Cost
Income of other
469,983.10 14,341.34 365,575.75 8,067.65
business
Total 469,983.10 14,341.34 365,575.75 8,067.65
2. Investment income
Items 2015 2014
Long-term investment incomes accounted for
4,071,858.09 3,314,391.81
by cost method
Long-term investment incomes accounted for
6,062.32 44.77
by equity method
Investment income produced from disposing
-22,598.02
the long-term equity investment
Investment income of the holding period of
1,860.00
the available-for-sale financial assets
Financial investment income 117,001.50 84,654.96
Total 611,607.12 122,578.02
Long-term investment incomes accounted for
4,808,389.03 3,499,071.54
by cost method
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2015 Semi-Annual Report of Midea Group Co., Ltd.
XVI. Other supplementary information
(I) Non-recurring profits and losses
Items Amount
Profits and losses of disposal of illiquid assets, including the offset part with
-45,667.95
provision for the impairment of assets
Tax refund or exemption with ultra vires approval, without formal approval
documents, or as sporadic
The government subsidies included in the current profits and losses(the government
subsidiary is closely related with normal business of the company, it keeps with the
485,175.82
state industrial policy, but it does not include the government subsidiaries which
based on standard quota or quantitative continuous enjoyment )
Payment for occupied funds collected from the non-financial enterprises and
recorded into the current profits and losses
When the company obtains the subsidiary, the investment cost of associated
enterprises and joint venture is less than the income produced from fair value of the
identifiable net assets which shared by the investment company at the acquisition of
the investment.
Gain or loss arising from non-monetary asset trade
Profits or losses which entrust others for investment or asset management. 682,954.05
Provision of impairment of various assets for force majeure, i.e., natural disaster
Gain or loss from debt recombination 17.25
Expenses for enterprise restructuring, i.e., expenditures for laid-off staff,
combination, etc.
(Continued)
Items Amount
Gain or loss arising from the trading price higher than fair value
Net gain or loss of current period of the enterprises under common control from
beginning of period to the date of merger.
Profits and losses produced from contingencies which have nothing to do with the
normal operation of business of the company
In addition to the effective hedging business related with the normal operation of
business of the company, holding the tradable financial assets, profits and losses of
fair value variable produced from transaction monetary assets, and disposal of 95,856.62
tradable financial assets, transaction financial liabilities and investment income
produced from salable financial assets
Reversals of Provision for amounts receivable impairment which tested alone for 341.34
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2015 Semi-Annual Report of Midea Group Co., Ltd.
impairment
Profits and losses gained from foreign trusted loans
Profits and losses produced form fair value variables of investment real estate by
using the fair value modes for subsequent measurement
The influences of current profits and losses by one-time adjustment according to the
laws and regulations of the revenue, accountancy and so on
Hosting fees obtained by entrusting the operation
Other operating income and expenditure except the items mentioned above 82,747.20
Other profit and loss items in accordance with the definition of non-recurring profits
and losses
Subtotal 1,301,424.33
Less: the number of the influence of income tax of the enterprise(the income tax
287,749.72
decreased as “-”)
The influence amount of the minority interests (after tax) 122,589.00
The net amount of non-recurring gains and losses belonged to the owner of the parent
891,085.61
company
(II) The rate of return on net assets and earnings per share
1. Detailed information
The rate of Earnings per share (RMB / share)
return on
common
Profits of Reporting Period stockholder's
Basic EPS Diluted EPS
equity by
weighted
average method
Net-profits pertaining to the ordinary share
19.62% 1.97 1.96
shareholders
Net profits attributed to the holders of ordinary shares
17.52% 1.76 1.75
of the company after deducting abnormal losses
2. Counting process of the rate of return of the weighted average net assets
Items S/N 2015
Net-profits pertaining to the ordinary
A 8,324,122.61
share shareholders
Extraordinary gain or loss B 891,085.61
Net profits attributed to the holders of
ordinary shares of the company after
C=A-B 7,433,037.00
deducting the nonrecurring gains and
losses
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2015 Semi-Annual Report of Midea Group Co., Ltd.
The opening net assets attributed to the
D 39,470,499.84
holders of ordinary shares of the company
The issue of new shares or debt and other E1 246,210.97
new shares, these all belong to the net
assets which attributed to the holders of
ordinary shares of the company
E2 1,301,585.33
The cumulative number of months of the
increased net assets during the next month
to final Reporting Period
Repurchase or cash dividends decreased, F1 1
these are parts of the net assets attributed
to the holders of ordinary shares of the F2
company
Net-profits pertaining to the ordinary
G 4,215,808.47
share shareholders
Extraordinary gain or loss H 2
Other change of net assets attributable to I1 326,143.62
common shareholders of the parent
I2 701,987.57
company
The cumulative number of months of the J1 3
increased and decreased net assets during
J2
the next month to final Reporting Period
The number of months during the
K 6
Reporting Period
L=
The weighted average net assets D+A/2+(E1×F1+E2×F2)/K-G×H/K+(I 42,431,398.63
1×J1+I2×J2)/K
The rate of return on the weighted average
M=A/L 19.62%
net assets
The rate of return on weighted average net
assets after deducting the nonrecurring N=C/L 17.52%
gains and losses
3. Counting process of the basic EPS and diluted EPS
(1) Counting process of the basic EPS
Items S/N 2015
Net-profits pertaining to the ordinary share
A
shareholders 8,324,122.61
Extraordinary gain or loss B
891,085.61
Net profits attributed to the holders of ordinary C=A-B
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2015 Semi-Annual Report of Midea Group Co., Ltd.
shares of the company after deducting the 7,433,037.00
nonrecurring gains and losses
Total amount of the shares at the period-begin D
4,215,808.47
Amount of the increased shares owing to
accumulation fund turn add equity or the E
distribution of the shares dividends
Amount of the increased shares owing to the
F1
issue of new shares or the debt-to-equity swap 13,894.52
The cumulative number of months of the
increased shares during the next month to final F2
60,419.60
Reporting Period
Amount of the decreased shares owning to G1 1
re-purchasement
The cumulative number of months of the
G2
decreased shares during the next month to final
Reporting Period
The number of the share compressing during
H
the Reporting Period
The number of months during the Reporting
I
Period
Weighted average amount of the outstanding
J
common shares
Basic EPS K 6
Basic EPS deducting the non-current gains and
L=D+E+(F1×G1+F2×G2)/K-H×I/K-J
losses 4,218,124.22
Net-profits pertaining to the ordinary share
M=A/L
shareholders 1.97
Extraordinary gain or loss N=C/L
1.76
(2) Counting process of the diluted EPS
Items S/N 2015
Net-profits pertaining to the ordinary share shareholders A 8,324,122.61
Influence number of the net profits by the dilutive
B
potential ordinary shares
Diluted net profits attributed to the common share
C=A-B 8,324,122.61
shareholders of the Company
Extraordinary gain or loss D 891,085.61
Diluted net profits attributed to the common share
E=C-D 7,433,037.00
shareholders of the Company deducting the non-current
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2015 Semi-Annual Report of Midea Group Co., Ltd.
gains and losses
Weighted average amount of the outstanding common
F 4,218,124.22
shares
Weighted average amount of the increased common
shares owning to the stock warrant, the stock option and G 20,630.47
the convertible bonds
Diluted weighted average amount of the outstanding
H=F+G 4,238,754.69
common shares
Diluted EPS M=C/H 1.96
Diluted EPS deducting the non-current gains and losses N=E/H
1.75
181
2015 Semi-Annual Report of Midea Group Co., Ltd.
Section X Documents Available for Reference
1. The original of the 2015 Semi-Annual Report of Midea Group Co., Ltd. signed by the legal
representative;
2. The financial statements signed and stamped by the legal representative, the financial head and
the person-in-charge of the accounting work;
3. The originals of all company documents and announcements that have been disclosed to the
public via newspaper designated for information disclosure during the Report Period.
Midea Group Co., Ltd.
Legal Representative: Fang Hongbo
31 August 2015
182
