香 港 交 易 及 結 算 所 有 限 公 司 及 香 港 聯 合 交 易 所 有 限 公 司 對 本 公 告 的 內 容 概 不 負 責, 對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明, 並 明 確 表 示, 概 不 對 因 本 公 告 全 部 或 任 何 部 份 內 容 而 產 生 或 因 倚 賴 該 等 內 容 而 引 致 之 任 何 損 失 承 擔 任 何 責 任 ( 在 開 曼 群 島 註 冊 成 立 之 有 限 公 司 ) ( 股 份 代 號 : 0322) 海 外 監 管 公 告 本 公 告 是 由 康 師 傅 控 股 有 限 公 司 ( 本 公 司 ) 根 據 香 港 聯 交 所 有 限 公 司 證 券 上 市 規 則 第 13.10B 條 而 作 出 以 下 附 件 是 本 公 司 依 臺 灣 證 券 交 易 所 股 份 有 限 公 司 規 定 於 2015 年 11 月 20 日 在 臺 灣 證 券 交 易 所 股 份 有 限 公 司 刊 發 的 公 告 承 董 事 會 命 康 師 傅 控 股 有 限 公 司 公 司 秘 書 葉 沛 森 香 港,2015 年 11 月 20 日 於 本 公 告 日 期, 本 公 司 之 執 行 董 事 為 魏 應 州 先 生 井 田 純 一 郎 先 生 吳 崇 儀 先 生 長 野 輝 雄 先 生 魏 宏 名 先 生 及 筱 原 幸 治 先 生 ; 本 公 司 之 獨 立 非 執 行 董 事 為 徐 信 群 先 生 李 長 福 先 生 及 深 田 宏 先 生 網 址 : http://www.masterkong.com.cn http://www.irasia.com/listco/hk/tingyi * 僅 供 識 別
康 師 傅 控 股 有 限 公 司 2015 年 第 三 季 度 業 績 報 告
2015 2015
9 30 3 9 30 9 2015 2014 2015 2014 2,763,470 2,953,923 6.45% 7,633,872 8,458,341 9.75% (%) 33.30% 32.07% 1.23 33.04% 31.42% 1.62 920,186 947,337 2.87% 2,522,235 2,657,830 5.10% (EBITDA) 408,063 401,360 1.67% 1,087,701 1,104,774 1.55% 188,094 205,532 8.48% 461,386 542,531 14.96% 144,275 159,653 9.63% 341,934 391,559 12.67% 2.57 2.85 0.28 6.10 6.99 0.89 2.57 2.84 0.27 6.09 6.97 0.88 2015 9 30 1,666,044 2014 12 31 482,941 0.28 2015 9 30 9 2014 2015 1
2015 9 30 3 9 2015 2015 2014 2014 7 9 1 9 7 9 1 9 2 2,763,470 7,633,872 2,953,923 8,458,341 (1,843,284) (5,111,637) (2,006,586) (5,800,511) 920,186 2,522,235 947,337 2,657,830 46,811 142,737 44,270 154,044 (522,802) (1,486,877) (598,107) (1,703,582) (90,993) (265,118) (68,503) (237,273) (76,444) (208,401) (35,740) (105,425) 5 (14,954) (45,844) (12,220) (33,120) 5,390 15,219 4,820 14,292 5 267,194 673,951 281,857 746,766 6 (79,100) (212,565) (76,325) (204,235) 188,094 461,386 205,532 542,531 144,275 341,934 159,653 391,559 43,819 119,452 45,879 150,972 188,094 461,386 205,532 542,531 7 2.57 6.10 2.85 6.99 2.57 6.09 2.84 6.97 2
2015 9 30 3 9 2015 2015 2014 2014 7 9 1 9 7 9 1 9 188,094 461,386 205,532 542,531 (118,021) (123,628) 38,365 (66,284) (3,551) 2,709 2,371 2,371 (5,736) (121,572) (126,655) 40,736 (63,913) 66,522 334,731 246,268 478,618 51,298 246,857 194,565 349,900 15,224 87,874 51,703 128,718 66,522 334,731 246,268 478,618 3
2015 9 30 2015 2014 9 30 12 31 5,659,190 5,859,905 719,474 737,387 26,739 27,305 32,964 31,973 89,052 74,153 88,669 79,052 51,832 53,009 6,667,920 6,862,784 7,590 2,352 362,938 386,958 9 310,322 238,239 442,057 532,621 17,534 12,203 1,648,510 1,170,900 2,788,951 2,343,273 9,456,871 9,206,057 4
2015 2014 9 30 12 31 10 28,014 28,019 63,900 65,421 2,996,006 2,940,117 3,087,920 3,033,557 1,108,669 1,062,107 4,196,589 4,095,664 11 1,371,900 1,246,720 30,606 28,702 227,152 198,487 1,629,658 1,473,909 12 1,163,390 896,131 1,169,876 1,233,472 11 1,171,082 1,382,034 48,942 100,522 77,334 24,325 3,630,624 3,636,484 5,260,282 5,110,393 9,456,871 9,206,057 (841,673) (1,293,211) 5,826,247 5,569,573 5
2015 9 30 9 2014 1 1 27,982 53,431 2,798,879 2,880,292 1,046,095 3,926,387 391,559 391,559 150,972 542,531 (44,030) (44,030) (22,254) (66,284) 2,371 2,371 2,371 (41,659) (41,659) (22,254) (63,913) 349,900 349,900 128,718 478,618 9,522 9,522 9,522 33 10,854 (2,600) 8,287 8,287 2013 (204,324) (204,324) (38,504) (242,828) 33 10,854 (197,402) (186,515) (38,504) (225,019) 2014 9 30 28,015 64,285 2,951,377 3,043,677 1,136,309 4,179,986 6
2015 9 30 9 2015 1 1 28,019 65,421 2,940,117 3,033,557 1,062,107 4,095,664 341,934 341,934 119,452 461,386 (92,050) (92,050) (31,578) (123,628) 2,709 2,709 2,709 (5,736) (5,736) (5,736) (95,077) (95,077) (31,578) (126,655) 246,857 246,857 87,874 334,731 9,219 9,219 9,219 2 698 (127) 573 573 2014 (200,067) (200,067) (41,312) (241,379) (7) (2,219) 7 (2,219) (2,219) (5) (1,521) (190,968) (192,494) (41,312) (233,806) 2015 9 30 28,014 63,900 2,996,006 3,087,920 1,108,669 4,196,589 7
2015 9 30 9 2015 2014 1 9 1 9 1,392,246 1,216,607 (125,774) (151,902) (44,774) (32,162) 1,221,698 1,032,543 36,622 51,952 (23,686) (31,947) (378,882) (747,686) (56,105) (45,361) 19,823 36,018 (269,467) (386,033) (1,022,686) (200,067) (204,324) (41,312) (38,504) 639,420 1,115,241 (909,711) (669,500) 187,789 8,288 (323,881) 211,201 511,784 221,058 1 1 1,183,103 1,249,890 (28,843) (18,027) 9 30 1,666,044 1,452,921 1,648,510 1,433,843 17,534 19,078 1,666,044 1,452,921 8
1. 34 2014 12 31 2015 1 1 2014 12 31 19 (2011) 2010 2012 2011 2013 2. 9
3. 2015 9 30 9 2,853,995 4,599,831 102,936 77,110 7,633,872 55 421 185 101,308 (101,969) 2,854,050 4,600,252 103,121 178,418 (101,969) 7,633,872 378,821 291,705 (9,809) (1,060) 1,004 660,661 22,016 (6,797) 15,219 (1,929) (1,929) 378,821 313,721 (16,606) (2,989) 1,004 673,951 (112,965) (97,831) (1,769) (212,565) 265,856 215,890 (16,606) (4,758) 1,004 461,386 2014 9 30 9 3,165,869 5,060,957 136,883 94,632 8,458,341 40 575 118 71,143 (71,876) 3,165,909 5,061,532 137,001 165,775 (71,876) 8,458,341 388,096 353,995 (7,361) 2,079 (2,367) 734,442 22,136 (7,844) 14,292 (1,968) (1,968) 388,096 376,131 (15,205) 111 (2,367) 746,766 (107,692) (96,475) 428 (496) (204,235) 280,404 279,656 (14,777) (385) (2,367) 542,531 10
3. 2015 9 30 3,590,535 5,043,843 137,674 1,366,387 (899,843) 9,238,596 32,932 32 32,964 78,076 10,976 89,052 96,259 9,456,871 980,422 3,061,951 51,542 1,977,470 (841,708) 5,229,677 30,605 5,260,282 2014 12 31 3,446,274 5,227,348 160,291 1,340,036 (1,155,422) 9,018,527 30,646 1,327 31,973 58,346 15,807 74,153 81,404 9,206,057 1,041,013 3,311,438 62,817 1,766,568 (1,100,145) 5,081,691 28,702 5,110,393 4. 6 8 11
5. 2015 2015 2014 2014 7 9 1 9 7 9 1 9 14,954 45,844 12,220 33,120 133,720 391,725 121,380 370,668 3,938 12,802 2,090 6,173 6. 2015 2015 2014 2014 7 9 1 9 7 9 1 9 65,120 180,271 65,313 174,321 3,690 8,385 3,073 4,534 10,290 23,909 7,939 25,380 79,100 212,565 76,325 204,235 2015 2014 9 30 9 25% 2014 25% [2011]58 70% 2011 2020 15% 15% 2014 15% 10% 2008 1 1 2007 12 31 10% 2007 50% 50% 2007 12
7. (a) 2015 2015 2014 2014 7 9 1 9 7 9 1 9 144,275 341,934 159,653 391,559 5,603,352 5,603,804 5,601,583 5,598,633 2.57 6.10 2.85 6.99 (b) 2015 2015 2014 2014 7 9 1 9 7 9 1 9 144,275 341,934 159,653 391,559 5,603,352 5,603,804 5,601,583 5,598,633 6,106 7,953 16,542 17,799 5,609,458 5,611,757 5,618,125 5,616,432 2.57 6.09 2.84 6.97 8. 2015 9 30 9 2014 9. 30 90 2015 2014 9 30 12 31 0 90 287,701 216,763 90 22,621 21,476 310,322 238,239 13
10. 2015 9 30 2014 12 31 0.005 7,000,000,000 35,000 7,000,000,000 35,000 5,603,759,360 28,019 5,596,405,360 27,982 350,000 2 7,354,000 37 (1,238,000) (7) 5,602,871,360 28,014 5,603,759,360 28,019 350,000 350,000 573,000 2,000 571,000 127,000 1,238,000 2,219,000 7,000 2,219,000 7,000 11. 2015 2014 9 30 12 31 1,171,082 1,382,034 738,874 276,621 633,026 970,099 2,542,982 2,628,754 (1,171,082) (1,382,034) 1,371,900 1,246,720 2015 8 6 1,000,000,000 156,097,000 2015 9 30 151,482,000 2014 2012 6 20 497,502,000 2014 496,504,000 2015 9 30 511,625,000 2014 516,950,000 2015 9 30 9 639,420,000 2014 1,183,066,000 1,070,000 2014 958,000 909,711,000 2014 669,500,000 14
12. 2015 2014 9 30 12 31 0 90 1,124,329 863,205 90 39,061 32,926 1,163,390 896,131 13. (a) 2015 9 30 13 1 2 3 2015 9 30 2014 12 31 1 2 3 1 2 3 12,636 57,065 69,701 24,956 50,708 75,664 15,600 15,600 2,779 2,779 2,352 2,352 771 771 4,040 4,040 2,779 17,447 72,665 92,891 2,352 24,956 50,708 78,016 314 314 314 314 2015 2014 9 30 9 1 2 3 3 15
13. (a) 2015 2014 9 30 3 2015 9 30 2014 9 30 50,708 (314) 21,275 (6,893) 8,086 15,600 12,435 (1,781) 52 617 57,065 15,600 (314) 34,327 (6,893) 781 2 3 (i) 2 3 3 3 16
13. (a) (ii) 3 (iii) (iv) 3 2014 12 31 2015 9 30 3 2014 12 31 3 2014 12 31 3 3 1 3 (b) 11 2015 9 30 2014 12 31 17
14. 2015 2014 9 30 12 31 (a) 161,588 280,056 28,411 28,026 189,999 308,082 (b) 42,783 47,235 80,468 75,865 33,463 42,214 156,714 165,314 15. 2015 2015 2014 2014 7 9 1 9 7 9 1 9 (a) (b) 8,263 20,086 7,237 19,375 7,500 19,571 6,610 18,294 13,059 46,681 10,875 28,235 104,923 281,594 107,323 318,899 27,610 65,767 28,187 62,762 1,258 4,222 1,822 5,497 16. 2014 2015 9 30 9 37,000 2015 9 30 2015 2016 37,000 2014 12 31 70,000 17. 2015 11 16 2015 18
2015 2009 GDP 6.9% 2015 6.45% 2,763,470 6.2% 5.26% 1.23 33.30% 18.92% 1.33 2015 EBITDA 1.67% 408,063 EBITDA 1.18 14.77% 9.63% 144,275 5.22% 0.18 0.28 2.57 2.8% 0.4% 46.3% 55.0% 2015 1,061,913 6.2% 38.43% 1.95 31.76% 5.48% 112,645 0.08 10.61% 1. 2. 3. 4. 19
5 2015 Spikes Asia Award 40.5% 1.0 2015 3.4% 1.4% 19.3% 13.1% 2015 36,235 23.44% 1.31% 2015 5,651 1. 2. 20
3+2 3+2 2015 11 4 Calbee 2015 0.3% 2.5% 2015 1,638,143 59.28% 5.26% PET 1.06 34.47% 2015 35,775 4.42% 1. 2. NBA 3. 4. 2015 56.0% 0.1 NBA 21
18.6% 59 ISO22000 NBA Canadean 2015 45.9% 36.4% FUN 21.3% 30% 550ml LPC 2015 2015 9 30 1,666,044 2014 12 31 482,941 2015 9 30 9,456,871 5,260,282 2014 12 31 250,814 149,889 55.62% 2014 12 31 0.11 22
2015 9 30 2,542,982 2014 12 31 85,772 87%:13% 82%:18% 54%:46% 47%:53% 2015 8 11 GDP 7.0 9 2015 8 6 1,000,000,000 99.656 2015 8 6 4.375 8 6 2018 8 6 2.36% 2015 1-9 49,479 2014 2015 9 30 9 37,000 2015 9 30 2015 2016 37,000 2014 12 31 70,000 2015 9 30 9 22,000 2015 9 30 19,000 2015 9 30 2014 12 31 9.71 11.73 9.81 8.89 0.77 0.64 55.62% 55.51% 0.28 0.48 2015 9 30 72,474 2015 6 30 73,556 23
6.5 9 15 30 400 150 7 2000 9 12 10 30 1 2015 2 MMA 3 2015 4 2015 24
2015 9 30 A.4.1 A.2.1 A.2.1 2015 1 1 A2.1 A.4.1 A.4.1 25
10 1,238,000 2,219 2008 3 20 A 2008 3 20 11,760,000 2013 3 21 2018 3 20 $9.28 2,000,000 2009 4 22 26,688,000 2014 4 23 2019 4 22 $9.38 2,816,000 2010 4 1 15,044,000 2015 4 1 2020 3 31 $18.57 2,200,000 2011 4 12 17,702,000 2016 4 12 2021 4 11 $19.96 2,264,000 2012 4 26 9,700,000 2017 4 26 2022 4 25 $20.54 1,368,000 2013 5 27 11,492,000 2018 5 27 2023 5 26 $20.16 1,390,000 904,000 2014 4 17 12,718,500 2019 4 17 2024 4 16 $22.38 1,486,000 1,148,000 2015 6 5 17,054,000 2020 6 5 2025 6 4 $16.22 1,726,000 2,006,000 2015 9 30 350,000 9.38 17.49 2015 9 30 (a) (b) 352 (c) (a) 1 2 13,242,000 1,854,827,866 33.61% 15,250,000 1,854,827,866 33.10% 4,058,000 26
(b) 3 3 3 180,008 17.10% 180,008 17.10% 1. 1,854,827,866 44.761% 30.239% 17.835% China Foods Investment Corp. 6.482% 0.683% Profit Surplus Holdings Limited Profit Surplus 100% Profit Surplus HSBC International Trustee Limited 2. 13,242,000 2008 3 20 15,250,000 28 A 2008 3 20 4,058,000 28 A 3. 180,008 1 2015 9 30 2015 9 30 (a) (b) 352 (c) 27
2015 9 30 336 % 1 ^ 1,854,827,866 33.10 1 ^ 1,854,827,866 33.10 1 ^ 1,854,827,866 33.10 Profit Surplus Holdings Limited 1 ^ 1,854,827,866 33.10 HSBC International Trustee Limited 1 ^ 1,854,827,866 33.10 1 2 ^ 1,883,319,866 33.61 1 ^ 1,854,827,866 33.10 1 ^ 1,854,827,866 33.10 1 ^ 1,854,827,866 33.10 1,882,927,866 33.60 ^ 1 2 29-30 2015 9 30 336 2015 11 16 http://www.masterkong.com.cn http://www.irasia.com/listco/hk/tingyi * 28
2015
TTINGYI (CAYMAN ISLANDS) HOLDING CORP. SUMMARY For the three months ended 30 September For the nine months ended 30 September US$ 000 2015 2014 Change 2015 2014 Change Turnover 2,763,470 2,953,923 6.45% 7,633,872 8,458,341 9.75% Gross margin 33.30% 32.07% 1.23 ppt 33.04% 31.42% 1.62 ppt Gross profit of the Group 920,186 947,337 2.87% 2,522,235 2,657,830 5.10% EBITDA 408,063 401,360 1.67% 1,087,701 1,104,774 1.55% Profit for the period 188,094 205,532 8.48% 461,386 542,531 14.96% Profit attributable to owners of the Company 144,275 159,653 9.63% 341,934 391,559 12.67% Earnings per share (US cents) Basic 2.57 2.85 0.28 cents 6.10 6.99 0.89 cents Diluted 2.57 2.84 0.27 cents 6.09 6.97 0.88 cents At 30 September 2015, cash and cash equivalents was US$1,666.044 million, with an increase of US$482.941 million when compared to 31 December 2014. Gearing ratio was 0.28 times. 2015 THIRD QUARTERLY RESULTS The Board of Directors of Tingyi (Cayman Islands) Holding Corp. (the Company ) is pleased to announce the unaudited condensed consolidated results of the Company and its subsidiaries (the Group ) for the three months and nine months ended 30 September 2015 together with the comparative figures for the corresponding periods in 2014. These unaudited condensed consolidated third quarterly financial statements have been reviewed by the Company s Audit Committee. 1
TTINGYI (CAYMAN ISLANDS) HOLDING CORP. CONDENSED CONSOLIDATED INCOME STATEMENT For the Three Months and Nine Months Ended 30 September 2015 July to January to July to January to September September September September 2015 2015 2014 2014 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Note US$ 000 US$ 000 US$ 000 US$ 000 Turnover 2 2,763,470 7,633,872 2,953,923 8,458,341 Cost of sales (1,843,284) (5,111,637) (2,006,586) (5,800,511) Gross profit 920,186 2,522,235 947,337 2,657,830 Other revenue and other net income 46,811 142,737 44,270 154,044 Distribution costs (522,802) (1,486,877) (598,107) (1,703,582) Administrative expenses (90,993) (265,118) (68,503) (237,273) Other operating expenses (76,444) (208,401) (35,740) (105,425) Finance costs 5 (14,954) (45,844) (12,220) (33,120) Share of results of associates and joint ventures 5,390 15,219 4,820 14,292 Profit before taxation 5 267,194 673,951 281,857 746,766 Taxation 6 (79,100) (212,565) (76,325) (204,235) Profit for the period 188,094 461,386 205,532 542,531 Attributable to Owners of the Company 144,275 341,934 159,653 391,559 Non-controlling interests 43,819 119,452 45,879 150,972 Profit for the period 188,094 461,386 205,532 542,531 Earnings per share 7 Basic 2.57 cents 6.10 cents 2.85 cents 6.99 cents Diluted 2.57 cents 6.09 cents 2.84 cents 6.97 cents 2
TTINGYI (CAYMAN ISLANDS) HOLDING CORP. CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the Three Months and Nine Months Ended 30 September 2015 July to September 2015 January to September 2015 July to September 2014 January to September 2014 (Unaudited) (Unaudited) (Unaudited) (Unaudited) US$'000 US$'000 US$'000 US$'000 Profit for the period 188,094 461,386 205,532 542,531 Other comprehensive (loss) income Items that are or may be reclassified subsequently to profit and loss: Exchange differences on consolidation (118,021) (123,628) 38,365 (66,284) Fair value changes in available-for-sale financial assets (3,551) 2,709 2,371 2,371 Reclassification adjustments relating to available-for-sale financial assets disposed of in the period (5,736) Other comprehensive (loss) income for the period (121,572) (126,655) 40,736 (63,913) Total comprehensive income for the period 66,522 334,731 246,268 478,618 Total comprehensive income attributable to: Owners of the Company 51,298 246,857 194,565 349,900 Non-controlling interests 15,224 87,874 51,703 128,718 66,522 334,731 246,268 478,618 3
TTINGYI (CAYMAN ISLANDS) HOLDING CORP. CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION At 30 September 2015 At 30 September At 31 December 2015 2014 (Unaudited) (Audited) Note US$ 000 US$ 000 ASSETS Non-current assets Property, plant and equipment 5,659,190 5,859,905 Prepaid lease payments 719,474 737,387 Intangible assets 26,739 27,305 Interest in associates 32,964 31,973 Interest in joint ventures 89,052 74,153 Available-for-sale financial assets 88,669 79,052 Deferred tax assets 51,832 53,009 6,667,920 6,862,784 Current assets Financial assets at fair value through profit or loss 7,590 2,352 Inventories 362,938 386,958 Trade receivables 9 310,322 238,239 Prepayments and other receivables 442,057 532,621 Pledged bank deposits 17,534 12,203 Bank balances and cash 1,648,510 1,170,900 2,788,951 2,343,273 Total assets 9,456,871 9,206,057 4
TTINGYI (CAYMAN ISLANDS) HOLDING CORP. At 30 September At 31 December 2015 2014 (Unaudited) (Audited) Note US$ 000 US$ 000 EQUITY AND LIABILITIES Capital and reserves Issued capital 10 28,014 28,019 Share premium 63,900 65,421 Reserves 2,996,006 2,940,117 Total capital and reserves attributable to owners of the Company 3,087,920 3,033,557 Non-controlling interests 1,108,669 1,062,107 Total equity 4,196,589 4,095,664 Non-current liabilities Long-term interest-bearing borrowings 11 1,371,900 1,246,720 Employee benefit obligations 30,606 28,702 Deferred tax liabilities 227,152 198,487 1,629,658 1,473,909 Current liabilities Trade payables 12 1,163,390 896,131 Other payables and deposit received 1,169,876 1,233,472 Current portion of interest-bearing borrowings 11 1,171,082 1,382,034 Advance payments from customers 48,942 100,522 Taxation 77,334 24,325 3,630,624 3,636,484 Total liabilities 5,260,282 5,110,393 Total equity and liabilities 9,456,871 9,206,057 Net current liabilities (841,673) (1,293,211) Total asset less current liabilities 5,826,247 5,569,573 5
TTINGYI (CAYMAN ISLANDS) HOLDING CORP. CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the Nine Months Ended 30 September 2015 Attributable to owners of the Company Total capital and reserves Noncontrolling interests Issued capital Share premium Reserves Total Equity (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 At 1 January 2014 27,982 53,431 2,798,879 2,880,292 1,046,095 3,926,387 Profit for the period 391,559 391,559 150,972 542,531 Other comprehensive loss: Exchange differences on consolidation (44,030) (44,030) (22,254) (66,284) Fair value changes in available-forsale financial assets 2,371 2,371 2,371 Total other comprehensive loss (41,659) (41,659) (22,254) (63,913) Total comprehensive income for the period 349,900 349,900 128,718 478,618 Transactions with owners of the Company: Contributions and distribution Equity settled share-based transactions 9,522 9,522 9,522 Shares issued under share option scheme 33 10,854 (2,600) 8,287 8,287 2013 dividend approved and paid (204,324) (204,324) (38,504) (242,828) Total transactions with owners of the Company 33 10,854 (197,402) (186,515) (38,504) (225,019) At 30 September 2014 28,015 64,285 2,951,377 3,043,677 1,136,309 4,179,986 6
TTINGYI (CAYMAN ISLANDS) HOLDING CORP. CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the Nine Months Ended 30 September 2015 Attributable to owners of the Company Total capital and reserves Noncontrolling interests Issued capital Share premium Reserves Total Equity (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 At 1 January 2015 28,019 65,421 2,940,117 3,033,557 1,062,107 4,095,664 Profit for the period 341,934 341,934 119,452 461,386 Other comprehensive loss: Exchange differences on consolidation (92,050) (92,050) (31,578) (123,628) Fair value changes in available-for-sale financial assets 2,709 2,709 2,709 Reclassification adjustments relating to available-for-sale financial assets disposed of during the period (5,736) (5,736) (5,736) Total other comprehensive loss (95,077) (95,077) (31,578) (126,655) Total comprehensive income for the period 246,857 246,857 87,874 334,731 Transactions with owners of the Company: Contributions and distribution Equity settled share-based transactions 9,219 9,219 9,219 Shares issued under share option scheme 2 698 (127) 573 573 2014 dividend approved and paid (200,067) (200,067) (41,312) (241,379) Shares repurchased (7) (2,219) 7 (2,219) (2,219) Total transactions with owners of the Company (5) (1,521) (190,968) (192,494) (41,312) (233,806) At 30 September 2015 28,014 63,900 2,996,006 3,087,920 1,108,669 4,196,589 7
TTINGYI (CAYMAN ISLANDS) HOLDING CORP. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS For the Nine Months Ended 30 September 2015 January to January to September 2015 September 2014 (Unaudited) (Unaudited) US$ 000 US$ 000 OPERATING ACTIVITIES Cash generated from operations 1,392,246 1,216,607 The People s Republic of China ( PRC ) enterprise income tax paid (125,774) (151,902) Interest paid (44,774) (32,162) Net cash from operating activities 1,221,698 1,032,543 INVESTING ACTIVITIES Interest received 36,622 51,952 Purchase of available-for-sale financial assets (23,686) (31,947) Purchase of property, plant and equipment (378,882) (747,686) Prepaid lease payments (56,105) (45,361) Net cash inflow on disposal of a subsidiary 19,823 Others 36,018 (269,467) Net cash used in investing activities (386,033) (1,022,686) FINANCING ACTIVITIES Dividends paid to owners of the Company (200,067) (204,324) Dividends paid to non-controlling interests (41,312) (38,504) Proceeds from bank borrowings 639,420 1,115,241 Repayments of bank borrowings (909,711) (669,500) Others 187,789 8,288 Net cash (used in) from financing activities (323,881) 211,201 Net increase in cash and cash equivalents 511,784 221,058 Cash and cash equivalents at 1 Janauary 1,183,103 1,249,890 Effect on exchange rate changes (28,843) (18,027) Cash and cash equivalents at 30 September 1,666,044 1,452,921 Analysis of the balances of cash and cash equivalents: Bank balances and cash 1,648,510 1,433,843 Pledged bank deposits 17,534 19,078 1,666,044 1,452,921 8
TTINGYI (CAYMAN ISLANDS) HOLDING CORP. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of preparation and accounting policies The Directors are responsible for the preparation of the Group s unaudited condensed consolidated third quarterly financial statements. These condensed consolidated third quarterly financial statements have been prepared in accordance with Hong Kong Accounting Standard ( HKAS ) 34 Interim Financial Reporting, issued by the Hong Kong Institute of Certified Public Accountants ( HKICPA ). These condensed consolidated third quarterly financial statements should be read in conjunction with the 2014 annual financial statements. The accounting policies adopted in preparing the condensed consolidated third quarterly financial statements for the nine months ended 30 September 2015 are consistent with those in the preparation of the Group s annual financial statements for the year ended 31 December 2014, except for the adoption of the new/revised standard of Hong Kong Financial Reporting Standards ( HKFRS ) which are relevant to the Group s operation and are effective for the Group s financial year beginning on 1 January 2015. Amendments to HKAS 19 (2011) Various HKFRSs Various HKFRSs Defined Benefit Plans Employee Contributions Annual Improvements Project 2010-2012 cycle Annual Improvements Project 2011-2013 cycle The adoption of these amendments to HKFRSs did not result in substantial changes to the Group s accounting policies and amounts reported for the current and prior periods. 2. Turnover The Group s turnover represents revenue arising from the sale of goods at invoiced value to customers, net of returns, discounts and value added tax. 9
TTINGYI (CAYMAN ISLANDS) HOLDING CORP. 3. Segment information Segment results For the Nine Months ended 30 September 2015 Inter-segment Instant noodles Beverages Instant food Others elimination Group (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 Turnover Revenue from external customers 2,853,995 4,599,831 102,936 77,110 7,633,872 Inter-segment revenue 55 421 185 101,308 (101,969) Segment revenue 2,854,050 4,600,252 103,121 178,418 (101,969) 7,633,872 Segment results after finance cost 378,821 291,705 (9,809) (1,060) 1,004 660,661 Share of results of associates and joint ventures 22,016 (6,797) 15,219 Unallocated expenses, net (1,929) (1,929) Profit (loss) before taxation 378,821 313,721 (16,606) (2,989) 1,004 673,951 Taxation (112,965) (97,831) (1,769) (212,565) Profit (loss) for the period 265,856 215,890 (16,606) (4,758) 1,004 461,386 For the Nine Months ended 30 September 2014 Inter-segment Instant noodles Beverages Instant food Others elimination Group (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 Turnover Revenue from external customers 3,165,869 5,060,957 136,883 94,632 8,458,341 Inter-segment revenue 40 575 118 71,143 (71,876) Segment revenue 3,165,909 5,061,532 137,001 165,775 (71,876) 8,458,341 Segment results after finance cost 388,096 353,995 (7,361) 2,079 (2,367) 734,442 Share of results of associates and joint ventures 22,136 (7,844) 14,292 Unallocated expenses, net (1,968) (1,968) Profit (loss) before taxation 388,096 376,131 (15,205) 111 (2,367) 746,766 Taxation (107,692) (96,475) 428 (496) (204,235) Profit (loss) for the period 280,404 279,656 (14,777) (385) (2,367) 542,531 Segment information is prepared based on the regular internal financial information reported to the Company s executive directors for their decisions about resources allocation to the Group s business components and review of these components performance. The Company s executive directors assess the performance of reportable segments based on profit (loss) before taxation, share of results of associates and joint ventures and unallocated expenses, net. 10
TTINGYI (CAYMAN ISLANDS) HOLDING CORP. 3. Segment information (continued) Segment assets At 30 September 2015 Inter-segment Instant noodles Beverages Instant food Others elimination Group (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 Segment assets 3,590,535 5,043,843 137,674 1,366,387 (899,843) 9,238,596 Interest in associates 32,932 32 32,964 Interest in joint ventures 78,076 10,976 89,052 Unallocated assets 96,259 Total assets 9,456,871 Segment liabilities 980,422 3,061,951 51,542 1,977,470 (841,708) 5,229,677 Unallocated liabilities 30,605 Total liabilities 5,260,282 At 31 December 2014 Inter-segment Instant noodles Beverages Instant food Others elimination Group (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 Segment assets 3,446,274 5,227,348 160,291 1,340,036 (1,155,422) 9,018,527 Interest in associates 30,646 1,327 31,973 Interest in joint ventures 58,346 15,807 74,153 Unallocated assets 81,404 Total assets 9,206,057 Segment liabilities 1,041,013 3,311,438 62,817 1,766,568 (1,100,145) 5,081,691 Unallocated liabilities 28,702 Total liabilities 5,110,393 Segment assets include all assets with the exception of interest in associates, interests in joint ventures and unallocated assets. Segment liabilities include all liabilities with the exception of employee benefit obligation. 4. Seasonality of operations Due to the seasonal nature of the beverages segment, higher revenue is usually expected in the second and third quarters. Higher sales during the period from June to August are mainly attributed to the increased demand for packed beverages during the hot season. 11
TTINGYI (CAYMAN ISLANDS) HOLDING CORP. 5. Profit before taxation This is stated after charging: July to January to July to January to September September September September 2015 2015 2014 2014 (Unaudited) (Unaudited) (Unaudited) (Unaudited) US$ 000 US$ 000 US$ 000 US$ 000 Finance costs Interest on bank and other borrowings wholly repayable within five years 14,954 45,844 12,220 33,120 Other items Depreciation 133,720 391,725 121,380 370,668 Amortisation 3,938 12,802 2,090 6,173 6. Taxation July to January to July to January to September September September September 2015 2015 2014 2014 (Unaudited) (Unaudited) (Unaudited) (Unaudited) US$ 000 US$ 000 US$ 000 US$ 000 Current tax The PRC enterprise income tax Current period 65,120 180,271 65,313 174,321 Deferred taxation Origination and reversal of temporary differences, net 3,690 8,385 3,073 4,534 Effect of withholding tax on the distributable profits of the Group s PRC subsidiaries 10,290 23,909 7,939 25,380 Total tax charge for the period 79,100 212,565 76,325 204,235 The Cayman Islands levies no tax on the income of the Company and the Group. Hong Kong Profits Tax has not been provided as the Group s entities had no assessable profit subject to Hong Kong Profits Tax for the nine months ended September 2015 and 2014. The applicable PRC enterprise income tax for the PRC subsidiaries is at the statutory rate of 25% (2014: 25%). According to the Tax Relief Notice (Cai Shui [2011] no. 58) on the Grand Development of Western Region jointly issued by the Ministry of Finance, the State Administration of Taxation and China Customs, foreign investment enterprises located in the western region of PRC with principal revenue of over 70% generated from the encouraged business activities are entitled to a preferential income tax rate of 15% for 10 years from 1 January 2011 to 31 December 2020. Accordingly, certain subsidiaries located in the Western Region are entitled to a preferential rate of 15% (2014: 15%). Pursuant to the PRC Enterprise Income Tax Law, a 10% withholding tax is levied on dividends distributed to foreign investors by the foreign investment enterprises established in the PRC. The requirement is effective from 1 January 2008 and applies to earnings accumulated after 31 December 2007. A lower withholding tax rate may be applied if there is a tax treaty between PRC and jurisdiction of the foreign investors. For the Group s PRC subsidiaries, associates and joint ventures, the applicable rate is 10%. Deferred tax liability is provided on 50% of post-2007 net earnings of the Group s PRC subsidiaries that are expected to be distributed in the foreseeable future. The remaining 50% of post-2007 net earnings of the Group s PRC subsidiaries that are not expected to be distributed in the foreseeable future would be subject to additional taxation when they are distributed. Undistributed earnings of the Group s PRC associates and joint ventures are not subject to withholding tax as these companies are held by a PRC subsidiary. 12
TTINGYI (CAYMAN ISLANDS) HOLDING CORP. 7. Earnings per share a) Basic earnings per share July to January to July to January to September 2015 September 2015 September 2014 September 2014 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Profit attributable to ordinary shareholders (US$ 000) 144,275 341,934 159,653 391,559 Weighted average number of ordinary shares ( 000) 5,603,352 5,603,804 5,601,583 5,598,633 Basic earnings per share (US cents) 2.57 6.10 2.85 6.99 b) Diluted earnings per share July to January to July to January to September 2015 September 2015 September 2014 September 2014 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Profit attributable to ordinary shareholders (US$ 000) 144,275 341,934 159,653 391,559 Weighted average number of ordinary shares (diluted) ( 000) Weighted average number of ordinary shares 5,603,352 5,603,804 5,601,583 5,598,633 Effect of the Company s share option scheme 6,106 7,953 16,542 17,799 Weighted average number of ordinary shares for the purpose of calculated diluted earnings per share 5,609,458 5,611,757 5,618,125 5,616,432 Diluted earnings per share (US cents) 2.57 6.09 2.84 6.97 8. Dividend The Board of Directors do not recommend the payment of dividend for the nine months ended 30 September 2015 (2014: nil). 9. Trade receivables The majority of the Group s sales is cash-on-delivery. The remaining balances of sales are mainly at credit terms ranging from 30 to 90 days. The aging analysis of the trade receivables (net of impairment losses for bad and doubtful debts) based on invoice date, at the end of the reporting period is as follows: At 30 September At 31 December 2015 2014 (Unaudited) (Audited) US$ 000 US$ 000 0-90 days 287,701 216,763 Over 90 days 22,621 21,476 310,322 238,239 13
TTINGYI (CAYMAN ISLANDS) HOLDING CORP. 10. Issued capital At 30 September 2015 (Unaudited) At 31 December 2014 (Audited) No. of shares US$ 000 No. of shares US$ 000 Authorised: Ordinary shares of US$0.005 each 7,000,000,000 35,000 7,000,000,000 35,000 Issued and fully paid: At the beginning of the period/year 5,603,759,360 28,019 5,596,405,360 27,982 Shares issued under share option scheme 350,000 2 7,354,000 37 Shares repurchased (1,238,000) (7) At the end of the reporting period 5,602,871,360 28,014 5,603,759,360 28,019 During the reporting period, 350,000 options were exercised to subscribe for 350,000 ordinary shares of the Company at a consideration of US$573,000 of which US$2,000 was credited to share capital and the balance of US$571,000 was credited to the share premium account. US$127,000 has been transferred from the share-based payment reserve to the share premium account. During the reporting period, the Company repurchased 1,238,000 ordinary shares at a consideration of approximately US$2,219,000, of which US$7,000 and US$2,219,000 was debited to issued capital and share premium respectively and US$7,000 was credited to capital redemption reserve. 11. Interest-bearing borrowings At 30 September At 31 December 2015 2014 (Unaudited) (Audited) US$ 000 US$ 000 The maturity of the interest bearing borrowings: Within one year 1,171,082 1,382,034 In the second year 738,874 276,621 In the third to fifth years, inclusive 633,026 970,099 2,542,982 2,628,754 Portion classified as current liabilities (1,171,082) (1,382,034) Non-current portion 1,371,900 1,246,720 The interest-bearing borrowings consist of unsecured bank loans and notes payable. On 6 August 2015, the Company issued notes (the RMB Notes ) with an aggregate principal amount of RMB1,000,000,000. The carrying amount of the RMB Notes at the end of reporting period is US$156,097,000 and is included in the interest-bearing borrowings with maturity in the third to the fifth years. The RMB Notes are listed on the Singapore Exchange Securities Trading Limited. The fair value of the RMB Notes as at 30 September 2015 was US$151,482,000. The carrying value of the notes issued by the Company on 20 June 2012 (the US$ Notes ) at the end of the reporting period is US$497,502,000 (2014: US$496,504,000) and is included in the interest-bearing borrowings with maturity in the second year (2014: in the third to fifth years). The US$ Notes are listed on the Singapore Exchange Securities Trading Limited. The fair value of the US$ Notes as at 30 September 2015 was US$511,625,000 (2014: US$516,950,000). During the nine months ended 30 September 2015, the Group obtained bank loans in the amount of US$639,420,000 (2014: US$1,183,066,000) which were used for the acquisition of production facilities and working capital, and recognised amortised interest of the RMB Notes and US$ Notes of US$1,070,000 (2014: US$958,000). Repayments of bank loans amounting to US$909,711,000 (2014: US$669,500,000) were made in line with previously disclosed repayment term. 14
TTINGYI (CAYMAN ISLANDS) HOLDING CORP. 12. Trade payables The aging analysis of trade payables based on invoice date at the end of the reporting period is as follows: At 30 September At 31 December 2015 2014 (Unaudited) (Audited) US$ 000 US$ 000 0-90 days 1,124,329 863,205 Over 90 days 39,061 32,926 1,163,390 896,131 13. Fair Value Measurements (a) Financial assets and liabilities carried at fair value The following table presents the assets and liabilities measured at fair value or required to disclose their fair value in these condensed consolidated financial statements on a recurring basis at 30 September 2015 across the three levels of the fair value hierarchy defined in HKFRS 13, Fair Value Measurement, with the fair value measurement categorised in its entirety based on the lowest level of input that is significant to the entire measurement. The levels are defined as follows: Level 1 (highest level): quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the measurement date; Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; Level 3 (lowest level): unobservable inputs for the asset or liability. At 30 September 2015 At 31 December 2014 (Unaudited) (Audited) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 Assets Available-for-sale Investment funds 12,636 57,065 69,701 24,956 50,708 75,664 Unlisted equity securities 15,600 15,600 Financial assets at fair value through profit or loss Listed equity securities 2,779 2,779 2,352 2,352 Interest rate swap 771 771 Cross currency interest rate swaps 4,040 4,040 2,779 17,447 72,665 92,891 2,352 24,956 50,708 78,016 Liabilities Other payables and deposits received Derivative financial instruments 314 314 314 314 During the nine months ended 30 September 2015 and 2014, there was no transfers between Level 1 and Level 2 fair value measurements and no transfers into and out of Level 3 fair value measurements. 15
TTINGYI (CAYMAN ISLANDS) HOLDING CORP. 13. Fair Value Measurements (continued) (a) Financial assets and liabilities carried at fair value (continued) The details of the movements of the recurring fair value measurements categorised as Level 3 of the fair value hierarchy for the nine months ended 30 September 2014 and 2015 are shown as follows: 30 September 2015 (Unaudited) 30 September 2014 (Unaudited) Investment Funds Unlisted equity securities Derivative financial instruments Investment Funds Unlisted equity securities Derivative financial instruments US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 At beginning of the period 50,708 (314) 21,275 (6,893) Purchases 8,086 15,600 12,435 Disposals (1,781) Total gains or (losses) recognised: in profit or loss in other comprehensive income 52 617 At the end of the reporting period 57,065 15,600 (314) 34,327 (6,893) Total gains or (losses) for the period reclassified from other comprehensive income on disposals 781 Change in unrealised gain or (losses) for the period included in profit or loss for assets and liabilities held at the end of the reporting period Valuation techniques and significant inputs used in Level 2 and Level 3 fair value measurement (i) Available-for-sale: Investment funds The fair value of an investment fund in Level 2 is valued based on the net asset value of each trust unit quoted by the trust administrator based on quoted prices of underlying investments i.e. listed equity and debt securities in an active market without adjustments. The fair value of one of the investment funds in Level 3 is based on the net asset value of the investment fund reported to the investors by the investment manager as of the end of the reporting period. For the remaining investment funds in Level 3, their fair values are based on the fair values of the companies invested by the funds. All of the investment funds in Level 3 included both listed investments and unlisted investments. The fair value of listed investments are reference to quoted market price, while the fair value of unlisted investments which are valued by the respective investment managers are estimated by valuation techniques, mainly including using Price/earning ratio (P/E) multiple model, Price/sales (P/S) multiple model and discounted cash flows model. In determining the fair value of unlisted investments, it include assumptions that are not supported by observable market prices or rates, including the expected annual growth rates, average P/E multiples of comparable companies, average P/S multiples of comparable companies and discount rates. 16
TTINGYI (CAYMAN ISLANDS) HOLDING CORP. 13. Fair Value Measurements (continued) (a) Financial assets and liabilities carried at fair value (continued) (ii) Available-for-sale: Unlisted equity securities The fair value of the unlisted equity securities in Level 3 newly invested in current period are determined by the investment managers by using Price/sales (P/S) multiple model. In determining the fair value of the unlisted equity securities, it includes assumptions that are not supported by observable market prices or rates, including expected annual growth rates and average P/S multiples of comparable companies. (iii) Interest rate swap and cross currency interest rate swaps The fair value of cross-currency interest rate swap contracts and interest rate swap contract are calculated as the present value of the estimated cash flows based on the terms and maturity of each contract, taking into account the current interest rates, foreign exchange spot and forward rates and interest rate curves. (iv) Other payables and deposits received: Derivative financial instrusments The derivative financial instruments are measured at fair value estimated based on Monte Carlo Simulation Model. The unobservable inputs used for the valuation of the Derivative financial instruments include fair value of the underlying assets, exercising price, time to maturity, US$ risk free rate, volatility of the underlying asset s price in HK$ and dividend yield. There was no change in valuation techniques during the reporting period. The assumptions of the unobservable inputs used in Level 3 fair value measurement at the end of the reporting period were not significant different with those used in the Group s annual financial statements for the year ended 31 December 2014. Sensitivity to changes in significant unobservable inputs In the opinion of the directors, the impact of changes in significant unobservable inputs on the Level 3 fair value measurement and the Group s profit and other comprehensive income for the period were not significant different with those in the Group s annual financial statements for the year ended 31 December 2014, as there was no significant change in the reasonably possible range of significant unobservable inputs for Level 3 fair value measurements as at 30 September 2015 comparing to 31 December 2014. Valuation processes used in Level 3 fair value measurement In estimating the fair value of an asset or a liability within Level 3 of the fair value hierarchy, the Group uses market observabledata to the extent it is available. Where Level 1 inputs are not available, the Group obtains the valuations provided by the respective investment managers or trust administrator for the investment funds and unlisted equity securities. For the derivative financial instrument, the Group engaged independent qualified professional valuer to perform the valuation. The Group s finance department includes a team that reviews the valuations performed by the investment managers or trust administrator of the investment funds and unlisted equity securities and the independent valuer for financial reporting purposes. The team reports directly to the senior management. Discussions of valuation processes and results are held between the management, investment managers or trust administrator of the investment funds or unlisted equity securities and independent valuer at least once every year. At each financial year end, the finance department works closely with the investment managers or trust administrator of the investment funds or unlisted equity securities and independent valuer to establish the appropriate valuation techniques and inputs to the valuation models, verifies all major unobservable inputs in the valuations, assesses valuations movements when compared to the prior year valuation report and holds discussions with the investment managers or trust administrator of the investment funds and unlisted equity securities and independent valuer. At the end of the reporting period, the finance department assessed fair values of an asset or a liability within Level 3 of the fair value hierarchy based on the valuations performed by investment managers or trust administrator and an independent valuer at preceding financial year end taking into account of any significant changes in the assumptions of the unobservable inputs used in fair value measurements during the reporting period. (b) Fair values of financial assets and liabilities carried at other than fair value In the opinion of the directors, except for the notes payable as described in the note 11 to the condensed consolidated financial statements, no other financial assets and liabilities of the Group are carried at amount materially different from their fair values as at 30 September 2015 and 31 December 2014. 17
TTINGYI (CAYMAN ISLANDS) HOLDING CORP. 14. Commitments At 30 September At 31 December 2015 2014 (Unaudited) (Audited) US$ 000 US$ 000 (a) Capital expenditure commitments Contracted but not provided for Expenditures on property, plant and equipment 161,588 280,056 Investment funds 28,411 28,026 189,999 308,082 (b) Commitments under operating leases At the end of reporting period, the Group had total future minimum lease payments under non-cancellable operating leases, which are payable as follows: Within one year 42,783 47,235 In the second to fifth years, inclusive 80,468 75,865 After five years 33,463 42,214 156,714 165,314 15. Related party transactions In addition to the transactions disclosed elsewhere in the financial statements, the Group entered into the following material related party transactions in the ordinary course of the Group s business. July to September 2015 January to September 2015 July to September 2014 January to September 2014 (Unaudited) (Unaudited) (Unaudited) (Unaudited) USD 000 USD 000 USD 000 USD 000 (a) (b) Sales of goods to: Companies controlled by a substantial shareholder of the Company 8,263 20,086 7,237 19,375 Associates 7,500 19,571 6,610 18,294 Joint ventures 13,059 46,681 10,875 28,235 Purchases of goods from: A group of companies jointly controlled by the Company s directors and their dependent 104,923 281,594 107,323 318,899 Companies jointly controlled by the Company s directors 27,610 65,767 28,187 62,762 Joint ventures 1,258 4,222 1,822 5,497 16. Contingent liabilities In 2014, the Group announced a voluntary retirement plan (the Plan ) for its employees as a result of an integration programme of its Pepsi beverage business. The Group has made an offer of the Plan to the affected employees who can decide to accept the offer of benefits in exchange for the termination of their employments. The termination benefits of US$37 million have been recognised as expenses during the nine-month period ended 30 September 2015. At 30 September 2015, the estimated possible obligation of termination benefits is amounted to approximately US$37 million (31 December 2014: US$70 million) which is expected to be settled between 2015 and 2016 if all the offers are accepted by qualified employees. 17. Approval of third quarterly financial statements The third quarterly financial statements of 2015 were approved by the board of directors on 16 November 2015. 18
TTINGYI (CAYMAN ISLANDS) HOLDING CORP. MANAGEMENT DISCUSSION AND ANALYSIS During the third quarter of 2015, the momentum of global economic recovery remained weak. Faced with the pressure of overcapacity and financial leverage, the growth rate of the economy slowed down and its the lowest level since the first quarter of 2009, GDP only increased by 6.9% year-on-year ( yoy ). In the second half of the year, we still upheld our prudent attitude towards the business environment, which would be susceptible to the operations of food and beverage industry. In the third quarter, the Group further expanded the execution of planned operational strategies and management focus, so as to achieve the targets of cost cutting, efficiency enhancement, innovation and safety. These focuses included: providing consumers at large with more varieties of comprehensive quality products through products upgrade; strengthening business execution and supply chain management, and effectively managing the inventories at the channels and capital expenditure; entering into alliances with international strategic partners in order to stimulate products and operational innovation; and enhancing staff training in view of organization succession. In the third quarter of 2015, the Group s turnover decreased by 6.45% yoy to US$2,763.470 million. Turnover of instant noodles and beverages decreased by 6.2% and 5.26% respectively. However, the yoy decline rate of the Group s turnover during the third quarter has been slowed down as compared to that of the first half. During the period, benefiting from the fall in the prices of certain major raw materials, optimization of product mix and rationalization in production operations, gross profit margin was improved. The Group s gross profit margin in the third quarter of the year increased by 1.23 ppt. to 33.30% yoy. As a more conservative trend in consumption was developed, the Group has been well controlled operation costs. During the period, distribution costs as a percentage of the total turnover was 18.92%, a decrease of 1.33 ppt. yoy. The EBITDA of the Group for the third quarter of 2015 increased by 1.67% to US$408.063 million, EBITDA margin increased by 1.18 ppt. to 14.77%. Profit attributable to owners of the Company dropped by 9.63% to US$144.275 million. The yoy decline rate of the Group s net profit during the third quarter has been slowed down as compared to that of the first half. Net profit margin was 5.22%, a decrease of 0.18 ppt. yoy. Earnings per share decreased by 0.28 US cents to 2.57 US cents. Instant Noodle Business According to AC Nielsen, the instant noodle industry in China went into a recession for four consecutive quarters but had shown signs of stabilization. The sales volume of the market as a whole decreased by 2.8% yoy, but the sales amount increased by 0.4% yoy. During the third quarter, in terms of sales volume and sales amount, the market share of Master Kong s instant noodle was 46.3% and 55.0% respectively, maintained the leading position in the market. In the third quarter of 2015, the turnover of the Group s instant noodle business was US$1,061.913 million, a decrease of 6.2% on a yoy basis, and representing 38.43% of the Group s turnover. Benefited from the low level of palm oil price and other material prices remained stable during the period, as a result, the gross profit margin of the instant noodle business increased by 1.95 ppt. to 31.76%. During the period, the Group has effectively controlled marketing and promotion expenses. Due to the sales decline, profit attributable to owners of the Company from the instant noodle business dropped by 5.48% yoy to US$112.645 million. Profit attributable to owners of the Company margin for the third quarter of 2015 slightly rose by 0.08 ppt. to 10.61%. In order to meet the demand for nutritious ingredients from consumers at various strata of the society, the Group will continue to adopt the planned upgrade strategies for our instant noodle business, so as to maintain the momentum of sustainable growth: 1. To speed up the upgrade of mainstream products in the market and steer the upgrading of industrial technology and standard. 2. To focus on the operation of brand equity, and to committedly provide convenient, delicious, affordable perfect consumption experiences to consumers from different tiers. 3. To finalize the tracking system for food safety management and quality stability, which provided assurance on the products and services to the consumers. 4. To encourage proactive innovation by leveraging on the innovations on the taste and packaging, the operation of modern channels, and technical mechanisms of brand management and supply chain management, so that the needs of consumers and the growth of the enterprises were met. 19