Mega Financial Holding Co., Ltd. and Its Subsidiaries
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MEGA FINANCIAL HOLDING CO., LTD. AND ITS SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT ACCOUNTANTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2014 AND 2013 ------------------------------------------------------------------------------------------------------------------------------------------------ For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail. ~1~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 MEGA FINANCIAL HOLDING CO., LTD. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (EXPRESSED IN THOUSANDS OF DOLLARS) June 30, 2014 December 31, 2013 June 30, 2013 January 1, 2013 ASSETS Note Amount % Amount % Amount % Amount % ASSETS Cash and cash equivalents 6(1) $ 174,195,646 6 $ 160,288,195 5 $ 112,139,661 4 $ 93,059,992 4 Due from the Central Bank and call loans to banks 6(2) 289,669,101 9 390,959,236 13 273,215,592 10 365,430,137 13 Financial assets at fair value through profit or loss 6(3)(12) 175,725,721 6 195,800,759 6 195,342,744 7 184,716,442 7 Available-for-sale financial assets, net 6(7) and 12 276,349,200 9 272,943,633 9 260,134,518 10 223,271,043 8 Bills and bonds purchased under resale agreements 5,641,383 - 2,585,345 - 6,925,361 - 2,282,052 - Receivables, net 6(4)(5) 203,644,226 7 184,587,941 6 137,550,048 5 122,685,220 5 Current income tax assets 1,301,418 - 921,969 - 968,475 - 953,192 - Non-current assets held for sale 2,582 - 2,576 - 64 - - - Bills discounted and loans, net 6(5) 1,668,969,079 55 1,654,577,193 53 1,563,463,363 56 1,502,700,861 55 Reinsurance contract assets, net 6(6)(23) 3,481,496 - 3,293,937 - 3,436,521 - 3,301,550 - Held-to-maturity financial assets, net 6(8) and 12 178,963,013 6 184,411,233 6 166,295,479 6 161,253,982 6 Equity investments accounted for by the equity method, 6(9) net 2,679,628 - 2,697,551 - 2,736,614 - 2,966,843 - Other financial assets, net 6(5)(10) and 12 20,699,864 1 23,430,204 1 28,035,197 1 27,629,411 1 Investment property, net 6(11) and 12 2,310,530 - 2,059,428 - 2,209,636 - 2,101,127 - Property and equipment, net 6(12) and 12 22,041,310 1 22,150,245 1 22,214,662 1 22,331,091 1 Intangible assets, net 302,060 - 318,046 - 256,367 - 303,612 - Deferred income tax assets 6(38) 3,758,271 - 3,785,582 - 3,248,716 - 3,098,020 - Other assets, net 6(13) and 12 4,128,228 - 8,810,740 - 8,137,905 - 8,884,722 - TOTAL ASSETS $ 3,033,862,756 100 $ 3,113,623,813 100 $ 2,786,310,923 100 $ 2,726,969,297 100 LIABILITIES AND EQUITY LIABILITIES Due to the Central Bank and financial institutions 6(14) and 11 $ 376,096,025 13 $ 490,935,730 16 $ 345,562,502 12 $ 328,810,493 12 Funds borrowed from the Central Bank and other banks 6(15) 39,510,383 1 32,330,245 1 26,900,005 1 84,826,943 3 Financial liabilities at fair value through profit or loss 6(16) 14,326,707 1 14,856,685 1 15,510,988 2 14,676,886 1 Bills and bonds sold under repurchase agreements 6(17) 233,201,316 8 219,651,334 7 206,809,132 8 187,481,840 7 Commercial paper payable, net 6(18) and 11 7,187,117 - 4,393,653 - 6,258,203 - 1,880,597 - Payables 6(19) 76,253,441 3 66,105,983 2 72,689,166 3 59,583,525 2 Current income tax liabilities 8,295,619 - 5,522,518 - 7,221,337 - 5,993,633 - Deposits and remittances 6(20) and 11 1,915,959,215 63 1,933,722,541 62 1,790,830,585 64 1,717,989,498 63 Bonds payable 6(21) 61,900,000 2 55,898,677 2 55,874,079 2 62,449,668 2 Other loans 6(22) and 12 10,930,120 - 5,509,213 - 5,935,135 - 6,541,000 - Provisions for liabilities 6(23) 21,988,779 1 22,414,786 1 22,000,177 - 22,045,319 1 (Coutinued) ~ 4 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 MEGA FINANCIAL HOLDING CO., LTD. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Continued) (EXPRESSED IN THOUSANDS OF DOLLARS) June 30, 2014 December 31, 2013 June 30, 2013 January 1, 2013 LIABILITIES AND EQUITY Note Amount % Amount % Amount % Amount % Other financial liabilities 6(24) 11,946,570 - 10,094,610 - 10,821,043 - 11,728,176 1 Deferred income tax liabilities $ 2,193,326 - $ 2,051,201 - $ 1,693,505 - $ 1,694,706 - Other liabilities 6(25) 7,849,328 - 8,544,563 - 9,041,334 - 10,786,252 - Total Liabilities 2,787,637,946 92 2,872,031,739 92 2,577,147,191 92 2,516,488,536 92 Equity Equity attributable to owners of parent Share capital Common stock 6(26) 124,498,240 4 124,498,240 4 114,498,240 4 114,498,240 4 Capital surplus 6(26) 55,274,279 2 55,271,623 2 43,425,270 2 43,425,270 2 Retained earnings Legal reserve 6(26) 24,469,127 1 22,220,204 1 22,220,204 1 20,066,890 1 Special reserve 6(26) 2,547,719 - 2,547,719 - 2,569,119 - 2,569,119 - Inappropriate retained earnings 6(27) 36,834,124 1 36,766,912 1 26,625,101 1 29,461,030 1 Other equity interest 6(28) Other equity interest 2,418,558 - 100,838 - ( 460,680) - 179,145 - Non-controlling interest 182,763 - 186,538 - 286,478 - 281,067 - Total Equity 246,224,810 8 241,592,074 8 209,163,732 8 210,480,761 8 TOTAL LIABILITIES AND EQUITY $ 3,033,862,756 100 $ 3,113,623,813 100 $ 2,786,310,923 100 $ 2,726,969,297 100 The accompanying notes are an integral part of these consolidated financial statements. ~ 5 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 MEGA FINANCIAL HOLDING CO., LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE AMOUNTS) For the three-month periods ended June 30, For the six-month periods ended June 30, 2014 (2013 2014 2013 Note Amount % Amount % Amount % Amount % 6(29) and 11 Interest income $ 14,117,024 89 $ 11,276,818 85 $ 27,542,199 89 $ 22,171,526 84 6(29) and 11 Less: Interest expense ( 4,902,737) ( 31) ( 3,587,858) ( 27) ( 9,620,927) ( 31) ( 6,893,761) ( 26) Interest income, net 9,214,287 58 7,688,960 58 17,921,272 58 15,277,765 58 Revenues other than interest, net 6(30) Service fee revenue and commissions, net 2,506,999 16 2,295,735 17 5,025,432 16 4,743,582 18 Insurance revenue, net 376,862 2 388,768 3 814,310 3 697,305 3 6(31) and 11 Financial assets and liabilities at fair value through profit or loss 1,831,166 12 316,502 2 2,855,127 9 719,291 3 6(32) Realized gain on available-for-sale financial assets, net 629,974 4 461,402 4 1,012,712 3 1,520,800 6 Foreign exchange gain 508,227 3 886,757 7 1,387,571 4 1,901,120 7 Share of profit of associates and joint ventures accounted for under equity method 20,866 - 33,992 - 47,480 - 60,416 - 6(33) Loss on asset impairment ( 71,982) - ( 194,664) ( 1) ( 85,344) - ( 217,978) ( 1) Other revenue other than interest income 505,739 3 561,469 4 857,133 3 866,618 3 11 Revenue on disposal of non-performing loans 371,108 2 719,184 6 1,196,267 4 864,891 3 Net revenue 15,893,246 100 13,158,105 100 31,031,960 100 26,433,810 100 6(4)(5)(6)(10)(23) Bad debts expense and provisions for insurance reserve ( 521,118) ( 3) ( 618,512) ( 5) ( 662,304) ( 2) ( 1,479,688) ( 6) 6(23) Reversal of (provisions for) insurance reserve 68,660 - 62,979 1 64,846 - 160,922 1 Operating expenses 6(35) Employee benefit expense ( 3,651,979) ( 23) ( 3,309,106) ( 25) ( 7,486,768) ( 24) ( 6,934,601) ( 26) 6(36) Depreciation and amortization ( 178,284) ( 1) ( 184,080) ( 1) ( 358,129) ( 1) ( 377,309) ( 1) 6(37) Other business and administrative expenses ( 1,688,705) ( 11) ( 1,543,932) ( 12) ( 3,246,848) ( 11) ( 3,035,524) ( 12) Income before Income Tax 9,921,820 62 7,565,454 58 19,342,757 62 14,767,610 56 6(38) Income Tax Expense ( 1,838,252) ( 12) ( 1,838,803) ( 14) ( 3,216,728) ( 10) ( 2,853,372) ( 11) Profit for the year 8,083,568 50 5,726,651 44 16,126,029 52 11,914,238 45 6(28) Other comprehensive income Cumulative translation differences of foreign operations ( 545,980) ( 3) ( 516,162) ( 4) 154,685 - 482,094 2 Unrealized gain on valuation of available-for-sale financial assets 1,599,658 10 ( 1,487,077) ( 11) 2,128,518 7 ( 1,065,495) ( 4) Share of other comprehensive income of associates and joint ventures accounted for under equity method 37,641 - ( 47,183) ( 1) 46,931 - ( 43,520) - Total other comprehensive income(after Income Tax) 1,091,319 7 ( 2,050,422) ( 16) 2,330,134 7 ( 626,921) ( 2) Total comprehensive income $ 9,174,887 57 $ 3,676,229 28 $ 18,456,163 59 $ 11,287,317 43 (Continued) ~ 6 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 For the three-month periods ended June 30, For the six-month periods ended June 30, 2014 (2013 2014 (2013 Note Amount % Amount % Amount % Amount % Profit (loss), attributable to: Owners of parent $ 8,092,860 51 $ 5,725,771 44 $ 16,135,439 52 $ 11,912,191 45 Non-controlling interests ( 9,292) - 880 - ( 9,410) - 2,047 - $ 8,083,568 51 $ 5,726,651 44 $ 16,126,029 52 $ 11,914,238 45 Comprehensive income attributable to: Owners of parent $ 9,182,204 58 $ 3,685,126 28 $ 18,455,159 59 $ 11,272,366 43 Non-controlling interests ( 7,317) - ( 8,897) - 1,004 - 14,951 - $ 9,174,887 58 $ 3,676,229 28 $ 18,456,163 59 $ 11,287,317 43 6(39) Earnings per share Basic earnings per share (in dollars) $ 0.65 $ 0.50 $ 1.30 $ 1.04 Diluted earnings per share (in dollars) $ 0.65 $ 0.50 $ 1.30 $ 1.04 The accompanying notes are an integral part of these consolidated financial statements.