KONKA GROUP CO., LTD.
THE THIRD QUARTERLY REPORT 2010
§1. Important Notice
1.1 The Board of Directors, the Supervisory Committee, directors, supervisors and
senior executives of Konka Group Co., Ltd. (hereinafter referred to as “the Company”)
warrant that this report does not contain any false or misleading statements or omit
any material facts and shall accept the individual and joint responsibilities for
factuality, accuracy and completeness of the contents of this report.
1.2 The financial report for the third quarter has not been audited by a CPA firm.
1.3 Mr. Hou Songrong, Chairman of the Board of the Company, Ms. Yang Rong,
Chief Financial Officer of the Company, and Mr. Ruan Renzong, the person-in-charge
of the accounting organ hereby confirm that the Financial Report enclosed in the
Quarterly Report is factual and complete.
§2. Company Profile
2.1 Main accounting data and financial indices
Unit: RMB Yuan
30 Sep. 2010 31 Dec. 2009 Increase/decrease
Total assets (Yuan) 14,013,988,972.31 13,568,083,128.38 3.29%
Owners’ equity attributable to shareholders of
listed company (Yuan)
3,929,522,639.10 3,875,367,861.56 1.40%
Share capital (Share) 1,203,972,704.00 1,203,972,704.00 0.00%
Net assets per share attributable to
shareholders of listed company (Yuan/share)
3.26 3.22 1.24%
Jul.-Sep. 2010
Increase/decrease
year-on-year
Jan.-Sep. 2010
Increase/decrease
year-on-year
Operating revenue (Yuan) 4,541,445,371.76 17.84% 12,481,629,166.85 38.29%
Net profit attributable to shareholders of listed
company (Yuan)
10,290,954.38 -60.94% 61,178,474.77 -42.63%
Net cash flows arising from operating
activities (Yuan)
- - -289,245,256.22 -428.87%
Net cash flows per share arising from
operating activities (Yuan/share)
- - -0.24 -433.33%
Basic earnings per share (Yuan/share) 0.0085 -61.19% 0.0508 -42.66%
Diluted earnings per share (Yuan/share) 0.0085 -61.19% 0.0508 -42.66%
Weighted average ROE (%) 0.26% -0.43% 1.57% -1.22%
Weighted average ROE after deducting
non-recurring gains and losses (%)
0.14% -0.23% 1.05% -1.28%Items of non-recurring gains and losses
Amount for the period from the
year-begin to the period-end
Notes
Gains and losses from disposal of non-current assets 15,065,265.69
Governmental grants counted into the current profit and loss, except for the one
closely related with the normal operation of the company and gained constantly
at a fixed amount or quantity according to certain standard based on state policies
10,248,494.55
Gains and loss from change in fair value by holding tradable financial assets and
liabilities, and investment income from disposal of tradable financial assets and
liabilities as well as salable financial assets, excluding the effective hedging
businesses related with the normal operations of the company
-3,662,634.65
Other non-operating income and expenses besides the above items 5,811,049.44
Effect on minority interests -2,327,631.27
Effect on income tax -5,014,556.66
Total 20,119,987.10 -
2.2 Total number of shareholders at the end of the report period and shares held by the
top ten shareholders holding shares not subject to trading moratorium
Unit: Share
Total number of shareholders at period-end 109,055
Top ten shareholders holding shares not subject to trading moratorium
Full name of shareholder
Number of shares not subject to
moratorium held at period-end
Type of shares
HOLY TIME GROUP LIMITED 52,884,575
Domestically listed foreign
shares
Overseas Chinese Town Group Company 30,372,843 Renminbi ordinary shares
GAOLING FUND,L.P. 26,400,625
Domestically listed foreign
shares
BOCI SECURITIES LIMITED 19,117,659
Domestically listed foreign
shares
ICBC—Hua An Mid-cap and Small-cap Growth Stock
Securities Investment Fund
12,820,986 Renminbi ordinary shares
NAM NGAI 11,760,720
Domestically listed foreign
shares
CNCA A/C COMPAGNIE FINANCIERE EDMOND DE
ROTHSCHILD
9,999,997
Domestically listed foreign
shares
China Construction Bank—Yinhua Core Value Selected Stock
Securities Investment Fund
9,999,956 Renminbi ordinary shares
National Social Security Fund Portfolio 110 9,449,970 Renminbi ordinary shares
Changjiang Securities Co., Ltd. 7,196,905 Renminbi ordinary shares
§3. Significant Events
3.1 Particulars about large-margin changes in main items of the accounting statements
and financial indexes, as well as reasons for the changes
√Applicable □Inapplicable
A. Due to the following reasons, the operating income that the Company achieved inthe first three quarters went up by 38.29% as compared with the same period
of last year.
During the report period, the Company vigorously promoted LED TVs and launched
many new models of LED TV, which resulted in a considerable year-on-year increase
of the sales quantity and income of LED TV products and greatly improved the
Company’s product structure. Meanwhile, through the differential application of the
open platform, the Company continued to promote its TV functions concerning
movement sensing games, browser, on-line education, 3G video, etc. to a new level,
which helped form a whole new concept about Konka TV among consumers,
improved the brand image of Konka TV and boosted the sales of Konka TV products.
In terms of the cell phone business, the Company continued to work on projects for
fine products, quality, innovation and speed, constantly increased its core
competitiveness and pushed forward the differential product strategies. As a result, the
sales quantity and income of the Company’s cell phones both registered a
considerable growth, which kept the Company a leader among domestic cell phone
makers.
In terms of the export business, the Company actively dealt with various unfavorable
conditions and achieved a rapid growth of the business through constantly stabilizing
and tapping customer resources, as well as making innovations in terms of products
and marketing means.
Concerning the consumer appliance business, the Company reformed its
organizational structure to build a relatively independent operation team for the
consumer appliance business. Meanwhile, it tried to expand its channel coverage,
maintain the key customers and increase the same-store output so as to promote a
rapid development of the business.
B. Due to the following reasons, the net profit that the Company achieved in the first
three quarters went down as compared with the same period of last year.
a. With their advantage of upstream resources, foreign brands made their way into the
color TV market with low product prices, grabbing market shares from domestic
brands. And domestic brands were forced to lower their prices too, which quickly
pulled down the gross profit rates of their products.
b. Prices of copper, aluminum, steel and some other raw materials went up to some
degree, which pulled up the manufacturing cost and affected the net profit.
Due to the reasons above, the net profit attributable to owners of the parent company
that the Company achieved for the first three quarters fell by 42.63% over the same
period of last year.
C. Construction in process was up by 179.53% over the year-begin, which was mainly
due to the construction input increase of Konka R&D Building.
D. Short-term borrowings were up by 59.04% over the year-begin, which was mainly
due to the increase of short-term financing for operating purposes.
E. Financial expenses were down by 104.89% year on year, which was mainly
because the Renminbi appreciated by a large margin in the current period and the
exchange income from foreign-currency liabilities increased.
F. The non-business income was up by 404.48% year on year, which was mainly dueto the increase of the tax refund income and the income from fixed asset disposal in
the current period.
G. Net cash flows from operating activities were down by 428.87% year on year,
which was mainly because cash outflows increased for material purchases and selling
expenses in the current period.
3.2 Progress of significant events, as well as analysis and explanation on their impact
and solutions
3.2.1 Non-standard audit opinion
□Applicable √Inapplicable
3.2.2 Whether the Company provided funds to the controlling shareholder or its
related parties or provided guarantees to external parties in violation of the prescribed
procedures
□Applicable √Inapplicable
3.2.3 Signing and execution of significant contracts concerning routine operations
□Applicable √Inapplicable
3.2.4 Others
√Applicable □Inapplicable
The Company did not provide funds to the controlling shareholder or its related
parties or provide guarantees to external parties in violation of the prescribed
procedures.
3.3 Particulars about implementation of commitments made by the Company, its
shareholders and actual controller
√Applicable □Inapplicable
Commitment
Commitment
maker
Specific contents of the commitment Execution
Commitment concerning
share reform
OCT Group
Company
(1) All the non-tradable Konka Group shares held by OCT Group
would not be listed for trading or transferred within 24 months
since the day when the said shares became tradable in the A-share
market; and (2) Upon the expiration of the aforesaid commitment,
the originally non-tradable Konka Group shares listed and sold
through the stock exchange would not exceed 5% of the total
Konka Group shares within 12 months, and not exceed 10%
within 24 months.
No listing and
trading of the shares
subject to
moratorium has
been applied. And
those shares have
not been transferred,
either.
Commitment made in the
acquisition report or the
report on equity changes
Naught Naught Naught
Commitment concerning
significant asset
reorganization
Naught Naught Naught
Commitment concerning
issuance
Naught Naught Naught
Other commitments
(including supplementary
ones)
Naught Naught Naught
3.4 Warnings of possible losses or major changes of the accumulative net profitachieved during the period from year-begin to the end of the next report period
compared with the same period of last year, as well as explanation on reasons
□Applicable √Inapplicable
3.5 Other significant events that need to be explained
3.5.1 Securities investment
□Applicable √Inapplicable
3.5.2 Researches, interviews and visits received in report period
Time Place Way of reception Visitor
Main discussion and materials provided by the
Company
13 Jul. 2010
Conference
Room of the
Company
Field research
Guodu Securities,
Hongchou Investment,
Minshen Investment and
Light Horse Asset
Management
Development trends of the color TV industry, the
market competitiveness of LED TVs, market
prospects of new products and the progress of
relevant work
12 Aug. 2010
Conference
Room of the
Company
Field research Nikko Asset Management
The market competition situation of LCD TVs,
consumer appliances and cell phones
3.6 Investments into derivatives
Considering the fluctuating RMB exchange rate, to conduct the USD loan + RMB
pledged deposit + NDF portfolio business (hereinafter referred to as “the NDF
portfolio business”) was believed to be able to generate a proper sum of risk-free
profit. Therefore, upon the agreement of the Board of Directors, the Company started
its NDF portfolio business. In the portfolio business, NDF was a financial derivative
product, but it was only used to lock up the forward exchange rate and avoid relevant
risks. When the NDF portfolio business was due and settled, the Company would
obtain a proper risk-free income after paying off the relevant interest and expenses.
√Applicable □Inapplicable
Analysis on risks and control measures of derivative products
held in the report period (including but not limited to market
risk, liquidity risk, credit risk, operation risk, law risk, etc.)
In the NDF portfolio business, NDF was only used to lock up the
forward exchange rate and avoid relevant risks. The income from the
NDF portfolio business was fixed and risk-free.
Changes of market prices or fair values in the report period of
the invested derivatives. And the analysis on the fair value of
the derivatives should include the specific use methods and the
relevant assumptions and parameters.
Because the income from the NDF portfolio business was fixed and
risk-free, there would not be gain/loss fluctuations in the business or
fair value changes.
Whether significant changes occurred to the Company’s
accounting policy and specific accounting principles of
derivatives in the report period compared to the previous report
period
Compared with the last report period, no significant changes occurred
to the Company’s accounting policy and specific accounting
principals concerning the NDF portfolio business.
Specific opinion from independent directors, sponsors or
financial consultants on the Company’s derivatives investment
and risk control
Independent directors of the Company—Ms. Yang Haiying, Mr. Feng
Yutao and Mr. Zhang Zhong—believed that: the NDF portfolio
business could help the Company benefit from fluctuations of
renminbi exchange rates and gain fixed and risk-free incomes, so the
business was necessary to some degree; and the Company already
improved the internal control over derivatives investments and the
relevant risk control measure adopted were feasible.
3.6.1 Positions of derivatives investments held at period-end√Applicable □Inapplicable
Unit: RMB Yuan
Type of contract
Opening contract
amount
Closing contract
amount
Gain/loss for report
period
Proportion of the
closing contract
amount in the
Company’s closing
assets
USD loan + RMB pledged deposit +
NDF portfolio business
2,584,356,800.00 2,293,570,000.00 45,530,000.00 58.37%
Total 2,584,356,800.00 2,293,570,000.00 45,530,000.00 58.37%
§4. Appendix
4.1 Balance sheet
Prepared by Konka Group Co., Ltd 30 Sep. 2010 Unit: RMB Yuan
Closing balance Balance at year-begin
Item
Consolidation Parent company Consolidation Parent company
Current assets:
Monetary funds 2,714,148,792.04 2,329,667,956.57 3,624,480,380.25 2,920,787,369.99
Settlement fund reserves
Lendings to banks and other
financial institutions
Transaction financial assets 3,673,164.00 2,781,054.00
Notes receivable 3,277,376,143.14 2,995,195,307.25 2,807,539,700.27 2,679,933,632.86
Accounts receivable 1,759,003,089.72 1,243,709,566.74 1,302,066,597.13 1,105,121,784.81
Accounts paid in advance 180,476,557.25 609,486,759.34 275,850,813.27 259,306,577.60
Premium receivables
Receivables from reinsurers
Reinsurance contract reserve
receivables
Interest receivable 32,529,920.96 29,442,469.13
Dividend receivable
Other account receivables 46,509,636.48 683,192,345.04 19,572,445.66 863,563,519.29
Financial assets purchased under
agreements to resell
Inventories 3,991,442,774.58 3,098,639,103.29 3,580,780,457.01 2,880,442,228.65
Non-current assets due within 1
year
Other current assets
Total current assets 11,968,956,993.21 10,959,891,038.23 11,646,493,478.55 10,741,378,636.33
Non-current assets:
Loans and advances
Available-for-sale financial assets 9,985,404.00 9,985,404.00 10,268,121.10 10,268,121.10
Held-to-maturity investments
Long-term accounts receivableLong-term equity investment 65,904,576.15 1,653,402,169.87 57,800,445.23 1,278,602,169.87
Investing property
Fixed assets 1,455,917,468.96 370,048,490.40 1,433,674,626.29 397,886,724.19
Projects in construction 170,761,877.04 120,453,011.48 61,087,946.18 35,542,625.38
Engineering material
Fixed asset disposal 38,952.82 20,851,110.89
Bearer biological assets
Oil and gas assets
Intangible assets 172,436,313.45 18,360,947.30 167,502,525.56 18,952,170.77
Development expense
Goodwill 3,943,671.53 3,943,671.53
Long-term expense to be
apportioned
11,458,785.43 4,690,515.38 15,774,783.95 6,011,778.39
Deferred tax assets 154,584,929.72 138,754,122.92 150,686,419.10 139,410,896.12
Other non-current assets
Total of non-current assets 2,045,031,979.10 2,315,694,661.35 1,921,589,649.83 1,886,674,485.82
Total assets 14,013,988,972.31 13,275,585,699.58 13,568,083,128.38 12,628,053,122.15
Current liabilities:
Short-term loans 4,405,480,509.58 3,960,783,513.50 2,770,014,060.00 2,553,412,550.00
Loans from central bank
Deposits received and held for
others
Placements from banks and other
financial institutions
Transaction financial liabilities
Notes payable 2,073,469,273.58 1,834,770,235.97 2,884,697,072.42 2,546,131,169.12
Accounts payable 2,126,270,894.43 1,940,969,528.58 2,599,242,285.04 2,490,629,061.71
Accounts received in advance 270,098,949.96 747,694,457.84 279,331,464.38 162,177,552.53
Financial assets sold under
agreements to repurchase
Handling charges and
commissions payable
Employee’s compensation
payable
190,326,936.14 77,357,528.45 193,217,075.52 94,499,554.84
Tax payable -205,329,269.61 -202,174,316.16 -132,897,711.14 -74,701,335.32
Interest payable 23,633,016.78 21,675,319.92
Dividend payable 4,640,754.73 2,471,607.21 804,527.20
Other accounts payable 763,776,245.10 963,456,199.17 763,923,600.66 940,384,863.17
Due to reinsurers
Insurance contract reserve
Payables for acting trading
securities
Payables for acting underwritingsecurities
Non-current liabilities due within
1 year
Other current liabilities
Total current liabilities 9,628,734,293.91 9,325,328,754.56 9,381,965,390.86 8,734,208,735.97
Non-current liabilities:
Long-term borrowings 100,000,000.00 100,000,000.00
Bonds payable
Long-term payables
Special account payables
Projected liabilities
Deferred tax liabilities 1,308,715.59 611,831.88 1,308,715.59 611,831.88
Other non-current liabilities 113,979,248.48 71,205,048.48 78,541,048.48 62,205,048.48
Total non-current liabilities 215,287,964.07 171,816,880.36 79,849,764.07 62,816,880.36
Total liabilities 9,844,022,257.98 9,497,145,634.92 9,461,815,154.93 8,797,025,616.33
Owner’s equity (or shareholders’
equity)
Paid-in capital (or share capital) 1,203,972,704.00 1,203,972,704.00 1,203,972,704.00 1,203,972,704.00
Capital reserves 1,257,229,208.24 1,249,099,041.66 1,257,449,727.58 1,249,319,561.00
Less: treasury stock
Special reserve
Surplus reserve 809,307,995.80 809,307,995.80 809,307,995.80 809,307,995.80
General risk provision
Retained earnings 662,917,646.57 516,060,323.20 613,778,898.84 568,427,245.02
Foreign exchange difference -3,904,915.51 -9,141,464.66
Total owners' equity attributable
to holding company
3,929,522,639.10 3,778,440,064.66 3,875,367,861.56 3,831,027,505.82
Minority interests 240,444,075.23 230,900,111.89
Total owner’s equity 4,169,966,714.33 3,778,440,064.66 4,106,267,973.45 3,831,027,505.82
Total liabilities and owner’s
equity
14,013,988,972.31 13,275,585,699.58 13,568,083,128.38 12,628,053,122.15
4.2 Income statement for report period
Prepared by Konka Group Co., Ltd Jul.-Sep. 2010 Unit: RMB Yuan
Jul.-Sep. 2010 Jul.-Sep. 2009
Items
Consolidation Parent company Consolidation Parent company
I. Total operating income 4,541,445,371.76 4,745,758,487.49 3,853,977,811.36 3,345,070,509.22
Including: Sales 4,541,445,371.76 4,745,758,487.49 3,853,977,811.36 3,345,070,509.22
Interest income
Premium income
Handling charges and commission
income
II. Total operating cost 4,510,631,044.80 4,760,001,233.17 3,825,769,499.79 3,380,095,164.49Including: Cost of sales 3,851,812,648.68 4,238,426,004.81 3,161,286,159.30 2,818,338,010.57
Interest expenses
Service charge and commission
expenses
Cash surrender value
Claim expenses-net
Provision for insurance contract
reserves-net
Insurance policy dividend paid
Reinsurance expense
Business taxes and surcharges 962,862.61 206,140.83 743,601.89 199,376.18
Marketing and distribution
expenses
558,617,739.19 486,859,850.53 524,136,474.55 467,532,448.34
Administrative expenses 123,794,703.26 63,351,327.13 117,733,448.85 73,351,915.11
Financial costs -24,425,497.03 -28,842,090.13 22,686,179.10 20,673,414.29
Impairment loss -131,411.91 -816,363.90
Add: gain/(loss) from change in
fair value (“-” means loss)
2,553,854.00 1,409,434.00 8,445,431.25 8,445,431.25
Gain/(loss) from investment (“-”
means loss)
-892,110.00 450,000.00 1,909,738.01 51,291.95
Including: income form
investment on affiliated
enterprises and jointly-run
enterprises
Foreign exchange difference (“-”
means loss)
III. Business profit (“-” means
loss)
32,476,070.96 -12,383,311.68 38,563,480.83 -26,527,932.07
Add: non-business income 7,791,011.74 2,023,308.96 5,646,103.71 3,032,376.41
Less: non-business expense 2,276,441.64 462,271.56 889,318.58 503,294.36
Including: loss from non-current
asset disposal
1,896,354.74 121,933.94 265,639.19 213,130.81
IV. Total profit (“-” means loss) 37,990,641.06 -10,822,274.28 43,320,265.96 -23,998,850.02
Less: Income tax expense 23,360,537.65 11,047,990.64 10,564,856.20 5,015,664.91
V. Net profit (“-” means loss) 14,630,103.41 -21,870,264.92 32,755,409.76 -29,014,514.93
Attributable to owners of parent
company
10,290,954.38 -21,870,264.92 26,344,833.39 -29,014,514.93
Gain/loss of minority
shareholders
4,339,149.03 6,410,576.37
VI. Earnings per share
(I) Basic earnings per share 0.0085 -0.0182 0.0219 -0.0241
(II) Diluted earnings per share 0.0085 -0.0182 0.0219 -0.0241
VII. Other comprehensive income 593,364.33 148,232.92 -218,665.84 -218,665.84VIII. Total comprehensive income 15,223,467.74 -21,722,032.00 32,536,743.92 -29,233,180.77
Attributable to owners of parent
company
10,884,318.71 -21,722,032.00 26,126,167.55 -29,233,180.77
Attributable to minority
shareholders
4,339,149.03 0.00 6,410,576.37 0.00
4.3 Income statement for the period from the year-begin to the end of the report
period
Prepared by Konka Group Co., Ltd Jan.-Sep. 2010 Unit: RMB Yuan
Jan.-Sep. 2010 Jan.-Sep. 2009
Items
Consolidation Parent company Consolidation Parent company
I. Total operating income 12,481,629,166.85 12,311,111,993.76 9,025,977,839.56 7,674,833,760.83
Including: Sales 12,481,629,166.85 12,311,111,993.76 9,025,977,839.56 7,674,833,760.83
Interest income
Premium income
Handling charges and commission
income
II. Total operating cost 12,416,345,058.59 12,392,626,137.61 8,916,193,390.75 7,666,599,691.69
Including: Cost of sales 10,552,065,965.08 10,925,030,556.42 7,353,006,874.32 6,373,687,552.74
Interest expenses
Service charge and commission
expenses
Cash surrender value
Claim expenses-net
Provision for insurance contract
reserves-net
Insurance policy dividend paid
Reinsurance expense
Business taxes and surcharges 2,444,351.00 628,558.53 2,245,012.60 764,313.61
Marketing and distribution
expenses
1,486,457,373.21 1,273,079,448.29 1,194,700,330.45 1,052,296,455.44
Administrative expenses 370,243,827.84 202,929,328.40 331,940,106.45 214,194,849.50
Financial costs -1,900,821.77 -12,588,547.96 38,868,613.93 30,608,027.25
Impairment loss 7,034,363.23 3,546,793.93 -4,567,547.00 -4,951,506.85
Add: gain/(loss) from change in
fair value (“-” means loss)
-2,781,054.00 -2,781,054.00 10,623,434.10 10,623,434.10
Gain/(loss) from investment (“-”
means loss)
2,422,550.27 19,553,481.38 1,334,482.70 1,401,291.95
Including: income form
investment on affiliated
enterprises and jointly-run
enterprises
3,304,130.92 -575,255.31Foreign exchange difference (“-”
means loss)
III. Business profit (“-” means
loss)
64,925,604.53 -64,741,716.47 121,742,365.61 20,258,795.19
Add: non-business income 60,155,521.19 40,891,833.77 11,924,159.22 6,511,410.16
Less: non-business expense 6,793,303.70 2,156,241.93 2,743,685.85 1,392,944.57
Including: loss from non-current
asset disposal
2,179,678.84 334,394.62 1,018,815.05 675,209.14
IV. Total profit (“-” means loss) 118,287,822.02 -26,006,124.63 130,922,838.98 25,377,260.78
Less: Income tax expense 43,144,710.14 14,321,070.15 23,180,948.73 11,868,803.21
V. Net profit (“-” means loss) 75,143,111.88 -40,327,194.78 107,741,890.25 13,508,457.57
Attributable to owners of parent
company
61,178,474.77 -40,327,194.78 106,646,848.40 13,508,457.57
Gain/loss of minority
shareholders
13,964,637.11 1,095,041.85
VI. Earnings per share
(I) Basic earnings per share 0.0508 -0.0335 0.0886 0.0112
(II) Diluted earnings per share 0.0508 -0.0335 0.0886 0.0112
VII. Other comprehensive income 5,016,029.81 -220,519.34 372,576.56 372,576.56
VIII. Total comprehensive income 80,159,141.69 -40,547,714.12 108,114,466.81 13,881,034.13
Attributable to owners of parent
company
66,194,504.58 -40,547,714.12 107,019,424.96 13,881,034.13
Attributable to minority
shareholders
13,964,637.11 0.00 1,095,041.85 0.00
4.4 Cash flow statement for the period from the year-begin to the end of the report
period
Prepared by Konka Group Co., Ltd Jan.-Sep. 2010 Unit: RMB Yuan
Jan.-Sep. 2010 Jan.-Sep. 2009
Items
Consolidation Parent company Consolidation Parent company
I. Cash flows from operating
activities
Cash received from sales of
goods or rending of services
13,160,180,103.69 11,634,182,835.89 10,438,234,930.09 8,804,694,171.19
Net increase of customer
deposits received and held for
others
Net increase of loans from
central bank
Net increase of loans from
other financial institutions
Cash received against
original insurance contractsNet Cash received from
reinsurance
Net increase of client deposit
and investment
Net increase of disposal of
tradable financial assets
Cash received as interest,
fees and commissions
Net increase of borrowings
from banks and other financial
institutions
Cash received under
repurchasing, net
Tax and fare refunds 182,005,443.08 31,250,573.46 70,594,162.83 15,821,280.80
Other cash received from
operating activities
294,359,512.85 838,857,408.02 179,628,852.19 287,793,267.26
Sub-total of cash inflows
from operating activities
13,636,545,059.62 12,504,290,817.37 10,688,457,945.11 9,108,308,719.25
Cash paid for goods and
services
11,047,071,989.89 10,129,363,571.06 8,450,889,306.77 7,511,836,747.08
Net increase of customer
loans and advances
Net increase of deposits in
central bank, banks and other
financial institutions
Cash paid for original
contract claims
Cash paid for interest, fees
and commissions
Cash paid for policy
dividend
Cash paid to and for
employees
826,432,712.51 464,805,752.67 652,178,044.58 393,980,961.43
Cash paid for taxes and fares 1,126,160,078.88 879,517,009.26 1,021,065,218.57 858,756,754.19
Other cash paid relating to
operating activities
926,125,534.56 861,602,614.71 619,016,186.77 509,618,481.76
Sub-total of cash outflows
from operating activities
13,925,790,315.84 12,335,288,947.70 10,743,148,756.69 9,274,192,944.46
Net cash flows from
operating activities
-289,245,256.22 169,001,869.67 -54,690,811.58 -165,884,225.21
II. Cash Flows from Investing
Activities
Cash received from
withdrawal of investments
95,940.00 95,940.00 166,820.00 166,820.00Cash received from
investment income
10,529.35 19,553,481.38 51,291.95 1,401,291.95
Net cash received from
disposal of fixed assets, intangible
assets and other long-term assets
32,178,187.27 28,193,810.31 9,365,186.55 8,161,759.93
Net cash received from
disposal of subsidiaries and other
operating units
Other cash received relating
to investing activities
69,000,000.00 12,842,744.00
Sub-total of cash inflows of
investing activities
101,284,656.62 47,843,231.69 22,426,042.50 9,729,871.88
Cash paid for acquisition of
fixed assets, intangible assets and
other long-term assets
273,522,150.82 105,038,569.57 197,393,691.27 18,686,283.55
Cash paid for acquisition of
investments
4,800,000.00 374,800,000.00 166,820.00 166,820.00
Net increase of pledge loans
Net cash paid for acquisition
of subsidiaries and other operating
units
Other cash paid relating to
investing activities
69,000,000.00 69,000,000.00
Sub-total of cash outflows of
investing activities
347,322,150.82 548,838,569.57 197,560,511.27 18,853,103.55
Net cash flows from
investing activities
-246,037,494.20 -500,995,337.88 -175,134,468.77 -9,123,231.67
III. Cash Flows from Financing
Activities:
Cash received from
absorbing investments
6,093,075.82
Including: Cash received by
subsidiaries as investments from
minority shareholders
6,093,075.82
Cash received from
borrowings
2,917,069,241.37 2,532,505,690.00 2,772,987,335.00 2,561,333,550.00
Cash received from bonds
issuing
Other cash received relating
to financing activities
3,018,010,810.99 2,804,089,310.52 2,000,992,506.14 1,494,586,200.94
Sub-total of cash inflows of
financing activities
5,935,080,052.36 5,336,595,000.52 4,780,072,916.96 4,055,919,750.94
Cash paid for repayments of
borrowings
3,116,022,190.12 2,993,228,911.05 1,267,998,493.12 1,020,394,062.77Cash paid for dividends,
profit distribution or interest
27,902,889.19 18,128,821.71 71,496,591.28 60,198,635.20
Including: dividends or
profits paid to minority
shareholders by subsidiaries
3,056,053.45
Other cash paid relating to
financing activities
2,211,303,988.22 1,908,797,821.00 2,806,444,846.85 2,593,994,694.61
Sub-total of cash outflows of
financing activities
5,355,229,067.53 4,920,155,553.76 4,145,939,931.25 3,674,587,392.58
Net cash flows from
financing activities
579,850,984.83 416,439,446.76 634,132,985.71 381,332,358.36
IV. Effect of foreign exchange
rate changes on cash and cash
equivalents
-7,947,148.66 -3,723,831.97 -6,681,173.42 -6,188,917.55
V. Net decrease in cash and cash
equivalents
36,621,085.75 80,722,146.58 397,626,531.94 200,135,983.93
Add: Opening balance of
cash and cash equivalents
749,501,416.29 341,440,119.99 845,026,867.06 358,631,499.14
VI. Closing balance of cash and
cash equivalents
786,122,502.04 422,162,266.57 1,242,653,399.00 558,767,483.07
4.5 Auditor’s report
Audit opinion: Un-audited
Board of Directors
Konka Group Co., Ltd
27 October 2010
