KONKA GROUP CO., LTD.
SEMI-ANNUAL REPORT 2012
I. Important Notes
The Board of Directors, the Supervisory Committee, as well as directors, supervisors
and senior management staff of Konka Group Co., Ltd. (hereinafter referred to as “the
Company”) ensure that this report carries no false information, misleading statements
or significant omissions and will take individual and/or joint responsibilities for
the factuality, accuracy and integrality of all the information disclosed in this
report.
All directors were present at the board session for reviewing this report.
The financial statements for the first half of 2012 have not been audited by a CPAs
firm.
Hou Songrong, company principal, Yang Rong, head of the accounting work and Xu Youshan,
head of the accounting department (person-in-charge of accounting) hereby declare
that they guarantee the factuality and completeness of the financial report carried
in this report.
English Translation for Reference Only. Should there be any discrepancy between the
two versions, the Chinese version shall prevail.
II. Company Profile
（I）Basic information
A-share code 000016 B-share code 200016
A-share abbreviation SKJA B-share abbreviation SKJB
Stock exchange listed with Shenzhen Stock Exchange
Legal Chinese name of the
康佳集团股份有限公司
Company
Abbr. of the legal Chinese
康佳集团
name of the Company
Legal English name of the
KONKA GROUP CO.，LTD.
Company
Abbr. of the legal English
KONKA GROUP
name of the Company
Legal representative of
Hou Songrong
the Company
Registered address Overseas Chinese Town, Nanshan District, Shenzhen
Postal code for the
518053
registered address
Office address Overseas Chinese Town, Nanshan District, Shenzhen
Postal code for the office
518053
address
Internet website of the
http://www.konka.com
Company
Email address szkonka@konka.com
1
（II）For contact
Secretary to the Board Securities Affairs Representative
Name Xiao Qing
Konka Group Co., Ltd., Overseas Konka Group Co., Ltd., Overseas
Contact address
Chinese Town, Shenzhen, China Chinese Town, Shenzhen, China
Tel. 0755-26608866 0755-26608866
Fax 0755-26601139 0755-26601139
E-mail szkonka@konka.com szkonka@konka.com
（III）About information disclosure and where the semi-annual report is placed
Newspapers designated by the Company
Securities Times, etc.
for information disclosure
Internet website designated by CSRC
http://www.cninfo.com.cn
for disclosing the semi-annual report
Where the semi-annual report is placed Secretariat to the Board of Directors, Konka Group Co., Ltd.
III. Financial and Business Highlights
（I）Major accounting data and financial indexes
Any retrospective adjustment in previous financial statements?
□ Yes √ No □ Inapplicable
Major accounting data
Reporting period Same period of last
Major accounting data Increase/decrease (%)
(Jan.-Jun.) year
Gross operating revenues (RMB Yuan) 7,038,923,137.77 6,865,103,919.76 2.53%
Operating profit (RMB Yuan) -31,803,924.69 -254,020,614.69 87.48%
Total profit (RMB Yuan) 43,164,908.88 -175,902,661.96 124.54%
Net profit attributable to
shareholders of the Company (RMB 11,467,291.68 -195,000,941.75 105.88%
Yuan)
Net profit attributable to
shareholders of the Company after
-38,396,824.01 -219,848,387.35 82.53%
deducting non-recurring gains and
losses (RMB Yuan)
Net cash flow from operating
1,115,585,087.77 5,538,058.12 20,043.98%
activities (RMB Yuan)
As at the end of this As at the end of last
Increase/decrease (%)
reporting period year
Total assets (RMB Yuan) 14,831,013,390.83 16,906,453,313.31 -12.28%
Owners ’ equity attributable to
shareholders of the Company (RMB 4,002,985,758.82 4,009,723,963.82 -0.17%
Yuan)
Share capital (share) 1,203,972,704.00 1,203,972,704.00 0%
Major financial indexes
Major financial indexes Reporting period Same period of last Increase/decrease (%)
2
(Jan.-Jun.) year
Basic EPS (RMB Yuan/share) 0.0095 -0.162 105.86%
Diluted EPS (RMB Yuan/share) 0.0095 -0.162 105.86%
Basic EPS after deducting
non-recurring gains and losses (RMB -0.0319 -0.1826 82.53%
Yuan/share)
Fully diluted ROE（%） 0.2865% -5.157% 5.4435%
Weighted average ROE（%） 0.29% -5% 5.29%
Fully diluted ROE after deducting
-0.9592% -5.8142% 4.855%
non-recurring gains and losses（%）
Weighted average ROE after deducting
-0.96% -5.64% 4.68%
non-recurring gains and losses（%）
Net cash flow per share from
operating activities (RMB 0.9266 0.0046 20,043.98%
Yuan/share)
As at the end of this As at the end of last
Increase/decrease (%)
reporting period year
Net assets per share attributable to
shareholders of the Company (RMB 3.3248 3.3304 -0.17%
Yuan/share)
Liability/asset ratio（%） 71.48% 74.94% -3.46%
Notes to major accounting data and financial indexes before the end of this reporting period
(please write an adjustment note if there’s any retrospective adjustment)
（ II ） Accounting data differences under the domestic and overseas accounting
standards
1. Net profit and net asset differences between financial reports disclosed according to the
international and Chinese accounting standards respectively
□ Applicable√ Inapplicable
2. Net profit and net asset differences between financial reports disclosed according to the
overseas and Chinese accounting standards respectively
□ Applicable √Inapplicable
3. Specific items involving significant difference
Involved provisions of
Items involving international and/or
Amount (RMB Yuan) Reason for the difference
significant difference overseas accounting
standards
N/A 0 N/A N/A
4. Notes to accounting data differences under the domestic and overseas accounting standards
Naught
3
（III）Items of non-recurring gains and losses
√Applicable □Inapplicable
Items Amount (RMB Yuan) Notes
Gains and losses on disposal of non-current assets 8,236,511.30
Tax rebate, reduction or exemption due to un-authorized approval or the lack
of formal approval documents
Government grants recognized in the current year, except for those acquired
in the ordinary course of business or granted at certain quotas or amounts 25,452,246.34
according to the country’s unified standards
Capital occupation fees received from non-financial enterprises that are
included in current gains and losses
Gains generated when the investment costs of the Company ’ s acquiring
subsidiaries, associates and joint ventures are less than the fair value of
identifiable net assets in the investees attributable to the Company in the
acquisition of the investments
Exchange gains and losses of non-monetary assets
Gains and losses through entrusting others to invest or manage assets
Various asset impairment provisions due to acts of God such as natural
disasters
Gains and losses on debt restructuring
Enterprise reorganization expenses, such as expenses on employee settlement
and integration
Gains and losses on the parts exceeding the fair value when prices of
transactions become unfair
Net current gains and losses from the period-begin to the combination date
of subsidiaries due to business combinations under the same control
Gains and losses on contingent matters which are irrelevant to the normal
operation of the Company
Gains and losses on fair value changes of transactional financial assets and
liabilities, and investment gains on disposal of transactional financial
27,211,185.56
assets and liabilities and available-for-sale financial assets, except for
the effective hedging business related to the Company’s normal operation
Reversal of impairment provisions for accounts receivable which are
separately tested for impairment signs
Gains and losses on entrustment loans from external parties
Gains and losses on fair value changes of investing properties for which the
fair value method is adopted for subsequent measurement
Current gain and loss effect due to a just-for-once adjustment to current
gains and losses according to requirements of taxation and accounting laws
and regulations
Custodian fee income from entrusted operations with the Company
Other non-operating incomes and expenses besides the items above 4,604,289.99
Other gain and loss items that meet the definition of non-recurring gains
91,013.92
and losses
Minority interests effects -388,785.02
Income tax effects -15,342,346.40
4
Total 49,864,115.69 --
Explanation given by the Company to “other gain and loss items that meet the definition of
non-recurring gains and losses” and when it recognizes a non-recurring gain and loss item as
a recurring one according to the nature and features of its ordinary business
Amount involved (RMB
Item Notes
Yuan)
Investment income from disposal of
91,013.92
long-term equity investment
IV. Changes in Share Capital and Particulars about Shareholders
（I）Changes in share capital
1. Statement of changes of shares
√Applicable □Inapplicable
Unit: Share
Before the change Increase/decrease (+, -) After the change
Issuance Capitalizati
Proportion Bonus Proportion
Number of new on of public Others Subtotal Number
(%) shares (%)
shares reserve fund
I. Shares subject to
trading moratorium 198,388,540 16.48% -6,600 -6,600 198,381,940 16.48%
1. State-owned shares
2. State-owned legal
person shares 198,381,940 16.48% 198,381,940 16.48%
3. Other domestic
shares
Including: Shares held
by domestic legal
persons
Shares held by
domestic individuals
4. Shares held by
overseas shareholders
Including: Shares held
by overseas legal
persons
Shares held by
overseas individuals
5. Shares held by
senior management 6,600 0% -6,600 -6,600 0 0%
staff
II. Shares not subject
to trading moratorium 1,005,584,164 83.52% 6,600 6,600 1,005,590,764 83.52%
1. Ordinary shares
denominated in RMB 599,908,360 49.83% 6,600 6,600 599,914,960 49.83%
2. Domestically listed
foreign shares 405,675,804 33.69% 405,675,804 33.69%
3. Overseas listed
foreign shares
4. Others
III. Total shares 1,203,972,704.00 100% 1,203,972,704.00 100%
Approval of share changes (if applicable)
Inapplicable
5
Transfers in share changes
Inapplicable
Influence of share changes on the latest financial indexes such as EPS and net assets per share
(if any)
Inapplicable
Other contents that the Company thinks necessary or is asked by securities regulators to be
disclosed
Shares held by senior executives were 6,600 shares of A-share of Shen Konka that held by former
Vice President Mr. Wang Youlai. In terms of Mr. Wang Youlai has resigned from the post of Vice
President of the Company in Dec. 2011, according to relevant regulations, shares of the Company
that held by Mr. Wang Youlai was released for listing in Jun. 2012.
2. Changes in shares subject to trading moratorium
√Applicable □Inapplicable
Unit: Share
Shares subject Releasing from
Shares subject
to trading trading Increase in the Reason for
Number of to trading Date of
moratorium at moratorium in reporting trading
shareholders moratorium at releasing
the the reporting period moratorium
the period-end
period-begin period
Overseas Commitment in
Chinese Town the share
198,381,940 0 0 198,381,940 Unknown
Group splitting
Corporation reform
Subject to
trading
moratorium
within half a
Wang Youlai 6,600 6,600 0 0 Jun. 2012
year of the
resignation of
senior
management
Total 198,388,540 6,600 0 198,381,940 -- --
（II）Issuance and listing of securities
1. Securities issues in the previous three years
□Applicable √Inapplicable
2. Changes of the Company’s share number and structure, as well as the corresponding changes
in its asset-liability structure
□Applicable √Inapplicable
6
3. Existing employee shares
□Applicable √Inapplicable
（III）Shareholders and actual controller
1. Total number of shareholders at the end of the reporting period
The Company had 100,085 shareholders in total at the end of the reporting period.
2. Shareholding of the top ten shareholders
Unit: Share
Particulars about shares held by the top ten shareholders
Shareholdin Number of Pledged or frozen shares
Total shares
Name of shareholder (full Nature of g non-tradabl
held at the Status of Number of
name) shareholder percentage e shares
period-end shares shares
(%) held
OVERSEAS CHINESE TOWN State-owned
ENTERPRISES CO. corporation 19% 228,754,783 198,381,940 N/A 0
Foreign
HOLY TIME GROUP LIMITED 4.81% 57,880,800 0 Unknown
corporation
Foreign
GAOLING FUND,L.P. 2.19% 26,400,625 0 Unknown
corporation
Domestic
ICBC－GF LARGE-CAP GROWTH non-state-o
1.2% 14,496,595 0 Unknown
MIXED TYPE FUND wned
corporation
Foreign
NAM NGAI natural 0.98% 11,760,520 0 Unknown
person
Domestic
ABC－CHINA POST CORE GROWTH non-state-o
0.88% 10,589,505 0 Unknown
STOCK FUND wned
corporation
Domestic
ICBC － UBS SDIC RUIFU non-state-o
0.86% 10,391,976 0 Unknown
CLASSIFICATION STOCK FUND wned
corporation
Domestic
ABC-CHINA AMC STABLE GROWTH non-state-o
0.5% 6,000,000 0 Unknown
MIXED TYPE FUND wned
corporation
Domestic
ABC － CHINA POST CORE non-state-o
wned 0.5% 6,000,000 0 Unknown
SELECTED STOCK FUND
corporation
Domestic
LI YICHAO natural 0.45% 5,391,181 0 Unknown
person
Notes of particulars of shareholders
7
Particulars about shares held by the top ten shareholders holding tradable shares
√Applicable □Inapplicable
Unit: Share
Number of tradable Type and number of shares
Name of shareholder
shares held Type Number
HOLY TIME GROUP LIMITED 57,880,800 B-share 57,880,800
OVERSEAS CHINESE TOWN ENTERPRISES CO. 30,372,843 A-share 30,372,843
GAOLING FUND,L.P. 26,400,625 B-share 26,400,625
ICBC－GF LARGE-CAP GROWTH MIXED TYPE FUND 14,496,595 A-share 14,496,595
NAM NGAI 11,760,520 B-share 11,760,520
ABC－CHINA POST CORE GROWTH STOCK FUND 10,589,505 A-share 10,589,505
ICBC－UBS SDIC RUIFU CLASSIFICATION STOCK FUND 10,391,976 A-share 10,391,976
ABC-CHINA AMC STABLE GROWTH MIXED TYPE FUND 6,000,000 A-share 6,000,000
ABC－CHINA POST CORE SELECTED STOCK FUND 6,000,000 A-share 6,000,000
LI YICHAO 5,391,181 A-share 5,391,181
Explanation on associated relationship or/and persons acting in concert among the above-mentioned
shareholders:
Among the shareholders above, ABC－CHINA POST CORE GROWTH STOCK FUND and ABC－CHINA POST CORE
SELECTED STOCK FUND are under the same fund manager. The first majority shareholder OVERSEAS
CHINESE TOWN ENTERPRISES CO. has no related-party relationship with other shareholders and they
are not acting-in-concert parties, either. Except for that, the Company does not know whether
the other shareholders are related parties and whether they are acting-in-concert parties.
3. Controlling shareholder and actual controller
（1）Change of the controlling shareholder and actual controller
□Applicable √Inapplicable
（2）Particulars about the controlling shareholder and actual controller
Is there a new actual controller?
□ Yes √ No □ Inapplicable
Name of the actual controller Overseas Chinese Town Group Corporation
Type of the actual controller SASAC
Particulars:
Overseas Chinese Town Group Corporation is a large-scale state-owned enterprise, which was
founded on Nov. 11, 1985 with the approval of the State Council and belongs to one of the central
enterprises of State-owned Assets Supervision and Administration Commission of the State Council.
Its legal representative is Mr. Ren Kelei. Overseas Chinese Town Group Corporation has a
registered capital of RMB 6.1 billion, and the core businesses cover the tourism, real estate,
hotels and telecommunication.
（3）Illustration on the relationship between the Company and its actual controller
（4）
8
SASAC of the State Council
100%
OCT Group Corporation
19% (A shares)
Konka Group Co., Ltd.
（4）The actual controller controls the Company via trust or other ways of asset management.
□Applicable √Inapplicable
4. Other corporate shareholders with a shareholding over 10%
□Applicable √Inapplicable
（IV）Convertible corporate bonds
□Applicable √Inapplicable
9
V. Directors, Supervisors and Senior Management
（I）Shareholding changes of directors, supervisors and senior management
Sharehol Shareholdi Receives
Sharehol ding ng payment
Share
ding at increase decrease Shareholdi Including: from
options
Beginning date of Ending date of the during during ng at the restricted Reasons for shareholde
Name Position Gender Age held at the
office term office term period-b this this period-end shares held change r units or
period-end
egin reportin reporting (share) (share) other
(share)
(share) g period period related
(share) (share) units?
Hou
Chairman Male 43 17 Dec. 2010 17 Dec. 2013 0 0 0 0 0 0 No
Songrong
Su Zheng Director Male 55 17 Dec. 2010 17 Dec. 2013 0 0 0 0 0 0 Yes
Wang
Director Female 42 17 Dec. 2010 17 Dec. 2013 0 0 0 0 0 0 Yes
Xiaowen
He Haibin Director Male 37 17 Dec. 2010 17 Dec. 2013 0 0 0 0 0 0 Yes
Feng Yutao Director Male 44 17 Dec. 2010 17 Dec. 2013 0 0 0 0 0 0 No
Yang
Director Female 44 17 Dec. 2010 17 Dec. 2013 0 0 0 0 0 0 No
Haiying
Zhang
Director Male 43 17 Dec. 2010 17 Dec. 2013 0 0 0 0 0 0 No
Zhong
Dong
Supervisor Male 58 17 Dec. 2010 17 Dec. 2013 0 0 0 0 0 0 Yes
Yaping
Hao Gang Supervisor Male 38 17 Dec. 2010 17 Dec. 2013 0 0 0 0 0 0 Yes
Liu Yong Supervisor Male 40 17 Dec. 2010 17 Dec. 2013 0 0 0 0 0 0 No
Chen
President Male 48 25 Apr. 2012 25 Apr. 2014 0 0 0 0 0 0 No
Yuehua
10
Cheng Vice
Male 49 25 Apr. 2012 25 Apr. 2014 0 0 0 0 0 0 No
Dahou President
Vice
He Jianjun Male 42 25 Apr. 2012 25 Apr. 2014 0 0 0 0 0 0 No
President
Company
Xiao Qing Male 42 17 Dec. 2010 17 Dec. 2013 0 0 0 0 0 0 No
Secretary
Yang Rong CFO Female 37 25 Apr. 2012 25 Apr. 2014 0 0 0 0 0 0 No
Vice
Mu Gang Male 42 25 Apr. 2012 25 Apr. 2014 0 0 0 0 0 0 No
President
Vice
Lin Gaike Male 40 25 Apr. 2012 25 Apr. 2014 0 0 0 0 0 0 No
President
Vice
Liu Fengxi Male 40 25 Apr. 2012 25 Apr. 2014 0 0 0 0 0 0 No
President
Total -- -- -- -- -- 0 0 0 0 0 0 -- --
Equity incentives granted to directors, supervisors and senior management during the reporting period
□Applicable √Inapplicable
11
（II）Post-holding particulars
Post-holding in shareholders units
√Applicable □Inapplicable
Name of the
Receives
person
payment from
holding any Name of the shareholder Position in the Beginning date Ending date of
the
post in any unit shareholder unit of office term office term
shareholder
shareholder
unit?
unit
Standing committee
Overseas Chinese Town member of Party
Dong Yaping 1 Mar. 2008 Yes
Group Corporation Committee, Vice
General Manager
Standing committee
member of Party
Committee, Deputy
Overseas Chinese Town Secretary of Party
Su Zheng 1 Mar. 2008 Yes
Group Corporation Committee and
Secretary of
Inspecting Discipline
Commission
Standing committee
Overseas Chinese Town
Wang Xiaowen member of Party 1 Mar. 2008 Yes
Group Corporation Committee
Standing committee
Overseas Chinese Town
Hou Songrong member of Party 1 Mar. 2008 No
Group Corporation Committee
Overseas Chinese Town Chief of Enterprise
He Haibin 1 Feb. 2010 Yes
Group Corporation Management Department
Shenzhen Overseas Chinese Chief of Inspection
Hao Gang 1 Mar. 2010 Yes
Town Co., Ltd. Office
Notes to
post-holding
Except the above situation, other directors, supervisors and senior management didn’t hold any
in
position in the shareholders’ units.
shareholder
units
Post-holding in other units
√Applicable □Inapplicable
Name of the
Beginni
person Ending
ng date
date of Receives payment
holding any Name of other unit Position in other unit of
office from other unit?
post in other office
term
term
units
Chinese Young Entrepreneurs’
Hou Songrong Vice chairman No
Association
Hou Songrong Central Enterprise Youth Federation Standing member No
Wang Xiaowen Central Enterprise Youth Federation Vice chairman No
Wang Xiaowen Accounting Society of ShenZhen Vice chairman No
Dong Yaping Shenzhen Foundation for Justice and Vice President No
12
Courage
Advisory Committee of Shenzhen
Dong Yaping Member No
Municipal Government
Expert Evaluation Committee for
Dong Yaping Member No
Shenzhen Mayor Quality Award
Dong Yaping Chinese Culture Promotion Society Member of the presidium No
Vice President, GM of
Feng Yutao Ambarella Inc. Yes
Chinese Area
Hamburg Fritz und Mark Certified
Yang Haiying Senior Accountant Yes
Public Accountants
Zhang Zhong Beijing Zhonglun Law Firm Lawyer and Copartner Yes
Notes to
post-holding Hou Songrong, Wang Xiaowen and Dong Yaping all took part-time job in other units, while Feng Yutao,
in other Yang Haiying and Zhang Zhong were the independent directors of the Company.
units
（III）Remuneration for directors, supervisors and senior management
Decision-making
Remuneration of directors and supervisors of the Company was submitted for review and
procedure for the
approval of the Shareholders’ General Meeting after the review and approval of the Board
remuneration of
of Directors. And the remuneration of senior management was approved by the Board of
directors, supervisors
Directors.
and senior management
Basis for determining The Board of Directors determined the remuneration of directors, supervisors and senior
the remuneration of management, and referred to the following factors: a. scope of jobs and responsibility
directors, supervisors shouldered; b. actual profit of the Company; c. market remuneration level in the same
and senior management industry and same area.
Actual payment of the During the reporting period, there were a total of 18 directors, supervisors and senior
remuneration of management, 13 persons of who actually received remuneration from the Company. The total
directors, supervisors amount of remuneration paid for the directors, supervisors and senior management was
and senior management RMB 2,595,400 during the reporting period.
（IV）Change of directors, supervisors and senior management
Name Position Way of change Date of change Reason for change
Chen
President Reengaged 25 Apr. 2012 Engaged by the Board Session
Yuehua
Cheng
Vice President Reengaged 25 Apr. 2012 Engaged by the Board Session
Dahou
He Jianjun Vice President Reengaged 25 Apr. 2012 Engaged by the Board Session
Yang Rong CFO Reengaged 25 Apr. 2012 Engaged by the Board Session
Mu Gang Vice President Reengaged 25 Apr. 2012 Engaged by the Board Session
Lin Gaike Vice President Reengaged 25 Apr. 2012 Engaged by the Board Session
Liu Fengxi Vice President Newly engaged 25 Apr. 2012 Engaged by the Board Session
（V）Employees
Number of on-job employees 17,969
13
Number of retired employees for whom the Company shall
0
bear expenses
Function structure
Type of function Number of personnel
Production 12,029
Sale 3,150
Technical 1,123
Financial 542
Administration 1,125
Level of education
Level of education Number of personnel
Post doctors 3
Doctors 11
Masters 183
Bachelors 2,601
Junior college graduates 3,888
High school graduates and below 11,283
Notes to the employee particulars:
N/A
VI. Report of the Board of Directors
（I）Discussion and analysis by the management
The Company specializes in production and operation of color TVs, digital mobile phones,
consumer appliances, set-top boxes, LED products as well as the supporting products (such
as molds, injection, packages, etc), and belongs to the industries of electronics
manufacture and telecommunication equipment manufacture.
Since 2012, due to unfavorable domestic and overseas economic environments, the continuous
restriction on house purchasing, etc., demand for household appliances was weak. In face
of market challenges, the Company kept to the “product first” strategy and accelerated
functional transformation and business upgrading of its products, which further optimized
its product structure. As a result, the operating efficiency steadily increased as compared
with the same period of last year and the profitability also improved.
For the reporting period, the Company achieved a total sales income of RMB 7.039 billion,
up 2.53% from a year earlier; a net profit attributable to shareholders of the Company
of RMB 11.4673 million, up 105.88% over the same period of last year; and an EPS of RMB
0.0095.
A. The operating revenues increased due to the following reasons:
a. In terms of the domestic sale of color TVs, the Company adhered to intelligent cloud
TVs, promoting innovations and popularization of these products. Meanwhile, it developed
a lot of differential 3D TVs, intelligent TVs, LED TVs, etc., which further optimized the
14
product structure and helped realize healthy development of the color TV business. For
the reporting period, despite a considerable year-on-year drop of the sales volume and
income in the color TV industry, the color TV sales income of the Company saw some growth
over the same period of last year.
b. In terms of the consumer appliance business, the Company adhered to the “healthy product”
strategy, formulated a differential product strategy, enhanced product planning and design,
improved the product structure, promoted refrigerator products to a higher grade and thus
came to a higher position in the consumer appliance industry.
c. In terms of export, the Company took the initiative to adjust the marketing structure
and the sales volume of flat-panel TVs increased significantly. At the same time, it worked
hard to tap the purchasing potential in traditional districts, which ensured a stable total
sales income from export.
d. As for emerging business lines regarding the digital network, household appliances for
a better life quality, etc., the Company made innovations in terms of marketing channels,
products and the incentive mechanism, which helped realize a healthy and rapid development
of the emerging business lines.
B. The net profit soared over the same period of last year due to the following reasons:
a. In terms of the color TV business, the Company developed a lot of differential products
and greatly improved its product structure. As a result, the profitability improved greatly
as compared with the same period of last year and the gross profit rate increased from
14.59% of the same period of last year to 19.36% of the reporting period.
b. In terms of export, the Company increased its gross profit rate through improving the
existing product structure. And the profitability increased as a result.
c. As for the consumer appliance business, some achievements were made in terms of cost
reduction, the operating efficiency increased and the profitability also improved.
C. Influence of the Company’s R&D input, technical innovations and independent innovations
on its core competitiveness and position in the industry
During the reporting period, the Company enhanced R&D input, developed new products and
techniques, upgraded equipment and enriched the product range so as to lay a solid
foundation for the Company to carry out the product differentiation strategy. At the same
time, it conducted many activities to encourage technical innovations and helpful advices
to help increase the production efficiency and core competitiveness so that it could keep
a leading position in the industry.
Is the Company’s actual business performance 20% lower or higher than any earning forecast
or business plan for the reporting period which has been publicly disclosed earlier?
□ Yes √ No □ Inapplicable
15
Analysis to the business and performances of the Company ’ s main subsidiaries and
stock-participating companies:
A. Dongguan Konka Electronics Co., Ltd.
With its 100% equity held directly and indirectly by the Company and registered capital
of RMB 266.67 million, Dongguan Konka is engaged in production and operation of color TV.
At the end of the reporting period, the subsidiary’s total assets were RMB 590,979,467.44
and the net assets were RMB 359,274,781.10. The operating revenue for the first half of
2012 was RMB 124,169,094.17, the operating profit was RMB 19,981,981.70 and the net profit
was RMB 19,013,127.78.
B. Kunshan Konka Electronics Co., Ltd.
With its 100% equity directly held by the Company and registered capital of RMB 350 million,
Kunshan Konka Electronics Co., Ltd. is engaged in doing researches for, designing and
producing LCD modules and flat-panel TVs. At the end of the reporting period, the
subsidiary ’ s total assets were RMB 475,861,371.28 and the net assets were RMB
383,317,714.70. The operating revenue for the first half of 2012 was RMB 637,291,618.73,
the operating profit was RMB 9,707,822.0 and the net profit was RMB 14,791,332.61.
C. Anhui Konka Electronics Co., Ltd.
With its 78% equity held by the Company and registered capital of RMB 140 million, Anhui
Konka is engaged in production and operation of color TV. At the end of the reporting period,
the subsidiary ’ s total assets were RMB 439,142,017.65 and the net assets were RMB
357,444,411.02. The operating revenue for the first half of 2012 was RMB 700,907,822.86,
the operating profit was RMB 19,357,419.38 and the net profit was RMB 14,398,450.19.
D. Hong Kong Konka Co., Ltd.
With its 100% equity held by the Company and registered capital of HKD 500 thousand, Hong
Kong Konka is engaged in export and import of electromechanical and electronic products.
At the end of the reporting period, the subsidiary’s total assets were RMB 2,786,065,887.91
and the net assets were RMB 119,735,087.09. The operating revenue for the first half of
2012 was RMB 1,092,190,280.89, the operating profit was RMB 17,478,324.2 and the net profit
was RMB 18,275,655.18.
E. Shenzhen Konka Telecommunication Technology Co., Ltd
With its 100% equity directly and indirectly held by the Company and registered capital
of RMB 120 million, Shenzhen Konka Telecommunication Technology Co., Ltd. is engaged in
the business of developing, producing and selling digital mobile communication equipment
and mobile phone products. At the end of the reporting period, the subsidiary’s total
assets were RMB 592,695,175.79 and the net assets were RMB 3,235,758.72. The operating
revenue for the first half of 2012 was RMB 569,707,620.46, the operating profit was RMB
-20,947,589.10 and the net profit was RMB -20,191,112.55.
All risk factors that might have adverse impact on the Company’s effort to realize its
future development strategy and business goals:
A. Risk regarding a possible price battle in the household appliance industry
16
Due to many factors such as the weak consumer demand, the pressure from annual business
objectives on companies, the supply and demand changes of the local color TV industrial
chain, the stimulation of the energy-saving subsidy and the price competition among
household appliance makers, the risk of a price battle in the household appliance industry
in the second half of the year is looming.
B. E-commerce will affect the future development of color TVs and consumer appliances.
E-commerce has the characteristics of rapidness and convenience and more and more companies
attaché greater importance to it. Household appliance makers also start to carry out
e-commerce. All View Consulting predicts that the online purchase of household appliances
will maintain growth at a high speed in the coming few years and it may exceed 100 billion,
account for 14% of the total household appliance market scale and become the third biggest
marketing channel for household appliances by 2015. As such, e-commerce will produce
profound influence on the future development of color TVs and consumer appliances in China.
C. Development of intelligent TV terminals will change the business mode of color TVs.
Promoted by color TV brands at home and abroad, intelligent TV terminals will embrace a
rapid development in 2012. Under the expectation that intelligent TV terminals and its
clients will grow at a high speed, more and more entities will take part in various links
of the intelligent TV industrial chain and some substantial breakthroughs may be seen in
terms of the business mode innovation of intelligent TVs.
D. The rapid penetration of intelligent cellphones will change the competition situation
of the cellphone industry.
Intelligent cellphones are now in a rapid growth. Due to more and more new intelligent
cellphones and the operators’ subsidy policy, market prices for domestic intelligent
cellphones are in a downward track and at the same time fiercer competition appear in
middle-end and low-end markets.
1. Main business lines and their operating results
（1）Main business lines classified by industries and products
Unit: RMB Yuan
Increase/decre
Increase/decre Increase/decre
ase of
ase of ase of gross
Gross operating
Industries/pro operating cost profit rate
Operating revenue Operating cost profit revenue
ducts compared with compared with
rate (%) compared with
the same period the same period
the same period
last year (%) last year (%)
last year (%)
Industries
Electronics 6,976,145,869.85 5,674,892,770.60 18.65% 2.36% -1.98% 3.6%
Products
17
Color TVs 5,154,996,482.76 4,157,141,389.91 19.36% 1.09% -4.56% 4.77%
Cell phones 565,319,642.38 495,262,014.07 12.39% -12.26% -10.3% -1.92%
Consumer
717,953,215.54 580,042,564.86 19.21% 9.11% 9.52% -0.31%
appliances
Other 537,876,529.17 442,446,801.76 17.74% 30.18% 25.72% 2.92%
Explanation to the main business performances classified by industries and products:
When compared with the same period of last year, the operating revenue increased 2.36%,
the operating cost decreased 1.98% and the gross profit rate increased 3.6%. To be specific,
as for the color TV business, the operating revenue increased 1.09%, the operating cost
decreased 4.56% and the gross profit rate increased 4.77%; in terms of the cellphone
business, the operating revenue decreased 12.26%, the operating cost decreased 10.3% and
the gross profit rate decreased 1.92%; and in terms of the consumer appliance business,
the operating revenue increased 9.11%, the operating cost increased 9.52% and the gross
profit rate decreased 0.31%.
Explanation to the reasons for any significant year-on-year change of the gross profit
rate:
In the reporting period, in terms of the color TV business, the Company adhered to
intelligent cloud TVs, promoting innovations and popularization of these products.
Meanwhile, it developed a lot of differential 3D TVs, intelligent TVs, LED TVs, etc.,
further optimizing the product structure. As a result, the operating efficiency for the
reporting period increased steadily over the same period of last year and the profitability
also improved.
（2）Main business lines classified by regions
Unit: RMB Yuan
Increase/decrease compared with the
Region Operating revenue
same period last year (%)
Domestic 5,390,594,971.28 0.99%
Overseas 1,585,550,898.57 7.33%
Explanation to the main business performances classified by regions:
The domestic operating revenue increased 0.99% from a year earlier and the overseas
operating revenue increased 7.33% over the same period of last year.
Explanation to the main business structure:
For the reporting period, the color TV business accounted for 73.89% of the main business
operating revenues and the domestic operating revenue accounted for 77.27%.
18
（3）Reasons for significant changes in main business and its structure
□Applicable √Inapplicable
（4）Reasons for significant changes in profitability of main business (gross profit rate)
compared with that in the last year
√Applicable □Inapplicable
The gross profit rate of the Company’s color TV business increased during the reporting
period.
（5）Analysis on reasons of significant changes in profit breakdown compared with the last
year
√Applicable □Inapplicable
The profitability of the color TV business of the reporting period increased over the same
period of last year.
（6）Business nature, main products/services, net profit and other particulars about
subsidiaries which had an impact over 10% on the Company’s net profit for the reporting
period
√Applicable □Inapplicable
The investment earnings from the stock-participation subsidiary Shenzhen Refond
Optoelectronics Co., Ltd. had an impact over 10% on the Company’s net profit. Refond is
a company listed on the GEM of Shenzhen Stock Exchange (stock code: 300241), with the Company
holding 19.34% of its shares indirectly. Refond is mainly engaged in LED optoelectronics
manufacture, with its main products being LED. According to its business performance
forecast, its net profit for the first half of 2012 attributable to shareholders of the
Company was RMB 18-20.51 million.
(7) Problems and difficulties encountered in operation
A. Risk regarding a possible price battle in the household appliance industry
B. E-commerce will affect the future development of color TVs and consumer appliances.
C. Development of intelligent TV terminals will change the business mode of color TVs.
D. The rapid penetration of intelligent cellphones will change the competition situation
of the cellphone industry.
19
2. Internal control rules in relation to fair value measurement
√Applicable □Inapplicable
The Company defined the scope of application of the fair value measurement, conducted
confirmed measurement on the businesses relating to fair value measurement, strictly
implemented the decision-making and approving procedures concerning the purchase and sale
of the projects relating to fair value measurement, made clear the purchasing and holding
purposes, and disclosed the relevant information according to the share listing rules.
In terms of the institution, the Company strengthened its supervision on the management
team, to prevent the use of fair value to manipulate the Company’s financial information.
At the same time, the Company strengthened its efforts in providing relevant trainings
to its financial personnel and punishing those violating the relevant laws and regulations.
Items related to fair value measurement:
Unit: RMB Yuan
Gains/losses on Accumulative fair
Impairment
fair value changes value changes
Item Opening amount provisions for the Closing amount
in the reporting recorded into
reporting period
period equity
Financial assets
Including: 1.
Financial assets
measured at fair
value whose changes
are recorded into
current gains and
losses
Of which: derivative
financial assets
2.
Available-for-sale 6,408,065.70 -4,496,523.44 -1,266,515.97 1,045,232.10
financial assets
Subtotal of financial
6,408,065.70 -4,496,523.44 -1,266,515.97 1,045,232.10
assets
Financial
22,101,173.97 22,101,173.97 0.00
liabilities
Investing property
Production
biological assets
Others
Total 22,101,173.97 22,101,173.97 0.00
Where the value estimation technique was adopted to determine fair value for the same or similar items
20
within the two years, is there any significant difference between the value estimation results? If yes,
please state in detail.
□ Yes □ No √ Inapplicable
3. Foreign-currency financial assets and liabilities held
√Applicable □Inapplicable
Unit: RMB Yuan
Gains/losses
Accumulative
on fair value
fair value Impairment
changes in
Item Opening amount changes provisions for the Closing amount
the
recorded into reporting period
reporting
equity
period
Financial assets
Including: 1. Financial
assets measured at fair
value whose changes are
recorded into current
gains and losses
Of which: derivative
financial assets
2. Loans and
365,769,233.20 273,130,826.95
receivables
3. Available-for-sale
financial assets
4. Held-to-maturity
investments
Subtotal of financial
365,769,233.20 273,130,826.95
assets
Financial liabilities 1,813,082,157.91 22,101,173.97 278,372,879.10
（II）Investments
1. General utilization of the raised funds
□Applicable √Inapplicable
2. Projects promised to be invested with raised funds
□Applicable √Inapplicable
21
3. Change of projects invested with raised funds
□Applicable √Inapplicable
4. Significant projects invested with non-raised funds
□Applicable √Inapplicable
（III）Revision of the Board of Directors’ business plan for the second half
of the year
□Applicable √Inapplicable
（IV）Business performance estimate for Jan.-Sept. 2012
Warnings of estimated possible losses or major changes of the accumulative net profit achieved during
the period from the beginning of the year to the end of the next reporting period compared with the same
period of last year, as well as the reasons
□Applicable √Inapplicable
（V）Explanation of the Board of Directors on “Non-standard Auditing Report”
issued by the CPA firm for the reporting period
□Applicable √Inapplicable
（VI）Explanation of the Board of Directors on changes and solutions of the
issues involved in the “Non-standard Auditing Report” issued by the CPA firm
for last year
□Applicable √Inapplicable
（VII）State the discussion results of the Board of Directors on the reasons
and influence of the Company’s accounting policy and estimate alterations or
significant accounting error correction
□Applicable √Inapplicable
（VIII）Formulation and execution of the Company’s cash dividend policy
The cash dividend policy of the Company is clearly stated in its Articles of Association,
with explicit dividend standards and ratios, as well as sound decision-making procedures
and mechanisms. Independent directors have faithfully performed their duties and performed
their function well by giving minority shareholders opportunities to express their opinion
and demands and effectively safeguarding their lawful interests. The Company has strictly
executed the cash dividend policy in the Articles of Association, and cash dividend
distribution of the Company is in line with the Articles of Association and relevant
22
resolutions of the Shareholders’ General Meeting.
According to the spirit of the CSRC Notice on Further Implementing Matters Related to Cash
Dividend Distribution of Listed Companies (Zheng-Jian-Fa [2012] No. 37) and the CSRC
Shenzhen Bureau Notice on Seriously Implementing the CSRC Notice on Further Implementing
Matters Related to Cash Dividend Distribution of Listed Companies
(Shen-Zheng-Ju-Gong-Si-Zi [2012] No. 43), taking into account its actual situation, the
Company communicated with independent directors and some floating share holders on the
topic of the planning for returns for shareholders and carried out special discussions
in terms of the arrangements for returns for shareholders, profit distribution, especially
how to improve the decision-making procedure and mechanism for matters in relation to cash
dividends. Meanwhile, it listened to minority shareholders’ opinions and requirements
via hotlines, fax, email, the Company ’ s website, etc. so as to decide a proper
decision-making procedure for matters in relation to cash dividends that was in line with
the Company’s future development. And a reasoning report was formed. According to the
Reasoning Report on Matters in Relation to Returns for Shareholders, the Company revised
its Articles of Association and formulated the Return for Shareholder Planning for the
Coming Three Years (2012-2014) according to the profit distribution plan and its plans
for the coming three years. Meanwhile, as required by the said Notice, the Company convened
a board session and a general meeting, at which the Reasoning Report on Matters in Relation
to Returns for Shareholders, the Return for Shareholder Planning for the Coming Three Years
(2012-2014) and the Proposal on Revising the Articles of Association was reviewed and
approved. In order to further listen to the opinions of minority shareholders, the voting
on the Return for Shareholder Planning for the Coming Three Years (2012-2014) adopted both
on-site voting and online voting to protect legal rights and interests of minority
shareholders.
（IX）Pre-plan for profit distribution or turning capital reserve into share
capital
□Applicable √Inapplicable
（X）The accumulative retained profit as at the end of 2011 is a positive number
but the Company has not put forward a cash dividend pre-plan.
□Applicable √Inapplicable
（XI）Other matters that need to be disclosed
In accordance with the Notice on Conducting Experimental Work of Internal Control Standards
of Listed Companies in Shenzhen Administration Area (Shen-Zheng-Ju-Gong-Si-Zi [2011] No.31)
and the Notice on Doing a Better Job in Implementation of Internal Control Regulations
in Listed Companies in Shenzhen (Shen-Zheng-Ju-Fa [2012] No. 105), the Company undertook
standardizing work of internal control and submitted process of internal control to
23
Shenzhen SRC with requirements.
During the reporting period, the Company mainly accomplished the following specific work
in relation to internal control improvement:
A. According to the work plan for the internal control self-appraisal phase, the Company
rectified the internal control defects found in the appraisal.
B. RSM China Certified Public Accountants Co., Ltd. audited the internal control of the
Company for 2011 and the Company rectified the internal control defects found in the audit.
C. The internal audit department of the Company worked out and disclosed the 2011 Annual
Internal Control Self-Appraisal Report.
D. The Company conducted work such as comb of process, recognition of risks, preparation
of manuscript of internal control, check of flaws, report of flaw and so on to the Digital
Network
（XII）The Company’s liabilities, credit changes and future cash arrangements
for debt-clearing (Only listed companies with convertible corporate bonds are
required to fill the table below.)
□Applicable √Inapplicable
VII. Significant Events
（I）Corporate governance
In the reporting period, in strict compliance with the Company Law, the Securities Law
and other relevant laws, regulations and rules governing corporate governance of listed
companies, as well as the Company’s Articles of Association, the Company kept optimizing
its corporate governance structure, promoted compliance with applicable laws and
regulations in its operation, and performed the information disclosure duty strictly in
accordance with the Stock Listing Rules of the Shenzhen Stock Exchange. All directors,
supervisors and senior executives of the Company performed their duties diligently. The
Shareholders’ General Meeting, the Board of Directors and the Supervisory Committee all
operated in compliance with relevant laws and regulations. The Company’s existing internal
control rules played the role of supervision, control and guidance effectively in its
production and operation. Independence and transparency of the Company, together with a
professional board of directors, ensured that every decision of the Company was made in
a scientific procedure. The actual corporate governance situation of the Company was in
line with regulatory documents issued by the CSRC governing corporate governance of listed
companies.
24
（II）Execution of the plans for profit distribution, turning capital reserve
into share capital or new share issuance which had been made in the previous
period and were carried out in the reporting period
√Applicable □Inapplicable
Upon review of the 2011 Annual Shareholders’ General Meeting, the 2011 annual profit
distribution plan was determined as follows:
Dividend Plan: Based on the total share capital of 1,203,972,704 shares at the end of 2011,
the Company distributed RMB 0.1 (tax included) as cash bonus for every 10 shares to all
shareholders. The total distributed dividends on shares were RMB 12,039,727.04 and the
retained profit was carried forward for distribution for the coming years.
The said profit distribution plan was already carried out, with the date of record for
A-shares on 6 Jul. 2012, the ex-dividend date for A-shares on 9 Jul. 2012; the last trading
date for B-shares on 6 Jul. 2012, the ex-dividend date for B-shares on 9 Jul. 2012 and
the date of record for B-shares on 11 Jul. 2012.
(III) Significant lawsuits and arbitrations
□Applicable √Inapplicable
The Company was not involved in any significant lawsuit or arbitration during the reporting period.
(IV) Bankruptcy or reorganization events
□Applicable √Inapplicable
(V) Holding equity of other listed companies and joint financial enterprises
1. Securities investment
□Applicable √Inapplicable
Notes to securities investment:
2. Holding equity of other listed companies
√Applicable □Inapplicable
Initial Proportion Closing Gain/los Change of
Stock investment in the carrying s in the owners’ Accounting Stock
Stock code
abbr. amount (RMB company’s amount (RMB reportin equity title source
Yuan) total Yuan) g period during the
25
equity (%) (RMB reporting
Yuan) period (RMB
Yuan)
Subscriptio
Financial
n of
assets
000002 WKA 2,311,748.07 0% 1,045,232.10 0.00 168,926.40 additionall
available
y-issued
for sale
shares
Total 2,311,748.07 -- 1,045,232.10 0.00 168,926.40 -- --
Notes to holding equity of other listed companies:
3. Holding equity of non-listed financial enterprises
□Applicable √Inapplicable
Notes to holding equity of non-listed financial enterprises
4. Trading stocks of other listed companies
√Applicable □Inapplicable
Number of shares
Opening number of bought in/sold out Closing number of Used capital (RMB Investment income
Stock name
shares in the reporting shares Yuan) (RMB Yuan)
period
Churin Group 702,000 -702,000 0 0.00 5,110,011.59
The Company sold new shares obtained through subscription and thus gained a total investment
income of RMB 0.00 during the reporting period.
Notes to trading stocks of other listed companies:
During the reporting period, the Company sold out all the 702,000 shares of floating shares
of Churin Group.
(VI) Assets transaction events
1. Purchase of assets
□Applicable √Inapplicable
Notes to purchase of assets:
2. Sale of assets
□Applicable √Inapplicable
Notes to sale of assets:
26
3. Exchange of assets
□Applicable √Inapplicable
Notes to exchange of assets:
4. Business combination
□Applicable √Inapplicable
5. Progress of these events after the publication of the assets reorganization report or
public notices on the purchases or sales of assets, as well as the influences of these
events on the operation results and financial status of the Company in this reporting period
□Applicable √Inapplicable
(VII) Explanation on shareholding increase scheme during the reporting period
proposed or implemented by the principal shareholders and act-in-concert
persons
□Applicable √Inapplicable
(VIII) Implementation situation and influence of equity incentive plan of the
Company
□Applicable √Inapplicable
(IX) Significant related-party transactions
27
1. Related-party transactions relevant to routine operation
√ Applicable □ Inapplicable
Reason for
Pricing
significant
Type of the principle of Transactio Transactio Proportion in Settlement Influence on
Content of the Market price difference
related-par the n price n amount same kind of method of the the profits
Related party Relationship related-party (RMB Ten between the
ty related-par (RMB Ten (RMB Ten transactions related-part of the
transaction thousand) transaction
transaction ty thousand) thousand) (%) y transaction Company
price and the
transaction
market price
Under the same Purchasing
Anhui Huali Purchasing No direct
actual packing Agreed price 1,001.16 0.17% In cash Inapplicable
Packing Co., Ltd. goods from influence
controller materials
Under the same Purchasing
Shanghai Huali Purchasing No direct
actual packing Agreed price 545.92 0.1% In cash Inapplicable
Packing Co., Ltd. goods from influence
controller materials
Under the same Purchasing
Huizhou Huali Purchasing No direct
actual packing Agreed price 391.39 0.07% In cash Inapplicable
Packing Co., Ltd. goods from influence
controller materials
Purchasing
Shenzhen Overseas Under the same
Purchasing hotel room No direct
Chinese Town Hotel actual Market price 30.18 0.01% In cash Inapplicable
goods from catering influence
Group Co., Ltd. controller
services
Under the same Purchasing
Shenzhen OCT Water Purchasing No direct
actual water and Agreed price 380.42 0.06% In cash Inapplicable
and Power Co., Ltd goods from influence
controller power
Under the same
Shenzhen OCT East Selling No direct
actual Selling LCD Agreed price 43.5 0.88% In cash Inapplicable
Co., Ltd products to influence
controller
Chengdu Tianfu OCT Under the same Selling Selling LCD Agreed price 38 0.77% In cash No direct Inapplicable
28
Industrial actual products to influence
Development Co., controller
Ltd
OCT Urban
Entertainment Under the same
Selling No direct
Investment actual Selling LCD Agreed price 240 4.87% In cash Inapplicable
products to influence
Company of controller
Shenzhen
Wuhan OCT Industry Under the same
Selling No direct
Development Co., actual Selling LCD Agreed price 771.75 15.67% In cash Inapplicable
products to influence
Ltd. controller
Under the same
InterContinental Selling No direct
actual Selling LCD Agreed price 69.5 1.41% In cash Inapplicable
Hotels Group products to influence
controller
Shenzhen Window of Under the same
Selling No direct
the World Co., actual Selling LCD Agreed price 0.5 0.01% In cash Inapplicable
products to influence
Ltd. controller
Total -- -- -- -- -- --
Details of large amount of sales returns Naught
Related transactions of the Company with the above related parties occurred in daily operation of the
Company. They were carried out based on the principle of public bidding, and were necessary. The Company
Necessity and continuity of related-party transaction as well
would continue the cooperation of fairness and mutual benefits with them, given the operation and
as reason of choosing the related party (but not other
development of the Company was stable. The aforesaid related transactions were beneficial for maintaining
transaction parties) to conduct the said transaction
the long-term cooperation between the Company and related parties as well as promoting development of
the Company’s production and operation.
Business transactions between the Company and the above related enterprises were carried out based on
Impacts of related-party transaction on independency of the the general market operation rules and the principle of fairness and justice. The Company treated such
Company enterprises as equally as other transaction enterprises, and there was no damage to interests of the Company
and all of its shareholders. They did not affect the independence of the Company.
29
Dependant degree of the Company on related party and relevant Main business of the Company would not rely on the related parties in a significant manner due to the
solutions for the dependence (if any) related-party transactions above.
The Company has published the Forecasting Public Notice on Routine Related Transaction for Y2012 (public
As for the prediction on the total amount of routine notice No. 2012-14) on Securities Times, Shanghai Securities News, China Securities Journal and Hong Kong
related-party transactions to be occurred in the reporting Ta Kung Pao as well as the Internet website designated by CSRC http://www.cninfo.com.cn on 27 Apr. 2012.
period by relevant types, the actual performance in the In the reporting period, the basis for pricing, transaction price, transaction amount and settlement
reporting period methods of raw materials purchased by the Company from Anhui Huali Packing Co., Ltd., Huizhou Huali Packing
Co., Ltd. and Shanghai Huali Packing Co., Ltd., were basically in accordance with the forecast.
1. In the reporting period, no guarantee occurred between the Company and the related parties. 2. In the
reporting period, the Company did not involve in joint external investment with related parties. 3. The
aforesaid related-party transactions were fair transactions with rational pricing, which did no harm to
Explanation on related-party transaction
the interests of the Company and its shareholders. When the relevant proposals were being reviewed, related
directors stepped aside from the voting. And the voting procedure was in line with applicable laws and
regulations.
Related-party transactions relevant to routine operation
Purchasing products and receiving labor services from related
Selling products and providing labor services to related parties
parties
Related party
Transaction amount (RMB Ten Proportion in same kind of Transaction amount (RMB Ten Transaction amount (RMB Ten
thousand) transactions (%) thousand) thousand)
Anhui Huali Packing Co., Ltd. 0 0% 1,001.16 0.17%
Shanghai Huali Packing Co., Ltd. 0 0% 545.92 0.1%
Huizhou Huali Packing Co., Ltd. 0 0% 391.39 0.07%
Shenzhen Overseas Chinese Town Hotel
0 0% 30.18 0.01%
Group Co., Ltd.
Shenzhen OCT Water and Power Co., Ltd 0 0% 380.42 0.06%
Shenzhen OCT East Co., Ltd 43.5 0.88% 0 0%
Chengdu Tianfu OCT Industrial
38 0.77% 0 0%
Development Co., Ltd
30
OCT Urban Entertainment Investment
240 4.87% 0 0%
Company of Shenzhen
Wuhan OCT Industry Development Co.,
771.75 15.67% 0 0%
Ltd.
InterContinental Hotels Group 69.5 1.41% 0 0%
Shenzhen Window of the World Co., Ltd. 0.5 0.01% 0 0%
Total 1,163.25 23.61% 2,349.07 0.41%
Of which: the total amount of related-party transactions of the Company selling products to the controlling shareholder and subsidiaries during the reporting period
stood at RMB 11.6325 million.
2. Related-party transactions regarding purchase and sales of assets
□ Applicable √ Inapplicable
3. Significant related-party transitions with joint investments
□ Applicable √ Inapplicable
4. Significant credits and liabilities with related parties
√ Applicable □ Inapplicable
Is there any non-operating credit or liability with any related party?
□ Yes √ No
Funds provided by the Company to the related party (RMB Funds provided by the related party to the Company (RMB Ten
Ten thousand) thousand)
Related-party Relationship
Opening Incurre Repaid Closing Interes Intere Opening Incurred Repaid Closing Inter Interest
balance d amount amount balance t income st cost balance amount amount balance est cost
31
incom
e
For non-operating purposes:
N/A Ｎ/A
Subtotal
For operating purposes:
Under the same
Shenzhen OCT East Co., Ltd 110.7 22.05 88.65
actual controller
Chengdu Tianfu OCT Industrial Under the same
112.36 93.31 19.05
Development Co., Ltd actual controller
Taizhou Overseas Chinese Town Co., Under the same
19.81 15.1 4.71
Ltd. actual controller
OCT Urban Entertainment Investment Under the same
57 240 297
Company of Shenzhen actual controller
Under the same
InterContinental Hotels Group 0 69.5 69.5
actual controller
Shenzhen Splendid China Development Under the same
0 55.6 55.6
Co., Ltd. actual controller
Under the same
Shenzhen Window of the World Co., Ltd. 0 0.5 0.5
actual controller
Wuhan OCT Industry Development Co., Under the same
0 86.35 86.35
Ltd. actual controller
Under the same
Interlaken OCT Hotel 0 8.3 8.3
actual controller
Shenzhen Overseas Chinese Town Under the same
8 0 8
Service Station Co., Ltd. actual controller
Shenzhen Overseas Chinese Town Real Under the same
121.63 0 121.63
Estate Co., Ltd. actual controller
32
Shenzhen Overseas Chinese Town Under the same
7.74 0 7.74
Property Management Co., Ltd actual controller
Under the same
Shenzhen OCT Water and Power Co., Ltd 96.34 22.02 118.35
actual controller
Under the same
Anhui Huali Packing Co., Ltd. 844.49 157.09 687.4
actual controller
Shenzhen Huali Packing & Trading Co., Under the same
6.4 0 6.4
Ltd actual controller
Under the same
Huizhou Huali Packing Co., Ltd. 727.82 420.69 307.13
actual controller
Under the same
Shanghai Huali Packing Co., Ltd. 500.92 16.43 484.49
actual controller
The Company’s
Overseas Chinese Town Enterprises Co. 60,000 40,000 100,000 2,172.68
parent company
Subtotal 533.57 482.27 130.46 885.38 62,079.63 40,000 594.21 101,485.42 2,172.68
Total 61,546.06 39,053.98 100,600.04 2,172.68
Funds provided by the Company to the controlling
shareholder and its subsidiaries in the reporting period 482.27
(RMB Ten thousand)
Including: Amount incurred for non-operating purposes
0
(RMB Ten thousand)
Balance of the funds provided by the Company to the
controlling shareholder and its subsidiaries (RMB Ten 885.38
thousand)
Including: Balance of the non-operating amount (RMB Ten
0
thousand)
The Company carried out routine business with subordinates of the majority shareholder, which incurred credits
Reason for any credit or liability with the related party
and liabilities with related parties.
33
Debt-clearing progress of the credit or liability with
Inapplicable
the related party
Commitments made about the credit or liability with the
Inapplicable
related party
Influence of the credit or liability with the related
party on the Company’s operating results and financial No direct influence
position
Capital occupation during the reporting period and debt-clearing progress
□Applicable √Inapplicable
The accountability plan put forward by the Board of Directors when the Company had not completed collecting the capital occupied for non-operating purposes by the
end of the reporting period
□Applicable √Inapplicable
34
5. Other significant related-party transactions
In the reporting period, in order to cut down fund cost, the Company borrowed capital at call
totaling RMB 1 billion from principal shareholder—OCT Group—by means of entrusted loans.
Interest rate of the aforesaid loans was lower than the one-year interest rate of bank loans.
It was beneficial for the Company to reduce fund cost and realize sustainable development of
the Company’s businesses.
(X) Significant contracts and execution
1. The trust, contract and lease whose profits reaching more than 10% (including 10%) of the
total profits of the Company in the reporting period
(1) Status of trust
□ Applicable √ Inapplicable
（2）Particulars about contracting
□ Applicable √ Inapplicable
2. Guarantees provided by the Company
√ Applicable □ Inapplicable
Unit: RMB Ten thousand
Guarantees provided by the Company for external parties (excluding those for subsidiaries)
Disclosur Guarante
Actual
e date of Actual e for a
Amount for occurrence Type of Period of Executed
Guaranteed party relevant guarantee related
guarantee date (date of guarantee guarantee or not
announcem amount party or
agreement)
ent not
Naught 0 0 0
Total actual occurred
Total external guarantee line
amount of external
approved during the reporting 11,500 0
guarantee during the
period (A1)
reporting period (A2)
Total external guarantee line Total actual external
that has been approved at the guarantee balance at the
11,500 0
end of the reporting period end of the reporting
(A3) period (A4)
Guarantees provided by the Company for its subsidiaries
Disclosur Guarante
Actual
e date of Actual e for a
Amount for occurrence Type of Period of Executed
Guaranteed party relevant guarantee related
guarantee date (date of guarantee guarantee or not
announcem amount party or
agreement)
ent not
Konka Household 1 Dec.
189,000 31 Oct. 2011 86,617.83 Warranty 3 years No No
Appliances 2010
35
International
Trading Co., Ltd./
Hong Kong Konka
Co., Ltd.
Shenzhen Konka
Telecommunication 9 Jul.
50,000 20 Jun. 2012 24,040 Warranty 1 year No No
Technology Co., 2011
Ltd.
Total guarantee line approved Total actual occurred
for the subsidiaries during amount of guarantee for
the reporting period 41,000 0
the subsidiaries during
(B1) the reporting period (B2)
Total guarantee line that has Total actual guarantee
been approved for the balance for the
400,000 110,657.83
subsidiaries at the end of the subsidiaries at the end of
reporting period (B3) the reporting period (B4)
Total guarantee amount provided by the Company (total of the above-mentioned two kinds of guarantees)
Total actual occurred
Total guarantee line approved
amount of guarantee during
during the reporting period 52,500 0
the reporting period
(A1+B1)
(A2+B2)
Total guarantee line that has
Total actual guarantee
been approved at the end of
the reporting period 411,500 balance at the end of the 110,657.83
reporting period (A4+B4)
(A3+B3)
Proportion of total guarantee amount (A4+B4) to the net
27.64%
assets of the Company
Of which:
Amount of guarantee for shareholders, actual
0
controller and related parties (C)
Amount of debt guarantee provided for the guaranteed
party whose asset-liability ratio is not less than 70% 110,657.83
directly or indirectly (D)
Part of the amount of the total guarantee over 50% of
0
net assets (E)
Total amount of the above three guarantees (C+D+E) 110,657.83
Currently, the guaranteed parties are in normal operation
Explanation on the possibility of fulfilling the joint and a good financial position. Therefore, the possibility
responsibility of repayment due to immature guarantees for the Company to fulfill the joint responsibility of
repayment is small.
Explanation on provision of guarantees for external
Inapplicable
parties in violation of the prescribed procedure
3. Entrusted financial management
□ Applicable √ Inapplicable
36
4. Performance of significant contracts relevant to routine operation
During the reporting period, the significant contracts relevant to routine operation signed by
the Company were executed normally according to terms of the contracts.
5. Other significant contracts
□ Applicable √ Inapplicable
(XI) Explanation on issuing corporate bonds
□Applicable √Inapplicable
(XII) Performance of commitments
1. Commitments made by the Company or shareholders holding over 5% of the Company’s shares in
the reporting period, or such commitments carried down into the reporting period
√Applicable □Inapplicable
Commitm
Commitmen Commitment
Commitment Contents ent Fulfillment
t maker time
period
(1) No trading or transferring of the
non-tradable shares of Konka Group held by OCT
Up until now,
Overseas Group would be conducted within 24 months since
no shares
Chinese the date when those shares became tradable in
subject to
Commitments Town the A-share market; (2) After the expiration of
trading
made in a share Enterpris the aforesaid commitment, the originally 30 Mar. 2006 4 years
moratorium
reform es Co. non-tradable shares of Konka Group sold by OCT
have been
(OCT Group through listing at the stock exchange
traded or
Group) would not exceed 5% of Konka Group’s total
transferred.
shares within 12 months, and not exceed 10%
within 24 months.
Commitments
made in an
acquisition
Naught Naught Naught Naught
report or
report on
equity changes
Commitments
made in an Naught Naught Naught Naught
asset exchange
Commitments
made in share Naught Naught Naught Naught
issuance
Other
commitments
made to Naught Naught Naught Naught
minority
shareholders
Commitment
fulfilled in √ Yes □ No □ Inapplicable
time or not
Specific
Naught
reasons for
37
failing to
fulfill the
commitment and
the plan for
the next step
Whether a
commitment is
made regarding
the horizontal
competition □ Yes √ No □ Inapplicable
and
related-party
transactions
caused
Period for the
solution of the Inapplicable
commitment
Way of solving
Inapplicable
the problems
Fulfillment of
Inapplicable
the commitment
2. The Company’s assets or projects exist profitable prediction and the reporting period is
in such prediction period, it states the profits from the assets or projects reaching original
prediction and relevant reasons
□Applicable √Inapplicable
(XIII) Items of other comprehensive income
Unit: RMB Yuan
Items Jan.-Jun. 2012 Jan.-Jun. 2011
1. Profits/(losses) from available-for-sale financial
-4,496,523.44 26,981.30
assets
Less: Effects on income tax generating from
-1,124,130.86 6,475.51
available-for-sale financial assets
Net amount transferred into profit and loss in the current
period that recognized into other comprehensive income in
prior period
Subtotal -3,372,392.58 20,505.79
2. Interests in the investee entities’ other comprehensive
income as per equity method
Less: Effects on income tax generating from the interests in
the investee entities’ other comprehensive income as per
equity method
Net amount transferred into profit and loss in the current
period that recognized into other comprehensive income in
prior period
Subtotal
3. Profits/(losses) from cash flow hedging instrument
Less: Effects on income tax generating from cash flow hedging
instrument
38
Net amount transferred into profit and loss in the current
period that recognized into other comprehensive income in
prior period
The adjustment value that is the converted initial
recognition amount of arbitrage project
Subtotal
4. Converted amount of foreign currency financial statements -2,793,377.06 -10,400,633.77
Less: Net value of disposal of oversea operations that
recognized into current profit and loss
Subtotal -2,793,377.06 -10,400,633.77
5. Other
Less: Effects on income tax generating from the others that
included into other comprehensive income
Net amount transferred into profit and loss in the current
period that recognized into other comprehensive income in
prior period
Subtotal
Total -6,165,769.64 -10,380,127.98
(XIV) Particulars about researches, visits and interviews received in this reporting
period
Place of Way of Main discussion and materials
Time of reception Visitor type Visitor
reception reception provided by the Company
Conference Development trends of the
Field
6 Feb. 2012 Room of the Institution Chongyang Investment color TV industry in 2012,
research
Company color TV export
Development trends of the
Conference
Field color TV industry, price
21 Feb. 2012 Room of the Institution Zexi Investment
research trends of panels, competition
Company
among intelligent TV makers
Development trends of the
Conference
Field color TV industry in 2012,
24 Feb. 2012 Room of the Institution Ping An UOB Fund
research prospects of 3D TVs and
Company
intelligent TVs
Conference
Field Competition among
5 Mar. 2012 Room of the Institution Founder Securities
research intelligent TV makers
Company
The color TV product
structure, price trends of
Conference panels in 2012, development
Field China Merchants
30 Mar. 2012 Room of the Institution trends of the color TV,
research Securities
Company consumer appliance and
cellphone business lines in
2012
Growth of the color TV
Conference
Field industry in 2012, progress of
10 May 2012 Room of the Institution Yinhua Fund
research the intelligent TV project,
Company
rebuilding progress of the
39
plants of the headquarters
The general situation of the
Conference color TV industry in 2012,
Field
11 May 2012 Room of the Institution China Post Fund rebuilding progress of the
research
Company plants of the headquarters,
prospects of the LED industry
Growth of the color TV
Conference
Field industry in 2012, rebuilding
16 May 2012 Room of the Institution GF Fund
research progress of the plants of the
Company
headquarters
Market demands for color TVs,
Conference cellphones and consumer
Field
16 May 2012 Room of the Institution ChinaAMC appliances; rebuilding
research
Company progress of the plants of the
headquarters
Influence of the
Haitong Securities, energy-saving subsidy policy
Conference
Field Sinolink Securities, on the color TV industry, the
24 May 2012 Room of the Institution
research Manulife Teda Fund, Company’s product structure,
Company
Fullgoal Fund, etc. development trends of color
TV products
Guosen Securities Growth of the color TV
(HK), Manulife Asset industry in 2012, influence
Conference Management, BOC of the energy-saving subsidy
Field
25 May 2012 Room of the Institution International policy on the color TV
research
Company (China), Haitong industry, operation of the
Securities, Penghua Kunshan crystal liquid module
Fund, etc. production line
(XV) Particulars about engagement and disengagement of CPAs firm
Has this interim report been audited?
□ Yes √ No □ Inapplicable
Has the CPAs firm been changed?
□ Yes √ No □ Inapplicable
(XVI) Particulars about punishment and rectification order received by the Company,
its directors, supervisors, senior executives, shareholders, actual controller and
acquirer
□Applicable √Inapplicable
(XVII) Explanation on other significant events
√Applicable □Inapplicable
During the reporting period, the Company, its Board of Directors and directors received no
40
investigations, administrative punishments or notices of criticism from CSRC, or punishments
from other administrative services divisions, or denouncement from the stock exchange.
(XVIII) Particulars about significant changes in the profitability, asset status
and credit status of the Company’s convertible bonds guarantor
(Only listed companies which issue convertible corporate bonds are required to fill the form below.)
□Applicable √Inapplicable
(XIX) Index for information disclosure
Newspapers for
Internet website for disclosing
Event disclosing information Publishing date
information and the searching approach
and relevant page
Announcement on
nd
Resolutions of the 22 Securities Times B9; Ta http://www.cninfo.com.cn/finalpage/2012-
th
7 Jan. 2012
Session of the 7 Board Kung Pao B3 01-07/60416818.PDF?www.cninfo.com.cn
of Directors
Announcement on
Securities Times B9; Ta http://www.cninfo.com.cn/finalpage/2012-
Related-party 7 Jan. 2012
Kung Pao B3 01-07/60416817.PDF?www.cninfo.com.cn
Transactions
Announcement on 2011
Securities Times C16; Ta http://www.cninfo.com.cn/finalpage/2012-
Annual Business Results 20 Jan. 2012
Kung Pao A21 01-20/60468826.PDF?www.cninfo.com.cn
Forecast
Announcement on
th
Resolutions of the 24 Securities Times D17; Ta http://www.cninfo.com.cn/finalpage/2012-
th
8 Mar. 2012
Session of the 7 Board Kung Pao B19 03-08/60639812.PDF?www.cninfo.com.cn
of Directors
Announcement on
Securities Times D17; Ta http://www.cninfo.com.cn/finalpage/2012-
Related-party 8 Mar. 2012
Kung Pao B19 03-08/60639811.PDF?www.cninfo.com.cn
Transactions
Announcement on Securities Times D68; Ta http://www.cninfo.com.cn/finalpage/2012-
6 Apr. 2012
Receiving Tax Rebates Kung Pao A19 04-06/60786788.PDF?www.cninfo.com.cn
Announcement on the
Business Result Securities Times B24; Ta http://www.cninfo.com.cn/finalpage/2012-
14 Apr. 2012
Forecast for the First Kung Pao B2 04-14/60830033.PDF?www.cninfo.com.cn
Quarter of 2012
2011 Annual Preliminary Securities Times B24; Ta http://www.cninfo.com.cn/finalpage/2012-
14 Apr. 2012
Earnings Forecast Kung Pao B2 04-14/60830034.PDF?www.cninfo.com.cn
Abstract of the 2011
Securities Times C8; Ta http://www.cninfo.com.cn/finalpage/2012-
Annual Report of Konka 27 Apr. 2012
Kung Pao B19 04-27/60921189.PDF?www.cninfo.com.cn
Group Co., Ltd.
Abstract of the First
Securities Times C8; Ta http://www.cninfo.com.cn/finalpage/2012-
Quarter Report 2012 of 27 Apr. 2012
Kung Pao B19 04-27/60921213.PDF?www.cninfo.com.cn
Konka Group Co., Ltd.
Notice on Convening the
Securities Times C8; Ta http://www.cninfo.com.cn/finalpage/2012-
2011 Annual 27 Apr. 2012
Kung Pao B19 04-27/60921200.PDF?www.cninfo.com.cn
Shareholders’ General
41
Meeting
Announcement on
th
Resolutions of the 26 Securities Times C8; Ta http://www.cninfo.com.cn/finalpage/2012-
th
27 Apr. 2012
Session of the 7 Board Kung Pao B19 04-27/60921199.PDF?www.cninfo.com.cn
of Directors
Announcement on
th
Resolutions of the 5 Securities Times C8; Ta http://www.cninfo.com.cn/finalpage/2012-
th
27 Apr. 2012
Session of the 7 Kung Pao B19 04-27/60921206.PDF?www.cninfo.com.cn
Supervisory Committee
Announcement on
Expected Routine
Securities Times C8; Ta http://www.cninfo.com.cn/finalpage/2012-
Operation 27 Apr. 2012
Kung Pao B19 04-27/60921188.PDF?www.cninfo.com.cn
Related-party
Transactions for 2012
Announcement on
Provision of Guarantees
Securities Times C8; Ta http://www.cninfo.com.cn/finalpage/2012-
by Controlled 27 Apr. 2012
Kung Pao B19 04-27/60921219.PDF?www.cninfo.com.cn
Subsidiaries for
External Parties
Announcement on
Progress of the Urban Securities Times D12; Ta http://www.cninfo.com.cn/finalpage/2012-
3 May 2012
Renewal Application Kung Pao B5 05-03/60942993.PDF?www.cninfo.com.cn
Plan Project
Announcement on
th
Resolutions of the 27 Securities Times B11; Ta http://www.cninfo.com.cn/finalpage/2012-
th
2 Jun. 2012
Session of the 7 Board Kung Pao B17 06-02/61079517.PDF?www.cninfo.com.cn
of Directors
Announcement on
Securities Times B11; Ta http://www.cninfo.com.cn/finalpage/2012-
Provision of Guarantees 2 Jun. 2012
Kung Pao B17 06-02/61079516.PDF?www.cninfo.com.cn
for External Parties
Announcement on
Securities Times B11; Ta http://www.cninfo.com.cn/finalpage/2012-
Related-party 2 Jun. 2012
Kung Pao B17 06-02/61079515.PDF?www.cninfo.com.cn
Transactions
Announcement on Adding
New Proposals for the Securities Times B11; Ta http://www.cninfo.com.cn/finalpage/2012-
2 Jun. 2012
2011 Annual General Kung Pao B17 06-02/61079514.PDF?www.cninfo.com.cn
Meeting
Announcement on
Securities Times B16; Ta http://www.cninfo.com.cn/finalpage/2012-
Resolutions of the 2011 16 Jun. 2012
Kung Pao B2 06-16/61144540.PDF?www.cninfo.com.cn
Annual General Meeting
Announcement on
th
Resolutions of the 29 Securities Times B16; Ta http://www.cninfo.com.cn/finalpage/2012-
th
30 Jun. 2012
Session of the 7 Board Kung Pao B8 06-30/61200993.PDF?www.cninfo.com.cn
of Directors
Notice on Convening the Securities Times B16; Ta http://www.cninfo.com.cn/finalpage/2012-
st
30 Jun. 2012
1 Special General Kung Pao B8 06-30/61200988.PDF?www.cninfo.com.cn
42
Meeting for 2012
Announcement on the
Implementation of the Securities Times B16; Ta http://www.cninfo.com.cn/finalpage/2012-
30 Jun. 2012
2011 Annual Dividend Kung Pao B8 06-30/61200986.PDF?www.cninfo.com.cn
Plan
VIII. Financial Report
(I) Auditor’s report
Has this interim report been audited?
□ Yes √ No □ Inapplicable
(II) Financial statements
Consolidated statements or not?
√Yes □No □ Inapplicable
The monetary unit in the financial statements of the financial report is RMB Yuan if not specified otherwise.
Monetary unit of notes to financial statements: RMB Yuan
1. Consolidated balance sheet
Prepared by Konka Group Co., Ltd.
Unit: RMB Yuan
Item Note 30 Jun. 2012 31 Dec. 2011
Current Assets:
Monetary funds 3,331,826,971.35 2,701,892,431.70
Settlement reserves
Intra-group lendings
Transactional financial
0.00 0.00
assets
Notes receivable 3,012,622,153.19 4,865,963,486.09
Accounts receivable 1,667,207,173.47 1,893,039,292.61
Accounts paid in advance 228,142,821.97 574,363,453.07
Premiums receivable
Reinsurance premiums
receivable
Receivable reinsurance
contract reserves
Interest receivable 28,962,219.29 43,626,559.44
Dividend receivable 0.00 0.00
Other accounts receivable 131,803,213.55 134,333,284.70
Financial assets purchased
under agreements to resell
Inventories 3,282,265,364.96 2,829,591,759.41
Non-current assets due
0.00 0.00
within 1 year
Other current assets 225,620,000.00 911,000,000.00
Total current assets 11,908,449,917.78 13,953,810,267.02
Non-current assets:
43
Loans by mandate and advances
granted
Available-for-sale
1,045,232.10 6,408,065.70
financial assets
Held-to-maturity
0.00 0.00
investments
Long-term accounts
0.00 0.00
receivable
Long-term equity investment 271,291,808.59 271,188,014.48
Investing property 238,392,603.53 241,105,035.18
Fixed assets 1,749,203,938.08 1,779,259,823.65
Construction in progress 128,580,100.45 118,905,008.92
Engineering materials 0.00 0.00
Disposal of fixed assets 0.00 0.00
Production biological assets 0.00 0.00
Oil-gas assets 0.00 0.00
Intangible assets 204,589,658.97 194,383,622.95
R&D expense 0.00 0.00
Goodwill 3,943,671.53 3,943,671.53
Long-term deferred expenses 6,186,430.50 10,152,203.66
Deferred income tax assets 319,330,029.30 327,297,600.22
Other non-current assets 0.00 0.00
Total of non-current assets 2,922,563,473.05 2,952,643,046.29
Total assets 14,831,013,390.83 16,906,453,313.31
Current liabilities:
Short-term borrowings 5,302,455,422.71 6,835,265,235.56
Borrowings from Central Bank
Customer bank deposits and
due to banks and other
financial institutions
Intra-group borrowings
Transactional financial
0.00 22,101,173.97
liabilities
Notes payable 800,098,547.40 799,094,173.72
Accounts payable 2,156,311,311.81 2,530,352,186.42
Accounts received in advance 225,842,713.29 349,544,262.93
Financial assets sold for
repurchase
Handling charges and
commissions payable
Employee ’ s compensation
173,671,625.06 267,353,845.13
payable
Tax payable -178,340,648.85 33,174,908.08
Interest payable 28,945,599.55 26,446,960.89
Dividend payable 12,039,727.04 0.00
44
Other accounts payable 912,137,652.48 1,029,139,182.06
Reinsurance premiums payable
Insurance contract reserves
Payables for acting trading
of securities
Payables for acting
underwriting of securities
Non-current liabilities due
0.00 0.00
within 1 year
Other current liabilities 0.00 0.00
Total current liabilities 9,433,161,950.49 11,892,471,928.76
Non-current liabilities:
Long-term borrowings 1,010,000,000.00 610,000,000.00
Bonds payable
Long-term payables 30,000,000.00 30,000,000.00
Specific payables 0.00 0.00
Projected liabilities 17,413,925.02 20,163,356.00
Deferred income tax
563,067.21 1,370,569.08
liabilities
Other non-current
109,975,894.10 115,820,202.99
liabilities
Total non-current liabilities 1,167,952,886.33 777,354,128.07
Total liabilities 10,601,114,836.82 12,669,826,056.83
Owners ’ equity (or
shareholders’ equity)
Paid-up capital (or share
capital) 1,203,972,704.00 1,203,972,704.00
Capital reserves 1,272,313,869.64 1,275,686,262.22
Less: Treasury stock 0.00 0.00
Specific reserves 0.00 0.00
Surplus reserves 809,307,995.80 809,307,995.80
Provisions for general risks 0.00 0.00
Retained profits 709,106,973.48 709,679,408.84
Foreign exchange difference 8,284,215.90 11,077,592.96
Total equity attributable to
4,002,985,758.82 4,009,723,963.82
owners of the Company
Minority interests 226,912,795.19 226,903,292.66
Total owners ’ (or
4,229,898,554.01 4,236,627,256.48
shareholders’) equity
Total liabilities and owners’
14,831,013,390.83 16,906,453,313.31
(or shareholders’) equity
Legal representative: Hou Songrong Person-in-charge of the accounting work: Yang Rong
Chief of the accounting division: Xu Youshan
45
2. Balance sheet of the Company
Unit: RMB Yuan
Item Note 30 Jun. 2012 31 Dec. 2011
Current Assets:
Monetary funds 2,841,909,924.33 2,197,167,892.05
Transactional financial
assets
Notes receivable 2,834,023,415.54 4,731,536,936.35
Accounts receivable 877,003,523.28 1,272,793,163.17
Accounts paid in advance 158,316,307.83 115,891,757.12
Interest receivable 29,417,774.83 42,999,483.89
Dividend receivable
Other accounts receivable 527,627,254.10 590,667,690.98
Inventories 2,119,253,026.44 2,090,143,386.96
Non-current assets due
within 1 year
Other current assets 225,620,000.00 859,000,000.00
Total current assets 9,613,171,226.35 11,900,200,310.52
Non-current assets:
Available-for-sale
1,045,232.10 6,408,065.70
financial assets
Held-to-maturity
380,000,000.00 350,000,000.00
investments
Long-term accounts
receivable
Long-term equity investment 1,490,917,169.87 1,492,617,169.87
Investing property 238,392,603.53 241,105,035.18
Fixed assets 558,880,485.61 581,214,987.66
Construction in progress 8,915,744.66 6,056,730.30
Engineering materials
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 24,329,866.23 25,294,452.23
R&D expense
Goodwill
Long-term deferred expenses 2,709,193.70 3,796,432.62
Deferred income tax assets 241,474,450.53 249,756,554.62
Other non-current assets
Total of non-current assets 2,946,664,746.23 2,956,249,428.18
Total assets 12,559,835,972.58 14,856,449,738.70
Current liabilities:
Short-term borrowings 1,629,352,469.83 2,198,202,318.15
46
Transactional financial
21,760,628.97
liabilities
Notes payable 708,404,683.04 519,958,870.11
Accounts payable 2,293,326,087.03 4,033,093,915.06
Accounts received in advance 2,327,872,392.40 2,472,654,742.04
Employee ’ s compensation
80,464,521.98 134,487,974.49
payable
Tax payable -151,751,205.96 43,998,499.95
Interest payable 26,236,780.43 24,313,785.67
Dividend payable 12,039,727.04
Other accounts payable 950,913,023.51 1,078,512,870.69
Non-current liabilities due
within 1 year
Other current liabilities
Total current liabilities 7,876,858,479.30 10,526,983,605.13
Non-current liabilities:
Long-term borrowings 1,000,000,000.00 600,000,000.00
Bonds payable
Long-term payables
Specific payables
Projected liabilities
Deferred income tax
807,501.87
liabilities
Other non-current
69,974,554.37 74,177,633.26
liabilities
Total non-current liabilities 1,069,974,554.37 674,985,135.13
Total liabilities 8,946,833,033.67 11,201,968,740.26
Owners ’ equity (or
shareholders’ equity)
Paid-up capital (or share
1,203,972,704.00 1,203,972,704.00
capital)
Capital reserves 1,249,183,703.06 1,252,556,095.64
Less: Treasury stock
Specific reserves
Surplus reserves 809,307,995.80 809,307,995.80
General risk provision
Retained profits 350,538,536.05 388,644,203.00
Foreign exchange difference
Total owners ’ (or
3,613,002,938.91 3,654,480,998.44
shareholders’) equity
Total liabilities and owners’
12,559,835,972.58 14,856,449,738.70
(or shareholders’) equity
47
3. Consolidated income statement
Unit: RMB Yuan
Item Note Jan.-Jun. 2012 Jan.-Jun. 2011
I. Total operating revenues 7,038,923,137.77 6,865,103,919.76
Including: Sales income 7,038,923,137.77 6,865,103,919.76
Interest income
Premium income
Handling charge and
commission income
II. Total operating cost 7,101,902,409.35 7,133,712,205.48
Including: Cost of sales 5,722,506,955.64 5,836,932,046.71
Interest expenses
Handling charge and
commission expenses
Surrenders
Net claims paid
Net amount withdrawn for
the insurance contract reserve
Expenditure on policy
dividends
Reinsurance premium
Taxes and associate
24,480,585.29 17,163,873.16
charges
Selling and distribution
expenses 974,573,637.23 961,655,238.85
Administrative expenses 276,316,995.50 248,089,584.88
Financial expenses 109,770,636.77 71,427,282.01
Asset impairment loss -5,746,401.08 -1,555,820.13
Add: Gain/(loss) from change in
22,101,173.97 14,666,723.60
fair value (“-” means loss)
Gain/(loss) from
9,074,172.92 -79,052.57
investment (“-” means loss)
Including: share of profits in
3,873,147.41
associates and joint ventures
Foreign exchange gains (“-”
means loss)
III. Business profit ( “ - ”
-31,803,924.69 -254,020,614.69
means loss)
Add: non-operating income 77,248,515.09 81,233,539.84
Less: non-operating
2,279,681.52 3,115,587.11
expense
Including: loss from
1,877,844.62 1,989,220.58
non-current asset disposal
IV. Total profit (“-” means
43,164,908.88 -175,902,661.96
loss)
Less: Income tax expense 31,688,114.67 14,971,357.93
48
V. Net profit (“-” means loss) 11,476,794.21 -190,874,019.89
Including: Net profit
achieved by combined parties
before the combinations
Attributable to owners of
11,467,291.68 -195,000,941.75
the Company
Minority shareholders ’
9,502.53 4,126,921.86
income
VI. Earnings per share -- --
(I) Basic earnings per
0.0095 -0.162
share
(II) Diluted earnings per
0.0095 -0.162
share
Ⅶ . Other comprehensive
-6,165,769.64 -10,380,127.98
incomes
Ⅷ . Total comprehensive
5,311,024.57 -201,254,147.87
incomes
Attributable to owners of
5,301,522.04 -205,381,069.73
the Company
Attributable to minority
9,502.53 4,126,921.86
shareholders
Where business mergers under the same control occurred in this report period, the net profit achieved by the
merged parties before the business mergers was RMB 0.
Legal representative: Hou Songrong Person-in-charge of the accounting work: Yang Rong
Chief of the accounting division: Xu Youshan
4. Income statement of the Company
Unit: RMB Yuan
Item Note Jan.-Jun. 2012 Jan.-Jun. 2011
I. Total sales 6,774,153,821.67 6,784,805,647.51
Less: cost of sales 5,866,640,366.34 6,096,290,932.02
Business taxes and surcharges 15,134,191.37 12,534,755.83
Distribution expenses 781,809,952.93 755,344,777.49
Administrative expenses 177,679,601.14 193,040,863.60
Financial costs 25,071,725.43 49,510,239.87
Impairment loss -5,645,488.93
Add: gain/(loss) from change in
21,760,628.97 14,666,723.60
fair value (“-” means loss)
Gain/(loss) from investment
5,201,025.51
(“-” means loss)
Including: income form
investment on associates and
joint ventures
II. Business profit (“-” means
-59,574,872.13 -307,249,197.70
loss)
49
Add: non-business income 43,160,949.62 67,048,288.03
Less: non-business expense 1,048,741.89 977,614.17
Including: loss from
913,357.22 704,953.24
non-current asset disposal
III. Total profit (“-” means
-17,462,664.40 -241,178,523.84
loss)
Less: income tax expense 8,603,275.51 2,061,120.99
IV. Net profit (“-” means
-26,065,939.91 -243,239,644.83
loss)
V. Earnings per share -- --
(I) Basic earnings per share
(II) Diluted earnings per share
VI. Other comprehensive income -3,372,392.58 20,505.79
VII. Total comprehensive
-29,438,332.49 -243,219,139.04
income
5. Consolidated cash flow statement
Unit: RMB Yuan
Item Jan.-Jun. 2012 Jan.-Jun. 2011
I. Cash flows from operating
activities:
Cash received from sale of
commodities and rendering of 8,092,349,440.39 8,347,235,513.35
service
Net increase of deposits from
customers and dues from banks
Net increase of loans from the
central bank
Net increase of funds borrowed
from other financial institutions
Cash received from premium of
original insurance contracts
Net cash received from
reinsurance business
Net increase of deposits of
policy holders and investment fund
Net increase of disposal of
tradable financial assets
Cash received from interest,
handling charges and commissions
Net increase of intra-group
borrowings
Net increase of funds in
repurchase business
Tax refunds received 144,868,848.62 171,455,747.39
Other cash received relating to
176,013,167.48 117,213,527.35
operating activities
50
Subtotal of cash inflows from
8,413,231,456.49 8,635,904,788.09
operating activities
Cash paid for goods and services 5,097,741,993.05 6,659,586,300.84
Net increase of customer
lendings and advances
Net increase of funds deposited
in the central bank and amount due
from banks
Cash for paying claims of the
original insurance contracts
Cash for paying interest,
handling charges and commissions
Cash for paying policy dividends
Cash paid to and for employees 700,612,998.13 616,159,060.44
Various taxes paid 916,629,121.57 652,198,342.60
Other cash payment relating to
582,662,255.97 702,423,026.09
operating activities
Subtotal of cash outflows from
7,297,646,368.72 8,630,366,729.97
operating activities
Net cash flows from operating
1,115,585,087.77 5,538,058.12
activities
II. Cash flows from investing
activities:
Cash received from withdrawal of
2,657,324.08
investments
Cash received from return on
7,179,366.22
investments
Net cash received from disposal
of fixed assets, intangible assets 16,187,781.02 1,803,291.38
and other long-term assets
Net cash received from disposal
of subsidiaries or other business
units
Other cash received relating
to investing activities 1,455,277,858.53
Subtotal of cash inflows
1,481,302,329.85 1,803,291.38
from investing activities
Cash paid to acquire fixed
assets, intangible assets and 101,544,530.59 204,047,766.40
other long-term assets
Cash paid for investment 107,787,702.88
Net increase of pledged loans
Net cash paid to acquire
subsidiaries and other business
units
Other cash payments relating to
753,410,000.00
investing activities
Subtotal of cash outflows from
854,954,530.59 311,835,469.28
investing activities
51
Net cash flows from investing
626,347,799.26 -310,032,177.90
activities
III. Cash Flows from Financing
Activities:
Cash received from capital
4,919,598.14
contributions
Including: Cash received from
minority shareholder investments 4,919,598.14
by subsidiaries
Cash received from borrowings 3,784,211,969.43 4,233,076,590.37
Cash received from issuance of
bonds
Other cash received relating to
financing activities 2,437,886,588.09 1,269,634,401.11
Subtotal of cash inflows from
6,222,098,557.52 5,507,630,589.62
financing activities
Repayment of borrowings 4,753,774,207.18 1,601,003,120.78
Cash paid for interest expenses
and distribution of dividends or 56,263,690.71 63,150,611.44
profit
Including: dividends or
profit paid by subsidiaries to
minority shareholders
Other cash payments relating
2,503,627,277.55 2,859,728,837.35
to financing activities
Sub-total of cash outflows from
7,313,665,175.44 4,523,882,569.57
financing activities
Net cash flows from financing
-1,091,566,617.92 983,748,020.05
activities
IV. Effect of foreign exchange
rate changes on cash and cash -4,692,796.87 -8,858,781.80
equivalents
V. Net increase in cash and cash
645,673,472.24 670,395,118.47
equivalents
Add: Opening balance of cash
and cash equivalents 646,451,050.70 569,524,994.01
VI. Closing balance of cash and
1,292,124,522.94 1,239,920,112.48
cash equivalents
6. Cash flow statement of the Company
Unit: RMB Yuan
Item Jan.-Jun. 2012 Jan.-Jun. 2011
I. Cash flows from operating
activities:
Cash received from sale of
commodities and rendering of 7,124,507,661.06 7,297,760,150.20
service
Tax refunds received 61,104,715.33 77,270,969.80
52
Other cash received relating to
161,389,435.13 364,345,701.19
operating activities
Subtotal of cash inflows from
7,347,001,811.52 7,739,376,821.19
operating activities
Cash paid for goods and services 4,824,139,171.90 5,267,876,797.16
Cash paid to and for employees 389,770,210.49 339,639,511.81
Various taxes paid 736,696,148.57 513,248,833.19
Other cash payment relating to
482,313,091.81 870,706,065.78
operating activities
Subtotal of cash outflows from
6,432,918,622.77 6,991,471,207.94
operating activities
Net cash flows from operating
activities 914,083,188.75 747,905,613.25
II. Cash flows from investing
activities:
Cash received from retraction of
2,657,324.08
investments
Cash received from return on
17,082,012.91
investments
Net cash received from disposal
of fixed assets, intangible assets 15,963,344.44 1,260,901.38
and other long-term assets
Net cash received from disposal
of subsidiaries or other business
units
Other cash received relating
to investing activities 1,303,077,858.53
Subtotal of cash inflows
1,338,780,539.96 1,260,901.38
from investing activities
Cash paid to acquire fixed
assets, intangible assets and 41,707,809.09 87,909,071.33
other long-term assets
Cash paid for investment
Net cash paid to acquire
subsidiaries and other business
units
Other cash payments relating to
683,210,000.00
investing activities
Subtotal of cash outflows from
724,917,809.09 87,909,071.33
investing activities
Net cash flows from investing
613,862,730.87 -86,648,169.95
activities
III. Cash Flows from Financing
Activities:
Cash received from capital
contributions
Cash received from borrowings 1,191,078,585.00 2,627,255,835.43
Cash received from issuance of
bonds
53
Other cash received relating to
2,375,113,115.31 1,225,182,395.05
financing activities
Subtotal of cash inflows from
3,566,191,700.31 3,852,438,230.48
financing activities
Repayment of borrowings 2,050,979,015.67 1,364,191,120.50
Cash paid for interest expenses
and distribution of dividends or 31,087,175.19 49,063,483.40
profit
Other cash payments relating
2,476,365,375.37 2,814,264,619.68
to financing activities
Sub-total of cash outflows from
4,558,431,566.23 4,227,519,223.58
financing activities
Net cash flows from financing
activities -992,239,865.92 -375,080,993.10
IV. Effect of foreign exchange
rate changes on cash and cash -5,883,183.55 -2,935,845.02
equivalents
V. Net increase in cash and cash
529,822,870.15 283,240,605.18
equivalents
Add: Opening balance of cash
275,892,343.00 255,364,835.76
and cash equivalents
VI. Closing balance of cash and
805,715,213.15 538,605,440.94
cash equivalents
54
7. Consolidated statement of changes in owners’ equity
Reporting period Unit: RMB Yuan
Reporting period
Equity attributable to owners of the Company
Less: Speci
Item Paid-up capital General Minority
Capital treas fic Surplus Total owners’ equity
(or share risk Retained profit Others interests
reserve ury reser reserve
capital) reserve
stock ve
I. Balance at the end 1,203,972,704.0 1,275,686,262 809,307,995.8
709,679,408.84 11,077,592.96 226,903,292.66 4,236,627,256.48
of the previous year 0 .22 0
Add: change of
accounting policy
Correction of errors
in previous periods
Other
II. Balance at the 1,203,972,704.0 1,275,686,262 809,307,995.8
709,679,408.84 11,077,592.96 226,903,292.66 4,236,627,256.48
beginning of the year 0 .22 0
III. Increase/
decrease of amount in
-3,372,392.58 -572,435.36 -2,793,377.06 9,502.53 -6,728,702.47
the year (“-” means
decrease)
(I) Net profit 11,467,291.68 9,502.53 11,476,794.21
(II) Other
-3,372,392.58 -2,793,377.06 -6,165,769.64
comprehensive incomes
Subtotal of (I) and
-3,372,392.58 11,467,291.68 -2,793,377.06 9,502.53 5,311,024.57
(II)
(III) Capital paid
in and reduced by 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
owners
1. Capital paid in
by owners
2. Amounts of
share-based payments
55
recognized in owners’
equity
3. Others
(IV) Profit
0.00 0.00 0.00 0.00 0.00 0.00 -12,039,727.04 0.00 0.00 -12,039,727.04
distribution
1. Appropriations
to surplus reserves
2. Appropriations
to general risk
provisions
3. Appropriations
to owners (or -12,039,727.04 -12,039,727.04
shareholders)
4. Other
(V) Internal
carry-forward of 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
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 making up
losses
4. Other
(Ⅵ) Specific reserve 0.00
1. Withdrawn for
the period
2. Used in the
period
(Ⅶ) Other
IV. Closing balance 1,203,972,704.0 1,272,313,869 809,307,995.8 709,106,973.48 8,284,215.90 226,912,795.19 4,229,898,554.01
56
0 .64 0
Last year
Unit: RMB Yuan
Last year
Equity attributable to owners of the Company
Less:
Item Paid-up capital Specifi General Minority Total owners’
Capital treas Surplus
(or share c risk Retained profit Others interests equity
reserve ury reserve
capital) reserve reserve
stock
I. Balance at the end of the 1,203,972,704.0 1,272,239,687 809,307,995.8 225,490,212.0 4,224,137,444
696,746,297.76 16,380,548.05
previous year 0 .12 0 7 .80
Add: retrospective
adjustments due to business
combinations under the same
control
Add: change of accounting
policy
Correction of errors in
previous periods
Other
II. Balance atthe 1,203,972,704.0 1,272,239,687 809,307,995.8 225,490,212.0 4,224,137,444
696,746,297.76 16,380,548.05
beginning of the year 0 .12 0 7 .80
III. Increase/ decrease of
-10,400,633.7 -215,464,089.
amount in the year (“-” 20,505.79 -207,040,668.79 1,956,707.57
7 20
means decrease)
-190,874,019.
(I) Net profit -195,000,941.75 4,126,921.86
89
57
(II) Other comprehensive -10,400,633.7 -10,380,127.9
20,505.79
incomes 7 8
-10,400,633.7 -201,254,147.
Subtotal of (I) and (II) 20,505.79 -195,000,941.75 4,126,921.86
7 87
(III) Capital paid in and
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
reduced by owners
1. Capital paid in by
owners
2. Amounts of
share-based payments
recognized in owners ’
equity
3. Others
-14,209,941.3
(IV) Profit distribution 0.00 0.00 0.00 0.00 0.00 0.00 -12,039,727.04 0.00 -2,170,214.29
3
1. Appropriations to
surplus reserves
2. Appropriations to
general risk provisions
3. Appropriations to -14,209,941.3
-12,039,727.04 -2,170,214.29
owners (or shareholders) 3
4. Other
(V) Internal
carry-forward of owners’ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
equity
1. New increase of
capital (or share capital)
from capital public
58
reserves
2. New increase of
capital (or share capital)
from surplus reserves
3. Surplus reserves for
making up losses
4. Other
(Ⅵ) Specific reserve
1. Withdrawn for the
period
2. Used in the period
(Ⅶ) Other
1,203,972,704.0 1,272,260,192 809,307,995.8 227,446,919.6 4,008,673,355
IV. Closing balance 489,705,628.97 5,979,914.28
0 .91 0 4 .60
8. Statement of changes in owners’ equity of the Company
Reporting period Unit: RMB Yuan
Reporting period
Less:
Item Paid-up capital (or Specific General risk Total owners’
Capital reserve treasury Surplus reserve Retained profit
share capital) reserve reserve equity
stock
I. Balance at the end of the 3,654,480,998.4
1,203,972,704.00 1,252,556,095.64 809,307,995.80 388,644,203.00
previous year 4
Add: change of accounting
policy
Correction of errors in
previous periods
Other
59
II. Balance at the beginning 3,654,480,998.4
1,203,972,704.00 1,252,556,095.64 809,307,995.80 388,644,203.00
of the year 4
III. Increase/ decrease of
amount in the year ( “ - ” -3,372,392.58 -38,105,666.95 -41,478,059.53
means decrease)
(I) Net profit -26,065,939.91 -26,065,939.91
(II) Other comprehensive
-3,372,392.58 -3,372,392.58
incomes
Subtotal of (I) and (II) -3,372,392.58 -26,065,939.91 -29,438,332.49
(III) Capital paid in and
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
reduced by owners
1. Capital paid in by
owners
2. Amounts of
share-based payments
recognized in owners ’
equity
3. Others
(IV) Profit distribution 0.00 0.00 0.00 0.00 0.00 0.00 -12,039,727.04 -12,039,727.04
1. Appropriations to
surplus reserves
2. Appropriations to
general risk provisions
3. Appropriations to
-12,039,727.04 -12,039,727.04
owners (or shareholders)
4. Other
60
(V) Internal
carry-forward of owners ’ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
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
making up losses
4. Other
(Ⅵ) Specific reserve
1. Withdrawn for the
period
2. Used in the period
(Ⅶ) Other
3,613,002,938.9
IV. Closing balance 1,203,972,704.00 1,249,183,703.06 809,307,995.80 350,538,536.05
1
Last year
Unit: RMB Yuan
Last year
Less: General
Item Paid-up capital (or Specific Surplus Total owners’
Capital reserve treasury risk Retained profit
share capital) reserve reserve equity
stock reserve
61
I. Balance at the end of the 809,307,995.8
1,203,972,704.00 1,249,109,520.54 550,566,366.05 3,812,956,586.39
previous year 0
Add: change of accounting
policy
Correction of errors in
previous periods
Other
II. Balance at the beginning 809,307,995.8
1,203,972,704.00 1,249,109,520.54 550,566,366.05 3,812,956,586.39
of the year 0
III. Increase/ decrease of
-255,279,371.8
amount in the year (“-”means 20,505.79 -255,258,866.08
7
decrease)
-243,239,644.8
(I) Net profit -243,239,644.83
3
(II) Other comprehensive
20,505.79 20,505.79
incomes
-243,239,644.8
Subtotal of (I) and (II) 20,505.79 -243,219,139.04
3
(III) Capital paid in and
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
reduced by owners
1. Capital paid in by
owners
2. Amounts of
share-based payments
recognized in owners’equity
3. Others
(IV) Profit distribution 0.00 0.00 0.00 0.00 0.00 0.00 -12,039,727.04 -12,039,727.04
62
1. Appropriations to
surplus reserves
2. Appropriations to
general risk provisions
3. Appropriations to
-12,039,727.04 -12,039,727.04
owners (or shareholders)
4. Other
(V) Internal carry-forward
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
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
making up losses
4. Other
(Ⅵ) Specific reserve
1. Withdrawn for the
period
2. Used in the period
(Ⅶ) Other
809,307,995.8
IV. Closing balance 1,203,972,704.00 1,249,130,026.33 295,286,994.18 3,557,697,720.31
0
63
(III) Company Profile
1. Establishment
Konka Group Co., Ltd. (hereinafter referred to as “Company” or “the Company”),
is a joint-stock limited company reorganized from the former Shenzhen Konka
Electronic Co., Ltd. in August 1991 upon approval of the People’s Government of
Shenzhen Municipality, and has its ordinary shares (A-share and B-share) listed on
Shenzhen Stock Exchange with prior consent from the People’s Bank of China Shenzhen
Special Economic Zone Branch. On August 29, 1995, the Company, renamed to “Konka
Group Co., Ltd. ” , obtained corporate business license (registration No.:
440301501121863) with its main business falling into electronic industry.
2. Share Capital Changes upon Establishment
On November 27, 1991, with approval from the SRYFZ No. 102 [1991] document as issued
by the People’s Bank of China Shenzhen Special Economic Zone Branch, Shenzhen Konka
Electronic Co., Ltd., during December 8—December 31, 1991, has issued 128,869,000
RMB ordinary shares (A-share) at a par value of RMB1.00 per share, of which the
original net assets were converted into 98,719,000 state-owned institutional shares,
30,150,000 new shares were issued, including 26,500,000 circulating shares issued
to the public and 3,650,000 staff shares issued to the staff of the Company.
On January 29, 1992, with approval from the SRYFZ No. 106 [1991] document as issued
by the People’s Bank of China Shenzhen Special Economic Zone Branch, Shenzhen Konka
Electronic Co., Ltd., during December 20, 1991— January 31, 1992, has issued to
investors abroad 58,372,300 RMB special shares (B-share) at a par value of RMB1.00
per share, of which 48,372,300 shares held by the former foreign investor and founder
—Hong Kong Ganghua Electronic Group Co., Ltd. are converted into foreign legal
person’s shares, and 10,000,000 B-shares are issued additionally.
On April 10, 1993, the Proposal on Profit Distribution and Dividend Payout 1992 was
adopted at the second general meeting of shareholders of the Company. With approval
from the SZBF No. 2 [1993] document as issued by Shenzhen Securities Regulatory
Office, the Company began to perform dividend policy for FY 1992 as of April 30,
1993: distributing RMB 0.90 in cash plus 3.5 bonus shares for every 10 shares to
all shareholders. The total capital stock reached 187,473,150 shares after this
distribution.
On April 18, 1994, the Proposal on Profit Distribution and Dividend Payout 1993 was
adopted at the third general meeting of shareholders of the Company. With approval
from the SZBF No. 115 [1994] document as issued by Shenzhen Securities Regulatory
Office, the Company began to perform dividend policy for FY1993 as of June 10, 1994:
distributing RMB 1.10 in cash plus 5 bonus shares (including 4.4 profit bonus shares
64
and 0.6 bonus share capitalized from capital public reserve) for every 10 shares
to all shareholders. The total capital stock reached 281,209,724 shares after this
distribution and capitalization from capital public reserve.
On June 2, 1994, in accordance with the provisions that “staff shares could go public
and be transferred six months after listing”, as jointly promulgated by the State
Commission for Restructuring the Economic System and the State Council’s Securities
Commission, the staff shares of the Company was planned to be listed on the flow
on June 6, 1994, with the prior consent of Shenzhen Securities Regulatory Office
and Shenzhen Stock Exchange.
On October 8, 1994, the Proposal on Negotiable Bonus Shares of B-Share Corporate
Shareholders 1992 was adopted at the 1994 interim general meeting of shareholders
of the Company. With approval from the SZBF No. 224 [1994] document as issued by
Shenzhen Securities Regulatory Office, the 16,930,305 bonus shares for FY 1992
granted to foreign legal persons were listed and negotiated at B-share market on
October 26, 1994.
On February 6, 1996, the Proposal on Share Allotment Modes 1996 was adopted at the
1996 interim general metering of shareholders of the Company. With approval from
the SZBF No. 5 [1996] document as issued by Shenzhen Securities Regulatory Office,
and reexamination from the ZJPSZ No. 16 [1996] document and ZJGZ No. 2 [1996] document
as issued by China Securities Regulatory Commission, on July 16, 1996 and October
29, 1996, all shareholders were respectively allotted three shares for every ten
existing shares held at RMB 6.28/A-share and HKD 5.85/B-share. Corporate
shareholders took their respective existing shares as bases for full subscription
of the allocable shares. The total capital stock reached 365,572,641 shares after
this allotment.
On January 25, 1998, the Plan on Share Allotment 1998 was adopted at the 1998 interim
general meeting of shareholders of the Company. With approval from the ZZBZ No. 29
[1998] document as issued by Shenzhen Securities Regulatory Office, and ZJSZ No.64
[1998] document as issued by China Securities Regulatory Commission, on July 15,
1998, negotiable A-shares were allotted in proportion of 3:10 at RMB 10.50/A-share.
For such reasons as continued weakness in B-share secondary market (lower than share
allotment price), B-share negotiation and allotment plan was canceled, and the
corporate shareholders of the Company waived the preemptive right. The total capital
stock reached 389,383,603 shares after this allotment.
On June 30, 1999, the Proposal on Profit Distribution and Capitalization from Capital
Public Reserve 1998 was adopted at the eighth general meeting of shareholders of
the Company. On August 20, 1999, the profit distribution for FY 1998 was carried
out: all shareholders were presented RMB3.00 in cash for every 10 shares, plus 2
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shares capitalized from capital public reserve. The total capital stock reached
467,260,323 shares after this capitalization.
On June 30,1999, the Plan on A-Share Issue for Capital Increase was adopted at the
eighth general meeting of shareholders of the Company. With approval from the ZJFXZ
No.140 [1999] document as issued by China Securities Regulatory Commission, on
November 1, 1999, 80,000,000 A-shares were additionally issued to the public at
RMB15.50/share. The total capital stock reached 547,260,323 shares after this
additional issue.
On May 30, 2000, the Plan on Profit Distribution and Dividend Payout 1999 was adopted
at the ninth general meeting of shareholders of the Company. On July 25, 2000, the
profit distribution for FY 1999 was carried out: all shareholders were distributed
RMB4.00 in cash plus 1 bonus shares for every 10 shares. The total capital stock
reached 601,986,352 shares after this distribution.
On April 3, 2008, the 7th meeting of the sixth Board of Directors was convened, during
which the following resolutions were discussed and adopted: based on the total
capital stock of 601,986,352 shares for the year ended December 31, 2007,
capitalization from capital public reserve was made to all shareholders at a
proportion of 1:1, namely 10 new shares for every 10 existing shares. And the said
resolution was subject to approval by the 2007 annual general meeting of shareholders
convened on May 26, 2008. The Company, in June 2008, implemented the capitalization
from capital public reserve and went through the formalities for transfer
registration with China Securities Depository and Clearing Corporation Limited. On
December 16, 2008, with approval from the SMGZF No. 2662 [2008] document as issued
by Shenzhen Bureau of Trade and Industry, the Company was agreed to increase its
share capital, and went through the formalities for registration of changes with
the administration for industry and commerce on April 10, 2009. The total capital
stock reached 1,203,972,704 shares after change.
3. Approved business scope: research and development, production and operation of
such household appliances as televisions, refrigerators, washing machines, and
personal electronic appliances; manufacturing and application of home AV, IPTV
set-top boxes, digital TV receivers (including ground receiving equipment of
satellite television broadcasting), digital products, mobile communication
equipments and terminal products, daily-use electronic products, automotive
electronic products, satellite navigation systems, intelligent transportation
systems, fire-fighting and security systems, office equipments, computers, displays,
large screen display systems; LED (OLED) back light, illumination, light-emitting
devices, and packaging thereof; electronic parts and components, moulds, plastic
66
and rubber products, and packing materials, and technical consultancy and after-sale
paid services of related products( except mobile phone, the other products in the
above business scope are manufactured in other places outside Shenzhen); wholesale,
retail, import & export and relevant support services of the aforesaid products
(including spare parts) (Commodities subject to state trading management are not
involved. Products involved in quota, license management and other specified
management shall be subject to the relevant state provisions.); sale of
self-developed technological achievements; provision of maintenance services,
technical consultant service for electronic products; ordinary cargo transportation,
domestic freight forwarding, warehousing services; consultancy on enterprise
management; and self-owned property leasing and management services, recovery of
waste electrical appliances and electronic products (excluding dissembling)
(operated by branch offices); and outsourcing services of information technology
and business procedures by means of undertaking services in the way of outsourcing,
including management and maintenance of system application, management of
information technology, bank background service, financial settlement, human
resource service, software development, call center, and data processing.
4. The parent company, as well as the actual controller of the Company is Overseas
Chinese Town Group Co., Ltd., and the ultimate controller is the State-owned Assets
Supervision and Administration Commission of the State Council.
5. The financial statements of the Company were submitted upon approval of the Board
of Directors on 24 Aug. 2012.
6. A check list of corporate names and their abbreviations mentioned in this Report
Corporate name Abbreviation
Shenzhen Konka Telecommunications Technology Co., Ltd. Telecommunication Technology
Shenzhen Konka Video & Communication Systems Engineering Video & Communication Systems
Co., Ltd. Engineering
Shenzhen Konka Precision Mold Manufacturing Co., Ltd. Precision Mold
Shenzhen Konka Electronic Co., Ltd. Konka Electronic
Shenzhen Konka Information Network Co., Ltd. Information Network
Shenzhen Konka Plastic Products Co., Ltd. Plastic Products
Shenzhen Shushida Electronic Co., Ltd. Shushida
Shenzhen Electronic Fittings Technology Co., Ltd. Fittings Technology
Mudanjiang Arctic Ocean Appliances Co., Ltd. Mudanjiang Appliances
Shaanxi Konka Electronic Co., Ltd. Shaanxi Konka
Chongqing Konka Electronic Co., Ltd. Chongqing Konka
Chongqing Konka Automotive Electronic Co., Ltd. Chongqing Electronic
67
Corporate name Abbreviation
Chongqing Qingjia Electronics Co., Ltd. Chongqing Qingjia
Anhui Konka Electronic Co., Ltd. Anhui Konka
Anhui Konka Household Appliances Co., Ltd. Anhui Household Appliances
Changshu Konka Electronic Co., Ltd. Changshu Konka
Kunshan Konka Electronic Co., Ltd. Kunshan Konka
Dongguan Konka Electronic Co., Ltd. Dongguan Konka
Dongguan Konka Packing Materials Co., Ltd. Dongguan Packing
Dongguan Konka Mould Plastic Co., Ltd. Dongguan Mould Plastic
Boluo Konka PCB Co., Ltd. Boluo Konka
Boluo Konka Precision Technology Co., Ltd. Boluo Precision
Konka (Nanhai) Development Center Nanhai Institute
Hongkong Konka Co., Ltd. Hongkong Konka
Konka Household Appliances Investment & Development Co., Konka Household Appliances
Ltd. Investment
Konka Household Appliances
Konka Household Appliances International Trading Co., Ltd.
International Trading
KONKA AMERICA,INC. KONKA AMERICA
Konka (Europe) Co., Ltd. Konka Europe
Konka (Kunshan) Real Estate Investment Co., Ltd. Kunshan Real Estate
Dongguan Xutongda Mould Plastic Co., Ltd. Xutongda
Shenzhen Konka Optoelectronic Technology Co., Ltd. Konka Optoelectronic
Shenzhen Wankaida Science and Technology Co., Ltd. Wankaida
Kunshan Kangsheng Investment Development Co., Ltd. Kunshan Kangsheng
Anhui Konka Tongchuang Household Appliances Co., Ltd. Anhui Tongchuang
Indonesia Konka Electronics Co., Ltd. Indonesia Konka
Shenzhen Shushida Logistics Service Co., Ltd. Shushida Logistics
Beijing Konka Electronic Co., Ltd. Beijing Konka Electronic
Kunshan Jielunte Mould Plastic Co. , Ltd. Jielunte
( Ⅳ ) Main accounting policies, accounting estimates and
corrections of prior accounting errors
1. Basis for the preparation of financial statements
With the going-concern assumption as the basis, the Group prepared its financial
statements in light of the actual transactions and events, as well as the Basic
Standard and 38 specific standards of Accounting Standards for Business Enterprises
issued by the Ministry of Finance of the PRC on 15 Feb. 2006, the Application Guidance
of Accounting Standards for Business Enterprises, the Interpretation of Accounting
Standards for Business Enterprises and other regulations issued thereafter (jointly
referred to as “the Accounting Standards for Business Enterprises”), and the Rules
for Preparation Convention of Disclosure of Public Offering Companies No.15 —
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General Regulations for Financial Reporting (revised in 2010) by China Securities
Regulatory Commission (CSRC).
In accordance with the Accounting Standards for Business Enterprises, accounting
activities of the Group were conducted on the accrual basis. Except for some
financial instruments, the financial statements were prepared on the basis of
historical costs. Where impairment occurred in an asset, the corresponding
impairment provision was withdrawn according to relevant rules.
2. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements for the reporting period prepared by the Group are in
compliance with the requirements of the Accounting Standards for Business
Enterprises, factually and completely presenting the Company’s and the Group’
financial positions as at 30 Jun. 2012, and operating results, cash flows and other
relevant information for the first half of the year. Furthermore, these financial
statements, in all material respects, are also in line with relevant disclosure
requirements for financial statements and notes thereof stipulated in the Rules for
Preparation Convention of Disclosure of Public Offering Companies No. 15—General
Regulations for Financial Reporting (revised in 2010) by CSRC.
3. Fiscal period
The Group’s accounting periods are divided into annual periods (yearly) and interim
periods. The interim period is a reporting period which is shorter than a full fiscal
year. Gregorian calendar is adopted for fiscal year of the Company, namely from 1
Jan. to 31 Dec. every year.
4. Recording currency
Renminbi (RMB) is the prevailing currency used in the main economic circumstances
of the Company and its domestic subsidiaries. The Company and its domestic
subsidiaries adopt RMB as the recording currency. When preparing the financial
statements for the reporting period, the Group adopted RMB as the recording currency.
Recording currency for overseas subsidiaries of the Company
The overseas subsidiaries of the Company adopt the prevailing currency used in the
main economic circumstances as the recording currency, and translate it into RMB
when preparing the financial statements.
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5. Measurement method for the business combination under the same control and
business combination not under the same control
(1) Business combination under the same control
A business combination under the same control is a business combination in which
all the enterprises involved in the combination are ultimately controlled by the
same party or parties both before and after the business combination and on which
the control is not temporary. In a business combination under the same control, the
party which obtains control of other enterprise(s) involved in the business
combination on the combining date is the combining party, and the other enterprise(s)
involved in the business combination is (are) the combined party. The "combining
date" refers to the date on which the combining party obtains actual control on the
combined party.
The assets and liabilities that the combining party obtains in a business combination
shall be measured on the basis of their carrying amount in the combined party on
the combining date. As for the balance between the carrying amount of the net assets
obtained by the combining party and the carrying amount of the consideration paid
by it (or the total par value of the shares issued), the additional paid-in capital
shall be adjusted. If the additional paid-in capital is not sufficient to be offset,
the retained earnings shall be adjusted.
The direct cost for the business combination of the combining party shall be recorded
into the profits and losses at the current period.
(2) Business combinations not under the same control
A business combination not under the same control is a business combination in which
the combining enterprises are not ultimately controlled by the same party or the
same parties both before and after the business combination. In a business
combination not under the same control, the party which obtains the control on other
combining enterprise(s) on the purchase date is the acquirer, and other combining
enterprise(s) is (are) the acquiree. The "acquisition date" refers to the date on
which the acquirer actually obtains the control on the acquiree.
As for business combinations not under the same control, the combination costs shall
be the fair values, on the acquisition date, of the assets paid, the liabilities
incurred or assumed and the equity securities issued by the acquirer in exchange
for the control on the acquiree, and intermediary agency fees for auditing, legal,
consulting services, etc. and other administrative expenditures incurred for the
business combination, which were recorded in the profits and losses at the current
period when incurred. The trading expenditures arising from the acquirer’s issuance
of equity or liabilities securities as the consideration for the business
combination are recorded in the initial recognition amount for the equity or
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liabilities securities. The contingent consideration involved is recorded in the
combination costs according to its fair value on the acquisition date. Where new
or further evidence against the existing circumstances on the acquisition date
occurs within 12 months after the acquisition date, which makes it necessary to
adjust the contingent consideration, the combined business reputation is adjusted
accordingly. For a business combination realized by two or more transactions of
exchange, in the Group’s consolidated financial statements, as for the equity
interests of the acquiree held by the Group before the acquisition date, they are
re-measured according to their fair value on the acquisition date. The difference
between their fair value and their carrying amount is recorded in investment gains
for the period comprising the acquisition date. Other comprehensive incomes arising
from the equity interests of the acquiree held by the Group before the acquisition
date are transferred to investment gains at the current period. The combination costs
are the summation of the fair value on the acquisition date of the equity interests
of the acquiree held by the Group before the acquisition date and the fair value
on the acquisition date of the equity interests of the acquiree acquired by the Group
on the acquisition date.
The combination costs of the acquirer and the identifiable net assets obtained in
the combination are both measured at their fair values on the acquisition date. The
positive balance between the combination costs and the fair value of the identifiable
net assets the acquirer obtains from the acquiree is recognized as business
reputation. The acquirer shall, pursuant to the following provisions, treat the
balance between the combination costs and the fair value of the identifiable net
assets it obtains from the acquiree: a. it shall reexamine 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; b. 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 shall record the balance
into the profits and losses of the current period.
As for the unrecognized deductible temporary differences of the acquiree obtained
by the acquirer due to their not satisfying the recognition criteria for deferred
income tax assets on the acquisition date, if new or further information within 12
months after the acquisition date shows that the relevant circumstances on the
acquisition date has existed and that the economic benefits arising from the
deductible temporary differences of the acquiree on the acquisition date are
expected to be realized, the corresponding deferred income tax assets are recognized
and the business reputation is written down in the mean time. If the business
reputation is not sufficient to offset, the difference is recognized in the profits
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and losses at the current period. Except for the aforesaid circumstance, the
recognized deferred income tax assets in relation to the business combination are
recorded in the profits and losses at the current period.
6. Preparation methods for consolidated financial statements
(1) Preparation methods for consolidated financial statements
1) Ascertainment of the consolidation scope
The scope of consolidated financial statements shall be confirmed based on the
control. Control means the Company can decide the financial and manage policy of
investee entity and have authority to earn the benefit from the investee entity.
The consolidation scope includes the Company and all its subsidiaries. The Company’
s subsidiaries refer to the enterprises or entities controlled by the Company.
2) Preparation methods for consolidated financial statements
The Group consolidates a subsidiary from the date when the Group obtains actual
control over the subsidiary ’ s net assets and production and operation
decision-making and de-consolidates it from the date when such control ceases. As
for a disposed subsidiary, its operating results and cash flows before the disposal
date are properly included in the consolidated income statement and the consolidated
cash flow statement. As for a subsidiary disposed in the current period, the opening
accounts in the consolidated balance sheet are not restated. For a subsidiary
acquired in a business combination not under the same control, its operating results
and cash flows after the acquisition date are properly included in the consolidated
income statement and the consolidated cash flow statement, and the opening accounts
and comparative accounts in the consolidated financial statements are not restated.
For a subsidiary acquired in a business combination under the same control or a merged
party under merge and consolidation, its operating results and cash flows for the
period from the beginning of the reporting period to the combination date are
properly included in the consolidated income statement and the consolidated cash
flow statement, and the comparative accounts in the consolidated financial
statements are restated in the mean time.
In the preparation of the consolidated financial statements, where a subsidiary
adopts different accounting policies or accounting periods from those of the Company,
the subsidiary’s financial statements are adjusted according to the Company’s
accounting policy and accounting periods. For a subsidiary obtained in a business
combination not under the same control, its financial statements are adjusted on
the basis of the fair value of its identifiable net assets on the acquisition date.
All significant balances, transactions and unrealized profits within the Group are
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offset in the preparation of the consolidated financial statements.
The portions in a subsidiary’s shareholders’ equity and net current profits and
losses that are not attributable to the Company are separately presented, as minority
interests and minority shareholder gains and losses respectively, under the
shareholders’ equity item and the net profit item in the consolidated financial
statements. The portion in the subsidiary’ current net gains and losses that belongs
to minority interests is presented as “minority shareholder gains and losses” under
the net profit item in the consolidated income statement. Where the subsidiary’
s losses attributable to minority shareholders exceed the portion in the subsidiary’
s opening owners’ equity attributable to minority shareholders, minority interests
are offset.
Where the Company loses control over a former subsidiary due to disposal of some
equity investment or other reasons, the residual equity interests are re-measured
according to the fair value on the date when such control ceases. The summation of
the consideration obtained from the equity disposal and the fair value of the
residual equity interests, minus the portion in the former subsidiary’s net assets
measured on a continuous basis from the acquisition date that is attributable to
the Company according to its former shareholding ratio in the subsidiary, is recorded
in the investment gains for the reporting period when the Company’s control over
the subsidiary ceases. Other comprehensive incomes in relation to the former equity
investment in the subsidiary are transferred to the investment gains at the current
period when the Company’s control over the subsidiary ceases. Later on, subsequent
measurement is carried out on the residual equity interests in accordance with the
“Accounting Standards for Business Enterprises No.2—Long-term Equity Investment”
or the “ Accounting Standards for Business Enterprises No.22— Recognition and
Measurement of Financial Instruments” and other relevant regulations. For more
details, please refer to “10. Long-term Equity Investment” or “7. Financial
Instruments” under the Note IV.
(2) As for the event about purchasing and then selling (or selling and then purchasing)
equities of the same subsidiary in a consecutive two fiscal years, the Company shall
disclose relevant accounting treatment methods
The Company had no such situation about purchasing and then selling (or selling and
then purchasing) equities of the same subsidiary in a consecutive two fiscal years.
7. Recognition standard for cash and cash equivalents
The term “cash” refers to cash on hand and deposits that are available for payment
at any time. The term “cash equivalents” refers to short-term ( within 3 months
73
from the purchase date) 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.
8. Foreign currency and accounting method for foreign currency
(1) Foreign currency business
At the time of initial recognition of a foreign currency transaction, the Group shall
convert the amount in a foreign currency into amount in its Renminbi at the spot
exchange rate (generally refer to the middle price of market exchange rate published
by the People’s Bank of China, the same below) on the day the transaction is occurred.
Of which, as for such transactions as foreign exchange or involving in foreign
exchange, the Company shall converted into amount in the Renminbi at actual exchange
rate the transaction is occurred.
(2) Translation of foreign currency financial statements
1) Translation method for the foreign currency monetary items and foreign currency
non-monetary items:
On the balance sheet date, the foreign currency monetary items are translated at
the spot exchange rate on the date. Exchange differences are recorded in the profits
and losses at the current period except for the following circumstances: ① Exchange
differences arising from the special foreign currency borrowings for the acquisition
and construction of assets eligible for capitalization are treated in accordance
with the principle of borrowing cost capitalization; ② Exchange differences
arising from the net investment hedging instruments in an overseas operation are
recorded in other comprehensive incomes and can be recognized in the profits and
losses at the current period only when the net investment is disposed (the balance
was recorded into other comprehensive income, or current profits and losses until
the net investment being disposed); and ③ Exchange differences arising from
changes in the carrying balances other than the amortized costs of foreign currency
monetary items available for sale are recorded in other comprehensive incomes.
Foreign currency non-monetary items measured at historical costs are translated into
RMB at the spot exchange rate on the transaction date. The foreign currency
non-monetary items measured at the fair value are translated at the spot exchange
rate on the fair value confirming date, from which the exchange difference is treated
as change in fair value (including change in exchange rate) and recorded in the profit
and loss of the current period, or treated as other comprehensive incomes and
recorded in the capital reserves.
2) Translation of foreign currency financial statements
74
Where the consolidated financial statements involve an overseas operation and
foreign currency monetary items form in a substantial basis on the net investment
in the overseas operation, exchange differences arising from exchange rate changes
are recorded in the “translation difference of foreign currency statements” item
under the owners’ equity item; and recorded in the profits and losses at the
reporting period of the disposal when the overseas operation is disposed.
The foreign currency financial statements of an overseas operation are translated
in RMB in accordance with the following methods: The asset and liability items in
the balance sheets shall be translated at a spot exchange rate on the balance sheet
date. Among the owner’s equity items, except the ones as “retained profits”, others
shall be translated at the spot exchange rate at the time when they are incurred.
The income and expense items in the profits statements shall be translated at the
average exchange rate of the current period on transaction date. The opening retained
profit is the closing retained profit as of the previous year after translation;
The closing retained profit is measured and stated according to profit distribution
items after translation; And the difference between the asset items and the summation
of the liability and shareholders ’ equity items after translation, as the
translation difference of foreign currency statements, is recognized in other
comprehensive incomes and is presented separately under the shareholders’ equity
item in the balance sheet. Where an overseas operation is disposed and the Group’
s control on the overseas operation ceases, the foreign currency statement
translation difference in relation to the overseas operation and presented under
the shareholders’ equity items in the balance sheet is, all or according to the
disposal rate of the overseas operation, transferred to the profits and losses at
the reporting period comprising the disposal.
Foreign currency cash flows and cash flows generated by overseas subsidiaries are
translated at the average exchange rate for the current period on the date when the
cash flow is generated. The influence on cash due to change of exchange rate shall
be presented separately under the cash flow statement.
The opening amounts and the actual amounts in the previous year are presented on
the basis of the translated financial statements for the previous year.
9. Financial instruments
(1) Category of financial instruments
Category of financial assets
In the initial recognition, financial assets are divided into financial assets
measured at fair values and whose changes are recorded in current profits and losses,
held-to-maturity investments, loans and accounts receivables, and
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available-for-sale financial assets.
Category of financial liabilities
In the initial recognition, financial liabilities are divided into the financial
liabilities measured at fair values and whose changes are recorded in current gains
and losses and other financial liabilities.
(2) Recognition basis and measurements for financial instruments
Recognition basis and measurements for financial instruments
Financial assets bought in and sold out in the conventional way are recognized and
de-recognized in accordance with the transaction dates. In the initial recognition,
financial assets are divided into financial assets measured at fair values and whose
changes are recorded in current profits and losses, held-to-maturity investments,
loans and accounts receivables, and available-for-sale financial assets. In the
initial recognition, a financial asset is measured at its fair value. For a financial
asset measured at fair value and whose changes are recorded in current gains and
losses, the relevant trading expenditures are directly recorded in the gains and
losses at the current period. And the trading expenditures for the other financial
assets are recorded in the initially recognized amount.
① Financial assets measured at fair values and whose changes are recorded in current
profits and losses
Such financial assets include transactional financial assets and financial assets
designated to be measured at fair values and whose changes are recorded in current
gains and losses.
A transactional financial asset refers to a financial asset meeting any of the
following requirements: A. The purpose to acquire the financial asset is mainly for
selling or repurchase of it in the near future; B. Forming a part of the identifiable
combination of financial instruments which are managed in a centralized way and for
which there are objective evidences proving that the Group may manage the combination
by way of short-term profit making in the near future; and C. Being a derivative
instrument, excluding the designated derivative instruments which are effective
hedging instruments, or derivative instruments to financial guarantee contracts,
and the derivative instruments which are connected with the equity instrument
investments for which there is no quoted price in the active market, whose fair value
cannot be reliably measured, and which shall be settled by delivering the said equity
instruments.
Financial asset complying with one of following conditions can be measured at fair
value when being initially recognized and changes in that financial asset are
recorded in gains and losses of the current period: A. The designation can eliminate
or greatly reduce situations where related profits or losses were in inconformity
76
due to different measurement base of the financial asset; B. The formal written
document of concerning risk management or investment strategy of the Group has stated
that the Group shall manage and assess on financial asset group and financial asset
and financial liability group on the basis of fair value, and report to key management
staffs.
A transactional financial asset, which is measured at the fair value and changes
thereof are recorded in gains and losses of the current period, is subsequently
measured at the fair value. The gains and losses arising from the fair value changes,
as well as the dividend and interest incomes from the financial asset, are recorded
in the gains and losses for the current period.
② Held-to-maturity investments
A held-to-maturity investment refers to a non-derivative financial asset with a
fixed date of maturity, a fixed or determinable amount of repo price and which the
Group holds for a definite purpose or the Group is able to hold until its maturity.
A held-to-maturity investment is subsequently measured according to the amortized
cost using the actual interest rate method. The gains or losses arising from
de-recognition, impairment or amortization of the investment are recorded in the
profits and losses for the current period.
The actual interest rate method refers to the method by which the post-amortization
costs and the interest incomes of different installments or interest expenses are
calculated in light of the actual interest rates of the financial assets or financial
liabilities (including a set of financial assets or financial liabilities). The
actual interest rate refers to the interest rate adopted to cash the future cash
flow of a financial asset or financial liability within the predicted term of
existence or within a shorter applicable term into the current carrying amount of
the financial asset or financial liability.
When calculating the actual interest rate, the Group predicts the future cash flow
(not taking into account the future credit losses) on the basis of taking into account
all the contractual provisions concerning the financial asset or financial liability.
The various fee charges, trading expenses, reduced values, premiums, etc., which
are paid or collected by the parties to a financial asset or financial liability
contract and which form a part of the actual interest rate, are also taken into
account in the determination of the actual interest rate.
③ Loans and accounts receivable
Loans and accounts receivable refer to the non-derivative financial assets for which
there is no quoted price in the active market and of which the repo amount is fixed
or determinable. The financial assets defined by the Group as loans and accounts
receivable include notes receivable, accounts receivable, interest receivable,
77
dividend receivable, other receivables, etc..
Loans and accounts receivable are subsequently measured according to the amortized
cost using the actual interest rate method. The gains or losses arising from
de-recognition, impairment or amortization of the loans and accounts receivable are
recorded in the profits and losses for the current period.
④ Available-for-sale financial assets
Available-for-sale financial assets include the non-derivative financial assets
which are designated as available for sale when they are initially recognized, as
well as the financial assets other than the financial assets measured at fair values
and whose changes are recorded in current gains and losses, loans and accounts
receivable and held-to-maturity investments.
Available-for-sale financial assets are subsequently measured at their fair values.
Impairment losses and the exchange differences of foreign currency monetary
financial assets in relation to the amortized cost are recorded in the profits and
losses for the current period. Other gains or losses arising from fair value changes
are recognized as other comprehensive incomes and recorded in the capital reserves,
and transferred out and recorded in the profits and losses for the current period
when the financial asset is de-recognized.
Interest obtained during the period of holding an available-for-sale financial asset
and the cash dividends declared and distributed by an invested party are recorded
in investment gains.
Recognition basis and measurements for financial liabilities
In the initial recognition, financial liabilities are divided into the financial
liabilities measured at fair values and whose changes are recorded in current gains
and losses and other financial liabilities. Financial liabilities are initially
recognized at their fair values. As for a financial liability measured at fair value
and whose changes are recorded in current gains and losses, the relevant trading
expense is directly recorded in the profits and losses for the current period. As
for other financial liabilities, the relevant trading expenses are recorded in the
initially recognized amounts.
① Financial liabilities measured at fair values and whose changes are recorded in
current gains and losses
Such financial liabilities are divided into transactional financial liabilities and
financial liabilities designated to be measured at fair values and whose changes
are recorded in current gains and losses in the initial recognition under the same
conditions where such financial assets are divided into transactional financial
assets and financial assets designated to be measured at fair values and whose
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changes are recorded in current gains and losses in the initial recognition.
Financial liabilities measured at fair values and whose changes are recorded in
current gains and losses are subsequently measured at their fair values. Gains or
losses arising from the fair value changes, as well as the dividend and interest
expenses in relation to the said financial liabilities, are recorded in the profits
and losses for the current period.
② Other financial liabilities
As for a derivative financial liability connected to an equity instrument for which
there is not quoted price in an active market and whose fair value cannot be reliably
measured and which must be settled by delivering the equity instrument, it is
subsequently measured on the basis of costs. Other financial liabilities are
subsequently measured according to the amortized cost using the actual interest rate
method. Gains or losses arising from de-recognition or amortization of the said
financial liabilities are recorded in the profits and losses for the current period.
③ Financial guarantee contract
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, which shall be initially recognized by
fair value, and the subsequent measurement shall be made after they are initially
recognized according to the higher one of the following: a. the amount as determined
according to the Accounting Standards for Enterprises No. 13 – Contingencies; b.
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.
(3) Recognition basis and measurement of financial asset transfers
Where a financial asset satisfies any of the following requirements, the recognition
of it is terminated: ① The contractual rights for collecting the cash flow of the
said financial asset are terminated; ② The said financial asset has been
transferred and nearly all of the risks and rewards related to the ownership of the
financial asset to the transferee; or ③ The said financial asset has been
transferred. And the Group has ceased its control on the said financial asset though
it neither transfers nor retains nearly all of the risks and rewards related to the
ownership of the financial asset.
Where the Group neither transfers nor retains nearly all of the risks and rewards
related to the ownership of a financial asset, and it does not cease its control
on the said financial asset, it recognizes the relevant financial asset and liability
accordingly according to the extent of its continuous involvement in the transferred
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financial asset. The term "continuous involvement in the transferred financial
asset" refers to the risk level that the enterprise faces resulting from the change
of the value of the financial asset.
If the transfer of an entire financial asset satisfies the conditions for stopping
recognition, the difference between the amounts of the following 2 items is recorded
in the profits and losses of the current period: (1) The book value of the transferred
financial asset; and (2) The sum of consideration received from the transfer, and
the accumulative amount of the changes of the fair value originally recorded in other
comprehensive incomes.
If the transfer of partial financial asset satisfies the conditions to stop the
recognition, the book value of the transferred financial asset is apportioned
between the portion whose recognition has been stopped and the portion whose
recognition has not been stopped 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 summation of the consideration
received from the transfer and the portion of the accumulative amount of changes
in the fair value originally recorded in other comprehensive incomes which
corresponds to the portion whose recognition has been stopped; and (2) The amortized
carrying amounts of the aforesaid amounts.
(4) De-recognition of financial liabilities
Only when the prevailing obligations of a financial liability are relieved in all
or in part may the recognition of the financial liability be terminated in all or
partly. Where the Group (debtor) enters into an agreement with a creditor so as to
substitute the existing financial liabilities by way of any new financial liability,
and if the contractual stipulations regarding the new financial liability is
substantially different from that regarding the existing financial liability, it
terminates the recognition of the existing financial liability, and at the same time
recognizes the new financial liability.
Where the recognition of a financial liability is totally or partially terminated,
the enterprise concerned shall include into the profits and losses of the current
period for the gap between the book value which has been terminated from recognition
and the considerations it has paid (including the non-cash assets it has transferred
out and the new financial liabilities it has assumed).
(5) Recognition method of fair values of financial assets and liabilities
The “fair value” refers to the amount, at which both parties to a transaction who
are familiar with the condition exchange assets or clear off debts under fair
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conditions. As for the financial instrument for which there is an active market,
the Group determines its fair value using the quoted price in the active market.
The quoted prices in the active market refer to the prices, which are easily available
from the stock exchange, brokers, industry associations, pricing service
institutions, etc. at a fixed term, and which represent the prices at which actually
incurred market transactions are made under fair conditions. Where there is no active
market for a financial instrument, the Group adopts value appraisal techniques to
determine its fair value. The value appraisal techniques mainly include the prices
adopted by the parties, who are familiar with the condition, in the latest market
transaction upon their own free will, the current fair value obtained by referring
to other financial instruments of the same essential nature, the cash flow
capitalization method and the option pricing model, etc..
(6) Withdrawal of impairment provision for financial assets (excluding accounts
receivable)
For the financial assets other than the financial assets measured at fair values
and whose changes are recorded in current gains and losses, the Group runs a check
on their carrying amounts on every balance sheet date. Where there is any objective
evidence proving that such a financial asset has been impaired, an impairment
provision is made.
The Group carries out a separate impairment test for every financial asset which
is individually significant. As for a financial asset which is individually
insignificant, an impairment test is carried out separately or in the financial asset
group with similar credit risk. Where the financial asset (individually significant
or insignificant) is found not impaired after the separate impairment test, it is
included in the financial asset group with similar credit risk and tested again on
the group basis. Where the impairment loss is recognized for an individual financial
asset, it is not included in the financial asset group with similar credit risk for
an impairment test.
① Impairment of held-to-maturity investments, loans and accounts receivable
Where a financial asset measured on the basis of costs or amortized costs is impaired,
the carrying amount of the said financial asset is written down to the current value
of the predicted future cash flow. The amount written down is recognized as the
impairment loss of the asset and is recorded in the profits and losses for the current
period. Where a financial asset is recognized as having suffered from any impairment
loss, if there is any objective evidence proving that the value of the said financial
asset has been restored, and it is objectively related to the events that occur after
such loss is recognized, the impairment losses as originally recognized are reversed.
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The reversed carrying amount of the said financial asset does not exceed the
amortized cost of the said financial asset on the day of reverse under the assumption
that no provision is made for the impairment.
② Impairment of available-for-sale financial assets
Where an available-for-sale financial asset is impaired, the accumulative losses
arising from the decrease of the fair value of the capital reserve which is directly
included are transferred out and recorded in the profits and losses for the current
period. The accumulative losses transferred out are the balance obtained from the
initially obtained cost of the said financial asset after deducting the principals
as taken back, the amortized amount, the current fair value and the impairment loss
originally recorded in the profits and losses.
Where the impairment loss has been recognized for an available-for-sale financial
asset, if, within the accounting periods thereafter, there is any objective evidence
proving that the value of the said financial asset has been restored and the
restoration is objectively related to the events that occur after the impairment
loss was recognized, the originally recognized impairment loss is reversed. The
impairment losses on the available-for-sale equity instrument investments are
reversed and recognized as other comprehensive incomes, and the impairment losses
on the available-for-sale liability instruments are reversed and recorded in the
profits and losses for the current period.
The impairment loss incurred to an equity instrument investment for which there is
no quoted price in the active market and whose fair value cannot be reliably measured,
or incurred to a derivative financial asset which is connected with the said equity
instrument investment and which must be settled by delivering the said equity
investment, is not reversed.
(7) As for event about reclassifying the undue held-to-maturity investment into
available-for-sale financial assets, the Company shall state the basis of changes
in holding purpose or ability
The Company had no such event about reclassifying the undue held-to-maturity
investment into available-for-sale financial assets.
10. Recognition criteria and withdrawal methods for bad debts provision of accounts
receivable
Receivables include account receivables and other accounts receivables.
(1) Recognition of provision for bad debts:
The Group shall test the carrying amount of receivables on the balance sheet date.
Where there is any objective evidence proving that such receivables have been
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impaired, an impairment provision shall be made.
① debtor has serious financial difficult;
② debtor goes against the contract clause (for instance, breach of faith or overdue
paying interests or principal);
③ debtors has a great probability of bankruptcy or other financial reorganization;
④ other objective evidence proving such accounts receivable has been impaired;
(2) Withdraw method of provision for bad debts
① The recognition criteria and method of individual provision for bad debts of
receivables that are individually significant
The Group recognized the receivables with amount above RMB 20 million and other
receivables above 10 million as receivables with significant single amounts and
withdrawn the provision for bad debts.
The Group made an independent impairment test on receivables with significant single
amount, the financial assets without impairment by independent impairment test
should be included in financial assets portfolio with similar credit risk to take
the impairment test. Receivables was recognized with impairment should no longer
be included in receivables portfolio with similar credit risk to take the impairment
test.
② The recognition and method of provision for bad debts of receivables by credit
risk portfolio
A. Recognition of credit risk group
Receivables that are not individually significant and individually significant but
without impairment by independent impairment test, are grouped on the basis of
similarity and relevance of credit risk. This credit risk usually reflects the
debtor’s ability to repay all the due accounts in accordance with contract for such
assets, which also are related with the measurement on future cash flow of the
examined assets.
Recognition of different groups:
Item Recognition basis of group
Dividing accounts receivable into groups with debt age as
Aging group
the credit risk characteristics
Dividing accounts receivable into groups with whether the
The group of related parties
debtor is the related party among the group or not as the
of the Group
credit risk characteristics
B. Withdrawal method of provision for bad debts recognized by credit risk group
For the impairment test implemented by groups, the amount of provision for bad debts
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was appraised and recognized in accordance with the structure of accounts receivable
group and similar characteristics of credit risk (the debtor’s ability to pay off
the loans in accordance with the provisions of contract), experience of losses,
current economic status and the predicted losses in the accounts receivable group.
Withdrawal methods of provision for bad debts on different groups
Item Withdrawal method
Age group Aging analysis
Related parties groups
No withdrawal
within the Group
In the group, withdrawal method for provision for bad debts by aging analysis
Proportion of provision for Proportion of provision
Age bad debts of accounts for bad debts of other
receivable（%） accounts receivable（%）
Within 1 year（including 1 year,
2 2
the same below）
1-2 years 5 5
2-3 years 20 20
3-4 years 50 50
4-5 years 50 50
Over 5 years 100 100
Impairment of prepayment: The prepayment shall be subject to the individual
impairment test on the balance sheet date. The provision for bad debts should be
measured as per the balance between the carrying amount and the present value of
the cash flow in future if there is an objective evidence for the impairment
occurrence.
③ Receivables with insignificant amount but being individually withdrawn the
provision for bad debts
The Group made independent impairment test on receivables with insignificant amount
but with the following characteristics, if any objective evidence shows that the
accounts receivable has been impaired, impairment loss shall be recognized on the
basis of the gap between the current values of the future cash flow lower than its
book value so as to withdraw provision for bad debts:
A. Receivables exist dispute with the other parties or involving lawsuit and
arbitration;
B. Receivables exist obvious indication showing that the debtors are likely to fail
to perform the duty of repayment, etc..
(3) Reversal of provision for bad debts
If there is any objective evidence proving that the value of the said receivables
has been restored, and it is objectively related to the events occurred after such
loss is recognized, the impairment-related losses as originally recognized shall
84
be reversed and be recorded into the profits and losses of the current period. However,
the reversed carrying amount shall not be any more than the post-amortization costs
of the said accounts receivable on the day of reverse under the assumption that no
provision is made for the impairment.
1) Bad debt provision for individually significant accounts receivable
The Group recognized the receivables with amount
Judgement basis or monetary standards of provision for bad above RMB 20 million and other receivables above 10
debts of the individually significant accounts receivable million as receivables with significant single
amounts and withdrawn the provision for bad debts.
The Group made an independent impairment test on
receivables with significant single amount, the
financial assets without impairment by independent
impairment test should be included in financial
Method of individual provision for bad debts of the
assets portfolio with similar credit risk to take the
individually significant accounts receivable
impairment test. Receivables was recognized with
impairment should no longer be included in
receivables portfolio with similar credit risk to
take the impairment test.
2) Accounts receivable for which bad debt provisions are made on the group basis
Withdrawal method of bad
Name of group debt provision on the Recognition basis of group
group basis
Dividing accounts receivable into groups with debt age
Aging group Aging analysis method
as the credit risk characteristics
Dividing accounts receivable into groups with whether
The group of related parties
Aging analysis method the debtor is the related party among the group or not
of the Group
as the credit risk characteristics
In the groups, adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Inapplicable
Withdrawal proportion for Withdrawal proportion for other accounts
Age
accounts receivable (%) receivable (%)
Within 1 year (including 1
2% 2%
year)
1-2 years 5% 5%
2-3 years 20% 20%
Over 3 years
3-4 years 50% 50%
4-5 years 50% 50%
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Over 5 years 100% 100%
In the groups, adopting balance percentage method to withdraw bad debt provision
□ Applicable √ Inapplicable
In the groups, adopting other methods to withdraw bad debt provision
√ Applicable □Inapplicable
Name of group Note of method
The group of related parties of the Group No withdrawal
3) Accounts receivable with an insignificant single amount but for which the bad
debt provision is made individually
Reason of individually withdrawing bad debt provision:
The Group made independent impairment test on receivables with insignificant amount
but with the following characteristics, if any objective evidence shows that the
accounts receivable has been impaired, impairment loss shall be recognized on the
basis of the gap between the current values of the future cash flow lower than its
book value so as to withdraw provision for bad debts:
A. Receivables exist dispute with the other parties or involving lawsuit and
arbitration;
B. Receivables exist obvious indication showing that the debtors are likely to fail
to perform the duty of repayment, etc..
Withdrawal method for bad debt provision:
The Group recognized the impairment loss on the basis of the gap between the current
values of the future cash flow lower than its book value, and then withdrew relevant
provision for bad debts
11. Inventory
(1) Classification
Inventories are classified as: raw materials, goods in process, merchandise on hand,
goods delivered, circulating materials and development costs, etc..
Development cost refers to the unfinished property with the development purpose for
sales.
(2) Pricing method for outgoing inventories
□ First-in first-out method √ Weighted average method □ Specific
identification method □ Other
The inventories shall be measured in light of their cost when obtained. The cost
of inventory consists of purchase costs, processing costs and other costs. Inventory
is accounted by weight average method upon receiving and giving. For merchandise
on hand shall be accounted by planned cost, if the difference between planned cost
of and actual cost of raw materials is accounted through the cost variance item,
and the planned cost is adjusted to the actual cost according to the cost difference
86
which the carryover and given-out inventory should shoulder in the period.
(3) Recognition standard of net realizable value and withdrawal method of
depreciation reserves for inventories
The net realizable value refers, in the ordinary course of business, to the account
after deducting the estimated cost of completion, estimated sale expense and
relevant taxes from the estimated sale price of inventories. The net realizable value
of inventories shall be fixed on the basis of valid evidence as well as under
consideration of purpose of inventories and the effect of events after
balance-sheet-date.
On the balance sheet date, the inventories shall be measured according to the cost
or the net realizable value, whichever is lower. If the net realizable value is lower
than the cost, it shall withdraw the depreciation reserves for inventories, which
was withdrawn in accordance with the balance that the cost of individual inventory
item exceeding the net realizable value.
After withdrawing the depreciation reserves for inventories, if the factors, which
cause any write-down of the inventories, have disappeared, causing the net
realizable value of inventories is higher than its carrying amount, the amount of
write-down shall be reversed from the original amount of depreciation reserve for
inventories. The reversed amount shall be included in the profits and losses of the
current period.
(4) Inventory system for inventories
√ Perpetual inventory system □ Periodic inventory system □ Other
The inventory system for inventories is perpetual inventory system.
(5) Amortization method of the low-value consumption goods and packing articles
Low-value consumption goods
Amortization method: one-off amortization method
The Company shall amortize the low-value consumption goods through the one-off
amortization method.
Packing articles
Amortization method: one-off amortization method
The Company shall amortize the packing articles through the one-off amortization
method.
12. Long-term equity investment
(1) Recognition of initial investment cost
The initial cost of the long-term equity investment formed in business combination
shall be ascertained in accordance with the following provisions: For the business
combination under the same control, it shall regard the share of the carrying amount
of the owner's equity of the combined party on the date of combination as the initial
cost of the long-term equity investment. For the business combination under
different control, the combination costs shall be the sum of the fair values of the
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assets paid, the liabilities incurred or assumed and the equity securities issued
by the Company; the commission fees for audit, law services, assessment & consultancy
services and other relevant expenses occurred in the business combination by the
combining party, shall be recorded into current profits and losses upon their
occurrence; the transaction expense from the issuance of equity securities or bonds
securities which are as consideration for combination by the combining party, should
be recorded as the initial amount of equity securities and bonds securities.
Besides the long-term equity investments formed by business combination, the other
long-term equity investments shall be initially measured by cost, the cost is fixed
in accordance with the ways of gaining, such as actual cash payment paid by the Group,
the fair value of equity securities issued by the Group, the agreed value of the
investment contract or agreement, the fair value or original carrying amount of
exchanged assets from non-monetary assets exchange transaction, the fair value of
the long-term equity investments, etc. The expenses, taxes and other necessary
expenditures directly related with gaining the long-term equity investments shall
also be recorded into investment cost.
(2) Follow-up measurement of long-term equity investment and recognized method of
profits and losses
The long-term equity investment that the Company does not have joint control or
significant influences on the invested entity, and has no offer in the active market
and its fair value cannot be reliably measured, it shall be measured by adopting
the cost method; a long-term equity investment that the Company has joint control
or significant influences over the invested entity shall be measured by employing
the equity method; a long-term equity investment that the Company does not have
control, joint control or significant influence on the invested entity, as well as
its fair value can be reliably measured, it shall be accounted as financial assets
available-for-sale.
Moreover, long-term equity investment adopting the cost method in the financial
statements, and which the Company has control on invested entity.
① Long-term equity investment measured by adopting cost method
The price of a long-term equity investment measured by adopting the cost method shall
be included at its initial investment cost, the return on investment at current
period shall be recognized in accordance with the cash dividend or profit announced
to distribute by the invested entity, except the announced but not distributed cash
dividend or profit included in the actual payment or consideration upon gaining the
investment.
②Long-term equity investment measured by adopting equity method
If the initial cost of a long-term equity investment is more than the Company's
attributable share of the fair value of the invested entity's identifiable net assets
for the investment, the initial cost of the long-term equity investment may not be
adjusted. If the initial cost of a long-term equity investment is less than the
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Company's attributable share of the fair value of the invested entity's identifiable
net assets for the investment, the difference shall be included in the current
profits and losses and the cost of the long-term equity investment shall be adjusted
simultaneously.
When measured by adopting equity method, the investment profits or losses at current
period shall be the attributable share of the net profits or losses of the invested
entity. The investing enterprise shall, on the ground of the fair value of all
identifiable assets of the invested entity when it obtains the investment, and in
accordance with the accounting policies and accounting periods, recognize the
attributable share of the net profits and losses of the invested entity after it
adjusts the net profits of the invested entity. For the profits and losses of
unrealized insider dealing between the Group and joint-operative enterprise or
co-operative enterprise, the investment profits and losses shall be recognized after
the part attributable to the Group calculated by proportion of shares held being
offset. However, if the losses of unrealized insider dealing between the Group and
joint-operative enterprise or co-operative enterprise was attributed to the
impairment losses of the transferred assets in accordance with the Accounting
Standards for Enterprises No. 8— Asset Impairment, which shall not be offset. The
other comprehensive profits from invested entity shall be recognized as other
comprehensive profits after adjusting the book value of long-term equity investment,
and then recorded into capital reserves
The Group shall recognize the net losses of the invested enterprise until the book
value of the long-term equity investment and other long-term rights and interests
which substantially form the net investment made to the invested entity are reduced
to zero. However, if the Group has the obligation to undertake extra losses, which
shall be recognized as the estimated liabilities in accordance with the estimated
duties and then recorded into investment losses at current period. If the invested
entity realizes any net profits later, the Group shall, after the amount of its
attributable share of profits offsets against its attributable share of the
un-recognized losses, resume to recognize its attributable share of profits.
For the long-term equity investment on joint-enterprise and co-operative enterprise
held by the Group before the initial execution of New Accounting Standards for
Enterprise, if there existed the balance of debtor for equity investment related
with such long-term equity investment, which shall be recorded into current profits
and losses with the amount by straight-line amortization in the remained period.
③ Acquiring shares of minority interest
In the preparation for the financial statements, the balance existed between the
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long-term equity investment increased by acquiring shares of minority interest and
the attributable net assets on the subsidiary calculated by the increased shares
held since the purchase date (or combination date), the capital reserves shall be
adjusted, if the capital reserves are not sufficient to offset, the retained profits
shall be adjusted.
④ Disposal of long-term equity investment
In the preparation of financial statements, the Company disposed part of the
long-term equity investment on subsidiaries without losing its controlling right
on them, the balance between the disposed price and attributable net assets of
subsidiaries by disposing the long-term equity investment shall be recorded into
owners’ equity; where the Company losses the controlling right by disposing part
of long-term equity investment on such subsidiaries, it shall treated in accordance
with the relevant accounting policies in Note IV. 4 (2)— Method on preparation of
combined financial statements.
For other ways on disposal of long-term equity investment, the balance between the
book value of the disposed equity and its actual payment gained shall be recorded
into current profits and losses; for the long-term equity investment measured by
adopting equity method, the other comprehensive income originally recorded into
owners’ equity shall be transferred into current profits and losses by proportions
upon the disposal. The remained equity shall be recognized as long-term equity
investment or other relevant financial assets in accordance with the book value,
and carried out the follow-up measurement in accordance with the above accounting
policies for the long-term equity investment or financial assets. If the measurement
method of remained equity is transferred from cost method to equity method, it shall
be subject to retrospective adjustment in accordance with relevant rules and
stipulations.
(3) Recognition basis of joint control and significant influences
The term "control" refers to the power to determine the financial and operating
polices of an enterprise and obtain benefits from its operating activities of the
enterprise. The term "joint control" refers to the control over an economic activity
in accordance with the contracts and agreements, which does not exist unless the
investing parties of the economic activity with one an assent on sharing the control
power over the relevant important financial and operating decisions. The term
"significant influences" refers to the power to participate in making decisions on
the financial and operating policies of an enterprise, but not to control or do joint
control together with other parties over the formulation of these policies. When
ascertaining whether or not it is able to control or have significant influences
on an invested entity, an enterprise shall take into consideration the invested
enterprises' current convertible corporate bonds and current executable warrants
held by the investing enterprise and other parties, as well as other potential
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factors concerning the voting rights.
(4) Testing method of impairment and withdrawal method of provision for impairment
The Group shall, on the day of balance sheet, make a judgment on whether there is
any sign of possible impairment of the long-term equity investment. Where there is
sign of impairment, the Group shall estimate the recoverable amount of the long-term
equity investment. Where the recoverable amount of the long-term equity investment
is lower than its book value, which balance shall be withdrawn the provision for
impairment and recorded into current profits and losses.
Once any loss of impairment of the long-term equity investment is recognized, it
shall not be switched back in the future accounting periods.
13. Investment real estates
The term "investment real estates" refers to the real estates held for generating
rent and/or capital appreciation. Investment real estates of the Group include the
right to use any land which has already been rented; the right to use any land which
is held and prepared for transfer after appreciation; and the right to use any
building which has already been rented. Besides, as for the vacant buildings held
for operating lease, if the Board (or similar institution) made a written resolution,
and clearly expressed to hold it as operating lease with no change in the short time,
which shall be listed as investment real estates.
The initial measurement of the investment real estate shall be made at its cost.
Subsequent expenditures incurred for an investment real estate is included in the
cost of the investment real estate when it is probable that economic benefits
associated with the investment real estate will flow to the Group and the cost can
be reliably measured, otherwise the expenditure is recognized in profit or loss in
the period in which they are incurred.
The Group shall make a follow-up measurement to the investment real estates by
employing the cost pattern on the date of the balance sheet. An accrual depreciation
or amortization shall be made for the investment real estates in the light of the
accounting policies of the use right of buildings or lands.
For details of impairment test method and withdrawal method of impairment provision
of investment real estates, please refer to Note IV. 17. Impairment of Non-current
Non-financial Assets.
When owner-occupied real estate or inventories are changed into investment real
estate or investment real estate is changed into owner-occupied real estate, whose
book value prior to the change shall be the entry value after the change.
When an investment real estate is changed to an owner-occupied real estate, it is
transferred to fixed assets or intangible assets at the date of such change. When
an owner-occupied real estate is changed to be held to earn rental or for capital
appreciation, the fixed asset or intangible asset is transferred to investment real
estate at the date of such change. If the fixed asset or intangible asset is changed
91
into investment real estate measured by adopting the cost pattern, whose book value
prior to the change shall be the entry value after the change; if the fixed asset
or intangible asset is changed into investment real estate measured by adopting the
fair value pattern, whose fair value on the date of such change shall be the entry
value after the change
An investment real estate is derecognized on disposal or when the investment real
estate is permanently withdrawn from use and no future economic benefits are expected
from its disposal. The amount of proceeds on sale, transfer, retirement or damage
of an investment real estate less its carrying amount and related taxes and expenses
is recognized in profit or loss in the period in which it is incurred.
14. Fixed assets
(1)Recognized standard of fixed assets
The term "fixed assets" refers to the tangible assets that simultaneously possess
the features as follows: they are held for the sake of producing commodities,
rendering labor service, renting or business management; and their useful life is
in excess of one fiscal year.
(2) Recognition basis and pricing method of fixed assets by finance lease
The "finance lease" shall refer to a lease that has transferred in substance all
the risks and rewards related to the ownership of an asset. Its ownership may or
may not eventually be transferred. The fixed assets by finance lease shall adopt
the same depreciation policy for self-owned fixed assets. If it is reasonable to
be certain that the lessee will obtain the ownership of the leased asset when the
lease term expires, the leased asset shall be fully depreciated over its useful life.
If it is not reasonable to be certain that the lessee will obtain the ownership of
the leased asset at the expiry of the lease term, the leased asset shall be fully
depreciated over the shorter one of the lease term or its useful life.
(3) Category of fixed assets and depreciation
The initial measurement of a fixed asset shall be made at its cost after considering
the effect of expected discard expenses. The Group shall withdraw the depreciation
of fixed assets by adopting the straight-line method since the second month of its
useful life.
The "expected net salvage value" refers to the expected amount that the Group may
obtain from the current disposal of a fixed asset after deducting the expected
disposal expenses at the expiration of its expected useful life.
Expected net salvage Annual deprecation
Category of fixed assets Useful life (Y)
value (%) (%)
Housing and building 20-40 10.00 2.25-4.50
Machinery equipments 10 10.00 9.00
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Electronic equipments and
5 10.00 18.00
other
Transportation vehicle 5 10.00 18.00
Other equipments 5 10.00 18.00
Fixed assets acquired under
-- -- --
finance lease:
Of which: housing and
building
Machinery equipments
Electronic equipments and
other
Transportation vehicle
Other equipments
(4) Testing method of impairment and withdrawal method of provision for impairment
on fixed assets
For details, please refer to Note IV. 17— Impairment of non-current non financial
assets.
(5) Other explanations
The follow-up expenses related to a fixed asset, if the economic benefits pertinent
to this fixed asset are likely to flow into the enterprise and its cost can be reliably
measured, shall be recorded into cost of fixed assets and ultimately recognized as
the book value of the replaced part; otherwise, they shall be included in the current
profits and losses.
When the Group sells, transfers or discards any fixed assets, or when any fixed assets
of the Group is damaged or destroyed, the Group shall deduct the book value of the
fixed assets as well as the relevant taxes from the disposal income, and include
the amount in the current profits and losses.
The Group shall check the useful life, expected net salvage value and depreciation
method of the fixed assets at the end of the year at least, if there is any change,
it shall be regarded as a change of the accounting estimates.
15. Construction in progress
(1) Categories of construction in progress
Construction in progress is listed by actual projects.
(2) Standards and time of transferring construction in progress into fixed asset
Construction in progress is measured at actual cost. Actual cost comprises
construction costs, borrowing costs that are eligible for capitalization before the
fixed assets being ready for their intended us and other relevant costs. Construction
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in progress is transferred to fixed assets when the assets are ready for their
intended use.
(3) Impairment test method and withdrawal method for impairment provision of
construction in progress
For details of the testing method of impairment and withdraw method of impairment
provision on construction in progress, please refer to Note IV. 17— Impairment of
non-current non financial assets.
16. Borrowing costs
(1) Recognition principles for capitalization of borrowing costs
The borrowing costs shall include interest on borrowings, amortization of discounts
or premiums on borrowings, ancillary expenses, and exchange balance on foreign
currency borrowings. The borrowing costs shall not be capitalized unless they
simultaneously meet the following requirements:
1) The asset disbursements have already incurred;
2) The borrowing costs has already incurred; and
3) The acquisition and construction or production activities which are necessary
to prepare the asset for its intended use or sale have already started.
(2) Capitalization period of borrowing costs
Where the borrowing costs incurred to an enterprise can be directly attributable
to the acquisition and construction or production of assets eligible for
capitalization, it shall start to be capitalized when the asset disbursements have
already incurred, the borrowing costs has already incurred and the acquisition and
construction or production activities which are necessary to prepare the asset for
its intended use or sale have already started; When the qualified asset under
acquisition and construction or production is ready for the intended use or sale,
it shall stop to be capitalized. Other borrowing costs shall be recognized as costs
upon their occurrence.
(3) Period of suspension of capitalization of borrowing costs
Where the acquisition and construction or production of a qualified asset is
interrupted abnormally and the interruption period lasts for more than 3 months,
the capitalization of the borrowing costs shall be suspended until the acquisition
and construction or production of a qualified asset resume again.
(4) Calculation method of capitalized amount of borrowing costs
The to-be-capitalized amount of interests shall be determined in light of the actual
interests incurred of the specially borrowed loan at the present period minus the
income of interests earned on the unused borrowing loans as a deposit in the bank
or as a temporary investment; the enterprise shall calculate and determine the
to-be-capitalized amount on the general borrowing by multiplying the weighted
average asset disbursement of the part of the accumulative asset disbursements minus
the general borrowing by the capitalization rate of the general borrowing used. The
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capitalization rate shall be calculated and determined in light of the weighted
average interest rate of the general borrowing.
17. Biological assets
18. Oil-gas assets
19. Intangible assets
(1) Pricing method of intangible assets
The term "intangible asset" refers to the identifiable non-monetary assets possessed
or controlled by enterprises which have no physical shape.
The intangible assets shall be initially measured according to its cost. The costs
related with the intangible assets, if the economic benefits related to intangible
assets are likely to flow into the enterprise and the cost of intangible assets can
be measured reliably, shall be recorded into the costs of intangible assets;
otherwise, it shall be recorded into current profits and losses upon the occurrence.
The use right of land gained is usually measured as intangible assets. For the
self-developed and constructed factories and other constructions, the related
expenditures on use right of land and construction costs shall be respectively
measured as intangible assets and fixed assets. For the purchased houses and
buildings, the related payment shall be distributed into the payment for use right
of land and the payment for buildings, if it is difficult to be distributed, the
whole payment shall be treated as fixed assets.
(2) Estimated useful life of intangible assets with limited useful life
For intangible assets with a finite service life, from the time when it is available
for use, the cost after deducting the sum of the expected salvage value and the
accumulated impairment provision shall be amortized by straight line method during
the service life. While the intangible assets without certain service life shall
not be amortized.
At the end of period, the Group shall check the service life and amortization method
of intangible assets with finite service life, if there is any change, it shall be
regarded as a change of the accounting estimates. Besides, the Group shall check
the service life of intangible assets without certain service life, if there is any
evidence showing that the period of intangible assets to bring the economic benefits
to the enterprise can be prospected, it shall be estimated the service life and
amortized in accordance with the amortization policies for intangible assets with
finite service life.
Item Estimated useful life Basis
Foreign trademark
5 years Valid period of registered trade mark
registration fees
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Patents and special Beneficiary period of patents and special
5-10 years
technologies technologies
Software and others 5-10 years Beneficiary period of assets
Land use right 50 years Period of land use right
(3) Judgment basis of intangible assets with uncertain useful life
In accordance with the available situation, if there is valid evidence showing that
it is unable to reasonably forecast the useful life of intangible assets, which shall
be regarded as an intangible asset with uncertain useful life.
(4) Withdrawal of impairment provision of intangible assets
For details, please refer to Note IV. 17— Impairment of non-current non financial
assets.
(5) Criteria of separating the research phase and development phase of internal R&D
project
Research phase: the term "research" refers to the creative and planned investigation
to acquire and understand new scientific or technological knowledge. It includes
activities aiming to gain knowledge; application study, appraisal and final choice
of research results or other knowledge; research of the substitute of materials,
devices, products, working procedures, system or service; the allocation, design,
appraisal and final choice of possible substitute for the new or improved materials,
devices, goods, working procedures, system or service.
The term "development" refers to the application of research achievements and other
knowledge to a certain plan or design, prior to the commercial production or use,
so as to produce any new material, device or product, or substantially improved
material, devices and product.
(6) Calculation of the expenditures of internal R&D project
Expenditures for research and development shall be recorded into current profits
and losses upon the occurrence.
The development expenditures for its internal research and development projects of
an enterprise may be confirmed as intangible assets when they satisfy the following
conditions simultaneously, otherwise，it shall be recorded into current profits and
losses.
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 The usefulness of methods for intangible assets to generate economic benefits
shall be proved, including being able to prove that there is a potential market for
the products manufactured by applying the intangible assets or there is a potential
market for the intangible assets itself or the intangible assets will be used
internally;
④ It is able to finish the development of the intangible assets, and able to use
or sell the intangible assets, with the support of sufficient technologies,
financial resources and other resources; and
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⑤ The development expenditures of the intangible assets can be reliably measured.
If the expenditures for research and expenditures for development can not be
distinguished from each other, all the expenditures for research and development
shall be recorded into current profits and losses.
20. Amortization method of long-term deferred expenses
Long-term deferred expenses refer to general expenses with the apportioned period
over one year (one year excluded) that have occurred but attributable to the current
and future periods. Long-term deferred expense shall be amortized averagely within
benefit period.
21. Assets transfer with repurchasing conditions
22. Estimated liabilities
(1) Criteria of estimated liabilities
The obligation pertinent to a Contingencies shall be recognized as an estimated
liability when the following conditions are satisfied simultaneously: (1)That
obligation is a current obligation of the enterprise; (2)It is likely to cause any
economic benefit to flow out of the enterprise as a result of performance of the
obligation; and (3)The amount of the obligation can be measured in a reliable way.
(2) Measurement of estimated liabilities
On the balance sheet date, an enterprise shall take into full consideration of the
risks, uncertainty, time value of money, and other factors pertinent to the
contingencies to measure the estimated liabilities in accordance with the best
estimate of the necessary expenses for the performance of the current obligation.
When all or some of the expenses necessary for the liquidation of an estimated
liabilities of an enterprise is expected to be compensated by a third party, the
compensation should be separately recognized as an asset only when it is virtually
certain that the reimbursement will be obtained. Besides, the amount recognized for
the reimbursement should not exceed the book value of the estimated liabilities.
23. Share-based payment and equity instruments
The term "share-based payment" refers to a transaction in which the Company grants
equity instruments or undertakes equity-instrument-based liabilities in return for
services from employee or other parties.
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(1) Categories of share-based payment
(2) Recognition method of fair value of equity instruments
(3) Recognition basis of the best estimate of the vested equity instruments
(4) Accounting treatment relevant to implement, revise and terminate share-based
payment plan
25. Revenue
(1) Criteria for recognition time of revenue from sale of goods
No revenue from selling goods may be recognized unless the following conditions are
met simultaneously: the significant risks and rewards of ownership of the goods have
been transferred to the buyer by the enterprise; the enterprise retains neither
continuous management right that usually keeps relation with the ownership nor
effective control over the sold goods; the relevant amount of revenue can be measured
in a reliable way; the relevant economic benefits may flow into the enterprise; and
the relevant costs incurred or to be incurred can be measured in a reliable way.
(2) Recognition basis of revenue from transferring use rights of assets
1) Royalty revenue
In accordance with relevant contract or agreement, the amount of royalty revenue
should be recognized as revenue on accrual basis.
2) Interest revenue
The amount of interest revenue should be measured and confirmed in accordance with
the length of time for which the Group’s monetary fund is used by others and the
agreed interest rate.
(3) Recognition basis and method for the schedule of contracted project when
recognizing the revenue from providing labour services and construction contract
by percentage-of-completion method
26. Government grants
(1) Types
A government subsidy means the monetary or non-monetary assets obtained free by the
Group from the government, but excluding the capital invested by the government as
the owner of the enterprise. Government subsidies consist of the government
subsidies pertinent to assets and government subsidies pertinent to income.
(2) Accounting treatment method
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If a government subsidy is a monetary asset, it shall be measured in the light of
the received or receivable amount. If a government subsidy is a non-monetary asset,
it shall be measured at its fair value. If its fair value cannot be obtained in a
reliable way, it shall be measured at its nominal amount. The government subsidies
measured at their nominal amounts shall be directly included in the current profits
and losses.
The government subsidies pertinent to assets shall be recognized as deferred income,
equally distributed within the useful lives of the relevant assets, and included
in the current profits and losses. The government subsidies pertinent to incomes
shall be treated respectively in accordance with the circumstances as follows: those
subsidies used for compensating the related future expenses or losses of the
enterprise shall be recognized as deferred income and shall included in the current
profits and losses during the period when the relevant expenses are recognized; or
those subsidies used for compensating the related expenses or losses incurred to
the enterprise shall be directly included in the current profits and losses.
Where it is necessary to refund any government subsidy which has been recognized,
it shall be treated respectively in accordance with the circumstances as follows:
if there is the deferred income concerned, the book balance of the deferred income
shall be offset against, but the excessive part shall be included in the current
profits and losses; or if there is no deferred income concerned to the government
subsidy, it shall be directly included in the current profits and losses.
27. Deferred income tax assets and liabilities
(1) Recognition basis of deferred income tax assets
For the deferred income assets arising from deductible temporary difference, and
such deductible temporary difference arises from the difference between the book
value of assets and liabilities and its taxation basis, as well as the Group can
gain enough taxable income in the future to use such deductible temporary difference,
the Group shall recognize such deferred income tax assets to the extent of the amount
of the taxable income which it is most likely to obtain and which can be deducted
from the deductible temporary difference.
No deferred taxable assets should be recognized for the deductible temporary
difference of initial recognition of assets and liabilities arising from the
transaction which is not business combination, the accounting profits will not be
affected, nor will the taxable amount or deductible loss be affected at the time
of transaction. Besides, no deferred taxable assets should be recognized for the
deductible temporary difference related to the investments of the subsidiary
companies, associated enterprises and joint enterprises, which are not likely to
be reversed in the expected future or is not likely to acquire any amount of taxable
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income tax that may be used for making up such deductible temporary differences.
Otherwise, the Company shall recognize the deferred income tax assets arising from
a deductible temporary difference basing on the extent of the amount of the taxable
income that is likely to be acquired to make up such deductible temporary differences
For any deductible loss or tax deduction that can be carried forward to the next
year, the corresponding deferred income tax asset shall be determined to the extent
that the amount of future taxable income to be offset by the deductible loss or tax
deduction to be likely obtained.
On the balance sheet date, the deferred income assets and deferred income tax
liabilities shall be measured at the tax rate applicable to the period during which
the assets are expected to be recovered or the liabilities are expected to be settled.
The book value of deferred income tax assets shall be reviewed at each balance sheet
date. If it is unlikely to obtain sufficient taxable income to offset against the
benefit of the deferred income tax asset, the book value of the deferred income tax
assets shall be written down. Any such write-down should be subsequently reversed
where it becomes probable that sufficient taxable income will be available.
(2) Recognition basis of deferred income tax liabilities
For the deferred income liabilities arising from taxable temporary difference, and
it will increase the Group’s taxable income and income tax payable during the
reversal period of taxable temporary difference, and further cause the economic
benefits outflow the Group, as well as form the taxes payable for the Group upon
the occurring period, which shall be recognized as liabilities.
No deferred tax liability is recognized for a temporary difference arising from the
initial recognition of goodwill, the initial recognition of assets or liabilities
due to a transaction other than a business combination, which affects neither
accounting profit nor taxable profit (or deductible loss). Besides, no deferred tax
assets is recognized for the taxable temporary differences related to the
investments of subsidiary companies, associated enterprises and joint enterprises,
and the investing enterprise can control the time of the reverse of temporary
differences as well as the temporary differences are unlikely to be reversed in the
excepted future. Otherwise, the Group should recognize the deferred income tax
liabilities arising form other taxable temporary difference.
On the balance sheet date, the deferred income assets and deferred income tax
liabilities shall be measured at the tax rate applicable to the period during which
the assets are expected to be recovered or the liabilities are expected to be settled.
28. Operating lease and finance lease
(1) Accounting treatments of operating lease
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1) Business of operating leases recorded by the Group as the lessee
The rent expenses from operating leases shall be recorded by the lessee in the
relevant asset costs or the profits and losses of the current period by using the
straight-line method over each period of the lease term. The initial direct costs
shall be recognized as the profits and losses of the current period. The contingent
rents shall be recorded into the profits and losses of the current period in which
they actually arise.
2) Business of operating leases recorded by the Group as the lessor
The rent incomes from operating leases shall be recognized as the profits and losses
of the current period by using the straight-line method over each period of the lease
term. The initial direct costs of great amount shall be capitalized when incurred,
and be recorded into current profits and losses in accordance with the same basis
for recognition of rent incomes over the whole lease term. The initial direct costs
of small amount shall be recorded into current profits and losses when incurred.
The contingent rents shall be recorded into the profits and losses of the current
period in which they actually arise.
(2) Accounting treatments of finance lease
1) Business of finance leases recorded by the Group as the lessee
On the lease beginning date, the Group shall record the lower one of the fair value
of the leased asset and the present value of the minimum lease payments on the lease
beginning date as the entering value in an account, recognize the amount of the
minimum lease payments as the entering value in an account of long-term account
payable, and treat the balance between the recorded amount of the leased asset and
the long-term account payable as unrecognized financing charges. Besides, the
initial direct costs directly attributable to the leased item incurred during the
process of lease negotiating and signing the leasing agreement shall be recorded
in the asset value of the current period. The balance through deducting unrecognized
financing charges from the minimum lease payments shall be respectively stated in
long-term liabilities and long-term liabilities due within 1 year.
Unrecognized financing charges shall be adopted by the effective interest rate
method in the lease term, so as to calculate and recognize current financing charges.
The contingent rents shall be recorded into the profits and losses of the current
period in which they actually arise.
2) Business of finance leases recorded by the Group as the lessor
On the beginning date of the lease term, the Group shall recognize the sum of the
minimum lease receipts on the lease beginning date and the initial direct costs as
the entering value in an account of the financing lease values receivable, and record
the unguaranteed residual value at the same time. The balance between the sum of
the minimum lease receipts, the initial direct costs and the unguaranteed residual
value and the sum of their present values shall be recognized as unrealized financing
income. The balance through deducting unrealized financing incomes from the finance
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lease accounts receivable shall be respectively stated in long-term claims and
long-term claims due within 1 year.
Unrecognized financing incomes shall be adopted by the effective interest rate
method in the lease term, so as to calculate and recognize current financing revenues.
The contingent rents shall be recorded into the profits and losses of the current
period in which they actually arise.
29. Assets held for sale
(1) Recognition criteria of available-for-sale assets
(2) Accounting treatments of the assets held for sale
30. Capitalization of assets business
31. Hedging accounting
32. Changes in main accounting policies and estimates
Were the main accounting policies or estimates changed during the report period?
□Yes √No □ Inapplicable
(1) Change of accounting policies
Were the main accounting policies changed during the report period?
□Yes √No □ Inapplicable
(2) Change of accounting estimates
Were the main accounting estimates changed during the report period?
□Yes √No □ Inapplicable
33. Correction of previous accounting errors
Was any accounting error made in previous periods discovered in the report period?
□Yes √No □ Inapplicable
(1) Retrospective restatement method
Was any previous accounting error adopting retrospective restatement method
discovered in the report period?
□Yes √No □ Inapplicable
(2) Prospective application method
Was any previous accounting error adopting prospective application method
discovered in the report period?
□Yes √No □ Inapplicable
34. Other main accounting policies and estimates as well as compilation method of
financial statements
Employee compensation
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The Group recorded the employee compensation payables as liabilities during the
service period of employee.
The Group joins in the employee social security system established by the government
institution in accordance with relevant rules and laws, which include the basic
retirement insurance, medical insurance and other social insurances, as well as the
housing accumulation fund, and the relevant expenditures should be recorded into
cost of relevant assets or current profits and losses upon the occurrence.
If an enterprise cancels the labor relationship with any employee prior to the
expiration of the relevant labor contract or brings forward any compensation
proposal for the purpose of encouraging the employee to accept a layoff, and the
following conditions are met concurrently, the enterprise shall recognize the
expected liabilities incurred due to the compensation for the cancellation of the
labor relationship with the employee, and shall simultaneously record them into the
profit or loss for the current period: the enterprise has formulated a formal plan
on the cancellation of labor relationship or has brought forward a proposal on
voluntary layoff and will execute it soon; and the enterprise is unable to
unilaterally withdraw the plan on the cancellation of labor relationship or the
layoff proposal.
The inside employee retirement plan is treated by adopting the same principle with
the above dismission welfare. The group would recorded the salary and the social
security insurance fees paid and so on from the employee’s service terminative date
to normal retirement date into current profits and losses (dismission welfare) under
the condition that they meet the recognition conditions of estimated liabilities.
Critical accounting judgments and estimates
Due to the inside uncertainty of operating activity, the Group needed to make
judgments, estimates and assumption on the book value of the accounts without
accurate measurement during the employment of accounting policies. And these
judgments, estimates and assumption were made basing on the prior experience of the
senior executives of the Group, as well as in consideration of other factors. These
judgments, estimates and assumption would also affect the report amount of income,
costs, assets and liabilities, as well as the disclosure of contingent liabilities
on balance sheet date. However, the uncertainty of these estimates was likely to
cause significant adjustment on the book value of the affected assets and
liabilities.
The Group would check periodically the above judgments, estimates and assumption
on the basis of continuing operation. For the changes in accounting estimates only
affected on the current period, the influence should be recognized at the period
of change occurred; for the changes in accounting estimates affected the current
period and also the future period, the influence should be recognized at the period
of change occurred and future period.
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On the balance sheet date, the Group needed to make judgments, estimates and
assumption on the accounts in the following important items:
(1) Categorization of leasing
In accordance with Accounting Standards for Enterprises No. 21 – Leasing, the Group
categorized the leasing into operating lease and finance lease. During the
categorization, the management level needed to make analysis and judgment on whether
all the risk and compensation related with the leased assets had been transferred
to the leasee, or whether the Group had already undertaken all the risk and
compensation related with the leased assets.
(2) Provision for bad debts
In accordance with the accounting policies of accounts receivable, the Group
measured the losses for bad debts by adopting allowance method. The impairment of
accounts receivable was based on the appraisal of the recoverability of accounts
receivable. The impairment of accounts receivable was dependent on the judgment and
estimates. The actual amount and the difference of previous estimates would affect
the book value of accounts receivable and the withdrawal and reversal on provision
for bad debts of accounts receivable during the period of estimates being changed.
(3) Provision for falling price of inventories
In accordance with the accounting policies of inventories, for the inventories that
the costs were more than the net realizable value as well as out-of-date and dull-sale
inventories, the Group withdrew the provision for falling price of inventories on
the lower one between costs and net realizable value. Evaluating the falling price
of inventories needed the management level gain the valid evidence and take full
consideration of the purpose of inventories, influence of events after balance sheet
date and other factors, and then made relevant judgments and estimates. The actual
amount and the difference of previous estimates would affect the book value of
inventories and the withdrawal and reversal on provision for bad debts of inventories
during the period of estimates being changed.
(4) The fair value of financial instrument
For the financial instruments without active market, the Group recognized the fair
value by various methods. These evaluation methods included discounted cash flow
mode analysis, etc.. The Group needed to estimate the future cash flow, credit risk,
fluctuation rate of market and relativity and other factors, as well as choose the
property discount rate. Due to the uncertainty of relevant assumptions, so their
changes would affect the fair value of financial instrument.
(5) The impairment of financial assets available for sale
The Group judged whether the financial assets available for sale were impaired
relying heavily on the judgment and assumption of the management team, so as to decide
whether recognized the impairment losses in the income statement. During the process
of making the judgment and assumption, the Group needed to appraise the balance of
the cost of the investment exceeding its fair value and the continuous period, the
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financial status and business forecast in a short period, including the industrial
situation, technical reform, credit level, default rate and risk of counterparty.
(6) Provision for impairment of non-financial non-current assets
The Group made a judgment on the non-current assets other than financial assets
whether they had any indication of impairment on the balance sheet date. For the
intangible assets without finite service life, other than the annual impairment test,
they should be subject to the impairment test when there was any indication of
impairment. For other non-current non-financial assets, which should subject to
impairment test when there was indication of impairment showing that the book value
can’t be recoverable.
When the book value of the assets or assets portfolio was more than the recoverable
amount, which was the higher one between the net amount of fair value after deducting
the disposal expenses and the discounted amount of the estimated future cash flow,
it means impairment incurred.
The net amount of fair value after deducting the disposal expenses should be fixed
the price in the sale agreement for similar assets in the fair transaction minus
the increased costs directly attributable to the assets disposal.
When estimated the discounted value of future cash flow, the Group needed to make
important judgment on the output, selling price, relevant costs and the discount
rate for calculating the discounted amount, etc. When estimated the recoverable
amount, the Group would adopt all the available documents, including the predicts
for relevant output, selling price and relevant operating costs arising from
reasonable and supportive assumptions.
The Group made the impairment test on goodwill at least one time per year, which
required to predict the discounted amount of the future cash flow of the assets or
assets portfolio with the distributed good will, for which, the Group needed to
predict the future cash flow of the assets or assets portfolio, and adopt the property
discounted rate to decide the discounted amount of future cash flow.
(7) Depreciation and amortization
For the investment real estate, fixed assets and intangible assets, the Group
withdrew the depreciation and amortization by adopting the straight-line method
during the service life after full consideration of the salvage value. The Group
checked the service life periodically so as to decide the amount of depreciation
and amortization at each reporting period. The service life was fixed by the Group
in accordance with the previous experience of the similar assets and the expected
technical update. If there was any significant change on the previous estimates,
the depreciation and amortization expenses should be adjusted.
(8) Expenditures for development
When fixing the amount of capitalization, the management level of the Group needed
to make assumption on the predicted future cash flow, property discounted rate and
estimated beneficiary period for relevant assets.
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(9) Deferred income tax assets
Within the limit that it was likely to have sufficient taxable profits to offset
the losses, the Group recognized the deferred income tax assets by all the unused
tax losses, which needed the management level of the Group to estimate time and amount
of the future taxable profits incurred with many judgments, as well as integrate
strategy of tax payment, to decide the amount of deferred income tax assets which
should be recognized.
(10) Income tax
During the routine operating activities, there were some uncertainty in the ultimate
tax treatment and calculation for parts of transactions. Some accounts of such
transaction could be listed as pre-tax expenditures only after the approval of
taxation authorities. If there were any differences between the ultimate result of
recognition for these taxation maters and their initial estimates, the differences
would affect the current income tax and deferred income tax at the period of ultimate
recognition.
(11) Estimated liabilities
The Group made the estimation on product quality guarantee, predicted loss of
contract and the fine for delayed delivery, etc. and withdrew the relevant provision
for estimated liabilities in accordance the provisions of contract, current
knowledge and experience. Under the condition that the contingent event has formed
a current duty and fulfilling the duty is likely to cause the economical interest
outflow the Group, the Group measures the estimated liabilities in accordance with
the best estimate of the necessary expenses for the performance of the current duty.
The recognition and measurement of estimated liabilities were heavily relied on the
judgment of the management team. During the process of making judgment, the Group
needed to appraise the relevant risks, uncertainty and the time value of money and
etc..
Of which, the Group estimated the liabilities basing on the after-sale services
commitments to the customers upon the sale, repair and reform of goods. When
estimating the liabilities, the Group has fully taken the consideration of the latest
repair experience, but which may not reflect the repair situation in the future.
Any increase / decrease of the provision for estimated liabilities may affect the
profits and losses in the future periods.
(V) Taxation
1. Main taxes and tax rate
Category of taxes Tax basis Tax rate
Calculated the output tax at 17% of
taxable income and paid the VAT by
VAT 17%
the amount after deducting the
deductible withholding VAT at
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current period.
Consumption tax
Paid by 5% of taxable business
Business tax income 5%
Urban maintenance and construction Paid at 7% of the circulating tax
7%
tax actually paid
In the year of 2012, 25% for the
companies incorporated in Shenzhen
In the year of 2012, 25% for the
companies incorporated in Shenzhen except Konka Telecommunication
except Konka Telecommunication Technology and Precision Mold with
Technology and Precision Mold with
the income tax of 15% as well as
the income tax of 15% as well as
Wankaida with the income tax of Wankaida with the income tax of
Enterprise income tax
12.5%; 25% for the companies 12.5%; 25% for the companies
incorporated in other places; 16.5%
incorporated in other places; 16.5%
for the companies incorporated in
Hong Kong; 15% for Chongqing for the companies incorporated in
Qingjia and Dongguan Konka, and Hong Kong; 15% for Chongqing
12.5% for Boluo Precision
Qingjia and Dongguan Konka, and
12.5% for Boluo Precision
Paid at 3% of the circulating tax
Education surtax 3%
actually paid
The income tax rates adopted by each subsidiary and branch factory
According to the relevant stipulations by the Interim Measures for the
Administration of Collection of Business Income Tax for Trans-regional Business
Operations, where a resident enterprise sets up a business institution or
establishment without the qualification of legal person across the regions within
the territory of China, this resident enterprise shall be a consolidated taxpayer
enterprise, and shall be governed by the administrative measures for enterprise
income tax, namely “ uniform calculation, level-by-level administration,
pre-payment in place, consolidated settlement, and transfer to treasury”. These
measures shall be implemented as from the date of 1 Jan. 2008.
In accordance with the measures mentioned above, the sales branches of the Company
in all parts of the country shall, as from the date of 1 Jan. 2008, prepay the business
income tax, and the Company shall make the uniform settlement in the yearend.
In the year of 2012, 25% for the companies incorporated in Shenzhen except Konka
Telecommunication Technology and Precision Mold with the income tax of 15% as well
as Wankaida with the income tax of 12.5%; 25% for the companies incorporated in other
places; 16.5% for the companies incorporated in Hong Kong; 15% for Chongqing Qingjia
and Dongguan Konka, and 12.5% for Boluo Precision.
2. Tax preference and approved document
The wholly-owned subsidiary of the Company-Shenzhen Konka Telecommunications
Technology Co., Ltd. obtained the Certificate of High-Tech Enterprise No.
107
GF201144200088 jointly issued by Shenzhen Bureau of Science Technology &
Information, Shenzhen Financial Bureau, Shenzhen Municipal State Taxation Bureau,
and Shenzhen Municipal Local Taxation Bureau, valid for three years. In light of
the relevant tax regulations, Shenzhen Konka Telecommunications Technology Co.,
Ltd. would be entitled to the relevant preferential policies concerning the hi-tech
enterprise from 2011 to 2013 for consecutive three years, and be levied the business
income tax at the preferential tariff of 15%.
The wholly-owned subsidiary of the Company- Shenzhen Konka Video & Communication
Systems Engineering Co., Ltd. obtained the Certificate of High-Tech Enterprise No.
GR200944200457 jointly issued by Shenzhen Bureau of Science Technology &
Information, Shenzhen Financial Bureau, Shenzhen Municipal State Taxation Bureau,
and Shenzhen Municipal Local Taxation Bureau. Shenzhen Konka Video & Communication
Systems Engineering Co., Ltd. would be entitled to the relevant preferential
policies concerning the hi-tech enterprise from 2009 to 2011 for consecutive three
years, and be levied the business income tax at the preferential tariff of 15%.
The company and subsidiary companies incorporated in Shenzhen except Konka
Telecommunication Technology Co., Ltd. and Shenzhen Konka Video & Communication
Systems Engineering Co., Ltd., Precision Mould gradually implemented the legal tax
rate five years after the implementation of the new tax law and implemented the tax
rate of 25% in 2012 according to the relevant regulations in GF (2007) No. 39 Notice
by the PRC State Council on the Implementation of the Grandfathering Preferential
Policies under the PRC Enterprise Income Tax Law.
The Company’s subsidiary—Chongqing Qingjia Electronics Co., Ltd. is levied the
business income tax at the preferential tariff of 15% from 1 Jan. 2011 to 31 Dec.
2020 in accordance with CS (2011) No. 58 Notice on Relevant Tax Policies on Deeply
Implementing the western development strategy.
On 10 Nov. 2009, the Company’s subsidiary— Dongguan Konka Mould Plastic was filed
for the high-tech enterprise certification by Ministry of Science and Technology,
and received Certificate of High-Tech Enterprise with No. GR200944000021, was valid
for three years. According to relevant taxation regulations, Dongguan Konka Mould
Plastic would enjoy relevant preferential policies for high-tech enterprises for
successive three years since 2009 and was levied at the preferential enterprise
income tax rate of 15%.
On 8 Oct. 2008, Guangdong Boluo Office of State Administration of Taxation approved
the application of Boluo Konka Precision Technology Co., Ltd. for tax preferential
of “tax exemption for two years and 50% tax reduction for three years” in BGSH
(2008) No. 94 and thus Boluo Konka Precision Technology Co., Ltd. started to enjoy
the said tax preferential policy (i.e. exempted from the enterprise income tax in
year 2008 and 2009 and will be levied at 50% of the enterprise income tax rate from
year 2010 to year 2012), so its applicable tax rate in 2012 was 12.5%.
On 26 Sep. 2010, Dongguan Konka Co., Ltd., the Company’s subsidiary gained the
108
Certificate of Hi-tech Enterprise jointly issued by Department of Science &
Technology, Finance Bureau, National Taxation Bureau and Local Taxation Bureau of
Guangdong province (No. GR-201044000209) with valid term of three years. In
accordance with relevant stipulations of taxation, Dongguan Konka Co., Ltd. will
enjoy relevant preferential policies for high-tech enterprises for successive three
years since 2010 and was levied at the preferential enterprise income tax rate of
15%.
On 23 Feb. 2011, the Company ’ s subsidiary — Shenzhen Konka Precision Mold
Manufacturing Co., Ltd. gained the Certificate of Hi-tech Enterprise jointly issued
by Department of Science & Technology, Finance Bureau, National Taxation Bureau and
Local Taxation Bureau of Shenzhen (No. GR201144200236) with valid term of three years.
In accordance with relevant stipulations of taxation, Shenzhen Konka Precision Mold
Manufacturing Co., Ltd. will enjoy relevant preferential policies for high-tech
enterprises for successive three years since 2010 and was levied at the preferential
enterprise income tax rate of 15%.
On 19 Oct. 2011, the Company and its subsidiary—Shenzhen Wankaida Science and
Technology Co., Ltd. received the Notice on Registration and Recording of Tax
Preference from Shenzhen State Administration of Taxation
(Shen-Guo-Shui-Nan-Jian-Mian-Bei-An [2011] No. 421), at which approved Wankaida
enjoy the tax exemption for the first two years since the earning year and 50% tax
reduction for the next three years(i.e. exempted from the enterprise income tax in
year 2010 and 2011 and will be levied at 50% of the enterprise income tax rate from
year 2012 to year 2014), and the enterprise income tax rate from year 2012 to year
2014 is 12.5%.
On 8 Nov. 2011, Kunshan Konka Electronic Co., Ltd., the Company’s subsidiary gained
the Certificate of Hi-tech Enterprise jointly issued by Department of Science &
Technology, Finance Bureau, National Taxation Bureau and Local Taxation Bureau of
Jiangsu province (No. GR201132000506) with valid term of three years. In accordance
with relevant stipulations of taxation, Kunshan Konka Electronic Co., Ltd. will
enjoy relevant preferential policies for high-tech enterprises for successive three
years since 2011 and was levied at the preferential enterprise income tax rate of
15%.
3. Other explanations
(Ⅵ) Business combination and consolidated financial statements
General instruction of business combination and consolidated financial statements:
The Company’s consolidated financial statements and consolidated scope include the
Company and 39 controlled subsidiaries.
1. Subsidiaries
109
(1) Subsidiaries obtained by establishment and investment
Unit: RMB Yuan
Balance of
parent
company’s
equity after
deducting
Inclu
The The Deducti the
ded in
proport proport ble difference
Actual amount of Other conso
Subsidiari Registered Business Registered Curre ion of ion of Minority minorit that loss of
Type Business scope investments at essential lidat
es place nature capital ncy holding voting interest y minority
the period-end investment ed
shares rights interes interests
state
（%） （%） ts exceed
ment
equity
obtained by
minority
shareholder
s
Shenzhen
Production
Konka
and trading Mobile
Telecommun Limited Shenzhen
of mobile 120,000,000.00 CNY communication 120,000,000.00 100% 100% Yes 0.00
ications company Guangdong
communicati products
Technology
on products
Co., Ltd.
Shenzhen Limited Shenzhen Production Development
15,000,000.00 CNY 15,000,000.00 60% 60% Yes 5,676,600.00
Konka company Guangdong and trading and sales of
110
Video & of commercial
Communicat commercial televisions
ion televisions
Systems
Engineerin
g Co., Ltd.
Shenzhen
Konka
Precision
Limited Shenzhen
Mold Moulds 15,968,800.00 CNY Moulds 15,970,000.00 46.31% 52.49% Yes -25,066,600.00
company Guangdong
Manufactur
ing Co.,
Ltd.
Electronic Electronic
Shenzhen
equipment, equipment,
Konka Limited Shenzhen
small 8,300,000.00 CNY small 8,300,000.00 51% 51% Yes -11,281,600.00
Electronic company Guangdong
household household
Co., Ltd.
appliances appliances
Manufacturi
Shenzhen Manufacturing
ng and
Konka and selling
Limited Shenzhen selling
Informatio 30,000,000.00 CNY digital 30,000,000.00 100% 100% Yes 0.00
company Guangdong digital
n Network network
network
Co., Ltd. products
products
Shenzhen Limited Shenzhen Plastic Plastic
9,500,000.00 CNY 9,500,000.00 100% 100% Yes 0.00
Konka company Guangdong product product
111
Plastic manufacturi manufacturing
Products ng
Co., Ltd.
Video and
Shenzhen
audio Video and
Shushida Limited Shenzhen
products 42,000,000.00 CNY audio products 42,000,000.00 100% 100% Yes 0.00
Electronic company Guangdong
and and components
Co., Ltd.
components
Shenzhen
Electronic R&D of R&D of
Limited Shenzhen
Fittings electronic 65,000,000.00 CNY electronic 65,000,000.00 100% 100% Yes 0.00
company Guangdong
Technology components components
Co., Ltd.
Mudanjiang
Mudanjiang Color Color
Konka Limited
Heilongjia television 60,000,000.00 CNY television 60,000,000.00 60% 60% Yes 16,819,500.00
Industrial company
ng products products
Co., Ltd.
Shaanxi
Color Color
Konka Limited Xianyang
television 69,500,000.00 CNY television 69,500,000.00 60% 60% Yes 30,212,200.00
Electronic company Shaanxi
products products
Co., Ltd.
Chongqing
Color Color
Konka Limited
Chongqing television 45,000,000.00 CNY television 45,000,000.00 60% 60% Yes 5,715,300.00
Electronic company
products products
Co., Ltd.
Chongqing Limited Chongqing Development 30,000,000.00 CNY Development 30,000,000.00 57% 57% Yes -5,781,400.00
112
Konka company and sales of and sales of
Automotive automotive automotive
Electronic electronic electronic
Co., Ltd. equipment equipment
Chongqing
Qingjia Limited Electronic Electronic
Chongqing 15,000,000.00 CNY 15,000,000.00 40% 40% Yes 15,833,500.00
Electronic company tuners tuners
s Co., Ltd.
Anhui
Color Color
Konka Limited Chuzhou
television 140,000,000.00 CNY television 140,000,000.00 78% 78% Yes 67,630,200.00
Electronic company Anhui
products products
Co., Ltd.
Anhui Manufacturi
Manufacturing
Konka ng and
Limited Chuzhou and selling
Household selling 78,190,000.00 CNY 78,190,000.00 96.46% 97.45% Yes 2,601,100.00
company Anhui household
Appliances household
appliance
Co., Ltd. appliance
Manufacturi
Changshu Manufacturing
ng and
Konka Limited Changshu and selling
selling 24,650,000.00 CNY 24,650,000.00 60% 60% Yes 8,124,000.00
Electronic company Jiangsu electronic
electronic
Co., Ltd. products
products
Kunshan Researching Researching,
Konka Limited Kunshan , designing designing and
350,000,000.00 CNY 350,000,000.00 100% 100% Yes 0.00
Electronic company Jiangsu and manufacturing
Co., Ltd. manufacturi liquid crystal
113
ng liquid modules and
crystal flat panel
modules and television
flat panel
television
Dongguan
Television
Konka Limited Dongguan Television and
and audio 266,670,000.00 CNY 266,670,000.00 100% 100% Yes 0.00
Electronic company Guangdong audio products
products
Co., Ltd.
Dongguan
Plastic
Konka Plastic
Limited Dongguan product
Packing 10,000,000.00 CNY product 10,000,000.00 100% 100% Yes 0.00
company Guangdong manufacturi
Materials manufacturing
ng
Co., Ltd.
Dongguan
Manufacturi Manufacturing
Konka
Limited Dongguan ng moulds moulds and
Mould 10,000,000.00 CNY 10,000,000.00 59.73% 59.73% Yes 41,948,900.00
company Guangdong and plastic plastic
Plastic
products products
Co., Ltd.
Manufacturi Manufacturing
ng and and selling
Boluo selling electronic
Limited Bolo
Konka PCB electronic 40,000,000.00 CNY products with 40,000,000.00 51% 51% Yes 5,941,300.00
company Guangdong
Co., Ltd. products single or
with single double sided
or double circuit boards
114
sided
circuit
boards
Manufacturi
ng and
Manufacturing
Boluo selling
and selling
Konka electronic
Limited Bolo electronic
Precision products 15,000,000.00 CNY 11,250,000.00 100% 100% Yes 0.00
company Guangdong products with
Technology with high
high density
Co., Ltd. density
circuit boards
circuit
boards
R&D of flat
Konka panel R&D of flat
(Nanhai) Limited Foshan display panel display
500,000.00 CNY 500,000.00 100% 100% Yes 0.00
Developmen company Guangdong technologie technologies
t Center s and and products
products
Exporting
and Exporting and
Hongkong importing importing
Limited Hong Kong
Konka Co., machinery 500,000.00 HKD machinery and 540,000.00 100% 100% Yes 0.00
company China
Ltd. and electronic
electronic products
products
Konka Limited Hong Kong Investment 500,000.00 HKD Investment and 530,000.00 100% 100% Yes 0.00
115
Household company China and shareholding
Appliances shareholdin
Investment g
&
Developmen
t Co., Ltd.
Konka
Household
Appliances
Limited Hong Kong Internation International
Internatio 500,000.00 HKD 530,000.00 100% 100% Yes 0.00
company China al trade trade
nal
Trading
Co., Ltd.
KONKA Selling Selling
Limited
AMERICA,IN USA electronic 1,000,000.00 USD electronic 8,060,000.00 100% 100% Yes 0.00
company
C. products products
Konka Selling Selling
Limited
(Europe) Europe electronic 25,000.00 EUR electronic 260,000.00 100% 100% Yes 0.00
company
Co., Ltd. products products
Dongguan
Manufacturi Manufacturing
Xutongda
Limited Dongguan ng moulds moulds and
Mould 5,000,000.00 CNY 5,000,000.00 46.31% 52.49% Yes 11,639,500.00
company Guangdong and plastic plastic
Plastic
products products
Co., Ltd.
Shenzhen Limited Shenzhen Technology Technology
10,000,000.00 CNY 10,000,000.00 100% 100% Yes 0.00
Konka company Guangdong development development,
116
Optoelectr , sales and sales and
onic maintenance maintenance of
Technology of liquid liquid crystal
Co., Ltd. crystal mode
mode
Shenzhen
Wankaida Development Development
Science Limited Shenzhen and and
10,000,000.00 CNY 10,000,000.00 100% 100% Yes 0.00
and company Guangdong maintenance maintenance of
Technology of software software
Co., Ltd.
Kunshan
Kangsheng
Limited Kunshan Real estate Real estate
Investment 350,000,000.00 CNY 350,000,000.00 100% 100% Yes 0.00
company Jiangsu investment investment
Developmen
t Co., Ltd.
Anhui
Manufacture
Konka Manufacture of
of house
Tongchuang Limited Chuzhou house
appliances 180,000,000.00 CNY 120,000,000.00 100% 100% Yes 0.00
Household company Anhui appliances
refrigerati
Appliances refrigeration
on
Co., Ltd.
Indonesia
Selling Selling
Konka Limited
Indonesia electronic 1,500,000.00 USD electronic 9,750,000.00 51% 51% Yes 3,296,100.00
Electronic company
products products
s Co., Ltd.
117
Shenzhen
Shushida
Limited Shenzhen Ordinary
Logistics 10,000,000.00 CNY Ordinary cargo 10,000,000.00 100% 100% Yes 0.00
company Guangdong cargo
Service
Co., Ltd.
Beijing
Selling Selling
Konka Limited
Beijing electronic 30,000,000.00 CNY electronic 30,000,000.00 100% 100% Yes 0.00
Electronic company
products products
Co., Ltd.
Kunshan
Manufacturi Manufacturing
Jielunte
Limited Kunshan ng moulds moulds and
Mould 100,000,000.00 CNY 100,000,000.00 46.31% 52.49% Yes 53,604,200.00
company Jiangsu and plastic plastic
Plastic
products products
Co. , Ltd.
Other notes of Subsidiaries obtained by establishment and investment:
① The Company holds 46.31% of shares of Shenzhen Konka Precision Mold Manufacturing Co., Ltd., Konka Household Appliances Investment
& Development Co., Ltd, a subsidiary company of the Company, is entrusted to manage 6.18% shares held by Shenzhen Dingshengxin Mould
Technology Consultation Co., Ltd. After the entrustment, the percentage of voting rights of the Company increases to 52.49%. Therefore,
the financial statements of Shenzhen Konka Precision Mold Manufacturing Co., Ltd. are combined into the consolidated financial statements.
Xutongda is a wholly funded subsidiary of Dongguan Konka Mould Plastic Co., Ltd and is also combined into the consolidated financial
statements.
② The Company holds 40.00% shares of Chongqing Qingjia Electronic Co., Ltd that all senior managers of Chongqing Qingjia Electronic Co.,
Ltd are appointed and dismissed by the Company. 70% to 80% of its products are sold to the Company and thus the Company has absolute influence
and control over the production and operation of Chongqing Qingjia Electronic Co., Ltd., which is combined into the consolidated financial
118
statement.
③ Shenzhen Konka Precision Mold Manufacturing Co., Ltd. held 100% equity of Dongguan Xutongda Mould Plastic Co., Ltd., and the Company
is the actuall controller of Dongguan Xutongda Mould Plastic Co., Ltd., for the Company indirectly held 46.31% shares and 52.49 voting
right of Dongguan Xutongda Mould Plastic Co., Ltd., which which is combined into the consolidated financial statement.
④ Shenzhen Konka Precision Mold Manufacturing Co., Ltd. held 100% equity of Kunshan Jielunte Mould Plastic Co. , Ltd., and the Company
is the actuall controller of Shenzhen Konka Precision Mold Manufacturing Co., Ltd., for the Company indirectly held 46.31% shares and
52.49 voting right of Kunshan Jielunte Mould Plastic Co. , Ltd., which which is combined into the consolidated financial statement.
⑤ Anhui Tongchuang is a limited company jointly invested and established by the Company and Chuzhou Tongchuang Construction Investment
Co., Ltd. (hereinafter refer to as “Tongchuang Construction”) with registration capital of RMB 180 million, of which each party invested
in RMB 90 million repectively on contract. As to 31 Dec. 2010, Anhui Tongchuang with a paid-up capital of RMB 120 million (including paid-up
capital of RMB 120 million(including RMB 90 million of the Company, 75.00% of total paid-up capital; and paid-up capital of RMB 30 million
of Tongchuang Construction, 25.00% of total paid-up capital ). According to contract sign by two parties, Tongchuang Construction has
the rights of transferring stock ownership three years after the establishment of Anhui Tongchuang Company. Meanwhile, the Company can
repurchase the said stock ownership and contracted with Tongchuang Investement Company that the Company shall receive fixed investment
gains at 2% of actual capital invested by the Group annually. So the Company can conduct actual control to Anhui Tongchuang Company, and
combines it into the consolidated financial statement.
⑥ Indonesia Konka Electronics Co., Ltd. is a subsidiary newly established in 2011, and the Company held its 51% equity, so combines it
into the consolidation scope.
119
(2) Subsidiaries obtained by business combination under same control
Unit: RMB Yuan
Balance of
parent
company’s
equity
after
The deducting
Actual The
prop Inclu the
amount propo Deducti
orti ded in difference
Busin Regis of Other rtion Minorit ble
Regis Busin on of conso that loss
Subsid ess tered Curre investm essential of y minorit
Type tered ess hold lidat of
iaries natur capit ncy ents at investmen votin interes y
place scope ing ed minority
e al the t g t interes
shar state interests
period- right ts
es ment exceed
end s（%）
（%） equity
obtained
by
minority
shareholde
rs
Other notes to subsidiaries obtained by business combination under same control:
(3) Subsidiaries obtained by business combination not under same control
Unit: RMB Yuan
Balance of
parent
company’s
equity after
Actual The
Inclu deducting
amount propo The Deducti
Regi Other ded in the
Busin Regis of rtion proport Minorit ble
ster Busin essentia conso difference
Subsid ess tered Curre investm of ion of y minorit
Type ed ess l lidat that loss of
iaries natur capit ncy ents at holdi voting interes y
plac scope investme ed minority
e al the ng rights t interes
e nt state interests
period- share （%） ts
ment exceed
end s（%）
equity
obtained by
minority
shareholder
120
s
Other notes to subsidiaries obtained by business combination not under same control:
2. Special purpose entities or operating entities with control right formed by entrusted
operation or lease
□ Applicable √ Inapplicable
Other explanation on special purpose entities or operating entities with control right formed
by entrusted operation or lease:
3. Explanation on changes in consolidated scope
Explanation on changes in consolidated scope:
□ Applicable √ Inapplicable
No unit newly increased in the reporting period, the reason is as follows:
No unit decreased in the reporting period, the reason is as follows:
4. Subsidiaries that newly and no longer combined into consolidation scope in the reporting period
The subsidiaries, special purpose entities and operating entities with control right formed by
entrusted operation or lease that newly included in the consolidated scope
Unit: RMB Yuan
Net profit in current
Name Closing net assets
period
The subsidiaries, special purpose entities and operating entities with control right formed by
entrusted operation or lease that not longer included in the consolidated scope
Unit: RMB Yuan
Net asset at the disposal Net profit from year-begin
Name
date to disposal date
Other notes to changes in consolidated scope:
5. Business combination under same control during the reporting period
Unit: RMB Yuan
Judgment basis The The Cash flow
Actual
of business consolidated consolidated arising from
The combined controller of
combination income from net profit from operating
party the same
under the same period-begin period-begin activities
control
control to combination to combination between
121
date date period-begin
and
combination
date
Other notes to business combination under same control:
6. Business combination not under same control during the reporting period
Unit: RMB Yuan
The combined party Amount of goodwill Calculation method of goodwill
Other notes to business combination not under same control:
7. Subsidiaries reduced by selling equities without control right during the reporting period
Recognition method of gains
Name of subsidiary Disposal date
and losses
Other notes to subsidiaries reduced by selling equities without control right during the reporting
period:
8. The counter purchases in the reporting period
Calculation method of
goodwill recognized or
Judgment basis of Recognition method of
The backdoor party included into current
counter purchase combination costs
gains and losses in the
combination
Other notes to counter purchases:
9. Mergers in the reporting period
Unit: RMB Yuan
Type of merger Main assets merged in Main liabilities merged in
Mergers under the same control Item Amount Item Amount
Mergers not under the same control Item Amount Item Amount
122
Other notes to mergers:
10. Exchange rates of major items in financial statements for foreign entities
Item of assets and liabilities
30 Jun. 2012 2012年1月1日
USD 1 =RMB 6.3249 USD 1 = RMB 6.3009
HKD 1= RMB 0.8152 HKD 1= RMB 0.8107
IDR 100= RMB 0.06771 IDR 100= RMB 0.06963
EUR 1 = RMB 7.8710 EUR 1 = RMB 8.1625
Item of income, expense and cash flow
Jan.-Jun. 2012 Jan.-Jun. 2011
USD 1 =RMB 6.3129 USD 1 =RMB 6.5472
HKD 1= RMB 0.8130 HKD 1= RMB 0.8413
IDR 100= RMB 0.06867 IDR 100= RMB 0.07571
EUR 1 = RMB 8.0168 EUR 1 = RMB 9.0839
(Ⅶ) Notes on major items in consolidated financial statements of the Company
1. Monetary funds
Unit: RMB Yuan
Closing balance Opening balance
Amount in
Item Amount in foreign Exchange Exchange
Amount in RMB foreign Amount in RMB
currency rate rate
currency
Cash: -- -- 169,522.85 -- -- 1,821,014.39
RMB -- -- 167,960.11 -- -- 1,797,916.42
HKD 79.27 0.8152 64.62 756.09 0.8107 612.96
USD 236.86 6.3249 1,498.12 238.86 6.3009 1,505.03
EUR
IDR 30,130,662.07 0.000696 20,979.98
1,291,955,000.0
Bank deposit: -- -- -- -- 644,630,036.31
9
RMB -- -- 976,690,432.70 -- -- 464,377,184.46
HKD 14,821,511.88 0.8152 12,082,496.48 14,544,576.12 0.8107 11,791,287.86
USD 46,471,227.05 6.3249 293,925,863.97 26,273,639.70 6.3009 165,547,576.41
EUR 1,062,676.47 7.871 8,364,326.50 259,109.41 8.1625 2,114,980.56
GBP 1.32 9.8169 12.96 1.18 9.7116 11.50
MOP 324.85 6.4093 2,082.07
IDR 1,314,770,849.49 0.000677 890,231.34 1,144,497,271. 0.000696 796,913.45
123
29
CAD 267.23 6.1223 1,636.14
Other monetary 2,039,702,448.4
-- -- -- -- 2,055,441,381.00
funds: 1
2,039,702,448.4
RMB -- -- -- -- 2,055,441,381.00
1
3,331,826,971.3
Total -- -- -- -- 2,701,892,431.70
5
Special explanation shall be made for the accounts limited by being mortgaged, pledged or frozen,
deposited overseas or with potential collecting risks:
The balance of other monetary funds at the end of the period includes marginal deposits that
cannot be withdrawn freely, of which RMB 202,590,000.00 is used as a loan pledge; RMB
1,070,001,360.32 is used as credit deposit; and RMB 3,507,737.22 is used as engineering margins;
RMB 763,603,350.87 is used as marginal deposits for internal guarantee and external loan.
2. Trading financial assets
(1) Trading financial assets
Unit: RMB Yuan
Item Closing fair value Opening fair value
Trading bonds investment 0.00 0.00
Trading equity instruments investment 0.00 0.00
The financial assets which are measured at
their fair values and the variation of which
0.00 0.00
is recorded into the profits and losses of
the current period
Derivative financial assets 0.00 0.00
Hedging instruments 0.00 0.00
Others 0.00 0.00
Total 0.00 0.00
(2) Trading financial assets with realizable limit
Unit: RMB Yuan
Trading restriction or other
Item Closing balance
significant limits in realization
124
(3) Hedging instruments and notes to relevant hedging transaction
3. Notes receivable
(1) Category of notes receivable
Unit: RMB Yuan
Category Closing balance Opening balance
Bank acceptance bill 3,012,121,248.05 4,864,855,284.64
Commercial acceptance bill 500,905.14 1,108,201.45
Total 3,012,622,153.19 4,865,963,486.09
(2) Notes receivable pledged at period-end
Unit: RMB Yuan
Issuing entity Date of issuance Expiring date Amount Remark
Hunan Suning
12 Jan. 2012 12 Jul. 2012 10,000,000.00
Appliance Co., Ltd.
Hunan Suning
12 Jan. 2012 12 Jul. 2012 10,000,000.00
Appliance Co., Ltd.
Shanghai Suning
26 Mar. 2012 26 Sept. 2012 10,000,000.00
Appliance Co., Ltd.
Shanghai Suning
26 Mar. 2012 26 Sept. 2012 10,000,000.00
Appliance Co., Ltd.
Nanjing Purchase
Center of Suning 6 Jan. 2012 6 Jul. 2012 10,000,000.00
Appliance Co., Ltd.
Total -- -- 50,000,000.00 --
Note:
The balance of notes used as pledge in the notes receivable at the end of the period amounts
to RMB 2,043,027,553.18
(3) Notes transferred to accounts receivable because drawer of the notes fails to execute the
contract or agreement, and undue notes endorsed to other parties at the end of the period
Unit: RMB Yuan
Issuing entity Date of issuance Expiring date Amount Remark
0.00
Total -- -- 0.00 --
Notes:
There were no notes transferred to accounts receivable because drawer of the notes fails to execute
the contract or agreement at the period-end.
125
Undue notes endorsed to other parties by the Company
Unit: RMB Yuan
Issuing entity Date of issuance Expiring date Amount Remark
Shanghai Suning
26 Mar. 2012 26 Sept. 2012 10,000,000.00
Appliance Co., Ltd.
International Far
Eastern Leasing Co., 31 Jan. 2012 31 Jul. 2012 4,211,635.00
Ltd.
Jiangsu Five-star
29 May 2012 29 Nov. 2012 4,200,000.00
Appliance Co., Ltd.
Chengdu GOME
Electrical Appliances 24 Feb. 2012 24 Aug. 2012 4,045,549.60
Co., Ltd.
Tengda Electrical
31 May 2012 30 Nov. 2012 3,000,000.00
Equipment Co., Ltd.
Total -- -- 25,457,184.60 --
Note:
Note of discounted or pledged commercial acceptant bill:
4. Dividends receivable
Unit: RMB Yuan
Item Opening balance Increase Decrease Closing balance
Dividends receivable
0.00 0.00 0.00 0.00
aging within one year
Of which:
N/A 0.00 0.00 0.00 0.00
Dividends receivable
0.00 0.00 0.00 0.00
aging over one year
Of which: -- -- -- --
N/A 0.00 0.00 0.00 0.00
Total 0.00 0.00 0.00 0.00
Note:
5. Interest receivable
(1) Interest receivable
Unit: RMB Yuan
Increase in current Decrease in current
Item Opening balance Closing balance
period period
126
Income from NDF
renminbi pledge 14,030,636.73 14,030,636.73
deposits
Income from renminbi
exchange into US
12,207,299.68 7,092,928.27 19,300,227.95
dollar pledge
deposits
Income from fixed
17,388,623.03 42,798,893.31 31,225,297.05 28,962,219.29
deposits
Total 43,626,559.44 49,891,821.58 64,556,161.73 28,962,219.29
(2) Overdue interest
Unit: RMB Yuan
Borrowing entity Overdue days (day) Amount of overdue interest
0.00
Total -- 0.00
(3) Notes to interest receivable
6. Accounts receivable
(1) Accounts receivable listed by categories
Unit: RMB Yuan
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category
Proport Proport Proport Proport
Amount Amount Amount Amount
ion (%) ion (%) ion (%) ion (%)
Accounts
receivable
with
significant
single
103,357,300.00 5.43% 5,167,865.00 5% 103,357,300.00 4.84% 5,167,865.00 5%
amount and
individuall
y withdrawn
bad debt
provision
Accounts receivable for which bad debt provisions are made on the group basis
Aging group 1,799,535,752.72 94.57% 230,518,014.25 12.81% 2,030,804,344.94 95.16% 235,954,487.33 11.62%
127
Subtotal of
1,799,535,752.72 94.57% 230,518,014.25 12.81% 2,030,804,344.94 95.16% 235,954,487.33 11.62%
the groups
Accounts
receivable
with
insignifica
nt single
0.00 0% 0.00 0% 0.00 0% 0.00 0%
amount and
individuall
y withdrawn
bad debt
provision
Total 1,902,893,052.72 -- 235,685,879.25 -- 2,134,161,644.94 -- 241,122,352.33 --
Notes to category of accounts receivable:
There was no accounts receivable due to shareholders holding 5% (including 5%) voting rights
of the Company during the reporting period.
Accounts receivable with significant single amount and individually withdrawn bad debt provision
√ Applicable □ Inapplicable
Unit: RMB Yuan
Provision for bad Withdrawing
Content of accounts receivable Book balance Reason
debt amount proportion（%）
Beijing Pangu Investment Co., Ltd. 103,357,300.00 5,167,865.00 5% 涉及诉讼
Total 103,357,300.00 5,167,865.00 --
In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Inapplicable
Unit: RMB Yuan
Closing balance Opening balance
Book balance Book balance
Aging Provision for bad Provision for
Proportio Proport
Amount debts Amount bad debts
n ion
Within 1 year
Including: -- -- -- -- -- --
Within 1 year 1,556,113,899.79 86.47% 34,375,951.23 1,760,096,724.60 86.67% 38,082,568.82
Subtotal of
1,556,113,899.79 86.47% 34,375,951.23 1,760,096,724.60 86.67% 38,082,568.82
within 1 year
1-2 years 35,193,050.33 1.96% 1,759,652.51 57,834,325.78 2.85% 2,891,716.29
2-3 years 9,411,267.59 0.52% 1,882,253.51 14,282,977.09 0.7% 2,856,595.42
Over 3 years 198,817,535.01 11.05% 192,500,157.00 198,590,317.47 9.78% 192,123,606.80
3 to 4 years 5,878,335.57 0.33% 2,939,167.79 1,184,260.27 0.06% 592,130.14
4 to 5 years 6,756,420.47 0.38% 3,378,210.24 11,749,161.08 0.58% 5,874,580.54
Over 5 years 186,182,778.97 10.34% 186,182,778.97 185,656,896.12 9.14% 185,656,896.12
Total 1,799,535,752.72 -- 230,518,014.25 2,030,804,344.94 -- 235,954,487.33
128
In the groups, accounts receivable adopting balance percentage method to withdraw bad debt
provision
□Applicable√ Inapplicable
In the groups, accounts receivable adopting other methods to withdraw bad debt provision
□Applicable√ Inapplicable
Other closing individually insignificant but provisions for bad debts individually accounts
receivable:
□Applicable√ Inapplicable
(2) Accounts receivable reversed or collected in the reporting period
Unit: RMB Yuan
Amount of the accrued
Recognition basis of
Content of accounts Reversed or bad debt provision Reversed or collected
original bad debt
receivable collected reason before reversal or amount
provision
collection
Total -- -- --
The withdrawal of bad debt provision of accounts receivable with significant single amount or
insignificant single amount but individually made impairment test at the end of reporting period:
Content of accounts Withdrawing
Book balance Bad debt amount Reason
receivable proportion（%）
Total -- --
Notes to accounts receivable with insignificant single amount but large risks of groups after
grouping by credit risks characteristics:
(3) The write-off accounts receivable
Unit: RMB Yuan
Whether arising
Nature of accounts from related party
Name of entity Write-off time Write-off amount Write-off reason
receivable transaction or
not?
N/A N/A 0.00 N/A N/A
Total -- -- 0.00 -- --
Notes to write off of accounts receivable:
(4) Particulars about accounts receivable due to shareholders holding 5% (including 5%) voting
rights of the Company
□Applicable√ Inapplicable
129
(5) Information of top 5 accounts receivable:
(6) The amounts due from related parties
Unit: RMB Yuan
The relationship
Name of entity Amount Proportion
with the Company
Shenzhen OCT East Co., Ltd. Related party 886,515.00 0.05%
Chengdu Tianfu OCT Industrial
Related party 190,512.40 0.01%
Development Co., Ltd
Taizhou OCT Co., Ltd Related party 47,100.00 0%
OCT Urban Entertainment Investment
Related party 2,970,000.00 0.16%
Company of Shenzhen
OCT Hotel Group Related party 695,000.00 0.04%
Shenzhen Splendid China
Related party 556,000.00 0.03%
Development Co., Ltd.
Shenzhen Window of the World Co.,
Related party 5,000.00 0%
Ltd.
Wuhan OCT Industry Development Co.,
Related party 2,150,483.00 0.11%
Ltd.
Shenzhen OCT East Interlaken Hotel Related party 83,000.00 0%
Total -- 7,583,610.40 0.4%
(7) Information of accounts receivable that terminated recognition
Unit: RMB Yuan
Gains or loses related to the termination
Item Amount of termination
of recognition
N/A 0.00 0.00
Total 0.00 0.00
(8) If securitization is carried out on accounts receivable as the underlying assets, please
list amount of assets and liabilities arising from further involvement
Unit: RMB Yuan
Item Period-end
Assets:
N/A 0.00
Subtotal of assets 0.00
Liabilities:
N/A 0.00
Subtotal of liabilities 0.00
130
7. Other accounts receivable
(1) Other accounts receivable disclosed by type:
Unit: RMB Yuan
Closing balance Opening balance
Provision for bad Provision for bad
Book balance Book balance
debts debts
Category Propo Propor Prop Propor
rtion tion orti tion
Amount Amount Amount Amount
(%) (%) on (%)
(%)
Other accounts
receivable that is
individually
0.00 0% 0.00 0% 0.00 0% 0.00
significant and
provisions for bad
debts individually
Other accounts receivable that provisions for bad debts by group
Aging group 150,616,753.61 100% 18,813,540.06 12.49% 153,482,074.33 100% 19,148,789.63 12.48%
Subtotal of group 150,616,753.61 100% 18,813,540.06 12.49% 153,482,074.33 100% 19,148,789.63 12.48%
Other accounts
receivable that is
individually
0.00 0% 0.00 0% 0.00 0% 0.00 0%
insignificant but
provisions for bad
debts individually
Total 150,616,753.61 -- 18,813,540.06 -- 153,482,074.33 -- 19,148,789.63 --
Notes to category of other accounts receivable:
There was no other accounts receivable due to shareholders holding 5% (including 5%) voting rights
of the Company during the reporting period.
Other accounts receivable with significant single amount and individually withdrawn bad debt
provision
□ Applicable √Inapplicable
In the group, other accounts receivable that withdraws provision for bad debts by aging analysis:
√ Applicable □ Inapplicable
Unit: RMB Yuan
Period-end Period-begin
Book balance Book balance
Aging Provision for Provision for bad
Propor Propor
Amount bad debts Amount debts
tion tion
Within 1 year
Including:
Within 1 year 121,039,545.44 80.36% 2,509,446.74 123,211,427.81 80.28% 3,776,808.23
131
Subtotal of within 1
121,039,545.44 80.36% 2,509,446.74 123,211,427.81 80.28% 3,776,808.23
year
1-2 years 7,235,050.51 4.8% 361,752.53 12,589,330.20 8.2% 629,466.51
2-3 years 5,910,873.55 3.92% 1,182,174.71 1,134,020.35 0.74% 226,804.07
Over 3 years 16,431,284.11 10.92% 14,760,166.08 16,547,295.97 10.78% 14,515,710.82
3 to 4 years 2,881,150.42 1.91% 1,440,575.21 2,853,325.54 1.86% 1,426,662.77
4 to 5 years 461,085.64 0.31% 230,542.82 1,209,844.76 0.79% 604,922.38
Over 5 years 13,089,048.05 8.7% 13,089,048.05 12,484,125.67 8.13% 12,484,125.67
Total 150,616,753.61 -- 18,813,540.06 153,482,074.33 -- 19,148,789.63
In the group, other accounts receivable that withdrawn provision for bad debts by balance
percentage:
□Applicable√ Inapplicable
In the group, other accounts receivable that withdrawn provision for bad debts by other methods:
□Applicable√ Inapplicable
Other closing individually insignificant but withdrawn provision for bad debts individually
accounts receivable:
□Applicable√ Inapplicable
(2) Information of other accounts receivable reversed or recovered in the reporting period
Unit: RMB Yuan
Basis for
Content of other accounts Reason for reversed Accrued amount before Amount of reversed or
determination of bad
receivable or recovered reversal or recovery recovered
debts provision
N/A 0.00 0.00
Total -- -- 0.00 --
Withdrawal of closing individually significant or insignificant but provisions for bad debts
individually accounts receivable:
Content Book balance Amount of bad debts Withdrawal percentage Reason
Total -- --
Notes of individually insignificant but was of big risk after grouped by credit risk other accounts
receivable:
(3) Information of other accounts receivable written off in the reporting period
Unit: RMB Yuan
Nature of other Whether arising from
Name of company accounts Write off date Write off amount Write off reason related party
receivable transactions or not
N/A 0.00
Total -- -- 0.00 -- --
132
Notes of written-off of other accounts receivable:
(4) Other accounts receivable is due from shareholders with more than 5% (including 5%) of the
voting shares of the Company
□Applicable √Inapplicable
(5) Nature or details of other significant accounts receivable
Unit: RMB Yuan
Nature or details of
Name of entity Amount Proportion of the total (%)
the amount
Management Committee of
Development Zone of 30,000,000.00 Compensation for land 19.92%
Chuzhou
Total 30,000,000.00 -- 19.92%
Note:
(6) Information of top five other accounts receivable
Unit: RMB Yuan
Relationship with the Proportion of the
Name of entity Amount Aging
Company total (%)
Management Committee
of Development Zone of Non-related party 30,000,000.00 1 年以内 19.92%
Chuzhou
Yunnan Radio and
Non-related party 2,429,934.00 1 年以内 1.61%
Television Bureau
Margin of home
appliances to rural Non-related party 2,100,000.00 1 至 4 年 1.39%
areas
Jiangxi Broadcast
Television Networks Non-related party 1,700,000.00 1 年以内 1.13%
Co., Ltd.
Biding office of the
State Administration
Non-related party 1,370,962.73 1 年以内 0.91%
of Radio Film and
Television
Total -- 37,600,896.73 -- 24.96%
(7) Information of the amounts due from related parties
Unit: RMB Yuan
Name of entity Relationship with the Amount Aging
133
Company
Shenzhen Overseas Chinese
Related party 80,000.00 0.05%
Town Gas Station Co., Ltd.
Shenzhen OCT Real Estate
Related party 1,216,264.86 0.81%
Co., Ltd
Shenzhen OCT Property
Related party 77,402.65 0.05%
Management Co., Ltd
Shenzhen OCT Water and
Related party 1,183,539.44 0.79%
Power Co., Ltd
Total -- 2,557,206.95 1.7%
(8) Information of other accounts receivable that terminated recognition
Unit: RMB Yuan
Gains or loses related to the termination
Item Amount of termination
of recognition
N/A 0.00 0.00
Total 0.00 0.00
(9) If securitization is carried out on other accounts receivable as the underlying assets, please
list amount of assets and liabilities arising from further involvement
Unit: RMB Yuan
Item Closing balance
Assets:
N/A 0.00
Subtotal of assets 0.00
Liabilities:
N/A 0.00
Subtotal of liabilities 0.00
8. Prepayment
(1) List by aging analysis:
Unit: RMB Yuan
Closing balance Opening balance
Aging Proportio Proportio
Amount Amount
n (%) n (%)
Within 1
225,597,199.52 98.88% 400,954,021.88 69.8%
year
1 year to 2
2,203,926.29 0.97% 173,373,636.61 30.19%
years
2 years to 3 341,696.16 0.15% 35,794.58 0.01%
134
years
Over 3
0.00 0% 0.00 0%
years
Total 228,142,821.97 -- 574,363,453.07 --
Notes of aging of prepayment:
(2) Information of the top 5 prepayment
Unit: RMB Yuan
Relationship with the
Name of entity Amount Aging Reason for unsettled
Company
KELON INTERNATIONAL Materials not yet
Non-related party 23,185,499.93
INC delivered
HONG KONG EYANG Materials not yet
Non-related party 12,491,490.76
TECHNOLOGY CO .LTD delivered
YANTAI WANHUA
Materials not yet
POLYURETHANES CO., Non-related party 12,104,301.29
delivered
LTD
JIN PIN ELECTRICAL
Materials not yet
CO.,LTD. ZHUHAI Non-related party 8,307,277.78
delivered
S.E.Z.
CHINA RADIO & TV CO.
FOR INTERNATIONAL During the contract
Non-related party 6,240,000.00
TECHNO-ECONOMIC period
COOPERATION
Total -- 62,328,569.76 -- --
Notes to main units of prepayment:
There was no amount due from shareholders with more than 5% (including 5%) of the voting shares
of the Company in prepayment
(3) Information about amount due from shareholders with more than 5% (including 5%) of the voting
shares of the Company in prepayment
□ Applicable √ Inapplicable
(4) Notes of prepayment
9. Inventory
(1) Category
Unit: RMB Yuan
Item Closing balance Opening balance
135
Provision for Provision for
Book balance Book value Book balance Book value
falling price falling price
1,342,756,702.2 1,131,694,936.7 1,188,713,292.9 211,532,469.8
Raw materials
9 211,061,765.53 6 3 3 977,180,823.10
Construction 133,952,527.0
335,222,602.31 133,952,527.00 201,270,075.31 338,390,661.80 204,438,134.80
contract assets 0
1,882,530,095.1 1,519,588,492.7 1,953,192,692.1 362,163,605.0 1,591,029,087.1
Inventory goods 362,941,602.37
4 7 1 0 1
Turnover material 9,053,904.08 661,253.80 8,392,650.28 7,437,439.99 661,253.80 6,776,186.19
Consumable
biological assets
Development costs
421,319,209.84 421,319,209.84 50,167,528.21 50,167,528.21
3,990,882,513.6 3,282,265,364.9 3,537,901,615.0 708,309,855.6 2,829,591,759.4
Total 708,617,148.70
6 6 4 3 1
(2) Provision for falling price of inventories
Unit: RMB Yuan
Opening book Decrease Closing book
Category Increase
balance Reversal Written off balance
Raw materials 211,532,469.83 0.00 470,704.30 211,061,765.53
Construction
133,952,527.00 133,952,527.00
contract assets
Inventory goods 362,163,605.00 848,587.73 70,590.36 362,941,602.37
Turnover material 661,253.80 661,253.80
Consumable
biological assets
Development costs
Total 708,309,855.63 848,587.73 0.00 541,294.66 708,617,148.70
(3) Details of provision for falling price of inventories
Proportion of reversal of
Basis on provision for
provision for impairment of
Item falling price of Reasons for reversal
inventories to closing
inventories
balance
Net realizable value lower
Raw materials
than the cost
Net realizable value lower
Inventory goods
than the cost
Construction contract Net realizable value lower
assets than the cost
Net realizable value lower
Turnover material
than the cost
Consumable biological
136
assets
Notes of inventory:
10. Other current assets
Unit: RMB Yuan
Item Closing balance Opening balance
Short-term deposit, etc. 225,620,000.00 911,000,000.00
Total 225,620,000.00 911,000,000.00
Notes of other current assets:
11. Available-for-sale financial assets
(1) Information of available-for-sale financial assets
Unit: RMB Yuan
Item Closing fair value Opening fair value
Available-for-sale bonds
Available-for-sale equity instruments 1,045,232.10 6,408,065.70
Others
Total 1,045,232.10 6,408,065.70
In the reporting period, the Company reclassified the held-to-maturity investment into
available-for-sale financial assets, a total of RMB0.00 was reclassified, which takes 0% of total
matured investment before reclassification.
Notes of available-for-sale financial assets
(2) Long-term liability investment of available-for-sale financial assets
Unit: RMB Yuan
Accrued
Interest in
Initial accounts
Matured Opening the Closing
Item Category Par value investment receivable
date balance reporting balance
cost or received
period
interest
N/A 0.00 0.00 0.00 0.00 0.00
Total -- -- 0.00 -- 0.00 0.00 0.00 0.00
Notes of long-term liability investment of available-for-sale financial assets:
137
12. Held-to-maturity investment
(1) Information
Unit: RMB Yuan
Item Closing book balance Opening book balance
Total 0.00 0.00
Notes of held-to-maturity investment:
(2) Information of held-to-maturity investment sold in the reporting period but was not matured
Unit: RMB Yuan
Percentage of the investment amount before
Item Amount
sales
N/A 0.00
Total 0.00 --
Notes of undue held-to-maturity investment sold in the reporting period:
13. Long-term accounts receivable
Unit: RMB Yuan
Category Closing balance Opening balance
Financing leases 0.00 0.00
Including: unrealized
0.00 0.00
financing gains
Installment sales 0.00 0.00
Installment offering service 0.00 0.00
Others 0.00 0.00
Total 0.00 0.00
14. Investment to joint ventures and associated enterprises
Unit: RMB Yuan
138
Percen
tage of
Natur Total
Legal Nature holdin Voting
e of Regist Total operation Net profit of
Name of repres of Registered Curren g percentage of Total closing Net closing
enter ration closing revenue of the the reporting
investee entati busine capital cy shares the Company in liabilities assets
prise place assets reporting period
ve ss of the investee
s period
Compan
y
I. Joint ventures
II. Associated enterprises
Manufa
Chongqin cture
g Limit and
Wang
Jingkang ed Chongq proce
Xiaoyo 12,000,000.00 CNY 31.25% 31.25% 4,554,396.06 1,854,714.87 2,699,681.19 -216,563.92
Plastic compa ing ss of
ng
Products ny mode
Co., Ltd produ
cts
Shenzhen Manufa
Limit
Refond cturin
ed Shenzh Gong
Optoelec g and 107,000,000.00 CNY 19.34% 19.34%
compa en Weibin
tronics sellin
ny
Co., Ltd g LEDs
Shenzhen New
Konka Limit energy
Energy ed Shenzh Dong produc
20,000,000.00 CNY 30% 30%
Technolo compa en Yaping ts for
gy Co., ny mobile
Ltd equipm
139
ent
EnRay Tek
Manufa
Optoelec Limit
cturin
tronics ed Shangh Zhang 421,683,141.
g and 50,000,000.00 USD 36% 36% 127,308,775.70 294,374,365.60 92,868.72 -3,938,359.00
(Shangha compa ai Rujing 30
sellin
i) Co., ny
g LEDs
Ltd.
KONRAY
INTERNAT Limit
Zhang
IONAL ed Hong Invest
Xiaohu 50,000,000.00 HKD 38% 38%
DEVELOPM compa Kong ment
i
ENT ny
LIMITID
140
Notes if significant differences exist between the important accounting policies and accounting
estimations of joint ventures, associated enterprises and the Company:
15. Long-term equity investment
141
(1) List of long-term equity investment
Unit: RMB Yuan
Explanation
for
Withdrawn
indifferences
Share Voting impairment Cash bonus
Accounti between the
Initial Increase/decre holding percentage Impairment provision in in the
Investee ng Opening balance Closing balance share holding
investment cost ase percentage in provision the reporting
method percentage and
in investee investee reporting period
voting
period
percentage in
investee
Chongqing
Jingkang
Equity
Plastic 3,750,000.00 823,395.44 -67,676.23 755,719.21 31.25% 31.25% 0.00 0.00 0.00
method
Products Co.,
Ltd
Shenzhen
Refond Equity
27,606,942.51 93,800,959.50 3,289,279.52 97,090,239.02 19.34% 19.34% 0.00 0.00 0.00
Optoelectron method
ics Co., Ltd
Enray Tek
Equity
Optoelectron 148,036,152.86 137,649,716.63 -1,417,809.18 136,231,907.45 36% 36% 0.00 0.00 0.00
method
ic Co., Ltd
Shenzhen
Equity
Konka Energy 5,983,965.19 3,649,728.08 0.00 3,649,728.08 30% 30% 0.00 0.00 0.00
method
Technology
142
Co., Ltd
Shenzhen
Dekon Cost
3,000,000.00 7,137,424.83 0.00 7,137,424.83 30% 30% 0.00 0.00 0.00
Electronic method
Co., Ltd
Fehong
Cost
Electronics 1,300,000.00 1,300,000.00 0.00 1,300,000.00 8.33% 8.33% 1,300,000.00 0.00 0.00
method
Co., Ltd.
Shenzhen
Association
of Cost
100,000.00 100,000.00 0.00 100,000.00 100,000.00 0.00 0.00
Enterprises method
with Foreign
Investment
Shenzhen
Make-plan
Cost
Investment 485,000.00 485,000.00 0.00 485,000.00 1% 1% 485,000.00 0.00 0.00
method
Development
Co., Ltd
IGRS
Information
Technology Cost
5,000,000.00 5,000,000.00 0.00 5,000,000.00 9.62% 9.62% 0.00 0.00 0.00
Engineering method
Center Co.,
Ltd
Shenzhen
Cost
Julong 2,000,000.00 2,000,000.00 -2,000,000.00 0.00 0.00 0.00
method
Optoelectron
143
ics Co., Ltd
Shenzhen CTU Cost
1,153,000.00 1,153,000.00 0.00 1,153,000.00 11.5% 11.5% 0.00 0.00 0.00
Hi-tech Ltd method
Shenzhen
Digital TV
Cost
National 2,400,000.00 2,400,000.00 0.00 2,400,000.00 6% 6% 0.00 0.00 0.00
method
Engineering
Lab Co., Ltd.
Shanghai
Digital TV
National Cost
2,400,000.00 2,400,000.00 0.00 2,400,000.00 4.26% 4.26% 0.00 0.00 0.00
Engineering method
R&D Center
Co., Ltd.
KONRAY
INTERNATIONA Equity
15,473,790.00 15,473,790.00 0.00 15,473,790.00 38% 38% 0.00 0.00 0.00
L DEVELOPMENT method
LIMITID
Total -- 218,688,850.56 273,373,014.48 -196,205.89 273,176,808.59 -- -- -- 1,885,000.00 0.00 0.00
144
(2) Information of the limitation on the capability to transfer capital to investee
Unit: RMB Yuan
Item that with limitation on the
Investment losses unrecognized
capability to transfer capital Reason for limitation
in current period
to investee
Notes of long-term equity investment:
16. Investment property
(1) Investment property calculated by cost
√Applicable □Inapplicable
Unit: RMB Yuan
Item Opening book balance Increase Decrease Closing book balance
I. Total original
241,105,035.18 0.00 0.00 241,105,035.18
book value
1. Property and
241,105,035.18 241,105,035.18
buildings
2. Land use right
II. Total
accumulated
0.00 2,712,431.65 0.00 2,712,431.65
depreciation and
amortization
1. Property and
2,712,431.65 2,712,431.65
buildings
2. Land use right
III. Total net book
value of fixed 241,105,035.18 0.00 0.00 238,392,603.53
assets
1. Property and
241,105,035.18 238,392,603.53
buildings
2. Land use right
IV. Total
accumulated
0.00 0.00 0.00 0.00
impairment
provision
1. Property and
buildings
2. Land use right
V. Total book value 241,105,035.18 0.00 0.00 238,392,603.53
145
of investment
property
1. Property and
241,105,035.18 238,392,603.53
buildings
2. Land use right
Unit: RMB Yuan
Reporting period
Amount of depreciation and amortization in the reporting
2,712,431.65
period
Withdrawal amount of provision for impairment of investment
0.00
property in the reporting period
(2) Investment property calculated by fair value
□ Applicable √ Inapplicable
Notes of investment property that altered calculated mode and failed to accomplish certification
of property, and notes of reason that the fail accomplish and estimated accomplish date:
17. Fixed assets
(1) Fixed assets details
Unit: RMB Yuan
Opening book Decrease in the Closing book
Item Increase in the reporting period
balance reporting period balance
I. Total original book
value 3,157,960,574.87 50,340,854.82 33,429,240.05 3,174,872,189.64
Including: Houses and
1,500,715,242.16 23,029,768.41 14,953,211.78 1,508,791,798.79
buildings
Machineries 1,100,018,921.03 8,739,872.21 7,447,740.27 1,101,311,052.97
Vehicles 79,868,218.22 3,399,885.61 2,906,465.73 80,361,638.10
Electronics 277,221,524.60 5,432,947.18 959,334.68 281,695,137.10
Other equipments 200,136,668.86 9,738,381.41 7,162,487.59 202,712,562.68
Increase in
II. Accumulated Opening book Withdrawal in Decrease in the Closing book
reporting
depreciation balance reporting period reporting period balance
period
Including: Houses and
1,353,108,219.57 0.00 65,377,247.16 18,402,298.89 1,400,083,167.84
buildings
Machineries 314,153,561.09 0.00 18,322,151.36 1,575,964.33 330,899,748.12
Vehicles 628,049,372.08 0.00 30,190,404.63 6,758,669.01 651,481,107.70
II. Accumulated
50,788,109.76 0.00 3,324,406.66 2,854,976.26 51,257,540.16
depreciation
Electronics 221,449,586.69 0.00 6,895,584.22 825,406.88 227,519,764.03
Other equipments 138,667,589.95 0.00 6,644,700.29 6,387,282.41 138,925,007.83
-- Opening book -- Closing book
146
balance balance
III. The net book value
1,804,852,355.30 -- 1,774,789,021.80
of fixed assets
Including: Houses and
1,186,561,681.07 -- 1,177,892,050.67
buildings
Machineries 471,969,548.95 -- 449,829,945.27
Vehicles 29,080,108.46 -- 29,104,097.94
Electronics 55,771,937.91 -- 54,175,373.07
Other equipments 61,469,078.91 -- 63,787,554.85
IV. Total impairment
25,592,531.65 -- 25,585,083.72
provision
Including: Houses and
1,412,531.97 -- 1,412,531.97
buildings
Machineries 18,996,960.75 -- 18,989,512.82
Vehicles 1,068,048.33 -- 1,068,048.33
Electronics 2,414,407.59 -- 2,414,407.59
Other equipments 1,700,583.01 -- 1,700,583.01
V. Total book value of
1,779,259,823.65 -- 1,749,203,938.08
fixed assets
Including: Houses and
1,185,149,149.10 -- 1,176,479,518.70
buildings
Machineries 452,972,588.20 -- 430,840,432.45
Vehicles 28,012,060.13 -- 28,036,049.61
Electronics 53,357,530.32 -- 51,760,965.48
Other equipments 59,768,495.90 -- 62,086,971.84
Depreciation amount of this reporting period was RMB 65,377,247.16; original value of RMB26,852,105.58 was
transferred into fixed assets from construction project.
(2) Temporary idle fixed assets
Unit: RMB Yuan
Original book Accrued Impairment
Item Net book value Note
value depreciation provision
Houses and
4,284,173.90 2,458,069.58 0.00 1,826,104.32
buildings
Machineries 52,838,644.40 43,032,311.52 8,287,231.30 1,519,101.58
Vehicles 1,236,850.00 1,112,484.90 87,259.60 37,105.50
Electronics 16,942,202.12 15,387,580.23 1,134,750.95 419,870.94
Other equipments 1,289,258.32 1,135,387.79 115,978.25 37,892.28
(3) Fixed assets leased in from financing lease
□Applicable √Inapplicable
(4) Information of hold-for-sale fixed assets at period-end
Unit: RMB Yuan
Estimated expense on Estimated time for
Item Book value Fair value
disposal diposal
147
(5) Information of fixed assets failed to accomplish certification of property
Item Reason Estimated time of completion
Integrate building of Already gained land use right, the property
Cannot be estimated
Chongqing Konka right was under progress.
The license for using state-owned land has not
Yikang building of Konka
been obtained and the certificate of title to Cannot be estimated
Group
house property cannot be handled temporarily.
Jingyuan office building - Cannot be estimated
Henan office building Under progress 2012
Zhejiang office building Under progress 2012
R&D mansion Under progress 2012
The license for using state-owned land has not
Main plant of Mudangjiang
been obtained and the certificate of title to Cannot be estimated
electric appliances etc.
house property cannot be handled temporarily.
Office building of The license for using state-owned land has not
Changshu Konka Color TV been obtained and the certificate of title to Cannot be estimated
etc. house property cannot be handled temporarily.
Notes of fixed assets:
18. Construction in progress
(1)
Unit: RMB Yuan
Closing balance Opening balance
Impairm
Item Impairment ent
Book balance Book value Book balance Book value
provision provisi
on
1# supplimental plant
43,552,765.74 0.00 43,552,765.74 33,552,765.74 0.00 33,552,765.74
projectof Kunkang
Canteen and dormitory
project of new 19,207,115.90 0.00 19,207,115.90
industrial
Plant and warehouse
project of new
68,082,581.79 0.00 68,082,581.79 51,882,983.13 0.00 51,882,983.13
industrial
park
Supplemental project of
111,750.00 0.00 111,750.00 904,869.20 0.00 904,869.20
new industrial park
Other small projects 16,833,002.92 0.00 16,833,002.92 13,357,274.95 0.00 13,357,274.95
Total 128,580,100.45 0.00 128,580,100.45 118,905,008.92 0.00 118,905,008.92
148
(2) Changes in significant construction in progress
Unit: RMB Yuan
Increase in Project Including: Capitaliza
Opening Transferred Capitaliza Closing
Name of Other input Project capitalizatio tion of Source of
Budget reporting to fixed tion of
project balance decrease percentage process n of interest interest funding balance
period assets interest
of budget this period rate (%)
1#
supplimental
Self-owne
plant 33,552,765.74 10,000,000.00 0.00 0.00 43,552,765.74
d capital
projectof
Kunkang 46,900,000
Canteen and
dormitory
Self-owne
project of 19,207,115.90 7,746.96 19,214,862.86 0.00 0.00
d capital
new
industrial 15,750,000
Plant and
warehouse
project of Self-owne
51,882,983.13 16,363,182.66 163,584.00 0.00 0.00 68,082,581.79
new d capital
industrial
park 59,160,000
Supplemental
project of
Self-owne
new 904,869.20 793,119.20 0.00 0.00 111,750.00
d capital
industrial
park 13,420,000
Other small 31,950,000 13,357,274.95 11,334,637.51 6,844,123.52 1,014,786.02 0.00 0.00 Self-owne 16,833,002.92
149
projects d capital
0.00 0.00
Total 167,180,000 118,905,008.92 37,705,567.13 26,852,105.58 1,178,370.02 -- -- 0.00 0.00 -- -- 128,580,100.45
Notes of changes in construction in progress:
150
(3) Impairment provision of construction in progress
Unit: RMB Yuan
Increase in Decrease in Reason for
Item Opening balance Closing balance
reporting period reporting period withdrawal
Naught 0.00 0.00 0.00 0.00
Total 0.00 0.00 0.00 0.00 --
(4) Information of procedures of significant construction in progress
Item Process of the project Remark
(5) Notes of construction in progress
19. Engineering materials
Unit: RMB Yuan
Increase in Decrease in
Item Opening balance Closing balance
reporting period reporting period
Naught 0.00 0.00 0.00 0.00
Total 0.00 0.00 0.00 0.00
Notes of engineering materials:
20. Clearance of fixed assets
Unit: RMB Yuan
Reason for transferring to
Item Opening book value Closing book value
clearance
Naught 0.00 0.00
Total 0.00 0.00 --
Notes of clearance process of fixed assets with a clearance term of over 1 year since the transfer into fixed
assets:
21. Productive biological assets
(1) Calculated by cost
□Applicable √Inapplicable
(2) Calculated by fair value
□Applicable √Inapplicable
22. Oil and gas assets
Unit: RMB Yuan
Opening book Increase in Decrease in reporting
Item Closing book balance
balance reporting period period
I. Total original book
0.00 0.00 0.00 0.00
value
1. Property rights of
proved mining area
151
2. Property rights of
unproved mining area
3. Well and relevant
facilities
II. Total accumulated
0.00 0.00 0.00 0.00
depreciation
1. Property rights of
proved mining area
2. Well and relevant
facilities a
III. Total accumulated
oil and gas assets 0.00 0.00 0.00 0.00
depreciation
1. Property rights of
proved mining area
2. Property rights of
unproved mining area
3. Well and relevant
facilities
IV. Total book value of
0.00 0.00 0.00 0.00
oil and gas assets
1. Property rights of
proved mining area
2. Property rights of
unproved mining area
3. Well and relevant
facilities
Notes of oil and gas assets:
23. Intangible assets
(1) Information
Unit: RMB Yuan
Opening book Increase in reporting Decrease in reporting
Item Closing book balance
balance period period
I. Total original book
260,484,652.91 14,210,784.61 0.00 274,695,437.52
value
Land use right 197,983,480.81 13,904,000.00 211,887,480.81
Trademark registration
costs in foreign 3,007,341.61 3,007,341.61
countries
Patents and
proprietary 41,519,762.51 204,647.86 41,724,410.37
technologies
Others 17,974,067.98 102,136.75 18,076,204.73
152
II. Total accumulated
63,199,947.35 4,004,748.59 0.00 67,204,695.94
damage
Land use right 22,901,677.04 2,711,330.34 25,613,007.38
Trademark registration
costs in foreign 2,736,982.56 73,533.56 2,810,516.12
countries
Patents and
proprietary 29,930,759.18 1,029,600.71 30,960,359.89
technologies
Others 7,630,528.57 190,283.98 7,820,812.55
III. Total provisions
197,284,705.56 0.00 0.00 207,490,741.58
for depreciation
Land use right 175,081,803.77 186,274,473.43
Trademark registration
costs in foreign 270,359.05 196,825.49
countries
Patents and
proprietary 11,589,003.33 10,764,050.48
technologies
Others 10,343,539.41 10,255,392.18
IV. Total book value 2,901,082.61 0.00 0.00 2,901,082.61
Land use right
Trademark registration
costs in foreign
countries
Patents and
proprietary 2,901,082.61 2,901,082.61
technologies
Others
Total original book
value of intangible 194,383,622.95 0.00 0.00 204,589,658.97
assets
Land use right 175,081,803.77 186,274,473.43
Trademark registration
costs in foreign 270,359.05 196,825.49
countries
Patents and
proprietary 8,687,920.72 7,862,967.87
technologies
153
Others 10,343,539.41 10,255,392.18
Amortization was of 4,004,748.59 in reporting period.
(2) Company development expense
Unit: RMB Yuan
Decrease in reporting period
Increase in
Item Opening balance Recognized into Closing balance
reporting period Recognized as
current
intangible assets
gains/losses
Naught 0.00 0.00 0.00 0.00 0.00
Total 0.00 0.00 0.00 0.00 0.00
Development expense percentage of total expenditure of R&D projects in the reporting period.
Percentage intangible assets arising from inner R&D of the Company of closing book value of intangible assets.
Notes of R&D projects of the Company, those that includes individual value of more than RMB 1 million and recognized
with a basis of assessed value, please disclose name of evaluation authority and method of evaluation:
(3) Information of intangible assets that failed to accomplish certification of property
24. Goodwill
Unit: RMB Yuan
Impairment
Name of investee or event Increase in the Decrease in the
Opening balance Closing balance provision at
that generated goodwill reporting period reporting period
period-end
Purchasing equity of
3,943,671.53 0.00 0.00 3,943,671.53 0.00
subsidiaries
Total 3,943,671.53 0.00 0.00 3,943,671.53 0.00
Notes of test method of goodwill impairment and impairment withdrawal method:
25. Long-term amortization expense
Unit: RMB Yuan
Amortization Reason for
Item Opening balance Increase Other decrease Closing balance
balance other decrease
Decoration 4,743,005.83 45,243.00 1,283,408.34 0.00 3,504,840.49
Development
platform 621,045.32 110,951.60
expenses 510,093.72
Other 4,788,152.51 1,187,645.38 3,405,159.48 2,570,638.41
Total 10,152,203.66 1,232,888.38 5,198,661.54 0.00 6,186,430.50 --
Notes:
154
26. Deferred income tax assets and deferred income tax liabilities
(1) Deferred income tax assets and deferred income tax liabilities are not listed as the net
value after offset
√Applicable □Inapplicable
Recognized deferred income tax assets and deferred income tax liabilities:
Unit: RMB Yuan
Item Closing balance Opening balance
Deferred income tax assets
Provision for assets impairment 192,196,499.24 193,208,892.50
Formation expenses
Deductible losses 68,287,381.12 67,501,450.49
Fair value changes of available-for-sale
financial assets that recognized into 316,628.99
capital reserves
Off-set unrealized profits from
10,361,442.01 10,361,442.01
intra-group transactions
Guarantee expense 21,301,437.67 22,817,166.23
Other non-current liabilities-deferred
26,866,640.27 27,917,410.00
income
Estimated value of trading financial
instruments, derivative financial 5,491,238.99
instruments
Subtotal 319,330,029.30 327,297,600.22
Deferred income tax liabilities:
Estimated value of trading financial
instruments, derivative financial
instruments
Fair value changes on
available-for-sale financial assets
that recognized into capital reserves
Fixed assets of appreciation on appraisal 563,067.21 563,067.21
Subtotal 563,067.21 563,067.21
List of unrecognized deferred income tax assets and deferred income tax liabilities:
Unit: RMB Yuan
Item Closing balance Opening balance
Deductible temporary differences
Deductible losses
Total
Unrecognized deferred income tax assets and deferred income tax liabilities that will expire in the following
155
fiscal year:
Unit: RMB Yuan
Year Closing balance Opening balance Remark
Total --
List of deferred income tax assets and deferred income tax liabilities:
Unit: RMB Yuan
Temporary differences amount
Item
As at 30 Jun. 2012 As at 1 Jan. 2012
Taxable differences item
Subtotal
Deductible differences items
Subtotal
(2) List of net amount of deferred income tax assets and deferred income tax liabilities after
write-off
√Applicable □Inapplicable
Notes of deferred income tax assets and deferred income tax liabilities:
Unit: RMB Yuan
Deductible Deductible
Deferred income temporary Deferred income tax temporary
tax assets or differences or assets or differences or
Item
liabilities at taxable temporary liabilities at taxable temporary
period-end differences at period-begin differences at
period-end period-begin
Deferred income tax assets:
Provision for assets impairment 192,196,499.24 879,391,093.91 193,208,892.50 881,429,512.43
Formation expense
Deductible losses 68,287,381.12 292,788,843.74 67,501,450.49 292,221,156.76
Fair value changes of
available-for-sale financial
316,628.99 1,266,515.97
assets that recognized into capital
reserves
Off-set unrealized profits from
10,361,442.01 41,445,768.02 10,361,442.01 41,445,768.02
intra-group transactions
Guarantee expense 21,301,437.67 97,807,749.25 22,817,166.23 103,870,663.47
Other non-current
26,866,640.27 127,484,253.13 27,917,410.00 112,967,332.01
liabilities-deferred income
Estimated value of trading
financial instruments, derivative 5,491,238.99 22,101,173.97
financial instruments
156
Subtotal 319,330,029.30 1,440,184,224.02 327,297,600.22 1,454,035,606.66
Deferred income tax liabilities:
Estimated value of trading
financial instruments, derivative
financial instruments
Fair value changes on
available-for-sale financial
assets that recognized into capital
reserves
Fixed assets of appreciation on
563,067.21 2,252,268.84 563,067.21 2,252,268.84
appraisal
Subtotal 563,067.21 2,252,268.84 563,067.21 2,252,268.84
Particulars of the counter off-set between deferred income tax assets and deferred income tax liabilities:
Unit: RMB Yuan
Item Counter off-set amount in Jan.-Jun. 2012
Notes of deferred income tax assets and deferred income tax liabilities:
27. List of provision for assets impairment
Unit: RMB Yuan
Opening book Increase in Decrease in reporting period Closing book
Item
balance reporting period Reversal Written off balance
I. Provision for bad debt 266,421,416.28 2,070,056.79 8,665,045.60 -1,139,134.71 260,965,562.18
II. Provision for
708,309,855.63 848,587.73 0.00 541,294.66 708,617,148.70
inventory falling price
III. Impairment provision
of available-for-sale
financial assets
IV. Impairment provision
of held-to-maturity
investment
V. Impairment provision of
long-term equity 2,185,000.00 0.00 300,000.00 1,885,000.00
investment
VI. Impairment provision
0.00 0.00 0.00
of investment property
VII. Impairment provision
25,592,531.65 7,447.93 25,585,083.72
of fixed assets
VIII. Impairment
provision of engineering
materials
IX. Impairment provision
of construction in 0.00 0.00 0.00
progress
X. Impairment provision of
productive biological
assets
157
Including: mature
productive biological
assets
XI. Impairment provision
0.00 0.00 0.00
of oil gas assets
XII. Impairment provision
2,901,082.61 0.00 2,901,082.61
of intangible assets
XIII. Impairment
0.00
provision of goodwill
XIV. Others
Total 1,005,409,886.17 2,918,644.52 8,665,045.60 -290,392.12 999,953,877.21
Notes of the list of assets impairment:
28. Other non-current assets
Unit: RMB Yuan
Item Closing balance Opening balance
Naught 0.00 0.00
Total 0.00 0.00
Notes of other non-current assets:
29. Short-term loan
(1)Category
Unit: RMB Yuan
Item Closing balance Opening balance
Pledge loan 2,628,834,123.70 4,575,805,685.57
Mortgage loan 55,000,000.00 58,000,000.00
Guarantee loan 35,000,000.00
Credit loan 2,357,314,886.40 1,813,276,090.19
Other loans 261,306,412.61 353,183,459.80
Total 5,302,455,422.71 6,835,265,235.56
Notes of category of short-term loan:
(2) List of unsettled mature short-term loan
Unit: RMB Yuan
Reason for
Name of creditor Amount of loan Rate of loan Usage Estimated settle date
unsettlement
Naught 0.00
Total 0.00 -- -- -- --
RMB** was paid back after the Balance Sheet Date.
Notes of short-term loan, for those gaining extended term, notes term of extension and new maturity day:
158
30. Trading financial liabilities
Unit: RMB Yuan
Item Closing fair value Opening fair value
Public trading bonds 0.00
Financial liabilities designed to
recognized with a basis on fair value and
0.00
with its changes recognized into current
gains and losses
Derivative financial liabilities 0.00 22,101,173.97
Other financial liabilities 0.00
Total 0.00 22,101,173.97
Notes of trading financial liabilities:
31. Notes payable
Unit: RMB Yuan
Category Closing balance Opening balance
Trade acceptance bill 6,700,000.00 10,000,000.00
Bank acceptance bill 793,398,547.40 789,094,173.72
Total 800,098,547.40 799,094,173.72
RMB800,098,547.40 will be due in next fiscal period.
Notes of notes payable:
32. Accounts payable
(1)
Unit: RMB Yuan
Item Closing balance Opening balance
Within 1 year 2,092,440,489.95 2,457,600,655.13
1 year to 2 years 38,489,071.07 39,130,063.07
2 years to 3 years 2,694,160.58 11,375,842.98
Over 3 years 22,687,590.21 22,245,625.24
Total 2,156,311,311.81 2,530,352,186.42
(2) The accounts payable to shareholders with more than 5% (including 5%) of the voting shares
of the Company
□Applicable √Inapplicable
Notes of the accounts payable aging over one year:
33. Advance from customers
(1)
Unit: RMB Yuan
Item Closing balance Opening balance
159
Within 1 year 211,996,652.70 327,188,528.90
1 year to 2 years 2,679,484.70 4,344,117.41
2 years to 3 years 1,281,406.41 2,169,291.93
Over 3 years 9,885,169.48 15,842,324.69
Total 225,842,713.29 349,544,262.93
(2) Advanced from customers from shareholders with more than 5% (including 5%) of the voting
shares of the Company
□Applicable √Inapplicable
Notes of significant advance from customers aging over one year:
34. Payroll payable
Unit: RMB Yuan
Increase in reporting Decrease in reporting
Item Opening book balance Closing book balance
period period
I. Salary, bonus,
allowance, 250,089,732.72 502,756,890.91 605,797,021.45 147,049,602.18
subsidy
II. Employee
2,886,302.41 36,129,164.16 31,047,583.99 7,967,882.58
welfare
III. Social
5,031,936.87 80,519,641.55 78,105,664.75 7,445,913.67
insurance
Including:1.
1,196,239.84 19,775,550.91 18,789,766.23 2,182,024.52
Medical insurance
2. Basic endowment
3,473,581.15 54,511,906.42 53,258,746.82 4,726,740.75
insurance
3. Annuity payment 15,012.84 14,818.82 194.02
4. Unemployment
124,186.24 2,915,558.16 2,839,062.15 200,682.25
insurance expense
5. Maternity
112,348.84 1,297,347.09 1,260,711.27 148,984.66
insurance
6. Employment
125,580.80 2,004,266.13 1,942,559.46 187,287.47
injury insurance
IV. Housing fund 1,120,775.76 15,322,803.73 14,618,105.03 1,825,474.46
V. Dismissal
651,324.26 702,993.53 859,445.39 494,872.40
welfare
VI. Other 7,573,773.11 19,445,073.86 18,130,967.20 8,887,879.77
Including: 1.
Labour union
budget and 4,666,052.65 6,477,804.37 4,255,480.58 6,888,376.44
employee eduction
budget
2. Other 2,907,720.46 12,967,269.49 13,875,486.62 1,999,503.33
Total 267,353,845.13 654,876,567.74 748,558,787.81 173,671,625.06
160
RMB 0.00 is the amounts in arrears in the payroll payable.
The labor union budget and employee education budget is RMB4,666,052.65, the non-monetary benefits are RMB 0.00,
and the compensation for terminating the labor contract is RMB 0.00.
The estimated distribution date and amount as well as other arrangements for payroll payable:
35. Taxes payable
Unit: RMB Yuan
Item Closing balance Opening balance
VAT -204,093,308.73 -32,374,859.22
Consumption tax 0.00 0.00
Business tax 686,776.89 636,010.23
Corporate income tax 4,099,862.45 29,358,042.52
Personal income tax 1,723,618.74 1,208,924.06
Urban maintenance and construction tax 555,231.83 5,634,688.93
Education surtax 499,332.08 4,107,450.46
Other 18,187,837.89 24,604,651.10
Total -178,340,648.85 33,174,908.08
Notes of taxes payable: for the taxable income of branch companies and factories approved to be inter-adjusted
by their local tax authorities, the Company shall specified their calculation procedure:
Naught
36. Interest payable
Unit: RMB Yuan
Item Closing balance Opening balance
Interest payable on long-term borrowings that
interest was paid by stages and principle was
repay upon due 1,439,416.66 789,379.44
Interest of corporate bond
Interest payable on short-term borrowings 27,506,182.89 25,657,581.45
Other
Total 28,945,599.55 26,446,960.89
Notes:
Naught
37. Dividends payable
Unit: RMB Yuan
Reason for unsettlement over 1
Name of entity Closing balance Opening balance
year
Dividends payable of common
12,039,727.04 0.00
stock
Total 12,039,727.04 0.00 --
Notes:
161
Naught
38. Other accounts payable
(1)
Unit: RMB Yuan
Item Closing balance Opening balance
Within 1 year 800,706,465.94 770,012,290.81
1 year to 2 years 48,543,557.14 181,502,423.11
2 years to 3 years 10,882,907.28 42,661,459.51
Over 3 years 52,004,722.12 34,963,008.63
Total 912,137,652.48 1,029,139,182.06
(2) Other accounts payable from shareholders with more than 5% (including 5%) of the voting shares
of the Company
□Applicable √Inapplicable
(3) Notes of the other large amount accounts payable aging over 1 year
Whether
return after
Reason for
Name of creditor Amount the
unsettlement
reporting
date
China Construction Fourth 10,000,000.00 Guarantee money No
Engineering Division Cop., Ltd.
Total 10,000,000.00
(4) Notes of other accounts payable with significant amount
Whether
return after
Reason for
Name of creditor Amount the
unsettlement
reporting
date
China Construction Fourth 10,000,000.00 Guarantee money No
Engineering Division Cop., Ltd.
Total 10,000,000.00
39. Estimated liabilities
Unit: RMB Yuan
Increase in reporting Decrease in reporting
Item Opening balance Closing balance
period period
External offering
guarantee
Unsettled lawsuit
Product quality
162
guarantee
Responsibility of
reorganization
Dismissal welfare 20,163,356.00 0.00 2,749,430.98 17,413,925.02
Loss contract to be
executed
Other
Total 20,163,356.00 0.00 2,749,430.98 17,413,925.02
Notes of estimated liabilities:
Naught
40. Non-current liabilities due within 1 year
(1)
Unit: RMB Yuan
Item Closing balance Opening balance
Long-term loan due within 1 year 0.00 0.00
Bonds payable due within 1 year 0.00 0.00
Long-term accounts payable due within 1
0.00 0.00
year
Total 0.00 0.00
(2) Long-term loan due within 1 year
Long-term loan due within 1 year
Unit: RMB Yuan
Item Closing balance Opening balance
Pledge loan 0.00
Mortgage loan
Guarantee loan
Credit loan
Total 0.00 0.00
RMB* of long-term loan due within 1 year was of mature loan with extended term.
Top five long-term loans due within 1 year
Unit: RMB Yuan
Closing balance Opening balance
Starting Ending Foreign Foreign
Creditor Currency Rate (%) RMB RMB
date date currency currency
balance balance
balance balance
Naught 0.00 0.00
Total -- -- -- -- -- 0.00 -- 0.00
Mature loan of long-term loan due within 1 year:
Unit: RMB Yuan
163
Name of Reason for Estimated date
Amount of loan Overdue date Annual rate (%) Usage
creditor unsettlement of completion
无 0.00
Total 0.00 -- -- -- -- --
RMB* of long-term loan due within 1 year was of mature loan with extended term.
Top five long-term loan due within 1 year
(3)Bonds payable due within 1 year
Unit: RMB Yuan
Accrued Interest
Opening Closing
Issuance Issuing interest paid in the Closing
Name Par value Term interest interest
date amount in current reporting balance
payable payable
period period
Notes:
(4) Long-term accounts payable due within 1 year
Unit: RMB Yuan
Accrued
Creditor Term Initial amount Rate (%) Closing balance Conditions
interest
Notes of long-term accounts payable due within 1 year:
41. Other current liabilities
Unit: RMB Yuan
Item Closing book balance Opening book balance
Naught 0.00 0.00
Total 0.00 0.00
Notes:
42. Long-term loan
(1)Category of long-term loan
Unit: RMB Yuan
Item Closing balance Opening balance
Pledge loan
Mortgage loan
Guarantee loan
Credit loan 10,000,000.00 10,000,000.00
Entrust loan 1,000,000,000.00 600,000,000.00
Total 1,010,000,000.00 610,000,000.00
Notes of category:
164
(2)The top five long-term loans
Unit: RMB Yuan
Closing balance Opening balance
Curre Rate Foreign Foreign
Creditor Starting date Ending date
ncy (%) currency RMB amount currency RMB amount
amount amount
OCT Branch of
16 Sept. 2010 1 Aug. 2013 CNY 3.7% 100,000,000.00 100,000,000.00
CCB
OCT Branch of
15 Apr. 2010 31 Jul. 2013 CNY 5.42% 100,000,000.00 100,000,000.00
CCB
OCT Branch of
16 Nov. 2011 31 Jul. 2013 CNY 3.92% 300,000,000.00 300,000,000.00
CCB
OCT Branch of
17 Mar. 2011 4 Mar. 2016 CNY 5.67% 100,000,000.00 100,000,000.00
CCB
OCT Branch of
13 Mar. 2012 31 Jul. 2013 CNY 4.73% 300,000,000.00
CCB
Total -- -- -- -- -- 900,000,000.00 -- 600,000,000.00
Notes of long-term loan: for the long-term loans arising from mature loans with extended term, the Company shall
explain the conditions of extension, principal, interest, expected repayment arrangement:
43. Bonds payable
Unit: RMB Yuan
Interest
Opening Closing Closing
Issuance Issuing paid in the Closing
Name Par value Term interest interest interest
date amount reporting balance
payable payable payable
period
Notes of bonds payable, including the conditions and date of conversion of the convertible corporate bonds:
44. Long-term payable
(1) The top five long-term payable
Unit: RMB Yuan
Accrued Conditions of
Company Term Initial amount Rate (%) Closing balance
interest loan
Chuzhou
Tongchuang
Construction 30,000,000.00 2% 300,000.00 30,000,000.00
Investment
Co., Ltd.
(2) List of the financing lease payable under the long-term loan
Unit: RMB Yuan
Company Closing balance Opening balance
165
Foreign currency RMB Foreign currency RMB
Naught 0.00 0.00 0.00 0.00
Total 0.00 0.00 0.00 0.00
RMB** was guarantee for the Company’s financing lease provided by the independent third party.
Notes of the long-term payable:
45. Specific payable
Unit: RMB Yuan
Increase in Decrease in
Opening Closing
Item reporting reporting Note
balance balance
period period
Naught 0.00
Total 0.00 0.00 0.00 0.00 --
Notes of specific payable:
46. Other non-current liabilities
Unit: RMB Yuan
Item Closing book balance Opening book balance
Deferred income 109,975,894.10 115,820,202.99
Total 109,975,894.10 115,820,202.99
Notes of other non-current liabilities, including each government grants relevant to assets and income received
in the reporting period and their closing amounts:
Item Closing Opening balance
balance
(1) Government subsidy relevant to assets
Subsidies for supporting equipment of 29,740,000.00 28,080,000.00
Kunshan liquid crystal module project
Fund for flat panel display industry in 10,000,000.00 10,000,000.00
year 2008
Development of new type display -
technologies such as liquid crystal
module (Ministry of Industry and
Information Technology)
R&D and industrialization of large size 9,600,000.00 10,800,000.00
liquid crystal display module
Key technology and industrialization 5,000,000.00 5,000,000.00
of LED Backlight of flat TV set
Industrialization project of large 10,400,000.00 11,600,000.00
size liquid crystal display module
R&D and industrialization of 3,975,000.00 4,425,000.00
166
Item Closing Opening balance
balance
integrated module of flat TV set
R&D and industrialization of 6,969,999.98 7,790,000.00
integrated DTMB
Others 28,948,784.39 28,206,863.26
(2) Government subsidy relevant to earnings
Government subsidy on R&D of white 2,925,238.75 7,465,468.75
goods
Other 2,416,870.98 2,452,870.98
Total 109,975,894.1
115,820,202.99
0
47. Share capital
Unit: RMB Yuan
Increase/Decrease (+/-)
Capitalizat
Opening Closing
Issuing Bonus ion of
balance Other Subtotal balance
new shares shares public
reserves
Total
1,203,972,704 0 1,203,972,704
shares
Notes of changes in share capital, for those action of increasing capital or decreasing capital in the reporting
period, the Company shall disclose the name of the accounting firm executing the capital verification and document
number of the capital verification report; for joint-stock companies running for less than three years, only
the net assets shall be specified for particulars before establishment; while for case of totally changing the
limited liability companies into joint-stock companies, capital verification on the establishment shall be
specified:
48. Treasury stock
Notes of treasury stock:
49. Special reserves
Notes of special reserves:
50. Capital reserves
Unit: RMB Yuan
Item Opening balance Increase Decrease Closing balance
Capital premium (share
1,211,366,082.55 1,211,366,082.55
capital premium)
167
Other capital reserves 64,320,179.67 3,372,392.58 60,947,787.09
Total 1,275,686,262.22 0.00 3,372,392.58 1,272,313,869.64
Notes:
51. Surplus reserves
Unit: RMB Yuan
Item Opening balance Increase Decrease Closing balance
Statutory surplus reserves 555,245,730.23 555,245,730.23
Discretional surplus
254,062,265.57 254,062,265.57
reserves
Reserve fund
Enterprise development
funds
Other
Total 809,307,995.80 0.00 0.00 809,307,995.80
Notes of surplus reserves: for surplus reserves transferred to share capital, compensating losses and distributed
as dividends, relevant resolutions shall be explained:
52. Provision for general risk
Notes of provision for general risk:
53. Retained profits
Unit: RMB Yuan
Withdrawal or
Item Amount distributed
proportion
Opening balance of retained profits
709,679,408.84 --
before adjustments
Adjustments of opening balance of
retained profits (“+” means add, “-” --
means reduce)
Opening balance of retained profits
709,679,408.84 --
after adjustments
Add: Net profit attributable to owners
11,467,291.68 --
of the Company
Less: Withdrawal of statutory surplus
reserves
Withdrawal of discretional surplus
168
reserves
Withdrawal of provision for general
risk
Dividend of common stock payable 12,039,727.04
Dividend of common stock converted into
share capital
Closing retained profits 709,106,973.48 --
List of adjustment of opening retained profits:
1) RMB** opening retained profits was affected by retrospective adjustment conducted according to the Accounting
Standards for Business Enterprises and relevant new regulations.
2) RMB** opening retained profits was affected by changes on accounting policies.
3) RMB** opening retained profits was affected by correction of significant accounting errors.
4) RMB-9,515,279.08 opening retained profits was affected by changes in combination scope arising from same
control.
5) RMB0.00 opening retained profits was affected totally by other adjustments.
Notes: as for IPO companies, if the accumulated profits were enjoyed by new and original shareholders according
to the resolutions made at the shareholders’ general meeting before public offering, the Company shall explain
clearly; if the accumulated profits were distributed before public offering and enjoyed by the original
shareholders according to the resolutions made at the shareholders’ general meeting, the Company shall clearly
disclose the audited profits of dividends payable enjoyed by the original shareholders:
54. Revenue and Cost of Sales
(1) Revenue, Cost of Sales
Unit: RMB Yuan
Item Reporting period Same period of last year
Sales of main business 6,976,145,869.85 6,815,109,144.09
Other operating income 62,777,267.92 49,994,775.67
Cost of sales 5,722,506,955.64 5,836,932,046.71
(2)Main business (Classified by industry)
√Applicable □Inapplicable
Unit: RMB Yuan
Reporting period Same period of last year
Name of industry
Revenue of sales Costs of sales Revenue of sales Costs of sales
Electronics industry 6,976,145,869.85 5,674,892,770.60 6,815,109,144.09 5,789,352,688.21
Total 6,976,145,869.85 5,674,892,770.60 6,815,109,144.09 5,789,352,688.21
(3)Main business (Classified by product)
√Applicable □Inapplicable
169
Unit: RMB Yuan
Reporting period Same period of last year
Product
Revenue of sales Costs of sales Revenue of sales Costs of sales
Color television business 5,154,996,482.76 4,157,141,389.91 5,099,596,529.67 4,355,701,727.30
Mobile phone business 565,319,642.38 495,262,014.07 644,313,624.57 552,109,424.39
White goods business 717,953,215.54 580,042,564.86 658,018,271.84 529,603,595.74
Others 537,876,529.17 442,446,801.76 413,180,718.01 351,937,940.78
Total 6,976,145,869.85 5,674,892,770.60 6,815,109,144.09 5,789,352,688.21
(4) Main business (Classified by area)
√Applicable □Inapplicable
Unit: RMB Yuan
Reporting period Same period of last year
Area
Revenue of sales Costs of sales Revenue of sales Costs of sales
Domestic sales 5,390,594,971.28 4,228,987,297.87 5,337,862,953.94 4,419,402,806.41
Overseas sales 1,585,550,898.57 1,445,905,472.73 1,477,246,190.15 1,369,949,881.80
Total 6,976,145,869.85 5,674,892,770.60 6,815,109,144.09 5,789,352,688.21
(5) The revenue of sales from the top five customers
55. Revenue from the construction contracts
□Applicable √Inapplicable
Notes:
56. Business tax and surtax
Unit: RMB Yuan
Same period of last
Item Reporting period Calculation and payment standard
year
Consumption tax
Business tax 1,449,811.16 494,366.82
Urban maintenance and
12,262,073.87 10,672,073.33
construction tax
Education surtax 5,688,845.13 5,519,410.83
Resources tax
Local education surtax 3,329,710.02
Other 1,750,145.11 478,022.18
Total 24,480,585.29 17,163,873.16 --
Notes:
170
57. Gains and losses from changes in fair value
Unit: RMB Yuan
Source Reporting period Same period of last year
Trading financial assets
Including: gains from the changes in fair
value of derivative financial instruments
Trading financial liabilities 22,101,173.97 14,666,723.60
Investment property calculated by fair value
Other 0.00 0.00
Total 22,101,173.97 14,666,723.60
Notes:
58. Investment income
(1) List of investment income
Unit: RMB Yuan
Item Reporting period Same period of last year
Long-term equity investment income accounted
0.00 0.00
by cost method
Long-term equity investment income accounted
3,873,147.41 -79,052.57
by equity method
Investment income arising from disposal of
91,013.92
long-term equity investments
Investment income received from holding of
trading financial assets
Investment income received from holding of
held-to-maturity investments
Investment income received from holding of
available-for-sale financial assets
Investment income received from disposal of
trading financial assets
Investment income received from holding of
held-to-maturity investments
Investment income received from
5,110,011.59
available-for-sale financial assets
Other
Total 9,074,172.92 -79,052.57
(2) Long-term equity investment income accounted by cost method
Unit: RMB Yuan
171
Same period of last
Name of investee Reporting period Reason for increase/decrease
year
Naught 0.00 0.00
Total 0.00 0.00 --
(3) Long-term equity investment income accounted by equity method
Unit: RMB Yuan
Same period of last
Name of investee Reporting period Reason for increase/decrease
year
Chongqing Jingkang Plastic -67,676.23 -79,052.57
Shenzhen Refond
5,358,632.82
Optoelectronics Co., Ltd
EnRay Tek Optoelectronics
-1,417,809.18
(Shanghai) Co., Ltd.
Total 3,873,147.41 -79,052.57 --
Notes of investment income: make notes if there is significant limitation for recovery of investment income.
If there isn’t the said limitation, notes too:
59. Impairment losses
Unit: RMB Yuan
Item Reporting period Same period of last year
I. Bad debts losses -6,594,988.81 -1,807,457.22
II. Inventory falling price losses 848,587.73 251,637.09
III. Impairment losses of available-for-sale
financial assets
IV. Impairment losses of held-to-maturity of
investment
V. Impairment losses of long-term equity
investment
VI. Impairment losses of investment property
VII. Impairment losses of fixed assets
VIII. Impairment losses of engineering materials
IX. Impairment loss of construction in progress
X. Impairment losses of productive biological
assets
XI. Impairment losses of oil and gas assets
XII. Impairment losses of intangible assets
XIII. Impairment losses of goodwill
XIV. Other
172
Total -5,746,401.08 -1,555,820.13
60. Non-operating gains
(1)
Unit: RMB Yuan
Item Reporting period Same period of last year
Total gains from disposal of non-current assets 10,114,355.92 2,892,290.40
Including：Gains from disposal of fixed assets 10,114,355.92 2,892,290.40
Gains from disposal of intangible assets
Gains from debt reconstruction
Gains from non-monetary assets exchange
Acceptance of donations
Government grants 62,128,032.28 72,266,954.72
Penalty income 2,512,302.85 2,180,265.38
Other 2,493,824.04 3,894,029.34
Total 77,248,515.09 81,233,539.84
(2) List of government grants
Unit: RMB Yuan
Same period of last
Item Reporting period Note
year
R&D subsidy 4,540,230.00
Industrialization of large
size liquid crystal display 1,200,000.00
module
R&D and industrialization of
large size liquid crystal 1,200,000.00
display module
R&D and industrialization of
820,000.02
integrated DTMB
Establishment of development
799,999.98 800,000.00
center for signal TV
Grants of Ministry of Industry
and Information Technology for
899,100.00
IPV6 high-definition
multi-functional displays
Grants of Infrastructure
Office of Shenzhen Finance
1,347,992.75
Bureau for IPV6
high-definition displays
Patent subsidy 682,400.00 618,000.00
Insurance subsidy from 3,160,381.25
173
Shenzhen Finance Bureau
Capital for technology
1,340,000.00
performance commercialization
Industrial subsidy capita. 1,160,000.00
Subsidy on power 1,500,000.00
Refund on software tax 36,675,785.94 59,197,587.22
Other 9,049,235.09 9,404,274.75
Total 62,128,032.28 72,266,954.72 --
Notes
61. Non-operating expenses
Unit: RMB Yuan
Item Reporting period Same period of last year
Loss on disposal of non-current assets 1,877,844.62 1,989,220.58
Including: Loss on disposal of fixed assets 1,877,844.62 1,989,220.58
Loss on disposal of intangible assets
Loss on debt reconstruction
Loss on exchange of non-monetary assets
External donation expense 15,000.00 1,829.06
Other 261,066.84 653,614.82
Penalty expense 125,770.06 470,922.65
Total 2,279,681.52 3,115,587.11
Notes:
62. Income tax expense
Unit: RMB Yuan
Item Reporting period Same period of last year
Current income tax expense accounted by tax and
23,403,914.76 14,864,929.85
relevant regulations
Adjustment of income tax 8,284,199.91 106,428.08
Total 31,688,114.67 14,971,357.93
63. Calculation procedure of basic earnings per share and diluted earnings per share
①When basic earnings per share are being calculated, the net profits attributable to shareholders
of ordinary shares are:
Item Reporting period Same period of last year
Net profits attributable to shareholders 11,467,291.68 -195,000,941.75
of ordinary shares of the reporting period
Of which: net profits attributable to 11,467,291.68 -195,000,941.75
174
sustainable operation
Net profits attributable to terminated
operation
Net profits attributable to shareholders -38,396,824.01 -219,848,387.35
of ordinary shares of the Company after
deducting non-recurring profits and losses
Of which: net profits attributable to -38,396,824.01 -219,848,387.35
sustainable operation
Net profits attributable to terminated -
operation
②While basic earnings per share are being calculated, the denominator is the average weighted
number of ordinary shares issued publicly, and the calculation is as the following:
Item Reporting period Same period of last year
Ordinary shares publicly issued at the 1,203,972,704.00 1,203,972,704.00
beginning of 2012
Add: Weighted average number of ordinary - -
shares issued in 2012
Less: Weighted average number of ordinary - -
share repurchased in 2012
Weighted average number publicly issued at 1,203,972,704.00 1,203,972,704.00
the end of 2012
64. Other comprehensive income
Unit: RMB Yuan
Item Reporting period Same period of last year
1. Profits/(losses) from available-for-sale financial
-4,496,523.44 26,981.30
assets
Less: Effects on income tax generating from
-1,124,130.86 6,475.51
available-for-sale financial assets
Net amount transferred into profit and loss in the
current period that recognized into other
comprehensive income in prior period
Subtotal -3,372,392.58 20,505.79
2. Interests in the investee entities ’ other
comprehensive income as per equity method
Less: Effects on income tax generating from the
interests in the investee entities ’ other
175
comprehensive income as per equity method
Net amount transferred into profit and loss in the
current period that recognized into other
comprehensive income in prior period
Subtotal 0.00 0.00
3. Profits/(losses) from cash flow hedging instrument
Less: Effects on income tax generating from cash flow
hedging instrument
Net amount transferred into profit and loss in the
current period that recognized into other
comprehensive income in prior period
The adjustment value that is the converted initial
recognition amount of arbitrage project
Subtotal 0.00 0.00
4. Converted amount of foreign currency financial
-2,793,377.06 -10,400,633.70
statements
Less: Net value of disposal of oversea operations that
recognized into current profit and loss
Subtotal -2,793,377.06 -10,400,633.70
5. Other
Less: Effects on income tax generating from the others
that included into other comprehensive income
Net amount transferred into profit and loss in the
current period that recognized into other
comprehensive income in prior period
Subtotal 0.00 0.00
Total -6,165,769.64 -10,380,127.98
Notes:
65. Notes of Cash Flow Statement
(1) Other cash received relevant to operating activities
Unit: RMB Yuan
Item Amount
Mortgage guarantee money
Temporary received repair fund 78,388.50
Interest income from bank deposits 39,415,838.98
Bargain money and deposit 24,230,753.26
Income from fine and penalty 1,374,313.61
Repayment of individual borrowing 4,049,794.14
Subsidy income 9,514,851.33
176
Income from waste 7,085,461.92
Other expenses and current accounts 90,263,765.74
Total 176,013,167.48
Notes of other cash received relevant to operating activities
(2) Other cash paid relevant to operating activities
Unit: RMB Yuan
Item Amount
Cash paid for administration expense 76,666,383.33
Cash paid for operation cost 327,287,067.43
Mortgage guarantee moeny
Deposit, guarantee money and repair fund expense 25,454,338.25
Employee reserve fund 22,014,098.37
Donation expense 15,000.00
Advanced payment 6,152,792.51
Penalty expense 39,534.09
Interest and charges 23,512,137.36
Other expenses and current accounts 101,520,904.63
Total 582,662,255.97
Notes:
(3) Other cash received relevant to investment activities
Unit: RMB Yuan
Item Amount
Products such like short-term deposit etc. 1,455,277,858.53
Total 1,455,277,858.53
Notes
(4) Other cash paid relevant to investment activities
Unit: RMB Yuan
Item Amount
Products such like short-term deposit etc. 753,410,000.00
Total 753,410,000.00
Notes:
(5) Other cash received relevant to financing activities
Unit: RMB Yuan
Item Amount
Receipt and return of pledged RMB fixed deposits upon
2,437,727,144.09
maturity
177
Other 159,444.00
Total 2,437,886,588.09
Notes
(6) Other cash payments relating to financing activities
Unit: RMB Yuan
Item Amount
Deposit of RMB guarantee money used for pledge 2,474,431,673.60
Other 29,195,603.95
Total 2,503,627,277.55
Notes:
66. Appendix of Cash Flow Statement
(1) Appendix of Cash Flow Statement
Unit: RMB Yuan
Supplemental information Reporting period Same period of last
1. Reconciliation of net profit to net cash flows
-- --
generated from operating activities
Net profit 11,476,794.21 -190,874,019.89
Add: Provision for impairment of assets -5,746,401.08 -1,555,820.13
Depreciation of fixed assets, of oil-gas assets, of
65,377,247.16 61,815,036.49
productive biological assets
Amortization of intangible assets 4,004,748.59 3,736,253.32
Amortization of long-term deferred expense 5,198,661.54 4,130,658.83
Losses on disposal of property, plant and
equipment, intangible assets and other long-term -10,114,355.92 -2,367,987.15
assets (gains: negative)
Loss on retirement of fixed assets (gains:
1,877,844.62 641,804.35
negative)
Loss on fair value change (gains: negative) -22,101,173.97 -14,666,723.60
Financial cost (gains: negative) 86,258,499.42 50,373,009.18
Investment loss (gains: negative) -9,074,172.92 79,052.57
Decrease in deferred income tax assets (gains:
7,967,570.92 -541,235.89
negative)
Increase in deferred income tax liabilities
-807,501.87
(decrease: negative)
Decrease in inventory (gains: negative) -452,980,898.62 405,636,033.66
Decrease in accounts receivable from operating
2,433,695,876.94 588,457,586.06
activities (gains: negative)
Increase in payables from operating activities
-999,447,651.25 -899,325,589.68
(decrease: negative)
178
Other
Net cash flows generated from operating activities 1,115,585,087.77 5,538,058.12
2. Investing and financing activities that do not
involving -- --
cash receipts and payment:
Conversion of debt into capital
Convertible bond due within one year
Fixed assets financed by finance leases
3. Net increase in cash and cash equivalents -- --
Closing balance of cash 1,292,124,522.94 1,239,920,112.48
Less: Opening balance of cash 646,451,050.70 569,524,994.01
Add: Closing balance of cash equivalents
Less: Opening balance of cash equivalents
Net increase in cash and cash equivalents 645,673,472.24 670,395,118.47
(2) Information about acquisition or disposal of subsidiary and other business units in the
reporting period
Unit: RMB Yuan
Occurred in same period of last
Supplementary Information Occurred in reporting period
year
I. Information about acquisition of subsidiaries
-- --
and other business units:
1. Price of the acquisition of subsidiaries and
other business units
2. Cash and cash equivalents paid for the
acquisition of subsidiaries and other business
units
Less: Cash and cash equivalents held by
subsidiaries and other business units
3. Net cash paid for the acquisition of subsidiaries
and other business units
4. Net assets from the acquisition of subsidiaries 0.00 0.00
Current assets
Non-current assets
Current liabilities
None current liabilities
II. Information about disposal of subsidiaries and
-- --
other business units
1. Price of the disposal of subsidiaries and other
business units
2. Cash and cash equivalents received from the
disposal of subsidiaries and other business units
Less: Cash and cash equivalents held by
179
subsidiaries and other business units
3. Net cash received from the disposal of
subsidiaries and other business units
4. Net assets from the disposal of subsidiaries 0.00 0.00
Current assets
Non-current assets
Current liabilities
None current liabilities
(3) Composition of cash and cash equivalents
Unit: RMB Yuan
Item Closing amount Opening amount
I. Cash 1,292,124,522.94 646,451,050.70
Including: cash in hand 169,522.85 1,821,014.39
Bank deposit can be used for payment at any time 1,291,955,000.09 644,630,036.31
Other monetary funds can be used for payment at
any time
Deposits in central bank can be used for
payment
Deposits in other banks
Call loans to banks
II. Cash equivalents
Including: bond investments due within three months
III. Closing balance of cash and cash equivalents 1,292,124,522.94 646,451,050.70
Note to Supplementary Information of Cash Flow Statement
67. Note to changes in owners’ equity
Explain the “Other” items to be adjusted at the end of the first half year and the adjusted
amount; the retroactive adjustment due to consolidation of enterprises under the same control:
There wasn’t any adjustment.
(VIII) Accounting treatment of asset securitization business
1. Main transaction arrangements, accounting treatments and bankruptcy remoteness terms of asset
securitization
2. Special purpose entities that the company doesn’t own but bears the risks
Unit: RMB Yuan
Total
Total assets at Net assets at Operating
liabilities at Net profits of
Name the end of the end of revenue of Remark
the end of current period
period period current period
period
180
(Ⅸ) Relationship and Related Party Transactions
1. Particulars about the parent company:
Unit: RMB Yuan
Proporti
Proporti
ons of
ons of
parent
parent
Enter company’ Ultimate
Name of Rela Registr Legal company’
prise Business Registered Curr s controll Organizati
parent tion ation represe s voting
natur nature capital ency sharehol er of the on code
company ship place ntative right to
e ding to company
the
the
company
company
(%)
(%)
Cont State Travel
OCT roll -owne industry, OCT
Group ing d Shenzhe Ren property Group
6,100,000,000.00 CNY 19% 19% 19034617-5
Corporat shar share n Kelei industry and Corporat
ion ehol holdi electronics ion
der ng industry
Notes of the parent company of the Company:
Overseas Chinese Town Group Corporation is a large-scale state-owned enterprise, which was
founded on Nov. 11, 1985 with the approval of the State Council and belongs to one of the central
enterprises of State-owned Assets Supervision and Administration Commission of the State Council.
Its legal representative is Mr. Ren Kelei. Overseas Chinese Town Group Corporation has a
registered capital of RMB 6.1 billion, and the core businesses cover the tourism, real estate,
hotels and telecommunication
2. Subsidiaries of the Company
Unit: RMB Yuan
Propor
Proport
Full-name Legal tion
ion of
of Relationsh Registered repres Business Registered Curre of Organizatio
Type shares
subsidiar ip place entati nature capital ncy voting n code
held
ies ve right
(%)
(%)
Telecommu Mobile
Controllin Huang
nication Limited Shenzhen, communicat
g Zhongt 120,000,000.00 CNY 100% 100% 70848057-2
Technolog company Guangdong ion
subsidiary ian
y products
Video & Controllin Limited Shenzhen, He Developmen
15,000,000.00 CNY 60% 60% 72858645-4
Communica g company Guangdong Jianju t and sales
181
tion subsidiary n of
Systems commercial
Engineeri television
ng s
Controllin Lou
Precision Limited Shenzhen,
g Yilian Moulds 15,968,800.00 CNY 46.31% 52.49% 61881661-8
Mold company Guangdong
subsidiary g
Electronic
Konka Controllin Huang equipment,
Limited Shenzhen,
Electroni g Zhongt little 8,300,000.00 CNY 51% 51% 61881678-1
company Guangdong
c subsidiary ian appliances
products
Manufactur
ing and
Informati Controllin
Limited Shenzhen, Liu selling
on g 30,000,000.00 CNY 100% 100% 73416472-5
company Guangdong Fengxi digital
Network subsidiary
network
products
Plastic
Controllin
Plastic Limited Shenzhen, Sun product
g 9,500,000.00 CNY 100% 100% 61881662-6
Products company Guangdong Wenbo manufactur
subsidiary
ing
Video and
Controllin Huang audio
Limited Shenzhen,
Shushida g Zhongt products 42,000,000.00 CNY 100% 100% 70841244-9
company Guangdong
subsidiary ian and
components
Fittings Controllin Niu R&D of
Limited Shenzhen,
Technolog g Weidon electronic 65,000,000.00 CNY 100% 100% 70848057-2
company Guangdong
y subsidiary g components
Mudanjian
Controllin Mudanjiang Chuai Color
g Limited
g Heilongjia Rongwe television 60,000,000.00 CNY 60% 60% 72858645-4
Appliance company
subsidiary ng i products
s
Controllin Su Color
Shaanxi Limited Xianyang
g Zengme television 69,500,000.00 CNY 60% 60% 61881661-8
Konka company Shaanxi
subsidiary ng products
Controllin Color
Chongqing Limited Zhang
g Chongqing television 45,000,000.00 CNY 60% 60% 61881678-1
Konka company Xian
subsidiary products
Chongqing Controllin Limited Zeng Developmen
Chongqing 30,000,000.00 CNY 57% 57% 73416472-5
Electron g company Hui t and sales
182
ic subsidiary of
automotive
electronic
equipment
Electronic
Controllin Wang
Chongqing Limited coordinato
g Chongqing Xiaoyo 15,000,000.00 CNY 40% 40% 61881662-6
Qingjia company r and
subsidiary ng
tuners
Controllin Gong Color
Anhui Limited Chuzhou
g Zhipin television 140,000,000.00 CNY 78% 78% 70841244-9
Konka company Anhui
subsidiary g products
Manufactur
eof home
Ankang Controllin electronic
Limited Chuzhou Wang
Appliance g s and white 78,190,000.00 CNY 96.46% 97.45% 793892132
company Anhui Youlai
s subsidiary home
appliances
products
Manufactur
Controllin ing and
Changshu Limited Changshu Wang
g selling 24,650,000.00 CNY 60% 60% 60610286-1
Konka company Jiangsu Youlai
subsidiary electronic
products
Researchin
g,
designing
and
Controllin
Kunshan Limited Kunshan Chen manufactur
g 350,000,000.00 CNY 100% 100% 62310230-2
Konka company Jiangsu Yuehua ing liquid
subsidiary
crystal
modules and
flat panel
television
Controllin Yao Television
Dongguan Limited Dongguan
g Jianpi and audio 266,670,000.00 CNY 100% 100% 62192098-5
Konka company Guangdong
subsidiary ng products
Plastic
Controllin
Dongguan Limited Dongguan Li product
g 10,000,000.00 CNY 100% 100% 78155925-2
Packing company Guangdong Yunfei manufactur
subsidiary
ing
Dongguan Controllin Lou Manufactur
Limited Dongguan
Mould g Yilian ing moulds 10,000,000.00 CNY 59.73% 59.73% 62192187-3
company Guangdong
Plastic subsidiary g and plastic
183
products
Manufactur
ing and
selling
electronic
Controllin
Boluo Limited Bolo Lin s products
g 40,000,000.00 CNY 51% 51% 61056872-8
Konka company Guangdong Gaike such like
subsidiary
single-,
double-sid
ed circuit
boards
Manufactur
ing and
Controllin selling
Boluo Limited Bolo Lin
g electronic 15,000,000.00 CNY 100% 100% 74890634-7
Precision company Guangdong Gaike
subsidiary products as
high
density PCB
R&D of flat
panel
Controllin
Nanhai Limited Foshan Lin display
g 500,000.00 CNY 100% 100% 62822347-X
Institute company Guangdong Gaike technologi
subsidiary
es and
products
Exporting
and
Controllin Huang importing
Hongkong Limited Hong Kong
g Zhongt machinery 500,000.00 HKD 100% 100% 68053275-5
Konka company China
subsidiary ian and
electronic
products
Konka
Household Investment
Controllin Niu
Appliance Limited Hong Kong and
g Weidon 500,000.00 HKD 100% 100% 61811698-8
s company China shareholdi
subsidiary g
Investmen ng
t
Konka
Household
Controllin Niu
Appliance Limited Hong Kong Internatio
g Weidon 500,000.00 HKD 100% 100% 722456042
s company China nal trade
subsidiary g
Internati
onal
184
Trading
Controllin Selling
KONKA Limited Chang
g USA electronic 1,000,000.00 USD 100% 100% 75109846-7
AMERICA company Dong
subsidiary products
Controllin Frankfurt, Selling
Konka Limited Chang
g German, electronic 25,000.00 EUR 100% 100% 72112128-3
Europe company Dong
subsidiary Europe products
Manufactur
Controllin Xiang
Dongguan Limited Dongguan, ing moulds
g Tiansh 5,000,000.00 CNY 46.31% 52.49% 79931260-8
Xutongda company Guangdong and plastic
subsidiary un
products
Technology
developmen
t, sales
Konka Controllin
Limited Shenzhen, Lin and
Optoelect g 10,000,000.00 CNY 100% 100% 68243005-8
company Guangdong Gaike maintenanc
ronic subsidiary
e of liquid
crystal
mode
Developmen
Controllin t and
Limited Shenzhen, Lin
Wankaida g maintenanc 10,000,000.00 CNY 100% 100% -
company Guangdong Gaike
subsidiary e of
software
Real estate
Controllin investment
Kunshan Limited Kunshan, Sun
g and 350,000,000.00 CNY 100% 100% -
Kangsheng company Jiangsu Wenbo
subsidiary developmen
t
Manufactur
Anhui Controllin Xia e of house
Limited Chuzhou,
Tongchuan g Guangb appliances 180,000,000.00 CNY 100% 100% -
company Anhui
g subsidiary ei refrigerat
ion
Controllin Selling
Indonesia Limited Chang
g Indonesia electronic 1,500,000.00 USD 51% 51% -
Konka company Dong
subsidiary products
Controllin Niu
Shushida Limited Shenzhen Ordinary
g Weidon 10,000,000.00 CNY 100% 100% -
Logistics company Guangdong cargo
subsidiary g
Beijing Controllin Limited Chen Selling
Beijing 30,000,000.00 CNY 100% 100% 69649113-4
Konka g company Yuehua electronic
185
Electroni subsidiary products
c
Manufactur
Controllin Lou
Kunshan Limited Kunshan ing moulds
g Yilian 100,000,000.00 CNY 46.31% 52.49% 55719393-8
Jielunte company Jiangsu and plastic
subsidiary g
products
186
3. Particulars on joint ventures and associated enterprises of the Company
Unit: RMB Yuan
Propo
rtion Proport Operatin
Total
Legal of ion of Total assets g revenue Net profits Organi
Business Registrat Business Registered Currenc Organizatio liabilities Relatio
Item represent holdi voting at the end of of of current zation
Type ion place scope capital y n code at the end of nship
ative ng rights period current period code
period
share (%) period
s (%)
I. Joint
-- -- -- -- -- -- -- -- -- -- -- -- -- -- --
ventures
II.
Associate
d -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
enterpris
es
Chongqing Manufactu
ring and
Jingkang
Limited Wang processin 12,000,000. 31.25 4,554,396.0
Plastic Chongqing CNY 31.25% 1,854,714.87 2,699,681.19 -216,563.92
company Xiaoyong g of 00 % 6
Products
module
Co., Ltd
products
Shenzhen Manufactu
Refond Limited Gong ring and 107,000,000 19.34
Shenzhen CNY 19.34%
Optoelect company Weibin selling .00 %
ronics LEDs
187
Co., Ltd
New
Shenzhen energy
Konka products
Limited Dong 20,000,000.
Energy Shenzhen for CNY 30% 30%
company Yaping 00
Technolog mobile
y Co., Ltd equipment
, etc.
EnRay Tek
Optoelect Manufactu
ronics Limited Zhang ring and 50,000,000. 421,683,141 127,308,775. 294,374,365. 92,868.7 -3,938,359.
Shanghai USD 36% 36%
(Shanghai company Rujing selling 00 .30 70 60 2 00
) Co., LEDs
Ltd.
KONRAY
INTERNATI
ONAL Limited Zhang Investmen 50,000,000.
Hong Kong HKD 38% 38%
DEVELOPME company Xiaohui t 00
NT
LIMITID
188
4. Other related parties of the Company
Name Relationship Organization code
Shenzhen OCT East Co., Ltd Same actual controller 75252879-9
Shanghai OCT Investment Development
Same actual controller 78589775-0
Co., Ltd
Chengdu Tianfu OCT Industrial
Same actual controller 78012858-1
Development Co., Ltd
Beijing Century OCT Industrial Co.,
Same actual controller 74005033-7
Ltd
Taizhou OCT Co., Ltd Same actual controller 79457788-X
Shanghai Tianxiang OCT Investment
Same actual controller 74805502-8
Co., Ltd
Anhui Huali Packaging Co., Ltd Same actual controller 76276957X
Chongqing Machinery & Electronics
Shareholder of subsidiary 45041726-8
Holding (Group) Co., Ltd
OCT Hotel Group Same actual controller 71524077-X
Shenzhen OCT Water and Power Co., Ltd Same actual controller 19217869-7
Shanghai Huali Packaging Co., Ltd Same actual controller 60737971-5
Shenzhen Huayou Packaging Co., Ltd Same actual controller 76198355-8
Shenzhen Huali Packing & Trading Co.,
Same actual controller 61881654-6
Ltd
Huali Packaging (Huizhou)Co.,Ltd. Same actual controller 68061271-2
Shenzhen Overseas Chinese Town Gas
Same actual controller 70849783-3
Station Co., Ltd.
Dongyangyi Industry Co., Ltd Shareholder of subsidiary -
Wuhan OCT Industry Development Co.,
Same actual controller 69531802-2
Ltd.
Notes:
5．Related party transactions
(1) Purchase of goods, services received among the related-party
Unit: RMB Yuan
Occurred in same period
Occurred in reporting period
Pricing of last year
Content of related
Name of company principle of Proportion in Proporti
transaction
related parties Amount transactions Amount on in
of the same transact
189
kind ions of
the same
kind
Anhui Huali Purchase of package
Negotiated price 10,011,593.75 0.17% 13,753,884.21 0.24%
Packaging Co., Ltd materials
Shanghai Huali Purchase of package
Negotiated price 5,459,192.10 0.1% 12,903,160.58 0.22%
Packaging Co., Ltd materials
Guangzhou Panyu
Huali Youde Color Purchase of package
Negotiated price 1,528,190.30 0.03%
Printing and materials
Packing Co., Ltd.
Huali Packaging
Purchase of package
(Huizhou) Negotiated price 3,913,890.03 0.07% 3,906,092.28 0.07%
materials
Co.,Ltd.
Shenzhen Overseas
Chinese Town Hotel Hotel room repast Market price 301,754.03 0.01% 1,062,529.69 0.02%
Group Co., Ltd.
Shenzhen OCT Water Water and
Negotiated price 3,804,189.78 0.06% 2,967,794.10 0.05%
and Power Co., Ltd electricity
Statement of sales of goods and rendering of services
Unit: RMB Yuan
Occurred in reporting Occurred in same period of
period last year
Proporti Proporti
Pricing
Content of related on in on in
Name of company principle of
transaction transact transact
related parties Amount Amount
ions of ions of
the same the same
kind kind
Shenzhen OCT East
Selling LCDs Negotiated price 435,000.00 0.88% 1,256,410.26 3.22%
Co., Ltd
Chengdu Tianfu OCT
Industrial
Selling LCDs Negotiated price 380,000.00 0.77% 1,435,897.44 3.68%
Development Co.,
Ltd.
OCT Urban
Entertainment
Investment Selling LCDs Negotiated price 2,400,000.00 4.87%
Company of
Shenzhen
Wuhan OCT Industry
Selling LCDs Negotiated price 7,717,471.00 15.67%
Development Co.,
190
Ltd.
InterContinental
Selling LCDs Negotiated price 695,000.00 1.41%
Shenzhen
Shenzhen Window of
the World Co., Selling LCDs Negotiated price 5,000.00 0.01%
Ltd.
(2) Particulars about related trusteeship and guarantees
Table of particulars about trusteeship/contracting of the company
Unit: RMB Yuan
Trust /
Trust/con
Informatio Amount of Initial Ending Pricing contract
Name of Name of Type of the tract
n of the date of date of basis for income
entrusting trustee entrusted/ income
entrusted/ entrusted/ being being the trust / recognize
party/cont /contracto contracted effect on
contracted contracted entrusted/ entrusted/ contract d in the
ractee r assets the
assets assets contract contract income reporting
Company
period
Information of entrusting management/contracted
Unit: RMB Yuan
Trust / Entrustin
Informatio Amount of Initial Ending Pricing contract g /
Name of Name of Type of the
n of the date of date of basis for fee contracte
entrusting trustee entrusted/
entrusted/ entrusted/ entrusting entrusting the trust / recognize d income
party/cont /contracto contracted
contracted contracted / being / being contract d in the effect on
ractee r assets
assets assets contracted contracted fee reporting the
period Company
Notes
(3)Information of related-party lease
Rental situation of the Company
Unit: RMB Yuan
Rental
Rental
Category Informatio Pricing income
Amount of income
Name of Name of of the n of the Initial Ending basis for recognize
the leased effect on
lessor lessee leased leased date date the rental d in the
assets the
assets assets income reporting
Company
period
Lease situation of the Company
Unit: RMB Yuan
191
Lease
Rental
Category Informatio Pricing charges
Amount of income
Name of Name of of the n of the Initial Ending basis for recognize
the leased effect on
lessor lessee leased leased date date the lease d in the
assets the
assets assets charges reporting
Company
period
Notes:
(4)Information of related-party guarantee
Unit: RMB Yuan
Whether the
guarantee was
Guarantor Secured party Guarantee amount Initial date Due date
accomplished or
not
Notes
(5)Related-party call loan
Unit: RMB Yuan
Related party Amount of call loan Initial date Due date Note
Loan from banks and other financial institutions
OCT Group 100,000,000.00 16 Sep. 2010 1 Aug. 2013 Entrust loan
OCT Group 100,000,000.00 15 Apr. 2010 31 Jul. 2013 Entrust loan
OCT Group 300,000,000.00 16 Nov. 2011 31 Jul. 2013 Entrust loan
OCT Group 100,000,000.00 17 Mar. 2011 4 Mar. 2016 Entrust loan
OCT Group 100,000,000.00 9 Jan. 2012 12 Dec. 2016 Entrust loan
OCT Group 300,000,000.00 13 Mar. 2012 13 Jul. 2013 Entrust loan
Lending to banks and other financial institutions
(6)Information about assets transfer, debt reorganization of related parties
Unit: RMB Yuan
Pricing method Occurred in reporting Occurred in same period of
Type of and period last year
related decision-makin
Content of the
Related party party g procedures
transaction
transacti for the Amount Proportion (%) Amount Proportion (%)
on related-party
transaction
(7)Other related-party transaction
192
6. Amounts due from/to related parties
Amount due from related parties
Unit: RMB Yuan
Name of item Related party Closing balance Opening balance
Accounts
Shenzhen OCT East Co., Ltd 886,515.00 1,107,015.00
receivable
Accounts Chengdu Tianfu OCT Industrial
190,512.40 1,123,600.00
receivable Development Co., Ltd.
Accounts
Taizhou OCT Co., Ltd. 47,100.00 198,100.00
receivable
Accounts OCT Urban Entertainment Investment
2,970,000.00 570,000.00
receivable Company of Shenzhen
Accounts
InterContinental Shenzhen 695,000.00
receivable
Accounts SHENZHEN SPLENDID CHINA DEVELOPMENT
556,000.00
receivable COMPANY LTD.
Accounts
Shenzhen Window of the World Co., Ltd. 5,000.00
receivable
Accounts Wuhan OCT Industry Development Co.,
2,150,483.00
receivable Ltd.
Accounts
Shenzhen OCT East Interlaken Hotel 83,000.00
receivable
Other
accounts Shenzhen OCT Gas Station Co., Ltd 80,000.00 80,000.00
payable
Other
accounts Shenzhen OCT Real Estate Co., Ltd 1,216,264.86 1,216,264.86
payable
Other
Shenzhen OCT Property Management Co.,
accounts 77,402.65 77,402.65
Ltd
payable
Other
accounts Shenzhen OCT Water and Power Co., Ltd 1,183,539.44 963,359.57
payable
Accounts payable to related-party of the Company
Unit: RMB Yuan
Name of item Related party Closing balance Opening balance
Accounts receivable Chongqing Jingkang Plastic Co., Ltd. 202,407.08 202,407.08
Accounts receivable Shenzhen Dekon Electronic Co., Ltd 356,545.32 356,545.32
193
Accounts receivable Anhui Huali Packaging Co., Ltd. 3,353,849.74 3,213,768.67
Shenzhen Huali Packing and Trading
Accounts receivable 13,957.02 13,957.02
Co., Ltd.
Accounts receivable Huali Packaging (Huizhou)Co.,Ltd. 2,178,794.25 2,832,456.06
Accounts receivable Shanghai Huali Packaging Co., Ltd. 1,906,251.71 1,164,324.73
Notes payable Huali Packaging (Huizhou)Co.,Ltd. 892,511.81 4,445,774.47
Notes payable Anhui Huali Packaging Co., Ltd. 3,520,128.10 5,231,145.28
Notes payable Shanghai Huali Packaging Co., Ltd. 2,938,603.05 3,364,866.44
Receivables in Wuhan OCT Industry Development Co.,
1,286,988.00
advance Ltd.Limited company
Other accounts
Shanghai Huali Packaging Co., Ltd. 480,000.00
payable
Other accounts Shenzhen Huali Packing and Trading
50,000.00 50,000.00
payable Co., Ltd.
(X) Share-based Payment
1. Overview of share-based payment
Total of each equity instrument granted
by the Company in the reporting period
Total of each equity instrument excised
by the Company in the reporting period
Total of each equity instrument expired
in the reporting period
Scope of excising price and remaining
contract term of stock options that
externally issued as at the period-end
Scope of excising price and remaining
contract term of other equity instruments
as at the period-end
Notes:
2. Information of equity-settled share-based payment
Unit: RMB Yuan
Recognition method on fair value of equity instruments
at the grant date
Recognition method on the best estimate of the number
of vesting equity instruments
Reason for significant differences of estimate between
the reporting period and the same period of last year
Accumulated amount of equity-settled share-based
payment in capital reserves
Total expense recognized for the equity-settle
share-based payment
Notes:
194
3. Information of cash-settled share-based payment
Unit: RMB Yuan
Recognition method of fair value of liabilities that are
born by the Company and calculated basing on stocks or
other equity instruments
Accumulated amount of liabilities that arising from
cash-settled share-based payment
Total expense recognized for the cash-settle share-based
payment
Notes:
4. Information of share-based payment service
Unit: RMB Yuan
Total employee service exchanged by share-based payment
Total other service exchanged by share-based payment
5. Modification, termination of share-based payment
(XI) Contingency
1. Contingent liabilities and its financial effect arising from unsettled litigation or
arbitration
As of 19 Dec. 2007, the Design, Manufacture and Erection Contract for the Beijing Pangu Large-scale
Outdoors Full-Color LED Display Screen (Turn-key Project) (hereinafter referred to as the
“Contract Agreement”) was made by and between the subsidiary of Company-Shenzhen Konka Video
& Communication Systems Engineering Co., Ltd., (hereinafter referred to as Shenzhen Konka Video
& Communication) and Beijing Pangu Investment Co., Ltd. (hereinafter referred to as the “Pangu
Company”), stipulating that the total project period shall be 120 days, the contracted budget
price of total engineering payment shall be RMB 103,357,500. With six apartments, hotels and
commercial houses of 3,707.70 ㎡ at a total price of RMB 103,357,500 located at Beisihuan M.
Road, Chaoyang District, Beijing in pledge, Pangu Company and Konka Video & Communication entered
into the Advance Sale for Beijing Commercial Building (hereinafter referred to as the “Advance
Sale Contract”) numbered [Y581455], [Y581458], [Y581459], [Y581460], [Y581461] and [Y581462].
Meanwhile, both parties have entered into the Supplementary Agreement with provisions as follows:
① Beijing Pangu, prior to 30 Mar. 2009, shall pay the total construction cost amounting to RMB
103,357,500 in a lump sum to Shenzhen Konka Video & Communication. ② Termination of the Advance
Agreement: The agreement terminates automatically where Beijing Pangu deposits the payment of
RMB 103,357,500 to the account of Shenzhen Konka Video & Communication prior to 30 Mar. 2009.
Shenzhen Konka Video & Communication returns pledged apartments and receipts to Beijing Pangu
and assists Beijing Pangu in canceling the Advance Agreement. The responsibilities and
195
obligations of both parties arising from the Advance Agreement are terminated.
After the completion of the project, Shenzhen Konka Video & Communication delivered LED displays
to Beijing Pangu in Jul. 2008 prior to the start of Beijing Olympic Games. In Mar. 2009, the
project was accepted after the joint acceptance inspection by the involved engineering
supervision entity, design entity, Beijing Pangu and Shenzhen Konka Video & Communication and
Shenzhen Konka Video & Communication delivered all engineering documents to Beijing Pangu.
Shenzhen Konka Video & Communication performed all its responsibilities under the agreement,
however Beijing Pangu failed to perform its responsibilities. As of the date when the financial
report was approved to issue, Shenzhen Konka Video & Communication did not receive the account
receivable from Beijing Pangu amounting to RMB 103,357,500 and the Advance Agreement is not
terminated.
Shenzhen Konka Video & Communication raised a civil litigation to Beijing Higher People’s Court
on 13 Jul. 2009 and submitted an application for attachment at the same day to seal up Apartment
1001, 1101, 1201, 1501, 1601 and 1701 in Unit 5 and Apartment 1001, 1101 and 901 in Unit 6 in
Beijing Mogan 7 Star Plaza at Beisihuan M. Road, Chaoyang District, Beijing or freeze properties
or assets of the respondent, amounting to RMB 150,609,219.00.
On 17 Aug. 2009, Beijing Higher People’s Court issued GMCZ (2009) No. 4237 Civil Ruling Paper
and sealed up the property amounting to RMB 150,609,219 owned by Beijing Pangu.
After hearing, Beijing Higher People's Court consigned Beijing Price Certification Center to
conduct the price identification for involved project. The certification center provided price
certification conclusion paper on January 17, 2011, indentifying object cost of RMB
100,837,125.00 yuan. After the court opening for evidence, the certification center provided
indentified conclusion after adjustment on March 21. The conclusion is identifying that the object
cost is RMB 99,396,113.73 yuan according to the amount on volume method; the object cost is
indentified with RMB 103,274,987.25 yuan according to the calculation of actual cost.
On April 2, 2011, Beijing Higher People's Court held a court again for cross-examination with
adjusted identification conclusion.
Beijing Higher People ’
s Court issued on 15 May 2012 the first instance verdict as follows: A. Beijing Pangu Inves
tment Co., Ltd. shall, within 10 days after this verdict takes effect, hand over the six re
al estate units of the Seven Star Morgan Square Apartments located on the North 4th Ring Mi
ddle Road, Chaoyang District, Beijing under the Commercial House Pre-sale Contract of Beiji
ng to Shenzhen Konka Video & Communication Systems Engineering Co., Ltd.. And Beijing Pangu
Investment Co., Ltd. shall handle the real estate transfer formalities for Shenzhen Konka
Video & Communication Systems Engineering Co., Ltd., with Beijing Pangu Investment Co., Ltd.
bearing all the expenses and taxes arising from these formalities. B. Other claims of Shen
zhen Konka Video & Communication Systems Engineering Co., Ltd. are overruled. C. Other clai
ms of Beijing Pangu Investment Co., Ltd. are overruled.
196
Currently, both parties have appealed to the Supreme Court. Up to the date when this financ
ial report is approved for issue, Beijing Higher People ’
s Court has not made a new decision about this case.
2. Contingent liabilities and its financial effect arising from loan guarantee offered to other
companies
Other contingent liabilities and its financial effect:
1. Use of letters of credit
In the first half of 2012, the Company has issued letters of credit with a total amount of RMB2.113
billion, made payment with a total amount of RMB2.635billion; of which the amount of RMB0.995
billion was used for the payment of letters of credit in the first half of 2012. and RMB1.640
billion for that in 2011. The remaining payment was converted into RMB1.1billion, of which
including pending payment of RMB1.021 to Konka Household Appliances International Trading. The
pending payment excluding payment that was due but non-required by the counter party or cancelled
ones.
2. Other contingent liabilities and the effects on financial affairs
As of 30 Jun. 2012, the Group hasn’t any other significant contingent events that need to be
disclosed.
(XII) Commitments
1. Significant commitments
As of 30 Jun. 2012, the Group hasn’t any significant commitments issues that need
to be disclosed.
2. Fulfillment of previous commitments
(XIII)Events after the Balance Sheet Date
1. Notes of significant events after the Balance Sheet Date
Unit: RMB Yuan
Influence number on Reason for failing to
Item Details financial status and estimate the influence
operating results number
2. Notes of profit distribution after Balance Sheet Date
Unit: RMB Yuan
Drafted distributed profit or dividends
Profit or dividends claimed to distribute after review
12,039,727.04
and approval
3. Notes of other events after Balance Sheet Date
Notes of inportant events after Balance Shee Date:
197
(1) On 31 Jul. 2012, the Company returned back in advance the entrust loan of RMB 300 million
in the entrusted loan contract of Jian-Shen-Wei-Dai No. 2010018 signed between the parent
company of Company—OCT Group and Shenzhen Branch of CBC.
(2) On 11 Jul. 2012, the Company signed an entrusted loan contract of Xin-Shen-Wei-Dai No. 003
with its parent company—OCT Group and Shenzhen Branch of China CITIC Bank Corporation Limited.
According to the contract, OCT Group entrusted Shenzhen Branch of China CITIC Bank Corporation
Limited to provide a loan of RMB 300 million to the Company, with a valid period from 12 Jul.
2012 to 20 Apr. 2013 and an annual interest rate of 4.96%. And the Company will use the loan
as turnover capital.
(3) On 11 Jul. 2012, the Company signed an entrusted loan contract of Xin-Shen-Wei-Dai No. 003
with its parent company—OCT Group and Shenzhen Branch of China CITIC Bank Corporation Limited.
According to the contract, OCT Group entrusted Shenzhen Branch of China CITIC Bank Corporation
Limited to provide a loan of RMB 200 million to the Company, with a valid period from 23 Jul.
2012 to 1 Jun. 2015 and an annual interest rate of 5.51%. And the Company will use the loan as
turnover capital.
(4) On 4 Jul. 2012, the Company, Shenzhen Konka Communication Technology Co., Ltd. and Shenzhen
Branch of Bank of China entered into the Credit Line Agreement numbered “2012 ZZYEX Zi No. 000016”
stipulating that the loan, valid from 4 Jul. 2012 to 4 Jul. 2013, shall not exceed the comprehensive
credit line of RMB 5,300,000,000 (Of which, line of bank acceptance bill as RMB 1 billion, line
of trading financing as RMB 3.9 billion, line of L/C without guarantee as RMB 0.3 billion, line
of foreign currency transaction as RMB 0.1 billion). According to the Agreement, the Company
shall be the accredited party, and Shenzhen Konka Communication Technology Co., Ltd. shall be
the authorized withdrawer. On 4 Jul. 2012, the Ceiling Amount Mortgage Contracts numbered ZZYEX
Zi [2012] No. 000016 and ZZYSZE Zi [2012] No. 0003 were made between the Company and Shenzhen
Branch of Bank of China, the Company’s subsidiary Konka Communication and Shenzhen Branch of
Bank of China respectively. As stipulated, the Company’s banker’s acceptance bill of not less
than RMB 1.3 billion and its margin account with No. 82100364308401001, shall be pledged to secure
all liabilities incurred under the Credit Line Agreement.
2. Notes about particulars of profit distribution after the Balance Sheet Date
On 20 Apr. 2012, the Group convened the 26th Session of the Seventh Board of Directors,
of which approved Preplan on Profit Distribution for Y2011: based on the total share
capital of 1,203,972,704 shares at the end of 2011, the Company distributed RMB0.10
(tax included) as cash bonus for every 10 shares to all shareholders. The above profit
distribution plan has been reviewed and appoved by the Shareholders’ General Meeting
2011 convened on 15 Jun. 2012, and the cash bonus has made payment in Jul. 2012.
198
(XIV) Notes of other significant events
1. Exchange of non-monetary assets
2. Debt reorganization
3. Business combination
4. Lease
5. Closing financial instruments that externally issued and convertible into shares
6. Main content and significant changes of annuity plan
7. Other significant events
1. Assets and liabilities calculated by fair value
Item 31 Dec. 2011 Income from Accrued fair 30 Jan. 2012
fair value value change
change in that is
reporting recognized
period into equity
Financial assets
Financial assets available for 6,408,065.70 -4,496,523.44 -1,266,515.97 1,045,232.10
sale
Total financial assets 6,408,065.70 -4,496,523.44 -1,266,515.97 1,045,232.10
Financial liabilities
Financial liabilities measured 22,101,173.97 22,101,173.97 -
at fair value and of which the
change was recorded into
current year
Total financial liabilities 22,101,173.97 22,101,173.97 -
2. Financial assets and financial liabilities of foreign currency
Item 31 Dec. 2011 Income from Accrued fair Withdrawal of 30 Jun. 2012
fair value value change impairment in
change in that is reporting
reporting recognized period
period into equity
Financial assets
Monetary funds 180,275,949.82 - - 315,266,130.13
Loans and accounts 365,769,233.20 - - 273,130,826.95
receivable
Accounts paid in 9,277,443.43 - - 3,643,238.11
advance
Subtotal of financial 555,322,626.45 592,040,195.19
assets
199
Financial
liabilities
Accounts payable 1,790,980,983.94 - - - 278,372,879.10
Derivative financial 22,101,173.97 22,101,173.97 - - -
liabilities (NDF)
Subtotal of financial 1,813,082,157.91 278,372,879.10
liabilities
3. On 14 Oct. 2011, the 2 Administration Bureau directly under the Urban Planning, Land and
nd
Resources Commission of Shenzhen Municipality unveiled the Circular on Plant Renewal Unit
Planning (Draft) of the Headquarters of Konka Group in Nanshan District, Shenzhen on Shenzhen
Economic Daily, which meant that the Company’s Plant Renewal Unit Planning (Draft) of the
Headquarters passed the examination of the Urban Planning, Land and Resources Commission of
Shenzhen Municipality through a technological conference.
4. On 6 Jul. 2011, the People’s Government of Chuzhou Municipality issued the Reply on Agreeing
to Collect State-owned Land Use Right of Anhui Konka Electronics Co., Ltd. (Chu-Zheng-Mi [2011]
No. 140). On 1 Dec. 2011, the Administration Committee of Chuzhou Economic & Technological
Development Zone signed the Agreement with Anhui Konka, one of the Company’s subsidiaries.
According to the Agreement, Chuzhou Land Reserve Center would collect the use right of the
state-owned land with an area of 67,730 square meters (land certificate No. Chu-Guo-Yong [2007]
No. 00562) of Anhui Konka located at No. 99 Xin’an Road, Chuzhou Economic & Technological
Development Zone. The Administration Committee of Chuzhou Economic & Technological Development
Zone would pay a compensation of RMB 50 million to Anhui Konka in stages, i.e. RMB 10 million
before 31 Dec. 2011, RMB 10 million before 31 Jul. 2012 and the rest before 30 Nov. 2012. Up
to 30 Jun. 2012, Anuhui Konka received land compensation of RMB20 million in total.
5 On 26 Dec. 2011, the Proposal on Transferring Equity Interests of Mudanjiang Arctic Ocean
st th
Appliances Co., Ltd. was reviewed and approved at the 21 Session of the 7 Board of Directors.
Based on the net asset evaluation value (RMB 43.2222 million) of 60% equity interests of Mudanjiang
Arctic Ocean (previously known as “Mudanjiang Konka Industrial Co., Ltd.”, and renamed as
“Mudanjiang Arctic Ocean Appliances Co., Ltd.” in Mar. 2011), the Company intended to put 60%
equity interests of Mudanjiang Arctic Ocean for sale through public listing. On 18 Aug. 2012,
the Company decided to temporary cancel the sale of 60% equity interest of Mudanhuabg Arctic
Ocean through public listing. If the said equity was continued to be listing for sale, the Company
would perform responsibility of disclosing information in time.
6. Shaanxi Konka entered into shutdown stage due to market reason and the strategic adjustment
of the Company. On 12 Jan. 2012, the Plan of Shaanxi Konka about Economic Compensations for
th
Employees Dismissed due to Economic Reasons was reviewed and approved at the 7 Session of the
200
4th Board of Directors of Shaanxi Konka, one of the Company’s subsidiaries. According to the
Plan, the economic compensation for the relevant employees was about RMB 20.1634 million. As
to 30 Jun. 2012, Shaanxi Konka recognized the book value of projected liability of RMB17.4139.
7. Losses have occurred in Chongqing Electronic, Chongqing Konka and Mudanjiang Konka, subsidiary
companies of the Company in successive years and their operating activities are virtually stopped.
At of the date of the financial report was approved to issue, the Company has not made any decision
to stop operating activities of these companies.
8. Changshu Konka Electronic Co., Ltd., the Company’s subsidiary, is under the liquidation.
(XV) Notes of main items in the financial statements of the Company
1. Accounts receivable
(1) Accounts receivable
Unit: RMB Yuan
Closing balance Opening balance
Book balance Provision for bad debts Book balance Provision for bad debts
Prop
Category Propor
orti Proporti Proport
Amount Amount tion Amount Amount
on on (%) ion (%)
(%)
(%)
Accounts receivable
with significant
single amount and
individually
withdrawn bad debt
provision
Accounts receivable for which bad debt provisions are made on the group basis
Aging group 1,074,876,547.38 100% 197,873,024.10 18.41% 1,410,932,829.02 95.63% 202,639,314.02 13.73%
Grouping of related
parties within the 64,499,648.17 4.37%
Group
Subtotal of the groups 1,074,876,547.38 100% 197,873,024.10 18.41% 1,475,432,477.19 100% 202,639,314.02 13.73%
Accounts receivable
with insignificant
single amount but
individually
withdrawn bad debt
provision
Total 1,074,876,547.38 -- 197,873,024.10 -- 1,475,432,477.19 -- 202,639,314.02 --
Notes to category of accounts receivable:
Accounts receivable with significant single amount and individually withdrawn bad debt provision at period-end
□Applicable √Inapplicable
In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
201
√Applicable □Inapplicable
Unit: RMB Yuan
Closing balance Opening balance
Book balance Book balance
Aging Propor Provision for Propor Provision for bad
Amount tion bad debts Amount tion debts
(%) (%)
Within 1 year
Including: -- -- -- -- -- --
Within 1
876,530,710.28 81.55% 17,367,768.39 1,224,466,900.04 82.99% 23,694,653.24
year
Subtotal of
within 1 876,530,710.28 81.55% 17,367,768.39 1,224,466,900.04 82.99% 23,694,653.24
year
1-2 years 14,421,466.70 1.34% 721,073.34 5,819,116.98 0.39% 290,955.85
2-3 years 3,915,861.98 0.36% 783,172.40 1,562,489.30 0.11% 312,497.86
Over 3 years 180,008,508.42 16.75% 179,001,009.97 179,084,322.70 12.14% 178,341,207.08
3-4 years 1,076,946.50 0.1% 538,473.25 573,883.72 0.04% 286,941.86
4-5 years 938,050.40 0.09% 469,025.20 912,347.52 0.06% 456,173.76
Over 5 years 177,993,511.52 16.56% 177,993,511.52 177,598,091.46 12.04% 177,598,091.46
Total 1,074,876,547.38 -- 197,873,024.10 1,410,932,829.02 -- 202,639,314.02
In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision:
□Applicable √Inapplicable
In the groups, accounts receivable adopting other methods to withdraw bad debt provision:
□Applicable √Inapplicable
Accounts receivable with insignificant single amount but individually withdrawn bad debt provision at period-end:
□Applicable √Inapplicable
(2)Information of accounts receivable reversed or recovered in reporting period
Unit: RMB Yuan
Withdrawal amount of
Basis on recognition
Content of accounts Reason for reversal bad debt provision Reversed or recovered
of provision for bad
receivable or recovery before the reversal or amount
debts
recovery
Total -- -- --
The withdrawal of bad debt provision of accounts receivable with significant single amount or insignificant single
amount but individually made impairment test at the end of report period:
Content of accounts Withdrawal proportion
Book value Bad debt amount Reason
receivable (%)
202
Total -- --
Notes to accounts receivable with insignificant single amount but large risks of groups after grouping by credit
risks characteristic:
(3) Information of accounts receivable that written off in reporting period
Unit: RMB Yuan
Whether arising
from
Name of company Nature Date Amount Reason
related-party
transaction or not
Total -- -- -- --
Notes:
(4) Information of shareholders with more than 5% (including 5%) of the voting shares of the
Company in accounts receivable in report period
□Applicable √Inapplicable
(5)Nature or content of other accounts receivable with significant amount
(6) Top five accounts receivable
(7) Accounts receivable due from related parties
Unit: RMB Yuan
Name of company Relationship Amount Proportion (%)
Total --
(8)
RMB0.00 was transferred from the accounts receivable not satisfying the conditions of termination
recognition.
(9) If securitization is carried out on accounts receivable as the underlying asset, please brief
on the arrangement of relevant transactions
2. Other accounts receivable
(1) Other accounts receivable
Unit: RMB Yuan
Closing balance Opening balance
Provision for bad Provision for bad
Book balance Book balance
debts debts
Category
Propo Propor
Proport Proport
Amount rtion Amount tion Amount Amount
ion (%) ion (%)
(%) (%)
Other accounts
receivable with
significant single
203
amount and individually
withdrawn bad debt
provision
Other accounts receivable for which bad debt provisions are made on the group basis
Aging group 81,099,015.75 14.19% 15,692,163.20 19.35% 60,068,994.97 9.47% 15,691,056.86 23.97%
Grouping of related
490,489,766.41 85.81% 28,269,364.86 5.76% 574,176,780.82 90.53% 27,887,027.95 4.9%
parties within the Group
Subtotal of the groups 571,588,782.16 100% 43,961,528.06 7.69% 634,245,775.79 100% 43,578,084.81 6.87%
Other accounts
receivable with
insignificant single
amount but individually
withdrawn bad debt
provision
Total 571,588,782.16 -- 43,961,528.06 -- 634,245,775.79 -- 43,578,084.81 --
Notes of category:
Other accounts receivable with significant single amount and individually withdrawn bad debt provision at
period-en:
□Applicable √Inapplicable
In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision:
√Applicable □Inapplicable
Unit: RMB Yuan
Closing balance Opening balance
Book balance Book balance
Aging Propor Propor
Bad debt provision Bad debt provision
Amount tion Amount tion
(%) (%)
Within 1 year
Including: -- -- -- -- -- --
Within 1 year 59,998,626.96 73.98% 936,720.86 37,176,315.90 61.89% 637,171.03
Subtotal of
59,998,626.96 73.98% 936,720.86 37,176,315.90 61.89% 637,171.03
within 1 year
1-2 years 4,116,783.25 5.08% 205,839.16 4,287,927.40 7.14% 214,396.37
2-3 years 1,003,212.24 1.24% 200,642.45 2,819,738.85 4.69% 563,947.77
Over 3 years 15,980,393.3 19.70% 14,348,960.7 15,785,012.8 26.28% 14,275,541.7
3-4 years 2,801,779.50 3.45% 1,400,889.75 2,557,856.63 4.26% 1,278,928.32
4-5 years 461,085.64 0.57% 230,542.82 461,085.64 0.77% 230,542.82
Over 5 years 12,717,528.16 15.68% 12,717,528.16 12,766,070.55 21.25% 12,766,070.55
Total 81,099,015.75 -- 15,692,163.20 60,068,994.97 -- 15,691,056.86
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision:
204
□Applicable √Inapplicable
In the groups, other accounts receivable adopting other methods to withdraw bad debt provision:
√Applicable □Inapplicable
Unit: RMB Yuan
Content of group Book value Bad debt provision
Grouping of related parties within group 490,489,766.41 28,269,364.86
Total 490,489,766.41 28,269,364.86
Other accounts receivable with insignificant single amount but individually withdrawn bad debt provision at
period-end:
□Applicable √Inapplicable
(2) Information of other accounts receivable reversed or recovered in the reporting period
Unit: RMB Yuan
Withdrawal amount of
Basis on recognition
Content of other accounts Reason for reversal bad debt provision Reversed or recovered
of provision for bad
receivable or recovery before the reversal or amount
debts
recovery
Total -- -- --
The withdrawal of bad debt provision of other accounts receivable with significant single amount or insignificant
single amount but individually made impairment test at the end of report period:
Content of other Withdrawal proportion
Book balance Amount of bad debts Reason
accounts receivable (%)
Total -- --
Notes to other accounts receivable with insignificant single amount but large risks of groups after grouping
by credit risks characteristics:
(3) Information of the write-off other accounts receivable
Unit: RMB Yuan
Whether arising from
Date of written Reason for
Name of company Nature Amount related-party
off write-off
transactions
Total -- -- -- --
Notes:
(4) The other accounts receivable due from shareholders with more than 5% (including 5%) of the
voting shares of the Company in the reporting period
□Applicable √Inapplicable
(5) Nature or content of other accounts receivable with significant amount
Other accounts with significant amount in the Company were current accounts receivable from
205
internal subsidiaries.
(6) Top five other accounts receivable
Unit: RMB Yuan
Name of company Relationship Amount Term Proportion (%)
Subsidiary of the
Information Network 223,187,197.37 Within 1 years 39.05%
Company
Video & Communication Subsidiary of the
113,159,698.91 Within 1 years 19.8%
Systems Engineering Company
Subsidiary of the
Boluo Precision 83,694,752.73 1 year to 5 years 14.64%
Company
Subsidiary of the
Boluo Konka 21,976,930.15 1 year to 5 years 3.84%
Company
Subsidiary of the
Chongqing Konka 15,594,238.01 1 year to 5 years 2.73%
Company
Total -- 457,612,817.17 -- 80.06%
(7) Other accounts receivable due from related parties
Unit: RMB Yuan
Proportion of total other
Name of entity Relationship Amount
accounts receivable (%)
Shenzhen OCT Gas Station Subsidiary of ultimate
80,000.00 0.01%
Co., Ltd (deposit) controller
Shenzhen OCT Real Subsidiary of ultimate
1,216,264.86 0.21%
Estate Co., Ltd. controller
OCT Water and Power Co., Subsidiary of ultimate
1,183,539.44 0.21%
Ltd. controller
Video & Communication
Subsidiary of the Company 113,159,698.91 19.8%
Systems Engineering
Konka Electronic Subsidiary of the Company 11,282,917.68 1.97%
Chongqing Konka Subsidiary of the Company 15,594,238.01 2.73%
Boluo Konka Subsidiary of the Company 21,976,930.15 3.84%
Information Network Subsidiary of the Company 223,187,197.37 39.05%
Dongguan Mould Plastic Subsidiary of the Company 3,093,652.56 0.54%
Chongqing Electronic Subsidiary of the Company 12,675,126.85 2.22%
Boluo Precision Subsidiary of the Company 83,694,752.73 14.64%
Nanhai Institute Subsidiary of the Company 642,962.34 0.11%
Xutongda Subsidiary of the Company 5,182,289.81 0.91%
Total -- 492,969,570.71 86.25%
(8)
RMB** was transferred from the other accounts receivable not meeting the conditions of termination recognition.
206
(9) If securitization is carried out on the other accounts receivable as the underlying asset,
please brief on the arrangement of relevant transactions
3. Long-term equity investments
Unit: RMB Yuan
207
Withdrawal
Cash
amount of
Account Explanations on differences bonus in
Initial Increase/ Closing Shareholding Voting right Provision for impairment
The investee ing Opening balance between shareholding reporti
investment cost decrease balance proportion (%) proportion (%) impairment provision in
method proportion and voting right ng
reporting
period
period
Mudanjiang Cost
36,000,000.00 36,000,000.00 36,000,000.00 60% 60% - 36,000,000.00
Konka method
Shaanxi Cost
44,869,809.80 44,869,809.80 44,869,809.80 60% 60% -
Konka method
Cost
Anhui Konka 122,780,937.98 122,780,937.98 122,780,937.98 78% 78% -
method
Dongguan Cost
274,783,988.91 274,783,988.91 274,783,988.91 100% 100% -
Konka method
Hongkong Cost
781,828.61 781,828.61 781,828.61 100% 100% -
Konka method
Chongqing Cost
27,000,000.00 27,000,000.00 27,000,000.00 60% 60% - 27,000,000.00
Konka method
Anhui Konka indirectly held
4.48% of Anhui Household
Anhui
Cost Appliances, while Anhui
Household 5,278,509.85 5,278,509.85 5,278,509.85 6.55% 97.45%
method Tongchuang indirectly held
Appliances
86.42% shares of Anhui
Household Appliances
Cost
Konka Europe 261,482.50 261,482.50 261,482.50 100% 100% -
method
Cost
Nanhai Konka 500,000.00 500,000.00 500,000.00 100% 100% -
method
Kunshan Cost 350,000,000.00 350,000,000.00 350,000,000.00 100% 100% -
208
Konka method
Plastic Cost
4,655,000.00 4,655,000.00 4,655,000.00 100% 100% -
Products method
Konka Cost
10,732,484.69 10,732,484.69 10,732,484.69 51% 51% - 10,732,484.69
Electronic method
Telecommunic
Cost
ation 90,000,000.00 90,000,000.00 90,000,000.00 100% 100% -
method
Technology
Konka Cost
8,062,500.00 8,062,500.00 8,062,500.00 100% 100% - 8,062,500.00
America method
Information Cost
22,500,000.00 22,500,000.00 22,500,000.00 100% 100% - 22,500,000.00
Network method
Cost
Shushida 31,500,000.00 31,500,000.00 31,500,000.00 100% 100% -
method
Video &
Communicatio Cost
9,000,000.00 9,000,000.00 9,000,000.00 60% 60% -
n Systems method
Engineering
Chongqing Cost
17,100,000.00 17,100,000.00 17,100,000.00 57% 57% -
Electronic method
Fittings Cost
48,750,000.00 48,750,000.00 48,750,000.00 100% 100% -
Technology method
Kunshan Real Cost
200,000,000.00 100% 100% -
Estate method
Kunshan Cost
350,000,000.00 350,000,000.00 350,000,000.00 100% 100% -
Kangsheng method
Anhui Cost 69,702,612.22 69,702,612.22 69,702,612.22 100% 100% -
209
Tongchuang method
Konka
Cost
Optoelectron 10,000,000.00 10,000,000.00 10,000,000.00 100% 100% -
method
ic
Cost
Wankaida 10,000,000.00 10,000,000.00 10,000,000.00 100% 100% -
method
Shenzhen
Julong Cost
2,000,000.00 2,000,000.00 -2,000,000.00 10% 10% - 300,000.00 -300,000.00
Optoelectron method
ics Co., Ltd.
Feihong
Cost
Electronics 1,300,000.00 1,300,000.00 1,300,000.00 8.33% 8.33% - 1,300,000.00
method
Co., Ltd.
Shenzhen
Association
of Cost
100,000.00 100,000.00 100,000.00 - 100,000.00
Enterprises method
with Foreign
Investment
Shenzhen
Make-plan
Cost
Investment 485,000.00 485,000.00 485,000.00 10% 10% - 485,000.00
method
Development
Co., Ltd.
IGRS
Information Cost
5,000,000.00 5,000,000.00 5,000,000.00 9.62% 9.62% -
Technology method
Engineering
210
Center Co.,
Ltd.
Shenzhen CTU Cost
1,153,000.00 1,153,000.00 1,153,000.00 11.5% 11.5% -
Hi-tech Ltd. method
Shenzhen
Digital TV
Cost
National 2,400,000.00 2,400,000.00 2,400,000.00 6% 6% -
method
Engineering
Lab Co., Ltd.
Shanghai
Digital TV
National Cost
2,400,000.00 2,400,000.00 2,400,000.00 4.26% 4.26% -
Engineering method
R&D Center
Co., Ltd.
Beijing
Cost
Konka 30,000,000.00 30,000,000.00 30,000,000.00 100% 100% -
method
Electronic
Shenzhen
Shushida
Cost
Logistics 10,000,000.00 10,000,000.00 10,000,000.00 100% 100%
method
Service Co.,
Ltd.
Total -- 1,799,097,154.56 1,599,097,154.56 -2,000,000.00 -- -- -- 106,479,984.69 -300,000.00
211
Notes:
4. Revenue and Cost of Sales
(1) Revenue, cost of sales
Unit: RMB Yuan
Item Reporting period Same period of last year
Main business revenue 5,555,762,901.33 5,750,983,910.22
Other business revenue 1,218,390,920.34 1,033,821,737.29
Cost of sales 5,866,640,366.34 6,096,290,932.02
Total 907,513,455.33 688,514,715.49
(2) Main business (classified by industry)
√Applicable □Inapplicable
Unit: RMB Yuan
Reporting period Same period of last year
Name of industry
Revenue of sales Cost of sales Revenue of sales Cost of sales
Electronic industry 5,555,762,901.33 4,646,847,998.99 5,750,983,910.22 5,049,104,547.63
Total 5,555,762,901.33 4,646,847,998.99 5,750,983,910.22 5,049,104,547.63
(3) Main business (Classified by product)
√Applicable □Inapplicable
Unit: RMB Yuan
Reporting period Same period of last year
Name of product
Revenue of sales Cost of sales Revenue of sales Cost of sales
Color TV business 5,022,111,430.91 4,150,770,138.64 5,199,165,989.17 4,558,502,708.98
White goods business 431,078,329.53 393,345,365.79 545,724,450.62 484,589,423.88
Others 102,573,140.89 102,732,494.56 6,093,470.43 6,012,414.77
Total 5,555,762,901.33 4,646,847,998.99 5,750,983,910.22 5,049,104,547.63
(4) Main business (Classified by area)
√Applicable □Inapplicable
Unit: RMB Yuan
Reporting period Same period of last year
Name of area
Revenue of sales Cost of sales Revenue of sales Cost of sales
Domestic revenue 4,679,606,395.39 3,770,500,571.28 4,827,253,844.09 4,131,840,812.79
Overseas revenue 876,156,505.94 876,347,427.71 923,730,066.13 917,263,734.84
Total 5,555,762,901.33 4,646,847,998.99 5,750,983,910.22 5,049,104,547.63
(5) Revenue of sales from the top five customers
5. Investment income
(1)List of investment income
Unit: RMB Yuan
Item Reporting period Same period of last year
Long-term equity investment income accounted by cost method
Long-term equity investment income accounted by equity method
212
Investment income arising from disposal of long-term equity
91,013.92
investments
Investment income received from holding of trading financial
assets
Investment income received from holding of held-to-maturity
investments
Investment income received from holding of available-for-sale
financial assets etc.
Investment income received from disposal of trading financial
assets
Investment income received from holding of held-to-maturity
investments
Investment income received from available-for-sale financial
5,110,011.59
assets
Other
Total 5,201,025.51
(2)Long-term equity investment income accounted by cost method
Unit: RMB Yuan
Same period of
Name of investee Reporting period Reason for increase/decrease YoY
last year
Total --
(3)Long-term equity investment income accounted by cost method
Unit: RMB Yuan
Same period of
Name of investee Reporting period Reason for increase/decrease YoY
last year
Total --
Notes:
6. Supplemental information of Cash Flow Statement
Unit: RMB Yuan
Supplemental information Reporting period Same period of last year
1. Reconciliation of net profit to net cash flows generated
-- --
from operations：
Net profit -26,065,939.91 -243,239,644.83
Add: Provision for assets impairments -5,645,488.93
Depreciation of fixed assets, oil and gas assets and
14,831,805.55 14,902,230.74
productive biological assets
Amortization of intangible assets 1,066,722.75 879,959.78
Amortization of long-term deferred expense 1,132,481.93 1,068,304.61
Losses/gains on disposal of fix assets, intangible asset and
-10,089,460.37 -2,367,987.15
other long-term assets (gains: negative)
213
Losses/gains on scrapped of fixed assets (gains: negative) 913,357.22 685,174.12
Losses/gains from variation of fair value (gains: negative) -21,760,628.97 -14,666,723.60
Financial cost (income: negative) 15,834,773.93 38,821,080.62
Investment loss (gains: negative) -5,201,025.51
Decrease in deferred tax assets (increase: negative) 8,282,104.09 6,475.51
Increase in deferred tax liabilities (decrease: negative) -807,501.87
Decrease in inventory (increase: negative) -29,959,639.48 504,642,108.78
Decrease in accounts receivable from operating activities
2,466,488,556.12 575,743,550.67
(increase: negative)
Increase in accounts payable from operating activities
-1,494,936,927.80 -128,568,916.00
(decrease: negative)
Others
Net cash flows generated from operating activities 914,083,188.75 747,905,613.25
2. Significant investing and financing activities without
-- --
involvement of cash receipts and payments
Debt converted into capital
Convertible company bonds due within 1 year
Financing leased fixed assets
3. Change of cash and cash equivalent: -- --
Closing balance of cash 805,715,213.15 538,605,440.94
Less: opening balance of cash 275,892,343.00 255,364,835.76
Plus: closing balance of cash equivalent
Less: opening balance of cash equivalents
The net increase in cash and cash equivalents 529,822,870.15 283,240,605.18
7. Information of assets and liabilities recognized by evaluation value from the
counter purchase
Unit: RMB Yuan
Name of the asset or liability Evaluation value Original book value
Asset
Liability
(XVI) Supplemental information
1. Return on equity and earnings per share
Unit: RMB Yuan
The weighted average ROE EPS
Profit in the reporting period
(%) Basic EPS Diluted EPS
Net profit attributable to the Company’
0.29% 0.0095 0.0095
s common stock shareholders
Net profit attributable to shareholders
of the Company’s common stock after -0.96% -0.0319 -0.0319
deducting non-recurring gains and losses
214
2. Particulars on the abnormal conditions of main items in the financial statements
of the Company and relevant reasons
(1) As to 30 Jun. 2012, closing amount of notes receivable was of RMB3,012,622,153.19,
with a decrease of 38.09% compared to operning amount, for the reason of: business
of endorsement of notes receivable used for payment of purchase was increased;
(2) As to 30 Jun. 2012, closing amount of advance payment was of RMB228,142,821.97,
with a reduce of 60.28% compared to opening amount, for the reason of: land deed
received from advance payment of land in period-begin was calculted by transferring
into development cost;
(3) As to 30 Jun. 2012, closing amount of interest receivable was of RMB28,962,219.29,
a decrease of 33.61% compared to opening amount, for the reason of: part of fixed
deposit was mature that led to the decrease of interest receivable;
(4) As to 30 Jun. 2012, closing amount of available-for-sale financial assets was
of RMB 1,045,232.10, with a reduce of 83.69% compared to opening amount, for the
reason of: the Company sold shares of Churin Group in reporting period;
(5) As to 30 Jun. 2012, closing amount of taxes payable was of -178,340,648.85, with
a decrease of 637.58%, for the reason of overpay VAT was increased at period-end;
(6) As to 30 Jun. 2012, closing amount of long-term borrowings was of
1,010,000,000.00, with an increase of 65.57%, for the reason of: the Company
compensated capital gap by long-term borrowings;
(7) As to 30 Jun. 2012, closing amount of trading financial liabilities were zero,
which was less than opening amount, for the reason of: income from fair value change
was reversed as NDF group business was mature in reporting period;
(8) As to 30 Jun. 2012, occur amount of taxes and surcharges of first half of 2012
was of RMB4,480,585.29, with an increase of 42.63% than that of the first half of
2011, for the reason of: local education surtax was increase in reporting period;
(9) As to 30 Jun. 2012, occur amount of financial expense of the first half of 2012
was of RMB 109,770,636.77, with an increase of 53.68% than that of the first half
of 2011, for the reason of: interest cost of was incease by the rising of long-term
borrowings and exchange rate fulctuated that led to the increase of exchange loss
in reporting period;
(10) As to 30 Jun. 2012, occur amount of income from fair value change in the first
half of 2012 was of RMB 2,101,173.97, with an increase of 50.69% than that of the
first half of 2011, for the reason of: income from fair value change was reversed
as NDF group business was mature in reporting period;
(11) As to 30 Jun. 2012, occur amount of investment income in the first half of 2012
was of RMB 9,074,172.92, with an increase of RMB 9,153,225.49 than that of the first
half of 2011, for the reason of: investment income was incresased by calculated in
equity method in reporting period and disposal income of available-for-sale
financial assets was increased;
(12) As to 30 Jun. 2012, occur amount of income tax expense was of RMB31,688,114.67,
215
with an increase of 111.66% than that of the first half of 2011, for the reason of:
profit in reporting period was increased than same period of last and deferred income
tax assets was reversed.
IX. Documents for Reference
Documents for Reference
1. Text of Semi-annul Report 2012 signed by the Chairman of the Board of Directors of the Company;
2. Text of Financial statements signed and sealed by person in charge, principal of accounting
work, and manager of finance department;
3. In the reporting period, all texts of the Company’s documents have been publicly disclosed
in newspapers designated by CSRC;
4. Text of Articles of Association of the Company;
5. Other relevant materials.
Chairman of the Board of Directors: Hou Songrong
The Board of Directors
Konka Group Co., Ltd.
28 August 2012
216
