2013 Semi-annual Report of Konka Group Co., Ltd.
KONKA GROUP CO., LTD.
2013 SEMI-ANNUAL REPORT
2013-24
August 2013
1
2013 Semi-annual Report of Konka Group Co., Ltd.
I. Important Reminders, Catalogue & Explanation
The Board of Directors, the Supervisory Committee as well as all directors, supervisors and senior
management staff of Konka Group Co., Ltd. (hereinafter referred to as “the Company”) warrant that
this report is factual, accurate and complete without any false record, misleading statement or
material omission. And they shall be jointly and severally liable for that.
All directors attended the board session for reviewing this report.
The Company plans not to distribute cash dividends or bonus shares or turn capital reserve into
share capital.
Hou Songrong, company principal, Yang Rong, chief of the accounting work, and Xu Youshan,
chief of the accounting organ (chief of accounting), hereby confirm that the Financial Report
enclosed in this report is factual, accurate and complete.
This report is prepared in both Chinese and English. Should there be any discrepancy between the
two versions, the Chinese version shall prevail.
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2013 Semi-annual Report of Konka Group Co., Ltd.
Explanation
Refer
Term Contents
s to
Refer
Company, the Company, the Group Konka Group Co., Ltd.
s to
Refer
Telecommunication Technology Shenzhen Konka Telecommunications Technology Co., Ltd.
s to
Video & Communication Systems Refer Shenzhen Konka Video & Communication Systems Engineering Co.,
Engineering s to Ltd.
Refer
Precision Mold Shenzhen Konka Precision Mold Manufacturing Co., Ltd.
s to
Refer
Konka Household Appliances Shenzhen Konka Household Appliances Co., Ltd.
s to
Refer
Information Network Shenzhen Konka Information Network Co., Ltd.
s to
Refer
Plastic Products Shenzhen Konka Plastic Products Co., Ltd.
s to
Refer
Shushida Shenzhen Shushida Electronic Co., Ltd.
s to
Refer
Fittings Technology Shenzhen Konka Electronic Fittings Technology Co., Ltd.
s to
Refer
Mudanjiang Appliances Mudanjiang Arctic Ocean Appliances Co., Ltd.
s to
Refer
Shanxi Konka Shanxi Konka Electronic Co., Ltd.
s to
Refer
Chongqing Konka Chongqing Konka Electronic Co., Ltd.
s to
Refer
Chongqing Electronic Chongqing Konka Automotive Electronic Co., Ltd.
s to
Refer
Chongqing Qingjia Chongqing Qingjia Electronics Co., Ltd.
s to
Refer
Anhui Konka Anhui Konka Electronic Co., Ltd.
s to
Refer
Anhui Household Appliances Anhui Konka Household Appliances Co., Ltd.
s to
Refer
Changshu Konka Changshu Konka Electronic Co., Ltd.
s to
Refer
Kunshan Konka Kunshan Konka Electronic Co., Ltd.
s to
Refer
Dongguan Konka Dongguan Konka Electronic Co., Ltd.
s to
Refer
Dongguan Packing Dongguan Konka Packing Materials Co., Ltd.
s to
Dongguan Mould Plastic Refer Dongguan Konka Mould Plastic Co., Ltd.
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2013 Semi-annual Report of Konka Group Co., Ltd.
s to
Refer
Boluo Konka Boluo Konka PCB Co., Ltd.
s to
Refer
Boluo Precision Boluo Konka Precision Technology Co., Ltd.
s to
Refer
Nanhai Institute Konka (Nanhai) Development Center
s to
Refer
Hong Kong Konka Hong Kong Konka Co., Ltd.
s to
Refer
Konka Household Appliances Investment Konka Household Appliances Investment & Development Co., Ltd.
s to
Konka Household Appliances International Refer
Konka Household Appliances International Trading Co., Ltd.
Trading s to
Refer
Konka America Konka America, Inc.
s to
Refer
Konka Europe Konka (Europe) Co., Ltd.
s to
Refer
Xutongda Dongguan Xutongda Mould Plastic Co., Ltd.
s to
Refer
Konka Optoelectronic Shenzhen Konka Optoelectronic Technology Co., Ltd.
s to
Refer
Wankaida Shenzhen Wankaida Science and Technology Co., Ltd.
s to
Refer
Kunshan Kangsheng Kunshan Kangsheng Investment Development Co., Ltd.
s to
Refer
Anhui Tongchuang Anhui Konka Tongchuang Household Appliances Co., Ltd.
s to
Refer
Indonesia Konka Indonesia Konka Electronics Co., Ltd.
s to
Refer
Shushida Logistics Shenzhen Shushida Logistics Service Co., Ltd.
s to
Refer
Beijing Konka Electronic Beijing Konka Electronic Co., Ltd.
s to
Refer
Kunshan Jielunte Kunshan Jielunte Mould Plastic Co. , Ltd.
s to
Refer
Wuhan Jielunte Wuhan Jielunte Mould Plastic Co. , Ltd.
s to
Refer
Chuzhou Jielunte Chuzhou Jielunte Mould Plastic Co. , Ltd.
s to
Refer
CSRC China Securities Regulation Commission
s to
Refer
SZSE Shenzhen Stock Exchange
s to
Refer
CSRC Shenzhen Bureau Shenzhen Bureau of China Securities Regulation Commission
s to
4
2013 Semi-annual Report of Konka Group Co., Ltd.
Yuan, Ten thousand Yuan, One Hundred Refer
RMB Yuan, RMB Ten thousand, RMB One Hundred Million Yuan
Million Yuan s to
5
2013 Semi-annual Report of Konka Group Co., Ltd.
II. Company Profile
I. Basic information of the Company
Stock abbreviation SKJA, SKJB Stock code 000016, 200016
Stock abbreviation after change (if any) N/A
Stock exchange listed with Shenzhen Stock Exchange
Chinese name of the Company 康佳集团股份有限公司
Abbr. of the Chinese name of the
康佳集团
Company (if any)
English name of the Company (if any) KONKA GROUP CO.,LTD
Abbr. of the English name of the
KONKA GROUP
Company (if any)
Legal representative of the Company Hou Songrong
II. Contact information
Company Secretary Securities Affairs Representative
Name Xiao Qing Wu Yongjun
Secretariat to the Board of Directors, Secretariat to the Board of Directors,
Konka Group Co., Ltd., Overseas Konka Group Co., Ltd., Overseas
Contact address
Chinese Town, Nanshan District, Chinese Town, Nanshan District,
Shenzhen, Guangdong Province, China Shenzhen, Guangdong Province, China
Tel. 0755-26608866 0755-26608866
Fax 0755-26600082 0755-26600082
E-mail szkonka@konka.com szkonka@konka.com
III. Other information
1. Ways to contact the Company
Did any change occur to the registered address, office address and their postal codes, website
address and email address of the Company during the reporting period?
□ Applicable √ Inapplicable
The registered address, office address and their postal codes, website address and email address of
the Company did not change during the reporting period. The said information can be found in the
2012 Annual Report.
2. About information disclosure and where this report is placed
Did any change occur to information disclosure media and where this report is placed during the
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2013 Semi-annual Report of Konka Group Co., Ltd.
reporting period?
□ Applicable √ Inapplicable
The newspapers designated by the Company for information disclosure, the website designated by
CSRC for disclosing this report and the location where this report is placed did not change during
the reporting period. The said information can be found in the 2012 Annual Report.
3. Change of the registered information
Did any change occur to the registered information during the reporting period?
□ Applicable √ Inapplicable
The registration date and place of the Company, its business license No., taxation registration No.
and organizational code did not change during the reporting period. The said information can be
found in the 2012 Annual Report.
4. Other relevant information
Did any change occur to other relevant information during the reporting period?
□ Applicable √ Inapplicable
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2013 Semi-annual Report of Konka Group Co., Ltd.
III. Accounting & Business Highlights
I. Major accounting data and financial indicators
Does the Company adjust retrospectively or restate accounting data of previous years due to change
of the accounting policy or correction of any accounting error?
□ Yes √ No
Reporting period Same period of last year YoY +/-（％）
Operating revenues (RMB Yuan) 9,421,399,281.00 7,038,923,137.77 33.85%
Net profit attributable to shareholders of
40,547,673.62 11,467,291.68 253.59%
the Company (RMB Yuan)
Net profit attributable to shareholders of
the Company after extraordinary gains 13,903,675.19 -38,396,824.01 136.21%
and losses (RMB Yuan)
Net cash flows from operating activities
2,271,690,220.43 1,115,585,087.77 103.63%
(RMB Yuan)
Basic EPS (RMB Yuan/share) 0.0337 0.0095 254.74%
Diluted EPS (RMB Yuan/share) 0.0337 0.0095 254.74%
Weighted average ROE (%) 1.00% 0.29% 0.71%
As at the end of the
As at the end of last year YoY +/-（％）
reporting period
Total assets (RMB Yuan) 15,127,738,418.65 16,562,917,198.06 -8.67%
Net assets attributable to shareholders of
4,074,979,574.84 4,043,591,538.85 0.78%
the Company (RMB Yuan)
II. Differences between accounting data under domestic and overseas accounting standards
1. Differences of net profit and net assets disclosed in financial reports prepared under
international and Chinese accounting standards
Unit: RMB Yuan
Net profit attributable to shareholders of the Net assets attributable to shareholders of the
Company Company
Reporting period Same period of last year Closing amount Opening amount
According to Chinese
40,547,673.62 11,467,291.68 4,074,979,574.84 4,043,591,538.85
accounting standards
Items and amounts adjusted according to international accounting standards
Naught 0.00 0.00 0.00 0.00
According to international 40,547,673.62 11,467,291.68 4,074,979,574.84 4,043,591,538.85
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2013 Semi-annual Report of Konka Group Co., Ltd.
accounting standards
2. Differences of net profit and net assets disclosed in financial reports prepared under
overseas and Chinese accounting standards
Unit: RMB Yuan
Net profit attributable to shareholders of the Net assets attributable to shareholders of the
Company Company
Reporting period Same period of last year Closing amount Opening amount
According to Chinese
40,547,673.62 11,467,291.68 4,074,979,574.84 4,043,591,538.85
accounting standards
Items and amounts adjusted according to overseas accounting standards
Naught 0.00 0.00 0.00 0.00
According to overseas
40,547,673.62 11,467,291.68 4,074,979,574.84 4,043,591,538.85
accounting standards
3. Explain reasons for the differences between accounting data under domestic and overseas
accounting standards
No difference
III. Items and amounts of extraordinary gains and losses
Unit: RMB Yuan
Item Amount Explanation
Gains/losses on the disposal of non-current assets (including
8,313,488.52
the offset part of asset impairment provisions)
Government grants recognized in the current period, except for
those acquired in the ordinary course of business or granted at
26,741,064.35
certain quotas or amounts according to the country’s unified
standards
Gains and losses on change in fair value from tradable financial
assets and tradable financial liabilities, as well as investment
income from disposal of tradable financial assets and tradable
21,115.80
financial liabilities and financial assets available for sales
except for effective hedging related with normal businesses of
the Company
Other non-operating income and expenses other than the above 1,044,270.80
Other gain/loss items that meet the definition of an
extraordinary gain/loss
Less: Income tax effects 9,029,984.87
Minority interests effects (after tax) 445,956.17
Total 26,643,998.43 --
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2013 Semi-annual Report of Konka Group Co., Ltd.
Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the
definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies
Offering Their Securities to the Public—Extraordinary Gains and Losses, or classifies any
extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent
gain/loss item
□ Applicable √ Inapplicable
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2013 Semi-annual Report of Konka Group Co., Ltd.
IV. Report of the Board of Directors
I. Overview
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.
In the reporting period, the color TV domestic market kept a high-speed growth. In its color TV
business, guided by the overall strategy of “building the brand, enlarging the size, adjusting the
structure and taping the potential”, the Company maintained its leading position in product and
technology through a fast integration of the up-stream and down-stream resources of the industrial
chain. Its sales growth was higher than the average in the industry, with an improved sales structure
and quality. When compared with the same period of last year, the operating efficiency increased
steadily with a higher profitability.
For the reporting period, the Company achieved operating revenues of RMB 9.421 billion, up
33.85% over the same period of last year; net profit attributable to shareholders of the Company of
RMB 40.5477 million, up 253.59% on the year-on-year basis; and EPS of RMB 0.0337/share.
II. Main business analysis
Overview
I. Operating revenues and net profit increased over the same period of last year due to the following
reasons:
(I) In the domestic sale of color TVs, the Company seized the market opportunities arising from the
implementation of the energy saving and consumer benefiting policy; adopted “building the brand,
enlarging the size, adjusting the structure and taping the potential” as the operational policy; gave
play to the integration and coordination effects of R&D, production, supply and sale; tried to build
the “UD First Brand”; carried out the “perfect living room” strategy; reformed management; and
innovated in marketing. As a result, the operating performance and quality improved thoroughly.
(II) In the cell phone business, the Company captured the development trend of intelligent cell
phones and launched the first internet cell phone—“Fangao”, marking a significant breakthrough in
internet products.
(III) In the consumer appliance business, the Company adhered to the healthy strategy and launched
the third generation cloud ion healthy refrigerator that could degrade pesticide, which solidified its
leading position in the healthy appliance field and brought it to a higher position in the consumer
appliance industry.
(IV) In export, the Company took the initiative to adjust the sales structure, boosting a sharp
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2013 Semi-annual Report of Konka Group Co., Ltd.
increase in the sales volume of flat-panel TVs. At the same time, it worked hard to tap the customer
potential in the traditional regions, which ensured a stable sales income from export.
(V) As for the emerging business lines such as digital networks, large-sized LED screens and home
appliances, the Company innovated in marketing channel, product and incentive mechanism,
realizing a healthy and rapid development.
II. Influence of the R&D input, technical innovation and independent innovation on the core
competitiveness and the position in the industry in the reporting period
In the reporting period, the Company continued to enhance the R&D input and laid a solid
foundation for the implementation of product differentiation through constantly developing new
products, studying new techniques, altering the existing equipment and enriching the product
variety and series. Meanwhile, it continuously carried out measures such as technical innovation
and rational suggesting to constantly increase the production efficiency and core competitiveness to
maintain the leading momentum in the industry.
YoY change of major financial data:
Unit: RMB Yuan
Same period of last
Reporting period YoY +/-% Main reasons for change
year
See “main business
Operating revenues 9,421,399,281.00 7,038,923,137.77 33.85%
analysis”
Operating revenues
Operating costs 7,835,777,505.69 5,722,506,955.64 36.93%
increased.
The sales promotion
expenses, the maintenance
expenses, the expenses on
Selling expenses 1,211,403,089.80 974,573,637.23 24.3% disposal of disused
electrical appliances and
electronics and the labor
cost increased.
Administrative
312,936,108.52 276,316,995.50 13.25%
expenses
The loan interest decreased
Financial expenses -21,707,338.29 109,770,636.77 -119.78% and the gain on fluctuations
of exchange rates increased.
Income tax expenses 23,047,922.18 31,688,114.67 -27.27%
R&D input 101,602,125.00 86,676,360.00 17.22%
Net cash flows from
2,271,690,220.43 1,115,585,087.77 103.63%
operating activities
Net cash flows from
-68,371,493.46 626,347,799.26 -110.92%
investing activities
Net cash flows from
-1,272,989,661.59 -1,091,566,617.92 -16.62%
financing activities
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2013 Semi-annual Report of Konka Group Co., Ltd.
Net increase in cash
945,263,306.86 645,673,472.24 46.40%
and cash equivalents
Major changes to the profit structure or sources of the Company during the reporting period:
√ Applicable □ Inapplicable
In the reporting period, the color TV domestic market kept a high-speed growth. In its color TV
business, guided by the overall strategy of “building the brand, enlarging the size, adjusting the
structure and taping the potential”, the Company maintained its leading position in product and
technology through a fast integration of the up-stream and down-stream resources of the industrial
chain. Its sales growth was higher than the average in the industry, with an improved sales structure
and quality. When compared with the same period of last year, the operating efficiency increased
steadily with a higher profitability.
Reporting period progress of the future development planning in the disclosed documents of the
Company such as share-soliciting prospectuses, offering prospectuses, asset reorganization reports,
etc.:
□ Applicable √ Inapplicable
The Company did not mention any future planning for the reporting period in its disclosed
documents such as share-soliciting prospectuses, offering prospectuses, asset reorganization reports,
etc.
Review the progress of the previously disclosed business plan in the reporting period:
During the reporting period, adhering to the annual operational plan, the Company overcame
difficulties and steadily pushed forward all the operational and management tasks. As a result, the
product structure improved significantly, the operating efficiency increased and the profitability also
increased. For more details about the progress, see “overview” and “main business analysis”.
III. Breakdown of main business
Unit: RMB Yuan
Increase/decrea Increase/decrea Increase/decrea
se of operating se of operating se of gross
Gross profit
Operating revenues Operating costs revenues over costs over the profit rate over
rate (%)
the same period same period of the same period
of last year (%) last year (%) of last year (%)
Classified by industry:
Electronic 9,329,229,395.36 7,783,071,113.88 16.57% 33.73% 37.15% -2.08%
Classified by product:
Color TVs 7,478,282,465.06 6,178,528,941.50 17.38% 45.07% 48.62% -1.98%
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2013 Semi-annual Report of Konka Group Co., Ltd.
Cell phones 686,575,916.65 618,861,444.21 9.86% 21.45% 24.96% -2.53%
Customer
785,194,995.56 665,864,686.59 15.2% 9.37% 14.8% -4.01%
appliances
Other 379,176,018.10 319,816,041.58 15.65% -29.51% -27.72% -2.09%
Total 9,329,229,395.36 7,783,071,113.88 16.57% 33.73% 37.15% -2.08%
Classified by region:
Domestic 7,782,919,179.42 6,314,646,566.63 18.87% 44.38% 49.32% -2.68%
Overseas 1,546,310,215.94 1,468,424,547.25 5.04% -2.47% 1.56% -3.77%
IV. Core competitiveness analysis
The Company’s capability in R&D, the marketing network and manufacture constitutes its
competitive edges. Through resource integration, the Company will vigorously try to make
substantial breakthroughs in intelligent products, cloud computing, application of the internet
technology, application software, etc.. It will also try to enhance the strength and thickness of
technical innovations to increase its overall competitiveness.
V. Investment analysis
1. Investments in equities of external parties
（1） Investments in external parties
Investments in external parties
Investment amount in the reporting Investment amount in the same period of
+/-%
period (RMB Yuan) last year (RMB Yuan)
462,198,731.89 472,423,533.19 -2.16%
Particulars about investees
Proportion of the Company’s investment
Name of investee Main business in the investee’s total equity interests
(%)
（2）Equity-holdings in financial enterprises
Gain/los
Initial Closing
Opening Opening Closing Closing s in the
investme book
Enterpris Enterpris equity-h equity-h equity-h equity-h reportin Account Equity
nt cost value
e name e variety oldings olding oldings olding g period ing title source
(RMB (RMB
(share) ratio (%) (share) ratio (%) (RMB
Yuan) Yuan)
Yuan)
Total 0.00 0 -- 0 -- 0.00 0.00 -- --
（3）Securities investments
Variety Code of Name Initial Numbe Shareh Numbe Shareh Closing Gain/lo Accoun Source
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2013 Semi-annual Report of Konka Group Co., Ltd.
of securiti of investm r of olding r of olding book ss for ting of
securiti es securiti ent cost shares percent shares percent value reportin title stock
es es (RMB held at age at held at age at (RMB g
Yuan) period- period- period- period- Yuan) period
begin begin end end (RMB
Yuan)
Total 0.00 0 -- 0 -- 0.00 0.00 -- --
Shareholdings in other listed companies:
√ Applicable □ Inapplicable
The Company held common shares of Vanke A at the end of the reporting period, with the initial
investment cost being RMB 2,311,748.07, the opening fair value being RMB 1,187,177.20 and the
closing fair value being RMB 1,155,503.50.
2. Wealth management entrustment, derivative investments and entrustment loans
（1）Wealth management entrustment
Unit: RMB Ten thousand
Actual
Related Princip Impair
Amoun Paymen gain/los
Name -party al ment
Relatio Product t Beginni Ending t Predict s in
of transact actually provisi
n variety entruste ng date date determi ed gain reportin
trustee ion or recover on (if
d nation g
not ed any)
period
Total 0 -- -- -- 0 0 0 0
Source of the entrusted funds Inapplicable
Cumulative overdue principals and gains 0
Lawsuit (if applicable) Inapplicable
（2）Derivative investments
Unit: RMB Ten thousand
Proport
ion of
the
Actual
Related Type of Openin Impair closing
Initial Closing gain/los
-party derivati g ment investm
Operat Relatio investm Beginni Ending investm s in
transact ve investm provisi ent
or n ent ng date date ent reportin
ion or investm ent on (if amount
amount amount g
not ent amount any) in the
period
Compa
ny’s
closing
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2013 Semi-annual Report of Konka Group Co., Ltd.
net
assets
(%)
Total 0 -- -- 0 0 0 0% 0
Capital source for derivative investment Inapplicable
Lawsuit (if applicable) Inapplicable
（3）Entrustment loans
Unit: RMB Ten thousand
Related
Loan Interest Guarantor or Use of funds by
Borrower party or
amount rate pawn the borrower
not
Anhui Konka Tongchuang Household Appliances Turnover of the
No 30,000 6% Naught
Co., Ltd. operating funds
Kunshan Kangsheng Investment Development Co., Turnover of the
No 20,500 6% Naught
Ltd. operating funds
Total -- 50,500 -- -- --
Extension, overdue loans or lawsuits (if any) Naught
Countermeasures for extension overdue loans or
Naught
lawsuits (if any)
3. Use of raised funds
（1）Overview of the use of raised funds
Unit: RMB Ten thousand
General utilization of the raised funds
（2）Projects invested with raised funds as promised
Unit: RMB Ten thousand
Date
Invest
Project when
ment Materia
change Accum the Profit
Raised Invest progres l
Projects invested d or not Input ulative project generat Reach
capital ment s up to change
with raised capital as (includi in the input reaches ed in the
input after the in the
promised and ng reporti up to the the expecte
as adjust period- project
investments with partiall ng the expecte reporti d profit
promis ment end feasibil
over-raised capital y period period- d ng or not
ed (1) (%)(3) ity or
change end (2) usable period
＝ not
d) conditi
(2)/(1)
on
Projects invested with raised capital as promised
Investments of over-raised capital
Total -- 0 0 0 0 -- -- 0 -- --
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2013 Semi-annual Report of Konka Group Co., Ltd.
Amount, usage and Inapplicable
Change of the Inapplicable
Adjustment of the Inapplicable
Advanced input and Inapplicable
Idle raised capital for Inapplicable
Outstanding raised
funds in project
Inapplicable
implementation and
reasons
（3）Change of raised-funds-invested projects
Unit: RMB Ten thousand
Total
raised
Date
funds Investme Material
when the
planned Actual nt Profit change in
Actual project Reach the
Project Project to be cumulativ progress generated the
input for reaches expected
after before input for e input by up to the in the after-chan
reporting the profit or
change change the period-en period-en reporting ge project
period expected not
project d (2) d (%)(3) period feasibility
usable
after ＝(2)/(1) or not
condition
change
(1)
Total -- 0 0 0 -- -- 0 -- --
Reasons for change,
decision-making procedure and
Inapplicable
relevant information disclosure
(explain one project by one project)
Reason for failing to reach
scheduled progress or projected
Inapplicable
income (explain one project by one
project)
Explanation on significant changes
Inapplicable
in feasibility of projects after change
（4）Projects invested with raised funds
Overview of the project Disclosure date Index for the disclosed information
4. Analysis to main subsidiaries and stock-participating companies
Main subsidiaries and stock-participating companies:
Unit: RMB Yuan
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2013 Semi-annual Report of Konka Group Co., Ltd.
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2013 Semi-annual Report of Konka Group Co., Ltd.
Compa Main
Company
ny Industry products/servi Registered capital Total assets Net assets Operating revenues Operating profit Net profit
name
variety ces
Dongguan
Production
Konka Subsidi Manufact and sale of
RMB 266,670,000 682,761,563.96 339,426,815.39 141,075,344.78 -22,958,283.87 -21,620,999.21
Electronic ary ure multimedia
Co., Ltd. products
Import and
Hongkong export of
Subsidi Internatio electro-mecha
Konka Co., HKD 500,000 1,414,500,317.22 54,592,673.25 1,208,460,257.33 -40,881,811.64 -40,880,538.34
ary nal trade nical and
Ltd. electronic
products
Konka
Household
Appliances Import and
Subsidi Internatio
export of HKD 50,0000 2,168,980,985.93 36,717,125.26 2,059,444,722.82 73,255,354.41 73,255,354.41
International ary nal trade
electronics
Trading Co.,
Ltd.
Production
and sale of
Anhui
household
Konka Subsidi Manufact appliances
Household RMB 78,190,000 201,887,414.78 103,761,395.97 197,486,465.83 3,900,830.02 3,897,546.79
ary ure such as
Appliances
refrigerators
Co., Ltd.
and washing
machines
Anhui Production
and sale of
Konka household
Subsidi Manufact appliances
Tongchuang RMB 180,000,000 988,556,689.46 104,563,369.51 694,242,005.63 -36,387,905.70 -27,788,741.60
ary ure such as
Household refrigerators
and washing
Appliances machines
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2013 Semi-annual Report of Konka Group Co., Ltd.
Co., Ltd.
Shenzhen
Production
Konka
and sale of
Video &
Subsidi Manufact LED display
Communica RMB 15,000,000 184,484,983.64 -6,298,541.66 37,498,128.26 -9,082,884.06 -8,784,235.52
ary ure screens and
tion Systems
lighting
Engineering
products
Co., Ltd.
Shenzhen
Development
Wankaida Software and
Subsidi
Science and developm maintenance RMB 10,000,000 132,860,986.87 128,139,128.31 6,613,920.00 -10,556,702.09 -10,354,284.20
ary
Technology ent of software
technology
Co., Ltd.
Kunshan
Kangsheng Development,
Subsidi Real operation and
Investment RMB 350,000,000 603,921,520.97 316,572,650.46 -10,465,950.70 -10,453,950.70
ary estate investment of
Developmen real estate
t Co., Ltd.
Dongguan Production
Konka Subsidi Manufact and sale of
Mould mould and RMB 10,000,000 391,954,010.54 104,663,939.55 147,123,108.16 10,794,536.37 9,138,757.43
Plastic Co., ary ure plastic
Ltd. products
Shenzhen
Production
Konka
and sale of
Precision Subsidi Manufact
plastic RMB 40,000,000 297,028,734.03 99,536,781.60 96,810,329.43 7,105,822.99 5,998,936.37
Mold ary ure
products and
Manufacturi
molds
ng Co., Ltd.
Shenzhen Shareh
Production
Refond olding Manufact
and sale of RMB 107,000,000 772,209,636.36 567,006,873.73 294,382,839.75 28,696,953.44 26,182,088.13
Optoelectro compa ure
LED
nics Co., ny
20
2013 Semi-annual Report of Konka Group Co., Ltd.
Ltd.
EnRay Tek
Optoelectro Shareh
Production
olding Manufact
nics and sale of USD 50,000,000 449,036,494.34 237,567,613.22 31,981,068.27 -51,302,064.20 -36,836,629.89
compa ure
(Shanghai) LED
ny
Co., Ltd.
21
2013 Semi-annual Report of Konka Group Co., Ltd.
5. Significant projects of investments with non-raised funds
Unit: RMB Ten thousand
Total Cumulative actual
Input for the Project
Project name planned input as at the Project earnings
reporting period progress
investment period-end
The project is still in the
Kunshan Shui Yue Zhou input period and has not yet
200,000 5,017.38 48,027.64 24.01%
Estate generated income and
profit.
Total 200,000 5,017.38 48,027.64 -- --
Date when the relevant interim
announcement was disclosed on the 6 Jul. 2010
designated website (if any)
Index to the relevant interim
announcement disclosed on the www.cninfo.com.cn
designated website (if any)
VI. Predict the operating results of Jan.-Sept. 2013
Warning of possible loss or considerable YoY change of the accumulated net profit made during the
period-begin to the end of the next reporting period according to prediction, as well as explanations
on the reasons:
□ Applicable √ Inapplicable
VII. Explanation by the Board of Directors and the Supervisory Committee about the
“non-standard audit report” issued by the CPAs firm for the reporting period
Inapplicable
VIII. Explanation by the Board of Directors about the “non-standard audit report” of last
year
Inapplicable
IX. Implementation of profit allocation during the reporting period
Profit allocation plan implemented during the reporting period, especially execution and adjustment
of the cash dividend plan and the plan for turning capital reserve into share capital:
√ Applicable □ Inapplicable
As reviewed at the 2012 Annual Shareholders’ General Meeting, the profit allocation plan for 2012
was decided as follows:
Dividend distribution plan: Based on the Company’s total share capital of 1,203,972,704 shares as
at the end of 2012, the Company distributed a cash dividend of RMB 0.1 (tax included) to every 10
22
2013 Semi-annual Report of Konka Group Co., Ltd.
shares. The distributed profits aggregated RMB 12,039,727.04 and the retained profit was carried
forward into the next year for distribution.
The profit allocation plan has been carried out. For A-shares, the date of record was 13 Jun. 2013
and the ex-dividend date was 14 Jun. 2013; for B-shares, the last trading date was 13 Jun. 2013, the
ex-dividend date was 14 Jun. 2013 and the date of record was 18 Jun. 2013.
X. Pre-plan for profit allocation and turning capital reserve into share capital for the
reporting period
Bonus shares for every 10 shares (share) 0
Dividend for every 10 shares (RMB Yuan) (tax
0.00
included)
Shares turned from capital reserve for every 10
0
shares (share)
Total shares as the basis for the allocation
0
preplan (share)
Total cash dividends (RMB Yuan) (tax included) 0.00
Distributable profit (RMB Yuan) 0.00
Details about the profit allocation or turning capital reserve into share capital
The Board of Directors of the Company did not put forward any proposal on profit allocation or turning capital reserve into share
capital for the reporting period.
XI. Particulars about researches, visits and interviews received in this reporting period
Time of Place of Way of Visitor Main discussion and materials
Visitor
reception reception reception type provided by the Company
Market situation of color TV business
in 2013, marketing channel of color
Conference China Galaxy
Field Institutio TV business, pricing tendency of
29 Jan. 2013 Room of the Securities Co.,
research n panel in 2013 and progress of the
Company Ltd.
renovation of land of the headquarter
plants area
China
Market situation of color TV business
Investment
in 2013, marketing channel of color
Conference Securities Co.,
Field Institutio TV business, progress of the
4 Feb. 2013 Room of the Ltd., Fortune
research n renovation of land of the headquarter
Company One Assets
plants area and development trend of
Management
OLED panel
Co., Ltd.
CITIC Securities Market situation of color TV business
Co., Ltd., in 2013, marketing channel of color
Conference
Field Institutio Industrial TV business, pricing tendency of
26 Feb. 2013 Room of the
research n Securities Co., panel in 2013, progress of the
Company
Ltd. and UBS renovation of land of the headquarter
Securities Co. plants area and cell phone business
Conference CCB Principal Market situation of color TV business
27 Feb. 2013 Field Institutio
Room of the Asset in 2013, pricing tendency of panel in
23
2013 Semi-annual Report of Konka Group Co., Ltd.
Company Management 2013 and cell phone business
research n
Co., Ltd.
Yinhua Fund
Management
Co., Ltd.,
Beijing Star Market situation of color TV business
Conference Rock Investment in 2013, cell phone business,
Field Institutio
28 Feb. 2013 Room of the Management marketing channel of color TV
research n
Company Co., Ltd., Citic business and development trend of
Securities Co., OLED panel
Ltd. and Haitong
Securities Co.,
Ltd.
Changjiang
Securities Co.,
Progress of the renovation of land of
Conference Ltd. and
Field Institutio the headquarter plants area, operating
21 Mar. 2013 Room of the Shenzhen
research n strategy in 2013 and the Company’s
Company Harmony Asset
plan on solving the matters of B-share
Management
Co., Ltd.
V. 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 situation of the Company’s governance was in compliance with the
Company Law and the relevant CSRC requirements.
II. Significant lawsuits or arbitrations
□ Applicable √ Inapplicable
The Company was not involved in any significant lawsuit or arbitration during the reporting period.
24
2013 Semi-annual Report of Konka Group Co., Ltd.
III. The media’s doubts
□ Applicable √ Inapplicable
There was no such a case in the reporting period where most of the media raised the same doubt
about the Company.
IV. Bankruptcy and reorganization
No bankruptcy or reorganization occurred in the reporting period.
V. Asset transaction
1. Asset acquisition
Relationsh
ip between
the
Transa Influen
Transa Ratio of the transaction
ction ce on Relate
Asset ction Influence on net profit party and Disclos
party Progre the d-part
acquire price the contributed by the ure Disclos
or ss Compa y
d or (RMB Company’s the asset to the Company date ure
ultimat (note ny’s transa
bought Ten operation Company to (applicable (note index
e 2) gain/lo ction
in thousa (note 3) the total profit for 5)
control ss (note or not
nd) (%) related-par
ler 4)
ty
transaction
s)
2. Sale of assets
Net Ratio Relati Whet
profit of the onshi her or Whet
contri net p not her or
Influe not
buted profit betwe the the
Trans nce of
by the contri Relate en the owner credit
action the or’s
asset buted Pricin d-part transa ship right
Trans Date price sale Discl Discl
Asset from to the g y ction of the and
action of (RMB on the liabilit osure osure
sold the Comp princi transa party asset ies
party sale Ten Comp date index
period any ple ction and involv involv
thous any ed
-begin by the or not the ed has have
and) (note
to the asset Comp been been
3) fully
date sale to any fully transf
of the (appli transf erred
sale total cable erred
25
2013 Semi-annual Report of Konka Group Co., Ltd.
(RMB profit for
Ten (%) relate
thous d-part
and) y
transa
ctions
)
The
equity
transf
er will
achie
ve a
Public
certai listed
n for
amou transf
nt of er
premi basin
g on
60% um,
Chon the
equity which
qing apprai
of will
Machi sal
nere Chon benefi value
& gqing t to of the
17 10
Electr Konk 6,939. the net Inappl
Jul. 0 0% No No No Nov.
onics a 81 increa assets icable
2013 2012
Holdi Electr se of of
ng onics cash 60%
(Grou equity
co., flow
p)., of
Ltd and
Ltd Chon
impro
gqing
veme Konk
nt of a
the Electr
financ onic
ial Co.,
condit Ltd.
ion of
the
Comp
any
Note: Announcement on Listing to Transfer 60% Equity of the Subsidiary Chongqing Konka
Electronic Co., Ltd. (Announcement No.: 2012-39), published on
http://www.cninfo.com.cn/information/companyinfo.html
26
2013 Semi-annual Report of Konka Group Co., Ltd.
3. Business combination
Inapplicable
VI. Implementation of equity incentive and its influence
The Company did not conduct equity incentive expire the disclosure of the report.
VII. Significant related-party transactions
1. Related-party transactions arising from routine operation
Proport
ion in Obtaina
the ble
Transacti total market
Related Type of Content Trans on amount Mode price
Pricing Disclos
transact Relatio the s of the actio amount s of of for the Disclos
principl ure
ion n transact transact n (RMB transact settlem transact ure date
e index
party ion ion price Ten ions of ent ion of
thousand) the the
same same
kind kind
(%)
Under Purchas
Anhui
the Purchas ing the The
Huali Mark 27
same e of packagi Agreed Forecas
Packing et 1,948.19 0.34% In cash April
actual commo ng price ting
Co., price 2013
contro dities materia Public
Ltd.
ller ls Notice
Under Purchas on
Shangh
the Purchas ing the Routine
ai Huali Mark 27
same e of packagi Agreed Related
Packing et 502.22 0.09% In cash April
actual commo ng price Transac
Co., price 2013
controll dities materia tion for
Ltd.
er ls Y2013
Huali Under Purchas (public
(Huizh the Purchas ing the notice
Mark 27
ou) same e of packagi Agreed No.
et 489.23 0.09% In cash April
Packing actual commo ng price 2013-0
price 2013
Co., controll dities materia 5),
Ltd. er ls http://w
Huizho Under Purchas Purchas ww.cni
Mark 27
u Huali the e of ing the Agreed nfo.co
et 40.58 0.01% In cash April
Packing same commo packagi price m.cn
price 2013
Co., actual dities ng
27
2013 Semi-annual Report of Konka Group Co., Ltd.
Ltd. controll materia
er ls
Shenzh
Under
en OCT Purchas
the Purchas
Water ing Mark 27
same e of Agreed
and water et 449.79 0.08% In cash April
actual commo price
Power and price 2013
controll dities
Co., power
er
Ltd
Shenzh
en
Overse Under Purchas
as the Purchas ing
Mark 27
Chinese same e of hotel Agreed
et 7.71 0.01% In cash April
Town actual commo room price
price 2013
Hotel controll dities catering
Group er services
Co.,
Ltd.
Under
Shenzh
the Selling
en OCT sales of Mark 27
same liquid Agreed
East commo et 21 0.8% In cash April
actual crystal price
Co., dities price 2013
controll display
Ltd
er
Chengd
u
Tianfu Under
OCT the Selling
sales of Mark 27
Industri same liquid Agreed
commo et 38 1.45% In cash April
al actual crystal price
dities price 2013
Develo controll display
pment er
Co.,
Ltd
Total -- -- 3,496.72 -- -- -- -- --
Details of large amount of sales returns Inapplicable
The Company has published the Forecasting Public Notice on Routine Related
Transaction for Y2013 (public notice No. 2013-05) on Securities Times, Shanghai
As for the prediction on the total amount
Securities News, China Securities Journal and Hong Kong Ta Kung Pao as well as
of routine related-party transactions to be
the Internet website designated by CSRC http://www.cninfo.com.cn on 27 Apr.
occurred in the reporting period by
2013. In the reporting period, the basis for pricing, transaction price, transaction
relevant types, the actual performance in
amount and settlement methods of raw materials purchased by the Company were
the reporting period
basically in accordance with the forecast. The total amount was RMB 34,967,200
Yuan.
Reason for significant difference
The transaction price was fixed by referring to the market price, which had not any
between the transaction price and the
significant difference with the market price.
market price
28
2013 Semi-annual Report of Konka Group Co., Ltd.
2. Related-party transactions arising from acquisition and sale of assets
Assess
Book
ed
value
value Marke Transf
of the Gain/l
Relate Conten of the t fair er
Type Pricin transfe Mode oss
d ts of transfe value price Disclo Disclo
Relatio of the g rred of (RMB
transac the rred (RMB (RMB sure sure
n transac princip asset settle Ten
tion transac asset Ten Ten date index
tion le (RMB ment thousa
party tion (RMB thousa thousa
Ten nd)
Ten nd) nd)
thousa
thousa
nd)
nd)
3. Significant related-party transactions arising from joint investment in external parties
Total assets Net assets Net profit
Main Registered
Joint Pricing of investee of investee of investee
Relation Investee business of capital of
investor principle (RMB Ten (RMB Ten (RMB Ten
investee investee
thousand) thousand) thousand)
4. Credits and liabilities with related parties
Was there any credit or liability with any related party for non-operating purpose?
√ Yes □ No
Amount
Non-operating Opening incurred in Closing
Variety of
Related Relationsh capital balance reporting balance
credit or Reason
party ip occupation or (RMB Ten period (RMB Ten
liability
not? thousand) (RMB Ten thousand)
thousand)
In order to reduce
the fund cost, the
Shenzhen Company lent
Overseas Actual Credit or money from
Chinese controller liabilities Shenzhen Overseas
No 130,000 -110,000 10,000
Town of the Payables to Chinese Town
Group Co., Company related parties Group Co., Ltd
Ltd through entrusted
loans.
29
2013 Semi-annual Report of Konka Group Co., Ltd.
5. Other significant related-party transactions
In order to meet the development of the existing business capital need and reduce fund cost, the
Company reviewed and approved the Proposal on Borrowing Loans from OCT ENTERPRISES CO
on the 42nd Session of the 7th Board of Directors, which agreed the Company to apply on increasing
a line of loans not over RMB 3 billion from OCT ENTERPRISES CO. The balance of the line of
loan was not over 150 million at any time. According to the market condition, the interest rate of the
aforesaid loans was lower than the interest rate of other financial institution loans in the same period.
In predict the corresponding interest rate amount of this year and the aforesaid line of loans was not
over RMB 90 million.
Index for the interim reports on significant related-party transactions disclosed on the relevant
website
Title of the interim announcement Disclosure date Disclosure website
Announcement of Related Transaction 27 Apr. 2013 www.cninfo.com.cn
VIII. Significant contracts and their fulfillment
1. Trusteeship, contracting and leasing
（1）Trusteeship
Particulars about trusteeship
Inapplicable
Any trusteeship event with an over-10% influence on the total profit of the Company for the
reporting period:
□ Applicable √ Inapplicable
（2）Contracting
Particulars about contracting
There was no contracting assets occurred or incurred to the Company during or before but continue
to the reporting period
Any contracting event with an over-10% influence on the total profit of the Company for the
reporting period:
□ Applicable √ Inapplicable
（3）Leasing
Particulars about leasing
The company had small amount of housing assets leasing, during the reporting period, there was no
single event with an over-10% influence on the total profit of the Company for the reporting period.
30
2013 Semi-annual Report of Konka Group Co., Ltd.
Any leasing event with an over-10% influence on the total profit of the Company for the reporting
period:
There was no leasing assets occurred or incurred to the Company during or before but continue to
the reporting period
□ Applicable √ Inapplicable
2. Guarantees provided by the Company
Unit: RMB Ten thousand
Guarantees provided by the Company for external parties (excluding those for subsidiaries)
Guaran
Disclosure
tee for
date of Actual
a
relevant occurrence Actual
Guaranteed Amount for Type of Period of Execute related
announceme date (date guarantee
party guarantee guarantee guarantee d or not party or
nt on the of amount
not
guarantee agreement)
(Yes/N
amount
o)
Kunshan
General
Jielunte Mould 21 Jul. 2012 1,620.85 0 5 years No No
guarantee
Plastic Co., Ltd.
Dongguan
27 Apr. General
Konka Mould 4,631 0 3 years No No
2013 guarantee
Plastic Co., Ltd.
Total actual occurred
Total external guarantee line
amount of external
approved during the reporting 4,631 0
guarantee during the
period (A1)）
reporting period (A2)
Total external guarantee line Total actual external
that has been approved at the 6,251.85 guarantee balance at the end 0
end of the reporting period (A3) of the reporting period (A4)
Guarantees provided by the Company for its subsidiaries
Disclosur Guaran
e date of tee for
relevant Actual a
Amount Actual
announce occurrence Type of Period of Execute related
Guaranteed party for guarantee
ment on date (date of guarantee guarantee d or not party or
guarantee amount
the agreement) not
guarantee (Yes/N
amount o)
Hong Kong Konka 1st Dec. 63,000 16 Jul. 2012 6,111 General 1 year No No
31
2013 Semi-annual Report of Konka Group Co., Ltd.
Co., Ltd. 2010 guarantee
Hong Kong Konka 1st Dec. General
63,000 29 Oct. 2012 3,024 1 year No No
Co., Ltd. 2010 guarantee
Hong Kong Konka 1st Dec. General
63,000 19 Nov. 2012 3,024 1 year No No
Co., Ltd. 2010 guarantee
Hong Kong Konka 1st Dec. General
63,000 27 Nov. 2012 9,072 1 year No No
Co., Ltd. 2010 guarantee
Hong Kong Konka 1st Dec. General
63,000 3 Dec. 2012 15,120 1 year No No
Co., Ltd. 2010 guarantee
Hong Kong Konka 13 Dec. General
126,000 14 Mar. 2013 29,610 2 year No No
Co., Ltd. 2011 guarantee
Hong Kong Konka 13 Dec. General
126,000 25 Mar. 2013 8,883 2 year No No
Co., Ltd. 2011 guarantee
Hong Kong Konka 13 Dec. General
126,000 22 May 2013 14,538.64 1 year No No
Co., Ltd. 2011 guarantee
Hong Kong Konka 13 Dec. General
126,000 27 May 2013 11,938.27 1 year No No
Co., Ltd. 2011 guarantee
Hong Kong Konka 13 Dec. General
126,000 7 Jun. 2013 5,584.38 1 year No No
Co., Ltd. 2011 guarantee
Hong Kong Konka 13 Dec. General
126,000 27 Jun. 2013 12,600 1 year No No
Co., Ltd. 2011 guarantee
Anhui Konka
Tongchuang
2nd Jun. General
Household 41,000 31 May 2013 3,000 1 year No No
2012 guarantee
Appliances Co.,
Ltd.
Total guarantee line approved Total actual occurred
for the subsidiaries during the amount of guarantee for the
0 86,154.29
reporting period subsidiaries during the
(B1) reporting period (B2)
Total guarantee line that has Total actual guarantee
been approved for the balance for the subsidiaries
400,000 122,505.29
subsidiaries at the end of the at the end of the reporting
reporting period (B3) 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 4,631 86,154.29
the reporting period
(A1+B1)
(A2+B2)
Total guarantee line that has Total actual guarantee
406,251.85 122,505.29
been approved at the end of the balance at the end of the
32
2013 Semi-annual Report of Konka Group Co., Ltd.
reporting period reporting period (A4+B4)
(A3+B3)
Proportion of total guarantee amount (A4+B4) to the net
30.06%
assets of the Company (%)
Of which:
Amount of guarantee for shareholders, actual controller and
0
related parties (C)
Amount of debt guarantee provided for the guaranteed party
whose asset-liability ratio is not less than 70% directly or 122,505.29
indirectly (D)
Part of the amount of the total guarantee over 50% of net
0
assets (E)
Total amount of the above three guarantees (C+D+E) 122,505.29
Currently, the guaranteed parties are in normal operation and a
Explanation on possible bearing joint responsibility of
good financial position. Therefore, the possibility for the
liquidation due to immature guarantee (if any)
Company to fulfill the joint responsibility of repayment is small.
Explanation on provision of guarantees for external parties in
Naught
violation of the prescribed procedure (if any)
Particulars about guarantees provided in a compound way
There was no guarantee provided in a compound way in the Company.
3. Other significant contracts
Evaluat
Book
ed
value
value Transac
of Executi
of Base tion Related
involve Evaluat on
Signing involve day for Pricing price -party
Signing Signing d assets ion Relatio progres
compan d assets evaluati principl (RMB transact
person date (RMB agency nship s up to
y (RMB on (if e Ten ion or
Ten (if any) period-
Ten any) thousan not
thousan end
thousan d)
d) (if
d) (if
any)
any)
4. Other significant transactions
There was no other significant transaction occurred during or before but continue to the reporting
period.
33
2013 Semi-annual Report of Konka Group Co., Ltd.
IX. 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
Time of
Commitme Period of
Commitment Contents making Fulfillment
nt maker commitment
commitment
Commitment on share reform Naught Naught
Commitment in acquisition reports or reports
Naught Naught
on equity changes
Commitments made upon the assets
Naught Naught
reorganization
Commitments made upon IPO or refinancing Naught Naught
Other commitments made to minority
Naught Naught
shareholders
Executed in time or not? Yes
Detailed reason for failing to execute and the
Inapplicable
next plan (if any)
X. Engagement and disengagement of the CPAs firm
Has the semi-annual financial report been audited or not?
□ Yes √ No
XI. Punishment and rectification
Type of
Name of the Type of the Conclusion (if Disclosure
Reason investigation/p Disclosure date
punished punished any) index
unishment
Particulars about rectification:
□ Applicable √ Inapplicable
XII. Explanation on other significant events
（I）Index for information disclosure during the reporting period
No. Time Name of announcement Page
Forecasting Public Notice on Annual
2013-01 2013-1-26 Securities Times B13, Ta Kung Pao B2
Performance for Y2012
Announcement on Resolutions of the 42nd
2013-02 2013-4-27 Securities Times B109, Ta Kung Pao A21
Session of the 7th Board of Directors
Announcement on Resolutions of the 8th
2013-03 2013-4-27 Securities Times B109, Ta Kung Pao A21
Session of the 7th Board of Supervisors
2013-04 2013-4-27 Announcement on Holding Annual General Securities Times B109, Ta Kung Pao A21
34
2013 Semi-annual Report of Konka Group Co., Ltd.
Meeting of 2012
Forecasting Public Notice on Routine Related
2013-05 2013-4-27 Securities Times B109, Ta Kung Pao A21
Transaction for Y2013
Abstract of Annual report 2012 of Konka Group
2013-06 2013-4-27 Securities Times B109, Ta Kung Pao A21
Co., Ltd.
2013-07 2013-4-27 Annual report 2012 of Konka Group Co., Ltd. Securities Times B109, Ta Kung Pao A21
2013-08 2013-4-27 Announcement on Related Party Transaction Securities Times B109, Ta Kung Pao A21
Announcement on Provision of Guarantees by
2013-09 2013-4-27 Securities Times B109, Ta Kung Pao A21
Controlled Subsidiaries for External Parties
The First Quarter Report 2013 of Konka Group
2013-10 2013-4-27 Securities Times B109, Ta Kung Pao A21
Co., Ltd.
Abstract of the First Quarter Report 2013 of
2013-11 2013-4-27 Securities Times B109, Ta Kung Pao A21
Konka Group Co., Ltd.
Announcement on Resolutions of Annual
2013-12 2013-5-21 Securities Times B41, Ta Kung Pao B3
General Meeting of 2012
Announcement on the Implementation of the
2013-13 2013-6-5 Securities Times B28, Ta Kung Pao B4
2012 Annual Dividend Plan
Announcement on Dissolution of Liquidation of
2013-14 2013-6-6 Securities Times B17, Ta Kung Pao B10
Controlled Subsidiaries
Announcement on Resolutions of the 43rd
2013-15 2013-6-6 Securities Times B17, Ta Kung Pao B10
Session of the 7th Board of Directors
Announcement on Resignation of the
2013-16 2013-6-18 Securities Times B53, Ta Kung Pao B9
Company’s Vice President
Announcement on the Progress of the Urban
2013-17 2013-6-29 Securities Times B20, Ta Kung Pao B3
Renewal Plan
(II)Progress of urban renewal projects of the Company headquarters
On 14 Oct. 2011, the 2nd Administration Bureau directly under the Urban Planning, Land and
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. In 2012, Land and Resources
Commission of Shenzhen Municipality issued Reply to the examination and approval of Plant
Renewal Unit Planning (Draft) of the Headquarters of Konka Group in Nanshan District. Plant
Renewal Unit Planning (Draft) of the Headquarters of Konka Group in Nanshan District has been
examined and approved by the Architecture and Environmental Art Commission of City Planning
Commission of Shenzhen. Land and Resources Commission of Shenzhen Municipality examined
the Project of Plant Renewal of the Headquarters of Konka Group, issued Construction Land
Planning Permit (License No. ZG-2013-0006) and approved the Company headquarters’ conduction
of Urban Plant Renewal construction land Planning. The 2nd Administration Bureau directly under
the Urban Planning, Land and Resources Commission of Shenzhen Municipality issued Shenzhen
state-owned land use right transfer income payment notice in 2013, the Company totally paid RMB
1,492,931,087 Yuan for the aforesaid project.
The Company recently received Comment Letter about Konka as Main Implementer of Plant
Renewal of the Headquarters of Konka Group Project from the restructuring office of Chengzhong
35
2013 Semi-annual Report of Konka Group Co., Ltd.
Village in Nanshan District of Shenzhen, the main content of the Comment Letter was as follows:
In recent, the Restructuring Office of Chengzhong Village in Nanshan District of Shenzhen
received the comment letter about opposing Konka as main implementer of Plant Renewal of the
Headquarters of Konka Group Project from OCT Group Co., Ltd. The OCT Group Co., Ltd was
against the Konka as the only main implementer of Plant Renewal of the Headquarters of Konka
Group Project and recognized that there are historical and residual property rights disputes in the
ground (T309-0056, the land area of 37251.8 square meters) of the Plant Renewal Unit of the
Headquarters of Konka Group, and the related procedures should be suspended and dealt with after
the OCT Group Co., Ltd and Konka Group negotiating the solutions.
36
2013 Semi-annual Report of Konka Group Co., Ltd.
VI. Change in Shares & Shareholders
I. Change in shares
Before the change Increase/decrease (+, -) After the change
Capitali
Issuance zation
Proporti of Bonus of Othe Subt Proporti
Amount Amount
on (%) new shares public rs otal on (%)
shares reserve
fund
I. Restricted shares 198,381,940 16.48% 198,381,940 16.48%
2. Share held by
state-owned 198,381,940 16.48% 198,381,940 16.48%
corporations
5. Share held by
senior management 0 0% 0 0%
staff
II. Non-restricted 1,005,590,76
83.52% 1,005,590,764 83.52%
shares 4
1. Renminbi
599,914,960 49.83% 599,914,960 49.83%
ordinary shares
2. Domestically
listed foreign 405,675,804 33.69% 405,675,804 33.69%
shares
1,203,972,70
III. Total shares 100% 1,203,972,704 100%
4
Reason for the change in shares
□ Applicable √ Inapplicable
Approval of the change in shares
□ Applicable √ Inapplicable
Transfer of share ownership
□ Applicable √ Inapplicable
Effects of the change in shares on the basic EPS, diluted EPS, net assets per share attributable to
common shareholders of the Company and other financial indexes over the last year and last period
□ Applicable √ Inapplicable
Other contents that the Company considered necessary or were required by the securities regulatory
authorities to disclose
□ Applicable √ Inapplicable
Change of the total shares, shareholder structure, asset structure and liability structure
□ Applicable √ Inapplicable
37
2013 Semi-annual Report of Konka Group Co., Ltd.
II. Total number of shareholders and their shareholdings
Unit: share
Total number of shareholders at
96,366
the end of the reporting period
Particulars about shares held by shareholders with a shareholding percentage over 5%
Shareh Increase/d Pledged or frozen shares
Number of
Nature of olding Total shares ecrease Number of
Name of non-restric
sharehold percent held at the during the restricted Status of Number
shareholder ted shares
er age period-end reporting shares held shares of shares
held
(%) period
State-own
OCT Pledged or
ed 198,381,94
ENTERPRISES 19% 228,754,783 0 30,372,843 0
corporatio 0 frozen
CO.
n
HOLY TIME Foreign Pledged or
GROUP corporatio 4.83% 58,200,560 -629,440 0 58,200,560 0
frozen
LIMITED n
Foreign Pledged or
GAOLING
corporatio 2.19% 26,400,625 0 0 26,400,625 0
FUND,L.P. frozen
n
Foreign Pledged or
NAM NGAI natural 0.98% 11,760,520 0 0 11,760,520 0
frozen
person
Domestic
Pledged or
LI YICHAO natural 0.45% 5,447,381 56,200 0 5,447,381 0
frozen
person
Domestic Pledged or
XIA RUI natural 0.42% 5,006,500 0 0 5,006,500 0
frozen
person
JIANGSU
Domestic
CAMMY non-state- Pledged or
MEMBRANE owned 0.31% 3,745,864 3,745,864 0 3,745,864 0
frozen
TECHNOLOGY corporatio
n
CO., LTD
YHG Foreign Pledged or
INVESTMENT, corporatio 0.25% 2,967,661 0 0 2,967,661 0
frozen
L.P. n
Domestic
non-state- Pledged or
GZSZJL CO.,
owned 0.24% 2,878,561 1,143,500 0 2,878,561 0
LTD frozen
corporatio
n
Domestic Pledged or
GAN XIAOYAN natural 0.24% 2,841,178 0 0 2,841,178 0
frozen
person
Strategic investor or general
corporation becoming a top ten
Naught
shareholder due to placing of
new shares (if any)
38
2013 Semi-annual Report of Konka Group Co., Ltd.
Explanation on associated The first majority shareholder OVERSEAS CHINESE TOWN ENTERPRISES CO. has no
relationship or/and persons related-party relationship with other shareholders and they are not acting-in-concert parties,
acting in concert among the either. Except for that, the Company does not know whether the other shareholders are related
above-mentioned shareholders: parties and whether they are acting-in-concert parties.
Particulars about shareholdings of the top ten shareholders holding non-restricted shares
Number of non-restricted shares held at the Type of shares
Name of shareholder
period-end Type Number
Domestically
HOLY TIME GROUP LIMITED 58,200,560 listed foreign 58,200,560
shares
RMB ordinary
OCT ENTERPRISES CO. 30,372,843 30,372,843
share
Domestically
GAOLING FUND,L.P. 26,400,625 listed foreign 26,400,625
shares
Domestically
NAM NGAI 11,760,520 listed foreign 11,760,520
shares
RMB ordinary
LI YICHAO 5,447,381 5,447,381
share
RMB ordinary
XIA RUI 5,006,500 5,006,500
share
JIANGSU CAMMY
RMB ordinary
MEMBRANE TECHNOLOGY 3,745,864 3,745,864
CO., LTD share
Domestically
YHG INVESTMENT, L.P. 2,967,661 listed foreign 2,967,661
shares
RMB ordinary
GZSZJL CO., LTD 2,878,561 2,878,561
share
RMB ordinary
GAN XIAOYAN 2,841,178 2,841,178
share
Explanation on associated
relationship or/and persons acting The first majority shareholder OVERSEAS CHINESE TOWN ENTERPRISES CO. has no
in concert among the top ten related-party relationship with other shareholders and they are not acting-in-concert parties,
tradable shareholders and between either. Except for that, the Company does not know whether the other shareholders are
the top ten tradable shareholders related parties and whether they are acting-in-concert parties.
and the top ten shareholders
Explanation on shareholders Gan Xiaoyan held 2,814,178 shares of the Company through the account of Customer
participating in the margin trading credit trading collateral securities.
business (if any)(see Note 4)
Did any shareholder of the Company carry out an agreed buy-back in the reporting period?
39
2013 Semi-annual Report of Konka Group Co., Ltd.
□ Yes √ No
III. Change of the controlling shareholder or the actual controller
Change of the controlling shareholder in the reporting period
□ Applicable √ Inapplicable
Change of the actual controller in the reporting period
□ Applicable √ Inapplicable
40
2013 Semi-annual Report of Konka Group Co., Ltd.
VII. Directors, Supervisors & Senior Management Staff
I. Shareholding changes of directors, supervisors and senior management staff
□ Applicable √ Inapplicable
Shareholdings of directors, supervisors and senior management staff did not change in the reporting
period. For details, see the 2012 Annual Report.
II. Directors, supervisors and senior management staff who left their posts
Name Position Type Date Reason
Liu Fengxi President On the post 25 Apr. 2013 Job demand
Li Hongtao Vice president Employed 25 Apr. 2013 Job demand
Former
Chen Yuehua Leave office 25 Apr. 2013 Personal reason
president
Former
Mu Gang Leave office 18 Jun. 2013 Personal reason
president
41
2013 Semi-annual Report of Konka Group Co., Ltd.
VIII. Financial Statements
I. Audit report
Has this semi-annual report been audited?
□ Yes √ No
The semi-annual financial report has not been audited.
II. Financial statements
Currency unit for the statements in the notes to these financial statements: RMB Yuan
1. Consolidated balance sheet
Prepared by Konka Group Co., Ltd.
Unit: RMB Yuan
Item Closing balance Opening balance
Current Assets:
Monetary funds 1,967,916,106.35 1,728,946,511.11
Settlement reserves
Intra-group lendings
Transactional financial assets
Notes receivable 3,116,490,790.65 5,033,056,004.97
Accounts receivable 2,328,416,523.74 1,975,605,771.07
Accounts paid in advance 176,815,074.95 183,008,022.27
Premiums receivable
Reinsurance premiums receivable
Receivable reinsurance contract
reserves
Interest receivable 1,354,814.02 7,171,998.73
Dividend receivable
Other accounts receivable 772,983,032.05 316,590,715.96
Financial assets purchased under
agreements to resell
Inventories 3,578,641,728.16 4,059,339,049.25
Non-current assets due within 1
year
Other current assets
42
2013 Semi-annual Report of Konka Group Co., Ltd.
Total current assets 11,942,618,069.92 13,303,718,073.36
Non-current assets:
Loans by mandate and advances
granted
Available-for-sale financial assets 1,155,503.50 1,187,177.20
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investment 462,198,731.89 472,423,533.19
Investing property 232,967,740.24 235,680,171.89
Fixed assets 1,845,273,643.19 1,887,836,271.02
Construction in progress 51,140,977.31 50,682,893.85
Engineering materials
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 288,786,964.40 290,280,443.01
R&D expense
Goodwill 3,943,671.53 3,943,671.53
Long-term deferred expenses 7,996,783.63 6,261,286.45
Deferred income tax assets 291,656,333.04 310,903,676.56
Other non-current assets
Total of non-current assets 3,185,120,348.73 3,259,199,124.70
Total assets 15,127,738,418.65 16,562,917,198.06
Current liabilities:
Short-term borrowings 4,867,487,486.36 5,456,351,486.48
Borrowings from Central Bank
Customer bank deposits and due to
banks and other financial institutions
Intra-group borrowings
Transactional financial liabilities
Notes payable 430,984,500.20 846,746,137.62
Accounts payable 3,088,961,265.75 2,735,993,787.52
Accounts received in advance 346,055,109.32 441,836,467.09
Financial assets sold for repurchase
Handling charges and commissions
43
2013 Semi-annual Report of Konka Group Co., Ltd.
payable
Employee’s compensation payable 237,393,383.38 305,003,416.73
Tax payable -68,892,000.44 -231,087,836.60
Interest payable 33,716,566.61 27,651,352.67
Dividend payable
Other accounts payable 1,632,455,077.29 1,364,756,260.46
Reinsurance premiums payable
Insurance contract reserves
Payables for acting trading of
securities
Payables for acting underwriting of
securities
Non-current liabilities due within 1
110,000,000.00 810,000,000.00
year
Other current liabilities
Total current liabilities 10,678,161,388.47 11,757,251,071.97
Non-current liabilities:
Long-term borrowings 400,000,000.00
Bonds payable
Long-term payables 30,000,000.00 30,000,000.00
Specific payables
Estimated liabilities 2,511,814.54 2,511,814.54
Deferred income tax liabilities 563,067.21 563,067.21
Other non-current liabilities 142,165,597.94 125,743,462.22
Total non-current liabilities 175,240,479.69 558,818,343.97
Total liabilities 10,853,401,868.16 12,316,069,415.94
Owners’ equity (or shareholders’
equity)
Paid-up capital (or share capital) 1,203,972,704.00 1,203,972,704.00
Capital reserves 1,272,396,573.19 1,272,420,328.46
Less: Treasury stock
Specific reserves
Surplus reserves 827,291,207.52 827,291,207.52
Provisions for general risks
Retained profits 753,993,650.68 725,485,704.10
44
2013 Semi-annual Report of Konka Group Co., Ltd.
Foreign exchange difference 17,325,439.45 14,421,594.77
Total equity attributable to owners of
4,074,979,574.84 4,043,591,538.85
the Company
Minority interests 199,356,975.65 203,256,243.27
Total owners’ (or shareholders’)
4,274,336,550.49 4,246,847,782.12
equity
Total liabilities and owners’ (or
15,127,738,418.65 16,562,917,198.06
shareholders’) equity
Legal representative: Hou Songrong Person-in-charge of the accounting
work: Yang Rong
Chief of the accounting division: Xu Youshan
2. Balance sheet of the Company
Prepared by Konka Group Co., Ltd.
Unit: RMB Yuan
Item Closing balance Opening balance
Current Assets:
Monetary funds 1,403,071,490.96 1,232,222,002.19
Transactional financial assets
Notes receivable 2,913,770,620.86 4,745,072,740.14
Accounts receivable 1,373,117,631.16 1,236,932,980.35
Accounts paid in advance 171,517,644.94 194,043,254.39
Interest receivable 4,016,480.63 7,894,632.07
Dividend receivable
Other accounts receivable 1,295,552,861.08 743,098,527.06
Inventories 2,220,248,414.98 2,840,661,422.34
Non-current assets due within 1
year
Other current assets
Total current assets 9,381,295,144.61 10,999,925,558.54
Non-current assets:
Available-for-sale financial assets 1,155,503.50 1,187,177.20
Held-to-maturity investments 505,000,000.00 395,000,000.00
Long-term accounts receivable
45
2013 Semi-annual Report of Konka Group Co., Ltd.
Long-term equity investment 1,693,717,169.87 1,693,717,169.87
Investing property 232,967,740.24 235,680,171.89
Fixed assets 538,655,218.20 555,870,405.39
Construction in progress 6,832,156.54 5,584,347.15
Engineering materials
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 26,621,500.91 24,518,958.53
R&D expense
Goodwill
Long-term deferred expenses 1,408,626.61 1,811,365.14
Deferred income tax assets 195,846,005.81 223,333,764.57
Other non-current assets
Total of non-current assets 3,202,203,921.68 3,136,703,359.74
Total assets 12,583,499,066.29 14,136,628,918.28
Current liabilities:
Short-term borrowings 2,277,480,809.66 2,451,684,485.86
Transactional financial liabilities
Notes payable 214,774,553.79 597,563,690.81
Accounts payable 3,722,657,627.27 3,664,516,644.48
Accounts received in advance 646,335,858.62 1,197,059,751.70
Employee’s compensation payable 128,036,951.53 164,101,581.67
Tax payable -71,560,150.50 -245,006,993.34
Interest payable 25,569,914.12 19,388,598.90
Dividend payable
Other accounts payable 1,562,199,833.24 1,189,885,260.79
Non-current liabilities due within 1
100,000,000.00 800,000,000.00
year
Other current liabilities
Total current liabilities 8,605,495,397.73 9,839,193,020.87
Non-current liabilities:
Long-term borrowings 400,000,000.00
Bonds payable
46
2013 Semi-annual Report of Konka Group Co., Ltd.
Long-term payables
Specific payables
Estimated liabilities
Deferred income tax liabilities
Other non-current liabilities 81,977,202.20 78,428,442.55
Total non-current liabilities 81,977,202.20 478,428,442.55
Total liabilities 8,687,472,599.93 10,317,621,463.42
Owners’ equity (or shareholders’
equity)
Paid-up capital (or share capital) 1,203,972,704.00 1,203,972,704.00
Capital reserves 1,249,266,406.61 1,249,290,161.88
Less: Treasury stock
Specific reserves
Surplus reserves 827,291,207.52 827,291,207.52
Provisions for general risks
Retained profits 615,496,148.23 538,453,381.46
Foreign exchange difference
Total owners’ (or shareholders’)
3,896,026,466.36 3,819,007,454.86
equity
Total liabilities and owners’ (or
12,583,499,066.29 14,136,628,918.28
shareholders’) equity
Legal representative: Hou Songrong Person-in-charge of the accounting
work: Yang Rong
Chief of the accounting division: Xu Youshan
3. Consolidated income statement
Prepared by Konka Group Co., Ltd.
Unit: RMB Yuan
Item Jan.-Jun. 2013 Jan.-Jun 2012
I. Total operating revenues 9,421,399,281.00 7,038,923,137.77
Including: Sales income 9,421,399,281.00 7,038,923,137.77
Interest income
Premium income
Handling charge and
47
2013 Semi-annual Report of Konka Group Co., Ltd.
commission income
II. Total operating cost 9,394,355,334.09 7,101,902,409.35
Including: Cost of sales 7,835,777,505.69 5,722,506,955.64
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 charges 33,034,164.50 24,480,585.29
Selling and distribution
1,211,403,089.80 974,573,637.23
expenses
Administrative expenses 312,936,108.52 276,316,995.50
Financial expenses -21,707,338.29 109,770,636.77
Asset impairment loss 22,911,803.87 -5,746,401.08
Add: Gain/(loss) from change in fair
22,101,173.97
value (“-” means loss)
Gain/(loss) from investment (“-”
-8,176,580.12 9,074,172.92
means loss)
Including: share of profits in
-8,197,695.92 3,873,147.41
associates and joint ventures
Foreign exchange gains (“-” means
loss)
III. Business profit (“-” means loss) 18,867,366.79 -31,803,924.69
Add: non-operating income 45,954,814.02 77,248,515.09
Less: non-operating expense 5,125,852.63 2,279,681.52
Including: loss from non-current asset
3,868,800.73 1,877,844.62
disposal
IV. Total profit (“-” means loss) 59,696,328.18 43,164,908.88
Less: Income tax expense 23,047,922.18 31,688,114.67
V. Net profit (“-” means loss) 36,648,406.00 11,476,794.21
Including: Net profit achieved
by combined parties before the
48
2013 Semi-annual Report of Konka Group Co., Ltd.
combinations
Attributable to owners of the
40,547,673.62 11,467,291.68
Company
Minority shareholders’ income -3,899,267.62 9,502.53
VI. Earnings per share -- --
(I) Basic earnings per share 0.0337 0.0095
(II) Diluted earnings per share 0.0337 0.0095
Ⅶ. Other comprehensive incomes 2,880,089.41 -6,165,769.64
Ⅷ. Total comprehensive incomes 39,528,495.41 5,311,024.57
Attributable to owners of the
43,427,763.03 5,301,522.04
Company
Attributable to minority shareholders -3,899,267.62 9,502.53
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
Prepared by Konka Group Co., Ltd.
Unit: RMB Yuan
Item Jan.-Jun. 2013 Jan.-Jun 2012
I. Total sales 9,702,218,724.14 6,774,153,821.67
Less: cost of sales 8,499,715,386.70 5,866,640,366.34
Business taxes and surcharges 21,482,263.96 15,134,191.37
Distribution expenses 943,734,400.78 781,809,952.93
Administrative expenses 139,566,110.08 177,679,601.14
Financial costs -6,425,825.96 25,071,725.43
Impairment loss 15,096,511.60 -5,645,488.93
Add: gain/(loss) from change in fair
21,760,628.97
value (“-” means loss)
Gain/(loss) from investment (“-”
21,115.80 5,201,025.51
means loss)
Including: income form investment
on associates and joint ventures
II. Business profit (“-” means loss) 89,070,992.78 -59,574,872.13
Add: non-business income 28,874,525.07 43,160,949.62
49
2013 Semi-annual Report of Konka Group Co., Ltd.
Less: non-business expense 1,367,346.85 1,048,741.89
Including: loss from non-current asset
708,641.08 913,357.22
disposal
III. Total profit (“-” means loss) 116,578,171.00 -17,462,664.40
Less: income tax expense 27,495,677.19 8,603,275.51
IV. Net profit (“-” means loss) 89,082,493.81 -26,065,939.91
V. Earnings per share -- --
(I) Basic earnings per share
(II) Diluted earnings per share
VI. Other comprehensive income -23,755.27 -3,372,392.58
VII. Total comprehensive income 89,058,738.54 -29,438,332.49
Legal representative: Hou Songrong Person-in-charge of the accounting
work: Yang Rong
Chief of the accounting division: Xu Youshan
5. Consolidated cash flow statement
Prepared by Konka Group Co., Ltd.
Unit: RMB Yuan
Item Jan.-Jun. 2013 Jan.-Jun 2012
I. Cash flows from operating
activities:
Cash received from sale of
10,162,808,854.72 8,092,349,440.39
commodities and rendering of 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
50
2013 Semi-annual Report of Konka Group Co., Ltd.
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 153,435,412.27 144,868,848.62
Other cash received relating to
205,805,076.79 176,013,167.48
operating activities
Subtotal of cash inflows from
10,522,049,343.78 8,413,231,456.49
operating activities
Cash paid for goods and services 5,650,732,166.65 5,097,741,993.05
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 861,559,419.57 700,612,998.13
Various taxes paid 954,929,345.27 916,629,121.57
Other cash payment relating to
783,138,191.86 582,662,255.97
operating activities
Subtotal of cash outflows from
8,250,359,123.35 7,297,646,368.72
operating activities
Net cash flows from operating
2,271,690,220.43 1,115,585,087.77
activities
II. Cash flows from investing
activities:
Cash received from withdrawal of
2,657,324.08
investments
Cash received from return on
2,048,223.48 7,179,366.22
investments
Net cash received from disposal of 29,550,434.18 16,187,781.02
51
2013 Semi-annual Report of Konka Group Co., Ltd.
fixed assets, intangible assets and
other long-term assets
Net cash received from disposal of
subsidiaries or other business units
Other cash received relating to
1,455,277,858.53
investing activities
Subtotal of cash inflows from
31,598,657.66 1,481,302,329.85
investing activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 99,970,151.12 101,544,530.59
assets
Cash paid for investment
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
99,970,151.12 854,954,530.59
investing activities
Net cash flows from investing
-68,371,493.46 626,347,799.26
activities
III. Cash Flows from Financing
Activities:
Cash received from capital
contributions
Including: Cash received from
minority shareholder investments by
subsidiaries
Cash received from borrowings 2,508,372,133.01 3,784,211,969.43
Cash received from issuance of
bonds
Other cash received relating to
1,089,113,577.37 2,437,886,588.09
financing activities
Subtotal of cash inflows from
3,597,485,710.38 6,222,098,557.52
financing activities
Repayment of borrowings 4,376,015,648.31 4,753,774,207.18
Cash paid for interest expenses
85,282,170.19 56,263,690.71
and distribution of dividends or profit
52
2013 Semi-annual Report of Konka Group Co., Ltd.
Including: dividends or profit
paid by subsidiaries to minority
shareholders
Other cash payments relating to
409,177,553.47 2,503,627,277.55
financing activities
Sub-total of cash outflows from
4,870,475,371.97 7,313,665,175.44
financing activities
Net cash flows from financing
-1,272,989,661.59 -1,091,566,617.92
activities
IV. Effect of foreign exchange rate
14,934,241.48 -4,692,796.87
changes on cash and cash equivalents
V. Net increase in cash and cash
945,263,306.86 645,673,472.24
equivalents
Add: Opening balance of cash
824,043,169.37 646,451,050.70
and cash equivalents
VI. Closing balance of cash and cash
1,769,306,476.23 1,292,124,522.94
equivalents
Legal representative: Hou Songrong Person-in-charge of the accounting
work: Yang Rong
Chief of the accounting division: Xu Youshan
6. Cash flow statement of the Company
Prepared by Konka Group Co., Ltd.
Unit: RMB Yuan
Item Jan.-Jun. 2013 Jan.-Jun 2012
I. Cash flows from operating
activities:
Cash received from sale of
8,169,470,748.42 7,124,507,661.06
commodities and rendering of service
Tax refunds received 100,561,758.82 61,104,715.33
Other cash received relating to
131,778,571.89 161,389,435.13
operating activities
Subtotal of cash inflows from
8,401,811,079.13 7,347,001,811.52
operating activities
Cash paid for goods and services 4,399,419,343.02 4,824,139,171.90
Cash paid to and for employees 486,682,695.14 389,770,210.49
53
2013 Semi-annual Report of Konka Group Co., Ltd.
Various taxes paid 733,498,583.63 736,696,148.57
Other cash payment relating to
567,857,933.56 482,313,091.81
operating activities
Subtotal of cash outflows from
6,187,458,555.35 6,432,918,622.77
operating activities
Net cash flows from operating
2,214,352,523.78 914,083,188.75
activities
II. Cash flows from investing
activities:
Cash received from retraction of
2,657,324.08
investments
Cash received from return on
11,780,384.78 17,082,012.91
investments
Net cash received from disposal of
fixed assets, intangible assets and 22,513,818.18 15,963,344.44
other long-term assets
Net cash received from disposal of
subsidiaries or other business units
Other cash received relating to
30,000,000.00 1,303,077,858.53
investing activities
Subtotal of cash inflows from
64,294,202.96 1,338,780,539.96
investing activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 52,560,352.69 41,707,809.09
assets
Cash paid for investment
Net cash paid to acquire
subsidiaries and other business units
Other cash payments relating to
140,000,000.00 683,210,000.00
investing activities
Subtotal of cash outflows from
192,560,352.69 724,917,809.09
investing activities
Net cash flows from investing
-128,266,149.73 613,862,730.87
activities
III. Cash Flows from Financing
Activities:
Cash received from capital
contributions
54
2013 Semi-annual Report of Konka Group Co., Ltd.
Cash received from borrowings 142,130,800.00 1,191,078,585.00
Cash received from issuance of
bonds
Other cash received relating to
1,089,113,577.37 2,375,113,115.31
financing activities
Subtotal of cash inflows from
1,231,244,377.37 3,566,191,700.31
financing activities
Repayment of borrowings 2,001,719,302.86 2,050,979,015.67
Cash paid for interest expenses
60,306,800.51 31,087,175.19
and distribution of dividends or profit
Other cash payments relating to
407,569,308.18 2,476,365,375.37
financing activities
Sub-total of cash outflows from
2,469,595,411.55 4,558,431,566.23
financing activities
Net cash flows from financing
-1,238,351,034.18 -992,239,865.92
activities
IV. Effect of foreign exchange rate
4,658,418.09 -5,883,183.55
changes on cash and cash equivalents
V. Net increase in cash and cash
852,393,757.96 529,822,870.15
equivalents
Add: Opening balance of cash
365,891,615.75 275,892,343.00
and cash equivalents
VI. Closing balance of cash and cash
1,218,285,373.71 805,715,213.15
equivalents
Legal representative: Hou Songrong Person-in-charge of the accounting
work: Yang Rong
Chief of the accounting division: Xu Youshan
55
2013 Semi-annual Report of Konka Group Co., Ltd.
7. Consolidated Statement of Changes in Owners’ Equity
Prepared by Konka Group Co., Ltd.
Jan.-Jun. 2013
Unit: RMB Yuan
Jan.-Jun. 2013
Equity attributable to owners of the Company
Less: Speci Gener
Item Minority Total owners’
Paid-up capital treas fic al risk
Capital reserve Surplus reserve Retained profit Others interests equity
(or share capital) ury reser reserv
stock ve e
I. Balance at the end of 1,272,420,328.4 4,246,847,782.1
1,203,972,704.00 827,291,207.52 725,485,704.10 14,421,594.77 203,256,243.27
the previous year 6 2
Add: change of
accounting policy
Correction of errors in
previous periods
Other
II. Balance at the 1,272,420,328.4 4,246,847,782.1
1,203,972,704.00 827,291,207.52 725,485,704.10 14,421,594.77 203,256,243.27
beginning of the year 6 2
III. Increase/ decrease in
the period (“-” means -23,755.27 28,507,946.58 2,903,844.68 -3,899,267.62 27,488,768.37
decrease)
(I) Net profit 40,547,673.62 -3,899,267.62 36,648,406.00
(II) Other
-23,755.27 2,903,844.68 2,880,089.41
comprehensive incomes
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2013 Semi-annual Report of Konka Group Co., Ltd.
Subtotal of (I) and (II) -23,755.27 40,547,673.62 2,903,844.68 -3,899,267.62 39,528,495.41
(III) Capital paid in and
reduced by owners
1. Capital paid in by
owners
2. Amounts of
share-based payments
recognized in owners’
equity
3. Others
(IV) Profit distribution -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
(V) Internal
carry-forward of owners’
equity
1. New increase of
capital (or share capital)
from capital public
reserves
2. New increase of
57
2013 Semi-annual Report of Konka Group Co., Ltd.
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
1,272,396,573.1 4,274,336,550.4
IV. Closing balance 1,203,972,704.00 827,291,207.52 753,993,650.68 17,325,439.45 199,356,975.65
9 9
58
2013 Semi-annual Report of Konka Group Co., Ltd.
Jan.-Jun. 2012
Unit: RMB Yuan
Jan.-Jun. 2012
Equity attributable to owners of the Company
Less: Gener
Item Minority Total owners’
Paid-up capital treas Specific Surplus al risk Retained
Capital reserve Others interests equity
(or share capital) ury reserve reserve reserv profit
stock e
I. Balance at the end of the 1,203,972,704.0 1,275,686,262. 809,307,995 709,679,408. 11,077,592.9 226,903,292.
4,236,627,256.48
previous year 0 22 .80 84 6 66
Add: retrospective
adjustment due to business
combination under the same
control
Add: change of accounting
policy
Correction of errors in
previous periods
Other
II. Balance at the beginning 1,203,972,704.0 1,275,686,262. 809,307,995 709,679,408. 11,077,592.9 226,903,292.
4,236,627,256.48
of the year 0 22 .80 84 6 66
III. Increase/ decrease in the -2,793,377.0
-3,372,392.58 -572,435.36 9,502.53 -6,728,702.47
period (“-” means decrease) 6
11,467,291.6
(I) Net profit 9,502.53 11,476,794.21
8
(II) Other comprehensive -2,793,377.0
-3,372,392.58 -6,165,769.64
incomes 6
11,467,291.6 -2,793,377.0
Subtotal of (I) and (II) -3,372,392.58 9,502.53 5,311,024.57
8 6
59
2013 Semi-annual Report of Konka Group Co., Ltd.
(III) Capital paid in and
reduced by owners
1. Capital paid in by
owners
2. Amounts of
share-based payments
recognized in owners’ equity
3. Others
-12,039,727.
(IV) Profit distribution -12,039,727.04
04
1. Appropriations to
surplus reserves
2. New increase of
capital (or share capital) from
surplus reserves
3. Surplus reserves for -12,039,727.
-12,039,727.04
making up losses 04
4. Other
(V) Internal carry-forward
of owners’ equity
1. New increase of
capital (or share capital) from
capital public reserves
2. New increase of
capital (or share capital) from
surplus reserves
3. Surplus reserves for
60
2013 Semi-annual Report of Konka Group Co., Ltd.
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 1,272,313,869. 809,307,995 709,106,973. 8,284,215.9 226,912,795.
IV. Closing balance 4,229,898,554.01
0 64 .80 48 0 19
Legal representative: Hou Songrong Person-in-charge of the accounting work: Yang Rong
Chief of the accounting division: Xu Youshan
8. Statement of Changes in Owners’ Equity of the Company
Prepared by Konka Group Co., Ltd.
Jan.-Jun. 2013
Unit: RMB Yuan
Jan.-Jun. 2013
Less: General
Item Paid-up capital (or Specific Retained Total owners’
Capital reserve treasur Surplus reserve risk
share capital) reserve profit equity
y stock reserve
538,453,381.4 3,819,007,454.8
I. Balance at the end of the previous year 1,203,972,704.00 1,249,290,161.88 827,291,207.52
6 6
Add: change of accounting policy
Correction of errors in previous periods
Other
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2013 Semi-annual Report of Konka Group Co., Ltd.
538,453,381.4 3,819,007,454.8
II. Balance at the beginning of the year 1,203,972,704.00 1,249,290,161.88 827,291,207.52
6 6
III. Increase/ decrease in the period (“-”
-23,755.27 77,042,766.77 77,019,011.50
means decrease)
(I) Net profit 89,082,493.81 89,082,493.81
(II) Other comprehensive incomes -23,755.27 -23,755.27
Subtotal of (I) and (II) -23,755.27 89,082,493.81 89,058,738.54
(III) Capital paid in and reduced by
owners
1. Capital paid in by owners
2. Amounts of share-based payments
recognized in owners’ equity
3. Others
-12,039,727.0
(IV) Profit distribution -12,039,727.04
4
1. Appropriations to surplus reserves
2. Appropriations to general risk
provisions
3. Appropriations to owners (or -12,039,727.0
-12,039,727.04
shareholders) 4
4. Other
(V) Internal carry-forward of owners’
equity
1. New increase of capital (or share
capital) from capital public reserves
2. New increase of capital (or share
capital) from surplus reserves
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2013 Semi-annual Report of Konka Group Co., Ltd.
3. Surplus reserves for making up
losses
4. Other
(Ⅵ) Specific reserve
1. Withdrawn for the period
2. Used in the period
(Ⅶ) Other
615,496,148.2 3,896,026,466.3
IV. Closing balance 1,203,972,704.00 1,249,266,406.61 827,291,207.52
3 6
Jan.-Jun. 2012
Unit: RMB Yuan
Jan.-Jun. 2012
Less:
Item Paid-up capital (or Specific General risk Retained Total owners’
Capital reserve treasur Surplus reserve
share capital) reserve reserve profit equity
y stock
388,644,203.0 3,654,480,998.4
I. Balance at the end of the previous year 1,203,972,704.00 1,252,556,095.64 809,307,995.80
0 4
Add: change of accounting policy
Correction of errors in previous
periods
Other
388,644,203.0 3,654,480,998.4
II. Balance at the beginning of the year 1,203,972,704.00 1,252,556,095.64 809,307,995.80
0 4
III. Increase/ decrease in the period (“-” -38,105,666.9
-3,372,392.58 -41,478,059.53
means decrease) 5
-26,065,939.9
(I) Net profit -26,065,939.91
1
63
2013 Semi-annual Report of Konka Group Co., Ltd.
(II) Other comprehensive incomes -3,372,392.58 -3,372,392.58
-26,065,939.9
Subtotal of (I) and (II) -3,372,392.58 -29,438,332.49
1
(III) Capital paid in and reduced by
owners
1. Capital paid in by owners
2. Amounts of share-based
payments recognized in owners’ equity
3. Others
-12,039,727.0
(IV) Profit distribution -12,039,727.04
4
1. Appropriations to surplus
reserves
2. Appropriations to general risk
provisions
3. Appropriations to owners (or -12,039,727.0
-12,039,727.04
shareholders) 4
4. Other
(V) Internal carry-forward of owners’
equity
1. New increase of capital (or share
capital) from capital public reserves
2. New increase of capital (or share
capital) from surplus reserves
3. Surplus reserves for making up
losses
4. Other
64
2013 Semi-annual Report of Konka Group Co., Ltd.
(Ⅵ) Specific reserve
1. Withdrawn for the period
2. Used in the period
(Ⅶ) Other
350,538,536.0 3,613,002,938.9
IV. Closing balance 1,203,972,704.00 1,249,183,703.06 809,307,995.80
5 1
Legal representative: Hou Songrong Person-in-charge of the accounting work: Yang Rong
Chief of the accounting division: Xu Youshan
65
2013 Semi-annual Report of Konka Group Co., Ltd.
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 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
66
2013 Semi-annual Report of Konka Group Co., Ltd.
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 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.
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2013 Semi-annual Report of Konka Group Co., Ltd.
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 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
68
2013 Semi-annual Report of Konka Group Co., Ltd.
undertaking services, including management and maintenance of system application, management
of information technology, bank background service, financial settlement, human resource service,
software development, call center, data processing and business process outsourcing services.
Designing, producing and selling wireless radio and television emission devices (operating within
the valid date of license); designing and installing wireless, cable television system; integrating
and installing systems; designing and selling security products and monitoring products; providing
business display equipments and solutions to suppliers.
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 29 Aug. 2013.
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
Video & Communication Systems
Shenzhen Konka Video & Communication Systems Engineering 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
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
69
2013 Semi-annual Report of Konka Group Co., Ltd.
Corporate name Abbreviation
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., Ltd. Konka Household Appliances 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. Kunshan Jielunte
Wuhan Jielunte Mould Plastic Co. , Ltd. Wuhan Jielunte
Chuzhou Jielunte Mould Plastic Co. , Ltd. Chuzhou Jielunte
V. Main accounting policies, accounting estimates and early 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—General
70
2013 Semi-annual Report of Konka Group Co., Ltd.
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 first half of 2013 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’s financial positions as at 30 Jun. 2013, and operating
results, cash flows and other relevant information for the six months then ended. 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, the Group adopted RMB as the
recording currency.
5. Accounting methods for business combinations under the same control and not under the
same control
(1) Business combinations under the same control
A business combination refers to a transaction or event bringing together two or more separate
enterprises into one reporting entity. Business combinations are divided into business combinations
under the same control and those not under the same control.
Business combinations 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
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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 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
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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 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 of consolidated financial statements
(1)Preparation of consolidated financial statements
(a) 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.
(b) 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
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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 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’s 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
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Measurement of Financial Instruments” and other relevant regulations. For more details, please
refer to “12. V. in the eighth chapter “Long-term Equity Investment” or “9. V. in the eighth chapter
“Financial Instruments”.
(2) Relevant accounting methods shall be disclosed if the same subsidiary purchases then
sells, or sells then purchases stock equities in two consecutive accounting years
There existed not same subsidiary purchasing then selling, or selling then purchasing stock equities
in two consecutive accounting 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 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 businesses and translation of foreign currency financial statements
(1) Foreign currency businesses
(a) Translation of foreign currency transactions
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.
(b) Treatment 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.
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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
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) Classification of financial instruments
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Classification of financial assets
Financial assets in the initial confirmation shall be divided into financial assets which are
calculated by fair value and whose variation shall be reckoned into current gains and losses,
held-to-maturity investment, loads, account receivables and available-for-sale financial assets.
Classification of financial liabilities
Financial liabilities in the initial confirmation shall be divided into financial liabilities which are
calculated by fair value and whose variation shall be reckoned into current gains and losses and
other financial liabilities.
(2) Recognition basis and measurement of financial instruments
(a) Recognition basis and measurement of 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 due to different measurement base of the financial asset; B. The
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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, 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
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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.
(b) Classification and measurement 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. 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 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
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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.
(c) Derivative instrument and embedded derivative instrument
Derivative instrument shall be initially measured at its fair value on the signing date for relevant
contracts, and made the follow-up measurement at fair value. The changes in the fair value of the
derivative instrument shall be recorded into gain/loss at current period.
Where a mixed instrument including an embedded derivative instrument fails to be designated as a
financial asset or financial liability measured at its fair value and of which the variation is included
in the current profits and losses, and it can simultaneously meet the two conditions that there is no
close relationship between it and the principal contract in terms of economic features and risks, as
well as there is no close relationship between it and the principal contract in terms of economic
features and risks. Then the embedded derivative instrument shall be separated from the mixed
instrument and treated as an independent derivative instrument. Where it is impossible to make an
independent measurement when it is obtained or subsequently on the balance sheet date, the mixed
instrument shall be designated entirely as a financial asset or financial liability measured at its fair
value and of which the variation is included in the current profits and losses.
(d) The offset of financial assets and financial liabilities
When the Group has the legal right to offset the confirmed financial assets and financial liabilities,
and can execute this legal right now, meanwhile, the Group plans to settle them at their net amount
or realize the financial assets and pay off the financial liabilities at the same time, the financial
assets and financial liabilities should be listed in the balance sheet by the amount after their offset
with each other. Apart from this, the financial assets and financial liabilities should be listed in the
balance sheet respectively and should not offset with each other.
(e) Equity instruments
The "equity instruments" refers to the contracts which can prove that the Group holds the surplus
equities of the assets after the deduction of all the debts. For equity instruments, the consideration
received in the issuance of equity instruments after deducting the transaction cost shall be recorded
in the owners’ equity.
The owners’ equity decreased from the Group’s various distributions (excluding the dividend
distribution) to the owners of equity instruments, the Group shall not make it as the change in the
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fair value of equity instruments.
(3) Recognition 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 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
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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) Ascertainment 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 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) Impairment testing methods and provision withdrawing methods of financial assets
(excluding account receivables)
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. The reversed
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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
When it judged that the decrease of fair value of the available-for-sale equity instrument
investment is serious and not temporarily after comprehensive considering relevant factors, it
reflected that the available-for-sale equity instrument investment occurred impairment. Of which,
the “serious decline” refers to the accumulative decline range of the fair value over 20%; while the
“non-temporary decline” refers to the consecutive decline time of the fair value over 12 months.
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) Reclassifying undue held-to-maturity investment into available-for-sale financial assets
and illustrating intention or basis of ability to change
There existed not reclassification of undue held-to-maturity investment into available-for-sale
financial assets in the Company.
10. Recognition and withdrawing methods of bad debt provision of accounts receivables
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 impaired, an impairment provision
shall be made.
① debtor has serious financial difficult;
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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 amounts,
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.
(1) Bad debt provision for individual significant accounts receivables
Recognition of individual significant Individual amounts with accounts receivables over 20 millions, Individual amounts
accounts with other accounts receivables over 10 millions
Individual accounts receivables with significant amounts shall be individually made
Withdrawing method of individual impairment test. As for financial assets without impairment after the impairment test,
accounts with significant amounts and it shall be included into financial assets groups similar to credit risk and made
individual withdrawn of bad debt impairment test. As for accounts receivables affirmed with impairments after the test,
provision it shall not be included into financial assets groups similar to credit risk and made
impairment test.
(2) Accounts receivables withdrawn bad debt provision on the basis of groups
Name of group Withdrawing method Recognition basis
Defining group on the basis of accounts receivables aging as
Aging group Aging analyzing method
credit risk
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Balance percentage Defining group on the basis of credit risk of whether the
Relevant parties group
method obligator is related to the Group
In the group, withdrawal method for provision for bad debts by aging analysis
√ Applicable □ Inapplicable
Proportion of provision for bad debts Proportion of provision for bad debts of other
Age
of accounts 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%
In the group, withdrawal method for provision for bad debts by balance percentage
□ Applicable √ Inapplicable
In the group, withdrawal method for provision for bad debts by other methods
□ Applicable √ Inapplicable
Name of group notes
Group related to the Group Without withdrawal
(3) Receivables with insignificant amount but being individually withdrawn the provision for bad
debts
A. Receivables exist dispute with the other parties or involving lawsuit and
Reason for individual withdrawal of arbitration;
provision for bad debts B. Receivables exist obvious indication showing that the debtors are likely to fail
to perform the duty of repayment.
The Group made independent impairment test on receivables with insignificant
amount but with the following characteristics, if any objective evidence shows that
Withdrawal methods for bad debts
the accounts receivable has been impaired, impairment loss shall be recognized on
provision
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.
11. Inventory
(1) Classification
The Group’s inventories are classified as non-property inventories and property inventories. And
the non-property inventories include raw materials, goods in process, merchandise on hand, goods
delivered and circulating materials, etc; while the property inventories include property in process
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and finished property, etc.
① The finished property refers to the finished and held-for-sale property.
② The property in process (development costs) refers to the unfinished property with the
development purpose for sale.
(2) Pricing method of outgoing and obtaining inventories
Pricing method: weighted average method
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 which the carryover and given-out inventory should shoulder in
the period.
The property inventories are initially measured at the costs, and the costs of the developed property
include the land premium, expenditures for supporting infrastructures, expenditures for
construction and installation projects, the borrowing costs before the completion of the developed
project and other expenses occurred during the development process.
① The public supporting facilities recorded the development costs at the actual costs, the
amortization upon completion was transferred to the costs of houses and other available-for-sale
property, while as for the supporting facilities with operating value and beneficiary rights owned
by the Group as well as available for individual sale and measurement, which shall be recorded
into the “investment property”.
② For the accounting policies on borrowing costs occurred for developing property, please refer
to Note V. 16 in the eighth chapter “Pricing of borrowing Costs”.
(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.
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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
Inventory system for inventories: 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
Packing articles
Amortization method: one-off amortization method
The Company shall amortize the low-value consumption goods and packing through the one-off
amortization method.
12. Long-term equity investment
(1) Recognition of 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 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
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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 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
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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, it 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 recognition of 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 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 (4) “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.
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(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 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
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lands.
For details of impairment test method and withdrawal method of impairment provision of
investment real estates, please refer to Note IV. 34 in the eighth chapter “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 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.
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(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. Useful life, expected net salvage
value and annual depreciation rate of each fixed assets are as below:
Expected net salvage value
Category of fixed assets Useful life (Y) Annual deprecation rate（%）
（%）
Housing and building 20-40 10% 2.25-4.50
Machinery equipments 10 10% 9.00
Transportation vehicle 5 10% 18.00
Electronic equipments 5 10% 18.00
Other equipments 5 10% 18.00
(4) Testing method of impairment and withdrawal method of provision for impairment on
fixed assets
For details, please refer to Note IV. 34 in the eighth chapter “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) Classification
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.
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(2) Standard and time-point of transformation of construction in progress into fixed assets
Construction in progress is transferred to fixed assets when the assets are ready for their intended
use.
(3) Testing method and provision withdrawal method for impairment 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.34 in the eighth chapter “Impairment of
non-current non financial assets”.
16. Borrowing costs
(1) Recognition basis of capitalized 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. If
borrowing costs meet the following three conditions simultaneously, it shall be capitalized:
1 Expenditures have happened;
2 Borrowing costs have happened;
3 Necessary constructions or activities in order to make assets reaching expected usable or
salable stage have happened.
(2) Period of capitalized 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
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) Calculating method of amounts of capitalized borrowing costs
The to-be-capitalized amount of interests shall be determined in light of the actual interests
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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 capitalization rate shall be calculated and determined in light of the weighted average
interest rate of the general borrowing.
17. Biological assets
18. Oil and gas assets
19. Intangible assets
(1) 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.
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.
(2) Life estimation of intangible assets with finite life
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.
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Item Estimated useful life Basis
Domestic trade mark
5 years Validity of trade mark registration
registration fee
Patent and proprietary
5-10 years Benefit period of patent and proprietary technology
technology
Software and others 5-10 years Benefit period of assets
Land usage right 50 years Usage life of land
(3) Recognition basis of intangible assets with indefinite life
Judging from available situation, if there is any intangible asset with unambiguous evidence that
the usage life of intangible assets can’t be estimated, it shall be defined as intangible assets with
indefinite life.
(4) Withdrawal method of impairment provision for intangible assets
For details, please refer to Note IV. 34 in the eighth chapter “Impairment of non-current non
financial assets”.
(5) Standard of dividing research stage and development stage of internal R&D project of the
Company
Research stage: Research is planned investigation with a intention to obtain new technology and
knowledge, including activities to obtain knowledge; research achievement or research, evaluation
of the appliance and ultimate choice of other knowledge; research of materials, devices, products,
processes, systems or substitutes of services; configuration, design, evaluation and ultimate choice
of new or modified materials, devices, products, processes, systems or substitutes of services.
Development stage: Development refers to application of research achievements or other
knowledge in a plan or design before commercial production or usage in order to produce new or
substantially modified materials, devices and products, etc.
(6) Expenditures for research and development
The expenditures for its internal research and development projects of the Company shall be
classified into research expenditures and development expenditures.
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;
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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;
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. 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 transference with counter purchase conditions
22. Estimated liabilities
(1) Recognition basis 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) Calculating method 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.
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23. Stock payment and equity instrument
(1) Classification of stock payment
Stock payment refers to awards of equity instrument in order to obtain services form employees
and other parties, or transactions of liabilities on the basis of equity instruments.
(2) Recognition of fair value of equity instruments
(3) Recognition basis of the best estimation of available equity instrument
(4) Relevant accounting methods for implementation, revise and termination of stock
payment plan
24. Counter-purchase of the Company stocks
25. Revenue
(1) Specific standard of time recognition of revenues from selling goods
(a) Revenues from selling 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. The recognition of revenue from exported goods: For good exported by way of FOB, the
revenue shall be recognized once the goods were delivered to the carrier designated by the
purchaser; for goods exported by way of CIF, the revenue shall be recognized once the goods reach
the port of the purchase.
(b) Recognition method of revenue from sales of property
(c) It can recognize the realization of revenue of sales after signing the sales contract, the property
completed and accepted as qualified, reaching the deliverable conditions agreed on the sales contract
and the property payment totally paid according to the sales contract
(2) Recognition basis of revenues from releasing the right to use assets
(a) Royalty revenue
In accordance with relevant contract or agreement, the amount of royalty revenue should be
recognized as revenue on accrual basis.
(b) 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;
(c) Property rental revenue
For details about the recognition method of property rental revenue, please refer to Note IV. 28
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“Operating lease, Finance lease”.
(3) Revenue from providing labor services
If the Company can reliably estimate the outcome of a transaction concerning the labor services it
provides, it shall recognize the revenue from providing services employing the
percentage-of-completion method on the date of the balance sheet. The completed proportion of a
transaction concerning the providing of labor services shall be decided by the proportion of the
labor service already provided to the total labor service to provide.
The outcome of a transaction concerning the providing of labor services can be measured in a
reliable way, means that the following conditions shall be met simultaneously: ① The amount of
revenue can be measured in a reliable way; ② The relevant economic benefits are likely to flow
into the enterprise; ③ The schedule of completion under the transaction can be confirmed in a
reliable way; and ④ The costs incurred or to be incurred in the transaction can be measured in a
reliable way.
If the outcome of a transaction concerning the providing of labor services can not be measured in a
reliable way, the revenue from the providing of labor services shall be recognized in accordance
with the amount of the cost of labor services incurred and expected to be compensated, and make
the cost of labor services incurred as the current expenses. If it is predicted that the cost of labor
services incurred could not be compensated, thus no revenue shall be recognized.
Where a contract or agreement signed between Group and other enterprises concerns selling goods
and providing of labor services, if the part of sale of goods and the part of providing labor services
can be distinguished from each other and can be measured respectively, the part of sale of goods
and the part of providing labor services shall be treated respectively. If the part of selling goods
and the part of providing labor services can not be distinguished from each other, or if the part of
sale of goods and the part of providing labor services can be distinguished from each other but can
not be measured respectively, both parts shall be conducted as selling goods.
(4) Recognition basis of completion progress of contracts when confirming revenues from
providing services and constructing contracts in a way of completion percentage
20. Government subsidies
(1) Classification
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 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 deferred income tax liabilities
(1) Recognition basis of deferred income tax assets
Generally speaking, deferred income tax assets are from deductible temporary differences. When
deductible temporary differences occur from differences between fair value of assets, liabilities and
its tax basis, and enough taxable incomes are estimated retrievable in the future by taking
advantages of the deductible temporary differences, deferred income tax assets shall be confirmed
by retrievable taxable income tax which can be used to deduct deductible temporary differences.
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 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.
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On the balance sheet date, the deferred income assets 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
Deferred income tax liabilities are from taxable temporary differences. During the transferring
period, taxable temporary differences would increase taxable incomes and income tax payable,
which leads to the outflow of economic benefits of enterprises. Therefore, those referred to as tax
payable of enterprises shall be confirmed 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, 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 leases and finance leases
(1) Accounting method of operating leases
(a) 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.
(b) 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
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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 method of finance leases
(a) 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.
(b) 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
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.
(3) Accounting method of leaseback
29. Available-for-sale assets
(1) Recognition standard of available-for-sale assets
(2) Accounting method of available-for-sale assets
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30. Asset securitization services
31. Hedge accounting
32. Change in major accounting policies and accounting estimates
In the reporting period, did any change in major accounting policies and accounting estimates
□ Yes √ No
Three is not change in major accounting policies and accounting estimates in the reporting period.
(1) Change in accounting policies
Did any accounting policies changed in the Group during the reporting period?
Yes √ No
(2) Change in accounting estimates
Did any accounting estimate changed in the Group during the reporting period?
Yes √ No
33. Corrections of prior accounting errors
Did any corrections of prior accounting error?
Yes √ No
In this period, the Group has no matter related to correction of prior-period errors.
(1) Retrospective restatement method
Did any corrections of prior accounting error by retrospective restatement method?
Yes √ No
(2) Perspective application method
Did any corrections of prior accounting error by Perspective application method?
Yes √ No
23. Other accounting policies, accounting estimates and compilation methods of financial
statements
Employee compensation
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 relevant
expenditures should be recorded into cost of relevant assets or current profits and losses upon the
occurrence.
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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.
Impairment of non-current non-financial assets
For the non-current non-financial assets, such as fixed assets, construction in progress, intangible
assets with finite service life, investment real assets measured by cost mode as well as long-term
equity investment on subsidiaries, co-operative enterprise and joint-operative enterprise, etc., are
tested for impairment if there is any indication that an asset may be impaired at the balance date.
If there is any sign of possible assets impairment, the Group shall estimate the recoverable amount
and made the impairment tests. No matter whether there is any sign of possible assets impairment,
the good will, intangible assets without certain service life, intangible assets not ready for use shall
be subject to impairment test every year.
If the result of the impairment test indicates that the recoverable amount of the asset is less than its
book value, a provision for impairment and an impairment loss are recognized for the amount by
which the asset’s book value exceeds its recoverable amount. The recoverable amount is the higher
of an asset’s fair value less costs to sell and the present value of the future cash flows expected to
be derived from the asset. The fair value of an asset shall be determined in light of the basis of the
price as stipulated in the sales agreement. Where there is no sales agreement but there is an active
market of assets, the fair value of the asset shall be determined according to the price bidden by the
buyer of the asset; Where there is no sales agreement and no active market of assets, the fair value
of an asset shall be estimated in light of the best information available. The disposal expenses shall
include the relevant legal expenses, relevant taxes, trucking charge as well as the direct expenses
for bringing the assets into a marketable state. The current value of the expected future cash flow
of an asset shall be determined by the discounted cash with an appropriate discount rate, on the
basis of the expected future cash flow generated during the continuous use or final disposal of an
asset. A provision for asset Impairment is determined and recognized on an individual asset basis.
If it is not possible to estimate the recoverable amount of an individual asset, the recoverable
amount of the group of assets to which the asset belongs is determined. A group of assets is the
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smallest group of assets that is able to generate independent cash inflows.
For the goodwill separately listed in the financial statements, during the impairment test, the book
value of this goodwill is allocated to the related asset group or groups of asset group which is
expected to benefit from the synergies of the business combination. If the result of the test
indicates that the recoverable amount of an asset group or groups of asset group including the
goodwill allocated is lower than its book value, the corresponding impairment loss is recognized.
The impairment loss is first deducted from the book value of goodwill allocated to the asset group
or groups of asset group, and then deducted from the book value of the remaining assets of the
asset group or groups of asset group pro rata with goodwill.
Once the asset impairment loss mentioned above is recognized, it is not allowed to be reversed
even if the value is recovered in the subsequent periods.
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.
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
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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 financial status and business forecast in a short period,
including the industrial situation, technical reform, credit level, default rate and risk of
counter-party.
(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, it 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.
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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 predictions 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.
(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
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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 Basis Particulars on tax rates
Calculated the output tax at 17% of
taxable income and paid the VAT by
VAT the amount after deducting the 17%
deductible withholding VAT at current
period.
Paid by 5% of taxable business
Business tax income 5%
Paid at 7% of the circulating tax
Urban maintenance and construction tax 7%
actually paid
Paid at 25% of the taxable income,
Hong Kong company at 16.5%,
Telecommunication Technology,
Paid by current income taxable and
Enterprise income tax Chongqing Konka, Dongguan Mould
applicable income tax rate
and plastic, Dongguan Konka,
Precision Mold, Kunshan Konka and
Anhui Tongchuang at 15%.
Paid at 3% of the circulating tax
Education surtax 3%
actually paid
Paid at 2% of the circulating tax
Local education surtax 2%
actually paid
Income tax rate of subsidiaries and branch factories
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As for the transportation revenue of the logistic business of the Company’s subsidiary Shushida
Logistics, it originally paid the business tax at the rate of 5%. While in accordance with the Notice
on Carrying out the Pilot of Change on Charging the Business Taxes of Transportation Industry
and Partial Modern Service Industry to Value Added Taxes in Eight Provinces and Cities including
Bejing issued by the Ministry of Finance and the National Taxation Bureau (CS [2012] No. 71)
and other regulations, the revenue of logistic business was changed to charge the VAT since 1 Sept.
2012, with the tax rate of 3%.
In accordance with the Notice on Printing the Administration Method on Charging and Use of the
Treatment Funds of Discarded Electronic Appliance and Electric Products issued by the Ministry
of Finance, Ministry of Environmental Protection, National Development and Reform Commission,
Ministry of Industry and Information, General Administration of Customs and National Taxation
Bureau (CZ [2012] No. 34), and the Administration Method on Charging and Use of the Treatment
Funds of Discarded Electronic Appliance and Electric Products issued by National Taxation
Bureau (GJSWZJGG [2012] No. 41), the domestic manufacturer of the electrical appliances and
electronic products of PRC started to pay the treatment funds for discarded electrical appliance and
electronic products according the sales volume (trusted processing amount) and relevant charging
standards from 1 Jul. 2012. According to the regulations, the Group’s charging standards were
RMB 13 per set of TV, RMB 12 per set of refrigerator and RMB 7 per set of washing machine.
Pursuant to “Temporary Method of Taxation Management for Trans-regional Operating Enterprises
in Income Tax” by SAT, resident enterprises that establish trans-regional business organizations,
locations within China without corporate capacity, are finalization tax enterprises and implement
tax management method of “Aggregate calculation, hierarchic management, local prepay,
collecting liquidation, financial transference” executed on 1 January. 2008.
Pursuant to the above method, from 1 January 2008, the Company aggregately imposes tax on
sales branch companies of the Company at the year-end in line with the local business income tax.
Except for Telecommunication technology and precision mould with tax rate of 15%, tax rate of
companies set up in Shenzhen in 3013 are 25%. In addition, tax rate of nonlocal companies is 25%,
of companies in HK is 16.5%, and Chongqing Qingjia, Dongguan Plastic Mould, Anhui
Tongchuang and Kunshan Konka is 15%.
2. Tax preference and approved document
(1) On 30 Nov. 2011, the wholly-owned subsidiary of the Company-Shenzhen Konka
Telecommunications Technology Co., Ltd. obtained the Certificate of High-Tech Enterprise No.
GF201144200088 jointly issued by Shenzhen Bureau of Science Technology & Information,
Shenzhen Financial Bureau, Shenzhen Municipal State Taxation Bureau, and Shenzhen Municipal
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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%.
(2) 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.
(3) On 12 Sept. 2012, 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. GF201244000053, 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 2012 and was levied
at the preferential enterprise income tax rate of 15%.
(4) 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%.
(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%.
(6) On 3 Jul. 2012, the Company’s subsidiary Anhui Tongchuang received the Certificate of
Hi-tech Enterprise jointly issued by Department of Science & Technology, Finance Bureau,
National Taxation Bureau and Local Taxation Bureau of Anhui Province (No. GR201234000074)
with valid term of three years. In accordance with relevant stipulations of taxation, Anhui
Tongchuang will enjoy relevant preferential policies for high-tech enterprises for successive three
years since 2012 and was levied at the preferential enterprise income tax rate of 15%.
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2013 Semi-annual Report of Konka Group Co., Ltd.
(7) According to the CS No. [2011] 100 Article issued by Ministry of Finance and State
Administration of Taxation, if the ordinary VAT payer sells software products developed by itself,
the VAT is levied at the rate of 17% and after that, the part of actual tax burden of VAT which
exceeds 3% can enjoy the policy of refunding taxes immediately after levying taxes. Video
engineering and information network of the Company and its subsidiaries can enjoy such favorable
policy.
3. Other notes
Ⅵ. Business Combination and Consolidated Financial Statements
1. Subsidiaries
(1) Subsidiaries obtained through establishment or investment
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subsid ed by
of
iaries minor
minor ity
share
ity holder
intere s
st
Shenz Produ Yes
Wholl Manu
hen Shenz ction
y-own factur
Konk hen, RMB and 12,00
ed ing 12,00 100% 100%
a Guan sales 0.00
0.00
subsid indust
Telec gdong of
iary ry
ommu mobil
110
2013 Semi-annual Report of Konka Group Co., Ltd.
nicati e
ons comm
Techn unicat
ology ion
Co., produ
Ltd. cts
and
sales
of
multi-
media
produ
cts
Shenz Yes
hen
Produ
Konk
ction
a
and
Video
sales
& Manu
Holdi Shenz of
Com factur
ng hen, RMB LED 1,500. -251.9
munic ing 1,500. 60% 60%
subsid Guan displa 00 4
00
ation indust
iary gdong y
Syste ry
screen
ms
s and
Engin
lighti
eering
ng
Co.,
Ltd.
Shenz Yes
hen
Produ
Konk
ction
a
and
Precis Manu
Holdi Shenz sales
ion factur
ng hen, RMB of 4,000. 46.31 52.49 5,344.
Moul ing 4,000.
subsid Guan plasth 00 % % 13
00
d indust
iary gdong etics
Manu ry
and
factur
mould
ing
s
Co.,
Ltd.
Shenz Holdi Shenz Sales RMB Produ Yes
830.0 -912.4
830.0 51% 51%
hen ng hen, of ction 0 4
0
111
2013 Semi-annual Report of Konka Group Co., Ltd.
Konk subsid Guan electr and
a iary gdong onic sales
Electr applia of
onic nce house
Co., hold
Ltd. applia
nce
Shenz Yes
Produ
hen
ction
Konk
and
a Wholl Manu
Shenz sales
Infor y-own factur
hen, RMB of 3,000.
matio ed ing 3,000. 100% 100%
Guan digital 00
00
n subsid indust
gdong netwo
Netw iary ry
rk
ork
produ
Co.,
cts
Ltd.
Shenz Yes
hen
Produ
Konk
Wholl Manu ction
a Shenz
y-own factur and
Plasti hen, RMB
950.0
ed ing 950.0 sales 100% 100%
c Guan 0
0
subsid indust of
Produ gdong
iary ry plasth
cts
etics
Co.,
Ltd.
Produ Yes
ction
Shenz
and
hen
Wholl Manu sales
Shush Shenz
y-own factur of
ida hen ， RMB
4,200.
ed ing 4,200. electr 100% 100%
Electr Guan 00
00
subsid indust onic
onic gdong
iary ry produ
Co.,
cts
Ltd.
like
DVD
Shenz Wholl Shenz Invest Yes
hen y-own hen, ment RMB Invest 6,500.
6,500. 100% 100%
Konk ed Guan holdin ment 00
00
a subsid gdong g
112
2013 Semi-annual Report of Konka Group Co., Ltd.
Electr iary
onic
Fittin
gs
Techn
ology
Co.,
Ltd.
Produ Yes
Muda
ction
njiang Muda
Manu and
Arctic Holdi njiang
factur RMB sales
Ocean ng , 6,000. 1,286.
ing 6,000. of 60% 60%
Appli subsid Huilo 00 34
indust 00 multi-
ances iary ngjian
ry media
Co., g
produ
Ltd.
cts
Produ Yes
Shanx
ction
i
Manu and
Konk Holdi Xiany
factur RMB sales
a ng ang, 6,950. 2,923.
ing 6,950. of 60% 60%
Electr subsid Shaan 00 87
indust 00 multi-
onic iary xi
ry media
Co.,
produ
Ltd.
cts
Produ Yes
Chon
ction
gqing
Manu and
Konk Holdi
factur RMB sales
a ng Chon 4,500. 550.2
ing 4,500. of 60% 60%
Electr subsid gqing 00 2
indust 00 multi-
onic iary
ry media
Co.,
produ
Ltd.
cts
Chon Produ Yes
gqing ction
Manu
Konk Holdi and
factur RMB
a ng Chon sales 3,000. -724.4
ing 3,000. 57% 57%
Eurot subsid gqing of 00 2
indust 00
omoti iary Eurot
ry
ve omoti
Electr ve
113
2013 Semi-annual Report of Konka Group Co., Ltd.
onic electr
Co., onic
Ltd. equip
ment
Produ Yes
ction
Chon and
gqing sales
Manu
Qingji Holdi of
factur RMB
a ng Chon electr 1,500. 1,140.
ing 1,500. 40% 40%
Electr subsid gqing onic 00 85
indust 00
onic iary turner
ry
Co., s and
Ltd. 3D
glasse
s
Produ Yes
Anhui ction
Konk Manu and
Holdi
a Chuz factur RMB sales
ng 14,00 4,939.
Electr hou, ing 14,00 of 78% 78%
subsid 0.00 00
onic Anhui indust 0.00 multi-
iary
Co., ry media
Ltd. produ
cts
Produ Yes
ction
and
sales
of
Anhui house
Konk Manu hold
Holdi
a Chuz factur RMB applia
ng 7,819. 96.46 97.45 265.2
Appli hou, ing 7,819. nce
subsid 00 % % 5
ance Anhui indust 00 like
iary
Co., ry refrig
Ltd. erator
s and
washi
ng
machi
ne
2,465. 804.7
Chan Holdi Chan Manu RMB Produ 60% 60% Yes
00 3
114
2013 Semi-annual Report of Konka Group Co., Ltd.
gshu ng gshu, factur 2,465. ction
Konk subsid Jiangs ing 00 and
a iary u indust sales
Electr ry of
onic electr
Co., onic
Ltd. produ
Konk cts
a and
Electr electr
onic onic
Co., transf
Ltd. ormer
Produ Yes
ction
and
Kuns sales
han of
Wholl Manu
Konk Kuns liquid
y-own factur RMB
a han, crysta 35,00
ed ing 35,00 100% 100%
Electr Jiangs l 0.00
subsid indust 0.00
onic u modul
iary ry
Co., es and
Ltd. multi-
media
produ
cts
Produ Yes
Dong
ction
guan
Wholl Manu and
Konk Dong
y-own factur RMB sales
a guan, 26,66
ed ing 26,66 of 100% 100%
Electr Guan 7.00
subsid indust 7.00 multi-
onic gdong
iary ry media
Co.,
produ
Ltd.
cts
Dong Produ Yes
guan Wholl Manu ction
Dong
Konk y-own factur RMB and
guan, 1,000.
a ed ing 1,000. sales 100% 100%
Guan 00
Packi subsid indust 00 of
gdong
ng iary ry plasti
Mater c
115
2013 Semi-annual Report of Konka Group Co., Ltd.
ials produ
Co., cts
Ltd. and
plasti
c
packa
ging
Produ Yes
Dong
ction
guan
and
Konk Manu
Holdi Dong sales
a factur RMB
ng guan, of 1,000. 59.73 59.73 -4,533
Moul ing 1,000.
subsid Guan mould 00 % % .28
d indust 00
iary gdong s and
Plasti ry
plasth
c Co.,
etics
Ltd.
Produ Yes
ction
and
sales
of
single
Boluo Manu -faced
Holdi Boluo
Konk factur RMB and
ng ， 4,000. 349.6
a PCB ing 4,000. doubl 51% 51%
subsid Guan 00 3
Co., indust 00 e-face
iary gdong
Ltd. ry d
circuit
board
electr
onic
produ
cts
Boluo Produ Yes
Konk ction
a Wholl Manu and
Boluo
Precis y-own factur RMB sales
, 1,125.
ion ed ing 1,500. of 100% 100%
Guan 00
Techn subsid indust 00 high-
gdong
ology iary ry densit
Co., y
Ltd. circuit
116
2013 Semi-annual Report of Konka Group Co., Ltd.
board
electr
onic
produ
ctions
R&D Yes
Konk
of flat
a
Resea panel
(Nanh Wholl
Fosha rch displa
ai) y-own
n, and RMB y
Devel ed 50.00 100% 100%
Guan devel 50.00 techn
opme subsid
gdong opme ologie
nt iary
nt s and
Cente
produ
r
cts
Expor Yes
ting
and
impor
Hong Wholl
Hong ting
Kong y-own Intern
Kong HKD machi
Konk ed ationa 54.00 100% 100%
， 50.00 nery
a Co., subsid l trade
China and
Ltd. iary
electr
onic
produ
cts
Konk Yes
a
House
hold
Appli
Wholl
ances Invest
y-own Hong
Invest ment HKD Invest
ed Kong, 53.00 100% 100%
ment holdin 50.00 ment
subsid China
& g
iary
Devel
opme
nt
Co.,
Ltd.
Konk Wholl Hong Intern HKD Expor Yes
53.00 100% 100%
a y-own Kong, ationa 50.00 t and
117
2013 Semi-annual Report of Konka Group Co., Ltd.
House ed China l trade impor
hold subsid t of
Appli iary electr
ances onic
Intern produ
ationa cts
l
Tradi
ng
Co.,
Ltd.
Sales Yes
KON Wholl
of
KA y-own Intern
The USD1 electr 806.0
AME ed ationa 100% 100%
USA 00.00 onic 0
RICA subsid l trade
produ
,INC. iary
cts
Konk Frank Sales Yes
Wholl
a furt, of
y-own Intern
(Euro Germ EUR2 electr
ed ationa 26.00 100% 100%
pe) any, .50 onic
subsid l trade
Co., Europ produ
iary
Ltd. e cts
Dong Produ Yes
guan ction
Xuton Manu and
Holdi Dong
gda factur RMB sales
ng guan 500.0 46.31 52.49 577.4
Moul ing 500.0 of
subsid Guan 0 % % 3
d indust 0 mould
iary gdong
Plasti ry s and
c Co., plasti
Ltd. cs
Shenz Devel Yes
hen opme
Konk nt,
a Wholl sales
Shenz
Optoe y-own RMB and
hen 1,000.
lectro ed R&D 1,000. maint 100% 100%
guang 00
nic subsid 00 enanc
dong
Techn iary e of
ology techn
Co., ologie
Ltd. s like
118
2013 Semi-annual Report of Konka Group Co., Ltd.
liquid
crysta
l
modul
es
Devel Yes
Shenz
opme
hen
nt and
Wank
Wholl Softw maint
aida Shenz
y-own are RMB enanc
Scien hen 1,000.
ed devel 1,000. e of 100% 100%
ce and Guan 00
subsid opme 00 softw
Techn gdong
iary nt are
ology
techn
Co.,
ologie
Ltd.
s
Kuns Yes
Devel
han
opme
Kangs
nt,
heng Wholl
Kuns Prope operat
Invest y-own RMB
han rty ion 35,00
ment ed 35,00 100% 100%
Jiangs indust and 0.00
Devel subsid 0.00
u ry invest
opme iary
ment
nt
of real
Co.,
estate
Ltd.
Anhui Produ Yes
ction
Konk and
a sales
of
Tongc Wholl Manu house
hold
huang y-own Chuz factur RMB
applia
12,00
House ed hou ing 18,00 nce 100% 100%
0.00
like
hold subsid Anhui indust 0.00 refrig
Appli iary ry erator
s and
ances washi
Co., ng
machi
Ltd. ne
Indon Yes
Holdi Sales
esia Intern of
ng Indon USD1 electr 975.0 139.6
Konk ationa 51% 51%
subsid esia 50.00 onic 0 2
a l trade produ
iary cts
Electr
119
2013 Semi-annual Report of Konka Group Co., Ltd.
onics
Co.,
Ltd.
Shenz Yes
hen
Shush Wholl
Shenz Ordin
ida y-own RMB ary
hen Logist freigh 1,000.
Logist ed 1,000. 100% 100%
Guan ics t 00
ics subsid 00 transp
gdong ort
Servic iary
e Co.,
Ltd.
Beijin Yes
g Sales
Wholl
Konk of Sales
y-own RMB of
a Beijin house electr 3,000.
ed 3,000. 100% 100%
Electr g hold onic 00
subsid 00 produ
onic applia cts
iary
Co., nce
Ltd.
Kuns Yes
han
Jielun Produ
Manu ction
te Holdi Kuns and
factur RMB
Moul ng han sales
10,00 46.31 52.49 5,344.
ing 10,00 of
d subsid Jiangs 0.00 % % 74
mould
indust 0.00 s and
Plasti iary u
ry plasth
c etics
Co. ,
Ltd.
Wuha Produ
Yes
n ction
Jielun Manu and
Holdi
te Wuha factur RMB sales
ng 3,000. 46.31 52.49 1,611.
Moul n ing 3,000. of
subsid 00 % % 87
d and Hubei indust 00 mould
iary
Plasti ry s and
c Co., plasth
Ltd. etics
Chuz Produ
Yes
hou ction
Jielun Manu and
Holdi
te Chuz factur RMB sales
ng 2,000. 46.31 52.49 1,080.
Moul hou ing 2,000. of
subsid 00 % % 10
d and Anhui indust 00 mould
iary
Plasti ry s and
c Co., plasth
Ltd. etics
Note: ① The Company holds 46.31% of shares of Shenzhen Konka Precision Mold
Manufacturing Co., Ltd., Konka Household Appliances Investment & Development Co., Ltd, a
120
2013 Semi-annual Report of Konka Group Co., Ltd.
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.
Among the directors, half of them or over half are dispatched directly or indirectly by the
Company. Moreover, in Chongqing Qingjia, 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 statement.
③ Shenzhen Konka Precision Mold Manufacturing Co., Ltd. held 100% equity of Dongguan
Xutongda Mould Plastic Co., Ltd., and the Company is the actual 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 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 actual 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 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 respectively on contract. As to 31 Dec. 2010, Anhui Tongchuang with a paid-up capital
of RMB 120 million (including paid-up capital of 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 Investment 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.
(2) Subsidiaries obtained by corporation combination under the same control
Unit: RMB Yuan
Balan
Name Type Regist Busin Regist Busin Actua Balan Shar Votin Whet Equit Amo ce of
parent
of of ration ess ered ess l ce of e g her y of unt of
comp
121
2013 Semi-annual Report of Konka Group Co., Ltd.
any’s
subsid subsid place nature capita scope invest other holdi right conso the equit equity
iary iary l ment items ng prop lidati minori y of after
deduc
amou substa prop ortio ng ty the ting
nt at ntially ortio n financ shareh minor the
differ
the consti n (%) ial olders ity ence
that
period tuting (%) state share loss
-end net ment holde of
minor
invest or not rs ity
ment used intere
sts
to to excee
subsid offset d
equity
iaries profit obtain
and ed by
minor
loss ity
share
of holder
minor s
ity
intere
st
Notes of subsidiaries obtained by corporation combination under the same control
(3) Subsidiaries obtained by corporation combination not under the same control
Unit: RMB Yuan
Amo
Balan
unt of ce of
parent
equit
comp
Balan y of any’s
ce of equity
the after
other Whet minor deduc
Actua ting
items Shar her ity the
l Votin Equit
substa e conso share differ
invest g y of ence
Name Type Regist ntially holdi lidati holde that
Regist Busin Busin ment right the
of of ered consti ng ng rs loss
ration ess ess amou prop minori of
subsid subsid capita tuting prop financ used minor
place nature scope nt at ortio ty ity
iary iary l net ortio ial to
the n shareh intere
invest n state offset sts
period (%) olders excee
ment (%) ment profit d
-end
to or not and equity
obtain
subsid loss ed by
iaries of minor
ity
minor share
ity holder
s
intere
122
2013 Semi-annual Report of Konka Group Co., Ltd.
st
Notes of subsidiaries obtained by corporation combination not under the same control
2. Special entities or business entities established through trusted operation or leases
Unit: RMB Yuan
Main business contact Closing balance of major assets and liabilities
Name
with the Company confirmed in the consolidation statement
Other notes of special entities or business entities established through trusted operation or leases
3. Notes of change in consolidation scope
Notes of change in consolidation scope
Wuhan Jielunte and Chuzhou Jielunte were subsidiaries newly established this year and included
into the consolidation scope.
□ Applicable √ Inapplicable
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
Name Closing net assets Net profit in current period
Wuhan Jielunte 30,021,772.34 21,772.34
Chuzhou Jielunte 20,117,432.92 117,432.92
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 profit from year-begin
Name Net asset at the disposal date
to disposal date
Other notes of entities in consolidation scope and entities not longer combined into consolidation
scope
There was not entity not longer combined into consolidation scope in the reporting period.
5. Business combination under same control during the reporting period
Unit: RMB Yuan
123
2013 Semi-annual Report of Konka Group Co., Ltd.
Cash flow
arising from
The The
Judgment basis operating
Actual consolidated consolidated
of business activities
The combined controller of income from net profit from
combination between
party the same period-begin to period-begin to
under the same period-begin
control combination combination
control and
date date
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 and
Name of subsidiary Disposal date
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
Other notes to mergers
124
2013 Semi-annual Report of Konka Group Co., Ltd.
10. Exchange rates of major items in financial statements for foreign entities
Item of assets and liabilities
30 June 3013 31 December 2013
USD 1 =6.1787 RMB USD 1 =6.2855 RMB
HKD 1=0.79655 RMB HKD 1 =0.81085 RMB
IDR 100= 0.06187 RMB IDR 100= 0.06480 RMB
EUR 1=8.0536 RMB EUR 1 =8.3176 RMB
GBP 1 =9.4213 RMB GBP 1 =10.1611 RMB
Item of income, expense and cash flow
First half year of 2013 First half year of 2012
USD 1 = 6.2321 RMB USD 1 = 6.3129 RMB
HKD 1 =0.8037 RMB HKD 1=0.81295 RMB
IDR 100=0.063335 RMB IDR 100= 0.06867 RMB
EUR 1 =8.1856 RMB EUR 1 =8.01675 RMB
GBP 1 =9.7912 RMB GBP 1 =9.9890 RMB
(Ⅶ) Notes on major items in consolidated financial statements of the Company
1. Monetary funds
Unit: RMB Yuan
Closing balance Opening balance
Amount in Amount in
Item Exchange Exchange
foreign Amount in RMB foreign Amount in RMB
rate rate
currency currency
Cash: -- -- 14,153.64 -- -- 1,861,577.93
RMB -- -- 6,694.80 -- -- 1,858,311.95
HKD 380.09 0.79655 302.76 586.00 0.81085 475.16
USD 746.61 6.1787 4,613.08 444.01 6.2855 2,790.82
0.000618
IDR 4,110,229.00 2,543.00 —
7
Bank deposit: -- -- 1,769,292,322.5 -- -- 822,181,591.44
125
2013 Semi-annual Report of Konka Group Co., Ltd.
9
1,472,256,013.1
RMB -- -- -- -- 610,781,217.62
9
HKD 13,336,018.35 0.79655 10,622,805.42 14,932,810.88 0.81085 12,108,269.70
USD 46,245,328.99 6.1787 285,736,014.23 31,371,330.00 6.2855 197,184,494.72
EUR 79,035.35 8.0536 636,519.09 206,307.43 8.3176 1,715,982.68
GBP 1.32 9.4213 12.44 1.32 10.1611 13.41
MOP — —
0.000618 604,341,524.5 0.000648
IDR 66,200,457.11 40,958.22 391,613.31
7 9 0
Other monetary funds: -- -- 198,609,630.12 -- -- 904,903,341.74
RMB -- -- 198,609,630.12 -- -- 904,336,296.87
USD — 90,214.76 6.2855 567,044.87
1,967,916,106.3
Total -- -- -- -- 1,728,946,511.11
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 176,035,077.61 is used as a loan pledge; and RMB
9,029,241.40 is used as engineering margins; RMB 8,751,039.64 is used as marginal deposits for
internal guarantee and external loan, RMB 4,794,271.47 is used as bank acceptance margins.
2. Trading financial assets
(1) Trading financial assets
Unit: RMB Yuan
Item Closing fair value Opening fair value
(2) Trading financial assets with realizable limit
Unit: RMB Yuan
Trading restriction or other significant
Item Closing balance
limits in realization
126
2013 Semi-annual Report of Konka Group Co., Ltd.
(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 3,114,768,205.63 5,032,534,742.17
Commercial acceptance bill 1,722,585.02 521,262.80
Total 3,116,490,790.65 5,033,056,004.97
(2) Notes receivable pledged at period-end
Unit: RMB Yuan
Issuing entity Date of issuance Expiring date Amount Remark
Suning Procurement
center of Suning 8 March 2013 7 September 2013 37,443,320.18
Appliance Co., Ltd.
Suning Procurement
center of Suning 22 February 2013 21 August 2013 36,050,185.99
Appliance Co., Ltd.
Beijing Jingdong
Information 26 April 2013 24 July 2013 29,824,741.52
Technology Co., Ltd
Beijing Jingdong
Information 29 May 2013 26 August 2013 27,956,476.45
Technology Co., Ltd
Shenzhen GOME
Electrical Appliance 22 January 2013 22 July 2013 20,529,500.00
Co., Ltd
Total -- -- 151,804,224.14 --
(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
Accounts receivable because drawer of the notes fails to execute the contract or agreement
Unit: RMB Yuan
Issuing entity Date of issuance Expiring date Amount Remark
127
2013 Semi-annual Report of Konka Group Co., Ltd.
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.
Undue notes endorsed to other parties by the Company
Unit: RMB Yuan
Issuing entity Date of issuance Expiring date Amount Remark
Feilong Electrical
Appliance Group Co., 11 Jan. 2013 11 July 2013 14,500,000.00
Ltd
Fujian Suning
Yunshang Commercial 27 Apr. 2013 27 Oct. 2013 10,000,000.00
Co., Ltd
Xiamen Fuxia Suning
30 Jan. 2013 30 July 2013 10,000,000.00
Appliance Co., Ltd.
Xiamen Fuxia Suning
30 Jan. 2013 30 July 2013 10,000,000.00
Appliance Co., Ltd.
Xiamen Fuxia Suning
30 Jan. 2013 30 July 2013 10,000,000.00
Appliance Co., Ltd.
Total -- -- 54,500,000.00 --
Note:
Note of discounted or pledged commercial acceptant bill
4. Dividends receivable
Unit: RMB Yuan
Does relevant
Opening Closing Reason for
Item Increase Decrease account occur
balance balance unsettled
impairment
Of which -- -- -- -- -- --
Of which -- -- -- -- -- --
Note:
5. Interest receivable
(1) Interest receivable
Unit: RMB Yuan
Increase in current Decrease in current
Item Opening balance Closing balance
period period
128
2013 Semi-annual Report of Konka Group Co., Ltd.
Income from fixed
7,171,998.73 21,392,625.77 27,209,810.48 1,354,814.02
deposits
Total 7,171,998.73 21,392,625.77 27,209,810.48 1,354,814.02
(2) Overdue interest
Unit: RMB Yuan
Borrowing entity Overdue days (day) Amount of overdue interest
(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
Proportio Proportio Amoun Proportio Proportion
Amount Amount Amount
n (%) n (%) t n (%) (%)
Accounts receivable
with significant single 103,35
103,357, 5,167,86 5,167,865.
amount and individually 3.98% 5% 7,300.0 4.61% 5%
300.00 5.00 00
withdrawn bad debt 0
provision
Accounts receivable for which bad debt provisions are made on the group basis
2,118,7
2,476,10 245,880, 243,194,00
Aging group 95.36% 9.93% 24,691. 94.53% 11.48%
7,681.74 593.00 4.11
83
2,118,7
2,476,10 245,880, 243,194,00
Subtotal of the groups 95.36% 9.93% 24,691. 94.53% 11.48%
7,681.74 593.00 4.11
83
Accounts receivable
with insignificant single
17,077,0 17,077,0 19,269, 17,383,610
amount and individually 0.66% 100% 0.86% 90.21%
36.55 36.55 259.03 .68
withdrawn bad debt
provision
2,241,3
2,596,54 268,125, 265,745,47
Total -- -- 51,250. -- --
2,018.29 494.55 9.79
86
Notes to category of accounts receivable:
129
2013 Semi-annual Report of Konka Group Co., Ltd.
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（%）
Involving
Beijing Pangu Investment Co., Ltd. 103,357,300.00 5,167,865.00 5% litigation, please
refer to VIII, (11)
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 Proportio
Amount debts Amount bad debts
n n
Within 1 year
Including: -- -- -- -- -- --
1,823,695,794.4
Within 1 year 2,180,795,199.67 88.08% 38,493,643.92 86.08% 36,476,541.94
6
Subtotal of 1,823,695,794.4
2,180,795,199.67 88.08% 38,493,643.92 86.08% 36,476,541.94
within 1 year 6
1-2 years 64,452,370.51 2.6% 3,222,618.53 69,265,131.92 3.27% 3,463,256.60
2-3 years 27,094,308.00 1.09% 5,418,861.60 21,634,147.72 1.02% 4,326,829.54
Over 3 years 203,765,803.56 8.23% 198,745,468.95 204,129,617.73 9.63% 198,927,376.03
3 to 4 years 9,289,640.83 0.38% 4,644,820.42 9,653,455.00 0.46% 4,826,727.50
4 to 5 years 751,028.40 0.03% 375,514.20 751,028.40 0.03% 375,514.20
Over 5 years 193,725,134.33 7.82% 193,725,134.33 193,725,134.33 9.14% 193,725,134.33
2,118,724,691.8
Total 2,476,107,681.74 -- 245,880,593.00 -- 243,194,004.11
3
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:
130
2013 Semi-annual Report of Konka Group Co., Ltd.
√ Applicable □ Inapplicable
Unit: RMB Yuan
Withdrawal proportion
Category Book balance Provision for bad debts Reason
（%）
There are problems in
Client 17,077,036.55 17,077,036.55 100%
business operation
Total 17,077,036.55 17,077,036.55 -- --
(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
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:
Unit: RMB Yuan
Content of accounts Withdrawing
Book balance Bad debt amount Reason
receivable proportion（%）
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
Name of entity Write-off time Write-off amount Write-off reason from related party
receivable
transaction or not?
Notes to write off of accounts receivable:
(4) Particulars about accounts receivable due to shareholders holding 5% (including 5%)
voting rights of the Company
Unit: RMB Yuan
Closing amount Opening amount
Amount of Amount of
Name of entity
Book balance withdrawal of bad Book balance withdrawal of bad
debt provision debt provision
131
2013 Semi-annual Report of Konka Group Co., Ltd.
(5) Information of top 5 accounts receivable:
Unit: RMB Yuan
The relationship with
Name of entity Amount Aging Proportion
the Company
Suning Procurement
center of Suning
Non-related company 199,326,474.32 Within one year 7.68%
Yunshang Group Co.,
Ltd
GOME Electrical
Non-related company 192,416,014.98 Within one year 7.41%
Appliances Co., Ltd.
Beijing Pangu
Non-related company 103,357,300.00 4-5years 3.98%
Investment Co., Ltd.
SEMP TOSHIBA
Non-related company 219,443,816.80 Within one year 8.45%
AMAZONAS S/A
Beijing Jingdong
Information Non-related company 46,060,316.85 Within one year 1.77%
Technology Co., Ltd.
Total -- 760,603,922.95 -- 29.29%
(6) The amounts due from related parties
Unit: RMB Yuan
The relationship with the
Name of entity Amount Proportion
Company
Shenzhen OCT East Co.,
Related party 385,260.00 0.01%
Ltd.
Chengdu Tianfu OCT
Industrial Development Co., Related party 190,512.40 0.01%
Ltd
Shenzhen OCT East
Related party 83,000.00 0%
Interlaken Hotel
Taizhou OCT Co., Ltd Related party 61,600.00 0%
OCT Urban Entertainment
Investment Company of Related party 2,033,400.00 0.08%
Shenzhen
Shenzhen Splendid China
Related party 76,500.00 0%
Development Co., Ltd.
Wuhan OCT Industry
Related party 555,193.00 0.02%
Development Co., Ltd.
OCT Hotel Group Related party 69,500.00 0%
Shenzhen Ruifeng Related party 6,279,883.01 0.23%
132
2013 Semi-annual Report of Konka Group Co., Ltd.
Photoelectron Co., Ltd.
Total -- 9,734,848.41 0.35%
(7) Information of accounts receivable that terminated recognition
Unit: RMB Yuan
Gains or loses related to the termination of
Item Amount of termination
recognition
(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
Liabilities
7. Other accounts receivable
(1) Other accounts receivable disclosed by type:
Unit: RMB Yuan
Closing balance Opening balance
Book balance Provision for bad debts Book balance Provision for bad debts
Category
Proport Propor Propor Proport
Amount ion (%) Amount tion Amount tion Amount ion (%)
(%) (%)
Other accounts receivable that provisions for bad debts by group
807,825,890 4.31 342,551,165.9 25,960,449.9
Aging group 100% 34,842,858.19 100% 7.58%
.24 % 3 7
807,825,890 4.31 342,551,165.9 25,960,449.9
Subtotal of group 100% 34,842,858.19 100% 7.58%
.24 % 3 7
807,825,890 342,551,165.9 25,960,449.9
Total -- 34,842,858.19 -- -- --
.24 3 7
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
133
2013 Semi-annual Report of Konka Group Co., Ltd.
Unit: RMB Yuan
Period-end Period-begin
Book balance Book balance
Aging Provision for Provision for bad
Propo Propo
Amount bad debts Amount debts
rtion rtion
Within 1 year
Including:
94.44 86.28
Within 1 year 762,918,386.12 13,764,655.14 295,547,016.92 6,959,834.96
% %
Subtotal of within 1 94.44 86.28
762,918,386.12 13,764,655.14 295,547,016.92 6,959,834.96
year % %
1.59 4.93
1-2 years 12,842,495.25 642,124.76 16,893,232.69 844,661.63
% %
1.02 3.64
2-3 years 8,205,927.95 1,641,185.59 12,488,300.00 2,497,660.00
% %
2.95 5.15
Over 3 years 23,859,080.92 18,794,892.70 17,622,616.32 15,658,293.38
% %
0.85 0.32
3 to 4 years 6,884,783.54 3,442,391.77 1,084,020.35 542,010.18
% %
0.83
4 to 5 years 3,243,592.90 0.4% 1,621,796.45 2,844,625.54 1,422,312.77
%
Over 5 years 13,730,704.48 1.7% 13,730,704.48 13,693,970.43 4% 13,693,970.43
Total 807,825,890.24 -- 34,842,858.19 342,551,165.93 -- 25,960,449.97
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
Withdrawal of closing individually significant or insignificant but provisions for bad debts
individually accounts receivable:
134
2013 Semi-annual Report of Konka Group Co., Ltd.
Unit: RMB Yuan
Content Book balance Amount of bad debts Withdrawal percentage Reason
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
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
Unit: RMB Yuan
Closing amount Opening amount
Amount of Amount of
Name of entity
Book balance withdrawal bad Book balance withdrawal bad
debt provision debt provision
(5) Nature or details of other significant accounts receivable
Unit: RMB Yuan
Nature or details of the
Name of entity Amount Proportion of the total (%)
amount
Note:
(6) Information of top five other accounts receivable
Unit: RMB Yuan
Relationship with the Proportion of the total
Name of entity Amount Aging
Company (%)
State energy
conservation
people-benefit bureau Non-related party 645,004,650.00 Within one year 79.84%
(energy conservation
subsidies)
energy conservation
Non-related party 22,763,810.00 Within one year 2.82%
subsidies
Yikang Building Non-related party 14,311,273.77 Within five years 1.77%
135
2013 Semi-annual Report of Konka Group Co., Ltd.
Shenzhen Trading
Non-related party 10,000,000.00 Within one year 1.24%
Center of Real Estate
Yunnan Bureau of
Radio and Television Non-related party 2,429,934.00 Within one year 0.3%
(cash deposit)
Total -- 694,509,667.77 -- 85.97%
(7) Information of the amounts due from related parties
Unit: RMB Yuan
Relationship with the
Name of entity Amount Aging
Company
Shenzhen Overseas Chinese
Related party 80,000.00 0.01%
Town Gas Station Co., Ltd.
Shenzhen OCT Real Estate
Related party 1,209,064.86 0.15%
Co., Ltd
Shenzhen OCT Property
Related party 77,402.65 0.01%
Management Co., Ltd
Shenzhen OCT Water and
Related party 1,184,055.35 0.15%
Power Co., Ltd
Total -- 2,550,522.86 0.32%
(8) Information of other accounts receivable that terminated recognition
Unit: RMB Yuan
Gains or loses related to the termination of
Item Amount of termination
recognition
（ (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:
Liabilities:
8. Prepayment
(1) List by aging analysis:
Unit: RMB Yuan
Aging Closing balance Opening balance
136
2013 Semi-annual Report of Konka Group Co., Ltd.
Proportio Proportio
Amount Amount
n (%) n (%)
Within 1
163,213,417.17 92.31% 177,723,515.26 97.11%
year
1 year to 2
11,616,126.56 6.57% 4,266,804.57 2.33%
years
2 years to 3
1,985,531.22 1.12% 1,017,702.44 0.56%
years
Over 3
0.00 0% 0.00 0%
years
Total 176,815,074.95 -- 183,008,022.27 --
Notes of aging of prepayment
(1) The top five prepayments are RMB 34,730,380.36, accounting for 18.92% of the prepayments.
(2) There is not shareholder entity with 5% (including 5%) shareholding of prepayment in the
reporting period.
(2) Information of the top 5 prepayment
Unit: RMB Yuan
Relationship with the
Name of entity Amount Aging Reason for unsettled
Company
YANTAI WANHUA
POLYURETHANES Non-related party 9,718,855.83 Within one year Materials non-arrival
CO., LTD
Shenzhen Hot Media
Non-related party 7,215,000.00 Within one year Within contract
Co., Ltd.
Mingxin Electronic
Non-related party 7,146,524.78 Within one year Materials non-arrival
(Shenzhen) Co., Ltd.
Beijing Huaxintai
Non-related party 6,240,000.00 Within one year Materials non-arrival
Technology Co., Ltd.
Shenzhen Shengxu
Non-related party 4,409,999.75 Within one year Materials non-arrival
Development Co., Ltd.
Total -- 34,730,380.36 -- --
Notes to main units of prepayment:
(3) Information about amount due from shareholders with more than 5% (including 5%) of
the voting shares of the Company in prepayment
Unit: RMB Yuan
Closing amount Opening amount
Name of entity
Book balance Amount of Book balance Amount of
137
2013 Semi-annual Report of Konka Group Co., Ltd.
withdrawal of bad withdrawal of bad
debt provision debt provision
(4) Notes of prepayment
9. Inventory
(1) Category
Unit: RMB Yuan
Closing balance Opening balance
Item Provision for Provision for
Book balance Book value Book balance Book value
falling price falling price
1,399,000,798.9 355,562,537. 1,043,438,261. 1,511,033,412. 354,267,390.1 1,156,766,022.
Raw materials
3 00 93 83 0 73
Construction 144,510,959. 202,510,758.0 396,059,068.9 144,510,959.1 251,548,109.8
347,021,717.19
contract assets 16 3 6 6 0
2,124,264,731.6 258,479,060. 1,865,785,671. 2,499,040,813. 262,423,287.2 2,236,617,525.
Inventory goods
2 53 09 22 9 93
Turnover material 17,393,292.97 1,113,082.34 16,280,210.63 11,195,627.07 1,136,395.24 10,059,231.83
450,626,826.4 403,899,840.8 403,899,840.8
Development costs 450,626,826.48
8 4 4
Goods in transits 448,318.12 448,318.12
4,338,307,367.1 759,665,639. 3,578,641,728. 4,821,677,081. 762,338,031.7 4,059,339,049.
Total
9 03 16 04 9 25
(2) Provision for falling price of inventories
Unit: RMB Yuan
Opening book Decrease Closing book
Category Increase
balance Reversal Written off balance
Raw materials 354,267,390.10 8,398,274.34 7,103,127.44 355,562,537.00
Construction
144,510,959.16 144,510,959.16
contract assets
Inventory goods 262,423,287.29 2,470,165.82 6,414,392.58 258,479,060.53
Turnover material 1,136,395.24 23,312.90 1,113,082.34
Total 762,338,031.79 10,868,440.16 13,540,832.92 759,665,639.03
138
2013 Semi-annual Report of Konka Group Co., Ltd.
(3) Details of provision for falling price of inventories
Proportion of reversal of
Basis on provision for falling
Item Reasons for reversal provision for impairment of
price of inventories
inventories to closing balance
Net realizable value less than
Raw materials
costs
Net realizable value less than
Construction contract assets costs
Net realizable value less than
Inventory goods
costs
Net realizable value less than
Turnover material
costs
Notes of inventory:
10. Other current assets
Unit: RMB Yuan
Item Closing balance Opening balance
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 equity instruments 1,155,503.50 1,187,177.20
Total 1,155,503.50 1,187,177.20
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
Available-for-sale financial assets are ordinary stocks of Vanke Co., Ltd. hold by the Company.
(2) Long-term liability investment of available-for-sale financial assets
Unit: RMB Yuan
Initial Interest in Accrued
Matured Opening Closing
Item Category Par value investment the accounts
date balance balance
cost reporting receivable
139
2013 Semi-annual Report of Konka Group Co., Ltd.
period or received
interest
Notes of long-term liability investment of available-for-sale financial assets:
12. Held-to-maturity investment
(1) Information
Unit: RMB Yuan
Item Closing book balance Opening book balance
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
Item Amount Percentage of the investment amount before sales
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
14. Investment to joint ventures and associated enterprises
Unit: RMB Yuan
Total
Percentage Voting
operation Net profit of
Name of of holding percentage of Total closing Total closing Net closing
revenue of the reporting
investee shares of the the Company assets liabilities assets
the reporting period
Company in investee
period
I. Joint ventures
II. Associated enterprises
Chongqing
Jingkang
Plastic 31.25% 31.25% 4,342,832.14 1,859,714.87 2,483,117.27 -400.00
Products Co.,
Ltd
Shenzhen
772,209,636. 205,202,762. 567,006,873. 294,382,839. 26,182,088.1
Refond 19.34% 19.34%
36 63 73 75 3
Optoelectron
140
2013 Semi-annual Report of Konka Group Co., Ltd.
ics Co., Ltd
EnRay Tek
Optoelectron
449,036,494. 211,468,881. 237,567,613. 31,981,068.2 -36,836,629.
ics 36% 36%
34 12 22 7 89
(Shanghai)
Co., Ltd.
Shenzhen
Konka
13,771,194.9 12,127,609.3
Energy 30% 30% 1,643,585.59
3 4
Technology
Co., Ltd
KONRAYIN
TERNATIO
NAL
38% 38%
DEVELOPM
ENTLIMITI
D
Shanghai
Konka Green 550,695,227. 541,727,812.
39% 39% 8,967,415.73
Technology 75 02
Co., Ltd
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
(1) List of long-term equity investment
Unit: RMB Yuan
Explan
ation
Withdr
for
awn
indiffer
Share impair Cash
Voting ences
holding Impair ment bonus
Accoun Initial Openin Increas percent betwee
Investe Closing percent ment provisi in the
ting investm g e/decre age in n the
e balance age in provisi on in reportin
method ent cost balance ase investe share
investe on the g
e holding
e reportin period
percent
g
age and
period
voting
percent
141
2013 Semi-annual Report of Konka Group Co., Ltd.
age in
investe
e
Chongq
ing
Jingkan
g Equity 3,750,0 688,16 688,04
-125.00 31.25% 31.25%
Plastic method 00.00 7.99 2.99
Product
s Co.,
Ltd
Shenzh
en
Refond 102,67 105,71
Equity 27,606, 3,036,5 2,027,1
Optoele 8,758.9 5,269.3 19.34% 19.34%
method 942.51 10.46 05.38
ctronics 3 9
Co.,
Ltd
Enray
Tek
148,03 129,04
Optoele Equity -13,261 115,781
6,152.8 2,663.3 36% 36%
ctronic method ,186.76 ,476.60
6 6
Co.,
Ltd
Shenzh
en
Konka
Energy Cost 5,983,9 3,649,7 3,649,7
30% 30%
Technol method 65.19 28.08 28.08
ogy
Co.,
Ltd
Shenzh
en
Dekon Cost 3,000,0 7,137,4 7,137,4
30% 30%
Electro method 00.00 24.83 24.83
nic Co.,
Ltd
Fehong
Electro
Cost 1,300,0 1,300,0 1,300,0 1,300,0
nics 8.33% 8.33% 0.00
method 00.00 00.00 00.00 00.00
Co.,
Ltd.
Shenzh
en
Associa
tion of
Cost 100,00 100,00 100,00 100,00
Enterpr 0.00
method 0.00 0.00 0.00 0.00
ises
with
Foreign
Invest
142
2013 Semi-annual Report of Konka Group Co., Ltd.
ment
Shenzh
en
Make-p
lan
Invest Cost 485,00 485,00 485,00 485,00
1% 1% 0.00
ment method 0.00 0.00 0.00 0.00
Develo
pment
Co.,
Ltd
IGRS
Inform
ation
Technol
ogy Cost 5,000,0 5,000,0 5,000,0
9.62% 9.62%
Engine method 00.00 00.00 00.00
ering
Center
Co.,
Ltd
Shenzh
en CTU Cost 1,153,0 1,153,0 1,153,0
11.5% 11.5%
Hi-tech method 00.00 00.00 00.00
Ltd
Shenzh
en
Digital
TV
Nationa
Cost 2,400,0 2,400,0 2,400,0
l 6% 6%
method 00.00 00.00 00.00
Engine
ering
Lab
Co.,
Ltd.
Shangh
ai
Digital
TV
Nationa
l Cost 2,400,0 2,400,0 2,400,0
4.26% 4.26%
Engine method 00.00 00.00 00.00
ering
R&D
Center
Co.,
Ltd.
KONR
AY
Equity 15,473, 15,473, 15,473,
INTER 38% 38%
method 790.00 790.00 790.00
NATIO
NAL
143
2013 Semi-annual Report of Konka Group Co., Ltd.
DEVE
LOPM
ENT
LIMITI
D
Shangh
ai
Konka
202,80 202,80 202,80
Green Equity
0,000.0 0,000.0 0,000.0 39% 39%
Technol method
0 0 0
ogy
Co.,
Ltd
419,48 474,30 464,08
-10,224 1,885,0 2,027,1
Total -- 8,850.5 8,533.1 3,731.8 -- -- -- 0.00
,801.30 00.00 05.38
6 9 9
(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 in
capability to transfer capital to Reason for limitation
current period
investee
Notes of long-term equity investment:
Shenzhen Konka Energy Technology Co., Ltd, Shenzhen Konka Electronic Co., Ltd adopted cost
method because the companies did not participate in production, management and ran out of
business.
16. Investment property
(1) Investment property calculated by cost
Unit: RMB Yuan
Item Opening book balance Increase Decrease Closing book balance
I. Total original
241,105,035.18 241,105,035.18
book value
1. Property and
241,105,035.18 241,105,035.18
buildings
II. Total
accumulated
5,424,863.29 2,712,431.65 8,137,294.94
depreciation and
amortization
1. Property and
5,424,863.29 2,712,431.65 8,137,294.94
buildings
III. Total net book 235,680,171.89 -2,712,431.65 232,967,740.24
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2013 Semi-annual Report of Konka Group Co., Ltd.
value of fixed assets
1. Property and
235,680,171.89 -2,712,431.65 232,967,740.24
buildings
V. Total book value
of investment 235,680,171.89 -2,712,431.65 232,967,740.24
property
1. Property and
235,680,171.89 -2,712,431.65 232,967,740.24
buildings
Unit: RMB Yuan
Reporting period
Amount of depreciation and amortization in the reporting period 2,712,431.65
(2) Investment property calculated by fair value
Unit: RMB Yuan
Increase Decrease
Self-used
Variable Transferri
Opening real estate Closing
Item loss and ng to
fair value Purchase or Disposal fair value
gain of self-used
inventory
fair value real estate
shift-in
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 3,303,329,675.7 3,230,719,188.1
45,226,917.48 117,837,405.09
value 4 3
Including: Houses and 1,650,180,180.5 1,641,701,875.5
764,597.08 9,242,902.09
buildings 2 1
1,092,685,079.5 1,025,062,658.3
Machineries 26,727,348.13 94,349,769.27
1 7
Vehicles 80,292,410.89 3,258,012.60 1,665,952.30 81,884,471.19
Electronics 278,352,008.65 5,029,177.20 3,505,047.20 279,876,138.65
Other equipments 201,819,996.17 9,447,782.47 9,073,734.23 202,194,044.41
II. Accumulated Opening book Increase in Withdrawal in Decrease in the Closing book
depreciation balance reporting reporting period reporting period balance
145
2013 Semi-annual Report of Konka Group Co., Ltd.
period
Including: Houses and 1,391,644,362.1 1,372,197,757.6
67,001,921.02 86,448,525.51
buildings 0 1
Machineries 349,507,955.55 19,703,774.22 637,476.08 368,574,253.69
Vehicles 632,748,212.94 31,048,761.72 73,538,161.18 590,258,813.48
II. Accumulated
53,097,988.44 3,413,808.48 1,189,452.84 55,322,344.08
depreciation
Electronics 222,809,444.94 4,829,715.47 3,987,016.23 223,652,144.18
Other equipments 133,480,760.23 8,005,861.13 7,096,419.18 134,390,202.18
Opening book Closing book
-- --
balance balance
III. The net book value of 1,911,685,313.6 1,858,521,430.5
--
fixed assets 4 2
Including: Houses and 1,300,672,224.9 1,273,127,621.8
--
buildings 7 2
Machineries 459,936,866.57 -- 434,803,844.89
Vehicles 27,194,422.45 -- 26,562,127.11
Electronics 55,542,563.71 -- 56,223,994.47
Other equipments 68,339,235.94 -- 67,803,842.23
IV. Total impairment
23,849,042.62 -- 13,247,787.33
provision
Including: Houses and
1,412,531.97 -- 1,412,531.97
buildings
Machineries 17,367,644.79 -- 7,095,824.27
Vehicles 988,860.93 -- 952,210.68
Electronics 2,380,461.92 -- 2,275,540.80
Other equipments 1,699,543.01 -- 1,511,679.61
V. Total book value of 1,887,836,271.0 1,845,273,643.1
--
fixed assets 2 9
Including: Houses and 1,299,259,693.0 1,271,715,089.8
--
buildings 0 5
Machineries 442,569,221.78 -- 427,708,020.62
Vehicles 26,205,561.52 -- 25,609,916.43
Electronics 53,162,101.79 -- 53,948,453.67
Other equipments 66,639,692.93 -- 66,292,162.62
Depreciation amount of this reporting period was RMB 67,001,921.02; original value of RMB
10,886,036.04 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
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2013 Semi-annual Report of Konka Group Co., Ltd.
Houses and
34,571,929.56 13,556,192.91 164,726.07 20,851,010.58
buildings
Machineries 26,629,748.50 21,682,986.44 2,567,177.93 2,379,584.13
Vehicles 6,074,191.70 4,372,079.56 1,187,731.05 514,381.09
Electronics 25,448,632.36 22,865,422.00 788,843.74 1,794,366.62
Other equipments 9,168,938.06 8,606,766.10 171,511.72 390,660.24
Total 101,893,440.18 71,083,447.01 4,879,990.51 25,930,002.66
(3) Fixed assets leased in from financing lease
Unit: RMB Yuan
Item Original book value Accumulated depreciation Net book value
(3) Fixed assets leased in from operating lease
Unit: RMB Yuan
Category Closing book value
Houses and buildings 71,637,573.40
(5) 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 disposal
(6) 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 right
Cannot be estimated
Chongqing Konka was under progress.
The license for using state-owned land has not been
Yikang building of Konka
obtained and the certificate of title to house property Cannot be estimated
Group
cannot be handled temporarily.
Jingyuan office building - Cannot be estimated
Henan office building Under progress 2013
R&D mansion Under progress 2013
The license for using state-owned land has not been
Main plant of Mudangjiang
obtained and the certificate of title to house property Cannot be estimated
electric appliances etc.
cannot be handled temporarily.
The license for using state-owned land has not been
Office building of Changshu
obtained and the certificate of title to house property Cannot be estimated
Konka Color TV etc.
cannot be handled temporarily.
Kunshan Konka factories and Under progress 2013
147
2013 Semi-annual Report of Konka Group Co., Ltd.
dormitory buildings
Notes of fixed assets:
The Group obtained RMB 55,000,000.00 of bank loans by pledge of RMB 45,601,993.50 of
houses and buildings, RMB 5,547,226.46 of land usage right.
18. Construction in progress
(1) Construction in progress
Unit: RMB Yuan
Closing balance Opening balance
Item
Book Impairment Book Impairment
Book value Book value
balance provision balance provision
17,966,177.0 17,966,177.0 16,813,365.0
Office building project 16,813,365.00
0 0 0
10,039,487.9 10,039,487.9
Hotel project 7,745,435.95 7,745,435.95
5 5
Gallery project 1,643,881.07 1,643,881.07 1,643,881.07 1,643,881.07
Available-for-installation
6,022,205.78 6,022,205.78 7,052,589.78 7,052,589.78
project
15,469,225.5 15,469,225.5 17,427,622.0
Other fragmental projects 17,427,622.05
1 1 5
51,140,977.3 51,140,977.3 50,682,893.8
Total 50,682,893.85
1 1 5
(2) Changes in significant construction in progress
Unit: RMB Yuan
Includi
Increa ng: Capital
Openi Transf Project Capital Closin
se in capital ization Source
Name ng erred Other input Project ization g
Budge ization of of
of reporti to decrea percen proces of
t balanc of interes fundin balanc
project ng fixed se tage of s interes
interes t rate g
e assets budget t e
period t this (%)
period
Kunsh
an
29,000 16,813 17,966
office 1,152,
,000.0 ,365.0 ,177.0
buildin 812.00
0 0 0
g
project
Kunsh 560,00 10,039
7,745, 2,294,
an 0,000. ,487.9
435.95 052.00
Hotel 00 5
148
2013 Semi-annual Report of Konka Group Co., Ltd.
project
Kunsh
an 23,000
1,643, 1,643,
Galler ,000.0
881.07 881.07
y 0
project
Availa
ble-for
7,500, 7,052, 1,030, 6,022,
-install
000.00 589.78 384.00 205.78
ation
project
Other
fragme 42,000 17,427 15,469
7,897, 9,855,
ntal ,000.0 ,622.0 ,225.5
255.50 652.04
project 0 5 1
s
661,50 50,682 11,344 10,886 51,140
Total 0,000. ,893.8 ,119.5 ,036.0 -- -- -- -- ,977.3
00 5 0 4 1
Notes of changes in construction in progress:
(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
(4) Information of procedures of significant construction in progress
Item Process of the project Remark
Kunshan office building project 61.95%
Kunshan Hotel project 1.79%
Kunshan Gallery project 7.15%
（(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
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2013 Semi-annual Report of Konka Group Co., Ltd.
Notes of engineering materials:
20. Clearance of fixed assets
Unit: RMB Yuan
Reason for transferring to
Item Opening book value Closing book value
clearance
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
Unit: RMB Yuan
Opening book
Item Increase Decrease Closing book balance
balance
I. Planting industry
II. Livestock industry
III. Forestry
IV. Aquaculture
(2) Calculated by fair value
Unit: RMB Yuan
Opening book
Item Increase Decrease Closing book balance
balance
I. Planting industry
II. Livestock industry
III. Forestry
IV. Aquaculture
Notes of Productive biological assets
22. Oil and gas assets
Unit: RMB Yuan
Opening book Increase in reporting Decrease in reporting
Item Closing book balance
balance period period
Notes of oil and gas assets:
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2013 Semi-annual Report of Konka Group Co., Ltd.
23. Intangible assets
(1) Information
Unit: RMB Yuan
Increase in reporting Decrease in reporting
Item Opening book balance Closing book balance
period period
I. Total original book value 368,444,870.84 3,481,867.94 371,926,738.78
Land use right 303,488,845.78 303,488,845.78
Trademark registration
3,007,341.61 3,007,341.61
costs in foreign countries
Patents and proprietary
42,075,173.87 247,863.26 42,323,037.13
technologies
Others 19,873,509.58 3,234,004.68 23,107,514.26
II. Total accumulated
75,263,345.22 4,975,346.55 80,238,691.77
damage
Land use right 30,942,368.10 3,330,417.18 34,272,785.28
Trademark registration
3,007,341.61 0.00 3,007,341.61
costs in foreign countries
Patents and proprietary
31,770,877.61 651,183.09 32,422,060.70
technologies
Others 9,542,757.90 993,746.28 10,536,504.18
III. Total provisions for
293,181,525.62 -1,493,478.61 0.00 291,688,047.01
depreciation
Land use right 272,546,477.68 -3,330,417.18 0.00 269,216,060.50
Trademark registration
0.00 0.00 0.00 0.00
costs in foreign countries
Patents and proprietary
10,304,296.26 -403,319.83 0.00 9,900,976.43
technologies
Others 10,330,751.68 2,240,258.40 0.00 12,571,010.08
IV. Total book value 2,901,082.61 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 290,280,443.01 -1,493,478.61 0.00 288,786,964.40
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2013 Semi-annual Report of Konka Group Co., Ltd.
of intangible assets
Land use right 272,546,477.68 -3,330,417.18 0.00 269,216,060.50
Trademark registration
0.00 0.00 0.00 0.00
costs in foreign countries
Patents and proprietary
7,403,213.65 -403,319.83 0.00 6,999,893.82
technologies
Others 10,330,751.68 2,240,258.40 0.00 12,571,010.08
Amortization was of 4,975,346.55 in the 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
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 include 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:
24. Goodwill
Unit: RMB Yuan
Impairment
Name of investee or event that Increase in the Decrease in the
Opening balance Closing balance provision at
generated goodwill reporting period reporting period
period-end
Purchasing equity of
3,943,671.53 3,943,671.53
subsidiaries
Total 3,943,671.53 3,943,671.53
Notes of test method of goodwill impairment and impairment withdrawal method:
More details please refer to IV 34 in the eighth chapter “Impairment of non-current and
non-financial assets”
25. Long-term amortization expense
Unit: RMB Yuan
Opening Amortization Closing Reason for
Item Increase Other decrease
balance balance balance other decrease
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2013 Semi-annual Report of Konka Group Co., Ltd.
Decoration 2,547,457.90 732,244.22 613,016.21 4,004.58 2,662,681.33
Other 3,713,828.55 2,400,039.12 779,765.37 5,334,102.30
Total 6,261,286.45 3,132,283.34 1,392,781.58 4,004.58 7,996,783.63 --
Notes:
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
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 210,683,591.59 205,571,058.00
Fair value changes of available-for-sale
financial assets that recognized into capital 289,061.15 281,142.72
reserves
Off-set unrealized profits from intra-group
11,190,679.88 11,190,679.88
transactions
Guarantee expense 21,999,724.15 15,908,757.86
Other non-current liabilities-deferred
26,862,364.55 25,525,174.64
income
Deductible losses and others 20,630,911.72 52,426,863.46
Subtotal 291,656,333.04 310,903,676.56
Deferred income tax liabilities:
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 25,123,531.62 29,015,090.67
Deductible losses 74,711,275.37 63,665,559.14
Total 99,834,806.99 92,680,649.81
Unrecognized deferred income tax assets and deferred income tax liabilities that will expire in the
following fiscal year:
Unit: RMB Yuan
Year Closing balance Opening balance Remark
List of deferred income tax assets and deferred income tax liabilities:
Unit: RMB Yuan
153
2013 Semi-annual Report of Konka Group Co., Ltd.
Temporary differences amount
Item
As at 30 Jun. 2013 As at 1 Jan. 2013
Taxable differences item
Deductible differences items
(2) List of net amount of deferred income tax assets and deferred income tax liabilities after
write-off
Notes of deferred income tax assets and deferred income tax liabilities:
Unit: RMB Yuan
Deductible Deductible
Deferred income temporary Deferred income temporary
tax assets or differences or tax 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: 291,656,333.04 310,903,676.56
Deferred income tax liabilities 563,067.21 563,067.21
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 the reporting period
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 298,228,748.37 15,902,876.56 3,859,512.85 590,471.32 309,681,640.76
II. Provision for inventory
762,338,031.79 10,868,440.16 13,540,832.92 759,665,639.03
falling price
III. Impairment provision of
1,885,000.00 0.00 1,885,000.00
long-term equity investment
IV. Impairment provision of
23,849,042.62 10,601,255.29 13,247,787.33
fixed assets
V. Impairment provision of
2,901,082.61 2,901,082.61
intangible assets
1,087,381,149.7
Total 1,089,201,905.39 26,771,316.72 3,859,512.85 24,732,559.53
3
Notes of the list of assets impairment:
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2013 Semi-annual Report of Konka Group Co., Ltd.
28. Other non-current assets
Unit: RMB Yuan
Item Closing balance Opening balance
Notes of other non-current assets:
29. Short-term loan
(1) Category
Unit: RMB Yuan
Item Closing balance Opening balance
Pledge loan 2,926,968,078.67 2,641,579,639.42
Mortgage loan 55,000,000.00 55,000,000.00
Credit loan 1,885,519,407.69 2,659,771,847.06
Entrusted loan 100,000,000.00
Total 4,867,487,486.36 5,456,351,486.48
Notes of category of short-term loan:
1) The category of the mortgage assets of the mortgage loans and the amount, please refer to the section VIII, VII, 17th and section
VIII, VII, 23rd.
2) The pledge loans were the USD loans gained from the pledge for the bank deposits as well as the notes receivables, which was
because the Group wanted to carry out overseas payment business. The pledged RMB deposits please refer to section VIII, VII, 1st
and the pledged notes receivables please refer to section VIII, VII, 3rd.
(2) List of unsettled mature short-term loan
Unit: RMB Yuan
Amount of Reason for
Name of creditor Rate of loan Usage Estimated settle date
loan unsettlement
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:
30. Trading financial liabilities
Unit: RMB Yuan
Item Closing fair value Opening fair value
Notes of trading financial liabilities:
31. Notes payable
Unit: RMB Yuan
Category Closing balance Opening balance
Trade acceptance bill 429,480,886.23 846,746,137.62
Bank acceptance bill 1,503,613.97
Total 430,984,500.20 846,746,137.62
155
2013 Semi-annual Report of Konka Group Co., Ltd.
RMB 430,984,500.20 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 3,043,072,958.57 2,686,331,707.29
1 year to 2 years 4,269,175.51 7,156,630.71
2 years to 3 years 5,597,071.65 14,513,984.42
Over 3 years 36,022,060.02 27,991,465.10
Total 3,088,961,265.75 2,735,993,787.52
(2) The accounts payable to shareholders with more than 5% (including 5%) of the voting shares of the
Company
Unit: RMB Yuan
Entity Closing balance Opening balance
(3) Notes of the accounts payable aging over one year
Reason for Whether pay after the
Item Amount unsettlement Balance Sheet Date or
not?
Installation project 25,534,055.98 Unsettled No
Exterior wall project 3,877,746.61 Unsettled No
Project supervision fee 3,040,000.00 Unsettled No
Total 32,451,802.59
33. Advance from customers
(1)
Unit: RMB Yuan
Item Closing balance Opening balance
Within 1 year 328,038,720.75 418,357,441.25
1 year to 2 years 5,146,136.44 11,504,576.23
2 years to 3 years 4,971,521.75 2,647,309.25
Over 3 years 7,898,730.38 9,327,140.36
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2013 Semi-annual Report of Konka Group Co., Ltd.
Total 346,055,109.32 441,836,467.09
(2) Advanced from customers from shareholders with more than 5% (including 5%) of the voting shares
of the Company
Unit: RMB Yuan
Entity Closing balance Opening balance
(3) Notes of significant advance from customers aging over one year
The significant advance from customers aging over one year was the unsettled sales amounts.
34. Payroll payable
Unit: RMB Yuan
Increase in reporting Decrease in reporting
Item Opening book balance Closing book balance
period period
I. Salary, bonus,
286,063,426.11 683,518,211.39 757,901,543.47 211,680,094.03
allowance, subsidy
II. Employee
2,095,684.52 40,916,555.98 36,781,245.56 6,230,994.94
welfare
III. Social
5,493,167.06 89,273,000.61 89,010,218.10 5,755,949.57
insurance
Including:1.
1,446,451.87 19,917,606.49 19,742,203.13 1,621,855.23
Medical insurance
2. Basic
endowment 3,532,013.23 62,050,634.77 61,987,393.00 3,595,255.00
insurance
3. Annuity
1,100.00 880.00 220.00
payment
4. Unemployment
225,334.89 3,714,508.78 3,649,112.57 290,731.10
insurance expense
5. Maternity
124,075.12 1,391,919.72 1,457,834.99 58,159.85
insurance
6. Employment
165,291.95 2,197,230.85 2,172,794.41 189,728.39
injury insurance
IV. Housing fund 1,472,945.22 14,200,301.95 14,453,626.41 1,219,620.76
V. Dismissal
163,910.53 1,175,786.46 1,188,558.80 151,138.19
welfare
VI. Other 9,714,283.29 21,874,090.81 19,232,788.21 12,355,585.89
Total 305,003,416.73 850,957,947.20 918,567,980.55 237,393,383.38
RMB 0.00 is the amounts in arrears in the payroll payable.
The labor union budget and employee education budget is RMB 10,437,526.24, the non-monetary benefits are RMB 0.00, and the
compensation for terminating the labor contract is RMB 0.00.
157
2013 Semi-annual Report of Konka Group Co., Ltd.
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 -101,272,398.14 -274,015,057.88
Business tax 998,290.75 1,151,251.13
Corporate income tax -17,710,897.87 -6,187,617.27
Personal income tax 2,678,451.52 2,876,020.13
Urban maintenance and construction tax 1,430,802.51 4,239,904.85
Education surtax 789,707.27 2,365,376.38
Deposing funds of waste electrical and electronic
21,735,952.47 30,671,882.00
equipments
Other 22,458,091.05 7,810,404.06
Total -68,892,000.44 -231,087,836.60
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:
36. Interest payable
Unit: RMB Yuan
Item Closing balance Opening balance
Interest payable on long-term borrowings that interest
1,764,888.89
was paid by stages and principle was repay upon due
Interest payable on short-term borrowings 33,560,894.43 25,886,463.78
Non-current liabilities interests due within one year 155,672.18
Total 33,716,566.61 27,651,352.67
Notes:
37. Dividends payable
Unit: RMB Yuan
Reason for unsettlement over 1
Name of entity Closing balance Opening balance
year
Notes:
38. Other accounts payable
(1)
Unit: RMB Yuan
Item Closing balance Opening balance
Within 1 year 1,525,872,855.76 1,181,207,444.47
158
2013 Semi-annual Report of Konka Group Co., Ltd.
1 year to 2 years 55,385,052.97 120,523,681.87
2 years to 3 years 20,247,975.65 29,156,204.12
Over 3 years 30,949,192.91 33,868,930.00
Total 1,632,455,077.29 1,364,756,260.46
(2) Other accounts payable from shareholders with more than 5% (including 5%) of the voting shares of
the Company
Unit: RMB Yuan
Name of entity Closing balance Opening balance
(3) Notes of the other large amount accounts payable aging over 1 year
Whether return after the
Name of creditor Amount Reason for unsettlement
reporting date
Shanghai Shensi Logistics Co., Ltd. 4,500,000.00 Guarantee money No
Shanghai Yude International Logistics Co., Ltd. 2,650,000.00 Guarantee money No
Shanghai Yongxin Color Picture Tube Co., Ltd. 2,075,485.15 Guarantee money No
Chuzhou Jinshida Motor Transport Co., Ltd. 2,000,000.00 Guarantee money No
Chuzhou Henglida Logistics Co., Ltd. 2,000,000.00 Guarantee money No
Chuzhou Nanqiao Jingwei Motor Transport Co.,
Guarantee money No
Ltd. 2,000,000.00
Xianyang Weiye Logistics Co., Ltd. 2,000,000.00 Guarantee money No
Total 17,225,485.15
(4) Notes of other accounts payable with significant amount
Name of creditor Closing amount Nature or content
Gome Electrical Appliance Co., Ltd. Energy-saving subsidies
5,709,250.00
Zhenhua Group (Kunshan) Construction Proj
Guarantee money
ects Co., Ltd. 5,400,000.00
Shanghai Shensi Logistics Co., Ltd. 4,500,000.00 Guarantee money
Shanghai Yude International Logistics Co., Ltd. 2,650,000.00 Guarantee money
Total 18,259,250.00
39. Estimated liabilities
Unit: RMB Yuan
159
2013 Semi-annual Report of Konka Group Co., Ltd.
Increase in reporting Decrease in reporting
Item Opening balance Closing balance
period period
Dismissal welfare 2,511,814.54 2,511,814.54
Total 2,511,814.54 2,511,814.54
Notes of estimated liabilities:
40. Non-current liabilities due within 1 year
(1)
Unit: RMB Yuan
Item Closing balance Opening balance
Long-term loan due within 1 year 110,000,000.00 810,000,000.00
Total 110,000,000.00 810,000,000.00
(2) Long-term loan due within 1 year
Long-term loan due within 1 year
Unit: RMB Yuan
Item Closing balance Opening balance
Credit loan 10,000,000.00 10,000,000.00
Entrusted loan 100,000,000.00 800,000,000.00
Total 110,000,000.00 810,000,000.00
RMB 0.00 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
Foreig
n
Starting Ending Foreign
Creditor Currency Rate (%) RMB curren
date date currency RMB balance
balance cy
balance
balanc
e
CCB OCT 16 Sep. 1 Aug. 100,000,000.0
RMB Yuan 3.7%
Branch 2010 2013 0
CCB OCT 15 Apr. 31 July 100,000,000.0
RMB Yuan 5.42%
Branch 2010 2013 0
CCB OCT 31 Dec. 31 July 300,000,000.0
RMB Yuan 3.92%
Branch 2010 2013 0
Jiangsu
Internation 10 Dec. 10 Dec. 10,000,000.0
RMB Yuan 0.3% 10,000,000.00
al Trust 2010 2013 0
Co., Ltd.
160
2013 Semi-annual Report of Konka Group Co., Ltd.
CITIC Ind
ustrial Ban
k, Shenzhe 12 July 31 July 300,000,000.0
RMB Yuan 4.96%
n Citizens' 2012 2013 0
Center Br
anch
CCB OCT 12 Dec. 100,000,000.
9 Jan. 2012 RMB Yuan 5.28%
Branch 2016 00
110,000,000. 810,000,000.0
Total -- -- -- -- -- --
00 0
Mature loan of long-term loan due within 1 year:
Unit: RMB Yuan
Name of Annual rate Reason for Estimated date
Amount of loan Overdue date Usage
creditor (%) unsettlement of completion
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
(3) Bonds payable due within 1 year
Unit: RMB Yuan
Interest
Accrued
Opening paid in Closing
Issuance Issuing interest in Closing
Name Par value Term interest the interest
date amount current balance
payable reporting payable
period
period
Notes:
(4) Long-term accounts payable due within 1 year
Unit: RMB Yuan
Accrued Closing
Creditor Term Initial amount Rate (%) Conditions
interest balance
Notes of long-term accounts payable due within 1 year:
41. Other current liabilities
Unit: RMB Yuan
Item Closing book balance Opening book balance
Notes:
42. Long-term loan
(1) Category of long-term loan
161
2013 Semi-annual Report of Konka Group Co., Ltd.
Unit: RMB Yuan
Item Closing balance Opening balance
Credit loan 10,000,000.00 10,000,000.00
Entrust loan② 100,000,000.00 1,200,000,000.00
Less: Long-term loans due within one year
-110,000,000.00 -810,000,000.00
(annotations VII, 29th)
Total 400,000,000.00
Notes of category:
(2) The top five long-term loans
Unit: RMB Yuan
Closing balance Opening balance
Foreign
Starting Ending Foreign
Creditor Currency Rate (%) RMB currenc
date date currency RMB amount
amount y
amount
amount
CITIC
Industrial
Bank, Shen
200,000,000.
zhen 9 Jan. 2012 1 Jun. 2015 RMB Yuan 5.51%
00
Citizens'
Center
Branch
CCB OCT 17 Mar. 4 Mar. 100,000,000.
RMB Yuan 5.67%
Branch 2011 2016 00
CCB OCT 12 Dec. 100,000,000 100,000,000.
9 Jan. 2012 RMB Yuan
Branch 2016 .00 00
100,000,000 400,000,000.
Total -- -- -- -- -- --
.00 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 paid in Closing
Issuance Issuing Closing
Name Par value Term interest interest the interest
date amount balance
payable payable reporting payable
period
Notes of bonds payable, including the conditions and date of conversion of the convertible corporate bonds:
44. Long-term payable
162
2013 Semi-annual Report of Konka Group Co., Ltd.
(1) The top five long-term payable
Unit: RMB Yuan
Accrued Conditions of
Company Term Initial amount Rate (%) Closing balance
interest loan
Chuzhou
Tongchuang
30,000,000.00 2% 300,000.00 30,000,000.00
Construction
Investment Co., Ltd.
(2) List of the financing lease payable under the long-term loan
Unit: RMB Yuan
Closing balance Opening balance
Company
Foreign currency RMB Foreign currency RMB
RMB 0 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
Notes of specific payable:
46. Other non-current liabilities
Unit: RMB Yuan
Item Closing book balance Opening book balance
Deferred income 142,165,597.94 125,743,462.22
Total 142,165,597.94 125,743,462.22
Notes of other non-current liabilities, including each government grants relevant to assets and income received in the reporting
period and their closing amounts:
Of which, the list of deferred incomes as follows:
Item Closing balance Opening balance
Government subsidy relevant to assets
Subsidies for supporting equipment of Kunshan liquid crystal
22,815,000.00 24,570,000.00
module project
Fund for flat panel display industry in 2008 9,499,999.99 10,000,000.00
R&D and industrialization of large size liquid crystal display
7,200,000.00 8,400,000.00
module
Key technology and industrialization of LED Backlight of 5,000,000.00 5,000,000.00
163
2013 Semi-annual Report of Konka Group Co., Ltd.
flat TV set
Industrialization project of large size liquid crystal display
8,000,000.00 9,200,000.00
module
R&D and industrialization of integrated module of flat TV
3,075,000.00 3,525,000.00
set
R&D and industrialization of integrated DTMB 5,329,999.94 6,149,999.96
Special Funds for Strategic Emerging Industry Development
5,400,000.00 5,400,000.00
(High-end New Electronic Information)
Research and Development of Terminal and Supporting Core
3,750,000.00 3,750,000.00
Chip Based on AVS/DRA
Research, Development and Industrialization of New
3,750,000.00 3,750,000.00
Hunan-interactive Smart Television
Special Funds of Guidance for Technological Innovation and
3,000,000.00 3,000,000.00
Achievement Transformation
Research, Development and Industrialization of System of
2,950,000.00 3,000,000.00
New Terminal Application Service for Internet
Research and Development Project to Support
10,000,000.00
Next-generation Smart Terminal System for Internet
Others 40,162,046.02 30,854,910.27
Government subsidy relevant to earnings
Others 12,233,551.99 9,143,551.99
142,165,597.94 125,743,462.22
47. Share capital
Unit: RMB Yuan
Increase/Decrease (+/-)
Opening Issuing Capitalizatio
Closing balance
balance new Bonus shares n of public Other Subtotal
shares reserves
1,203,972,704.0
Total shares 1,203,972,704.00
0
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:
164
2013 Semi-annual Report of Konka Group Co., Ltd.
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)
Other capital reserves 61,054,245.91 23,755.27 61,030,490.64
Total 1,272,420,328.46 23,755.27 1,272,396,573.19
Notes:
The increase of other capital reserves in the reporting period was due to the available-for-sale financial assets—changes i
n the fair value, and the decrease in the reporting period was due to the disposal of the available-for-sale financial asset
s.
51. Surplus reserves
Unit: RMB Yuan
Item Opening balance Increase Decrease Closing balance
Statutory surplus reserves 573,228,941.95 573,228,941.95
Discretional surplus reserves 254,062,265.57 254,062,265.57
Total 827,291,207.52 827,291,207.52
Notes of surplus reserves: for surplus reserves transferred to share capital, compensating losses and distributed as dividends,
relevant resolutions shall be explained:
According to the rules of Companies Act, the Articles, the Company extracted the statutory surplus reserves according to
the 10% of the net profits. If the accumulated amount of the statutory surplus reserves was more than 50% of the regi
stered capital of the Company, could no more extract any.
The Company could extract discretional surplus reserves after extracted statutory surplus reserves. Through approved, the
discretional surplus reserves could be used to make up the losses of the previous years or to increase the share capital.
52. Provision for general risk
Notes of provision for general risk:
53. Retained profits
Unit: RMB Yuan
Item Amount Withdrawal or distributed
165
2013 Semi-annual Report of Konka Group Co., Ltd.
proportion
Opening balance of retained profits before
725,485,704.10 --
adjustments
Opening balance of retained profits after
725,485,704.10 --
adjustments
Add: Net profit attributable to owners of the
40,547,673.62 --
Company
Dividend of common stock payable 12,039,727.04
Closing retained profits 753,993,650.68 --
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 9,329,229,395.36 6,976,145,869.85
Other operating income 92,169,885.64 62,777,267.92
Cost of sales 7,835,777,505.69 5,722,506,955.64
(2) Main business (Classified by industry)
Unit: RMB Yuan
Reporting period Same period of last year
Industry
Revenue of sales Costs of sales Revenue of sales Costs of sales
Electronics industry 9,329,229,395.36 7,783,071,113.88 6,976,145,869.85 5,674,892,770.60
Total 9,329,229,395.36 7,783,071,113.88 6,976,145,869.85 5,674,892,770.60
(3) Main business (Classified by product)
Unit: RMB Yuan
166
2013 Semi-annual Report of Konka Group Co., Ltd.
Reporting period Same period of last year
Product
Revenue of sales Costs of sales Revenue of sales Costs of sales
Color television business 7,478,282,465.06 6,178,528,941.50 5,154,996,482.76 4,157,141,389.91
Mobile phone business 686,575,916.65 618,861,444.21 565,319,642.38 495,262,014.07
White goods business 785,194,995.56 665,864,686.59 717,953,215.54 580,042,564.86
Others 379,176,018.09 319,816,041.58 537,876,529.17 442,446,801.76
Total 9,329,229,395.36 7,783,071,113.88 6,976,145,869.85 5,674,892,770.60
(4) Main business (Classified by area)
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 7,782,919,179.42 6,314,646,566.63 5,390,594,971.28 4,228,987,297.87
Overseas sales 1,546,310,215.94 1,468,424,547.25 1,585,550,898.57 1,445,905,472.73
Total 9,329,229,395.36 7,783,071,113.88 6,976,145,869.85 5,674,892,770.60
(5) The revenue of sales from the top five customers
Unit: RMB Yuan
Customer Main business revenue Proportion of total business revenue (%)
Suning Appliance 603,254,635.76 6.4%
Gome Electrical Appliances
(including China Paradise
481,455,303.17 5.11%
Electronics Retail and Dazhong
Electronics)
SEMP TOSHIBA AMAZONAS
410,807,755.96 4.36%
S/A
RT-MART 162,066,611.26 1.72%
Wal-Mart 125,357,665.20 1.33%
Total 1,782,941,971.35 18.92%
Notes:
55. Revenue from the construction contracts
Unit: RMB Yuan
Recognized
Fixed price Incurred cumulative gross
Contract item Amount Settled amount
contract cumulative costs profit (Losses
presented by “-”)
Recognized
Incurred cumulative gross
Cost plus contract Contract item Amount Settled amount
cumulative costs profit (Losses
presented by “-”)
Notes:
167
2013 Semi-annual Report of Konka Group Co., Ltd.
56. Business tax and surtax
Unit: RMB Yuan
Same period of last
Item Reporting period Calculation and payment standard
year
Business tax 1,475,839.91 1,449,811.16
Urban maintenance and
18,018,626.18 12,262,073.87
construction tax
Education surtax 8,371,564.25 5,688,845.13
Local education surtax 4,902,454.38 3,329,710.02
Other 265,679.78 1,750,145.11
Total 33,034,164.50 24,480,585.29 --
Notes:
57. Selling expenses
Unit: RMB Yuan
Item Report period Same period of last year
Wages 162,510,473.38 125,536,361.12
Promotional activities 364,417,645.15 296,229,638.52
Logistic fees 159,743,609.13 150,457,267.50
Advertising expenses 159,060,890.75 143,843,849.42
Maintenance fees 154,895,890.42 109,597,299.76
Travel expenses 23,810,439.27 22,325,068.31
Social insurances 34,261,911.29 31,097,303.96
Housing funds 910,837.48 843,214.91
Rental fees 19,872,418.40 19,273,416.62
Business entertainment expenses 20,508,329.56 16,674,709.77
Employee benefits 13,033,537.39 11,563,829.96
Deposing funds of waste electrical and
40,450,564.00
electronic equipments
Other 57,926,543.58 47,131,677.38
Total 1,211,403,089.80 974,573,637.23
58. Administration expenses
Unit: RMB Yuan
Item Reporting period Same period of last year
R&D expenses 101,602,125.00 86,676,360.00
Wages 73,218,938.17 56,611,879.35
Depreciation 16,897,047.83 13,501,454.33
Taxes fees and funds 13,694,092.19 10,656,528.94
Business entertainment expenses 11,341,531.79 10,854,959.85
168
2013 Semi-annual Report of Konka Group Co., Ltd.
Consulting advisers fees 4,990,559.53 6,626,525.59
Travel expenses 6,794,316.49 8,485,134.20
Social insurances 9,129,792.51 6,907,461.31
Labor union expenditures 5,258,947.85 4,076,450.50
Utilities 4,090,061.80 3,924,119.28
Patent fees 3,713,744.62 3,098,210.35
Other 62,204,950.74 64,897,911.80
Total 312,936,108.52 276,316,995.50
59. Financial expenses
Unit: RMB Yuan
Item Reporting period Same period of last year
Interest incomes 107,675,645.05 142,952,522.01
Less: Interest costs -25,539,623.72 -67,960,768.60
Less: Amount of interest capitalizatio
-2,744,842.52
n
Exchange gains or losses -104,264,106.93 30,604,139.19
Less: Amount of exchange gains of
losses capitalization
Other 3,165,589.83 4,174,744.17
Total -21,707,338.29 109,770,636.77
60. Gains and losses from changes in fair value
Unit: RMB Yuan
Source Reporting period Same period of last year
Trading financial assets 22,101,173.97
Including: gains from the changes in fair value of
22,101,173.97
derivative financial instruments
Total 22,101,173.97
Notes:
61. Investment income
(1) List of investment income
Unit: RMB Yuan
Item Reporting period Same period of last year
Long-term equity investment income accounted
-8,197,695.92 3,873,147.41
by equity method
Investment income arising from disposal of 91,013.92
169
2013 Semi-annual Report of Konka Group Co., Ltd.
long-term equity investments
Investment income received from holding of
21,115.80
available-for-sale financial assets
Investment income received from
5,110,011.59
available-for-sale financial assets
Total -8,176,580.12 9,074,172.92
(2) Long-term equity investment income accounted by cost method
Unit: RMB Yuan
Same period of last
Name of investee Reporting period Reason for increase/decrease
year
(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 -125.00 -67,676.23
Shenzhen Refond Optoelectronics
5,063,615.84 5,358,632.82
Co., Ltd
EnRay Tek Optoelectronics
-13,261,186.76 -1,417,809.18
(Shanghai) Co., Ltd.
Total -8,197,695.92 3,873,147.41 --
Notes of investment income: make notes if there is significant limitation for recovery of investment income. If there is not anything
about the mentioned limitation, notes too:
62. Impairment losses
Unit: RMB Yuan
Item Reporting period Same period of last year
I. Bad debts losses 12,043,363.71 -6,594,988.81
II. Inventory falling price losses 10,868,440.16 848,587.73
Total 22,911,803.87 -5,746,401.08
63. Non-operating gains
(1)
Unit: RMB Yuan
The amount included in
Item Report period Same period of last year the current non-recurring
gains and losses
170
2013 Semi-annual Report of Konka Group Co., Ltd.
Total gains from disposal of non-current
12,182,289.25 10,114,355.92 12,182,289.25
assets
Including：Gains from disposal of fixed
12,182,289.25 10,114,355.92 12,182,289.25
assets
Government grants 31,471,202.07 62,128,032.28 26,741,064.35
Penalty income 1,535,922.81 2,512,302.85 1,535,922.81
Other 765,399.89 2,493,824.04 765,399.89
Total 45,954,814.02 77,248,515.09 41,224,676.30
(2) List of government grants
Unit: RMB Yuan
Item Reporting period Same period of last year Note
R&D subsidy 2,731,240.32 4,540,230.00
Refund on software tax 4,730,137.72 36,675,785.94
Establishment of development
799,999.98
center for signal TV
Patent subsidy 682,400.00
Insurance subsidy from Shenzhen
3,160,381.25
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
Industrialization of large size
1,200,000.00 1,200,000.00
liquid crystal display module
R&D and industrialization of
large size liquid crystal display 1,200,000.00 1,200,000.00
module
R&D and industrialization of
820,000.02 820,000.02
integrated DTMB
Industry funds of panel display in
500,000.01
2008
Enterprise development special
1,902,900.00
funds
Finance discounts 5,000,000.00
Other 13,386,924.00 9,049,235.09
Total 31,471,202.07 62,128,032.28 --
Notes
64. Non-operating expenses
Unit: RMB Yuan
Item Report period Same period of last The amount included
171
2013 Semi-annual Report of Konka Group Co., Ltd.
year in the current
non-recurring gains
and losses
Loss on disposal of non-current assets 3,868,800.73 1,877,844.62 3,868,800.73
Including: Loss on disposal of fixed assets 3,868,800.73 1,877,844.62 3,868,800.73
External donation expense 15,000.00
Other 159,482.03 125,770.06 159,482.03
Penalty expense 1,097,569.87 261,066.84 1,097,569.87
Total 5,125,852.63 2,279,681.52 5,125,852.63
Notes:
65. Income tax expense
Unit: RMB Yuan
Item Reporting period Same period of last year
Current income tax expense accounted by tax and relevant
3,800,578.66 23,403,914.76
regulations
Adjustment of income tax 19,247,343.52 8,284,199.91
Total 23,047,922.18 31,688,114.67
66. Calculation procedure of basic earnings per share and diluted earnings per share
Basic EPS is the basic earnings attributable to ordinary stockholders divided by the weighted average number of outstanding during
the year. The amount of the ordinary stock newly issued, according to the specific clauses of the distribution agreement, should be
calculated and established as of the date of receivable and consideration (generally issue date of stock).
The numerator of diluted EPS, according to the ordinary shares attributable to ordinary stockholders, is established after the
adjustment of the factors as follows:
The interests of the dilutive potential ordinary shares which have been established as cost; (2) The income and cost from the
transformation of the dilutive potential ordinary shares; (3) The income tax impact related to the adjustment mentioned above.
The denominator of diluted EPS equals to the sum of the following two: (1) The weighted average of the ordinary shares which are
issued by the parent company in the basic EPS; (2) The weighted average of the increased ordinary shares for the presumptive
transformation of the dilutive potential ordinary shares to the ordinary shares.
Calculating the weighted average of the increased ordinary shares for the presumptive transformation of the dilutive potential
ordinary shares to the ordinary shares, if the dilutive potential ordinary shares were issued in the former period, should suppose that
the shares transform at the period-begin of the year. If the dilutive potential ordinary shares were issued in the year, the
transformation should be supposed to take place in the issue date.
(1) List of the amount of basic EPS and diluted EPS each term
Profits in report period Report period Same period of last year
172
2013 Semi-annual Report of Konka Group Co., Ltd.
Basic EPS Diluted EPS Basic EPS Diluted EPS
Net profit attributable to common
0.0337 0.0337 0.0095 0.0095
shareholders of the Company
Non-recurring gains and losses of net profit
attributable to common shareholders of the
0.0115 0.0115 -0.0319 -0.0319
Company after deducting influence on
income tax
(2) Calculation procedure of earnings per share and diluted earnings per share
In the reporting period, the Company had not any diluted potential ordinary share, so the diluted earnings per share was equal
to basic 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 of ordinary shares of the
11,467,291.68
reporting period 40,547,673.62
Of which: net profits attributable to sustainable operation 40,547,673.62 11,467,291.68
Net profits attributable to terminated operation — —
Non-recurring gains and losses of net profit attributable to
common shareholders of the Company after deducting influence on -38,396,824.01
income tax 13,903,675.19
Of which: net profits attributable to sustainable operation 13,903,675.19 -38,396,824.01
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 beginning of the period 1,203,972,704.00 1,203,972,704.00
Add: Weighted average number of ordinary shares issued in
— —
the reporting period
Less: Weighted average number of ordinary share
— —
repurchased in the reporting period
Weighted average number publicly issued at the end of the
1,203,972,704.00 1,203,972,704.00
period
67. Other comprehensive income
Unit: RMB Yuan
Item Reporting period Same period of last year
1. Profits/(losses) from available-for-sale financial assets -31,673.70 -4,496,523.44
Less: Effects on income tax generating from -7,918.43 -1,124,130.86
173
2013 Semi-annual Report of Konka Group Co., Ltd.
available-for-sale financial assets
Subtotal -23,755.27 -3,372,392.58
4. Converted amount of foreign currency financial statements 2,903,844.68 -2,793,377.06
Subtotal 2,903,844.68 -2,793,377.06
Total 2,880,089.41 -6,165,769.64
Notes:
68. Notes of Cash Flow Statement
(1) Other cash received relevant to operating activities
Unit: RMB Yuan
Item Amount
Government subsidy income 26,280,631.00
Bargain money and deposit 24,675,043.20
Interest income from bank deposits 22,396,921.55
Income from waste 8,133,586.58
Repayment of individual borrowing 3,182,142.09
Temporary received repair fund
Income from fine and penalty 442,901.26
Other expenses and current accounts 120,693,851.11
Total 205,805,076.79
Notes of other cash received relevant to operating activities
(2) Other cash paid relevant to operating activities
Unit: RMB Yuan
Item Amount
Out of pocket expenses 653,851,725.69
Deposit, guarantee money and repair fund expense 36,224,530.76
Employee reserve fund 20,167,753.72
Advanced payment 6,582,536.16
Bank charges 16,482,745.75
Donation expense
Other expenses 49,828,899.78
Total 783,138,191.86
Notes:
(3) Other cash received relevant to investment activities
Unit: RMB Yuan
Item Amount
Notes:
174
2013 Semi-annual Report of Konka Group Co., Ltd.
(4) Other cash paid relevant to investment activities
Unit: RMB Yuan
Item Amount
Notes:
(5) Other cash received relevant to financing activities
Unit: RMB Yuan
Item Amount
Receipt and return of pledged RMB fixed deposits upon maturity 1,089,113,577.37
Total 1,089,113,577.37
Notes:
(6) Other cash payments relating to financing activities
Unit: RMB Yuan
Item Amount
Deposit of guarantee money used for pledge 407,569,308.18
Other 1,608,245.29
Total 409,177,553.47
Notes:
69. 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 36,648,406.00 11,476,794.21
Add: Provision for impairment of assets 22,911,803.87 -5,746,401.08
Depreciation of fixed assets, of oil-gas assets, of
67,001,921.02 65,377,247.16
productive biological assets
Amortization of intangible assets 4,975,346.55 4,004,748.59
Amortization of long-term deferred expense 1,392,781.58 5,198,661.54
Losses on disposal of property, plant and equipment,
intangible assets and other long-term assets (gains: -12,182,289.25 -10,114,355.92
negative)
Loss on retirement of fixed assets (gains: negative) 3,868,800.73 1,877,844.62
Loss on fair value change (gains: negative) 0.00 -22,101,173.97
Financial cost (gains: negative) 79,391,178.80 86,258,499.42
175
2013 Semi-annual Report of Konka Group Co., Ltd.
Investment loss (gains: negative) 8,176,580.12 -9,074,172.92
Decrease in deferred income tax assets (gains: negative) 19,247,343.52 7,967,570.92
Increase in deferred income tax liabilities (decrease:
0.00 -807,501.87
negative)
Decrease in inventory (gains: negative) 483,369,713.85 -452,980,898.62
Decrease in accounts receivable from operating activities
1,102,292,669.90 2,433,695,876.94
(gains: negative)
Increase in payables from operating activities (decrease:
454,595,963.74 -999,447,651.25
negative)
Net cash flows generated from operating activities 2,271,690,220.43 1,115,585,087.77
2. Investing and financing activities that do not involving
-- --
cash receipts and payment:
3. Net increase in cash and cash equivalents -- --
Closing balance of cash 1,769,306,476.23 1,292,124,522.94
Less: Opening balance of cash 824,043,169.37 646,451,050.70
Net increase in cash and cash equivalents 945,263,306.86 645,673,472.24
(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:
II. Information about disposal of subsidiaries and other
-- --
business units:
(3) Composition of cash and cash equivalents
Unit: RMB Yuan
Item Closing amount Opening amount
I. Cash 1,769,306,476.23 824,043,169.37
Including: cash in hand 14,153.64 169,522.85
Bank deposit can be used for payment at any time 1,769,292,322.59 1,291,955,000.09
III. Closing balance of cash and cash equivalents 1,769,306,476.23 824,043,169.37
Note to Supplementary Information of Cash Flow Statement
The Company accounted the bank deposit balance as the “other currency assets” and this kind of cash deposits were not used for
payment at any time before expires, so it had been deducted in the Cash Flow Statement.
70. 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:
176
2013 Semi-annual Report of Konka Group Co., Ltd.
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 does not own but bears the risks
Unit: RMB Yuan
Total assets at Total liabilities Net assets at Operating
Net profits of
Name the end of at the end of the end of revenue of Remark
current period
period period period current period
IX. Relationship and Related Party Transactions
1. Particulars about the parent company:
Proporti Proporti
ons of ons of
parent parent
Ultimate
Name of compan compan
Registrat Legal Register controlle Organiz
parent Relation Enterpri Business y’s y’s
ion represen ed r of the ation
compan ship se nature nature sharehol voting
place tative capital compan code
y ding to right to
y
the the
compan compan
y (%) y (%)
Travel
industry,
OCT Controlli State-ow property
Group ng ned Shenzhe Ren industry 6.1 1903461
19% 19% SASAC
Corporat sharehol sharehol n Kelei and Billion 7-5
ion der ding electroni
cs
industry
Notes of the parent company of the Company:
2. Subsidiaries of the Company
Full-name Proportio Proportio
Legal
of Relations Registere Business Registere n of n of Organizat
Type representa
subsidiarie hip d place nature d capital shares voting ion code
tive
s held (%) right (%)
Shenzhen Controlli Limited Shenzhen Li manufact RMB 100% 100% 70848057
177
2013 Semi-annual Report of Konka Group Co., Ltd.
Konka ng company , Hongtao ure 12,000.00 -2
Telecom subsidiary Guangdo
municatio ng
n
Technolo
gy Co.,
Ltd.
Shenzhen
Konka
Video &
Shenzhen
Communi Controlli
Limited , He manufact RMB 72858645
cation ng 60% 60%
company Guangdo Jianjun ure 1,500.00 -4
Systems subsidiary
ng
Engineeri
ng Co.,
Ltd.
Shenzhen
Konka
Shenzhen
Precision Controlli
Limited , Lou manufact RMB 61881661
Mold ng 46.31% 52.49%
company Guangdo Yiliang ure 1,596.88 -8
Manufact subsidiary
ng
ure Co.,
Ltd.
Shenzhen
Shenzhen
Konka Controlli
Limited , Huang Electrical RMB 61881678
Electronic ng 51% 51%
company Guangdo Zhongtian Sales 830.00 -1
s Co., subsidiary
ng
Ltd.
Shenzhen
Konka Shenzhen
Controlli
Informati Limited , Niu manufact RMB 73416472
ng 100% 100%
on company Guangdo Weidong ure 3,000.00 -5
subsidiary
Network ng
Co., Ltd.
Shenzhen
Shenzhen
Konka Controlli
Limited , Sun manufact RMB 61881662
Plastic ng 100% 100%
company Guangdo Wenbo ure 950.00 -6
Products subsidiary
ng
Co., Ltd.
Shenzhen
Shenzhen
Shushida Controlli
Limited , Huang manufact RMB 70841244
Electronic ng 100% 100%
company Guangdo Zhongtian ure 4,200.00 -9
s Co., subsidiary
ng
Ltd.
178
2013 Semi-annual Report of Konka Group Co., Ltd.
Shenzhen
Konka
Shenzhen
Electronic Controlli Investme
Limited , Niu RMB 79389213
s Fittings ng nt holdin 100% 100%
company Guangdo Weidong 6,500.00 2
Technolo subsidiary g
ng
gy Co.,
Ltd.
Mudanjia
Mudanjia
ng Controlli
Limited ng Chuai manufact RMB 60610286
Appliance ng 60% 60%
company Heilongji Rongwei ure 6,000.00 1
s Co., subsidiary
ang
Ltd.
Shanxi
Konka Controlli Su
Limited Xianyang manufact RMB 62310230
Electronic ng Zengmen 60% 60%
company Shaanxi ure 6,950.00 2
s Co., subsidiary g
Ltd.
Chongqin
g Konka Controlli
Limited Chongqin Zhang manufact RMB 62192098
Electronic ng 60% 60%
company g Xian ure 4,500.00 5
s Co., subsidiary
Ltd.
Chongqin
g
Konka A Controlli
Limited Chongqin manufact RMB 78155925
utomobile ng Zeng Hui 57% 57%
company g ure 3,000.00 2
Electroni subsidiary
cs Co.,
Ltd.
Chongqin
g Qingjia Controlli
Limited Chongqin Wang manufact RMB 62192187
Electronic ng 40% 40%
company g Xiaoyong ure 1,500.00 3
s Co., subsidiary
Ltd.
Anhui
Konka Controlli
Limited Chuzhou Gong manufact RMB 61056872
Electronic ng 78% 78%
company Anhui Zhiping ure 14,000.00 -8
s Co., subsidiary
Ltd.
Anhui
Konka Controlli
Limited Chuzhou manufact RMB 74890634
Appliance ng Mu Gang 96.46% 97.45%
company Anhui ure 7,819.00 7
s Co., subsidiary
Ltd.
179
2013 Semi-annual Report of Konka Group Co., Ltd.
Changshu
Konka Controlli
Limited Changshu Wang manufact RMB 62822347
Electronic ng 60% 60%
company Jiangsu Youlai ure 2,465.00 X
s Co., subsidiary
Ltd.
Kunshan
Konka Controlli
Limited Kunshan Huang manufact RMB 68053275
Electronic ng 100% 100%
company Jiangsu Zhongtian ure 35,000.00 -5
s Co., subsidiary
Ltd.
Donggua
Donggua
n Konka Controlli
Limited n Huang manufact RMB 61811698
Electronic ng 100% 100%
company Guangdo Zhongtian ure 26,667.00 -8
s Co., subsidiary
ng
Ltd.
Donggua Donggua
Controlli
n Packing Limited n Li manufact RMB 72245604
ng 100% 100%
Materials company Guangdo Yunfei ure 1,000.00 -2
subsidiary
Co., Ltd. ng
Donggua
Donggua
n Konka Controlli
Limited n Lou manufact RMB 75109846
Mould ng 59.73% 59.73%
company Guangdo Yiliang ure 1,000.00 -7
Plastic subsidiary
ng
Co., Ltd.
Boluo
Konka Controlli Bolo
Limited manufact RMB 72112128
Printing ng Guangdo Lin Gaike 51% 51%
company ure 4,000.00 -3
Plate Co., subsidiary ng
Ltd.
Boluo
Konka
Controlli Bolo
Precision Limited manufact RMB 79931620
ng Guangdo Lin Gaike 100% 100%
Technolo company ure 1,500.00 -8
subsidiary ng
gy Co.,
Ltd.
Konka
People-ru
(Nanhai) Controlli Guangdo
n non-ent RMB 68243005
Develop ng ngFosha Lin Gaike R&D 100% 100%
erprise u 50.00 8
ment subsidiary n
nits
Center
Hongkon Controlli Hong
Limited Huang Internatio HKD
g Konka ng Kong 100% 100% —
company Zhongtian nal trade 50.00
Co., Ltd. subsidiary China
Konka Controlli Limited Hong Niu Investme HKD 100% 100% —
180
2013 Semi-annual Report of Konka Group Co., Ltd.
Househol ng company Kong Weidong nt holding 50.00
d subsidiary China
Appliance
s
Investme
nt Co.,
Ltd.
Konka
Househol
d
Appliance Controlli Hong
Limited Niu Internatio HKD
s ng Kong 100% 100% —
company Weidong nal trade 50.00
Internatio subsidiary China
nal
Trading
Co., Ltd.
KONKA Controlli
Limited Chang Internatio USD
AMERIC ng USA 100% 100% —
company Dong nal trade 100.00
A,INC. subsidiary
Konka Controlli Frankfurt,
Limited Chang Internatio EUR
(Europe) ng German, 100% 100% —
company Dong nal trade 2.50
Co., Ltd. subsidiary Europe
Donggua
n Donggua
Controlli
Xutongda Limited n, Xiang manufact RMB 69649113
ng 46.31% 52.49%
Mould company Guangdo Tianshun ure 500.00 -4
subsidiary
Plastic ng
Co., Ltd.
Shenzhen
Konka
Shenzhen
Optoelect Controlli
Limited , Lin RMB 55719393
ronic ng R&D 100% 100%
company Guangdo Gaike 1,000.00 8
Technolo subsidiary
ng
gy Co.,
Ltd.
Shenzhen
Shenzhen
Wankaida Controlli Software
Limited , RMB 55718505
Technolo ng Lin Gaike developm 100% 100%
company Guangdo 1,000.00 7
gy Co., subsidiary ent
ng
Ltd.
Kunshan
Controlli
Kangshen Limited Kunshan, Sun Real RMB 55806907
ng 100% 100%
g company Jiangsu Wenbo estate 35,000.00 -4
subsidiary
Investme
181
2013 Semi-annual Report of Konka Group Co., Ltd.
nt
Develop
Co., Ltd.
Anhui
Konka
Tongchua
Controlli
ng Limited Chuzhou, Xu manufact RMB 55922811
ng 100% 100%
Electric company Anhui Qiansen ure 18,000.00 0
subsidiary
Appliance
s Co.,
Ltd.
Indonesia
Konka Controlli
Limited Chang Internatio USD
Electronic ng Indonesia 51% 51% —
company Dong nal trade 150.00
s Co., subsidiary
Ltd.
Shenzhen
Shushida Controlli Shenzhen
Limited Niu RMB 58791087
Logistics ng Guangdo Logistic 100% 100%
company Weidong 1,000.00 0
Service subsidiary ng
Co., Ltd.
Sales of
Beijing Controlli
Limited Chen home ap RMB 59067865
Konka ng Beijing 100% 100%
company Yuehua pliances 3,000.00 4
Electronic subsidiary
Kunshan
Jielunte Controlli
Limited Kunshan Lou manufact RMB 57672944
Mould ng 46.31% 52.49%
company Jiangsu Yiliang ure 10,000.00 3
Plastic subsidiary
Co., Ltd.
Wuhan
Jielunte Controlli
Limited Wuhan Lou manufact RMB 06680713
Mould ng 46.31% 52.49%
company Hubei Yiliang ure 3,000.00 0
Plastic subsidiary
Co., Ltd.
Chuzhou
Jielunte Controlli
Limited Chuzhou Lou manufact RMB 06247828
Mould ng 46.31% 52.49%
company Anhui Yiliang ure 2,000.00 8
Plastic subsidiary
Co., Ltd.
3. Particulars on joint ventures and associated enterprises of the Company
Item Business Registrati Legal Business Registere Proportio Proportio Relations Organizat
182
2013 Semi-annual Report of Konka Group Co., Ltd.
Type on place represent scope d capital n of n of hip ion code
ative holding voting
shares rights (%)
(%)
I. Joint ventures
II. Associated enterprises
Chongqin Manufact
g uring and Associate
RMB
Jingkang Limited Chongqin Wang processin d 62192113
12,000,00 31.25% 31.25%
Plastic company g Xiaoyong g of enterprise 6
0.00
Products module s
Co., Ltd products
Shenzhen
Manufact Associate
Refond RMB
Limited Gong uring and d 71526660
Optoelect Shenzhen 107,000,0 19.34% 19.34%
company Weibin selling enterprise 3
ronics 00.00
LEDs s
Co., Ltd
EnRay
Tek
Manufact Associate
Optoelect USD
Limited Zhang uring and d 56013355
ronics Shanghai 50,000,00 36% 36%
company Rujing selling enterprise 7
(Shanghai 0.00
LEDs s
) Co.,
Ltd.
New
Shenzhen
energy
Konka
products RMB
Energy Limited Dong The same 71520435
Shenzhen for 20,000,00 30% 30%
Technolo company Yaping controller 7
mobile 0.00
gy Co.,
equipmen
Ltd
t, etc.
KONRA
YINTER
Associate
NATION HKD
Limited Hong Zhang Investme d
ALDEVE 50,000,00 38% 38% —
company Kong Xiaohui nt enterprise
LOPME 0.00
s
NTLIMI
TID
Shanghai
Konka Manufact Associate
RMB
Green Limited Jiang uring and d 05933302
Shanghai 520,000,0 39% 39%
Technolo company Xiaoyi selling enterprise -9
00.00
gy Co., LEDs s
Ltd.
183
2013 Semi-annual Report of Konka Group Co., Ltd.
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., Ltd Same actual controller 74005033-7
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.,
Same actual controller 19217869-7
Ltd
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 79932011-9
Station Co., Ltd.
Dongyangyi Industry Co., Ltd Shareholder of subsidiary 70849783-3
Wuhan OCT Industry Development Co.,
Same actual controller —
Ltd.
Shenzhen OCT East Co., Ltd Same actual controller 69531802-2
Notes:
5．Related party transactions
(1) Purchase of goods, services received among the related-party
Unit: RMB Yuan
Occurred in same period of
Occurred in reporting period
last year
Proport Proport
Content of related Pricing principle ion in ion in
Name of company
transaction of related parties transact transact
Amount Amount
ions of ions of
the the
same same
184
2013 Semi-annual Report of Konka Group Co., Ltd.
kind kind
Anhui Huali
Purchase of package
Packaging Co., Negotiated price 19,481,890.89 0.34% 10,011,593.75 0.17%
materials
Ltd
Shanghai Huali
Purchase of package
Packaging Co., Negotiated price 5,022,236.58 0.09% 5,459,192.10 0.1%
materials
Ltd
Huali Packaging Purchase of package
Negotiated price 4,892,321.12 0.09% 3,913,890.03 0.07%
(Huizhou) Co.,Ltd. materials
Huizhou Huali
Purchase of package
Packaging Co., Negotiated price 405,782.52 0.01%
materials
Ltd
Shenzhen OCT
Water and Power Water and electricity Negotiated price 4,497,926.08 0.08% 3,804,189.78 0.06%
Co., Ltd
Shenzhen
Overseas Chinese
Hotel room repast Negotiated price 77,082.20 0.01% 301,754.03 0.01%
Town Hotel Group
Co., Ltd.
Shenzhen Refond
Purchase of raw
Optoelectronics Negotiated price 55,194,380.11 0.98% 14,739,517.96 0.29%
materials
Co., Ltd
Statement of sales of goods and rendering of services
Unit: RMB Yuan
Occurred in same period of
Occurred in reporting period
last year
Proport Proport
ion in ion in
Content of related Pricing principle
Name of company transact transact
transaction of related parties
Amount ions of Amount ions of
the the
same same
kind kind
Shenzhen OCT
Selling LCDs Negotiated price 210,000.00 0.8% 435,000.00 0.88%
East Co., Ltd
Chengdu Tianfu
OCT Industrial
Selling LCDs Negotiated price 380,000.00 1.45% 380,000.00 0.77%
Development Co.,
Ltd.
OCT Urban
Entertainment
Investment Selling LCDs Negotiated price 2,400,000.00 4.87%
Company of
Shenzhen
185
2013 Semi-annual Report of Konka Group Co., Ltd.
Wuhan OCT
Industry
Selling LCDs Negotiated price 7,717,471.00 15.67%
Development Co.,
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.
Shenzhen Refond
Selling printed
Optoelectronics Negotiated price 12,498,597.92 41.41% 60,563.99 0.18%
boards
Co., Ltd
(2) Particulars about related trusteeship and guarantees
Table of particulars about trusteeship/contracting of the company
Unit: RMB Yuan
Trust / contract
Name of Initial date of Ending date of Pricing basis
Information of income
entrusting Name of trustee being being for the trust /
entrusted/contr recognized in
party/contracte /contractor entrusted/contr entrusted/contr contract
acted assets the reporting
d act act income
period
Information of entrusting management/contracted
Unit: RMB Yuan
Name of Initial date of Ending date of Trust / contract
Information of Pricing basis
entrusting Name of trustee entrusting/ entrusting/ fee recognized
entrusted/contr for the trust /
party/contracte /contractor being being in the reporting
acted assets contract fee
d contracted contracted period
Notes
(3) Information of related-party lease
Rental situation of the Company
Unit: RMB Yuan
Rental income
Pricing basis
Category of the recognized in
Name of lessor Name of lessee Initial date Ending date for the rental
leased assets the reporting
income
period
Lease situation of the Company
Unit: RMB Yuan
Rental income
Pricing basis
Category of the recognized in
Name of lessor Name of lessee Initial date Ending date for the rental
leased assets the reporting
income
period
186
2013 Semi-annual Report of Konka Group Co., Ltd.
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 9 Jan. 2012 12 Dec. 2016 Entrusted loan
Lending to banks and other financial institutions
(6) Information about assets transfer, debt reorganization of related parties
Unit: RMB Yuan
Type of Occurred in reporting Occurred in same period of
related Pricing period last year
Content of the
Related party party decision-makin
transaction Proport Proport
transactio g procedures Amount Amount
ion (%) ion (%)
n
(7) Other related-party transaction
6. Amounts due from/to related parties
Amount due from related parties
Unit: RMB Yuan
Closing amount Opening amount
Name of
Related party Bad debts Bad debts
item Book balance Book balance
provision provision
Accounts
Shenzhen OCT East Co., Ltd 385,260.00 295,360.00 697,815.00 139,563.00
receivable
Accounts Chengdu Tianfu OCT Industrial
190,512.40 4,056.20 512.40 256.20
receivable Development Co., Ltd.
Accounts Shenzhen OCT East Interlaken
83,000.00 16,600.00 83,000.00 4,150.00
receivable Hotel
Accounts
Taizhou OCT Co., Ltd. 61,600.00 3,080.00 61,600.00 3,080.00
receivable
Accounts OCT Urban Entertainment
2,033,400.00 101,670.00 2,033,400.00 86,568.00
receivable Investment Company of
187
2013 Semi-annual Report of Konka Group Co., Ltd.
Shenzhen
SHENZHEN SPLENDID
Accounts
CHINA DEVELOPMENT 76,500.00 72,675.00 76,500.00 72,675.00
receivable
COMPANY LTD.
Accounts Wuhan OCT Industry
555,193.00 27,180.08 1,243,374.00 24,867.48
receivable Development Co., Ltd.
Accounts
Inter Continental Shenzhen 69,500.00 1,390.00 69,500.00 1,390.00
receivable
Accounts Shenzhen Refond
6,279,883.01 125,597.66 35,429.93 708.60
receivable Optoelectronics Co., Ltd
Notes
Shenzhen OCT East Co., Ltd 115,200.00
receivable
Other
Shenzhen OCT Gas Station Co.,
accounts 80,000.00 40,000.00 80,000.00 40,000.00
Ltd
receivable
Other
Shenzhen OCT Real Estate Co.,
accounts 1,209,064.86 1,066,916.68 1,209,064.86 1,066,916.68
Ltd
receivable
Other
Shenzhen OCT Property
accounts 77,402.65 72,554.48 77,402.65 72,554.48
Management Co., Ltd
receivable
Other
Shenzhen OCT Water and
accounts 1,184,055.35 23,681.11 348,938.41 6,978.77
Power Co., Ltd
receivable
Accounts payable to related-party of the Company
Unit: RMB Yuan
Name of item Related party Closing balance Opening balance
Accounts payable Chongqing Jingkang Plastic Co., Ltd. 202,407.08 202,407.08
Accounts payable Shenzhen Dekon Electronic Co., Ltd 356,545.32 356,545.32
Accounts payable Anhui Huali Packaging Co., Ltd. 8,775,169.46 4,344,588.65
Shenzhen Huali Packing and Trading
Accounts payable 13,957.02 13,957.02
Co., Ltd.
Accounts payable Huali Packaging (Huizhou)Co.,Ltd. 2,611,613.05 305,679.11
Accounts payable Shanghai Huali Packaging Co., Ltd. 1,954,616.43 3,237,533.41
Shenzhen Refond Optoelectronics Co.,
Accounts payable 108,091.44 25,904,591.39
Ltd
Notes payable Huali Packaging (Huizhou)Co.,Ltd.
Notes payable Anhui Huali Packaging Co., Ltd. 4,006,453.07 4,006,453.07
Notes payable Shanghai Huali Packaging Co., Ltd. 787,910.72 787,910.72
Shenzhen Refond Optoelectronics Co.,
Notes payable 15,733,563.63
Ltd
Other accounts
Shanghai Huali Packaging Co., Ltd. 480,000.00 480,000.00
payable
188
2013 Semi-annual Report of Konka Group Co., Ltd.
X. Share-based Payment
1. Overview of share-based payment
Unit: RMB Yuan
Notes:
2. Information of equity-settled share-based payment
Notes:
3. Information of cash-settled share-based payment
Notes:
4. Information of share-based payment service
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
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2013 Semi-annual Report of Konka Group Co., Ltd.
receipts to Beijing Pangu and assists Beijing Pangu in canceling the Advance Agreement. The responsibilities and 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, identifying object cost
of RMB 100,837,125.00 Yuan. After the court opening for evidence, the certification center provided identified 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 identified 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.
On May 15, 2012, Beijing Higher People's Court made the No. 4237 civil judgment of (2009) Gao-Min-Chu-Zi. The judgments
were: A. Beijing Pangu Investment Co., Ltd. shall, within 10 days after this verdict takes effect, hand over the six real estate units
under the Commercial House Pre-sale Contract of Beijing 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 Shenzhen Konka Video & Communication Systems Engineering Co., Ltd. are overruled.
C. Other claims of Beijing Pangu Investment Co., Ltd.
Both parties refused to accept the verdict, and they had appealed against the Supreme People's Court. The Supreme People's Court
formed a collegial panel in law, and heard of the case on November 6, 2012 as well as made a No. 85 civil judgment of (2012)
Min-Yi-Zhong-Zi on December 15, 2012 of which the verdict: dismissed the appeal and upheld the original verdict.
Beijing Pangu Investment Co., Ltd. should satisfy the judgment from the effective date of the judgment within ten days according to
the law, and the Beijing Second Intermediate People's Court had issued an enforcement notice that, Beijing Pangu Investment Co.,
Ltd. had not satisfied the obligations established by the court according to the enforcement notice.
The Beijing Second Intermediate People's Court had made the No. 00397 executive ruling of (2013) Er-Zhong-Zi according to law,
and should enforce according to law.
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2013 Semi-annual Report of Konka Group Co., Ltd.
In the process of enforcement, the Beijing Pangu Investment Co., Ltd. had appealed to the Supreme Court for retrial. As
on the date of approval of the financial report, the case was still under review for retrial in the Supreme People's Cour
t, and the Supreme Court had not yet ruled on whether had the retrial. The case filing investigation of the retrial in acc
ordance with the law would not affect the execution of No. 00397 Executive Orders of (2013) Er-Zhong-Zi.
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 2013, the Company has issued letters of credit with a total amount of RMB 1.067 billion, made payment with a
total amount of RMB 1.142 billion; of which the amount of RMB 1.142 billion was used for the payment of letters of credit in the
first half of 2012. The remaining payment was converted into RMB 0.899 billion, of which including pending payment of RMB
0.539 billion to Konka Household Appliances International Trading. The unpaid amount was not include the amount of which had
established but the beneficiary had not surrendered documents.
2. Other contingent liabilities and the effects on financial affairs
As of 30 Jun. 2013,, the Group had not any other significant contingent events that need to be disclosed.
XII. Commitments
1. Significant commitments
(1) Capital commitments
RMB Yuan
Item Closing amount Opening amount
Signed but not recognised in the financial statement
Significant outsourcing contract 50,980,000.00 92,727,629.28
Total 50,980,000.00 92,727,629.28
(2) Operating lease commitments
As of the date of balance sheet, the list of the Group’s operating lease contract which was foreign signed and
irrevocable:
RMB Yuan
Item Closing amount Opening amount
The least amount of the lease payment of the irrevocable
operating leasing
The 1st year of the date of balance sheet 13,622,553.56 13,306,102.37
The 2nd year of the date of balance sheet 7,810,312.92 6,966,504.38
The 3rd year of the date of balance sheet 6,275,877.19 3,899,233.83
Years after 6,435,684.93 3,079,767.80
Total 34,144,428.60 27,251,608.38
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2013 Semi-annual Report of Konka Group Co., Ltd.
(3) Other commitments
As of 30 Jun. 2013, the Group had not any other significant commitments 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 financial Reason for failing to estimate
Item Details
status and operating results the influence number
2. Notes of profit distribution after Balance Sheet Date
3. Notes of other events after Balance Sheet Date
The 40th meeting of the 7th board of directors of the Company which was held on 5 Apr. 2013 deliberated and passed Resolution
on the Transfer of the equity of CORIS International Development Co., Ltd. According to this resolution, the company decided to
transfer the 38% equity of the CORIS International Development Co., Ltd which was held by the wholly-owned subsidiary of
Konka Group------Hong Kong Konka Co., Ltd to the Shanghai Konka Green Technology Co., Ltd. The transfer price was
established on the basis of the net assets of CORIS International Development Co., Ltd after assessment. As of the date on which
the financial statements were authorized to be issued, the Company had finished the transferring procedures of the equity mentioned
above and received the transfer account.
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
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2013 Semi-annual Report of Konka Group Co., Ltd.
6. Assets and liabilities calculated by fair value
Unit: RMB Yuan
Income from fair Accrued fair
Withdrawn
value change in value change that
Item Opening amount impairment in Closing amount
the reporting recognized in
reporting period
period equity
Financial assets
Financial assets
1,187,177.20 -31,673.70 1,155,503.50
available for sale
Subtotal of financial
1,187,177.20 -31,673.70 1,155,503.50
assets
Total of above 0.00 0.00 0.00 0.00 0.00
Financial liabilities 0.00 0.00 0.00 0.00 0.00
7. Financial assets and financial liabilities of foreign currency
Unit: RMB Yuan
Income from fair Accrued fair
Withdrawn
value change in value change that
Item Opening amount impairment in Closing amount
the reporting recognized in
reporting period
period equity
Financial assets
Loans and accounts
379,433,571.80 3,480,916.18 438,050,245.28
receivable
Subtotal of
612,720,528.47 -31,673.70 764,334,113.68
financial assets
Financial
1,005,327,932.43 572,779,912.46
liabilities
8. The main content of the pension plan and the significant changes.
9. Others
(1) On 14 Oct. 2011, the 2nd Administration Bureau directly under the Urban Planning, Land and 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.Land and Resources Commission of Shenzhen Municipality approved and issued the
"Construction land planning license" (Shen-Gui-Tu-Xu ZG-2013-0006) of the update and reconstruction projects of the
headquarters factory of the Konka Group in 2013, which agreed to the plan of urban construction land renewal. The 2nd
Administration Bureau directly under the Land and Resources Commission of Shenzhen Municipality issued the "Shenzhen
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2013 Semi-annual Report of Konka Group Co., Ltd.
State-owned land use right transfer income payment notice" in 2013, and the total urban renewal amount of the Company’s
headquarters factory is of RMB1,492,931,087.
The Company recently received the "The Commitment Letter On the Konka Group of the Konka Group's headquarters factory
updated as the project implementation." issued by the Reconstruction Office of Shenzhen Nanshan District, Mid-Villages (Old
Village), and the “Commitment Letter” is as follows:
The Reconstruction Office of Shenzhen Nanshan District, Mid-Villages (Old Village) recently received “The Commitment Letter
On the Objection to the Konka Group as the Sole Implementation of the Main Propulsion of the ‘Urban renewal project of the
Konka Group’s headquarters factory’” by the OCT Group Corporation, which meant that the OCT Group Corporation objected to
the Konka Group as the sole implementation of the main propulsion of the urban renewal project of the Konka Group’s
headquarters factory, and considered that there is dissent of the historical situation as well as the remained legacy of property rights
of the parcel (T309-0056, with an area of 37251.8 square meters) involved with the unban renewal units of the Konka Group’s
headquarters factory. And proposed to suspend the relevant process procedure of the Konka Group’s headquarters factory. It would
deal with the project after the OCT Group Corporation and the Konka Group had properly negotiated the solution.
(2) The Company had held the Seventh Thirty-ninth Meeting of the Board of Directors, which adopted the "On the Result of
Guangming New District of Participating in the Land Bidding Auction"on 25 Mar. 2013, to authorize the Company's management
to participate in the competitive bidding, auction and listing of the industrial land in Shenzhen Guangming New District and to
conduct the corresponding deposits, payments for land use and so on.
According to the above resolutions, the Company signed up and participated in bidding the right to use of the No. A518-0103 parcel
which was sold by the Land and Resources Commission of Shenzhen Municipality through public bidding, and had received
the“Bargain Confirmation”issued by the Land and Resources Commission of Shenzhen Municipality on 28 Jun. 2013. The
Company had competed and owned of the land use right of the parcel with the amount of RMB 47,100,000.
(3) On 8 Nov. 2012, the Proposal on Transferring Equity Interests of Chongqing Konka Co., Ltd. was reviewed and approved at the
33rd Session of the 7th Board of Directors. Based on the net asset evaluation value (RMB 6,936,960,000 ) of 60% equity interests of
Chongqing Konka Co., Ltd., the Company intended to put 60% equity interests of Chongqing Konka Co., Ltd. for sale through
public listing. The Company listed and transferred its 60% equity interests of Chongqing Konka Co., Ltd. as well as the financial
claims of RMB 1,559,340,000 which the Chongqing Konka Co.,Ltd. owed the Company in the Chongqing United Assets and
Equity Exchange on 20 Jun.2013. After the listing period expired, there was one qualified intended assignee applied for transfer
through public solicitation, which the name was: Chongqing Machinery & Electronics Holding (Group)., Ltd., with the transfer
price of RMB 8,499,150,000. The equity transfer of this time adopted installment plan, and as of the approval date of the financial
report, the Company had received the first payment of RMB 2,549,750,000 (that was the 30% of the transfer price), as well as the
remained transfer price (that was the 70% f the transfer price), which should be paid off within one year from the date that the
equity transfer contract signed; as of the approval date of the financial report, the Company had not complete the transfer
formalities of the above equities.
(4) On 26 Dec.2011, the Proposal on Transferring Equity Interests of Mudanjiang Arctic Ocean Appliances Co., Ltd. Was reviewed
and approved at the 21st Session of the 7th Board of Directors. According to the resolution of the above Board of directors, the
Company had listed and transferred its 60% equity of Mudanjiang Arctic Ocean Appliances Co., Ltd. with the price of RMB
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2013 Semi-annual Report of Konka Group Co., Ltd.
4,322,220,000 in Shanghai United Assets and Equity Exchange on 29 Dec. 2011. During the public listing period, there was
interested assignee associated with the Company of the above equity matters, while both of them had not come to an agreement on
the significant clauses of the equity transfer. The Company had decided to suspend the listing as well as the transfer of its 60%
equity of Mudanjiang Arctic Ocean Appliances Co., Ltd.
Because of the maturity of the operation period which promised by the Articles of Association of Mudanjiang Arctic Ocean
Appliances Co., Ltd., for properly disposing its assets, and through negotiated and reviewed at the 43rd Session of the 7th Board of
Directors, the Company drew up that to settle its accounts according the legal procedures.
(5) Changshu Konka Electronic Co., Ltd., the Company’s subsidiary, is under the liquidation.
(6) On 28th Jun. 2012 the Company, Konka Communication and the Shenzhen branch of Bank of China Limited had signed Credit
Line Resolution (Zhen-Zhong-Yin-E-Xie-Zi[2012] No.000016). The resolution agreed that the loans should not exceed the general
credit line of RMB 5.3 billion from 28th Jun. 2012 to 28th Jun. 2013. In 2013 the resolution will be lengthened to 28th Dec. 2013
and the line of credit will be mainly used for trade finance. The resolution stipulated that the Company was granted credit and
Konka had the right to withdraw. On 28th Jun. 2012 the Company and the owned subsidiary Konka Communication had signed
Maximum Pledge Contract (Zhen-Zhong-Yin-E-Xie-Zi[2012] No.000016) and Maximum Pledge Contract
(Zhen-Zhong-Yin-E-Xie-Zi[2012] No.0003) with the Shenzhen branch of Bank of China Limited at the same time. The Company
and the owned subsidiary Konka Communication provided pledge guarantee for the debt included in the items of Credit Line
Resolution with the bank acceptance of more than RMB 1.3 billion and the margin account which the account number was
8210036308401001.
(7) On 27th Nov. 2012 the Company and the Shenzhen branch of China Construction Bank Corporation had signed General Credit
Line Contract of which the number was Jie-2012-E-0698-Group. The Contract stipulated that from 27th Nov. 2012 to 26th Nov.
2014 the bank would provide the general financing of which the total amount would not exceed RMB 2 billion (according to the
types and amounts of the itemized limits, the limit of current fund loan would be RMB 1.2 billion, the limit of guarantee would be
RMB 2 billion, the limit of the bank acceptance for the trade bills would be RMB 2 billion, the limit of import trade finance would
be RMB 2 billion and the limit of the other domestic trade finance would be RMB 2 billion (mainly in order to open the limit of
letter of credit).
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
Provision for bad Provision for bad
Book balance Book balance
Category debts debts
Propor Prop Propo Propo
Amount Amount Amount Amount
tion ortio rtion rtion
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2013 Semi-annual Report of Konka Group Co., Ltd.
(%) n (%) (%)
(%)
Accounts receivable for which bad debt provisions are made on the group basis
1,262,758,325. 80.17 202,075,214. 1,439,080,437 99.77 205,470,879. 14.28
Aging group 16%
96 % 83 .54 % 79 %
Grouping of related
19.83
parties within the 312,434,520.03 3,323,422.60 0.23%
%
Group
Subtotal of the 1,575,192,845. 202,075,214. 12.8 1,442,403,860 205,470,879. 14.25
100% 100%
groups 99 83 3% .14 79 %
1,575,192,845. 202,075,214. 1,442,403,860 205,470,879.
Total -- -- -- --
99 83 .14 79
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:
√Applicable □Inapplicable
Unit: RMB Yuan
Closing amount Opening amount
Book balance Book balance
Aging Propo Bad debts Propo Bad debts
Amount rtion provision Amount rtion provision
(%) (%)
Within 1 year
Including: -- -- -- -- -- --
Within 1 84.61
1,068,324,900.91 21,208,932.19 1,237,536,421.26 86% 25,296,267.23
year %
Subtotal of
84.61
within 1 1,068,324,900.91 21,208,932.19 1,237,536,421.26 86% 25,296,267.23
%
year
0.62 1.21
1 to 2 years 7,834,755.03 391,737.75 17,433,776.51 871,688.83
% %
0.39 0.33
2 to 3 years 4,985,227.00 997,045.40 4,743,247.12 948,649.42
% %
Over 3 14.38 12.46
181,613,443.02 179,477,499.49 179,366,992.65 178,354,274.31
years % %
0.11
3 to 4 years 3,802,858.66 0.3% 1,901,429.33 1,556,408.29 778,204.15
%
0.04 0.03
4 to 5 years 469,028.40 234,514.20 469,028.40 234,514.20
% %
Over 5 14.04 12.32
177,341,555.96 177,341,555.96 177,341,555.96 177,341,555.96
years % %
Total 1,262,758,325.96 -- 202,075,214.83 1,439,080,437.54 -- 205,470,879.79
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2013 Semi-annual Report of Konka Group Co., Ltd.
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
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:
Unit: RMB Yuan
Content of accounts Withdrawal proportion
Book value Bad debt amount Reason
receivable (%)
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
Name of company Nature Date Amount Reason from related-party
transaction or not
Notes:
(4) Information of shareholders with more than 5% (including 5%) of the voting shares of the Company
in accounts receivable in report period
Unit: RMB Yuan
Closing amount Opening amount
Withdrawal
Name of company Withdrawal amount of
Book balance amount of bad Book balance
bad debt provision
debt provision
(5)Nature or content of other accounts receivable with significant amount
(6) Top five accounts receivable
Unit: RMB Yuan
Name of company Relationship Amount Term Proportion (%)
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2013 Semi-annual Report of Konka Group Co., Ltd.
Suning Commerce
Group Co., Ltd.,
Non-related party 199,326,474.32 Within 1 year 12.65%
Suning Purchase
Center
Gome Electrical
Appliances Holding Non-related party 192,416,014.98 Within 1 year 12.22%
Co., Ltd.
Beijing Jingdong
Century Information Non-related party 46,060,316.85 Within 1 year 2.92%
Technology Co., Ltd.
Shanghai Yixun
e-Commerce Non-related party 24,886,811.60 Within 1 year 1.58%
Development Co., Ltd.
Kangcheng
Investment (China)
Non-related party 22,387,399.11 Within 1 year 1.42%
Co., Ltd. (Shanghai
RT-Mart)
Total -- 485,077,016.86 -- 30.79%
(7) Accounts receivable due from related parties
Unit: RMB Yuan
Name of company Relationship Amount Proportion (%)
Anhui Konka Subsidiary of the Company 38,664,173.53 2.45%
Hong Kong Konka Subsidiary of the Company 273,770,346.50 17.38%
Total -- 312,434,520.03 19.83%
(8)
RMB 0.00 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 amount Opening amount
Book balance Bad debts provision Book balance Bad debts provision
Pro
Category Propor Propo Prop
port
Amount tion Amount rtion Amount ortio Amount
ion
(%) (%) n (%)
(%)
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2013 Semi-annual Report of Konka Group Co., Ltd.
Accounts receivable for which bad debts provision are made on the group basis
53.84 4.34 317,395,991. 39.9 23,489,590.3 7.4
Aging group 730,192,609.39 31,708,739.72
% % 27 % 9 %
Grouping of related
44.02 449,192,126. 56.47
parties within the 597,068,991.41 0%
% 18 %
Group
1,327,261,600. 97.86 2.39 766,588,117. 96.37 23,489,590.3 6.8
Subtotal of the groups 31,708,739.72
80 % % 45 % 9 3%
Other accounts
receivable with
insignificant single 28,861,543.7 3.63 28,861,543.7 100
28,961,348.73 2.14% 28,961,348.73 100%
amount but individually 7 % 7 %
withdrawn bad debt
provision
1,356,222,949. 795,449,661. 52,351,134.1
Total -- 60,670,088.45 -- -- --
53 22 6
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 amount Opening amount
Book balance Book balance
Aging Proport Bad debt Bad debt
Proport
Amount ion provision Amount provision
ion (%)
(%)
Within 1 year
Including: -- -- -- -- -- --
95.34
Within 1 year 696,076,734.78 15,954,288.42 272,689,657.12 85.91% 6,232,680.11
%
Subtotal of 95.34
696,076,734.78 15,954,288.42 272,689,657.12 85.91% 6,232,680.11
within 1 year %
1 to 2 years 17,120,198.06 2.34% 856,009.90 24,551,980.71 7.75% 1,227,599.04
2 to 3 years 674,816.93 0.09% 134,963.39 2,169,712.26 0.68% 433,942.45
Over 3 years 16,320,859.62 2.23% 14,763,478.01 17,984,641.18 5.66% 15,595,368.79
3 to 4 years 2,584,056.54 0.35% 1,292,028.27 2,520,388.89 0.79% 1,260,194.45
4 to 5 years 530,706.69 0.07% 265,353.35 2,258,155.90 0.71% 1,129,077.95
Over 5 years 13,206,096.39 1.81% 13,206,096.39 13,206,096.39 4.16% 13,206,096.39
Total 730,192,609.39 -- 31,708,739.72 317,395,991.27 -- 23,489,590.39
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision:
□Applicable √Inapplicable
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2013 Semi-annual Report of Konka Group Co., Ltd.
In the groups, other accounts receivable adopting other methods to withdraw bad debt provision:
□Applicable √Inapplicable
Other accounts receivable with insignificant single amount but individually withdrawn bad debt provision at period-end:
□Applicable √Inapplicable
Unit: RMB Yuan
Withdrawal proportion
Content of group Book value Bad debt provision Withdrawal reason
(%)
Suspend production,
Chongqing Konka 15,651,883.98 15,651,883.98 100%
losses
Suspend production,
Chongqing Electronics 13,309,464.75 13,309,464.75 100%
losses
Total 28,961,348.73 28,961,348.73 -- --
(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
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:
Unit: RMB Yuan
Content of other Withdrawal proportion
Book balance Amount of bad debts Reason
accounts receivable (%)
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
Reason for
Name of company Nature Date of written off Amount related-party
write-off
transactions
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
Unit: RMB Yuan
Closing amount Opening amount
Name of company Amount of bad Amount of bad
Book balance Book balance
debts debts
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2013 Semi-annual Report of Konka Group Co., Ltd.
(5) Nature or content of other accounts receivable with significant amount
(6) Top five other accounts receivable
Unit: RMB Yuan
Name of company Relationship Amount Term Proportion (%)
National energy saving
benefits of private
Non-related party 645,004,650.00 Within 1 year 47.56%
offices (energy
subsidies)
Subsidiary of the
Dongguan Konka 207,195,715.29 Within 1 year 15.28%
Company
Subsidiary of the
Information Network 143,951,281.37 Within 1 year 10.61%
Company
Video &
Subsidiary of the
Communication 121,356,083.69 Within 1 year 8.95%
Company
Systems Engineering
Subsidiary of the
Boluo Precision 85,124,211.26 Within 1 year 6.28%
Company
Total -- 1,202,631,941.61 -- 88.68%
(7) Other accounts receivable due from related parties
Unit: RMB Yuan
Name of company Relationship Amount Proportion (%)
Video & Communication
Subsidiary of the Company 121,356,083.69 8.94%
Systems Engineering
Konka Electronic Subsidiary of the Company 16,656,068.93 1.23%
Dongguan Konka Subsidiary of the Company 207,195,715.29 15.28%
Boluo Konka Subsidiary of the Company 22,036,930.15 1.62%
Information Network Subsidiary of the Company 143,951,281.37 10.61%
Boluo Precision Subsidiary of the Company 85,124,211.26 6.28%
Nanhai Institute Subsidiary of the Company 648,029.34 0.05%
Xutongda Subsidiary of the Company 95,671.38 0.01%
Beijing Konka Subsidiary of the Company 5,000.00 0%
Chongqing Konka Subsidiary of the Company 15,651,883.98 1.15%
Chongqing electronics Subsidiary of the Company 13,309,464.75 0.98%
Shenzhen OCT Gas Station Subsidiary of the ultimate
80,000.00 0.01%
Co., Ltd (deposit) controller
Shenzhen OCT Real Subsidiary of the ultimate
1,209,064.86 0.09%
Estate Co., Ltd. controller
Shenzhen OCT Property Subsidiary of the ultimate
77,402.65 0.01%
Management Co., Ltd. controller
Total -- 627,396,807.65 46.26%
201
2013 Semi-annual Report of Konka Group Co., Ltd.
(8)
RMB** was transferred from the other accounts receivable not meeting the conditions of termination recognition.
(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
Explan
ations Withdr
on awal
differen amount
Cash
ces of
Increas Shareh Voting Provisi bonus
The Accoun Initial Openin betwee impair
e/ Closing olding right on for in
investe ting investm g n ment
decreas balance proporti proporti impair reportin
e method ent cost balance shareho provisi
e on (%) on (%) ment g
lding on in
period
proporti reportin
on and g
voting period
right
Mudanj
Cost 36,000, 36,000, 36,000, 36,000,
iang 60% 60% —
method 000.00 000.00 000.00 000.00
Konka
Shaanx Cost 44,869, 44,869, 44,869,
60% 60% —
i Konka method 809.80 809.80 809.80
122,78 122,78 122,78
Anhui Cost
0,937.9 0,937.9 0,937.9 78% 78% —
Konka method
8 8 8
Dongg 274,78 274,78 274,78
Cost
uan 3,988.9 3,988.9 3,988.9 100% 100% —
method
Konka 1 1 1
Hongk
Cost 781,82 781,82 781,82
ong 100% 100% —
method 8.61 8.61 8.61
Konka
Chongq
Cost 27,000, 27,000, 27,000, 27,000,
ing 60% 60% —
method 000.00 000.00 000.00 000.00
Konka
Anhui Anhui
Househ Cost 5,278,5 5,278,5 5,278,5 Konka
6.55% 97.45%
old method 09.85 09.85 09.85 indirect
Applia ly held
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2013 Semi-annual Report of Konka Group Co., Ltd.
nces 4.48%
of
Anhui
Househ
old
Applian
ce,
while
Anhui
Tongch
uang
indirect
held
86.42%
shares
of
Anhui
Househ
old
Applian
ce
Konka Cost 261,48 261,48 261,48
100% 100% —
Europe method 2.50 2.50 2.50
Nanhai Cost 500,00 500,00 500,00
100% 100% —
Konka method 0.00 0.00 0.00
Kunsha 350,00 350,00 350,00
Cost
n 0,000.0 0,000.0 0,000.0 100% 100% —
method
Konka 0 0 0
Plastic
Cost 4,655,0 4,655,0 4,655,0
Product 100% 100% —
method 00.00 00.00 00.00
s
Konka
Cost 10,732, 10,732, 10,732, 10,732,
Electro 51% 51% —
method 484.69 484.69 484.69 484.69
nic
Teleco
mmuni
Cost 90,000, 90,000, 90,000,
cation 75% 100% —
method 000.00 000.00 000.00
Techno
logy
Konka
Cost 8,062,5 8,062,5 8,062,5 8,062,5
Americ 100% 100% —
method 00.00 00.00 00.00 00.00
a
Inform Cost 22,500, 22,500, 22,500, 22,500,
100% 100% —
ation method 000.00 000.00 000.00 000.00
203
2013 Semi-annual Report of Konka Group Co., Ltd.
Networ
k
Shushi Cost 31,500, 31,500, 31,500,
100% 100% —
da method 000.00 000.00 000.00
Video
&
Comm
unicati
Cost 9,000,0 9,000,0 9,000,0
on 60% 60% —
method 00.00 00.00 00.00
System
s
Engine
ering
Chongq
ing Cost 17,100, 17,100, 17,100,
57% 57% —
Electro method 000.00 000.00 000.00
nic
Fittings
Cost 48,750, 48,750, 48,750,
Techno 100% 100% —
method 000.00 000.00 000.00
logy
Kunsha
350,00 350,00 350,00
n Cost
0,000.0 0,000.0 0,000.0 100% 100% —
Kangsh method
0 0 0
eng
Anhui
Cost 69,702, 69,702, 69,702,
Tongch 100% 100% —
method 612.22 612.22 612.22
uang
Konka
Cost 10,000, 10,000, 10,000,
Optoele 100% 100% —
method 000.00 000.00 000.00
ctronic
Wankai Cost 10,000, 10,000, 10,000,
100% 100% —
da method 000.00 000.00 000.00
Feihon
g
Electro Cost 1,300,0 1,300,0 1,300,0 1,300,0
8.33% 8.33% —
nics method 00.00 00.00 00.00 00.00
Co.,
Ltd.
Shenzh
en
Associa Cost 100,00 100,00 100,00 100,00
—
tion of method 0.00 0.00 0.00 0.00
Enterpr
ises
204
2013 Semi-annual Report of Konka Group Co., Ltd.
with
Foreign
Invest
ment
Shenzh
en
Make-p
lan
Invest Cost 485,00 485,00 485,00 485,00
1% 1% —
ment method 0.00 0.00 0.00 0.00
Develo
pment
Co.,
Ltd.
IGRS
Inform
ation
Techno
logy Cost 5,000,0 5,000,0 5,000,0
9.62% 9.62% —
Engine method 00.00 00.00 00.00
ering
Center
Co.,
Ltd.
Shenzh
en CTU Cost 1,153,0 1,153,0 1,153,0
11.5% 11.5% —
Hi-tech method 00.00 00.00 00.00
Ltd.
Shenzh
en
Digital
TV
Nationa
Cost 2,400,0 2,400,0 2,400,0
l 6% 6% —
method 00.00 00.00 00.00
Engine
ering
Lab
Co.,
Ltd.
Shangh
ai
Cost 2,400,0 2,400,0 2,400,0
Digital 4.26% 4.26% —
method 00.00 00.00 00.00
TV
Nationa
205
2013 Semi-annual Report of Konka Group Co., Ltd.
l
Engine
ering
R&D
Center
Co.,
Ltd.
Beijing
Konka Cost 30,000, 30,000, 30,000,
100% 100% —
Electro method 000.00 000.00 000.00
nic
Shenzh
en
Shushi
da
Cost 10,000, 10,000, 10,000,
Logisti 100% 100% —
method 000.00 000.00 000.00
cs
Service
Co.,
Ltd.
Shangh
ai
Konka
202,80 202,80 202,80
Green Equity
0,000.0 0,000.0 0,000.0 39% 39% —
Techno method
0 0 0
logy
Co.,
Ltd.
1,799,8 1,799,8 1,799,8 106,17
Total -- 97,154. 97,154. 97,154. -- -- -- 9,984.6
56 56 56 9
Notes:
The reason of the differences between shareholding proportion and voting right of Anhui Tongchuang was that, the Company and
the Cuzhou Chuzhou Economic and Technological Development Zone Council Secretary (hereinafter referred to as the “Council
Secretary ”) had signed the cooperation agreement, which promised that the Council Secretary could transfer its equity of Anhui
Tongchuang 3 years after the founding of the Anhui Tongchuang, and the Company could also repurchase the equity, as well as the
Council Secretary’s annual profits would fixed to be 2% of its investment amount.
4. Revenue and Cost of Sales
(1) Revenue, cost of sales
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2013 Semi-annual Report of Konka Group Co., Ltd.
Unit: RMB Yuan
Item Reporting period Same period of last year
Main business revenue 7,585,146,118.79 5,555,762,901.33
Other business revenue 2,117,072,605.35 1,218,390,920.34
Total 9,702,218,724.14 6,774,153,821.67
Cost of sales 8,499,715,386.70 5,866,640,366.34
(2) Main business (classified by industry)
Unit: RMB Yuan
Reporting period Same period of last year
Industry
Revenue of sales Cost of sales Revenue of sales Cost of sales
Electronic industry 7,585,146,118.79 6,399,306,613.49 5,555,762,901.33 4,646,847,998.99
Total 7,585,146,118.79 6,399,306,613.49 5,555,762,901.33 4,646,847,998.99
(3) Main business (Classified by product)
Unit: RMB Yuan
Reporting period Same period of last year
Product
Revenue of sales Cost of sales Revenue of sales Cost of sales
Color TV business 7,193,714,335.47 6,038,011,984.73 5,022,111,430.91 4,150,770,138.64
White goods business 314,564,511.73 284,545,946.01 431,078,329.53 393,345,365.79
Others 76,867,271.59 76,748,682.75 102,573,140.89 102,732,494.56
Total 7,585,146,118.79 6,399,306,613.49 5,555,762,901.33 4,646,847,998.99
(4) Main business (Classified by area)
Unit: RMB Yuan
Reporting period Same period of last year
Area
Revenue of sales Cost of sales Revenue of sales Cost of sales
Domestic revenue 6,691,973,676.52 5,507,625,473.12 4,679,606,395.39 3,770,500,571.28
Overseas revenue 893,172,442.27 891,681,140.37 876,156,505.94 876,347,427.71
Total 7,585,146,118.79 6,399,306,613.49 5,555,762,901.33 4,646,847,998.99
(5) Revenue of sales from the top five customers
Unit: RMB Yuan
Proportion of total
Name of customer Total revenue of sales
revenue of sales (%)
Suning appliance 603,254,635.76 6.22%
Gome Electrical Appliances (including China Paradise
481,455,303.17 4.96%
Electronics Retail and Dazhong Electronics)
RT-Mart 162,066,611.26 1.67%
Wal-Mart 125,357,665.20 1.29%
Metro 104,022,230.28 1.07%
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2013 Semi-annual Report of Konka Group Co., Ltd.
Total 1,476,156,445.67 15.21%
Notes:
5. Investment income
(1) List of investment income
Unit: RMB Yuan
Item Reporting period Same period of last year
Investment income arising from disposal of long-term
91,013.92
equity
Investment income received from holding of
21,115.80
available-for-sale financial assets etc.
Investment income received from available-for-sale
5,110,011.59
financial assets
Total 21,115.80 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
(3) Long-term equity investment income accounted by equity method
Unit: RMB Yuan
Same period of
Name of investee Reporting period Reason for increase/decrease YoY
last year
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 89,082,493.81 -26,065,939.91
Add: Provision for assets impairments 15,096,511.60 -5,645,488.93
Depreciation of fixed assets, oil and gas assets and productive
14,155,355.84 14,831,805.55
biological assets
Amortization of intangible assets 1,074,662.30 1,066,722.75
Amortization of long-term deferred expense 414,627.07 1,132,481.93
Losses/gains on disposal of fix assets, intangible asset and other
-10,673,034.17 -10,089,460.37
long-term assets (gains: negative)
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2013 Semi-annual Report of Konka Group Co., Ltd.
Losses/gains on scrapped of fixed assets (gains: negative) 708,641.08 913,357.22
Losses/gains from variation of fair value (gains: negative) -21,760,628.97
Financial cost (income: negative) 40,285,879.28 15,834,773.93
Investment loss (gains: negative) -21,115.80 -5,201,025.51
Decrease in deferred tax assets (increase: negative) 27,487,758.76 8,282,104.09
Increase in deferred tax liabilities (decrease: negative) -807,501.87
Decrease in inventory (increase: negative) 610,239,785.09 -29,959,639.48
Decrease in accounts receivable from operating activities
1,160,265,454.56 2,466,488,556.12
(increase: negative)
Increase in accounts payable from operating activities (decrease:
266,235,504.36 -1,494,936,927.80
negative)
Net cash flows generated from operating activities 2,214,352,523.78 914,083,188.75
2. Significant investing and financing activities without
-- --
involvement of cash receipts and payments
3. Change of cash and cash equivalent: -- --
Closing balance of cash 1,218,285,373.71 805,715,213.15
Less: opening balance of cash 365,891,615.75 275,892,343.00
The net increase in cash and cash equivalents 852,393,757.96 529,822,870.15
7. Information of assets and liabilities recognized by evaluation value from the counter purchase
Information of assets and liabilities recognized by fair value from the counter purchase
Unit: RMB Yuan
Method of recognised Calculation process of
Item Fair value Original book value
fair value fair value
Notes of the long-term equity investment formed from the counter purchase:
Unit: RMB Yuan
The amount of long-term equity Calculation process of long-term equity
Item
investment from the counter purchase investment
XVI. Supplemental information
1. Notes of non-recurrent profit and loss in reporting period
Unit: RMB Yuan
Item Amount Notes
Losses and gains on disposal of non-current assets (Including
8,313,488.52 8,236,511.30
write-off part of the provision for assets impairment)
Governmental subsidy included in the current profits and losses
(is closely related with the business event, except for the
26,741,064.35 25,452,246.34
governmental subsidy that according to the national unity
standard quota or the quantitative regal assets)
In addition to the valid hedging activity associated with the 21,115.80 27,211,185.56
209
2013 Semi-annual Report of Konka Group Co., Ltd.
normal operation of the Company, the changes in fair value
through gains or losses with which arising from the holding
trading financial assets and the trading financial liabilities as
well as the investment income that earning from the disposal of
trading financial liabilities and available-for-sale financial
assets
Income and expenses of the other operation except for the
1,044,270.80 4,604,289.99
mentioned above
The other items of gains and losses conforming the definition
91,013.92
of non-recurring gains and losses
Less: the effect of income tax 9,029,984.87 15,342,346.40
The effect of minority interest (after tax) 445,956.17 388,785.02
Total 26,643,998.43 --
According to the company's "public offering of securities of the Company Disclosure Explanatory Notice No. 1 - non-recurring
loss" definition for non-recurring items, as well as the "public offering of securities of the Company Disclosure Explanatory Notice
No. 1 - - non-recurring items "listed in non-recurring items defined as recurring items, should explain the reasons
□Applicable √ Inapplicable
2. Accounting data differences according to the domestic and foreign accounting standards
(1) Different situations of the net profits and net assets in the financial disclosure reports in accordance
with the international accounting standards and Chinese accounting standards at the same time
Unit: RMB Yuan
Net profits belongs to the shareholders of the Net assets belongs to the shareholders of the
listed companies listed companies
Current period
Last period amount Closing balance Opening balance
amount
According to Chinese
40,547,673.62 11,467,291.68 4,074,979,574.84 4,043,591,538.85
accounting standards
Items and amounts adjusted in accordance with international accounting standards assets
Naught 0.00 0.00 0.00 0.00
According to the
international accounting 40,547,673.62 11,467,291.68 4,074,979,574.84 4,043,591,538.85
standards
(2) Different situations of the net profits and net assets in the financial disclosure reports in accordance
with the international accounting standards and Chinese accounting standards at the same time
Unit: RMB Yuan
Net profits belongs to the shareholders of the Net assets belongs to the shareholders of the
listed companies listed companies
Current period
Last period amount Closing balance Opening balance
amount
210
2013 Semi-annual Report of Konka Group Co., Ltd.
According to Chinese
40,547,673.62 11,467,291.68 4,074,979,574.84 4,043,591,538.85
accounting standards
Items and amounts adjusted in accordance with international accounting standards assets
Naught 0.00 0.00 0.00 0.00
According to the
international accounting 40,547,673.62 11,467,291.68 4,074,979,574.84 4,043,591,538.85
standards
(3) Notes of the reasons of the differences between the accounting data according to the domestic and
foreign accounting standards
There was no any difference of the accounting data according to the domestic and foreign accounting standards in the reporting
period.
3. Return on equity and earnings per share
Unit: RMB Yuan
The weighted average EPS
Profit in the reporting period
ROE (%) Basic EPS Diluted EPS
Net profit attributable to the Company's
1% 0.0337 0.0337
common stock shareholders
Net profit attributable to shareholders of the
Company's common stock after deducting 0.34% 0.0115 0.0115
non-recurring gains and losses
4. Particulars on the abnormal conditions of main items in the financial statements of the Company and
relevant reasons.
(1) As to 30 Jun. 2013, closing amount of notes receivable was of RMB 3,116,490,790.65, with a decrease of 38.08% compared to
opening amount, for the reason of: withdrew of notes receivable and payment for goods of endorsement transfer;
(2) As to 30 Jun. 2013, closing amount of interests receivable was of RMB 1,354,814.02, with a decrease of 81.11% compared to
opening amount, for the reason of: the regular, pledged deposits decreased at the period-end.
(3) As to 30 Jun. 2013, closing amount of other accounts receivable was of RMB 772,983,032.05, with an increase of 144.16%
compared to opening amount, for the reason of: the state-owned energy savings subsidies increased in the reporting period.
(4) As to 30 Jun. 2013, closing amount of taxes payable was of RMB 68,892,000.44, with an increase of 70.19% compared to
opening amount, for the reason of: the VAT overpaid decreased in the reporting period.
(5) As to 30 Jun. 2013, closing amount of other non-recurring liabilities due within 1 year was of RMB 110,000,000.00, with a
decrease of 86.42% compared to opening amount, for the reason of: paid back the entrusted loans of OCT in the reporting period.
211
2013 Semi-annual Report of Konka Group Co., Ltd.
(6) As to 30 Jun. 2013, closing amount of long-term loans was of RMB 0.00, with a decrease of RMB 0.4 billion compared to
opening amount, for the reason of: paid back the entrusted loans of OCT in the reporting period.
(7) As to 30 Jun. 2013, occur amount of total operating income of first half of 2013 was of RMB 9,421,399,281.00, with an increase
of 33.85% than that of the first half of 2012, for the reason of: influenced by the policy of the state-owned energy savings subsidy in
the reporting period, the sales scale of the color TV business increased.
(8) As to 30 Jun. 2013, occur amount of the operating costs of first half of 2013 was of RMB 7,835,777,505.69, with an increase of
36.93% than that of the first half of 2012, for the reason of: the sales scale increased and the corresponding costs increased.
(9) As to 30 Jun. 2013, occur amount of business tax and surcharges of first half of 2013 was of RMB 33,034,164.50, with an
increase of 34.94% than that of the first half of 2012, for the reason of: the actually paid turnover tax increased in the current year,
which led the urban construction taxes and additional taxes including educational surcharges and so on increased.
(10) As to 30 Jun. 2013, occur amount of sales costs of first half of 2013 was of RMB 1,211,403,089.80, with an increase of 24.3%
than that of the first half of 2012, for the reason of: the relevant promotion activities expenses and the maintenance fees of sales
increased, as well as the disposal funds of the newly increased waste electric goods and the labor charges went up.
(11) As to 30 Jun. 2013, occur amount of financial expenses of first half of 2013 was of RMB -21,707,338.29, with a decrease of
119.78% than that of the first half of 2012, for the reason of: the interests loans decreased and the exchange rate changed, which led
the exchange gains increased in the reporting period.
(12) As to 30 Jun. 2013, occur amount of assets impairment losses of first half of 2013 was of RMB 22,911,803.87, with an
increase of 498.72% than that of the first half of 2012, for the reason of: the withdrawal inventory falling price reserves and the bad
debts provision increased.
(13) As to 30 Jun. 2013, occur amount of non-operating incomes of first half of 2013 was of RMB 45,954,814.02, with a decrease
of 40.51% than that of the first half of 2012, for the reason of: the software drawback received in the reporting period decreased
compared to the same period of last year.
(14) As to 30 Jun. 2013, occur amount of non-operating costs of first half of 2013 was of RMB 5,125,852.63, with an increase of
124.85% than that of the first half of 2012, for the reason of: disposed parts of the fixed assets in the reporting period.
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2013 Semi-annual Report of Konka Group Co., Ltd.
IX. Documents for Reference
I. Financial statements signed and sealed by legal representative, principal of accounting work, and principal of
accounting institution (manager of finance department);
II. Originals of all documents and announcements of the Company ever disclosed on CSRC designated
disclosure media in the reporting period;
III. Other relevant materials.
Chairman of the Board of Directors: Hou Songrong
The Board of Directors
Konka Group Co., Ltd.
31 Aug. 2013
213
