Konka Group Co., Ltd. Third Quarter Report 2016
Konka Group Co., Ltd.
Third Quarter Report 2016
2016-52
October 2016
1
Konka Group Co., Ltd. Third Quarter Report 2016
Section I Important Statements
The Board of Directors, the Supervisory Committee, directors, supervisors and
senior management staff of Konka Group Co., Ltd. (hereinafter referred to as
“the Company”) warrant that the information carried in 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 have attended the board session for reviewing this report.
Liu Fengxi, Company Principal, Xu Youshan, Chief of the Accounting Work,
and Xu Youshan, Chief of the Accounting Organ (Chief of Accounting), hereby
confirm that the financial statements enclosed in this report are 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.
2
Konka Group Co., Ltd. Third Quarter Report 2016
Section II Financial Highlights & Shareholder Changes
I Highlights of accounting data and financial indicators
Whether the Company performs any retroactive adjustments to or restatements of its accounting
data of last year due to change in accounting policies or correction of accounting errors
□ Yes √ No
30 September 2016 31 December 2015 +/- (%)
Total assets (RMB) 15,075,061,321.15 14,250,367,548.28 5.79%
Net assets attributable to shareholders
2,749,444,969.68 2,814,382,870.81 -2.31%
of the Company (RMB)
January-September
July-September 2016 YoY +/- (%) YoY +/- (%)
2016
Operating revenues (RMB) 6,008,160,392.02 22.61% 14,617,241,214.26 5.58%
Net profit attributable to shareholders
-57,165,694.07 89.70% -44,330,957.31 94.80%
of the Company (RMB)
Net profit attributable to shareholders
of the Company excluding exceptional -93,347,364.40 74.46% -122,083,511.60 82.54%
profit and loss (RMB)
Net cash flows from operating
-- -- -410,578,551.13 -135.98%
activities (RMB)
Basic earnings per share (RMB/share) -0.0237 89.72% -0.0184 94.80%
Diluted earnings per share
-0.0237 89.72% -0.0184 94.80%
(RMB/share)
Weighted average return on equity (%) -2.05% 12.47% -1.59% 21.64%
Unit: RMB
Item January-September 2016 Note
Profit/loss on disposal of non-current assets (including offset amount of asset
5,328,831.93
impairment provisions)
Government grants charged to the profit/loss for the Reporting Period (except for
the government grants closely related to the business of the Company and given 68,705,332.37
at a fixed quota or amount in accordance with the State’s uniform standards)
Profit/loss on entrusting others with investments or asset management 39,157,479.27
Profit/loss on fair value changes of transactional financial assets and liabilities &
investment profit on disposal of transactional financial assets and liabilities as
-21,541,328.13
well as financial assets available for sale, except for effectively hedging business
related to normal business operations of the Company
3
Konka Group Co., Ltd. Third Quarter Report 2016
Impairment provision reversal for accounts receivable on which the impairment
72,735.80
test is carried out separately
Profit/loss on entrusted loans 707,777.78
Non-operating income and expense other than the above 12,172,155.23
Other profit/loss that meet the definition of exceptional profit/loss 2,136,847.06
Less: Income tax effects 23,270,429.06
Minority interests effects (after tax) 5,716,847.96
Total 77,752,554.29 --
Explanation of why the Company classified an item as exceptional profit/loss according to the
definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies
Offering Their Securities to the Public—Exceptional Profit and Loss, or reclassified any exceptional
profit/loss item given as an example in the said explanatory announcement to recurrent profit/loss
√ Applicable □ Not applicable
Item Involved amount (RMB) Reason
Government grants closely related to the Company’s normal
Tax rebates on software 89,913,747.18 operation and constantly given at certain quotas or amounts
according to the government’s policies and standards
Total 89,913,747.18
II Total number of shareholders at the period-end and shareholdings of top ten shareholders
1. Numbers of common shareholders and preference shareholders with resumed voting rights
as well as shareholdings of top ten shareholders
Unit: share
Total number of ordinary shareholders Total number of preference shareholders who had resumed
136,122 0
at the end of the Reporting Period their voting right at the end of the Reporting Period (if any)
Shareholdings of top 10 shareholders
Pledged or
frozen shares
Shareholding Number of
Nature of Number of Statu Num
Name of shareholder percentage restricted
shareholder shares held s of ber of
(%) shares held
share share
s s
Pledg
0
State-owned ed
OCT ENTERPRISES CO. 21.75% 523,746,932 0
corporation Froze
0
n
CITIC SECURITIES BROKERAG Foreign 7.56% 182,100,202 0 Pledg 0
4
Konka Group Co., Ltd. Third Quarter Report 2016
(HK) CO., LIMITED corporation ed
Froze
0
n
Pledg
0
GUOYUAN SECURITIES Foreign ed
2.39% 57,497,261 0
BROKERAG (HK) CO., LIMITED corporation Froze
0
n
Pledg
0
Foreign ed
HOLY TIME GROUP LIMITED 2.32% 55,971,924 0
corporation Froze
0
n
Pledg
0
Foreign ed
GAOLING FUND,L.P. 2.19% 52,801,250 0
corporation Froze
0
n
Pledg
0
Foreign ed
NAM NGAI 0.97% 23,285,040 0
individual Froze
0
n
Pledg
0
State-owned ed
CMS (HK) CO., LIMITED 0.96% 23,134,020 0
corporation Froze
0
n
Pledg
0
Foreign ed
CSI Capital Management Limited 0.83% 20,050,928 0
corporation Froze
0
n
Pledg
0
Domestic ed
Meng Diliang 0.58% 13,888,883 0
individual Froze
0
n
Pledg
Nanhua Futures Co., Ltd. – Nanhua 0
ed
Futures Yinye No. 2 Asset Other 0.58% 13,871,001 0
Froze
Management Plan 0
n
Shareholdings of top 10 non-restricted shareholders
Number of non-restricted shares held at Type of shares
Name of shareholder
the period-end Type Number
RMB ordinary
OCT ENTERPRISES CO. 523,746,932 523,746,932
share
CITIC SECURITIES BROKERAG (HK) 182,100,202 Domestically 182,100,202
5
Konka Group Co., Ltd. Third Quarter Report 2016
CO., LIMITED listed foreign share
GUOYUAN SECURITIES BROKERAG Domestically
57,497,261 57,497,261
(HK) CO., LIMITED listed foreign share
Domestically
HOLY TIME GROUP LIMITED 55,971,924 55,971,924
listed foreign share
Domestically
GAOLING FUND,L.P. 52,801,250 52,801,250
listed foreign share
Domestically
NAM NGAI 23,285,040 23,285,040
listed foreign share
Domestically
CMS (HK) CO., LIMITED 23,134,020 23,134,020
listed foreign share
Domestically
CSI Capital Management Limited 20,050,928 20,050,928
listed foreign share
RMB ordinary
Meng Diliang 13,888,883 13,888,883
share
Nanhua Futures Co., Ltd. – Nanhua
RMB ordinary
Futures Yinye No. 2 Asset Management 13,871,001 13,871,001
share
Plan
The wholly owned subsidiary Jialong Investment Co., Ltd. of the first majority
shareholder OVERSEAS CHINESE TOWN ENTERPRISES CO. respectively hold
the common share of the Company of 180,001,110 shares and 18,360,000 shares
Related or act-in-concert parties among through CITIC SECURITIES BROKERAG (HK) CO., LIMITED and CMS (HK)
the shareholders above CO., LIMITED, and Jialong Investment Co., Ltd. and OVERSEAS CHINESE
TOWN ENTERPRISES CO. were persons acting in concert; the Company does
not know whether the other shareholders are related parties and whether they are
acting-in-concert parties.
Top 10 ordinary shareholders conducting A-share shareholder Mr. Meng Diliang held 13,888,883 shares through customer
securities margin trading (if any) credit collateral securities trading account of Essence Securities Co., Ltd.
Did any of the top 10 ordinary shareholders or the top 10 non-restricted ordinary shareholders of the
Company conduct any promissory repo during the Reporting Period?
□ Yea √ No
No such cases in the Reporting Period.
2. Total number of preference shareholders and shareholdings of the top 10 of them at the
period-end
□ Applicable √ Not applicable
6
Konka Group Co., Ltd. Third Quarter Report 2016
Section III Significant Events
I Changes in main accounting statement items and financial indicators in the Reporting
Period, as well as reasons for the changes
√ Applicable □ Not applicable
(I) Due to the double hits by the rising production cost caused by inflated panel prices since the
second quarter and the low color TV prices as a result of the price battle among internet TV
enterprises, the third quarter saw a decrease in the gross profit margin of our color TV business,
causing some loss to the Company.
(II) In the Reporting Period, we pushed forward our Internet-oriented strategy:
1. We strengthened the domestic retail channel of our color TVs, put new medium and high-end
products including the ultra-fast series of 91\81\8000 to the market and mass production in a speedy
manner, and improved the domestic sale structure of our color TVs, with smart TVs with a user
operation base once accounting for over 90% of our total domestic sales of color TVs.
2. In terms of overseas sales of our color TVs, we achieved a fast growth and better earnings
through improving business team appointment on a geographical section basis, repeating the use of
the R&D resources of domestically sold color TVs, strictly control costs, adopting a product
differentiation strategy, etc.
3. Our smart TV operation business has become increasingly mature, which generates steady
earnings and allows us to explore new profit models as our smart TV users grow.
(III) Changes in major financial indicators
Unit: RMB’0,000
30 September 31 December
Item Change Change (%) Main reason for change
2016 2015
Shenzhen Konka Precision Mold Manufacturing
Long-term
Co., Ltd. and its subsidiaries were deconsolidated
equity 27,953.30 19,057.35 8,895.95 46.68%
and restated as long-term equity investments
investment
measured at the equity method
Accounts
received in 146,995.68 34,978.48 112,017.20 320.25% Increase in advances from house buyers in the
advance Shuiyue Zhouzhuang real estate project
Long-term Mainly for the increase in long-term borrowings of
4,000.00 2,370.00 1,630.00 68.78%
borrowings the parent company.
January-Septe January-Septe
Item Change Change (%) Main reason for change
mber 2016 mber 2015
Finance costs 10,150.89 28,058.11 -17,907.22 -63.82% Decrease in exchange loss
7
Konka Group Co., Ltd. Third Quarter Report 2016
II Progress on significant events, as well as the influence and solutions
√ Applicable □ Not applicable
(I) Urban renewal project of the headquarters factory of Konka Group: So far, the land use scheme
drawing and the planning permit have been obtained. Received and Shenzhen urban planning and
land resources Committee of Nanshan Shenzhen, issued under the authority of the proceeds
of State-owned land use right transfer demand notice.
(II) Kunshan Shuiyue Zhouzhuang real estate project: The Phase I and Phase II residences have
completed the construction and are selling while the Phase III residence is still in development.
(III)Progress of the private offering shares:the relevant proposals such as the Proposal on the Preplan
for the Private Offering A Share of the Copmany had been reviewed and approved by the Board of
Directors and Annual General Meeting with the reply from the SASAC. In present,Companies have
submitted to the CSRC suspended the review of non-public offering of a shares of the company to
apply for documents requests. As for the relevant contents of the private offering shares, please
refer to the announcements of the company on http://www.cninfo.com.cn.
III Commitments of the Company, its shareholders, actual controller, acquirer, directors,
supervisors, senior management or other related parties fulfilled in the Reporting Period or
ongoing at the period-end
√ Applicable □ Not applicable
Perio
Date of d of
Commit Commitme Executio
Type Contents of commitment commitmen com
ment nt maker n
t mitm
ent
The irregularity actions such as hadn’t disclose the idle
Othe land, bid up the land price with property hoarding as well
Being
Konka r as bid up the housing prices by the subsidiaries which Long
Commit 12 Apr. normally
Group Co., com engaged in the real estate business that subordinated to -ter
ments at 2016 executin
Ltd. mitm Konka Group Co., Ltd. caused the losses for the listed m
the time g.
ent companies and the investors, those subsidiaries should
of initial
burden the compensation responsibility.
public
The irregularity actions such as hadn’t disclose the idle
issuance
Othe land, bid up the land price with property hoarding as well
or Being
OCT r as bid up the housing prices by the subsidiaries which Long
re-financ 12 Apr. normally
Holdings com engaged in the real estate business that subordinated to -ter
ing 2016 executin
Company mitm Konka Group Co., Ltd. caused the losses for the listed m
g.
ent companies and the investors, those subsidiaries should
burden the compensation responsibility.
Executed timely or not? No
8
Konka Group Co., Ltd. Third Quarter Report 2016
Detailed reason for failing to execute and the next plan (if any) Not applicable
IV Performance forecast for Y2016
Warning of possible loss or considerable YoY change in the accumulative net profit made during the
year-beginning to the end of the next reporting period, as well as the reasons
□ Applicable √ Not applicable
V Securities investment
√ Applicable □ Not applicable
Shar
ehold
Number Numb Shareh
Vari ing Gain/loss
Nam of er of olding Closing Sour
ety Code of Initial perce for
e of shares shares percen book Accounti ce of
of securiti investment ntage reporting
secur held at held at tage at value ng title secur
secu es cost (RMB) at period
ities period- period period (RMB) ities
rities perio (RMB)
begin -end -end
d-be
gin
New
Joude Available
share
Stoc r -for-sale
300548 7,515.00 0 0% 500 0% 10,820. 0 s
k Preci financial
subsc
sion assets
ribed
New
Available share
Stoc HYB -for-sale s
002787 5,685.00 500 0% 0 0% 0 15,380.40
k Z financial subsc
assets riptio
n
New
Available share
Stoc -for-sale s
300500 SZSJ 10,455.00 500 0% 0 0% 0 29,323.22
k financial subsc
assets riptio
n
Available Addit
Stoc Vank -for-sale ionall
000002 2,311,748.07 117,310 0% 0 0% 0 34,451.93
k eA financial y
assets issue
9
Konka Group Co., Ltd. Third Quarter Report 2016
d
share
s
subsc
ribed
Other security
investment held at 0 0 -- 0 -- 0 0 -- --
period-end
Total 2,335,403.07 118,310 -- 500 -- 10,820 79,155.55 -- --
Disclosure date of the
board announcement on
N/A
securities investment
approval
Disclosure date of the
general meeting
announcement on N/A
securities investment
approval (if any)
VI Investment in derivative financial instruments
√ Applicable □ Not applicable
Capital source for derivative investment USD financing
Cases involving lawsuit (if applicable) N/A
Disclosure date of the board announcement
approving the wealth management entrustment 2014-05-24
(if any)
Disclosure date of the general meeting
announcement approving the wealth 2014-06-10
management entrustment (if any)
The derivative business that the Company worked on was the forward
foreign exchange contract to reduce the fluctuation of exchange rate risk, the
aforesaid conductions were closely related to the daily operation demand of
Analysis on risks and control measures of
the Company and confirmed to stipulation of relevant laws and regulations.
derivative products held in the reporting period
The Company had set up Management Rules of Derivative Investment of
(including but not limited to market risk,
Konka Group Co., Ltd. which definitely stipulated the review and approval
liquidity risk, credit risk, operation risk, law risk,
procedure, risk control etc.. The Company had signed forward foreign
etc.)
exchange contract with Bank of China and other large banks which have
stable operation, good credit normally can avoid the loss of forward foreign
exchange contract due to bank failure.
Changes of market prices or fair values in the The Company’s calculation to fair value of derivative mainly was the undue
10
Konka Group Co., Ltd. Third Quarter Report 2016
reporting period of the invested derivatives. And contract of forward settlement traction the Company signed with the bank
the analysis on the fair value of the derivatives recognized as tradable financial assets or liabilities and correspondingly
should include the specific use methods and the recognized profit or loss of change in fair value in line with the difference
relevant assumptions and parameters. between the undue offer of forward foreign exchange settlement and future
exchange rate agreed on the contract on balance sheet date provided by
financial institution, the forward settlement exchange contract had lock
exchange rate, thus, there was not existing change in fair value comparing
settlement day to signing date.
Whether significant changes occurred to the
Company’s accounting policy and specific
accounting principles of derivatives in the No significant change
reporting period compared to the previous
reporting period
The events of Company through using financial instrument locked the cost
Specific opinion from independent directors on of USD financing which can effectively reduce the risk of fluctuation
the Company’s derivatives investment and risk exchange rate, with necessity, the Company had set up internal control
control rule of derivative investment and the risk control measures adopted
focusing on risk was workable.
Unit: RMB’0,000
Type of derivative Opening Closing
Profit or loss in the Proportion of closing investment amount in
financial contractual contractual
Reporting Period closing net assets of the Company
instrument amount amount
Forward foreign
exchange 224,712.77 90,451.02 -1,169.28 32.90%
contract
*Note: The profit on fair value changes of forward foreign exchange contracts signed in 2015 was recognized at RMB32.59 million
at the end of 2015.
VII Visits paid to the Company for purposes of research, communication, interview, etc.
during the Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VIII Illegal provision of guarantees for external parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
11
Konka Group Co., Ltd. Third Quarter Report 2016
IX Occupation of the Company’s funds for non-operating purposes by the controlling
shareholder and its related parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
12
Konka Group Co., Ltd. Third Quarter Report 2016
Section IV Financial Statements
I Financial statements
1. Consolidated balance sheet
Prepared by Konka Group Co., Ltd.
30 September 2016
Unit: RMB
Item Closing balance Opening balance
Current assets:
Monetary funds 2,337,841,428.54 1,706,446,928.92
Settlement reserve
Interbank lendings
Financial assets at fair value through profit/loss 12,169,529.16 33,196,377.28
Derivative financial assets
Notes receivable 2,640,066,762.99 2,880,860,750.44
Accounts receivable 2,408,690,571.43 2,048,813,439.34
Accounts paid in advance 813,037,373.23 193,664,620.66
Premiums receivable
Reinsurance premiums receivable
Receivable reinsurance contract reserve
Interest receivable 6,512,262.43 7,426,409.52
Dividends receivable 10,171,609.48
Other accounts receivable 154,284,283.07 160,165,779.82
Financial assets purchased under agreements to resell
Inventories 2,703,102,308.84 2,882,515,913.28
Assets held for sale
Non-current assets due within one year
Other current assets 297,604,946.75 647,311,938.45
Total current assets 11,383,481,075.92 10,560,402,157.71
Non-current assets:
Loans and advances to customers
Available-for-sale financial assets 309,111,034.36 311,974,282.66
13
Konka Group Co., Ltd. Third Quarter Report 2016
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investments 279,533,041.26 190,573,524.29
Investment property 223,494,722.83 227,718,178.53
Fixed assets 1,591,437,641.86 1,763,503,189.50
Construction in progress 230,483,289.53 207,854,180.88
Engineering materials
Disposal of fixed assets
Productive living assets
Oil-gas assets
Intangible assets 300,587,084.04 352,591,887.48
R&D expenses
Goodwill 3,597,657.15 3,597,657.15
Long-term deferred expenses 90,349,018.22 82,846,982.07
Deferred tax assets 662,986,755.98 549,305,508.01
Other non-current assets
Total non-current assets 3,691,580,245.23 3,689,965,390.57
Total assets 15,075,061,321.15 14,250,367,548.28
Current liabilities:
Short-term borrowings 4,261,398,930.97 4,150,773,195.76
Borrowings from the Central Bank
Money deposits accepted and inter-bank deposits
Interbank borrowings
Financial liabilities at fair value through profit/loss 714,523.51
Derivative financial liabilities
Notes payable 1,667,206,013.01 929,176,857.06
Accounts payable 2,600,583,849.87 2,980,416,983.25
Accounts received in advance 1,469,956,813.23 349,784,807.32
Financial assets sold for repurchase
Fees and commissions payable
Payroll payable 246,880,557.06 279,631,258.71
Taxes and fares payable 116,170,394.28 92,097,951.90
Interest payable 20,536,636.28 20,552,763.14
Dividends payable
14
Konka Group Co., Ltd. Third Quarter Report 2016
Other accounts payable 1,555,819,545.16 1,550,931,573.35
Reinsurance premiums payable
Insurance contract reserve
Payables for acting trading of securities
Payables for acting underwriting of securities
Liabilities held for sale
Non-current liabilities due within one year 41,025.60 573,398,959.65
Other current liabilities
Total current liabilities 11,939,308,288.97 10,926,764,350.14
Non-current liabilities:
Long-term borrowings 40,000,000.00 23,700,000.00
Bonds payable
Of which: Preference shares
Perpetual bonds
Long-term accounts payable 30,102,564.14 30,133,333.37
Long-term payroll payable 19,157,119.19 23,435,856.86
Special payables
Provisions 4,711,597.59 4,629,554.61
Deferred income 138,918,009.26 162,786,004.20
Deferred tax liabilities 7,417,135.74 3,468,031.97
Other non-current liabilities
Total non-current liabilities 240,306,425.92 248,152,781.01
Total liabilities 12,179,614,714.89 11,174,917,131.15
Owners’ equity:
Share capital 2,407,945,408.00 2,407,945,408.00
Other equity instruments
Of which: Preference shares
Perpetual bonds
Capital reserve 80,899,084.39 78,209,535.19
Less: Treasury shares
Other comprehensive income -20,140,749.02 3,155,744.00
Special reserve
Surplus reserve 847,908,466.28 847,908,466.28
Provisions for general risks
15
Konka Group Co., Ltd. Third Quarter Report 2016
Retained earnings -567,167,239.97 -522,836,282.66
Equity attributable to owners of the Company 2,749,444,969.68 2,814,382,870.81
Minority interests 146,001,636.58 261,067,546.32
Total owners’ equity 2,895,446,606.26 3,075,450,417.13
Total liabilities and owners’ equity 15,075,061,321.15 14,250,367,548.28
Legal representative: Liu Fengxi Person-in-charge of the accounting work: Xu Youshan
Chief of the accounting division: Xu Youshan
2. Balance sheet of the Company
Unit: RMB
Item Closing balance Opening balance
Current assets:
Monetary funds 780,847,924.80 502,899,530.83
Financial assets at fair value through profit/loss 12,169,529.16 7,184,035.29
Derivative financial assets
Notes receivable 2,350,327,755.86 2,635,643,772.62
Accounts receivable 2,127,730,262.20 1,417,915,276.56
Accounts paid in advance 1,257,527,593.84 372,509,871.77
Interest receivable 9,939,670.23 14,901,123.48
Dividends receivable
Other accounts receivable 1,698,481,522.19 938,447,798.08
Inventories 1,523,087,936.81 1,771,302,947.50
Assets held for sale
Non-current assets due within one year
Other current assets 224,446,785.72 530,272,796.83
Total current assets 9,984,558,980.81 8,191,077,152.96
Non-current assets:
Available-for-sale financial assets 269,050,214.36 271,924,282.66
Held-to-maturity investments 300,000,000.00 352,000,000.00
Long-term accounts receivable
Long-term equity investments 1,644,482,207.56 1,621,195,118.22
Investment property 223,494,722.83 227,718,178.53
Fixed assets 501,563,648.25 512,933,612.51
16
Konka Group Co., Ltd. Third Quarter Report 2016
Construction in progress 14,001,547.72 12,619,010.21
Engineering materials
Disposal of fixed assets
Productive living assets
Oil-gas assets
Intangible assets 87,621,310.55 88,336,594.02
R&D expenses
Goodwill
Long-term deferred expenses 63,535,302.46 57,865,790.98
Deferred tax assets 590,149,885.88 504,252,794.29
Other non-current assets
Total non-current assets 3,693,898,839.61 3,648,845,381.42
Total assets 13,678,457,820.42 11,839,922,534.38
Current liabilities:
Short-term borrowings 4,363,234,229.48 1,022,612,362.58
Financial liabilities at fair value through profit/loss 714,523.51
Derivative financial liabilities
Notes payable 1,339,954,200.08 377,002,860.08
Accounts payable 2,722,439,821.26 5,173,897,087.35
Accounts received in advance 321,694,180.11 251,204,710.89
Payroll payable 116,896,710.86 118,684,992.99
Taxes and fares payable 20,124,987.57 31,360,675.68
Interest payable 16,688,142.77 7,761,519.53
Dividends payable
Other accounts payable 1,810,666,442.88 1,667,884,936.14
Liabilities held for sale
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 10,712,413,238.52 8,650,409,145.24
Non-current liabilities:
Long-term borrowings 40,000,000.00
Bonds payable
Of which: Preference shares
Perpetual bonds
17
Konka Group Co., Ltd. Third Quarter Report 2016
Long-term payables
Long-term payroll payable
Special payables
Provisions 4,711,597.59 4,629,554.61
Deferred income 82,725,963.94 88,668,785.51
Deferred tax liabilities 2,863,751.41 1,935,167.63
Other non-current liabilities
Total non-current liabilities 130,301,312.94 95,233,507.75
Total liabilities 10,842,714,551.46 8,745,642,652.99
Owners’ equity:
Share capital 2,407,945,408.00 2,407,945,408.00
Other equity instruments
Of which: Preference shares
Perpetual bonds
Capital reserve 49,195,156.54 46,505,607.34
Less: Treasury shares
Other comprehensive income 303,868.87 1,803,252.77
Special reserve
Surplus reserve 847,908,466.28 847,908,466.28
Retained earnings -469,609,630.73 -209,882,853.00
Total owners’ equity 2,835,743,268.96 3,094,279,881.39
Total liabilities and owners’ equity 13,678,457,820.42 11,839,922,534.38
3. Consolidated income statement for the Reporting Period
Unit: RMB
Item July-September 2016 July-September 2015
1. Operating revenues 6,008,160,392.02 4,900,151,931.72
Including: Sales income 6,008,160,392.02 4,900,151,931.72
Interest income
Premium income
Fee and commission income
2. Operating costs 6,164,163,892.40 5,487,749,782.77
Including: Cost of sales 5,373,432,183.80 4,348,483,599.93
Interest expenses
18
Konka Group Co., Ltd. Third Quarter Report 2016
Fee and commission expenses
Surrenders
Net claims paid
Net amount provided as insurance contract reserve
Expenditure on policy dividends
Reinsurance premium
Business tax and surtaxes 11,154,354.58 23,436,891.68
Selling expenses 603,589,647.33 610,968,887.69
Administrative expenses 148,379,863.98 161,787,869.24
Finance costs 33,135,473.20 181,514,219.00
Asset impairment loss -5,527,630.49 161,558,315.23
Add: Profit on fair value changes (“-” means loss) -3,399,672.74 -23,744,128.23
Return on investment (“-” means loss) 35,392,521.44 4,976,331.44
Including: Share of profit/loss of associates and joint ventures 6,372,776.66 618,107.65
Exchange gains (“-” means loss)
3. Operating profit (“-” means loss) -124,010,651.68 -606,365,647.84
Add: Non-operating revenue 24,733,287.65 44,489,842.42
Including: Profit on disposal of non-current assets 15,335.65 532,417.97
Less: Non-operating expense 2,249,495.48 98,570,588.40
Including: Loss on disposal of non-current assets 195,730.08 5,456,264.40
4. Total profit (“-” means loss) -101,526,859.51 -660,446,393.82
Less: Corporate income tax -42,408,552.94 -106,637,412.14
5. Net profit (“-” means loss) -59,118,306.57 -553,808,981.68
Net profit attributable to owners of the Company -57,165,694.07 -555,256,040.41
Minority interests’ income -1,952,612.50 1,447,058.73
6. Other comprehensive income net of tax -8,256,379.72 -6,081,942.57
Other comprehensive income net of tax attributable to owners
-8,137,854.78 -6,330,540.91
of the Company
6.1 Other comprehensive income that will not be reclassified
into profit/loss
6.1.1 Changes in net liabilities or assets with a defined
benefit plan upon re-measurement
6.1.2 Share of other comprehensive income of investees
that cannot be reclassified into profit/loss under the equity method
6.2 Other comprehensive income to be subsequently
-8,137,854.78 -6,330,540.91
reclassified into profit/loss
19
Konka Group Co., Ltd. Third Quarter Report 2016
6.2.1 Share of other comprehensive income of investees
that will be reclassified into profit/loss under the equity method
6.2.2 Profit/loss on fair value changes of available-for-sale
-1,440,103.75 -193,125.18
financial assets
6.2.3 Profit/loss on reclassifying held-to-maturity
investments into available-for-sale financial assets
6.2.4 Effective profit/loss on cash flow hedges
6.2.5 Currency translation differences -6,697,751.03 -6,137,415.73
6.2.6 Other
Other comprehensive income net of tax attributable to minority
-118,524.94 248,598.34
interests
7. Total comprehensive income -67,374,686.29 -559,890,924.25
Attributable to owners of the Company -65,303,548.85 -561,586,581.32
Attributable to minority interests -2,071,137.44 1,695,657.07
8. Earnings per share
8.1 Basic earnings per share -0.0237 -0.2306
8.2 Diluted earnings per share -0.0237 -0.2306
Where business mergers under the same control occurred in the Reporting Period, the net profit
achieved by the merged parties before the business mergers was RMB0.00, with the corresponding
amount for the last period being RMB0.00.
Legal representative: Liu Fengxi Person-in-charge of the accounting work: Xu Youshan
Chief of the accounting division: Xu Youshan
4. Income statement of the Company for the Reporting Period
Unit: RMB
Item July-September 2016 July-September 2015
1. Operating revenues 3,617,192,362.26 3,764,448,066.71
Less: Operating costs 3,284,925,525.21 3,457,445,522.80
Business tax and surtaxes 3,790,230.21 14,017,425.60
Selling expenses 424,922,336.88 446,374,143.96
Administrative expenses 95,261,400.94 73,134,364.16
Finance costs 44,847,628.16 8,574,806.75
Asset impairment loss 144,809,651.76
Add: profit on fair value changes (“-” means loss) -3,399,672.74 -5,092,763.02
Return on investment (“-” means loss) 37,453,620.68 12,337,259.03
20
Konka Group Co., Ltd. Third Quarter Report 2016
Including: Share of profit/loss of associates and joint ventures 2,523,420.07 451,622.69
2. Operating profit (“-” means loss) -202,500,811.20 -372,663,352.31
Add: Non-operating revenue 6,828,609.03 82,240,061.89
Including: Profit on disposal of non-current assets -99,390.03 491,143.62
Less: Non-operating expense 1,746,185.21 91,042,240.83
Including: Loss on disposal of non-current assets 127,063.14 363,786.58
3. Total profit (“-” means loss) -197,418,387.38 -381,465,531.25
Less: Corporate income tax -49,196,799.99 -95,856,433.21
4. Net profit (“-” means loss) -148,221,587.39 -285,609,098.04
5. Other comprehensive income net of tax -2,140,403.86 -172,951.37
5.1 Other comprehensive income that will not be reclassified into
profit and loss
5.1.1 Changes in net liabilities or assets with a defined benefit
plan upon re-measurement
5.1.2 Share of other comprehensive income of investees that
cannot be reclassified into profit/loss under the equity method
5.2 Other comprehensive income to be subsequently reclassified
-2,140,403.86 -172,951.37
into profit/loss
5.2.1 Share of other comprehensive income of investees that
will be reclassified into profit/loss under the equity method
5.2.2 Profit/loss on fair value changes of available-for-sale
-1,442,913.00 -173,902.42
financial assets
5.2.3 Profit/loss on reclassifying held-to-maturity investments
into available-for-sale financial assets
5.2.4 Effective profit/loss on cash flow hedges
5.2.5 Currency translation differences -697,490.86 951.05
5.2.6 Other
6. Total comprehensive income -150,361,991.25 -285,782,049.41
7. Earnings per share
7.1 Basic earnings per share
7.2 Diluted earnings per share
5. Consolidated income statement for the period from the year-beginning to the end of the
Reporting Period
Unit: RMB
Item January-September 2016 January-September 2015
1. Operating revenues 14,617,241,214.26 13,844,710,852.68
21
Konka Group Co., Ltd. Third Quarter Report 2016
Including: Sales income 14,617,241,214.26 13,844,710,852.68
Interest income
Premium income
Fee and commission income
2. Operating costs 14,905,733,137.33 14,861,414,808.15
Including: Cost of sales 12,551,157,276.22 12,139,699,400.50
Interest expenses
Fee and commission expenses
Surrenders
Net claims paid
Net amount provided as insurance contract reserve
Expenditure on policy dividends
Reinsurance premium
Business tax and surtaxes 67,304,296.12 52,146,898.35
Selling expenses 1,712,736,570.94 1,735,657,838.04
Administrative expenses 439,299,154.00 454,026,772.95
Finance costs 101,508,905.20 280,581,130.17
Asset impairment loss 33,726,934.85 199,302,768.14
Add: Profit on fair value changes (“-” means loss) -21,541,328.13 -23,744,128.23
Return on investment (“-” means loss) 45,978,903.06 12,161,785.57
Including: Share of profit/loss of associates and joint ventures -1,158,799.02 -4,399,219.21
Exchange gains (“-” means loss)
3. Operating profit (“-” means loss) -264,054,348.14 -1,028,286,298.13
Add: Non-operating revenue 178,920,950.29 113,913,005.97
Including: Profit on disposal of non-current assets 3,162,497.32 673,192.87
Less: Non-operating expense 5,780,513.84 101,792,892.55
Including: Loss on disposal of non-current assets 813,295.65 6,789,889.20
4. Total profit (“-” means loss) -90,913,911.69 -1,016,166,184.71
Less: Corporate income tax -41,702,555.84 -157,739,031.34
5. Net profit (“-” means loss) -49,211,355.85 -858,427,153.37
Net profit attributable to owners of the Company -44,330,957.31 -852,209,547.80
Minority interests’ income -4,880,398.54 -6,217,605.57
6. Other comprehensive income net of tax -23,696,604.49 -4,949,439.26
Other comprehensive income net of tax attributable to owners
-23,296,493.02 -5,565,508.37
of the Company
22
Konka Group Co., Ltd. Third Quarter Report 2016
6.1 Other comprehensive income that will not be reclassified
into profit/loss
6.1.1 Changes in net liabilities or assets with a defined
benefit plan upon re-measurement
6.1.2 Share of other comprehensive income of investees
that cannot be reclassified into profit/loss under the equity method
6.2 Other comprehensive income to be subsequently
-23,296,493.02 -5,565,508.37
reclassified into profit/loss
6.2.1 Share of other comprehensive income of investees
that will be reclassified into profit/loss under the equity method
6.2.2 Profit/loss on fair value changes of available-for-sale
-1,441,978.75 -102,939.53
financial assets
6.2.3 Profit/loss on reclassifying held-to-maturity
investments into available-for-sale financial assets
6.2.4 Effective profit/loss on cash flow hedges
6.2.5 Currency translation differences -21,854,514.27 -5,462,568.84
6.2.6 Other
Other comprehensive income net of tax attributable to minority
-400,111.47 616,069.11
interests
7. Total comprehensive income -72,907,960.34 -863,376,592.63
Attributable to owners of the Company -67,627,450.33 -857,775,056.17
Attributable to minority interests -5,280,510.01 -5,601,536.46
8. Earnings per share
8.1 Basic earnings per share -0.0184 -0.3539
8.2 Diluted earnings per share -0.0184 -0.3539
Where business mergers under the same control occurred in the current period, the net profit
achieved by the merged parties before the business mergers was RMB0.00, with the corresponding
amount for the same period of last year being RMB0.00.
6. Income statement of the Company for the period from the year-beginning to the end of the
Reporting Period
Unit: RMB
Item January-September 2016 January-September 2015
1. Operating revenues 10,063,172,900.42 11,554,014,201.79
Less: Operating costs 8,923,684,652.89 10,496,844,522.12
Business tax and surtaxes 24,999,390.73 28,491,852.52
Selling expenses 1,233,429,048.82 1,256,234,984.04
Administrative expenses 248,111,963.10 226,533,974.27
23
Konka Group Co., Ltd. Third Quarter Report 2016
Finance costs 117,670,481.29 19,791,369.45
Asset impairment loss 24,699,388.50 162,892,130.89
Add: profit on fair value changes (“-” means loss) 4,270,970.36 -5,092,763.02
Return on investment (“-” means loss) 58,081,642.80 51,710,055.96
Including: Share of profit/loss of associates and joint ventures 6,636,136.04 -1,091,608.11
2. Operating profit (“-” means loss) -447,069,411.75 -590,157,338.56
Add: Non-operating revenue 105,453,118.72 121,990,873.72
Including: Profit on disposal of non-current assets 164,913.82 570,056.11
Less: Non-operating expense 2,935,780.09 92,568,471.71
Including: Loss on disposal of non-current assets 272,185.91 1,267,293.26
3. Total profit (“-” means loss) -344,552,073.12 -560,734,936.55
Less: Corporate income tax -84,825,295.39 -142,805,501.78
4. Net profit (“-” means loss) -259,726,777.73 -417,929,434.77
5. Other comprehensive income net of tax -1,499,383.90 -101,988.47
5.1 Other comprehensive income that will not be reclassified into
profit and loss
5.1.1 Changes in net liabilities or assets with a defined benefit
plan upon re-measurement
5.1.2 Share of other comprehensive income of investees that
cannot be reclassified into profit/loss under the equity method
5.2 Other comprehensive income to be subsequently reclassified
-1,499,383.90 -101,988.47
into profit/loss
5.2.1 Share of other comprehensive income of investees that
will be reclassified into profit/loss under the equity method
5.2.2 Profit/loss on fair value changes of available-for-sale
-1,444,788.00 -102,939.52
financial assets
5.2.3 Profit/loss on reclassifying held-to-maturity investments
into available-for-sale financial assets
5.2.4 Effective profit/loss on cash flow hedges
5.2.5 Currency translation differences -54,595.90 951.05
5.2.6 Other
6. Total comprehensive income -261,226,161.63 -418,031,423.24
7. Earnings per share
7.1 Basic earnings per share
7.2 Diluted earnings per share
24
Konka Group Co., Ltd. Third Quarter Report 2016
7. Consolidated cash flow statement for the period from the year-beginning to the end of the
Reporting Period
Unit: RMB
Item January-September 2016 January-September 2015
1. Cash flows from operating activities:
Cash received from sale of commodities and rendering of service 15,184,869,339.34 13,985,879,580.25
Net increase in money deposits from customers and interbank
placements
Net increase in loans from the Central Bank
Net increase in funds borrowed from other financial institutions
Cash received from premium of original insurance contracts
Net cash received from reinsurance business
Net increase in deposits of policy holders and investment fund
Net increase in disposal of financial assets at fair value through
profit/loss
Interest, fees and commissions received
Net increase in interbank borrowings
Net increase in funds in repurchase business
Tax refunds received 272,927,227.76 335,357,120.11
Cash received from other operating activities 339,356,257.44 323,220,047.69
Subtotal of cash inflows from operating activities 15,797,152,824.54 14,644,456,748.05
Cash paid for goods and services 13,509,836,467.28 10,903,464,117.59
Net increase in loans and advances to customers
Net increase in funds deposited in the Central Bank and interbank
placements
Cash paid for claims of original insurance contracts
Interest, fees and commissions paid
Cash paid as policy dividends
Cash paid to and for employees 1,255,016,825.23 1,315,880,285.54
Taxes and fares paid 533,287,050.15 400,440,616.35
Cash paid for other operating activities 909,591,033.01 883,649,538.18
Subtotal of cash outflows from operating activities 16,207,731,375.67 13,503,434,557.66
Net cash flows from operating activities -410,578,551.13 1,141,022,190.39
2. Cash flows from investing activities:
Cash received from retraction of investments 12,351,724.03 144,985,946.85
25
Konka Group Co., Ltd. Third Quarter Report 2016
Cash received as return on investments 29,084,576.02 17,924,800.38
Net cash received from disposal of fixed assets, intangible assets
349,958.28 2,578,218.68
and other long-term assets
Net cash received from disposal of subsidiaries or other business
units
Cash received from other investing activities 9,238,481,232.27 3,424,314,849.00
Subtotal of cash inflows from investing activities 9,280,267,490.60 3,589,803,814.91
Cash paid to acquire fixed assets, intangible assets and other
106,682,158.73 191,731,495.42
long-term assets
Cash paid for investment 6,017,970.00 78,300,427.00
Net increase in pledged loans
Net cash paid to acquire subsidiaries and other business units
Cash paid for other investing activities 8,861,934,225.29 3,387,601,232.07
Subtotal of cash outflows from investing activities 8,974,634,354.02 3,657,633,154.49
Net cash flows from investing activities 305,633,136.58 -67,829,339.58
3. Cash flows from financing activities:
Cash received from capital contributions 9,817,738.00 71,253,725.44
Including: Cash received from minority shareholder investments
9,817,738.00 71,253,725.44
by subsidiaries
Cash received as borrowings 3,366,615,353.71 2,475,961,527.30
Cash received from issuance of bonds
Cash received from other financing activities 1,114,445,232.65 116,254,909.74
Subtotal of cash inflows from financing activities 4,490,878,324.36 2,663,470,162.48
Repayment of borrowings 3,545,455,084.37 2,142,528,825.32
Cash paid for interest expenses and distribution of dividends or
81,880,268.08 104,782,035.89
profit
Including: dividends or profit paid by subsidiaries to minority
interests
Cash paid for other financing activities 45,886,956.93 160,167,712.58
Sub-total of cash outflows from financing activities 3,673,222,309.38 2,407,478,573.79
Net cash flows from financing activities 817,656,014.98 255,991,588.69
4. Effect of foreign exchange rate changes on cash and cash
24,344,476.24 -26,171,931.83
equivalents
5. Net increase in cash and cash equivalents 737,055,076.67 1,303,012,507.67
Add: Opening balance of cash and cash equivalents 1,488,154,851.35 1,640,236,837.08
6. Closing balance of cash and cash equivalents 2,225,209,928.02 2,943,249,344.75
26
Konka Group Co., Ltd. Third Quarter Report 2016
8. Cash flow statement of the Company for the period from the year-beginning to the end of
the Reporting Period
Unit: RMB
Item January-September 2016 January-September 2015
1. Cash flows from operating activities:
Cash received from sale of commodities and rendering of service 8,538,983,012.64 9,728,289,659.91
Tax refunds received 126,233,515.53 171,735,060.92
Cash received from other operating activities 1,356,473,038.10 1,561,565,595.45
Subtotal of cash inflows from operating activities 10,021,689,566.27 11,461,590,316.28
Cash paid for goods and services 9,762,065,352.00 8,210,914,476.56
Cash paid to and for employees 702,251,202.16 705,264,163.09
Taxes and fares paid 233,896,365.68 134,399,486.02
Cash paid for other operating activities 2,520,362,805.93 1,456,823,738.53
Subtotal of cash outflows from operating activities 13,218,575,725.77 10,507,401,864.20
Net cash flows from operating activities -3,196,886,159.50 954,188,452.08
2. Cash flows from investing activities:
Cash received from retraction of investments 2,317,433.07 130,093,919.85
Cash received as return on investments 33,915,695.73 31,784,264.84
Net cash received from disposal of fixed assets, intangible assets
313,107.85 57,414,081.68
and other long-term assets
Net cash received from disposal of subsidiaries or other business
units
Cash received from other investing activities 9,138,291,591.96 3,087,884,590.00
Subtotal of cash inflows from investing activities 9,174,837,828.61 3,307,176,856.37
Cash paid to acquire fixed assets, intangible assets and other
17,959,270.01 37,606,302.33
long-term assets
Cash paid for investment 14,016,000.00 191,751,411.00
Net cash paid to acquire subsidiaries and other business units
Cash paid for other investing activities 9,140,572,463.21 3,454,884,590.00
Subtotal of cash outflows from investing activities 9,172,547,733.22 3,684,242,303.33
Net cash flows from investing activities 2,290,095.39 -377,065,446.96
3. Cash flows from financing activities:
Cash received from capital contributions
Cash received as borrowings 4,081,439,101.51 61,422,000.00
Cash received from issuance of bonds
27
Konka Group Co., Ltd. Third Quarter Report 2016
Cash received from other financing activities 22,940,000.00 634,734,396.24
Subtotal of cash inflows from financing activities 4,104,379,101.51 696,156,396.24
Repayment of borrowings 244,827,402.55
Cash paid for interest expenses and distribution of dividends or
41,121,454.13 11,608,876.32
profit
Cash paid for other financing activities 335,822,516.60 1,067,804,525.32
Sub-total of cash outflows from financing activities 621,771,373.28 1,079,413,401.64
Net cash flows from financing activities 3,482,607,728.23 -383,257,005.40
4. Effect of foreign exchange rate changes on cash and cash
11,304,902.99 -2,694,776.40
equivalents
5. Net increase in cash and cash equivalents 299,316,567.11 191,171,223.32
Add: Opening balance of cash and cash equivalents 478,267,624.53 991,459,790.62
6. Closing balance of cash and cash equivalents 777,584,191.64 1,182,631,013.94
II Auditor’s report
Is this Report audited?
□ Yes √ No
This Report is unaudited.
The Board of Directors
Konka Group Co., Ltd.
28 October 2016
28