Konka Group Co., Ltd. Third Quarterly Report 2020 KONKA GROUP CO., LTD. THIRD QUARTERLY REPORT 2020 2020-118 October 2020 1 Konka Group Co., Ltd. Third Quarterly Report 2020 Part I Important Notes The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors, supervisors and senior management of Konka Group Co., Ltd. (together with its consolidated subsidiaries, the “Company”, except where the context otherwise requires) hereby guarantee the factuality, accuracy and completeness of the contents of this Report and its summary, and shall be jointly and severally liable for any misrepresentations, misleading statements or material omissions therein. All the Company’s directors have attended the Board meeting for the review of this Report and its summary. Liu Fengxi, the Company’s legal representative, Li Chunlei, the Company’s Chief Financial Officer (CFO), and Feng Junxiu, head of the Company’s financial department (equivalent to financial manager) hereby guarantee that the financial statements carried in this Report are factual, accurate and complete. This Report and its summary have been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese versions shall prevail. 2 Konka Group Co., Ltd. Third Quarterly Report 2020 Part II Key Corporate Information I Key Consolidated Financial Information Indicate by tick mark whether there is any retrospectively restated datum in the table below. □ Yes √ No 30 September 2020 31 December 2019 Change (%) Total assets (RMB) 44,785,049,225.79 42,586,955,452.27 5.16% Equity attributable to the listed company’s 8,518,673,314.06 8,068,505,598.13 5.58% shareholders (RMB) YoY change YoY change Q3 2020 Q1-Q3 2020 (%) (%) Operating revenue (RMB) 12,276,961,374.42 -21.53% 29,801,145,271.16 -28.50% Net profit attributable to the listed 520,661,894.19 432.78% 615,363,686.82 36.60% company’s shareholders (RMB) Net profit attributable to the listed company ’ s shareholders before -843,908,630.71 -99.32% -1,493,919,126.18 -42.78% exceptional items (RMB) Net cash generated from/used in operating -99,506,432.85 81.21% -1,175,873,360.33 54.29% activities (RMB) Basic earnings per share (RMB/share) 0.2162 432.51% 0.2556 36.61% Diluted earnings per share (RMB/share) 0.2162 432.51% 0.2556 36.61% Weighted average return on equity (%) 6.27% 5.07% 7.37% 1.97% Exceptional gains and losses: √ Applicable □ Not applicable Unit: RMB Item Q1-Q3 2020 Note Gain/Loss arising from disposal of non-current assets (inclusive of impairment 1,306,383,744.02 allowance write-offs) Government subsidies recognized in the current period, except for those acquired in the ordinary course of business or granted at certain quotas or amounts according to the 451,617,886.43 government’s unified standards Gain/Loss on entrusting others with investments or asset management 29,457,327.63 Gain/Loss on changes in fair value arising from holding of held-for-trading financial assets and liabilities and derivative financial assets and liabilities, and investment 59,718,772.71 income from disposal of held-for-trading financial assets and liabilities, derivative financial assets and liabilities, and other debt investments other than effective hedge 3 Konka Group Co., Ltd. Third Quarterly Report 2020 business related to the Company’s normal operating businesses Gain/loss on entrustment loans 267,097.29 7,388,516.01 Other non-operating income and expense other than the above 675,542,207.54 Other gains and losses that meet definition of exceptional gain/loss Less: Income tax effects 325,646,046.95 Non-controlling interests effects (net of tax) 95,446,691.68 Total 2,109,282,813.00 -- Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss Items: √ Applicable □ Not applicable Item Amount (RMB) Reason Recurrent government subsidies given in the Company’s ordinary course of Tax rebates on software 21,347,468.54 business at fixed quotas or amounts as per government’s uniform standards II Total Number of Shareholders and Holdings of Top 10 of Them as at the End of the Reporting Period 1. Numbers of Ordinary Shareholders and Preference Shareholders with Resumed Voting Rights as well as Holdings of Top 10 Shareholders Unit: share Number of preference shareholders with resumed Number of ordinary shareholders 139,572 0 voting rights (if any) Top 10 shareholders Shareh Shares in pledge or Nature of olding Total shares Restricted frozen Name of shareholder shareholder percent held shares held Shar Status age es OVERSEAS CHINESE TOWN State-owned 21.75% 523,746,932 0 ENTERPRISES CO., LTD corporation CITIC SECURITIES BROKERAGE Foreign 7.56% 182,100,202 0 (HONG KONG) CO., LTD. corporation GUOYUAN SECURITIES BROKER (HK) Foreign 2.44% 58,852,625 0 CO., LTD. corporation Foreign HOLY TIME GROUP LIMITED 2.38% 57,289,100 0 corporation GAOLING FUND,L.P. Foreign 2.19% 52,801,250 0 4 Konka Group Co., Ltd. Third Quarterly Report 2020 corporation Domestic WANG JINGFENG 1.52% 36,569,800 0 individual Foreign NAM NGAI 0.94% 22,567,540 0 individual CHINA MERCHANTS SECURITIES (HK) State-owned 0.82% 19,752,620 0 LIMITED corporation Haitong International Securities Company Foreign 0.52% 12,452,154 0 Limited-Account Client corporation HONG KONG SECURITIES CLEARING Foreign 0.37% 8,810,290 0 COMPANY LTD. corporation Top 10 unrestricted shareholders Shares by class Name of shareholder Unrestricted ordinary shares held Class Shares OVERSEAS CHINESE TOWN RMB-denominated 523,746,932 523,746,932 ENTERPRISES CO., LTD ordinary share CITIC SECURITIES BROKERAGE Domestically listed 182,100,202 182,100,202 (HONG KONG) CO., LTD. foreign share GUOYUAN SECURITIES BROKER (HK) Domestically listed 58,852,625 58,852,625 CO., LTD. foreign share Domestically listed HOLY TIME GROUP LIMITED 57,289,100 57,289,100 foreign share Domestically listed GAOLING FUND,L.P. 52,801,250 52,801,250 foreign share RMB-denominated WANG JINGFENG 36,569,800 36,569,800 ordinary share Domestically listed NAM NGAI 22,567,540 22,567,540 foreign share CHINA MERCHANTS SECURITIES (HK) Domestically listed 19,752,620 19,752,620 LIMITED foreign share Haitong International Securities Company Domestically listed 12,452,154 12,452,154 Limited-Account Client foreign share HONG KONG SECURITIES CLEARING RMB-denominated 8,810,290 8,810,290 COMPANY LTD. ordinary share Jialong Investment Limited, a wholly-funded subsidiary of the Company ’s first majority shareholder Overseas Chinese Town Enterprises Co. (“OCT Group” for Related or acting-in-concert parties among short), holds 180,001,110 and 18,360,000 common shares in the Company shareholders above respectively through CITIC Securities Brokerage (Hong Kong) Co., Ltd. and China Merchants Securities (HK) Limited. Jialong Investment Limited and 5 Konka Group Co., Ltd. Third Quarterly Report 2020 Overseas Chinese Town Enterprises Co. are parties acting in concert. Other than that, it is unknown whether the other shareholders are related parties or acting-in-concert parties or not. A-shareholders Wang Jingfeng held 36,309,800 A-shares in the Company through Top 10 ordinary shareholders involved in his account of collateral securities for margin trading in Guotai Junan Securities securities margin trading Co., Ltd.. Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the Company conducted any promissory repo during the Reporting Period. □ Yes √ No No such cases in the Reporting Period. 2. Number of Preference Shareholders and Shareholdings of Top 10 of Them □ Applicable √ Not applicable 6 Konka Group Co., Ltd. Third Quarterly Report 2020 Part III Significant Events I Changes in Key Financial Statement Line Items and Explanation of why √ Applicable □ Not applicable (I) During the Reporting Period, the Company actively promoted strategic transformation and upgrading by implementing the long-term development strategy of “ Technology + Industry + Parks ” and centering on “ Semiconductor + New Consumer Electronics + High-Tech Parks ” . In terms of the semiconductor business, the Company worked on development and commercialization in respect of Micro LED and Mini LED, in addition to the launch of the Mini LED 8K TV. With regard to the consumer electronics business, continued efforts were made to enrich product categories and content, and to enhance coordination between the online and offline marketing system. By way of live streaming (including live streaming in offline stores), the Company was able to further boost online and offline sales. As for the high-tech park business, the Yangtze River Delta Headquarters and the Frestec Refrigeration Park, among others, were launched during the Reporting Period. These industrial parks are expected to help the Company optimize resource allocation and promote intelligent upgrading in the high-tech park business. (II) Changes in Key Financial Statement Line Items Unit: RMB Percentage Item Q1-Q3 2020 Q1-Q3 2019 Amount of change Main reason for change of change Operating Decreases in both operating revenue 29,801,145,271.16 41,681,249,260.63 -11,880,103,989.47 -28.50% revenue and cost of sales as a result of the Cost of sales 27,874,517,742.42 39,601,480,656.43 -11,726,962,914.01 -29.61% pandemic during the Reporting Period R&D expense 486,664,300.94 319,102,256.98 167,562,043.96 52.51% Greater investments in R&D Return on Disposal of the Company’s interest in 1,932,345,020.63 795,857,862.21 1,136,487,158.42 142.80% investment Dongguan Konka Investment Co., Ltd. Credit Allowances for doubtful accounts impairment loss -419,369,553.83 -89,146,583.72 -330,222,970.11 -370.43% established in the current period (“-” for loss) Asset Inventory valuation allowances impairment loss -98,202,971.26 -9,456,436.22 -88,746,535.04 -938.48% established in the current period (“-” for loss) 7 Konka Group Co., Ltd. Third Quarterly Report 2020 II Progress, Influence and Solutions in respect of Significant Events (I) Private placements of corporate bonds: So far, in respect of the private placement of RMB2.3 billion of corporate bonds, the Company has received the No Objection Letter from the Shenzhen Stock Exchange; and RMB600 million of privately placed corporate bonds are in the process. (II) Launching and establishing funds: Currently, Orient Konka Industry M&A Fund respectively holds 7.75%, 2.75%, 11.73%, 6.05% and 3% equity interest in Jiangxi Yahua Electronic Materials Co., Ltd., Genew Technologies Co., Ltd., Shenzhen Grentech Technologies Co., Ltd., Huizhou Xuxin Intelligent Technology Co., Ltd. and Yimeide Technology Co., Ltd. Xinjia Emerging Industry Development Investment Fund, Wuzhen Jiayu Digital Economy Industry Fund and Yibin Kanghui Emerging Industry Fund have completed the filing in Asset Management Association of China. Yancheng Electronic Information Industry Fund has accomplished the signing of the partnership agreement and now the filing in Asset Management Association of China is underway. (III) Yibin Smart Terminal High-Tech Industrial Park has been completed and accepted. Konka Chuzhou Smart Appliances and Equipment Industrial Park, Dongguan Konka Smart Industrial Park, Chongqing Konka Semiconductor Optoelectronic Industrial Park and Suining Konka Electronic Technology Industrial Park have obtained the project land and are under construction. Yancheng Semiconductor Closed Beta Test Base has completed the basic construction and is headed towards interior decoration. Frestec Refrigeration Park, Konka Production Base for Exported Intelligent Terminals and Guxian Green Technology Town are in the pipeline and waiting to bid for the target land in government auditions. Summary of the significant event Date of disclosure Index to disclosure Private placement of RMB600 million of corporate bonds 18 September 2019 Investment and construction of Dongguan Konka Smart Industrial Park 11 March 2017 Investment and construction of Konka Chuzhou Smart Appliances and Equipment 5 December 2018 Industrial Park Investment and construction of Yibin Smart Terminal High-Tech Industrial Park 16 December 2017 Investment and construction of Suining Konka Electronic Technology Industrial 17 October 2018 Park Investment and construction of Chongqing Konka Semiconductor Optoelectronic 9 October 2019 Industrial Park http://www.cninfo.c Investment and construction of Yancheng Semiconductor Closed Beta Base 26 November 2019 om.cn/new/index Investment and construction of Guxian Green Technology Town 26 November 2019 Orient Konka Industry M &A Fund 7 September 2018 Xinjia Emerging Industry Development Investment Fund 4 March 2020 Wuzhen Jiayu Digital Economy Industry Fund 28 March 2020 Investment and construction of Konka Production Base for Exported Intelligent 6 June 2020 Terminals Private placement of RMB2.3 billion of corporate bonds 6 June 2020 Investment and construction of Frestec Refrigeration Park 21 July 2020 8 Konka Group Co., Ltd. Third Quarterly Report 2020 Yibin Kanghui Emerging Industry Fund 21 July 2020 Yancheng Electronic Information Industry Fund 23 September 2020 Completion of Ownership Transfer with the Industrial and Commercial Administration in Respect of the Disposal of a 51% Interest in Dongguan Konka 26 September 2020 Investment Co., Ltd. in an Open Manner Progress of any share repurchase: □ Applicable √ Not applicable Progress of any reduction of the repurchased shares through centralized bidding: □ Applicable √ Not applicable III Commitments that the Company ’ s Actual Controller, Shareholders, Related Parties, Acquirers, the Company Itself or Other Relevant Parties, Failed to Fulfill on Time during the Reporting Period □ Applicable √ Not applicable No such cases in the Reporting Period. IV Financial Investments 1. Securities Investments □ Applicable √ Not applicable No such cases in the Reporting Period. 2. Investments in Derivative Financial Instruments □ Applicable √ Not applicable No such cases in the Reporting Period. V Progress of Projects Financed with Raised Funds □ Applicable √ Not applicable VI 2020 Annual Operating Performance Forecast Warning of a forecast loss on or a forecast significant year-on-year change in the 2020 annual net profit, as well as explanation of why: □ Applicable √ Not applicable VII Significant Contracts Arising from the Company’s Ordinary Course of Business □ Applicable √ Not applicable VIII Cash Entrusted for Wealth Management √ Applicable □ Not applicable Unit: RMB’0,000 Type Funding source Amount Undue amount Unrecovered overdue amount Bank’s wealth management product Self-owned 0 940 0 Total 0 940 0 9 Konka Group Co., Ltd. Third Quarterly Report 2020 High-risk wealth management transactions with a significant single amount, or with low security, low liquidity or no principal protection: □ Applicable √ Not applicable Wealth management transactions with possible impairments including an expectedly unrecoverable principal: □ Applicable √ Not applicable IX Irregularities in the Provision of Guarantees □ Applicable √ Not applicable No such cases in the Reporting Period. X Occupation of the Company’s Capital by the Controlling Shareholder or any of Its Related Parties for Non-Operating Purposes □ Applicable √ Not applicable No such cases in the Reporting Period. XI Communications with the Investment Community such as Researches, Inquiries and Interviews Received during the Reporting Period □ Applicable √ Not applicable No such cases in the Reporting Period. 10 Konka Group Co., Ltd. Third Quarterly Report 2020 Part IV Financial Statements I Financial Statements 1. Consolidated Balance Sheet Prepared by Konka Group Co., Ltd. 30 September 2020 Unit: RMB Item 30 September 2020 31 December 2019 Current assets: Monetary assets 6,579,261,424.18 6,599,360,051.61 Settlement reserve Loans to other banks and financial institutions Held-for-trading financial assets 61,494,666.97 Derivative financial assets Notes receivable 1,846,727,412.55 2,838,041,432.89 Accounts receivable 5,879,294,945.56 4,416,179,657.87 Receivables financing 90,635,143.47 143,174,271.82 Prepayments 2,580,862,758.73 2,072,550,811.86 Premiums receivable Reinsurance receivables Receivable reinsurance contract reserve Other receivables 1,710,567,669.55 1,772,183,366.49 Including: Interest receivable 19,432,661.26 7,807,400.40 Dividends receivable 547,848.62 547,848.62 Financial assets purchased under resale agreements Inventories 5,005,680,260.84 5,318,503,044.69 Contract assets 57,517,986.07 Assets held for sale Current portion of non-current assets 93,761,768.42 108,087,016.22 Other current assets 1,566,320,040.85 2,093,212,552.25 Total current assets 25,410,629,410.22 25,422,786,872.67 Non-current assets: Loans and advances to customers 11 Konka Group Co., Ltd. Third Quarterly Report 2020 Debt investments Other debt investments Long-term receivables 406,490,863.41 410,509,555.85 Long-term equity investments 4,080,885,163.89 3,465,541,196.89 Investments in other equity instruments 26,642,171.36 21,642,170.36 Other non-current financial assets 1,812,985,572.95 1,753,121,727.83 Investment property 388,983,302.24 400,197,374.07 Fixed assets 2,397,168,269.57 2,561,254,191.55 Construction in progress 6,012,462,841.51 4,291,544,368.52 Productive living assets Oil and gas assets Right-of-use assets Intangible assets 1,135,960,506.05 1,213,271,713.22 Development costs 1,430,936.03 Goodwill 779,260,296.41 779,260,296.41 Long-term prepaid expense 119,132,580.66 107,590,078.88 Deferred income tax assets 1,044,085,436.95 987,763,182.17 Other non-current assets 1,168,931,874.54 1,172,472,723.85 Total non-current assets 19,374,419,815.57 17,164,168,579.60 Total assets 44,785,049,225.79 42,586,955,452.27 Current liabilities: Short-term borrowings 11,545,605,169.58 10,332,687,239.63 Borrowings from the central bank Loans from other banks and financial institutions Held-for-trading financial liabilities Derivative financial liabilities Notes payable 1,206,473,051.09 1,319,396,374.37 Accounts payable 5,853,839,416.94 5,797,822,479.60 Advances from customers 1,076,856,387.08 Contract liabilities 1,637,940,617.00 Financial assets sold under repurchase agreements Customer deposits and deposits from other banks and financial institutions Payables for acting trading of securities Payables for underwriting of securities 12 Konka Group Co., Ltd. Third Quarterly Report 2020 Employee benefits payable 349,178,094.68 426,870,498.58 Taxes and levies payable 301,663,370.44 607,845,294.99 Other payables 2,130,027,470.51 2,374,287,243.20 Including: Interest payable 153,125,872.24 227,831,108.53 Dividends payable Fees and commissions payable Reinsurance payables Liabilities directly associated with assets held for sale Current portion of non-current liabilities 13,023,381.44 210,066,077.13 Other current liabilities Total current liabilities 23,037,750,571.68 22,145,831,594.58 Non-current liabilities: Insurance contract reserve Long-term borrowings 5,169,802,097.54 4,890,315,729.90 Bonds payable 4,991,837,002.15 4,987,709,643.64 Including: Preference shares Perpetual bonds Lease liabilities Long-term payables 713,894,401.32 383,287,104.62 Long-term employee benefits payable 5,286,794.22 5,565,646.72 Provisions 137,192,250.40 206,591.51 Deferred income 158,620,881.77 151,874,258.45 Deferred income tax liabilities 88,347,193.28 95,467,096.05 Other non-current liabilities 110,361,780.89 Total non-current liabilities 11,375,342,401.57 10,514,426,070.89 Total liabilities 34,413,092,973.25 32,660,257,665.47 Owners’ equity: Share capital 2,407,945,408.00 2,407,945,408.00 Other equity instruments Including: Preference shares Perpetual bonds Capital reserves 230,368,577.09 230,368,577.09 Less: Treasury stock Other comprehensive income -66,091,804.01 -21,293,103.52 13 Konka Group Co., Ltd. Third Quarterly Report 2020 Specific reserve Surplus reserves 1,211,721,109.67 1,211,721,109.67 General reserve Retained earnings 4,734,730,023.31 4,239,763,606.89 Total equity attributable to owners of the Company as the 8,518,673,314.06 8,068,505,598.13 parent Non-controlling interests 1,853,282,938.48 1,858,192,188.67 Total owners’ equity 10,371,956,252.54 9,926,697,786.80 Total liabilities and owners’ equity 44,785,049,225.79 42,586,955,452.27 Legal representative: Liu Fengxi CFO: Li Chunlei Head of the financial department: Feng Junxiu 2. Balance Sheet of the Company as the Parent Unit: RMB Item 30 September 2020 31 December 2019 Current assets: Monetary assets 2,949,020,415.52 2,498,077,198.12 Held-for-trading financial assets 61,494,666.97 Derivative financial assets Notes receivable 1,325,764,809.15 2,148,312,821.38 Accounts receivable 5,604,165,653.64 9,564,720,940.39 Receivables financing 66,002,903.68 Prepayments 1,003,172,364.65 911,315,168.95 Other receivables 8,734,438,082.30 10,552,820,915.47 Including: Interest receivable 11,146,879.93 7,431,353.86 Dividends receivable 349,515,715.50 518,580,871.02 Inventories 257,339,197.13 218,644,308.47 Contract assets Assets held for sale Current portion of non-current assets Other current assets 753,175,326.36 1,096,689,897.40 Total current assets 20,627,075,848.75 27,118,078,820.83 Non-current assets: Debt investments Other debt investments Long-term receivables Long-term equity investments 8,992,378,578.30 7,712,084,967.88 14 Konka Group Co., Ltd. Third Quarterly Report 2020 Investments in other equity instruments 17,940,215.36 12,940,214.36 Other non-current financial assets 250,230,000.00 250,230,000.00 Investment property 388,983,302.24 400,197,374.07 Fixed assets 430,537,915.34 444,107,402.57 Construction in progress 75,312,908.26 40,933,270.51 Productive living assets Oil and gas assets Right-of-use assets Intangible assets 74,981,659.82 80,470,750.60 Development costs Goodwill Long-term prepaid expense 14,247,153.98 39,047,325.68 Deferred income tax assets 815,152,260.37 883,234,085.45 Other non-current assets Total non-current assets 11,059,763,993.67 9,863,245,391.12 Total assets 31,686,839,842.42 36,981,324,211.95 Current liabilities: Short-term borrowings 4,906,232,184.91 5,014,312,913.74 Held-for-trading financial liabilities Derivative financial liabilities Notes payable 1,764,184,964.11 2,610,991,473.69 Accounts payable 6,996,269,041.93 11,078,648,690.19 Advances from customers 318,839,961.84 Contract liabilities 198,727,133.74 Employee benefits payable 130,898,131.46 125,402,307.95 Taxes and levies payable 3,200,613.86 9,305,344.42 Other payables 4,026,877,947.82 3,193,392,734.69 Including: Interest payable 147,583,113.80 223,847,860.57 Dividends payable Liabilities directly associated with assets held for sale Current portion of non-current liabilities 130,512,375.00 Other current liabilities Total current liabilities 18,026,390,017.83 22,481,405,801.52 Non-current liabilities: 15 Konka Group Co., Ltd. Third Quarterly Report 2020 Long-term borrowings 2,353,034,612.32 3,438,055,729.90 Bonds payable 4,991,837,002.15 4,987,709,643.64 Including: Preference shares Perpetual bonds Lease liabilities Long-term payables 24,965,378.82 21,855,688.19 Long-term employee benefits payable Provisions 5,426,045.35 206,591.51 Deferred income 45,071,455.73 59,545,839.30 Deferred income tax liabilities Other non-current liabilities 57,440,562.28 Total non-current liabilities 7,477,775,056.65 8,507,373,492.54 Total liabilities 25,504,165,074.48 30,988,779,294.06 Owners’ equity: Share capital 2,407,945,408.00 2,407,945,408.00 Other equity instruments Including: Preference shares Perpetual bonds Capital reserves 114,018,066.79 114,018,066.79 Less: Treasury stock Other comprehensive income -2,682,217.31 -2,682,217.31 Specific reserve Surplus reserves 1,227,564,785.19 1,227,564,785.19 Retained earnings 2,435,828,725.27 2,245,698,875.22 Total owners’ equity 6,182,674,767.94 5,992,544,917.89 Total liabilities and owners’ equity 31,686,839,842.42 36,981,324,211.95 3. Consolidated Income Statement for Q3 Unit: RMB Item Q3 2020 Q3 2019 1. Revenues 12,276,961,374.42 15,644,806,446.79 Including: Operating revenue 12,276,961,374.42 15,644,806,446.79 Interest income Insurance premium income Fee and commission income 16 Konka Group Co., Ltd. Third Quarterly Report 2020 2. Costs and expenses 12,941,220,330.25 16,025,188,376.66 Including: Cost of sales 11,605,524,309.54 14,927,438,285.30 Interest expense Fee and commission expense Surrenders Net insurance claims paid Net amount provided as insurance contract reserve Expenditure on policy dividends Reinsurance premium expense Taxes and levies 19,117,752.68 18,882,712.84 Selling expense 443,120,418.41 537,449,008.46 Administrative expense 290,185,810.31 214,581,564.94 R&D expense 228,614,714.65 161,891,918.04 Finance costs 354,657,324.66 164,944,887.08 Including: Interest expense 209,255,381.22 286,311,826.27 Interest income 8,632,937.66 28,365,849.61 Add: Other income 149,944,065.29 298,288,604.77 Return on investment (“-” for loss) 1,333,651,444.04 236,696,834.29 Including: Share of profit or loss of joint ventures 468,102.97 -17,103,633.76 and associates Income from the derecognition of financial assets at amortized cost (“-” for loss) Exchange gain (“-” for loss) Net gain on exposure hedges (“-” for loss) Gain on changes in fair value (“-” for loss) Credit impairment loss (“-” for loss) -379,482,046.65 -39,670,359.96 Asset impairment loss (“-” for loss) -96,217,311.31 2,261,331.07 Asset disposal income (“-” for loss) 89,624,963.47 3. Operating profit (“-” for loss) 433,262,159.01 117,194,480.30 Add: Non-operating income 13,906,702.31 41,224,843.98 Less: Non-operating expense 6,986,036.13 1,809,247.39 4. Gross profit (“-” for loss) 440,182,825.19 156,610,076.89 Less: Income tax expense -29,221,823.79 4,284,277.99 5. Net profit (“-” for net loss) 469,404,648.98 152,325,798.90 17 Konka Group Co., Ltd. Third Quarterly Report 2020 5.1 By operating continuity 5.1.1 Net profit from continuing operations (“-” for net 469,404,648.98 152,325,798.90 loss) 5.1.2 Net profit from discontinued operations (“-” for net loss) 5.2 By ownership 5.2.1 Net profit attributable to owners of the Company as 520,661,894.19 97,725,667.63 the parent 5.2.1 Net profit attributable to non-controlling interests -51,257,245.21 54,600,131.27 6. Other comprehensive income, net of tax -48,021,475.59 -757,628.66 Attributable to owners of the Company as the parent -44,481,996.02 -2,540,311.85 6.1 Items that will not be reclassified to profit or loss 6.1.1 Changes caused by remeasurements on defined benefit schemes 6.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method 6.1.3 Changes in the fair value of investments in other equity instruments 6.1.4 Changes in the fair value arising from changes in own credit risk 6.1.5 Other 6.2 Items that will be reclassified to profit or loss -44,481,996.02 -2,540,311.85 6.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method 6.2.2 Changes in the fair value of other debt investments 6.2.3 Other comprehensive income arising from the reclassification of financial assets 6.2.4 Credit impairment allowance for other debt investments 6.2.5 Reserve for cash flow hedges 6.2.6 Differences arising from the translation of -44,481,996.02 -2,540,311.85 foreign currency-denominated financial statements 6.2.7 Other Attributable to non-controlling interests -3,539,479.57 1,782,683.19 7. Total comprehensive income 421,383,173.39 151,568,170.24 Attributable to owners of the Company as the parent 476,179,898.17 95,185,355.78 Attributable to non-controlling interests -54,796,724.78 56,382,814.46 8. Earnings per share 18 Konka Group Co., Ltd. Third Quarterly Report 2020 8.1 Basic earnings per share 0.2162 0.0406 8.2 Diluted earnings per share 0.2162 0.0406 Legal representative: Liu Fengxi CFO: Li Chunlei Head of the financial department: Feng Junxiu 4. Income Statement of the Company as the Parent for Q3 Unit: RMB Item Q3 2020 Q3 2019 1. Operating revenue 1,874,354,128.92 3,420,624,874.36 Less: Cost of sales 1,859,732,505.45 3,398,476,539.34 Taxes and levies 1,598,888.37 2,196,972.53 Selling expense 59,995,538.39 289,700,691.74 Administrative expense 153,151,582.89 97,690,345.27 R&D expense 11,884,823.72 11,583,116.72 Finance costs 222,105,925.22 51,277,210.40 Including: Interest expense 206,857,085.73 221,815,070.42 Interest income 116,575,711.62 107,028,598.07 Add: Other income 8,462,482.65 16,519,680.07 Return on investment (“-” for loss) 523,004,913.64 151,953,623.56 Including: Share of profit or loss of joint ventures -7,427,078.59 -7,857,057.42 and associates Income from the derecognition of financial assets at amortized cost (“-” for loss) Net gain on exposure hedges (“-” for loss) Gain on changes in fair value (“-” for loss) Credit impairment loss (“-” for loss) -212,612,195.51 -20,000,000.00 Asset impairment loss (“-” for loss) Asset disposal income (“-” for loss) 89,600,000.00 2. Operating profit (“-” for loss) -25,659,934.34 -281,826,698.01 Add: Non-operating income 8,790,701.45 185,713.17 Less: Non-operating expense 2,828,750.98 169,334.48 3. Gross profit (“-” for loss) -19,697,983.87 -281,810,319.32 Less: Income tax expense -15,512,798.22 -65,507,220.62 4. Net profit (“-” for net loss) -4,185,185.65 -216,303,098.70 4.1 Net profit from continuing operations (“-” for net loss) -4,185,185.65 -216,303,098.70 4.2 Net profit from discontinued operations (“-” for net loss) 5. Other comprehensive income, net of tax 19 Konka Group Co., Ltd. Third Quarterly Report 2020 5.1 Items that will not be reclassified to profit or loss 5.1.1 Changes caused by remeasurements on defined benefit schemes 5.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method 5.1.3 Changes in the fair value of investments in other equity instruments 5.1.4 Changes in the fair value arising from changes in own credit risk 5.1.5 Other 5.2 Items that will be reclassified to profit or loss 5.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method 5.2.2 Changes in the fair value of other debt investments 5.2.3 Other comprehensive income arising from the reclassification of financial assets 5.2.4 Credit impairment allowance for other debt investments 5.2.5 Reserve for cash flow hedges 5.2.6 Differences arising from the translation of foreign currency-denominated financial statements 5.2.7 Other 6. Total comprehensive income -4,185,185.65 -216,303,098.70 7. Earnings per share 7.1 Basic earnings per share 7.2 Diluted earnings per share 5. Consolidated Income Statement for Q1~Q3 Unit: RMB Item Q1~Q3 2020 Q1~Q3 2019 1. Revenues 29,801,145,271.16 41,681,249,260.63 Including: Operating revenue 29,801,145,271.16 41,681,249,260.63 Interest income Insurance premium income Fee and commission income 2. Costs and expenses 31,294,628,818.95 42,723,961,198.82 Including: Cost of sales 27,874,517,742.42 39,601,480,656.43 Interest expense Fee and commission expense 20 Konka Group Co., Ltd. Third Quarterly Report 2020 Surrenders Net insurance claims paid Net amount provided as insurance contract reserve Expenditure on policy dividends Reinsurance premium expense Taxes and levies 48,302,193.04 56,271,805.11 Selling expense 1,412,344,800.39 1,605,394,922.82 Administrative expense 731,101,590.75 562,506,207.37 R&D expense 486,664,300.94 319,102,256.98 Finance costs 741,698,191.41 579,205,350.11 Including: Interest expense 742,208,965.50 815,995,662.79 Interest income 132,894,768.38 147,039,381.38 Add: Other income 468,038,917.63 642,173,576.13 Return on investment (“-” for loss) 1,932,345,020.63 795,857,862.21 Including: Share of profit or loss of joint ventures 45,185,728.73 -8,562,359.20 and associates Income from the derecognition of financial assets at amortized cost (“-” for loss) Exchange gain (“-” for loss) Net gain on exposure hedges (“-” for loss) Gain on changes in fair value (“-” for loss) -3,005,381.67 Credit impairment loss (“-” for loss) -419,369,553.83 -89,146,583.72 Asset impairment loss (“-” for loss) -98,202,971.26 -9,456,436.22 Asset disposal income (“-” for loss) 188,079,246.33 293,705,840.64 3. Operating profit (“-” for loss) 577,407,111.71 587,416,939.18 Add: Non-operating income 22,568,475.79 63,494,286.07 Less: Non-operating expense 14,122,911.48 5,278,988.90 4. Gross profit (“-” for loss) 585,852,676.02 645,632,236.35 Less: Income tax expense 44,203,698.68 14,595,671.18 5. Net profit (“-” for net loss) 541,648,977.34 631,036,565.17 5.1 By operating continuity 5.1.1 Net profit from continuing operations (“-” for net 541,648,977.34 631,036,565.17 loss) 5.1.2 Net profit from discontinued operations (“-” for net loss) 21 Konka Group Co., Ltd. Third Quarterly Report 2020 5.2 By ownership 5.2.1 Net profit attributable to owners of the Company 615,363,686.82 450,492,688.36 as the parent 5.2.1 Net profit attributable to non-controlling interests -73,714,709.48 180,543,876.81 6. Other comprehensive income, net of tax -46,863,350.96 -3,865,740.99 Attributable to owners of the Company as the parent -44,798,700.49 -6,200,198.54 6.1 Items that will not be reclassified to profit or loss -4,800,000.00 6.1.1 Changes caused by remeasurements on defined benefit schemes 6.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method 6.1.3 Changes in the fair value of investments in other -4,800,000.00 equity instruments 6.1.4 Changes in the fair value arising from changes in own credit risk 6.1.5 Other 6.2 Items that will be reclassified to profit or loss -44,798,700.49 -1,400,198.54 6.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method 6.2.2 Changes in the fair value of other debt investments 6.2.3 Other comprehensive income arising from the reclassification of financial assets 6.2.4 Credit impairment allowance for other debt investments 6.2.5 Reserve for cash flow hedges 6.2.6 Differences arising from the translation of -44,798,700.49 -1,400,198.54 foreign currency-denominated financial statements 6.2.7 Other Attributable to non-controlling interests -2,064,650.47 2,334,457.55 7. Total comprehensive income 494,785,626.38 627,170,824.18 Attributable to owners of the Company as the parent 570,564,986.33 444,292,489.82 Attributable to non-controlling interests -75,779,359.95 182,878,334.36 8. Earnings per share 8.1 Basic earnings per share 0.2556 0.1871 8.2 Diluted earnings per share 0.2556 0.1871 Legal representative: Liu Fengxi CFO: Li Chunlei Head of the financial department: Feng Junxiu 6. Income Statement of the Company as the Parent for Q1~Q3 Unit: RMB 22 Konka Group Co., Ltd. Third Quarterly Report 2020 Item Q1~Q3 2020 Q1~Q3 2019 1. Operating revenue 5,249,800,159.81 8,788,646,584.76 Less: Cost of sales 4,810,832,336.30 8,662,626,032.49 Taxes and levies 4,054,892.86 5,247,218.40 Selling expense 406,754,081.49 892,638,143.13 Administrative expense 313,001,635.63 214,332,248.59 R&D expense 37,421,071.21 33,467,367.19 Finance costs 396,462,530.95 315,092,491.81 Including: Interest expense 637,210,813.14 706,461,849.17 Interest income 359,545,756.63 332,427,396.10 Add: Other income 68,743,421.98 42,403,642.65 Return on investment (“-” for loss) 1,031,869,975.34 337,929,362.44 Including: Share of profit or loss of joint ventures -8,126,917.97 -3,928,528.71 and associates Income from the derecognition of financial assets at amortized cost (“-” for loss) Net gain on exposure hedges (“-” for loss) Gain on changes in fair value (“-” for loss) -3,005,381.67 Credit impairment loss (“-” for loss) -222,810,467.29 -26,660,947.01 Asset impairment loss (“-” for loss) 5,726,253.37 -3,172,282.22 Asset disposal income (“-” for loss) 188,200,000.00 200.00 2. Operating profit (“-” for loss) 353,002,794.77 -987,262,322.66 Add: Non-operating income 9,106,266.95 1,708,572.98 Less: Non-operating expense 3,054,317.36 1,126,692.02 3. Gross profit (“-” for loss) 359,054,744.36 -986,680,441.70 Less: Income tax expense 68,788,742.83 -240,955,012.03 4. Net profit (“-” for net loss) 290,266,001.53 -745,725,429.67 4.1 Net profit from continuing operations (“-” for net loss) 290,266,001.53 -745,725,429.67 4.2 Net profit from discontinued operations (“-” for net loss) 5. Other comprehensive income, net of tax 5.1 Items that will not be reclassified to profit or loss 5.1.1 Changes caused by remeasurements on defined benefit schemes 5.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method 23 Konka Group Co., Ltd. Third Quarterly Report 2020 5.1.3 Changes in the fair value of investments in other equity instruments 5.1.4 Changes in the fair value arising from changes in own credit risk 5.1.5 Other 5.2 Items that will be reclassified to profit or loss 5.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method 5.2.2 Changes in the fair value of other debt investments 5.2.3 Other comprehensive income arising from the reclassification of financial assets 5.2.4 Credit impairment allowance for other debt investments 5.2.5 Reserve for cash flow hedges 5.2.6 Differences arising from the translation of foreign currency-denominated financial statements 5.2.7 Other 6. Total comprehensive income 290,266,001.53 -745,725,429.67 7. Earnings per share 7.1 Basic earnings per share 7.2 Diluted earnings per share 7. Consolidated Cash Flow Statement for Q1~Q3 Unit: RMB Item Q1~Q3 2020 Q1~Q3 2019 1. Cash flows from operating activities: Proceeds from sale of commodities and rendering of 29,184,784,329.28 41,460,695,427.76 services Net increase in customer deposits and deposits from other banks and financial institutions Net increase in borrowings from the central bank Net increase in loans from other financial institutions Premiums received on original insurance contracts Net proceeds from reinsurance Net increase in deposits and investments of policy holders Interest, fees and commissions received Net increase in loans from other banks and financial institutions Net increase in proceeds from repurchase transactions 24 Konka Group Co., Ltd. Third Quarterly Report 2020 Net proceeds from acting trading of securities Tax and levy rebates 158,747,704.56 596,940,645.18 Cash generated from other operating activities 2,779,748,792.23 2,810,409,063.92 Subtotal of cash generated from operating activities 32,123,280,826.07 44,868,045,136.86 Payments for commodities and services 28,608,102,086.75 42,633,289,918.22 Net increase in loans and advances to customers Net increase in deposits in the central bank and other banks and financial institutions Payments for claims on original insurance contracts Net increase in loans to other banks and financial institutions Interest, fees and commissions paid Policy dividends paid Cash paid to and for employees 1,359,110,793.58 1,354,791,311.98 Taxes and levies paid 785,311,074.53 604,891,331.46 Cash used in other operating activities 2,546,630,231.54 2,847,652,417.14 Subtotal of cash used in operating activities 33,299,154,186.40 47,440,624,978.80 Net cash generated from/used in operating activities -1,175,873,360.33 -2,572,579,841.94 2. Cash flows from investing activities: Proceeds from disinvestment 695,562,072.60 222,405,975.50 Return on investment 97,902,372.90 109,794,038.16 Net proceeds from the disposal of fixed assets, intangible 305,251,144.96 123,083,476.75 assets and other long-lived assets Net proceeds from the disposal of subsidiaries and other 588,620,437.06 90,801,480.11 business units Cash generated from other investing activities 2,057,357,513.79 1,757,416,878.42 Subtotal of cash generated from investing activities 3,744,693,541.31 2,303,501,848.94 Payments for the acquisition of fixed assets, intangible 2,417,483,605.63 1,280,750,151.25 assets and other long-lived assets Payments for investments 162,157,119.25 1,236,659,360.00 Net increase in pledged loans granted Net payments for the acquisition of subsidiaries and other business units Cash used in other investing activities 155,520,775.46 800,033,420.00 Subtotal of cash used in investing activities 2,735,161,500.34 3,317,442,931.25 Net cash generated from/used in investing activities 1,009,532,040.97 -1,013,941,082.31 3. Cash flows from financing activities: 25 Konka Group Co., Ltd. Third Quarterly Report 2020 Capital contributions received 133,039,439.25 316,350,268.17 Including: Capital contributions by non-controlling 133,039,439.25 316,350,268.17 interests to subsidiaries Borrowings received 14,453,038,928.17 21,816,836,119.64 Cash generated from other financing activities 1,396,812,658.86 662,446,627.50 Subtotal of cash generated from financing activities 15,982,891,026.28 22,795,633,015.31 Repayment of borrowings 13,243,185,186.02 15,301,413,298.24 Interest and dividends paid 745,791,874.18 674,111,965.45 Including: Dividends paid by subsidiaries to 4,513,500.00 33,607,322.95 non-controlling interests Cash used in other financing activities 1,347,499,266.63 534,292,325.64 Subtotal of cash used in financing activities 15,336,476,326.83 16,509,817,589.33 Net cash generated from/used in financing activities 646,414,699.45 6,285,815,425.98 4. Effect of foreign exchange rates changes on cash and cash -22,135,152.50 7,020,688.15 equivalents 5. Net increase in cash and cash equivalents 457,938,227.59 2,706,315,189.88 Add: Cash and cash equivalents, beginning of the period 4,493,701,917.22 3,434,149,481.72 6. Cash and cash equivalents, end of the period 4,951,640,144.81 6,140,464,671.60 8. Cash Flow Statement of the Company as the Parent for Q1~Q3 Unit: RMB Item Q1~Q3 2020 Q1~Q3 2019 1. Cash flows from operating activities: Proceeds from sale of commodities and rendering of 5,287,315,115.68 15,276,237,884.82 services Tax and levy rebates 42,763,151.28 48,371,777.09 Cash generated from other operating activities 10,273,988,822.96 9,241,152,305.86 Subtotal of cash generated from operating activities 15,604,067,089.92 24,565,761,967.77 Payments for commodities and services 3,473,166,490.54 13,228,154,713.94 Cash paid to and for employees 280,122,707.16 538,054,123.81 Taxes and levies paid 10,631,888.24 44,781,446.37 Cash used in other operating activities 10,751,419,805.68 10,978,851,545.86 Subtotal of cash used in operating activities 14,515,340,891.62 24,789,841,829.98 Net cash generated from/used in operating activities 1,088,726,198.30 -224,079,862.21 2. Cash flows from investing activities: Proceeds from disinvestment 1,217,936,530.00 166,685,882.00 Return on investment 187,723,779.95 96,058,958.81 26 Konka Group Co., Ltd. Third Quarterly Report 2020 Net proceeds from the disposal of fixed assets, intangible 188,253,456.56 255,200.79 assets and other long-lived assets Net proceeds from the disposal of subsidiaries and other business units Cash generated from other investing activities 1,935,867,847.12 777,615,551.82 Subtotal of cash generated from investing activities 3,529,781,613.63 1,040,615,593.42 Payments for the acquisition of fixed assets, intangible 65,949,474.37 59,662,429.02 assets and other long-lived assets Payments for investments 1,340,905,815.71 703,450,000.00 Net payments for the acquisition of subsidiaries and other business units Cash used in other investing activities 126,968,061.44 5,137,623,500.00 Subtotal of cash used in investing activities 1,533,823,351.52 5,900,735,929.02 Net cash generated from/used in investing activities 1,995,958,262.11 -4,860,120,335.60 3. Cash flows from financing activities: Capital contributions received Borrowings received 9,378,654,852.74 11,517,566,793.66 Cash generated from other financing activities 132,564,434.59 2,500,000.00 Subtotal of cash generated from financing activities 9,511,219,287.33 11,520,066,793.66 Repayment of borrowings 10,634,198,610.76 4,960,897,423.76 Interest and dividends paid 663,698,397.97 561,130,301.68 Cash used in other financing activities 494,170,138.20 10,922,037.42 Subtotal of cash used in financing activities 11,792,067,146.93 5,532,949,762.86 Net cash generated from/used in financing activities -2,280,847,859.60 5,987,117,030.80 4. Effect of foreign exchange rates changes on cash and cash -5,866,676.75 -10,762,185.92 equivalents 5. Net increase in cash and cash equivalents 797,969,924.06 892,154,647.07 Add: Cash and cash equivalents, beginning of the period 1,337,342,186.92 1,497,794,555.85 6. Cash and cash equivalents, end of the period 2,135,312,110.98 2,389,949,202.92 II Adjustments to the Financial Statements 1. Adjustments to the Financial Statements at the Beginning of the First Execution Year (2020) of the New Accounting Standards Governing Revenue and Leases √ Applicable □ Not applicable Whether items of the balance sheets at the beginning of the year need adjustments √ Yes □ No Consolidated balance sheet Unit: RMB 27 Konka Group Co., Ltd. Third Quarterly Report 2020 Item 31 December 2019 1 January 2020 Adjustment Current assets: Monetary assets 6,599,360,051.61 6,599,360,051.61 Settlement reserve Loans to other banks and financial institutions Held-for-trading 61,494,666.97 61,494,666.97 financial assets Derivative financial assets Notes receivable 2,838,041,432.89 2,838,041,432.89 Accounts receivable 4,416,179,657.87 4,419,658,123.40 3,478,465.53 Receivables financing 143,174,271.82 143,174,271.82 Prepayments 2,072,550,811.86 2,072,550,811.86 Premiums receivable Reinsurance receivables Receivable reinsurance contract reserve Other receivables 1,772,183,366.49 1,772,183,366.49 Including: Interest 7,807,400.40 7,807,400.40 receivable Dividends 547,848.62 547,848.62 receivable Financial assets purchased under resale agreements Inventories 5,318,503,044.69 5,307,497,440.88 -11,005,603.81 Contract assets 13,248,335.74 13,248,335.74 Assets held for sale Current portion of 108,087,016.22 108,087,016.22 non-current assets Other current assets 2,093,212,552.25 2,104,218,156.06 11,005,603.81 Total current assets 25,422,786,872.67 25,439,513,673.94 16,726,801.27 Non-current assets: Loans and advances to customers Debt investments Other debt investments 28 Konka Group Co., Ltd. Third Quarterly Report 2020 Long-term receivables 410,509,555.85 410,509,555.85 Long-term equity 3,465,541,196.89 3,465,541,196.89 investments Investments in other 21,642,170.36 21,642,170.36 equity instruments Other non-current 1,753,121,727.83 1,753,121,727.83 financial assets Investment property 400,197,374.07 400,197,374.07 Fixed assets 2,561,254,191.55 2,561,254,191.55 Construction in progress 4,291,544,368.52 4,291,544,368.52 Productive living assets Oil and gas assets Right-of-use assets Intangible assets 1,213,271,713.22 1,213,271,713.22 Development costs Goodwill 779,260,296.41 779,260,296.41 Long-term prepaid 107,590,078.88 107,590,078.88 expense Deferred income tax 987,763,182.17 987,763,182.17 assets Other non-current assets 1,172,472,723.85 1,172,472,723.85 Total non-current assets 17,164,168,579.60 17,164,168,579.60 Total assets 42,586,955,452.27 42,603,682,253.54 16,726,801.27 Current liabilities: Short-term borrowings 10,332,687,239.63 10,332,687,239.63 Borrowings from the central bank Loans from other banks and financial institutions Held-for-trading financial liabilities Derivative financial liabilities Notes payable 1,319,396,374.37 1,319,396,374.37 Accounts payable 5,797,822,479.60 5,797,822,479.60 Advances from 1,076,856,387.08 -1,076,856,387.08 customers Contract liabilities 959,538,151.80 959,538,151.80 29 Konka Group Co., Ltd. Third Quarterly Report 2020 Financial assets sold under repurchase agreements Customer deposits and deposits from other banks and financial institutions Payables for acting trading of securities Payables for underwriting of securities Employee benefits 426,870,498.58 426,870,498.58 payable Taxes and levies payable 607,845,294.99 607,845,294.99 Other payables 2,374,287,243.20 2,289,729,308.18 -84,557,935.02 Including: Interest 227,831,108.53 227,831,108.53 payable Dividends payable Fees and commissions payable Reinsurance payables Liabilities directly associated with assets held for sale Current portion of 210,066,077.13 210,066,077.13 non-current liabilities Other current liabilities Total current liabilities 22,145,831,594.58 21,943,955,424.28 -201,876,170.30 Non-current liabilities: Insurance contract reserve Long-term borrowings 4,890,315,729.90 4,890,315,729.90 Bonds payable 4,987,709,643.64 4,987,709,643.64 Including: Preference shares Perpetual bonds Lease liabilities Long-term payables 383,287,104.62 383,287,104.62 Long-term employee 5,565,646.72 5,565,646.72 30 Konka Group Co., Ltd. Third Quarterly Report 2020 benefits payable Provisions 206,591.51 101,491,327.80 101,284,736.29 Deferred income 151,874,258.45 151,874,258.45 Deferred income tax 95,467,096.05 95,467,096.05 liabilities Other non-current 117,318,235.28 117,318,235.28 liabilities Total non-current liabilities 10,514,426,070.89 10,733,029,042.46 218,602,971.57 Total liabilities 32,660,257,665.47 32,676,984,466.74 16,726,801.27 Owners’ equity: Share capital 2,407,945,408.00 2,407,945,408.00 Other equity instruments Including: Preference shares Perpetual bonds Capital reserves 230,368,577.09 230,368,577.09 Less: Treasury stock Other comprehensive -21,293,103.52 -21,293,103.52 income Specific reserve Surplus reserves 1,211,721,109.67 1,211,721,109.67 General reserve Retained earnings 4,239,763,606.89 4,239,763,606.89 Total equity attributable to owners of the Company as 8,068,505,598.13 8,068,505,598.13 the parent Non-controlling interests 1,858,192,188.67 1,858,192,188.67 Total owners’ equity 9,926,697,786.80 9,926,697,786.80 Total liabilities and 42,586,955,452.27 42,603,682,253.54 16,726,801.27 owners’ equity 31 Konka Group Co., Ltd. Third Quarterly Report 2020 Notes to the adjustment In 2017, the Ministry of Finance issued the revised "Accounting Standards for Business Enterprises No. 14-Revenue" (referred to as the "New Revenue Standards"). The company will begin accounting treatment in accordance with the newly revised standards from January 1, 2020. According to the convergence regulations, the comparable period information will not be adjusted. The difference between the implementation of the new standards and the current standards on the first day will be retrospectively adjusted. Profit or other comprehensive income. Balance sheet of the Company as the parent Unit: RMB Item 31 December 2019 1 January 2020 Adjustment Current assets: Monetary assets 2,498,077,198.12 2,498,077,198.12 Held-for-trading 61,494,666.97 61,494,666.97 financial assets Derivative financial assets Notes receivable 2,148,312,821.38 2,148,312,821.38 Accounts receivable 9,564,720,940.39 9,580,894,472.00 16,173,531.61 Receivables financing 66,002,903.68 66,002,903.68 Prepayments 911,315,168.95 911,315,168.95 Other receivables 10,552,820,915.47 10,552,820,915.47 Including: Interest 7,431,353.86 7,431,353.86 receivable Dividends 518,580,871.02 518,580,871.02 receivable Inventories 218,644,308.47 207,949,690.07 -10,694,618.40 Contract assets Assets held for sale Current portion of non-current assets Other current assets 1,096,689,897.40 1,107,384,515.80 10,694,618.40 Total current assets 27,118,078,820.83 27,134,252,352.44 16,173,531.61 Non-current assets: Debt investments Other debt investments Long-term receivables 32 Konka Group Co., Ltd. Third Quarterly Report 2020 Long-term equity 7,712,084,967.88 7,712,084,967.88 investments Investments in other 12,940,214.36 12,940,214.36 equity instruments Other non-current 250,230,000.00 250,230,000.00 financial assets Investment property 400,197,374.07 400,197,374.07 Fixed assets 444,107,402.57 444,107,402.57 Construction in progress 40,933,270.51 40,933,270.51 Productive living assets Oil and gas assets Right-of-use assets Intangible assets 80,470,750.60 80,470,750.60 Development costs Goodwill Long-term prepaid 39,047,325.68 39,047,325.68 expense Deferred income tax 883,234,085.45 883,234,085.45 assets Other non-current assets Total non-current assets 9,863,245,391.12 9,863,245,391.12 Total assets 36,981,324,211.95 36,997,497,743.56 16,173,531.61 Current liabilities: Short-term borrowings 5,014,312,913.74 5,014,312,913.74 Held-for-trading financial liabilities Derivative financial liabilities Notes payable 2,610,991,473.69 2,610,991,473.69 Accounts payable 11,078,648,690.19 11,078,648,690.19 Advances from 318,839,961.84 -318,839,961.84 customers Contract liabilities 269,891,156.62 269,891,156.62 Employee benefits 125,402,307.95 125,402,307.95 payable Taxes and levies payable 9,305,344.42 9,305,344.42 Other payables 3,193,392,734.69 3,181,261,535.24 -12,131,199.45 33 Konka Group Co., Ltd. Third Quarterly Report 2020 Including: Interest 223,847,860.57 223,847,860.57 payable Dividends payable Liabilities directly associated with assets held for sale Current portion of 130,512,375.00 130,512,375.00 non-current liabilities Other current liabilities Total current liabilities 22,481,405,801.52 22,420,325,796.85 -61,080,004.67 Non-current liabilities: Long-term borrowings 3,438,055,729.90 3,438,055,729.90 Bonds payable 4,987,709,643.64 4,987,709,643.64 Including: Preference shares Perpetual bonds Lease liabilities Long-term payables 21,855,688.19 21,855,688.19 Long-term employee benefits payable Provisions 206,591.51 28,511,322.57 28,304,731.06 Deferred income 59,545,839.30 59,545,839.30 Deferred income tax liabilities Other non-current 48,948,805.22 48,948,805.22 liabilities Total non-current liabilities 8,507,373,492.54 8,584,627,028.82 77,253,536.28 Total liabilities 30,988,779,294.06 31,004,952,825.67 16,173,531.61 Owners’ equity: Share capital 2,407,945,408.00 2,407,945,408.00 Other equity instruments Including: Preference shares Perpetual bonds Capital reserves 114,018,066.79 114,018,066.79 Less: Treasury stock 34 Konka Group Co., Ltd. Third Quarterly Report 2020 Other comprehensive -2,682,217.31 -2,682,217.31 income Specific reserve Surplus reserves 1,227,564,785.19 1,227,564,785.19 Retained earnings 2,245,698,875.22 2,245,698,875.22 Total owners’ equity 5,992,544,917.89 5,992,544,917.89 Total liabilities and 36,981,324,211.95 36,997,497,743.56 16,173,531.61 owners’ equity Notes to the adjustment In 2017, the Ministry of Finance issued the revised "Accounting Standards for Business Enterprises No. 14-Revenue" (referred to as the "New Revenue Standards"). The company will begin accounting treatment in accordance with the newly revised standards from January 1, 2020. According to the convergence regulations, the comparable period information will not be adjusted. The difference between the implementation of the new standards and the current standards on the first day will be retrospectively adjusted. Profit or other comprehensive income. 2. Retrospective Adjustments to the Comparative Data of Prior Periods due to the First Execution in 2020 of the New Accounting Standards Governing Revenue and Leases √ Applicable □ Not applicable In 2017, the Ministry of Finance issued the revised "Accounting Standards for Business Enterprises No. 14-Revenue" (referred to as the "New Revenue Standards"). The company will begin accounting treatment in accordance with the newly revised standards from January 1, 2020. According to the convergence regulations, the comparable period information will not be adjusted. The difference between the implementation of the new standards and the current standards on the first day will be retrospectively adjusted. Profit or other comprehensive income. III Independent Auditor’s Report Indicate by tick mark whether the financial statements above have been audited by an independent auditor. □Yes √ No These financial statements have not been audited by such an auditor. The Board of Directors Konka Group Co., Ltd 30 October 2020 35